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Courtesy of Barb Savoy-Pacella ABR, CNRS, CHMS ~ Director of Business & Career Development, Keller Williams Arizona Realty www.PacellaGroup.com
There are many variables that can effect what seems to be our continuing ascension from what appeared to be the bottom, such as, “strategic default” by Alt-A borrowers; the expiration of the home buyer tax credits; and any other economic news that could cause buyers to have lack of confidence; however, setting the crystal ball aside and evaluating data for today, it would appear that with the exception of the luxury market, all other areas of the Valley are seeing improvement over this same time period last year.
Days of available inventory and days on market have decreased 20% over the past year, and although appreciation has been bouncing around over the past few weeks (as high as almost 10% and as low as 5%) this week Valley wide appreciation is at 7.4%.
Please view the two columns below to see the year over year appreciation by major city:
2009 2010
Cave Creek -22.6% -3.7%
Chandler -23.1% -0.8%
Fountain Hills -24.8% -5.9%
Gilbert -19.9% -4.1%
Glendale -44.8% 12.2%
Paradise Valley -13.2% -21%
Peoria -26.1% -2%
Phoenix -51.8% 23.1%
Scottsdale -21.9% -11.6%
Current Conditions in the Phoenix Market:
There are 26,374 single family detached homes actively on the market in MLS. That is an increase of 152 listings for the week and the second week in a row that we’ve observed an inventory increase during a time period when we would normally see decrease.
There are 33,489 active listings in MLS, which includes patio homes, town homes, condos and loft properties.
note: I received this in an email, and thought it was worth sharing:
For the last few months we have been writing articles to keep Realtors informed on issues relating to short sales. We have had comments from some Realtors that they are afraid to handle short sales because of the risks involved. But lets look at the future of short sales and the potential benefits:
- First, from the Realtor’s perspective, there isn’t much of an option. Since REOs and short sales account for 59% of homes sold in April, Realtors must be willing to take these listings. That percentage is expected to increase since there is a huge shadow inventory of homes that will be hitting the market in the next few months as lenders have stopped their moratorium on foreclosures after the beginning of the year. JPMorgan Chase Warns Investors about Strategic Defaults.
- Short sales becoming more socially and ethically acceptable to homeowners because of government programs like HAMP and HAFA that have legitimized this option.
- For homeowners that face a potential deficiency liability, a short sale gives another opportunity to get a release from that liability. If the lender will not allow the language necessary for this release, a short sale may still reduce the amount of that liability as opposed to a trustee sale.
- If a homeowner knows there will be tax implications as a result of exiting a home, that liability may be reduced through a short sale as opposed to trustee sale that will typically fetch a lower price.
- More and more homeowners are deciding to exit their property compared to a year ago when most were trying to keep their home through a loan modification. The reality that loan mods are a failed exercise and that lenders are not doing as promised has seemed to reach consumers. Here are 8 reasons that loan mods fail.
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- Lenders make promises and later deny or retract loan mod offers.
- Temporary mods are often required but 3 to 5 months later they are told they do not qualify for a permanent mod.
- Lenders continually request updated financial records. This is not just a nuisance but is a method used by lenders to extract further payments from the homeowner and try to determine available assets for lawsuits.
- After following the lender’s instructions to make reduced payments as part of a temporary mod, when the lender later rejects that loan mod that borrower is now in default and the lender can file for trustee sale.
- Most loan mods are only a forbearance under which the missed payments, penalties and interest are added as a balloon to the end of the loan, further increasing the homeowner’s negative equity.
- Failure to disclose the investor and their NPV (Net Present Value) calculations to the homeowner make the decisions of the banks seem unreasonable and counter to financial logic.
- “Permanent” mods are not typically permanent. In most cases the lower interest rates are only fixed for 3 to 5 years.
- If a borrower decides to exit the property after receiving a permanent loan mod, it may be too late to receive the benefit of the Mortgage Debt Forgiveness Act (through 2012) creating a tax obligation that the borrower may not have faced, if they made their decision earlier.
Based on the results of loan mods to date, it seems a reasonable assumption that the whole process is not to help the homeowner, but to keep the homeowner making some kind of payment.
In the last HAMP report released in December of 2009, it is easy to see why homeowners need alternatives to loan modifications. In AZ only 4,137 homeowners have received a permanent modification. Nationally, out of 3.5 million homeowners that should have qualified, only about 66,000 received permanent mods and about half of those homeowners had their monthly payments increase.
Here are some tools that may be able to help homeowners decide whether or not a short sale is their best option.
Last chance to register for the free “Short Sales Exposed – Insiders Tell All Seminar“ on May 19th, 9:00AM to 12:00PM at the Scottsdale Center for the Performing Arts. Click here for more info or to register.
Doug Farnham (Central/Southern AZ)
(602)774-3753
Bob Verbic (Northern AZ)
(928)899-5765
Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director Business & Career Development ~ Keller Williams Arizona Realty
The Phoenix market certainly has it’s ups and downs, but one thing has been VERY consistent over the past year. Properties listed over $400,000 only account for 7% of what has been selling for the past year. In the month of April, 73% of all properties sold were listed under $200,000; and approximately 20% of what sold was in the mid-range between $200,000-$400,000.
Has the market hit bottom? The median sales price has fallen 52% from the market high of June 2006, however, it is up 10% over this same time period last year.
Equity sales held 40% of the inventory that closed in March, matching the 40% held by REO sales, while short sales made up 20% of the market.
The absorption rate (the number of pending listings versus the amount of available inventory) is 27.7% Valley wide, which is very promising when the historical percentage over the past two years is reviewed.
Current Conditions in the Phoenix Market:
There are 25,935 single family detached homes actively on the market in MLS. That is an increase of 370 listings for the week.
There are 32,034 active listings in MLS, which includes patio homes, town homes, condos and loft properties.
from Rebecca Roberts, Mortgage Banker with The Lending Company, Inc.
Advising Short Sale and Deed-in-Lieu Clients 2010
If you are working with a client who has had a short sale or a deed-in-lieu in their past…or you are listing a home and your sellers may have the same issues…Fannie announced new waiting periods, as of July 1, 2010, before being eligible for another loan. The waiting period is defined as “from the date of the pre-foreclosure to the date of application”.
- Fannie defines ALL Pre – foreclosure events as any one of the following:
- Deed-in-Lieu
- Preforeclosure Sale
- Short Sale
- Full Foreclosure retains a 5 yr waiting period
New Waiting Periods Effective July 1, 2010
Preforeclosure Event
|
Current Waiting Period Requirements
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New Waiting Period Requirements
|
| Deed-in-Lieu of Foreclosure |
4 years
Additional requirements apply after 4 years up to 7 years |
- 2 years – 80% maximum LTV ratios
- 4 years – 90% maximum LTV ratios
- 7 years – Standard LTV ratios
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| Preforeclosure Sale |
2 years |
| Short Sale |
No specific policy currently exists |
For extenuating circumstances, for all 3 event scenarios, it’s a 2-year waiting time and 90% LTV.
Rebecca Roberts Mortgage Banker
The Lending Company, Inc.
6910 E. Chauncey Ln. Ste. 220 Phoenix, AZ 85054
Phone: 602-791-6262 Fax: 866-559-9097
License: NMLS #231543 – BK0909441
rroberts@thelendingco.com
www.thelendingco.com
 
It appears as though we have another week of “the good, the bad, and the ?”
The good
The absorption rate Valley wide in all price ranges is 28.4%.
In the price ranges under $175,000 the absorption rate is 30-40%
Valley wide there is a 4.5 month supply of inventory (seller’s market)
The bad
The absorption rate drops into the teens at the $375,000 threshold
The absorption rate drops to single digits at the $800,000 threshold
In the luxury price ranges ($1,000,000 and over) there is a 17.2 month supply of inventory
The ?
Appreciation is down from 9.4% two weeks ago to 5.9% today. That may seem discouraging at first glance, but is much healthier than a steep incline that could be followed by a steep decline as we’ve seen historically.
Alt-A loans (borrowers who had good credit but chose stated income loans) that originated during the peak of the market just began re-setting in the fourth quarter of 2009. It is unknown how many of those borrowers 1). over stated their income at loan origination, 2). how many are still earning the same amount of income, and 3) how many who are able to afford the homes they purchased will strategically default.
Inventory is continuing to decrease, but appreciation is declining, which defies the law of supply and demand.
Current Conditions in the Phoenix Market:
There are 25,568 single family detached homes actively on the market in MLS. That is a decrease of 1405 listings for the week.
There are 32,645 active listings in MLS, which includes patio homes, town homes, condos and loft properties.
Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director Business & Career Development
Keller Williams Arizona Realty
www.PacellaGroup.com
(480) 767-3009
Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director Business & Career Development
Keller Williams Arizona Realty
www.PacellaGroup.com
(480) 767-3009
I hate to sound like a broken record (if you are under the age of 35, records were vynil discs that were used to store music prior to CDs, i-pods or MP3 players, and they sometimes became broken or scratched and repeated the same lyric over and over), but distress is playing a major factor in the inventory and movement of our market. Areas that have already experienced a high level of distress and are now moving through their inventory are beginning to see appreciation, while those who have not experienced a high level of distress are not. To illustrate, please note the percentage of distress and resulting appreciation in the following major cities:
percentage distress – annual appreciation
Chandler 67% -0.5%
Gilbert 64% -4.9%
Glendale 63% 8.4%
Mesa 75% 5.3%
Phoenix 67% 20%
Scottsdale 24% -3.1%
Surprise 74% 8.3%
Tempe 41% -6.6%
Valley wide, the price ranges under $350,000 are experiencing a seller’s market and have less than 5 months of inventory. The price ranges under $200,000 have less than 3 months of inventory.
Current Conditions in the Phoenix Market.
There are 26,169 single family detached homes actively on the market in MLS. That is a decrease of 804 listings for the week.
There are 33,415 active listings in MLS, which includes patio homes, town homes, condos and loft properties.
It was only a matter of time.
As of this writing, in the million dollars and over market there are now 57 foreclosed, lender owned luxury homes – some bonafide mansions – for sale now in metropolitan Phoenix (including Scottsdale and Paradise Valley). Luxury estates recently valued near 10 million dollars, being sold in the mid 3’s!!!
Yes, this is the market that had held longest resistance to the housing bubble burst, but it’s time has come. If you have been in the market for an incredible luxury home, there are some incredible steals now. Deals that will make your jaws drop.
Check them out here.
Tony Pomykala
602-290-6217
Sunrise Investments
www.ArizonaMansions.com
Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS Director of Business & Career Development ~ Keller Williams Arizona Realty ~ www.PacellaGroup.com
The Market Optimism May be Contagious!
As reported by Peter Corbett in the Arizona Republic on April 15th, according to a University of Arizona forecast, the Valley’s new-home market is on its way to recovery.
The UofA Economic & Business Research Center report predicts that new-home permits in metro phoenix will jump 54% over last year and that permits will more than double next year.
Also on the plus side is affordable housing. Data shows that six out of ten homes sold in the fourth quarter of 2009 were affordable for families earning the Valley’s median income.
Valley-wide, residential re-sale appreciation is hovering at 9.4%, up from -41.7% at this time last year.
Valley-wide active inventory:
17% are foreclosures
43% are short sales
40% are equity sellers
Valley-wide monthly sold inventory:
51% are foreclosures
17% are short sales
31% are equity sellers
Scottsdale active inventory:
7% are foreclosures
24% are short sales
69% are equity sellers
Scottsdale monthly sold inventory:
24% are foreclosures
16% are short sales
60% are equity sellers
Current Conditions in the Phoenix Market:
There are 26,973 single family detached homes actively on the market in MLS. That is a decrease of 374 listings for the week.
There are 33,940 active listings in MLS, which includes patio homes, town homes, condos and loft properties.
Introducing the Arizona Home Buyer Solutions™ Program
from The Lending Co. and Rebecca Roberts
Purchase a New Home with only a 1% Down Payment*
- Up to a 2.5% gift
- Gift to be used for a down payment by homebuyers utilizing an FHA 1st mortgage.
- Down payment requirements as low as 1%
- Seller can contribute up to 6% for closing costs and pre-paids
- Expanded Income Limits based on county.
- Competitive interest rates.
- Flexible loan approval guidelines.
- Not just for first time home buyers.
- Applies to ANY FHA-Approved Property in AZ!
This program is ideal for low to moderate income individuals and families looking to obtain quality affordable housing with only 1% down. And the better news is the 1% down payment can be a gift from a family member!
The Arizona Home Buyer Solutions Program is offered exclusively through The Lending Company, a direct endorsed U.S. Housing and Urban Development lender.
* Plus, the Down Payment can be a Gift from a Family Member!
The Lending Company is a Direct Endorsed H.U.D. Lender. The 1% down payment program is a qualified gift program. It is available statewide in ARIZONA to qualified homebuyers. The minimum down for FHA financing is 3.5%. The gift is available up to 2.5%. Example for illustration purposes only: $100,000 sales price. $1,000 down (1%) PLUS closing costs. 6.0%/6.684 APR. 30 year fixed rate. Subject to income and credit qualifications. Rates and fees subject to change without notice. Call your representative for current low rates and further details.
*Must be Owner Occupied.
The dynamics of short sales are very different from normal sales. Because the seller’s bank must approve any buyer’s offer PLUS approve of the eligibility of the seller themselves for a short sale, the process of a short sale transaction takes many months from start to finish to consummate. We’ve seen them taking anywhere from 3 months* to as long as 10 months for approvals.
That said, the home is “always” available even after receiving a “seller accepted offer” because of the unknown status of whether or not a potential buyer (the first-position offer) will still be around by the time the bank makes their decision concerning the eligibility of the seller and the worthiness of the buyer’s offer.
The seller typically wants to have a couple of backup offers in place so that the best one can become the first-position offer if the current one has rescinded or gets rejected by the seller’s bank.
This happens very often, because buyer’s oftentimes make multiple offers on many different homes until one of them gets “approved”. Once they have an accepted, approved contract, they rescind all the other offers they put out – even first-position ones, because they probably only need one house!
It is purely a numbers game. The more offers the buyers put out, the more likely - and quicker – they will have a new home.
Even though a short sale home has a first-position offer being considered right now by the seller’s bank, it will usually whole-heartedly welcome strong back-up offers. It is a very smart thing to do if you really like that house.
* Approval time of 3 to 10 months is from the Seller’s perspective. A shorter duration is possible from the Buyer’s perspective if the property you are offering on has already had a first-position offer approved, but the buyer rescinded/ walked away because of the scenario I pointed out above. In this case, it is very possible you could close in less time if your Offer is similar to the earlier offer that was already approved by the seller’s bank. If your offer is very different though, the approval process might have to be restarted all over again!
Tony Pomykala, REALTOR, ePro
602-290-6217
Sunrise Investments
http://www.HomeListingsArizona.com
http://www.BuyingHomesAZ.com
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