Real Estate Information

Is it freezing where you are today? What is the forecast for tomorrow? In Arizona you need to decide if it is formal shorts or Golf slacks and flip flops are also OK. We have an average of 339 days of sunshine a year and for 8 months of the year it gets no better than Arizona. The market is ripe for the perfect storm, low rates, buyer incentives and plentiful inventory.

Most banks are requiring only three percent down payment and on a 200K home that is only 6K. Rates are totally negotiable but it is important that you get pre-qualified before you start to house hunt. There is nothing worse than finding a home you have only dreamed of and get it for a steal, only to see your financing unwind before you. Most people make the mistake of counting on that last prequal from your last lender who may or may not be in business anymore. Many more still do more damge to their credit by having their credit ran several times a year. You have a window of 30 to 75 days to get your credit ran an a loan established as the banks will be able to see you are doing your homework finding the best bank and terms. People who get their credit ean arbitrarily thru the year are dreamers, and the banks know it, hence the denials.

If you have a lender great, you should still shop them to be sure it is a good deal. Once we have that set up we can really start to look and we will find, that home you only thought was a dream.

 It seems that sometimes the darkness of an economic slowdown will never end until it swallows your money like a pelican gulping down a fish. Well relax, that’s not the way it is. Good times follow tough times - it’s inevitable. They call it the economic cycle, and it’s been around since people started measuring such things. It’s just as important for a business owner to plan for the coming boom, as it was for them to prepare for the recession. But when do you start? How does one know it’s really over?

There are no clear, defining lines from recession to boom. It isn’t like throwing on a light switch in a room. It’s more of a slow, gradual dawn lighting up the eastern sky, taking its time to arrive. We want to find trends, not sudden eruptions from good to bad-we want to go from bad to just a little less bad.

It’s different this time: Sure it is, and the check’s in the mail and you’re my one and only. Don’t believe what you hear from the economic pundits. Economics was invented to make astrology look good. In the late 50s and early 60s we had an economic boom partly based on new technologies like transistors. The “nifty fifty” stocks reigned supreme and surely it was different this time. Then along came the early 70s and the Arab oil embargo. We were going to run out of oil in eight years, they said … it was different this time. Then we had the inflation and high interest rates of the late 80s, stock market crash of 1987, the 90s Internet boom, technology meltdown of 2000 followed by 9/11 and now the sub-prime crisis. Every downturn was followed by an economic boom and vice versa. It’s never “different this time” and this is no exception. So let’s start planning for the inevitable resurgence of economic growth with two questions:

1. Are we at bottom?
2. What business steps should we take if we are entering a recovery period?

OK, let’s look at the first one: Are we at the bottom? To answer that question we must first realize that it’s a regional game more than a national one. Las Vegas may be in a boom while New York is in recession. As of this writing, home prices, which are one economic indicator, reflects this regional disparity. US News and World Report states in their June 3, 2008 edition that home prices are UP 11.8% in Mobile Alabama and 6.7% in Jacksonville, Florida from a year ago. During that same period, the Washington Business Journal’s May 27, 2008 edition states the Standard & Poors/Case-Shiller Home price Index fell nationally by 14.4%.

So to figure out if we’re in a less-bad period, (no one can find the actual, exact bottom) look locally for the signs:

A surge in residential home sales, or at least a drop in the length of time homes stay on the market.
Increase in new construction means builders are experiencing a demand that will have ripple effect on the local economy (think appliances, local building materials outlets, etc…)

Decrease in vacant commercial properties and increase in commercial construction.
Easier credit from local banks
Lower interest rates for mortgages and consumer credit
Decrease in local unemployment
Increase in “help wanted” ads

All these signs, and more, indicate improving economic conditions locally. Once you see these positive signs, it’s time to analyze your finances for the right course to take.

What will it be, well in my humble opinion I think we hit bottom in Arizona in July 08. We will continue along the bottom past the election and into early 09. I do not think we will see 62% appreciation again anytime soon but we will bounce back. Banks and world markets will stabilize, homes that are foreclosing will get bought up and the resales will be more in demand and prices will go back up. Long story short, prices right now are very low, banks will be lowering rates in the coming months and we will be OK people, just hold on. Now for my market perspective.

The stock market has been taking bullets in the past months and rightfully so. On the other plus side as of the date of this post 10/08 the housing market is up 10.7 % in Phoenix. I for one do not agree with the experts who play the blame game. Lets face it the Democrats led the charge with sub prime lending and American dream was perpetuated by the greedy bastards on wall street, lend money to whomever under any circumstances, liars loans or stated loans became the norm. Many lenders jumped in on the refi boom, tearing peoples heads off and not caring that they would never see those people again because there was a line out the door waiting to get in and refi. Easy money and careless spending are we American's specialty and we are constantly looking for that next easy handout. We need to centralize our posture, become the super power that we claim to be and turn our selves and our attention to this country. Put people back to work and lets take this country back from the fat asses on wall street and in Washington. My grandpa once told me "Politicians Love Unarmed Peasants" Arm your selves with intelligence, read the constitution it requires and informed citizenry. The defining moments in peoples lives happen every day, follow my advice help those who need help and be true to yourself. Happy Holidays America!

Many lenders and agents alike all know one thing, the current down payment assisitasnce program is going away. What will we do now? Is it chicken little time or do we have a plan? We have a ton of inventory to sell yet and to shut the valve off would be and is crazy.

Currently Ameridream has a bill on the table in congress HR 6694 that will reauthorize the programs indefinitely. Urge your representatives to make this bill pass so we can continue to offer a real solution to thousands of potential home buyers.

Have a question or want to get or give an opinion? Drop us a line!

Turn off FOX news and CNN, put down the liberal newspapers they will rot your brain. The market ebbs and flows with the times. We have had 12 recessions and have recovered from all of them. We all got fat and lazy and have lost our direction, greed, would be speculators, (flippers) and shifty lenders have tanked our economy. All  bloated inventory is the result of our not paying attention. The biggest criminals still at large in my opinion are the builders and the lenders.

I had a conversation with an Engle homes rep yesterday, they are giving my owner his model leaseback back to him at the end of June. They told me they were selling all of the model furniture off last night in an auction (thurs nite, employess can buy, fri & Sat the public can go) and that they were unaware of where my owners keys are. I was outraged that they would hold an auction with out letting my owner know to see if he would like to come and buy some of the furnishings in his own home. I also said if any of the fixtutres or appliances went missing during their little sale they would be getting sued, they of course rebutted with " we are a professional company and are very good at this" I told them 'no you are not, your company went bankrupt because you do not know what you are doing!" (They went BK in early 2008.) Now my owner has a model home mortgaged for 413K and the only house standing for five blocks is this model, thanks Engle. If you want to rent this home let me know!

As for the market kids here is how it is: We got fat and we all ate well but the FED put us on a diet. We got the stomach sugery, we lost wieght almost overnight, prices have fallen (as have values) and now we are looking at ourselves in the mirror, have we lost enogh fat yet or do we continue to diet? Once that has been determined we will create a stimulous package and it will be another bull market. Hold on, because this market will pass.

Many Americans are upset the the Feds steped in and helped Bear Sterns and are concerned on how morttgage bailout will be distributed and qualified. Few taxpayers like to hear talk about "bailouts," especially as many tighten their own belts to deal with rising energy and food prices and falling values for their homes or stock investments.

Questions of fairness are sure to figure in the policy debate The people who might get bailed out, after all, include the same reckless lenders and often-speculative borrowers who helped cause the mess. Should mortgage companies be forced to knuckle under so borrowers can keep their homes and avoid foreclosure? Should taxpayer money be used to help troubled banks?

To a large number of Americans, such interventions in the marketplace are wrongheaded. Still, signs of economic weakness in the past month have made a hands-off approach less likely.

One choice is to be very puritanical and say that those who have sinned must suffer. The problem is that so many have sinned that all of us must suffer. The mortgage market is really way too big to let it fail.

Some say the whole economy is beginning to suffer through a recession, caused in large measure by the decline in Home Values and credit availability. Policy efforts may cost taxpayers some money but could also prevent a deeper slump.

At the very least, some argue, help should come only with strings attached. Where does the public stand on this?Many voters have mixed feelings, an ambivalence highlighted in one of the few polls so far that has tried to explore the question of mortgage bailouts.

In the survey, by CNN/Opinion Research in December, a slim majority of Americans said that borrowers who are defaulting on mortgages "have no one to blame but themselves." Yet in that same poll, a slim majority also supported the idea of "special treatment" to help those very home­owners avoid default.

The survey found less sympathy for banks. Nearly 3 in 4 Americans did not want to see special treatment to keep financial institutions from losing money on loans that go bad. Many of the rescue proposals under review, however, would provide some support for lenders even as they try to keep homeowners out of foreclosure. In one sense, taxpayer-backed help is already being provided by some federal authorities – aimed especially at averting a possible meltdown in the financial industry.

Among the steps taken so far:

•The Federal Reserve intervened to prevent the sudden collapse of Bear Sterns, an investment bank. But the Fed took on $29 billion worth of risk from JPMorgan Chase (which plans to buy Bear). That could expose the Fed – and by extension taxpayers – to a loss. The Fed is making other low-interest loans to Wall Street firms.

•Government-sponsored housing agencies are taking on more risk to keep home loans flowing. The cost to taxpayers may be small or large, depending on how those loans go.

•The Fed has been cutting interest rates. That helps many borrowers – whose ranks include financial companies as well as homeowners. But the move could push up inflation for all Americans, and many retirees face lower income on their savings as a result.

Many consumers and businesses who never took out a subprime loan now face tougher terms on credit cards and other borrowing. The great risk to the economy is a downward spiral, in which losses for banks tighten credit further.

If foreclosures erode household wealth and consumer confidence, home prices could overshoot on the downside just as they soared through the roof during the boom. That's one reason that efforts are ramping up in Congress for additional measures designed to slow the pace of foreclosures. The leading approach, for now, seems to be one backed by Rep. Barney Frank (D) of Massachusetts and Sen. Christopher Dodd (D) of Connecticut that could start moving this week.

It would have the Federal Housing Administration guarantee refinanced mortgages that make it more affordable for at-risk homeowners to avoid foreclosure. Lilly supports this concept, but he says another approach could also spur faster restructuring of troubled loans: a tax credit to induce lenders to adjust mortgage rates downward.

In most of the plans under review, the goal is not to keep home prices from falling to a new equilibrium, but simply to avoid greater financial chaos than is already under way.

Quite to the contrary I would say! I would like to dedicate this blog today to the negative idiots that are clogging up our  news media, I am sick and tired of the people with little to no sense or experience commenting on the housing market and having the public forum to cast such negative drivel.

This is a buyers market for the history books and as a REALTOR this is my favorite type of market. The perfect storm, sellers and builders must bend over back-wards like trained bears to help a first or second home buyer to buy a home from them. Just like a Golden Wonka ticket  good borrowers can find the homes they only dreamed of and pay only the fair price for them or sometimes even steal them. Rates are still historically low and will be lowering more. This is the real market here in Arizona anyway, we sell and will sell on average five thousand homes or more a month, that has been the same for at least the decade I have been doing this and can only go upward despite what anyone tells you. 

Prices are right, inventory is plentiful, the equivalent to how the West must have been a hundred years ago.. the banks are poised to get back in the water, (they can only stand to see the Fed monopolize the market for only so long) and until then FHA is making the plays up to 336K. If you are a home buyer, the market we are in has not been around in five years do not miss out on the opportunity to find your dream home and the means to get there. 

Happy 2008, Thankfully Congress got our house bill passed and a whole lot of loans that were set to adjust are frozen. The banks who made these crap loans for people that were only done to benefit the banks are being held off and at bay by our government wearing shiny armor thank you Congress! Lawsuits by the banks are skyrocketing, good luck banks, I am sure you will find a sympathetic jury, NOT!

FICO just revamped their credit reporting system and released FICO 2008, it will hit the books in early spring 08! Accurate credit reporting is just around the corner. Sales are rebounding and I see Arizona recovering this year and next. thank God, and the Fed. I have my crystal ball out, I see the Fed discount window hitting 3.75 percent, equating to loans in the high four percents available for you and me! We need to keep our eye on the ball though, speculation carries risk, unless you are willing to accept it, do not get in the pool folks.

Real estate can be fun and rewarding but it is not for the fool hardy. Every boom another bunch of part timers appear and we do not need them, inexperience costs borrowers and lenders alike, unless you are making your primary career out of Real Estate please stay where you are and leave it to the professionals. Have a Happy and safe 2008!

Happy Holidays or Happy Halloween? Like you most people are scared of the market and rightfully so. I for one am half glad that this market is the way it is, it has and will weed out all the crooked lenders, Realtors and title companies from the market place and thank God for that.

The sub-prime market only makes up 15% of the overall market and more than half of the foreclosures happened or that are happening are in that 15 percent. The ramifications of the idiot lending crisis are that over three trillion dollars in bad paper out there is due to adjust and the lending of new money has made home loans an un-appetizing dish for investors on wall street as they used to buy all the loans over 417K that the federal entity Fannie May will not buy. They are also charging 2 points or more to buy for the pleasure of your loan in this market because they can. In Congress right now is a bill to modernize FHA to be more competitive in the market place and it can and will straighten out  the majority of our problems. I hope you will want help and do your part by telling your Representatives in Washington that you support this modernization by going to http://realtoractioncenter.com/ and tell them how you feel! However we also need to keep our eyes on the ball ladies and gentlemen. The market is always changing, are you listening?

I asked my friend Dr. Doom what his thoughts on the market were and it's all gloom to him, but that is what he is all about and what we pay him to say. The negative will always have an audience because we all have the tendency to despair, especially when money gets tighter, lending money to consumers gets more expensive and we feel the grip around our collective throats of a credit crunch and a looming recession. The Fed's recent discount gave an enormous boost to the markets temporarily but days later rates are right back where they were weeks prior. So what do we do? Most analysts agree the true bottom won't be realized until the dust settles this fall.

The good news for you in Arizona with Arizona holdings (homes, land, commercial, rentals etc) a hell of a lot of people move here day after day after day, 150,000 a year by recorded standards, what do you think the odds are that one of those prospects will buy or rent a place from you? The odds are greatly in your favor if you own anything in Arizona. I have people who ask me every day, when should we buy? Should we focus on foreclosures? The answer is yes and no and maybe. Waiting to see what rates are going to do prior to buying may cause you to miss the opportunity to land your dream house, there is no way that I am aware of anyone being able to see the future, however, rates are at historical lows and home choices are at historical highs, what if you wait to long and demand has returned, now that house the owner was willing to liquidate and deal on is either gone or under contract. Foreclosures are adding to the bloated inventory that needs to be absorbed but they will be, but remember not all foreclosures are good deals, trust me on this. 

What keeps a market moving is growth, both by jobs and by urban sprawl and demand. There is money out there, allot of it going around despite the sub prime and credit mess. I  know some people who deal in only exclusivlely cash clients and they and others will buy no matter what the price is, if they want it bad enough so keep a positive attitude and keep your house in order, you never know when someone is going walk in and pay your price to sell.