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Janaury Phoenix Market Statistics
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
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
Top 10 Home Buying Mistakes
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.
Phoenix Real Estate Market Statistics for December
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
Great Article on Short Sales
Here is a great article that appeared in the Arizona Republic last week. Please give us a call if you know of anyone who could use our help in buying or selling a home, and remember that Short Sales are part of the Real Estate landscape today, and are not going away any time soon. As you will read in the article below, there were 1,448 homes under short sale contract in January, and 9,343 in October!
With encouragement from government, mortgage firms speeding up short sales
Short sales may be a new best option for Valley homeowners struggling to avoid foreclosure.
Home-loan modifications, endorsed by the federal government, are most borrowers' first choice when they fall behind on their mortgage payments because of a drop in their income. But short sales are also part of the federal housing plan to slow foreclosures. Unlike their slower-than-expected actions on loan modifications, lenders are now moving quickly on many short-sale requests in the Phoenix area.
New figures for the Valley show a record number of short-sale deals in various stages of completion. Pending short sales, including all of the deals under contract, reached 9,343 in October, compared with 1,448 in January, according to real-estate analyst Mike Orr. Almost 40 percent of the homes currently for sale in the Phoenix area are properties homeowners are trying to sell to avoid foreclosure.
Short sales, which require lender approval, allow homeowners to sell their homes for less than they owe their lenders. Borrowers still lose their homes, but the deals are better for their credit records and often their morale because they are not evicted.
Short sales are also better for neighborhoods because the houses are not abandoned as is often the case when a lender forecloses and tries to resell. Buyers are finding great deals on short-sale homes and in many cases opting for those homes over foreclosure properties because they are in better shape.
"The demand for short-sale properties from buyers is clearly strong," said Orr, who publishes the "Cromford Report," a local daily online real-estate update. "We anticipate that lender-owned properties (homes taken back through foreclosure to be resold) will continue to decline. We expect to see short sales increase."
Market watchers are advising more borrowers falling behind on their mortgages to consider short sales in order to slow the potential next wave of foreclosures.
"Short sales have a net result of everybody winning when compared to a foreclosure," said Randy Kutz, a Phoenix-area expert on the deals who recently worked with Arizona Treasurer Dean Martin to hold a series of seminars on why short sales are important to the economy's recovery.
"Even if you avoid foreclosure with a loan modification, many homes in Arizona will not recover value fast enough to allow struggling homeowners to sell for many years," Kutz said. "At some point, the same homeowners who are getting modifications now will likely need a short sale in the future."
Streamlined process
Short sales have been around for decades, but until recently, the deals were slow and difficult to do. Most homeowners, real-estate agents and lenders tried to avoid short sales because of all the paperwork and time they involved.
A year ago, borrowers often waited at least three months to hear back from lenders on potential short sales. The deals would fall through as buyers, who didn't want to wait, walked away.
Now, lenders are being encouraged and paid by the federal government to expedite short sales for homeowners who qualify for help from the federal housing plan but aren't candidates for loan modifications. Some Phoenix homeowners are now receiving approval in days.
"We are starting to see short-sale approvals come in much quicker from some lenders," said Bob Hertzog, a broker with Phoenix-based Summit Home Consultants. "I received an approval in less than 24 hours last week."
Selena Riviere recently was able to sell her Phoenix home in less than a month through a short sale.
"I had heard they were difficult, but when I got divorced, I couldn't afford my $2,000 mortgage payment anymore," said Riviere, who tried to obtain a loan modification for six months before settling for a short sale. "What helped me was having someone who knew the process and made it pretty easy for me."
Many homeowners who apply for loan modifications are still waiting three months to hear back from their lenders and can fall farther behind in their mortgages as they wait.
Hertzog said each lender handles short sales differently. He said it's important to find out what a lender requires from a short sale before even starting to look for a buyer or listing the home for sale.
Homeowners can contact their lender about a short sale. However, to close the deal, a homeowner has to have a buyer willing to purchase the house for its current appraised value.
Part of the seminars Kutz and Martin hosted educated Valley real-estate agents on changes in short-sale methods so such deals can be expedited and more foreclosures avoided.
"Navigating a short sale is much easier than it was a year ago," said Diane Watson of the Scottsdale office of Realty Executives. "More real-estate agents are prequalifying sellers for short sales before they list their homes."
She recently received approval for a client's short sale within a week of submitting the paperwork.
Lenders have begun to preapprove prices for homes eligible for short sales, which cuts weeks out of the process. The preapproved prices are based on current appraisals of the home. Also, lenders have added staff in their short-sale divisions and begun paying slightly higher real-estate commissions on shorts sales to entice more agents to put in the extra work it takes to close the deals. Some banks have launched online systems for short-sale applicants.
Jay Luber, a mortgage broker with Phoenix-based Galaxy Lending, said banks are also doing a lot more now to make short sales work.
"In most cases, banks will pay for some closing expenses," he said. "When an appraisal comes in lower than expected, I have found lenders meeting the lower appraised value on short sales to make the deals work."
Better than foreclosure
Foreclosing on a home is a costly process for lenders and an emotionally and financially draining event for homeowners.
It costs a lender more than $10,000 to foreclose on a home in Arizona. If no one purchases the house at the legally required foreclosure auction, then the lender typically has to spend more than $30,000 to fix it up and resell it.
Short sales still result in a loss for the lender. Most short-sale prices now are at least 30 percent below what is owed on the home, due to the Valley's drop in home values during the past two years.
The average price of homes sold through short sales in October was $87.55 a square foot, according to the "Cromford Report." The average price of homes taken back through foreclosure resold by lenders was $69.45 a square foot. The average price per square foot of regular home sales was $114.18.
Short sales cost thousands of dollars less in legal costs to process than a foreclosure. Also, through the federal housing plan, lenders can receive at least $1,000 for every short sale they complete to keep a home out of foreclosure. Homeowners who go through with short sales to avoid foreclosure can receive up to $1,500 from the government through the federal housing program.
Riviere, who is a nurse at a senior living center, would like to try to buy another home in a few years.
"I never would have bought such a large home if I knew I was going to be on my own," she said. "I want to buy a small condominium close to my job next. We'll see if the short sale was really better for my credit then."
Borrowers also benefit more from short sales because mortgage giant Fannie Mae requires them to wait only two years to buy another home, or even less than that if they were not late on their payments. People who lose homes to foreclosure have to wait five years to buy again.
More homeowners are now trying to sell before they fall behind on their mortgages. Almost half of the Valley homes listed for sale through short sales are owned by people who haven't yet received notice their lender has started foreclosure proceedings.
"The huge increase in short sales is because many homeowners are recognizing that they either do not qualify for a modification, or even with a modification they still cannot afford their mortgage," said Travis Hamel Oslon of Loan Resolution Corp. "A growing number of people are starting to understand that a short sale is their best option."
Ahwatukee Real Estate Numbers for October, 2009
If you would like more specific information for your particular neighborhood - anywhere in the valley, please give us a call and we would be happy to help you.
Janet
| Current Month | Last Month | Last Year | |
| October 2009 | September 2009 | October 2008 | |
| # Active Listings | 550 | 606 | 800 |
| # Sold | 112 | 118 | 85 |
| Median List Price | $437,355 | n/a | n/a |
| Median Sold Price | $235,609 | $272,326 | $271,866 |
| Days on Market | 97 | 117 | 108 |
| Monthly Supply of Inventory | 6.5 | 5.4 | 12.5 |
| Ave Price per Square Foot | $117.40 | $123.46 | 140.47 |
Distressed Property Analysis and Days on Market Analysis Phoenix
Here are a couple of charts that I thought would be of interest to you. The first is a Distressed Property Analysis. It was not my original intention to send this data out this month, but there was such a dramatic change in the number of non-distressed properties since last month, I decided to include it so we could keep an eye on it. This continues to be a major factor in the Real Estate market today, and will be an important trend to watch as we move forward with this market 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 for October.
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.
October statistics showed a significant increase in non-distressed home sales … a 12.9% increase. Last month Bank owned properties and Short Sales comprised 77% of the market, and in October it dropped to 64%. This could be attributed to improper coding in the MLS as well as any builder inventory that is being closed, or it could be a shift in the market. I will continue to watch this trend to see how monthly sales are changing from month to month.
The next statistic I want to take a look at is Days on the Market. This number represents how long properties are on the market before they sell. We'll look at how this number affects both Sellers and Buyers.
Sellers:
Pay attention!!! For the 7th month in a row, the average days on market has decreased. October saw this drop an average of 3 days! Considering the length of time that short sales can take, this is definitely a statistic to watch. Some banks do appear to be responding more quickly to short sale requests, resulting in those buyers staying in the transaction. We know, however, that there are still thousands of foreclosure properties that have been “on hold” with the banks (not released to the market), and we are still waiting to see when and how those properties will be introduced to the market and what impact those properties will have. For sellers who need to sell in this market, it is important to remain competitively priced and take advantage of the current buyer activity in the marketplace.
Buyers:
This number is important to buyers because it means homes are selling much more quickly – that happens when there is more buyer interest and competition for properties. As a result, the impact for buyers may mean paying a higher sales price and receiving fewer concessions from the seller for inspection items and closing costs. Before the extension of the Buyer Tax credit, buyers were very busy making sure they were taking advantage of the $8,000 credit before the deadline of October 31st.
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
Congress extends the Real Estate Tax Credit - and Expands it!
If you have any questions , or know someone who could benefit from this program, please give me a call. This program has been hugely popular, and is responsible for a lot of the home sale resurgence in Phoenix right now.
Trisha Bonnell Group 3rd Annual Halloween Street Party. Saturday October 31st from 3-6!
Just North of East of
Home Sales rise in September
In an effort to keep you updated on what is going on in the Real Estate Market, here is an article that the Arizona Republic published on Friday.
Please call us with any questions, or if we can help you with any of your Real Estate needs.
Home sales rise in Sept., beat forecasts
WASHINGTON – Home resales rose in September to the highest level in more than two years, beating expectations, as buyers scrambled to complete their purchases before a tax credit for first-time owners expires.
The National Association of Realtors said Friday that sales rose 9.4 percent to a seasonally adjusted annual rate of 5.57 million in September, from a downwardly revised pace of 5.1 million in August. Sales had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters.
The median sales price was $174,900, down 8.5 percent from a year earlier, and slightly lower than August's median of $177,300.
"There's a mini-boom going on in the housing market," said Thomas Popik, who conducts a monthly survey of real estate agents for Campbell Communications, a research firm.
The inventory of unsold homes on the market fell about 7 percent to 3.63 million. That's a 7.8 month supply at the current sales pace, and the lowest level since March 2007. Nationwide sales are up nearly 24 percent from their bottom in January, but are still down 23 percent from four years ago.
Sales rose around the country, especially in the West, where they grew 13 percent from a month earlier. Foreclosure sales are booming in cities like Los Angeles, San Diego and Las Vegas.
First-time homebuyers and investors are snapping up those homes and taking advantage of low mortgage rates. These buyers can also take advantage of a tax credit of 10 percent of the sales price, up to $8,000, if the sale is completed by the end of November.
The tax credit is so important to some buyers that they are adding a clause to their contracts, allowing them to back out if the sale doesn't close by Nov. 30.
While home sales and housing construction have risen steadily after hitting bottom earlier this year, most economists believe that the worst isn't over for home values.
Prices could see a double dip because rising unemployment is causing more foreclosures. The jobless rate, currently at 9.8 percent is expected to rise as high as 10.5 percent next year, causing more people to be unable to afford their monthly mortgage payment.
"There's more supply that's going to come into the marketplace," said Stan Humphries, chief economist at real estate Web site Zillow.com. "That additional supply will outpace demand."
With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.
Realtors and homebuilders are pressing lawmakers to do so, arguing that the tax credit is crucial to get the housing market back on its feet.
"We are not there in terms of removing the consumer fear factor," said Lawrence Yun, the Realtors' chief economist.
One potential roadblock, however, emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.
Is the Phoenix Real Estate Market beginning to recover?
Here is a great article that appeared in yesterday's paper. Phoenix Real Estate may be recovering......
Worst may be over for housing in the Valley
Signs of recovery starting to surface on the outskirts
Valley homeowners have watched their property values plummet with a sense of shock and horror during the past year. But the gut-wrenching drop could be over as early signs of the market finally hitting bottom have appeared in some areas.
On Sunday, The Arizona Republic's latest Valley Home Values report will show prices dropped in every Phoenix-area ZIP code during the first eight months of 2009. A closer look at the numbers, though, reveals newer communities on the outer edges of metropolitan Phoenix are seeing smaller declines in home prices this year compared with 2008.
Those areas, including neighborhoods in Buckeye, Gilbert, Queen Creek and Surprise, were the first to experience the housing market's collapse. Those former housing hot spots could be the first to recover.
Older areas closer to downtown Phoenix, including many central Phoenix neighborhoods, suffered the biggest home-price hits this year.
Most of these areas were the last parts of the Valley to see housing values tank, but they could bounce back more quickly because many of the neighborhoods are popular with people who want to live closer in.
Positive signs
And there are signs the Valley's housing market has begun to inch toward a recovery.
Foreclosures have dropped during the past two months. Home sales are well ahead of last year's pace. Home prices are slowly ticking up.
"Valley home prices hit bottom in April," said Mike Orr, who publishes the "Cromford Report," a daily analysis of metropolitan Phoenix's home-sales data. "Foreclosures have peaked. The market is struggling to establish a clear direction."
Orr said the Valley's affordable-housing markets, especially those farther out, are seeing gains in home prices now.
But prices continue to fall in the most expensive neighborhoods.
The latest figures on foreclosure rates, home sales and home prices may be early indicators the housing market is starting to come back.
Foreclosures
Valley foreclosures fell 29 percent in September from the record 5,300 reached in July. Pre-foreclosures were also down last month, but there were still 7,857 homes that lenders started to foreclose on.
This is the key gauge of the health of metro Phoenix's housing market.
As long as lenders continue to foreclose on Valley homes and resell them for half of what they sold for a few years ago, home prices will fall.
Check out the foreclosure-resale chart in Sunday's Valley Home Values package to see how many foreclosure homes sold in your neighborhood this year.
Home sales
In June, Valley home sales buoyed by foreclosure-home resales rivaled monthly records set during the boom years. Although sales have slowed a little in the past few months, 85,000 homes have sold across metro Phoenix so far this year. That's 50 percent ahead of last year's pace.
There's a positive indicator in the slight drop in recent home sales. Fewer of the sales are foreclosure homes.
Earlier this year, foreclosures homes accounted for almost 70 percent of all Valley home sales. Slightly less than half of the home sales in September were foreclosure homes.
Home prices
The median price of a Valley home has ticked up to $135,000 after falling to a 10-year low of about $120,000 six months ago.
The current median is half of what the record median high price for the market was in 2006, but it is heading in the right direction. Valley home prices started falling in mid-2007 but didn't plummet until late in the year when lenders placed thousands of foreclosure homes on the market all at once and began accepting low-ball offers.
The supply of foreclosure homes for sale in the Valley has also fallen, another good sign for the market. There currently are about 4,500 foreclosure homes listed for sale, compared with more than 20,000 in February.
The federal government's plan to push more lenders to restructure the mortgages of borrowers facing foreclosure could help ensure foreclosures don't soar again.