Current Stats for Phoenix - 01/21/2010

Current Stats for Phoenix

All Property Types

	ALL	Distressed	Not Distressed	% Distressed
Active	35097	14501	20596	41.32
Pending	10782	7316	3466	67.85
Closed - 12/2009	7553	4955	2598	65.60

Months of inventory for Not Distressed properties = 7.9
Months of inventory for Distressed properties = 2.9

Single Family Property Types

	ALL	Distressed	Not Distressed	% Distressed
Active	27536	11974	15562	43.48
Pending	9327	6408	2919	68.70
Closed - 12/2009	6485	4276	2209	65.94

Months of inventory for Not Distressed properties = 7
Months of inventory for Distressed properties = 2.8

Arizona #2 in US foreclosures for 2009

According to RealtyTrac, Arizona is second from the top in foreclosures for 2009 with only Nevada beating us out. This is not a list where you want to be on top. The numbers for 2009 were helped out by some government programs that slowed the foreclosure process down. All indicators point to things not getting much better for 2010. As you can see by the numbers, Nevada is in serious trouble with over 10% of all homes in foreclosure.

Here are the top 5: (calculated as a percentage of all homes)

1) Nevada - 10.17%
2) Arizona - 6.12%
3) Florida - 5.93%
4) California - 4.75%
5) Utah - 2.93%

Article from the Phoenix Business Journal

Big Banks Accused of Short Sale Fraud - CNBC

Big Banks Accused of Short Sale Fraud

via cnbc.com

Good article from CNBC. Apparently some second lien holders are asking to be greased on the side, outside of the closing docs (illegal), in turn for approving the short sale. Good work by Diana Olick and thanks for shining a light on this. click here to read the whole article.

FHA Lifts 90 Day Seasoning Requirment

Starting February 1^st for a period of 1 year the FHA will lift the 90 seasoning requirement.  This is fantastic news for investors.  There are still some restrictions and requirements, but the policy change recognizes the needs of the marketplace. Here is what the FHA had to say in their press release:

““In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.”

The complete press release is here.

Facing Foreclosure? You Have Options

Some of the options available to you are:

Home Affordable Modification Program: You must qualify First …. check if you qualify for HAMP

Short sale: A short sale is when you sell a home for less than what is owed on the mortgage…. you should list it with a real estate professional that's well versed in these types of sales.

Deed in lieu of foreclosure: Essentially handing over the keys to the lender in lieu of actually going through the foreclosure process.

Talk to your lender: The bottom line: If you're struggling to make your monthly mortgage payment or you've missed a payment, make a call to your lender.

To find out more about these options and others visit my Foreclosure Website.

Bank of America to release homes - Business - ReviewJournal.com

Bank of America expects to release about 6,000 foreclosed properties into the Nevada housing market in 2010, or about 500 a month, an executive with the bank said Wednesday. It's part of the so-called "phantom inventory" of foreclosed homes being held by banks as they work out loan modifications and negotiate short sales, two of the more desirable alternatives to foreclosure. Throughout the country, estimates of homes being taken back by Bank of America range from 11,000 to 14,000 a month in the early part of this year to 29,000 to 35,000 by November and December, said John Ciresi, vice president and portfolio manager for Bank of America in Towson, Md. To read the entire article go to Las Vegas Review-Journal.

I expect this to begin happening in Arizona as well. The "phantom inventory" is just too large for banks to continue holding on to. Eventually something has to give. A large influx of properties will definitely have a drag on the prices. 500 properties a month from one lender is HUGE.

Delinquency, Foreclosure Hit One in 7.5

One in every 7.5 homeowners in the U.S. is either delinquent on their loans or in foreclosure, according to Lender Processing Service. In its December 2009 Mortgage Monitor report, Florida-based LPS said total delinquencies, excluding foreclosure, rose to a record 9.97%, an increase of more than 21% from a year earlier. It also found that .... more than 5% of loans have moved to a more delinquent status, while 1.52% have improved. It did note, however, that the number of foreclosure starts has continued to decline, thanks to loss mitigation efforts such as the federal government’s Home Affordable Modification Program. Thanks to EMII for their report.

I expect this number to grow as long as the unemployment rate stays high. There are also a lot more sub-prime loans getting ready to reset their rates this year.

New Treasury Guidelines for Short Sales

The US Treasury has handed down new guidelines to lenders for dealing with short sales.  In addition to some cash incentives the lenders will be responsible for responding to offers within 10 days.  There are 83 banks that will be required to follow these guidelines.  To read more of the article go to: http://www.miamiherald.com/business/story/1421797.html

Jim Gruler, CDPE, CNE
Designated Broker
Hunter James Properties
602-618-6728

Home sales drop 2.7 percent

Home sales drop 2.7 percent, Median sales price down 12.5 percent!!

This is according to the National Association of Realtors.

There is still uncertainty in the real estate market.  Great time for buyers, not so good for sellers.

 

http://finance.yahoo.com/news/Home-sales-drop-27-apf-2064841344.html?x=0&.v=4

And Now April Existing Home Sales are UP!!!

We saw that March had an increase from February sales.  Now April has seen a 13% increase from March sales.  There were 4783 existing home sales in April.  This is really good news.  Combine that news with the fact that the number of homes currently in escrow is close to 8000 means May looks to have at least as many sales as April.  I believe we will hit 5000 homes sales in May.  Right now Inventory is at 54716 with 49% of those properties sitting vacant.  We have just under 12 months of inventory.

I believe the bottom is here for Metro Phoenix.

[digg=http://digg.com/business_finance/April_Existing_Home_Sales_Up_Phoenix]

 

March Existing Home Sales are WAY UP!!!

It will be 15 days before you hear the “official” numbers from Arizona Association of Realtors, but you can say you heard it here first.  March existing home sales are up, WAY UP!!!  There were 4200 existing home sales in March which is an increase of nearly 34% over February’s sales.  The bigger news is that the number of homes currently in escrow is close to 7000.  This means that within the next 45 days or so most of these properties will be closing escrow.  If the number of homes in escrow stays consistently at or above about 6500 the monthly sales figures should remain brisk at over 4000 per month.  If all things continue along as they are now, April existing home sales will hit at least 4700.  Even though inventory is still hovering at 56000, months of inventory is now at 13 months and should shrink to 12 months by the end of April.  

Have we hit the bottom?  Can’t say yet, but we should know soon.

Stay tuned….

Lenders altering rules for credit

The article, Lenders altering rules for credit, from the Arizona Republic, reports that banks and lenders are rapidly changing their requirements for loans as home sales and prices fall and delinquencies and defaults rise. To adjust their standards, which many critics say grew too lax in the middle of the decade, lenders now are raising minimum credit scores, offering smaller loans and requiring detailed proof of income and assets.
For those who do meet the tightened criteria, a new plan announced Tuesday by the Federal Reserve to provide $200 billion to the financial-services sector should mean there is plenty of money available for borrowers and lower interest rates, said David Wyss, chief economist at Standard & Poor's. In early 2007, customers with credit scores in the low 600s would be able to receive a mortgage with no down payment and by simply stating their income. Today, a credit score below 680 is a red flag that subjects a prospective homeowner to higher rates and special fees.  Read the entire article to find out more.

Older Homeowners Cautioned On Use of Reverse Mortgages

The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years.

The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage -- an interest-bearing loan secured by the equity in a home -- can jeopardize their financial futures.

With a reverse mortgage, a bank makes payments to a homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out or dies. Reverse mortgages have high fees -- typically about 7% of the home's value -- and they make it difficult for homeowners to leave the property to their heirs.

Read the whole article at realestatejournal.com.

 

A Good Time to Buy a House If You Can Afford One

For years rapidly rising prices kept many first-time home buyers out of the housing market. But as home values slide further downward and interest rates hover at relatively low levels, it may be time to start looking to buy that first house.

That is, if you have a secure job, can afford higher down payments than were required a few years ago and can meet lenders' much stricter income and credit requirements.

Also, don't assume the seller is even in the right ballpark with his asking price. Most real-estate agents and sellers only look at comparable sales prices, or "comps," of similar homes in similar neighborhoods. Take a lesson from property investors and appraisers instead and check out prices from other angles as well.

 

To read the whole article go here

Arizona banks join 'Lifeline' to aid homeowners

White House effort will give homeowners at risk of foreclosure a 30-day reprieve.

 

If you are a homeowner and you have a loan with one of the following banks:

 

Bank of America, Chase, Citigroup, Countrywide Financial, Washington Mutual or Wells Fargo

 

AND you meet the following criteria you may be able to get a temporary reprieve from foreclosure proceedings:

 

□          90 days or more overdue on payments

□          have not filed for bankruptcy protection

□          don't have a foreclosure date set within the next 30 days

□          haven't vacated the property

□          haven't used your loan to fund investment property or vacation homes

 

Read the article at:

http://www.azcentral.com/realestate/articles/0213biz-lifeline0213.html

Stimulus plan also sparks housing market

This article from CNNMoney.com, reports that the economic stimulus plan announced by Congress last Thursday includes provisions that specifically address the mortgage crises. The package proposes lifting the dollar amount of loans that are eligible for purchase by Freddie Mac and Fannie Mae to $625,000 for 12 months, up from the current $417,000, and then raiding it to $725,000 permanently.  “This will have a big, immediate impact, especially in California where sales have been down most significantly,” said Lawrence Yun, chief economist for the National Association of Realtors (NAR). Yun added, “There’s a lot of pent-up demand in the market. This will boost confidence among these potential buyers, and some of the people on the fence will start buying.”

 

Read the whole article here.

 

October Stats

So, October stats came in last week and they are on par with September.  The month started off a little stronger at the beginning of the month, but slowed down toward the end of the month.  This is not all that unusual.  There were probably quite a few people that had some issues with financing in September that go pushed to early October.  October sales of existing homes came in at 3457 with an average sale price of $324,000.  Since getting a jumbo loan was and is considerably more difficult these days there is also no real surprise that the average sale price has dropped a bit.  We expect to see the average sale price climb as the mortgage situation gets straightened out.  Looking forward to November we see things staying about the same as October and September.  We expect the number of existing homes sold to be around 3400 for November.

RealtyTrac reports Q3 foreclosures up nearly 34%

An estimated 446,726 properties were hit with foreclosure filings during the third quarter, a 33.9 percent increase from the previous quarter and more than double the number a year ago, according to data aggregator RealtyTrac. Nevada, California and Florida posted the highest rates of foreclosure in the nation, followed by Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas.  Arizona is ranked 7th with a 203.1% increase over a year ago.  To read the whole article go here.

Oh Canada!

If you think the value of the dollar dropping is all bad, check out this article recently published in The Star, a newspaper out of Toronto. Canadians have some new found money to spend and some of them are looking South for some real estate bargains. Considering this is becoming the best buyer’s market in a long time, I can’t say that I blame them. I recently spoke with real estate broker Marg Scheben-Edey from Ontario. She definitely has seen an increase in interest from the snowbirds in her area. She has even posted about The Star article in her blog. I have personally noticed an increase in Canadians visiting Scottsdale looking for homes. This influx of money from outside the country may be a little shot in the arm for our sagging real estate market. I have talked to others who believe that we will continue to see an increase in snowbird activity from Canada as the Winter gets colder up North. Looks like we might have a good reason to thank our little brother North of the border.

October Sales Equal to September Sales

Considering how bad of a month September was for existing home sales, it is not surprising that sales in October were able to match September.  There were about 3420 existing home sales in October which is on par with September’s sales of 3430.  Typically, October is less than September, but there has really been nothing typical about the current market.  September was affected largely by the credit issues in mid-August it was not surprising to see those sales dip.  October saw the sale of some of those homes that would have sold in September if it weren’t for the credit crunch.  As credit issues subside we should see some increases in home sales.  Unfortunately, we are entering the two slowest months of the year for homes sales, November and December.  As of today there are just over 57,300 active listings in the ARMLS.  At the current sale rate we have over 16 months of inventory.  Of the active listings 48.6% or 27,842 properties are vacant.  Needless to say, until the number of listings declines considerably the market has little chance of improving.