Real Estate Information

You know the old saying, go big or go home? Well in Phoenix you can go big, as big as you like. One of the places I really fell for is downtown, located on the prestigious and private, Phoenix Country Club. Five bedrooms, Five baths in over four thousand square feet. The master suite includes his and her walk in closets and the master bath is finished in Italian tile and features a Jacuzzi tub and multiple head shower. The home also includes a separate guest house with a private bath, and is the perfect place to take a break when finished pool side. The price is $10,500.00 per month.

The second home here is for those who want to live on Camelback mountain in a Mediterranean pad. This seven thousand square footer boasts endless views, four bedrooms and 5.5 bathrooms. Rental price set at $16,000 per month.

Let me know when you want to move or visit Arizona!

Shane The Realtor

In 2009 Fannie Mae decided it would create amazing finance options for their foreclosed homes that were mounting. Here are some of the benefits Homepath loans offer.

These properties can be purchased as a primary residence, second home or investment.  If you plan to occupy the home, HomePath offers seller credits up to 6 percent to help offset closing costs. That’s double Fannie’s 3 percent limit for seller credits on conventional loans.  

Another cool feature … Fannie allows the buyer to choose the title company.  In a typical “bank owned” purchase transaction (except in California) the seller chooses the title company which many be located in a completely different part of the state. This can cause delays, high escrow charges and often complicates closing escrow.  

Fannie has made it easier to qualify for financing by lowering the adjustments for FICO scores below 720.  And … if you put 5 percent down instead of the minimum 3 percent, the LTV / interest rate adjustment is significantly less. 

To avoid mortgage insurance on a traditional conventional loan, you need 20 percent down payment.  Not true for HomePath. The minimum down payment is 3 percent.

Now that FHA appraisals are managed by the lender, they take longer.  Since NO appraisal is required, you not only save money… you save time closing escrow.   

Recent reports say foreclosures are declining in metro Phoenix and large numbers of homes are selling.

But many homeowners feel trapped in houses they can't sell.

Some real-estate agents can't find enough new listings to keep up with demand from buyers.

But others say there aren't enough buyers, and homes are selling too slowly.

The housing market in metro Phoenix may never have been as confusing as it is today.

Nearly five years after the beginning of the housing crash, the region's market has fractured into countless different niches.

Each niche is defined by who's selling, what kind of home is for sale and where the home is located.

And each niche has become a market of its own.

Some - such as the market for small central Phoenix foreclosure homes being sold at auction - are booming, with prices rising and a huge demand from buyers.

Others - for example, traditional resales of newer large family homes in some neighborhoods in the far west or southeast Valley - have ground to a halt, where homes seemingly won't sell at any price.

Location is one traditional factor in a home's value that still holds true. But in this market, its effect can be extreme. A seller in one neighborhood might receive 10 offers, while the owner of a similar house 5 miles away won't receive any.

In a market this splintered, once-reliable measurements just don't provide enough information for buyers or sellers.

One reliable measure of real-estate activity was the number of homes for sale. Traditionally, 20,000 to 25,000 homes on the market at any given time was considered normal. More than that meant an oversupply, and sellers might have trouble attracting buyers. Fewer meant a limited supply, a seller's market with rising prices.

As the housing market crashed, too many homes had been built. The region's inventory soared to more than 60,000 homes for sale in 2007, and prices plunged.

Today, according to the online real- estate publication the Cromford Report, listings in metro Phoenix are at 27,400 and falling - traditionally, a sure sign of rising demand and rising prices to follow.

But agents and analysts see the same thing many homeowners feel. While some homes are selling easily, others simply won't.

"Phoenix's housing market is a mixed bag now," said Marcus Fleming, manager with the real-estate brokerage Redfin Phoenix. "There's a new normal for the market, but it's a weird one."

Who's selling

One factor that has a big effect on home sales is the nature of the seller.

To understand, consider just how much things have changed in the past decade.

In June 2001, there were about 10,000 home sales, according to the Information Market, a Phoenix firm that analyzes real-estate data. Of that total:

- 7,300 were regular resales between a homeowner and a buyer.

- 2,700 were new home purchases

- 82 houses sold at foreclosure auctions.

- One home was sold by Fannie Mae, the federal mortgage giant that backs lenders and takes over those homes when borrowers default.

Ten years later, during June 2011, there were just over 11,000 home sales in metro Phoenix. But the variety of sales was far wider:

-  3,684 were regular resales between a homeowner and a buyer.

- 540 were new-home purchases.

- 1,350 homes sold at foreclosure auctions on the Maricopa County courthouse steps.

-  1,255 houses were sold by lenders that foreclosed on them.

-  2,183 houses were sold by Fannie Mae and Freddie Mac.

- 1,822 homes were sold in short sales, in which lenders agree to let a homeowner sell for less than what is owed on the loan.

-  401 homes were sold by the federal departments of Veterans Affairs and Housing and Urban Development.

Because all of these kinds of home sales work in different ways, the market overall becomes more complicated.

Different categories

The different splinters in the market have each begun to work in their own ways, real-estate market watchers say. Some parts see a lot of sales but low prices; others, the opposite.

- Traditional resales: Fewer of these happen because of competition from cheaper foreclosures and short sales. The ones that sell best are in popular neighborhoods with good schools, near freeways and shopping centers. But the percentage of foreclosure homes listed for sale in metro Phoenix has dropped by 5 percent in the past year, so regular sellers have less competition and might soon find it more easy to sell.

- New-home sales: Homebuilding has slowed to a crawl in metro Phoenix as the market continues to sell the many houses built on speculation during the boom years. Even with low land prices, it's still hard for homebuilders to compete with the prices of foreclosure houses that were built less than five years ago.

- Foreclosure auctions: These have become very popular, and a large volume of homes sell at metro Phoenix trustee auction each month. But homes sell at auction for lower prices, and that makes the market's overall average sales price lower.

- Fannie Mae and Freddie Mac: Homes owned by these entities now dominate the metro area's market. But the agencies often change their policies on appraising, maintaining, renting and selling their houses, so some buyers and real-estate agents steer clear of the hassles of these deals.

"The government's role in the housing market is making things more confusing and bringing down prices," said Mary Gomez, a real-estate agent with RE/MAX Renaissance Realty.

- Short sales: This type of sale was rare a decade ago. Banks were reluctant to agree to them in the early part of the crash, but they have now become common. Because they're not a foreclosure sale, but also are not a traditional sale, the value of a short-sale transaction skews the overall market in ways that are hard to measure.

The bottom line: Today's market is complicated and can't be summed up as simply as in years past.

"Everyone is trying to figure out Phoenix's housing market now, but there's no one set of data that truly tells the story. All the regular models for tracking the market are broken now," said Tom Ruff of the Information Market. "There is not just one market in metro Phoenix anymore."

The effects

That confusion makes it especially hard for homeowners and homesellers to know what their houses are worth.

Traditionally, a home's value could be estimated from its "comps," comparable sales of nearby homes. Those offered an idea of the going price in a neighborhood and the price per square foot.

Today, a regular home sells for $112 a square foot. A house sold through short sale goes for an average of $72 a square foot. A bank-owned, Freddie Mac or Fannie Mae home sells for $61.50 a square foot. And foreclosure homes selling at auction are averaging $57 a square foot.

"Comps for properties are inconsistent and can be confusing," said Jennifer Hillier, an agent with the Scottsdale office of West USA Realty. "People just don't know what to believe anymore."

Measures of the overall market are harder to trust, too. Currently, metro Phoenix's overall median sales price is $124,000. But because many of the homes sold are foreclosure auctions - in which low-priced homes are common - that number could be seen as low. Other homes may be worth far more. But few of those homes are selling, so they're not represented in the median price.

"Homes activity is still very concentrated at the bottom end of the market," said housing analyst Mike Orr, who publishes the Cromford Report.

What's selling now

"Homes in central Phoenix area priced under $100,000 are moving like gangbusters with very few homes remaining on the market for long," Hillier said. "I believe this is because of the location to jobs and public transportation" and because the low prices mean investors get a reasonable return, in the form of rent, on their cash investment.

Market watchers also say three- to four-bedroom homes in suburban neighborhoods with good schools are also selling fast to both regular homeowners and investors who want to rent them out, often to families who have lost similar homes to foreclosure.

The region's less-expensive neighborhoods experienced the crash first, and now high-end housing areas are feeling more pain because there are fewer buyers who can afford those houses.

Sales of homes in the million-dollar range have definitely slowed, said Walt Danley of the Phoenix office of Christies' International Real Estate. He said there are cash buyers looking for deals in Paradise Valley and north Scottsdale, but those deals bring prices down.

Some million-dollar homes also go to foreclosure auctions. Recently, a house in Paradise Valley that sold for $3.5 million in 2005 sold at auction for about $1 million.

But there are still homes in Paradise Valley and other high-end neighborhoods selling for prices just 20 percent lower than they sold during the market's peak. Other neighborhoods are also beginning to see homes sell for pre-boom prices from 2003-04, despite the fact the metro area is back to 1999's level.

"The one indicator we can still count on is location," Ruff said. "Homes in the right areas will continue to sell for the highest prices."

Summer is here, people are moving some selling, others buying and or renting. Sales have been brisk for a very good reason. We currently have about two months supply of homes on the market here in the Valley of the Sun. What that means to home buyers is inventory is getting low, promoting multiple offers on the same home. It is no longer months and months on the market, now they are getting offers in less than one month, I've had some transactions recently that literally sold with in days.

When buying a bank owned property it is an asset to them, no emotions and you can afford to be aggressive. When its a private seller, emotions can come into play. Would I treat them differently? Perhaps. It would depend on many factors like what is the sales price? 250K and under is where most of the sales happen in the valley, meaning you have more competition for the same home. Higher priced homes above 300K are still moving, but you have a little more time with out a competitor to get a lower price on the home.

The bottom line is be prepared and be patient, have your loan pre approved so you can get the property you want. if you are in the 250K and under buyer be patient and don't get frustrated if you miss a few homes, eventually the right one will come together for you. I've sold more homes to home buyers for less money because their financing was more solid that other competing higher offers.

Why is this a great time to Buy Homes? I've been in real estate for 12 years. 30 year fixed rate mortgages can be had for less than 5 percent. Recently, I had a client who got 4.6 percent. If you want a 15 year mortgage, you can (for now) still get it for less than 4 percent. These are astounding rates. As Robert Fogel, a Nobel prize winning economist from the University of Chicago said, it's like borrowing money for free, that's how I feel too. I remember back in the eighties when my parents bought a home they paid 16.5%.

There are amazing short sales and foreclosures out there. To find them, you'll have to hire a great agent who really knows what they are doing, has connections with the foreclosure sale (also known as real estate owned, or REO) departments of big lenders, and can help navigate a tricky and frustrating negotiation cycle.

If you need direction or the incentive to get off the fence, call or email because the time is here.

For the past decade Arizona took massive hits, both with massive appreciation and as we all know, price depreciation. We need to learn the lessons that this past decade has taught us. One problem in large part is the flippers and the over-buyers. A flipper is one who buys homes and uses them like a stock, hoping to sell it soon after acquiring it at a profit. Homes are not stocks. Can you Buy Homes correctly, rent them out or sell them and wait until the market is right to sell your assets and profit from it? Yes. A good plan before buying is this, can you hold this home or rent it out for five years? If so then you are probably going to be OK, if not don't buy it.

Another even larger problem is a larger Economic diversification is woefully lacking in Arizona. Which is the main reason we are feeling the crunch. The State of Arizona is largely reliant upon construction, tourism and education. When the housing market dried up from being overbuilt there was no other sector to sustain the downturn in one of our largest employment pools. Luckily most recently companies like Intel are investing heavily into Arizona including building a five billion dollar plant in Chandler, it will add four thousand permanent jobs and countless construction jobs, they break ground next month.

While Home Values took a hit and we nearly tanked, the market is correcting itself, some totals show that nearly fifty thousand homes were sold to investors last year, so the question begs to be asked, are renters a bad thing? Of course not but what neighborhoods and Arizona needs are people who intend to live in a home and to stay there because of the abbundance of employment options to attract permanent and part time residents.

Here's my list of the top 5 home improvements in the business, based on longevity, value, and just plain coolness.

#1 Kitchen Remodel: You would be hard pressed to find a home improvement, addition, or remodeling project that comes anywhere close to kitchen remodels in either popularity or payoff. Consumer reports cites kitchens as the single most popular home remodel of 2008, while a perusal of the last ten years of remodeling magazine's Cost vs. Value report reveals that both major and minor kitchen remodels consistently rank among the highest in the business when it comes to getting maximum return on your investment. In short, whether you're doing it for yourself, or looking to make your home more attractive to others, shelling out for a kitchen remodel is on of the best investments a homeowner can make.

#2 Bathroom Remodel: According to a Harvard University study on the home remodeling industry, money spent on remodeling bathrooms and kitchens accounts for over 20% of all the money spent on home remodeling and improvements in the United States, and if you believe the Home Improvement Research Institute (HIRI), those figures are even higher (25%). What are these two home improvements so popular in home remodeling circles? Because these projects are the total package. Take a bathroom remodel, for example. Where else can you improve your quality of life, the function of your home, and your home's ability to sell in one fowl swoop? Throw things like heated tile floors, spa showers, and whirlpool tubs into the mix and it's easy to see why these items are so popular.

#3 Master Suite Remodel: It shouldn't be a big surprise to find out that master suite remodels come in at number three. Contractors from LA to Chicago consistently count Master Bedroom upgrades among their most popular projects, including Tom Sertich, a Phoenix based contractor who told Remofdeling magazine that "of the additons we do, 85% are master bedroom suites." Theories abound for why this particular addition is gaining so much steam, though one of the most popular ones attributes the trend to aging baby boomers that have finally sent their kids off to college and have a little more time to spend under the covers!

#4 Deck or Patio: According to the Re-modelers Council of South Eastern Michigan, decks and patios rank #3 on the list of the most popular remodels in America. In Arizona a great patio with a fire-pit, seating areas both covered and not, really make a back yard pop.

#5 Wet Bar: Okay, so wet bars don't really make any top 5, or even any top 10 lists I've ever seen when it comes to home improvements however, a wet bar can be an exciting and fun addition to basements, decks, and even poolsides for homeowners that enjoy throwing a good party!

Our President Barack Obama has tried to prop up the housing market by helping people stay in their homes, even though they're still overwhelmed with mortgage debt. This is the latest in a long series of government interventions intended to promote homeownership. 

But propping up the housing market has only prolonged the housing slump -- a depressing fact brought home by the recent dismal home-sales reports.

So what to do?

Perhaps President Obama could learn a lesson from our neighbors to the north. Canada, after all, didn't have a housing bubble. What explains the difference?

For decades, the U.S. has actively promoted homeownership through a raft of programs: generous mortgage interest tax breaks, subsidized loans, Fannie Mae and Freddie Mac loan guarantees, limits on what banks can repossess when a borrower defaults and so on.

The result has been an increase in homeownership, true, but it's also convinced far too many people to Buy Homes who couldn't afford them, helping to unrealistically push up home prices, which inevitably led to the subsequent collapse.

Even now, with interest rates near zero, millions continue to struggle to make mortgage payments, making it likely that the number of mortgage defaults will increase when interest rates rise. That means more homes will be offered by individual homeowners and banks with an urgent need to sell, depressing home prices.

Contrary to popular belief, a home isn't a good investment for everyone. First of all, it's imprudent for people of limited means to have virtually everything tied up in a single asset such as a home, whose value can go down as well as up. The bills are never-ending. For many, owning a home makes it almost impossible to save money for anything else.

And when people get the government help to make their mortgage payments, they still have more debt and housing-related expenses than they can handle. In such circumstances, it's almost impossible to save money for the future.

Until the affected homes have been transferred to people who can afford the costs and risks of homeownership, those homes will hang over the market and continue depressing prices, as we're seeing now. When the government steps in to keep financially stretched people in their homes, it simply delays inevitable adjustments.

What's needed isn't more government involvement to help to prop up homeownership, but less. And if you don't think so, look at what's happened in Canada. More Canadians (68 percent) than Americans (66 percent) own their homes, yet the Canadian government has interfered very little in the private housing market.

• Canada doesn't have an income tax deduction for mortgage interest. Nor is there a tax advantage to converting home equity into debt.
• In Canada, mortgages aren't issued without verification of employment and income.
• Unlike Americans, Canadians cannot walk away from their homes without serious consequences -- Canadian mortgages are generally full recourse, which means a bank can attach an individual's other assets and wages/salaries if necessary to pay the deficiency in the event of a mortgage default.
• Canada has nothing like Fannie Mae or Freddie Mac, subsidizing subprime mortgages on a gigantic scale.
• Nor has Canada had anything comparable to the U.S. Community Reinvestment Act that promotes political influence over mortgage lending decisions.

The principal Canadian intervention in the housing market is to require that people buy mortgage insurance if their down payment is less than 25 percent of the purchase price.

As a result of these policies, in Canada people generally buy a home when they can afford it. Canadians tend to have significantly more equity in their homes than Americans do.

The Canadian housing market has been remarkable for its long-term stability. Occasional fluctuations have mainly reflected local circumstances, such as the oil-driven housing booms in Calgary and Edmonton, and the waves of Chinese money that have flowed into Vancouver.

Obama should end government interference that does much to prolong the housing slump. He should stop trying to prop up the housing market and let inevitable adjustments take place, so we can get through hard times as quickly as possible -- enabling a genuine housing recovery to begin.

Housing completion numbers also contribute to this dire picture, with privately owned housing completions reaching a seasonally adjusted annualized rate of 768,000 in December 2009. That was down 11.2% from the 865,000 completions in November and down 25.3% from the 1.03 million completions in December 2008.The focus of the U.S. real-estate market lately has been the number of foreclosures and people trying to purchase cheap housing. But Brian Wesbury, chief economist at First Trust Advisers, says that if Americans don’t start focusing on building new houses, the market will have a much bigger problem on its hands.

“We need one and a half million houses per year just to keep up with population growth,” Wesbury said in an interview with Steve Forbes. “And then if you throw in, you know, fires and tear-downs and just worn-out properties, we need 1.6 million or more per year. Right now, we’re down to about six and a half, seven months’ inventory whether you look at new homes or existing homes.”

Privately owned housing starts in December 2009 were at a seasonally adjusted annual rate of 557,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4% less than where it was in November, which had 580,000 housing starts.

For people who can get a mortgage, homes are very affordable as are interest rates. If you have any questions about the market or want me to keep an eye out for your next home let me know.