Here is the monthly market report for June.

We continue to watch the Distressed Sales portion of the market, as this is the most volatile segment of the market.

June statistics showed a significant increase in the number of short sales that closed – a 15.3% increase over May of this year.  Traditional sales decreased by 5.1%.  Bank owned/REO sales remained fairly constant. Continue to monitor this whether you are a buyer OR seller, as it provides the information on trends in home sales that will impact your success.

Regular Sales - 39%
REO/Bank Owned Sales - 36%
Short Sales - 25%

Average Sales Price Analysis

Sellers:
June saw an average sales price of $188,568 – the highest since December of 2008!  This is an increase of over 14% since we saw our 36-month low of $165,298.  This is good news for sellers who are wanting to see an upward movement in the average price of homes. 

Buyers:
Buyers who are waiting for prices to drop need to be alert as to the trends.  For buyers who are waiting for prices to drop, this trend shows that for the past 6 months, average prices have been higher than our 36-month low in 2009.  Investors and savvy buyers continue to understand the value the current market offers.  Combined with the current interest rates and financing options available to them, they are making decisions that have allowed them to take advantage of the affordability the current market continues to provide. 

Expired & Cancelled Listings Analysis

Sellers:
The month of June saw the highest number of expired and cancelled listings since June of last year! This means fewer homes are remaining on the market, creating less potential competition for active sellers.  However, it also means more sellers gave up.  This could be the time of year, it could be homes that went into foreclosure, or unsuccessful short sales.  Serious sellers need to pay attention to all of the numbers this month … longer days on the market, the average sales price, and more homes remaining on the market – this means sellers, more than ever, need to pay careful attention to how homes are priced so they can be the first choice of buyers.

Buyers:
For buyers, this means that there are 4,603 fewer homes to consider.  This means buyers will have to be more patient with homes still active AND be prepared to act quickly on available homes.  Continue to watch this trend, as this, combined with price, days on market, and list to sales price ratio are an important indicator of what buyers need to do in order to be successful in closing on the home of their dreams.

The market we are in today is in a constant state of shift, and month to month, I will keep you updated on the numbers that are having the most significant impact on the market.  The information I provide here is for the entire Phoenix area, but is can be narrowed down to your neighborhood if you would like me to get that for you.  I keep up with numbers, so if I can provide you with any other information, please do not hesitate to call.

Top 10 Fastest Growing U.S. Counties

The fastest-growing counties in the country, according to the U.S. Census Bureau, are mostly in suburban areas outside of urban centers.

The census numbers govern the distribution of more than $400 billion in federal money each year.

Here are the 10 fastest-growing counties:

1. Kendall County, Ill. (Chicago), 92.1 percent

2. Pinal County, Ariz. (Phoenix), 89.7 percent

3. Rockwall County, Texas (Dallas), 88.9 percent

4. Flagler County, Fla. (Jacksonville), 83.9 percent

5. Loudon County, Va. (Washington, D.C.), 77.6 percent

6. Forsyth County, Ga. (Atlanta), 77.4 percent

7. Lincoln County, S.D. (Sioux Falls), 70.7 percent

8. Paulding County, Ga. (Atlanta), 67.4 percent

9. Williamson County, Texas (Austin), 64.3 percent

10. Douglas County, Colo. (Denver), 64 percent

4.25% 30-Yr Fixed Mortgage Rate Available to Well-Qualified Consumers


Never before have mortgage rates been this low. 30-yr fixed mortgage rates are at 4.25% for well-qualified consumers paying a standard .07 to 1 point origination fee shows FreeRateUpdate.com research of wholesale lenders' rate sheets for brokers. 15-yr fixed mortgage rates, also at a record low, are at 3.75%.

A $250,000 30-year fixed mortgage at an interest rate of 4.25% has a monthly principal and interest payment of just $1,229.85 per month.

FHA mortgage rates today are nearly identical to those of conforming mortgages. Today's FHA 30-yr fixed rate is also 4.25%. That being said, MI and other FHA fees make the APR (closing costs) higher on an FHA loan, even with the same note rate.

Today's jumbo 30-yr fixed rate remains at 5.25%. Jumbo mortgage rates are also at a record low.

Wells Fargo is advertising a conventional 30-yr fixed-rate of 4.625% today, with an APR of 4.812%. (source: Wells Fargo Website)

Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, were up significantly yesterday, helping to stabilize mortgage interest rates at their current record low. It's possible we could see even lower rates as the week goes on.

Interest Rates Move Lower, But Is It Time To Refinance?

Answers To Commonly Asked Refinance Questions

With the recent down turn in interest rates to the lowest we have seen in years, many home owners have begun to contemplate the process of refinancing. Borrowers will find slightly tougher lending standards and decreased home values as their biggest barriers to actually being able to take advantage of lower rates. Once you are qualified however, there are other questions that are looked in determining whether now is the time to refinance. Below you will find answers to some of the most common questions we receive in regard to refinancing into a new home loan.

Should my new rate be 2 percent lower than my current rate to make it worthwhile?

The quick answer to this is, no. You do not have to wait until mortgage interest rates drop by 2 percent before you consider refinancing your mortgage.

 

The decision to refinance your home is dependent on many things, including how long you plan to be in the house, how much lower the interest rate will be on your new loan, the closing costs for the new loan, your equity position in the home and whether you plan to do a cash-out refinancing.

 

With a regular refinance, you're trying to take advantage of lower interest rates to lower your monthly payments. If you have enough equity in your home, you may even have a side benefit of being able to stop paying private mortgage insurance.

 

In order, to take advantage of a lower rate you'll have to close on a new loan and pay the closing costs associated with that loan. This is true even if you opt for a no-cash or low-cash closing. With a no-cash or low-cash closing, the costs still are there; they just are paid for either with a higher interest rate or are included in the principal balance of the loan. (There's truly no such thing as a free lunch.)

 

If you don't plan on being in the house very long, then the lower payments associated with the refinancing won't cover these closing costs. So you must weigh the options, but the bottom line is that you do not need a 2 percent interest rate deduction to make refinancing worthwhile.

 

Should I refinance with my current lender or use the services of a mortgage broker?

 

The question of using your existing lender versus a mortgage broker is one that many homeowners looking to refinance have. On one hand, the borrower believes that having an established relationship and paying their mortgage on time will allow them to receive better terms and fees for their lender to keep their business, rather than lose it to a refinance. This same notion is often also perceived by many borrowers in relation to a bank or credit union that they may have a relationship with as well. The unfortunate situation in today's economic environment is that this does not necessarily mean better rates and fees.

 

A mortgage broker has the ability to shop the mortgage around for you, especially in an environment of lower rates and find the best terms on a mortgage for your specific situation. This will allow you in the end to see all possible options available and not just the options available at one lender. It is however important to make sure you are dealing with a reputable mortgage brokerage with professionals such as Strategic Mortgage.

 

What is the difference between the rate and the APR?

 

Another common question received is the difference in the actual interest rate and the APR. The annual percentage rate adjusts the mortgage interest rate to reflect estimated closing costs, including points paid at closing and mortgage insurance.

 

The Truth in Lending Act requires lenders to provide the APR when advertising a mortgage loan and provide prospective borrowers with the loan's APR upon request. APRs aren't perfect, since closing costs are estimated and the lender can round off by up to a quarter-percent.

Therefore, the APR is not your actual interest rate paid on the loan, but factors in the cost of obtaining a loan and lists that as an interest rate as well on the loan disclosures.

 

If I have low rate on an adjustable rate mortgage should I refinance to a fixed rate now?

 

Many homeowners with lower rates on their adjustable rate mortgages have held off refinancing to fixed rates as interest rates have hovered around 6%. Now with rates a full percentage point lower, many homeowners are wondering if now is the time to refinance into a fixed rate mortgage for the long term. The answer, more often than not, is yes.

With interest rates at near historic lows, now may finally be the time to refinance to a fixed rate. Many homeowners have been content to take a wait and see approach and while some believe that rates may decline lower, if housing and the mortgage market has taught us anything, it is to expect the unexpected. Now may be your best opportunity to lock into a fixed rate for the long term and refinance out of your adjustable rate mortgage

The Arizona Market continues to be RED HOT with records sales for the second month in a row. There were 9,003 closings in April and 9,190 closings in May. These are both record months that were only surpassed by the sales in 2005. Now that the tax credit incentive is over, it will be interesting to see how the market reacts without government incentives to artificially stimulate the housing market. Typically our strongest months in AZ are May - July (people like shopping when its hot I guess!)

>>37% of the sales were REO (Bank Owned) and 21% of the closings were short sales. We classify these as Distressed Sales. This means that 42% of the closings were Equity Sellers. It is good to see the number of Equity Sales increase as it indicates a return to what would be classified as a “normal market”. We are still a little ways off from a "normal market" - but it is good to see we are in the right direction.

It is also interesting to know & look at what the actual ratio is from the asking/list price to the actual sales price. With everyone saying its a "buyers" market you would expect this to be low. In reality sellers are getting almost their full asking price. If the home is priced under $200K sellers are getting on average 99% of the asking price. If it is over $200K they are getting on average 97% of the asking price. If the home is priced right (fair market value) sellers are getting about full price.

If you would like to see a full report of the sales over the last 10 years please let me know & I can send it to you.

Please call or email me if you have any questions about buying or selling a home. Even if you are upside down on your mortgage I have options I can provide for you & information that might help.

An analysis of home sales in the Phoenix metropolitan area shows year-over-year price increases in some segments for the first time in three years.

Tuesday's report from the W. P. Carey School of Business at Arizona State University showed that both the lower end of the market and the foreclosure segment posted price increases in March.

Overall though, the ASU-Repeat Sales Index shows that prices for all sales dropped just 3 percent in March compared to a year earlier. In February that number was 7 percent, and in January it was 9 percent.

ASU Professor Karl Guntermann says the entire real estate market is finally showing steady improvement.

Preliminary figures show the median price for single-family homes sold in March was $132,000, up from $125,000 in January.

The Distressed Property Analysis continues to be an extremely important part of the market report, as it shows the percentage of sales that were bank owned/foreclosed,
short sales, and regular sales.  In 2010 we will continue to watch to see the shifts in the type of homes being sold.

A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home.  Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure. 

December saw a drop of 7% in “regular” home sales in laceName w:st="on">MaricopalaceName> laceType w:st="on">CountylaceType>, a 5% INCREASE in short sales, and a 2% increase in bank-owned/foreclosure sales.  This is most likely a reflection of Banks desires to make the Short Sale process quicker and more efficient.  Buyers and sellers alike need to continue to monitor these ratios to determine where buyers are spending their money.

Pending Sales Report Analysis:

Sellers:
Wow!  December saw an increase in the number of pending sales of nearly 57% over the month of November!  AND, this is an 83% increase over December of last year!  This means that buyers are very active and that sellers are having success in negotiating offers with those buyers.  We will continue to monitor this statistic to see what happens with home sales in the next 45-90 days.

Buyers:
Buyers should feel comfortable knowing that thousands of other buyers are finding homes AND making a commitment to purchase a home.  With prices remaining very affordable and interest rates at very attractive rates, it is very clear that buyers are taking advantage of the current market.   Buyers have not been this active
since April of 2009 … continue to work with your real estate professional to make sure you are benefiting as well from the fantastic opportunities available to you.

The market we are in today is in a constant state of shift, and month to month, I will keep you updated on the numbers that are having the most significant impact on the market. The information I provide here is for the entire Phoenix area, but it can be narrowed down to your neighborhood if you would like me to get that for you.  I keep up with the numbers, so if I can provide you with any other information, please do not hesitate to call.

Top 10 Home Buying Mistakes That Can Cost You

Mistake #1: Waiting for the market to improve or not buying at all

No one can predict precisely where the market is going, so trying to time your home purchase with the bottom of the market is futile. If you're financially and emotionally ready to be a homeowner, it's always a good time to buy. Just think: all the time you spend procrastinating on purchasing a home, you could be building equity, getting tax deductions and enjoying the many other benefits of homeownership!

Mistake #2: Making an offer without contingencies

Having a back-out plan is a must for smart home buying. If the home has an irresolvable flaw, it doesn't appraise for the purchase price, or your lender refuses to fund your loan, having contingencies on your contract gives you the right to cancel the transaction. Think about it this way: would you spend $100 in a store that doesn't have a 30-day return policy? If your answer is no, you wouldn't want to put hundreds of thousands of dollars on the line without the right to bail.

Mistake #3: Not reading the fine print

If you did your homework, you had your trustworthy real estate attorney review all your paperwork and discuss it with you so you don't get a nasty surprise at closing. Let's face it -- you won't have time to read that six-inch stack of legal documents at the closing table. Fortunately, there are a select few documents and items that are truly critical, and you can request a copy of these in advance. This gives you time to review them and ask questions before closing.

Mistake #4: Forgoing a home inspection

Even if a home looks flawless, it's a mistake to assume that it's actually problem-free. All homes have defects -- even brand new ones -- so getting a professional inspection before making the commitment to buy is crucial. Be sure to attend the inspection so the inspector can explain any issues.

Mistake #5: Falling for love at first sight

Buying the first house you like is kind of like marrying the first person you go on a date with: not necessarily a good idea. If you don't shop around and see what else is out there, you could miss out on a good deal or potentially regret your purchase. While you don't need to visit every home in the neighborhood, you should compare at least three homes before you make a decision to ensure that you're getting the right house at the right price.

Mistake #6: Buying a house you can't afford

Just because a lender is willing to loan you a fortune doesn't mean you should take it. Buying more home than you can afford can quickly lead to financial trouble. As a rule of thumb, your mortgage payment should be less than 28 percent of your gross monthly income. Besides your mortgage payment, be prepared for the additional costs of homeownership, such as insurance, property taxes, utilities and maintenance. You may want to scale back the size of the home you're looking for in order to bring the whole package in line with your budget.

Mistake #7: Buying a foreclosure or fixer-upper without doing your research

Some homebuyers are so set on finding a bargain, they overlook the fact that buying a home that needs repairs can be a stressful and expensive endeavor. Before buying a fixer-upper, get estimates on any necessary repairs and renovations and make sure they will pay for themselves in increased property value. The foreclosure market is also full of opportunities, but it's important to be aware of the potential pitfalls before buying a foreclosed property.

Mistake #8: Not researching the neighborhood

What good is having your dream home, if you don't like the community where it's located? Before shopping for a home, shop for a neighborhood. Make sure it's a good fit for your lifestyle -- figure out how long you want your work commute to be, how close you want to be to amenities like shopping and nightlife, and which school districts are the best. Even if you don't have children, living near good schools raises your property value. Visit the neighborhood several times and at different times of the day. The biggest incentive for finding a quality community: a great neighborhood will increase your home's value, while a bad one will drag it down.

Mistake #9: Thinking short-term

The house you purchase should be a place that feels like home to you and your family, but it's important to remember that it's also a huge investment. When shopping for a home, it pays to think about resale down the road. Search for homes in sought-after locations, and look for features that future buyers will want, such as central air conditioning and lots of storage space.

Mistake #10: Not getting pre-approved before house hunting

Why get your hopes up looking at $500,000 homes, when you can really only afford a $300,000 home? Before you start house hunting, narrow down your price range by getting pre-approved. Shop for a lender or mortgage broker you can trust. The mortgage pro will review your credit, income, assets and debts, and recommend a mortgage with monthly payments that fit your budget. The result is a good faith estimate, a document that spells out the likely terms of your loan, including the interest rate and closing costs. Not only does this let you know how much house you can afford, it also lets sellers know that you're serious about buying.

Here are a couple of charts that I thought would be of interest to you.  The data is updated through November.  The first is a Distressed Property Analysis. 

This market segment continues to be a major factor in the Real Estate market today, and will continue to be an important trend to watch as we move forward to see if there are any shifts in the type of homes being sold.

The chart shows the percentage of sales that were bank owned/foreclosed, short sales, and regular sales. 

A bank owned/foreclosure home is one that the seller no longer owns – it has been taken over by the lender(s) who had a note on the home.  Short sales are homes where the seller is negotiating with the bank to “forgive” a portion of the debt in order to avoid foreclosure. 

For the second month in a row, statistics showed a significant increase in non-distressed home sales … a 4% increase.  Short sales remained at the same percentage (20%), and bank-owned sales dropped by 4%.  As rumors of bank-owned properties entering the market after the first of the year play out, this will become even more important to watch.

Another segment of the market that bears watching is the Pending Sales Analysis, and how it affects both sellers and buyers.  I include it here because of the significant decrease in Pending Sales in November.

Sellers:
Pay attention – November saw a 20% decrease in the number of pending sales over the prior month.  This is the 7th month in a row, that the number of pending sales has decreased AND is the lowest this number has been since December of last year. Contributors definitely include the buyer credit deadline that just passed, shrinking inventory, the seasonality of home buying, and more homes remaining as Active With Contingency until they close.  Since homes usually take 45-60 days to close after they go pending, it will be very important to continue to monitor the impact on closed sales over the next few months!

Buyers:
Buyers have been given a reprieve with the extension and modifications in the home buyer credit.  As a result, this just might be the perfect time to look for a home – the holidays usually mean less competition, and buyers may be able to find the home of their dreams before buyer activity picks up again after the first of the year.

The market we are in today is in a constant state of shift, and month to month, I will keep you updated on the numbers that are having the most significant impact on the market. The information I provide here is for the entire Phoenix area, but it can be narrowed down to your neighborhood if you would like me to get that for you.  I keep up with the numbers, so if I can provide you with any other information, please do not hesitate to call.