Buying Arizona Real Estate » Foreclosure Properties

Here they come: Bank Owned Mansions, foreclosed luxury properties

Tony Pomykala — Thu, 29 Apr 2010 07:06:31 +0000

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

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Sales Trends 2010 thru February

Tony Pomykala — Wed, 10 Mar 2010 00:46:17 +0000

Information provided via email from WWW.ACTIVEFUNDINGGROUP.COM


Jan-10	Total Closings	5575

Sales price	No. sales	% of total
0-100,000	2219	39.8027%
101-200,000	2154	38.6368%
201-400,000	998	17.9013%
401-750,000	253	4.5381%
751-1,001,000	47	0.8430%
1,001-2,000,000	56	1.0045%
2,001-5,000,000	21	0.3767%
5,001-10,000,000	1	0.0179%



Feb-10	Total Closings	6635

Sales price	No. sales	% of total
0-100,000	2482	37.4077%
101-200,000	2557	38.5381%
201-400,000	1157	17.4378%
401-750,000	300	4.5215%
751-1,001,000	62	0.9344%
1,001-2,000,000	48	0.7234%
2,001-5,000,000	20	0.3014%
5,001-10,000,000	2	0.0301%

Supply as of 3-4-2010

Total no. actives 35110

List price	No. Active listings	Supply (in months)
0-100,000	8034	3.42
101-200,000	12064	5.47
201-400,000	8321	7.64
401-750,000	3493	12.63
751-1,001,000	3253	59.69
1,001-2,000,000	2133	41.02
2,001-5,000,000	763	37.22
5,001-10,000,000	82	27.67
Over 10,000,000	25

List price	Av. Days on market
0-100,000	85
101-200,000	107
201-400,000	135
401-750,000	188
751-1,001,000	234
1,001-2,000,000	258
2,001-5,000,000	361
5,001-10,000,000	369
Over 10,000,000	377

Summary

Over 78% of sales occur in the $200k and under category

Over 90% of sales occur in the $400k and under category

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.

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The Phoenix Real Estate Weekly 3/05/2010

Barb Savoy — Fri, 05 Mar 2010 18:35:00 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director Business & Career Development
Keller Williams Arizona Realty
www.PacellaGroup.com

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:
Over all Valley wide 24.2%.
Chandler 21.8%
Fountain Hills 14.8%
Gilbert 27.4%
Glendale 28.7%
Peoria 24%
Scottsdale 14.8%
Surprise 27.2%
Tempe 20.4%

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.

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Loss Mitigation Programs

Tony Pomykala — Wed, 10 Feb 2010 16:35:59 +0000

An interesting email I received from Stan Van Dyk of Cash Funding Options:

Hi All:
Today, I’m going to show you how the government’s
moratoriums and loss mitigation programs have affected
foreclosures and shadow inventory.

Shadow inventory is made up of all the properties that are
in foreclosure or headed toward foreclosure that haven’t
hit the market yet. There are 7 million homes in this shadow
inventory category. What the government isn’t telling you
is that their moratoriums and loss mitigation programs
created a huge surge of foreclosures that are about to pop.

Their effort to decrease foreclosures has backfired.

According to the National Association of Realtors, there
were 3.6 Million unsold homes in September. You think there
are a lot of homes on the market now? There are 7 Million
more coming that the government has created in this shadow
foreclosure inventory. That’s 2 times the amount of homes
that are currently on the market now!

The government’s Making Home Affordable (MHA) modification
program and FHA’s Hope for Homeowners refinance program DO
NOT WORK for borrowers that are too wealthy or owe too much
on their homes. The number of foreclosures for high end and
luxury homes in increasing and there are a ton of luxury
homes in this shadow inventory.

So what does all of this mean to you as a real estate
investor?

Opportunity, a lot of opportunity to help high-end
homeowners by offering them a short sale while making a
killing in the process.

So when can we expect to see the surge in foreclosures from
this shadow inventory?

We are in the first phase of shadow inventory right now and
it will continue into 2010. The second wave will start in
2010 and will continue into 2011 because the national
foreclosure moratoriums ended in March and the government
intensified its HOPE NOW Alliance program as well as its
Home Affordable Modification Program (HAMP). These programs
were released in the first week of March but the problem
was that the servicers and lenders did not receive training
until the middle of June. Then, the programs had to be
updated because they weren’t effective and they became more
complicated to implement effectively.

This created a huge amount of people that have not paid
their mortgage and their houses have not been taken back by
the lenders yet. Basically the government only delayed the
inevitable foreclosure process but they made it worse
because all of the homes will be entering foreclosure at
the same time and with more debt owed on the mortgages.

This is the ultimate short sale environment. These homes
are ripe for the picking. Many of these homeowners have thrown
their hands up and have vacated the houses. These vacant
houses are gold for you as a real estate investor.

The third phase of shadow inventory will be borrowers that
have exhausted their options on long term government
sponsored payment plans, forbearances, and failed
modifications. These will show up in 2011 and continue into
2012 as their foreclosure timelines were delayed or reset
by the latest HAMP efforts.

As you can see, the biggest mass of foreclosures hasn’t
even hit us yet!

Call us to see how you can help and profit from the the credit and housing crisis.

Thank you,

Stan Van Dyk – Managing Partner
Cash Funding Options
4625 S Lakeshore Dr Tempe, AZ 85282
888-341-3802 Toll Free 602-314-1025 Office 480-516-4364 Cell
480-240-1316 e-Fax
Stan@CashFundingOptions.com http://www.cashfundingoptions.com/

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The Phoenix Real Estate Weekly 1/29/2010

Barb Savoy — Sat, 30 Jan 2010 01:50:58 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director of Business & Career Development
Keller Williams Arizona Realty

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 27,448 single family detached listings currently active in MLS. That is an increase of 128 listings over last week.

* 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.

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The Phoenix Real Estate Weekly 1/22/2010

Barb Savoy — Fri, 22 Jan 2010 15:59:21 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Director Business & Career Development
Keller Williams Arizona Realty
(602) 908-7177
www.pacellagroup.com

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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FHA waives the 90 day flip rule

Tony Pomykala — Mon, 18 Jan 2010 17:09:56 +0000

I received a nice email from Michael Neill of American Alliance Mortgage Company with the following fantastic news:

BREAKING NEWS!!!!!FHA WAIVES 90 DAY FLIP RULE

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS

Measure to help bring stability to home values and accelerate sale of vacant properties

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes…

…The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

· All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

· In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

· The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website at: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Mike Neill
480-505-2202 ext 208
mike@aamcbank.com

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The Phoenix Real Estate Weekly 12/31/09

Barb Savoy — Thu, 31 Dec 2009 16:29:08 +0000

Courtesy of Barb Savoy-Pacella, ABR, CHMS
Director of Business Development
Keller Williams Arizona Realty

Happy New Year!

To view homes for sale, or for additional information about the Phoenix, Arizona market, visit www.PacellaGroup.com.

What a difference one year makes!

As we reflect on 2009 and anticipate 2010 here are some things we know:

* 94% of all properties that sold in 2009 were listed under $400,000.
* In the final weeks of 2009, we began to see the average sales price per square foot increase slightly.
* Valley-wide there is a three month supply of inventory for properties listed under $100,000
* Valley-wide there is a five month supply of inventory for properties listed under between $100,000-$300,000.
* Leading into 2009 short sales represented 1% of properties selling in any given month. By the close of 2009, that figure has risen to 20%.
* Alt-A 5 year ARM loans started re-setting in the fourth quarter of 2009.

What does the 2009 data lead us to anticipate for 2010?

* There is a perception of value and greater affordability in the lower price ranges.
* Lenders are being incentivized to reduce the time required for the short sale process, and we are likely to see substantial short sale inventory.
* The average price per square foot has been creeping up, but that could be unsustainable if Alt-A borrowers begin defaulting on loans.
* Lenders are targeting borrowers with Alt-A loans that are re-setting to counsel them regarding short sale, rather than foreclosure.

Current Conditions in the Phoenix Market:

* There are 26,637 single family detached listings currently active in MLS today. That is an increase of 99 listings over last week.
* Total listings (including condos, patio homes, town homes and lofts) currently active in MLS 34,218.

Wishing you a safe and prosperous New Year!

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The Phoenix Real Estate Weekly 12/18/09

Barb Savoy — Fri, 18 Dec 2009 14:37:45 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Keller Williams Arizona Realty
www.PacellaGroup.com

The Federal Reserve has concluded their final meeting of 2009. It appears that for the time being, the Federal Funds Rate will not be increasing. However, the mortgage backed security program currently in place that has kept rates artificially low will come to an end in March. During their meeting, the Reserve did indicate that they believe the unemployment rate and general economic activity are improving, leading to even more speculation for increasing rates in the Spring.

For the second week, there has been an increase in the overall sales price per square foot for short sale and equitable seller homes. We had been observing that trend for quite a few weeks on foreclosure properties, but were delighted to see it penetrate all sales for the first time last week. Data shows the following sales price increases per square foot as follows:

* Foreclsoures 1.1%

* Short Sales 0.6%

* Equitable Sellers 2.2%

Valley-wide, the absorption rate (the rate of pending versus active listings) is still hovering in the 30% range and the months of active inventory at our current rate of absorption is 5.3 months.

Current Conditions in the Phoenix Market:

There are 26,410 active, single family detached listings in MLS which is an increase of just 9 listings over last week.
There are 34,021 total active listings in MLS, which includes all dwelling types (single family, condo, patio homes, town homes)

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The Phoenix Real Estate Weekly 12/11/09

Barb Savoy — Fri, 11 Dec 2009 23:45:06 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Keller Williams Arizona Realty

As the Market Turns!

* Sales volumes are up 66% over the same time period last year.

• Pending sales are up 79% over the same time period last year.

There has been an interesting pricing trend over the past month. We have been observing the average price per square foot for foreclosed properties gradually increasing, but there are some interesting new developments this week.
• The price per square foot for foreclosed properties increased another 1.8% over the past 30 days.
• The average price per square foot for short sales increased 1.6% over the past 30 days.
• The truly remarkable number is that the average price per square foot for equity seller properties, which we had seen continually declining, actually increased by 2.4% over the last 30 days, which is significant.

The trend in pricing will be something to watch closely in the coming weeks.

Current Conditions in the Phoenix Market:
• There are 26,419 single family detached listings currently on the market in MLS. That is an increase of 182 listings from last week.
• There are 33,965 total listings on the market in MLS, which includes town homes, patio homes, and condos.

For additional information, or to view properties for sale, visit www.PacellaGroup.com

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