Real Estate Information

A report issued this Tuesday indicates that the total number past due mortgages have increased over the last two months. Lenders Processing Services (LPS) says that the number of past due mortgages that have not yet reached the foreclosure stage has increased  2.4% from June to July, but has decreased 10.4% from July of last year.

The number of past due mortgages that are in the first stages of foreclosure increased slightly (.4%) from June to July, but is 9.7% higher than in July 2010.

The LPS report shows that Arizona did NOT make the list of the top 5 states with past due mortgages. The dubious honors go to Florida, Mississippi, Nevada, New Jersey and Illinois. This is one list I’m glad to see we aren’t on!

The Arizona Republic reported that existing home sales in Maricopa County increased about 1% for the second quarter of 2011 when compared to the same time frame last year. According to the Republic’s Quarterly Housing Snapshot, this slight increase was accompanied by a continuing decrease in price.

Arizona State University and Ion Data, who provided the information for the Arizona Republic snapshot reported a 13% decrease in the median price for existing homes for this same time frame.  New home sales dropped about 37% but their median price increased about 4.5%.

The best news came in the second quarter data concerning foreclosures and short sales.  Foreclosures decreased slightly from second quarter 2010 levels, but notices of trustees sale (also called pre-foreclosure notices) dropped by about 16%. 

I don’t think anyone would disagree that this is indeed an unusual real estate market, where sales are increasing at the same time prices are decreasing. Still, it shows there are opportunities for buyers to get good deals, and for sellers who price right to successfully sell their properties.

The Phoenix area market still shows signs of improvement tempered with seasonal fluctuations. Inventory continues to be low as buyers absorb listings seemingly as fast as they’re coming on the market as is indicated in the number of pending listings as compared to active listings this month. Some of the numbers aren’t quite as vigorous as they’ve been in months past, but it’s not a sign the market is cooling. Rather, we are seeing a predictable, seasonal “late summer vacation”. Traditionally, things slow down a bit during the heat of summer and pick up with the cooler weather and these numbers indicate that trend will hold true to a certain degree this year as it has in years past. Many of the key numbers have remained virtually the same as last month’s; number of active listings, number of pending listings, days on market and active listings price per square foot have changed only slightly. However slight the changes are, they are still generally pointing in a positive direction.

The average price is continuing a downward trend, but the percentage of listings that sell is continuing to increase. This is likely due in part to the fact that banks have become more willing to negotiate short sales.

Potential borrowers who are turned down for loans now can find out why their applications were rejected. A new financial reform law, the Dodd-Frank Act, requires lenders to provide information such as the credit score used to determine eligibility for a loan and an explanation for the decision to decline a loan. In addition, lenders will have to explain why they didn’t offer borrowers their best rates.

This information is invaluable to borrowers who, in the past, were left in the dark as to why their loan applications were rejected or why they didn’t receive lower interest rates. If you apply for a loan and are declined (or are offered a higher interest rate) remember to exercise your rights and request information on how the lender made their decision!

The Phoenix real estate market has been making the Top 10 in many lists the past few years, primarily those lists dealing with the mortgage crisis and plummeting home values. However, according to an article in the Phoenix Business Journal, we made it to seventh place in a Top 10 list for best places to purchase rental properties. HomeVestors of America, Inc (you might know them as the “We Buy Ugly Homes” business name) and Local Market Monitor  came out with the list of the ten best markets for investing in rentals, based on vacancy rates and stable rents among other criteria.

The article cautions that rental investments entail risk, but if you would like more information on taking advantage of this unique market, give me a call or drop me an email. The full article can be found at the link below:

http://www.bizjournals.com/phoenix/news/2011/07/12/phoenix-among-10-best-places-to-buy.htm

HOPE NOW, an association of lenders, counselors, investors and other organizations that participate in the mortgage market, have released their May 2011 report indicating that foreclosure sales have decreased for two months in a row and were down about 7% from the previous month. The number of foreclosures started during the same time increased about 8% from the previous month. The number of homeowners who received permanent loan modifications remained fairly much the same.

As discouraging as these numbers might appear, there was some good news. Although the total number of permanent loan modifications hasn’t changed much, the number completed under the Home Affordability Modification Program (HAMP) increased about 12%. Another bit of good news is that the number of homeowners who are 60+ days delinquent has remained fairly stable for three months in a row.

Although HOPE NOW’s report leaves me with mixed emotions about where the mortgage situation is headed, the fact that there was some good news gives me hope that we may start seeing real signs of improvement. But only time will tell!

**The full report can be viewed at  HOPE NOW’s website at http://www.hopenow.com/press_release/files/May%202011%20Data_Final.pdf

Things are looking up for real estate in the Valley of the Sun! According to the Cromwell Report below, we’re showing slow but steady signs of improvement. The number of available listings has been steadily decreasing, which means that the supply of homes for sale is going down. Although the number of homes that are under contract is decreasing as well, the total number of closed sales per month is going up. This might seem contradictory, but it indicates that more and more listings with accepted offers are actually completing the sale process rather than the deals just falling apart as has been so common in the past. Buyers are steadily absorbing the available homes, as is shown by the Month’s Supply column below; as of 7/6/11 we have about 2.7 months’ supply of available listings, the lowest it has been for the previous two years.

In the past, more buyers and fewer listings generally equaled an increase in sale price as there are more buyers competing for a shrinking number of homes. However, the Cromford Report indicates a paradox; although the number of buyers may be going up and the number of available homes is decreasing, the average sales price has remained fairly constant the last several months. This can be good news for both buyers AND sellers; if you are looking to buy a home, prices are still quite attractive. And, if you find yourself having to sell your home, there are plenty of buyers out there!

You must ask yourself why? Why do the bank's want to pick your realtor? It must be because your bank is so friendly and accomodating right? Or you don't have a choice right? Oh yeah, don't forget all the competent talent you dealt with at the bank while trying to modify your mortgage and stay in your home. Yeah, the bank's are genius at picking the right people!

People, people, don't get sucked into their games and BS. No matter what the bank tells you, HIRE your own listing agent to do your short sale! Banks are saying you can't...not true. They won't approve the short sale....not true. Once again, why are they so insistent upon you choosing their referred agent? Money, folks! It's all about their bottom line. 

These agents have agreements with the bank for a reduced fee which is paid from offer price at closing. Lower fee, more $$$ to the bank. No, not more $$$ to the seller, to the bank. Now, listen to what I just said...there is already a relationship between your big bad bank and this unknown realtor. How does this benefit you? It doesn't? Really, when push comes to shove, where does this agents loyalties lie? Are you giving them multiple deals a month? No? Is your lender? Possibly. Do you think they want to tick off your lender? No. Sad to say, but many times we have to escalate files and call people's bosses, heck even call the Executives office or the investor to get your short sale approved. 

I am passionate about this because I am now in a short sale transaction where I represent the buyer and the listing agent was referred by the bank (Bank of America) to the seller. The seller was under the impression they HAD to use this agent. NOT! This is the seller's house, not the bank's house. Until the bank takes the home back the bank is not the legal owner and cannot sign the listing contract. The seller(s) is the only one who can sell their home and sign the legal contracts. 

Anyhow, it has been since 5/23/2011 and the listing agent still doesn't even have the offer uploaded to the bank because he cannot figure out how to do it. He has NEVER done a short sale. Yet, he told us he had a direct contact with the bank and it would be approved in 10 days. Now, he is begging for a postponement of the seller's foreclosure date and for someone to call him or email him back. Take note, this seller is a very HIGH risk of going into foreclosure becuase they allowed their bank to strong arm them into hiring a bad short sale listing agent.  

Short sales are serious real estate transactions. Interview and hire one who is experienced, has a successful track record, and systems in place to give you the best chance of success. This is one choice you do have control over so don't allow the bank to continue to hose you!

Arizona Attorney General Tom Horne and Judy Lowe, Commissioner of the Arizona Department of Real Estate are telling everyone to be cautious of scams that are related to Major League Baseball All-Star Game that’s happening on July 8-12.  The Department also issued an order against an unlicensed real estate business in Arizona which claims a connection with the game.  The business was Your Stay Accommodations.

Attorney General Tom Horne said, “Major events such as the All-Star Game attract thousands of people to Arizona.  Unfortunately, that means the potential for consumer scams increases.  I would urge people to be especially cautious of companies that promise they can rent your home for large rental fees during this or other major events.  Some companies collect up-front fees from consumers for rentals that never pan out, and then deny requests for refunds. People need to be wary and only use known, reputable companies for these kinds of transactions.”

It was noted that the Your Stay Accommodations which was operating in Phoenix was offering a lease to people who were planning to attend the 2011 MLB All-Star event.  All you needed to pay is an advance fee of about $1,495. 

Commissioner Lowe stated, “Unlicensed real estate activity in Arizona must be stopped. This is an example of a practice that harms the public. The Arizona Department of Real Estate observes a ‘Zero tolerance’ for this type of activity.” Consumers are warned to protect themselves against possible scams and to deal only with licensed real estate business owners.

Victims or those who feel they are not dealing with a fair deal can contact the Consumer Information & Complaints Unit at (602) 542-5763 / (520) 628-6504 / (800) 352-8431. You can also file a consumer complaint online at:www.azag.gov/consumer/complaintform.html.

If you are in the market to buy a home and are an FHA homebuyer you need to be aware that effective October 1, 2011, Congress will reduced the FHA loan limit for Arizona and some other states. The maximum loan amount for Maricopa County will be reduced from $346,250 to $271,050.

FHA is a loan program that only requires a 3.5% downpayment and a minimum of 620 credit score. There is PMI insurance on the loan but is quite lower than PMI insurance on a conventional loan. That is because a small upfront premium is paid at time of loan that comes from your downpayment. 

If you are a homebuyer who is seeking a home loan higher than $217,050 and don't have money for a large downpayment, then you need to be aware of this upcoming change and close on your new home before October 1st. Please contact me if you have questions about how this change may affect you.