Loading ... Cash Strapped Buyers Could Get Shut Out
If you have buyers in need of 100% financing, take notice! One widely popular tool for funding is about to run out of money. Buyers that need a no down payment loan guaranteed by the USDA are running out of time to get their deal done. USDA Rural Home Loans have been a phenomenal tool for helping cash strapped buyers get into homes for no down payment. Unlike many other loan programs though, the amount of funds available to fund these loans are set and capped at the beginning of the fiscal year. Notice was delivered from Washington on March 9 that the funds are nearly exhausted, with expectations that they will run out in late April. Unlike years past when similar notifications have been delivered, the USDA will not be issuing conditional commitments for buyers as the program awaits new appropriations from Washington. The USDA states they are “not certain when additional funding will be available.” What does this mean for your buyers? If your buyers need 100% financing and are not eligible for a VA loan, they have to act quickly or they will have to seek other options. Combined with tightening from HUD on FHA loans in April and potentially later this summer, cash strapped buyers may be shut out if they miss this opportunity. If you have any questions, call me and let’s discuss them. Sincerely, Rebecca Roberts |
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Information provided via email from WWW.ACTIVEFUNDINGGROUP.COM
In summary, the numbers don’t lie and market trending is abundantly clear. Two core elements drove the market into the sewer beginning in the 2nd quarter of 2006, which were rapid price deflation of residential assets coupled with a simultaneous dramatic lack of available take out financing. There is still an oversupply of active properties for sale (we believe the oversupply is approximately 40%) but that needs to be carefully analyzed in specific pricing segments as opposed to a “bulk number”. The majority of oversupply exists in properties that retail for a price that exceeds the FHA upper end lending limit. We are seeing predictable and relatively short resale marketing timeframes for properties that retail for $250K and under. Price deflation has largely occurred at this point and we are seeing modest price inflation in the $250K (retail) and under category and properties that retail for any price that is underneath the FHA upper end lending limit. Market speed and velocity for properties that retail for a price that exceeds the FHA upper end lending limit is lethargic and will continue to be that way until there is a more competitive take out market for loan amounts over the FHA lending limit as there are only so many 800 FICO score buyers with 30% (or more) in cash for a down payment. Prices being paid at Trustee sales recently are downright stupid if your business model is based upon an near term exit strategy, but the Bidders/Buyers attending the sale typically have little to no risk in the purchase, or the result reinforcing the largely accepted thought that it’s easy to spend someone else’s money. We believe the successful investor will “shoot with an arrow, not a shotgun” in this very competitive environment. We are seeing some good values in the purchase of bank recovered assets from local or regional lenders, and short sale purchases. There are still some “home runs” in the market – we see them daily but they are few in number and we see a lot more “singles and doubles”. Care and caution are the order of the day as we see it. ACTIVE FUNDING GROUP PROVIDES ASSET BASED LOANS FOR THE PROFESSIONAL REAL ESTATE INVESTOR WE OFFER SPEED, CONVENIENCE, DEPTH OF CAPITAL (WE DON’T RUN OUT OF MONEY) APPLICATION TO FUNDING IN HOURS WHEN NECESSARY – LOG ON TODAY  Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS For the past year, we have seen consistently month over month that 93-94% of all properties selling in our market are listed under $400,000. That is still holding true. As we know, the number of foreclosures listed has decreased, but the number of short sales have increased market share. The number of equity sellers has remained relatively unchanged over the past year. The absorption rate (the number of listings pending sale versus the total active inventory) by city is: Current Conditions in the Phoenix Market: * There are 27,497 single family detached homes actively on the market in MLS. * There are 35,126 active listings in inventory, which includes patio homes, town homes, condos, and lofts. Those Who Wait Will Pay Thousands More This Spring Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).
Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board’s mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.
Here are a few reasons why: It is important to note that in order to be eligible for the lower cost up-front mortgage insurance, a lender has to order a case number from the FHA before April 5th. A case number can only be generated for loan applications where a property is involved and a fully executed purchase contract exists. Home buyers who have been pre-approved but are not under contract will not be eligible for the reduced premium effective April 5th. Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these “seller concessions” can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000. There is only one way to avoid being affected by all of these costly changes that lie ahead – submit all FHA mortgage applications by the last week of March. If I can answer any questions you may have about how these changes could impact you, call me. I appreciate your business. Sincerely, Rebecca Roberts
Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director Business & Career Development Keller Williams Arizona Realty There are good reasons to be optimistic about the Phoenix market. There are signs that the light at the end of the tunnel may not be a train. It’s not a surprise that: * The weakest month for appreciation occurred in May of 2009 at -47%. What might be surprising is that: Current Conditions in the Phoenix Market: * There are 35,224 listings being actively marketed, including condos, patio homes, town homes and lofts. An interesting email I received from Stan Van Dyk of Cash Funding Options: Hi All: Shadow inventory is made up of all the properties that are Their effort to decrease foreclosures has backfired. According to the National Association of Realtors, there The government’s Making Home Affordable (MHA) modification So what does all of this mean to you as a real estate Opportunity, a lot of opportunity to help high-end So when can we expect to see the surge in foreclosures from We are in the first phase of shadow inventory right now and This created a huge amount of people that have not paid This is the ultimate short sale environment. These homes The third phase of shadow inventory will be borrowers that As you can see, the biggest mass of foreclosures hasn’t Call us to see how you can help and profit from the the credit and housing crisis. Thank you, Courtesy of Barb Savoy-Pacella ABR, CNRS, CHMS This week appears to be a good news/perhaps not so good news week in the market. The good news is that the totals for notice of trustee sale for the month of January are in. In Maricopa County 6,762 notices were served in January, which is the lowest number since November of 2008. However, in reviewing the market for the past week, we are observing an increase in listings (typical for this time of year), and the first sign of slowing pending sales. The slowing is not dramatic, but something that we will obviously be observing. Overall, price per square foot increased by $.52 cents for the month of January, bringing overall depreciation from -16.7% to -1.9%, but if pending sales remain slow, that could change. Current Conditions in the Phoenix Market: * There are 27,494 single family detached homes actively for sale in MLS. That is an overall increase of 46 listings from last week. Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Here we go! The moment we’ve all been anticipating! Would we see the traditional rise in pending sales anticipated to begin the third week in January annually, or would the “shadow inventory” of foreclosures flood the market? The results are in. According to the Cromford Report: * Pending listings are up 5% over the past week. * It is also anticipated that January will see the fewest notices of trustee sale in approximately 20 months. During the same week in 2009, we had approximately 20 months of active inventory, versus approximately 7 months in 2010. Additionally, the average sale price per square foot (Valley wide and all dweling types), increased by $2.00 per square foot in the past month. All of these are certainly positive indicators and reasons to be optimistic. Current Conditions in the Phoenix Market: * There are 35,015 total listings, including all dwelling types (including condos, patio homes, town homes and lofts). To view homes for sale, or for additional information visit www.PacellaGroup.com or phone (602) 908-0373. Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS The forecast for the Phoenix market is still optimistic. We are seeing the traditional swell of inventory that would be typical in January with inventory increasing, and pending sales decreasing, however; if you compare our current inventory with January of 2008 and/or 2009, our inventory is nearly half of what it had been, and our pending sales are nearly doubled. Overall, pricing for foreclosed properties and equity sellers has been stabilizing, however, short sales are still seeing price erosion. Notices of trustee sales have slowed considerably this month. If we continue on our current trend average for the month, this could be the slowest month for notice of trustee sale since April of 2008! Current Conditions in the Phoenix Market: * There are 27,320 single family detached properties actively on the market in MLS today. That is an increase of 712 listings. * There are a total of 34,830 properties (including condos, patio homes, town homes and lofts) currently on the market. Please contact us for additional information, or to receive a portal into MLS. |
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Copyright © 2010 Buying Arizona Real Estate - All Rights Reserved. Blog owner Tony Pomykala is a licensed Arizona Real Estate agent with Sunrise Investments. equal housing opportunity |
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