Real Estate Information

Monday is Halloween, when ghouls and goblins go on the prowl. If you are looking for a screaming good time, why not check out one (or more, if your nerves are up for it!) of these Valley haunted houses? Be terrified at your own risk, don’t say you weren’t warned! Please visit the events’ websites for information on admission, hours, special instructions, etc.

Chamber of Fear Haunted House – 11340 W. Bell Road. Promising “The Fright Of Your Life”, this fright fest was ranked #1 by the Arizona Republic.  Located in an air-conditioned facility, the scares are doled out even in inclement weather. Their website alone is enough to cause nightmares! For more information visit http://chambersoffear.com

AZ Fields of Screams – 5726 N. 75^th Ave. This haunted corn maze is inhabited by things that go bump in the night, being that is was planted over a cemetery! The inhabitants of this frightfest are waiting for you… visit http://www.azfieldofscreams.com for more information.

For those who prefer their ghosts a little more true to “life”, The Ghosts of Phoenix are touring the Hotel San Carlos. This famous downtown Phoenix landmark is allegedly haunted and was featured on “Weird Travels” on the Travel Channel.  The hour-long walking tour will visit areas where paranormal activities have been reported and accounts from past guests and staff members will be shared. There are no special effects or staged activities on this tour. Guests are allowed to bring cameras to capture possible supernatural events that might happen. Visit http://www.ghostsofphoenix.com for more information.

Fear Farm – 2209 N. 99^th Ave. Billing themselves as “the most terrifying experience in Phoenix”, this festival of fear offers several horrifying options, from an un-haunted corn maze to an extreme haunt. Visit their terrifying website for more information; http:// http://www.fearfarm.com

With a year to go before presidential elections, President Obama is announcing a new plan to assist homeowners who owe more on their mortgages than their homes are worth. The Home Affordability Refinance Program, or HARP, is being revamped to help homeowners  who are underwater but have remained current on their mortgages by refinancing their loans at lower costs and lower interest rates. The newly re-vamped HARP program will only apply to mortgages backed by Fannie Mae and Freddie Mac. The previous incarnation of HARP, designed to assist homeowners to refinance mortgages up to 125% of the loan’s amount, has received widespread criticism for being ineffective. Approximately 1 million homeowners had been assisted, but this number is just a drop in a very big bucket. The newly retooled HARP will bypass Congress with hopes that doing so will speed up the program’s ability to preserve home ownership for families who are facing a financial crisis.

Is this for real, or is it election year posturing? I think it’s great that the administration is thinking about how to help folks who aren’t in trouble yet, but who are just a job loss away from losing the homes they worked so hard for. However, property values have plummeted so much since the bubble burst that many homeowners find themselves with mortgages that are two and more times as much as the market value of their homes. If the principle isn’t reduced to levels closer to the home’s market value, is it reasonable to think that homeowners will line up to refinance mortgages that still leave them underwater for many years to come? In places like Arizona where property values are at least half of what many homeowners owe on a mortgage many homeowners will opt to walk away and start fresh with a new home in as little as two years versus staying in their over-leveraged home for a decade or more until they have equity again.

Proponents of the program say it would help boost the economy by relieving financial stress on homeowners and reducing their mortgage so that they would have more expendable money. But economists disagree on the number of people who would actually benefit. Some say it wouldn’t affect more than a 1 million households, a relatively small number given that more than 6 million homeowners are facing foreclosure or have delinquent payments. Others say the restrictions are too stringent and automatically cut out those under-water homeowners who have bad credit.

It is hard not to view this new strategy as yet another band aid on a very deep wound. Millions of homeowners have been foreclosed on going on five years now and 12 months out from an election this is the game plan? The administration had a bigger stick to help fix this mortgage crisis when it doled out billions of taxpayer dollars to the banking industry. At that time, the "no-strings attached" bailout was a fatal blow to any real reform and assistance for main street.

It’s state fair time, and the foreclosure rates have been just like a midway roller coaster ride these past few months. After a period of generally stable rates of foreclosure from month to month, the number of new foreclosure actions for August jumped up quite noticeably. Everyone held their breath when the September numbers came out, and let out a sigh of relief when foreclosure rates dropped back to levels similar to what they were before August.

Experts aren’t relaxing too much though. There are predictions that the roller coaster ride isn’t over yet, and we can expect to see similar rises and falls in foreclosure rates as banks continue to work through problems they’ve been facing in how to deal with the large numbers of defaulting loans they’re experiencing.

Foreclosure isn’t the only option available to troubled home owners though. If you or someone you know is facing the possibility of foreclosure, give me a call or drop me an email and let’s talk about what your options are.

A survey commissioned by FICO (the folks who bring you the most common credit score used in the United States) doesn’t give much hope for the short term future of credit and housing in the country.  The majority of risk managers surveyed feel that we will see elevated delinquencies by borrowers for at least five years as well as stricter requirements for borrowing money. The sluggish housing market was quoted as a major drag on recovery, with a large number feeling that it will be at least nine years before property values return to their pre-bubble levels. Since the largest investment most people tend to have is their homes, this drop in value represents a huge chunk of lost value. This latest study shows a dramatic shift in attitude among the respondents from the optimism late last year and earlier this year.

Although this survey comes across as all doom and gloom, we need to keep in mind that it doesn’t indicate that things are going backwards, but that they aren’t going forwards as quickly as was hoped and was once thought. However, to those who are delinquent on their mortgages things might look bleak but there IS help. If you or someone you know is facing foreclosure, give me a call or send me an email and let’s talk about the help that is available.

Despite the wild roller-coaster ride that Wall Street has taken us on recently, the Valley real estate market continue a slow but steady  road to recovery. The number of active listings continued creeping downwards (as well as the number of days on the market a listing takes to sell), while the average sale price actually increased a bit. With interest rates at historic lows, it appears that buyers are taking advantage of this attractive financing. The increase in average sale likely is due at least in part to the fact that an increasing number of buyers are competing for a decreasing number of competitively-priced listings. Multiple offers aren’t anything new in our post-bubble market, but it hasn’t translated in to an increase in sale price like what we used to see in years past. It is possible that enough buyers are entering the market now that their competition for listings is increasing prices. It will be interesting to see if prices continue an upward climb, or if this month’s numbers were just a coincidence.

It has been a buyer’s market in the Phoenix area for quite some time, and buyers are still definitely going to find great deals. Increased buyer interest is always good news for sellers, but we might be on the verge of seeing a gradual shift from a buyer’s market to a seller’s market if prices continue to increase.

Whether you are looking for a great deal or need to sell your home in our challenging market, give me a call or email me and let me show you how I can help!

In an incredibly sad article today, according to the Arizona Republic, a new show for the Discovery channel  called “Betting the House” is going to start filming right here in the Phoenix area. The premise of this reality program is to capture the fast-paced action that happens when foreclosed homes go on the auction block at the county court house.

One of the bidders that will be followed, Doug Hopkins, was quoted as saying “The foreclosure-auction market is more competitive than it’s ever been. It’s definitely entertaining to watch.” Most of those homes represent the shattered dreams of families who became victims of our harsh economic times, and for some reason I just can’t put the words ‘foreclosure auction’ and ‘entertaining’ together.

I understand that people may not see this the same way I do, because I work with many families who are only a few steps away from losing their homes, losing the security those homes represent, and the financial mess that foreclosure often leaves behind. The last word that comes to mind is entertainment. The only thing they got right on this one is this is a reality for homeowners in Arizona and throughout the country.  

The Arizona Republic published an article on September 12 (click here to read the story) that reported Phoenix area foreclosures were up in August. As the article stated, this was totally anticipated, as we’ve been seeing this increase every late summer for several years now.  Although this increase comes as no surprise, it’s always a bit disheartening to hear that the market took a bit of an expected stumble.

This story DOES give us some good news though; the total number of sales in August is up almost 300 from July, and up over 1500 from August of last year. Our real estate market is obviously not where we would like it to be, but at least it’s showing obvious signs of improvement.

One other thing this story mentions is that homes under $100,000 are selling quickly because investors are purchasing them as rentals. As struggling as our real estate market has been, the rental market seems to be picking up.  The low housing prices, combined with fairly healthy rental demand, can provide awesome investment opportunities for folks who  go enter the market well-informed. If you are thinking about investing in rentals, give me a call or drop me a line and let’s talk!

CNN Money ran a story on August 31 about how the government's attempts to stabilize the economy by stalling foreclosures might actually be causing our ongoing woes. The article quoted housing experts as pointing out that about 37% of the borrowers who are in trouble haven't made mortgage payments in over two years, and another 34% are 12 to 23 months behind. Those experts who in the beginning warned that preventing foreclosures might only be prolonging the inevitable may have been right.

There are experts who disagree, however. Many point out that other methods of assisting troubled borrowers haven't been tried out on a large scale yet. Adjusting payments, forgiving a portion of the balance due and refinancing at a lower interest rate are all ideas that have been suggested.

My thought is, the best course of action is a combination;get the already-foreclosed properties sold, make the short-sale process faster for those who are too far behind in their payments, and help those who can still catch up.

If you'd like to read the entire article, visit

http://money.cnn.com/2011/08/31/real_estate/housing_market_foreclosures/index.htm

August shaped up to be a pretty good month for our real estate market, especially considering that we usually see activity cooling down as the temperatures go up. The number of sales dropped from the previous month, but the number of listings that are under contract has increased. When we look at the sales per year as of 8/30 versus what it was for last year and 2 years ago, we can see a great improvement. 

The only negative that can’t be explained by the normal summer market slowdown is the continuing creeping downward of the average price. This really doesn’t come as a surprise though, given the severity of our market problems. Foreclosures and short sales still make up most of the properties that are on the market, and these distressed sales tend to push down prices.

Despite this bit of negative news, the market is providing opportunities for both buyers and sellers. The lower prices and historically low mortgage interest rates have really motivated buyers to get out into the market to snap up the good deals. They often find themselves bidding against other buyers for homes. Sellers who can price their properties competitively are seeing lots of interest and are frequently receiving multiple offers.

If you’d like to learn more about the unique buyer and seller opportunities our real estate market can offer,  give me a call or drop me an email.

There will always be people who prey on the most vulnerable in every type of real estate market. Over the past few years we have noticed that many investors and some real estate agents alike have partnered to take advantage of distressed homeowners facing foreclosure. We noticed a little practice of an agent taking a short sale listing and then selling to an investor at a very low price and negotiating that offer though the bank. However, they neglect to inform the seller's creditor that they also have another buyer who has a purchase contract for the same home at a much higher price that will close the same day or within days of investor's contract with the seller/homeowner. The investor ends up getting the home at a lower price and then simultaneously closes on the home with the other buyer the same day or next day. This investor makes upwards of tens of thousands of dollars. The agent ends up making multiple commissions for both the transactions and the end buyer ends up paying fair market value for the home. The loser is the seller, the bank and the taxpayer. The seller may have a much larger tax penalty if not protected by the tax forgiveness act AND is a party to fraud. The seller's creditor took a much larger loss than if the agent would have sold the home to the end buyer. The tax payer loses because as we all know, investors and PMI companies have their hands out to the American taxpayer for these losses.

I have had many of agents tell me this is a legitimate practice because it is fully disclosed. However, fully disclosed means the seller's creditor is disclosed to also and guess what, I am SURE that the seller's bank would not be happy knowing there is a buyer who would pay then tens of thousands more for the property but they will let it go to the investor buyer. My motto was if it walks like a duck, talks like a duck it IS a duck. Unfortunately, I have lost a few potential short sale listings along the way because some agent or investor has convinced my prospective short seller that they have better deal for them because they have a buyer already. That's ok.....because now not only is there a FBI task force just for this type of fraud but now the investors themselves are being proactive and asking the ethical realtors in the field to call out these real estate agents, buyers and sellers. If people don't know how serious this is they need to realize what the FBI does. They don't file lawsuits and want your money. They lock people away. This is not only a civil crime against the banks but it is a criminal crime against the banks and their investors. In addition this type of fraud can follow you around for years. It may be years after the fact when the banks catch their breath and then have time to audit their files. Don't get caught having to look over your shoulder wondering if your transaction will be the one audited.

My message to you sellers who are experiencing distress. Please contact an experienced short sale agent who shows integrity and really cares about the end game for you and not just their pocketbook.

Visit my source for more information on this problem: http://realtormag.realtor.org/daily-news/2011/08/23/short-sale-fraud-rising-freddie-mac-wants-your-help