Are We Getting Back to Normal Financed Home Sales?

As the investors leave and find less expensive housing elsewhere and the lending restrictions ease we are seeing a strong trend back towards normal in financed home sales, although we are not quite there yet.

We can sometimes get too focused on counting houses instead of counting dollars. This is particularly true when looking at how homes are funded.

Here are the numbers for August 2013 and August 2012 based on Maricopa County Affidavits of Value (i.e. excluding HUD sales and trustee sales)

Financed Home Sales

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Mortgage Rates Rise

Mortgage Rates In Freddie Mac’s results of its Primary Mortgage Market Survey (PMMS®), average fixed mortgage rates jumped along with bond yields amid recent Fed remarks that it could begin tapering its bond purchases later this year. The average 30-year fixed-rate mortgage rose from 3.93 percent last week to 4.46 percent this week; the highest it has been since the week of July 28, 2011. This represents the largest weekly increase for the 30-year fixed since the week ended April 17, 1987. Despite the recent gains in mortgage rates, homebuyer affordability remains strong for the typical family in most parts of the country, which should help fuel the ongoing housing recovery.

Mortgage Rates Breakdown

  • 30-year fixed-rate mortgage (FRM) averaged 4.46 percent with an average 0.8 point for the week ending June 27, 2013, up from last week when it averaged 3.93 percent. Last year at this time, the 30-year FRM averaged 3.66 percent.
  • 15-year FRM this week averaged 3.50 percent with an average 0.8 point, up from last week when it averaged 3.04 percent. A year ago at this time, the 15-year FRM averaged 2.94 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week with an average 0.7 point, up from last week when it averaged 2.79 percent. A year ago, the 5-year ARM averaged 2.79 percent.
  • 1-year Treasury-indexed ARM averaged 2.66 percent this week with an average 0.5 point, up from last week when it averaged 2.57 percent. At this time last year, the 1-year ARM averaged 2.74 percent.  According to Frank Nothaft, vice president and chief economist, Freddie Mac:

“Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong. For instance, existing home sales in May rose to its strongest pace since November 2009 and new home sales were the most seen since July 2008. for RE/MAX

If you are thinking of purchasing a home, this may be the best time to do so with both mortgage rates and home prices rising.  Give us a call:(480) 421-8116

Calculator and Home

Are You Thinking of Moving Up?

Many homeowners are asking themselves if now a good time to move up is. Between price reductions and record low interest rates it may just be the right time.

With home prices still at record lows, Buyers can get more home for less money under today’s housing conditions. Buyers will also pay a smaller amount of interest over time and can snag that dream home for a fraction of its boom era price. Additionally, with the large number of distressed homes on the market, you may even find a home at a steep 10 to 20 percent discount.

Before you start mentally decorating that dream home, however, you should consider what “moving up” means for you. For some buyers, moving up means a better neighborhood. For others it means a bigger home with more space or amenities.

Here’s what every buyer should consider before making the move.

Where do you stand on equity? In simple terms, equity is the difference between what you owe and what your home is worth. You might already know this amount, but if you don’t, you can always call your lender to get more details.

Despite recent declines in home prices — and some areas have had steeper declines than others — if you’ve lived in your home for over five years you may have built a substantial amount of equity. Equity gives you some wiggle room during the selling process. You can rest a bit easier that you will sell for a profit instead of a loss.

What is the state of your financial situation? Some jobs are more stable than others. You do not want to take on a new financial burden if you fear that there may be downsizing at your company. Are you a two income household? What would happen if one of you were to lose your job? Can you really afford to move up? This means having at least 20 percent to put down, being able to pay off your current mortgage, and not having to lay a finger on your retirement funds to make the new purchase.

Are you willing to move during a market that is still seeing home price declines? Yes, you might be able to get into your dream home, but will be you also might see your new home’s value decline in the months and years to come.

What is pricing like for your current neighborhood? You may wish to get a comprehensive market analysis to find out the current value of your home as well as the specifics on your neighborhood competition.

What is your real reason for wanting to move? Are you an empty nester wanting to simplify life by downsizing to a smaller home, condo, or town home? Are multiple generations living under the same roof? Are you wanting to move to a newer neighborhood? Consider what it is that you really want.

Does moving up make sense for you at this moment in time? While there are some great deals to be had, it has to make good financial sense right now.


Thinking of Moving Up to a Golf Property?

Inventory Is Shrinking Causing List Prices to Rise

Inventory shrinking and list prices rising are signs of the residential housing recovery.

Nationally we are seeing positive signs of recovery and a turning real estate market across all price points with the exception of a few weak housing markets.

USA Today reported that the number of existing homes for sale (inventory) dropped to 22% from a year ago.

The National Association of Realtorsreported a rise in home prices in 74 of the 146 housing markets they track in the first quarter of 2012 vs. declines in 72 areas.

Let’s look at some encouraging statistics for first quarter 2012:

  • In Phoenix the March Inventory was down 64% from a year ago.
  • The National Association of Realtors reported that there are a shortage of inventory of homes for sale in Phoenix,Orange County,California,Naples,Florida,Seattle, Suburban Washington, DC andNorth Dakota.
  • According to TransUnion mortgage delinquency rates dropped from 6.19% in the last quarter of 2011 to 5.78% in the first quarter of 2012.
  • Investors accounted for 22% of buyers.
  • Condo prices rose 3.4%.
  • All cash transactions made up 31% of all sales.
  • Existing home prices were up 5.3% and are the highest level since 2007.
  • The hardest hit markets are now among the top recovering markets.
ReMax-FOR SALE sign

What is Your Home Worth in Phoenix?

You want to sell your home, but you are not sure what it is really worth in today’s market? Using the right comparable sales will help you to find the perfect price.

The value of your home is much more difficult to predict and the information available to home sellers can be untrustworthy. Online home valuation sites are fun to play with, but they are based on past sales, not current market factors. Newspaper listings give you some information, but houses are usually so different that it’s hard to compare.

The best method available to home sellers to learn their home’s current value so they can select the best sale price is a CMA, or Comparative Market Analysis. CMA is the term real estate agents use when they conduct an in-depth analysis of a home’s worth in today’s market.

The best part about a CMA is that it’s usually free!

Your Realtor will prepare a CMA for you before you list your home. Setting the price too low means you’ll get less money for your home; setting it too high means it might not sell at all. Every real estate agent in the country will want to complete a CMA on your home before helping you sell it. Sellers who haven’t yet chosen a real estate agent often ask several agents to complete CMAs so there is opportunity to meet different agents and to see how they work.

How much can you sell your home for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.

Knowing how much homes similar to yours sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?

Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:

Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades: Is the kitchen new? Is there a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowner’s association fees?

Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sales sweeteners: Did the comparable-sale sellers give the buyers down payment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents can help adjust price based on insider insights

Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or an office—is one of the ways real estate agents add value.

An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She/he has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to her/him without taking the criticism personally).

Are foreclosures and short sales comparables?

If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.

A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell because they’re divorcing, or their employer is moving them out of state.

How much short sales are discounted from their market value varies among local markets.
So you have to rely on your REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.

Call us today at (480) 421-8116  for Your Personalized Market Analysis.

It’s Time to Sell: Phoenix Named #1 City for Rising Home Prices names Phoenix as the #1 market in the nation for rising home prices. How can this be? Phoenix was one of the hardest hit metro areas in the housing slump. We were one of the first major metro areas to fall and now we are one of the first to rise.

According to data from’s: “First-Quarter Real Estate Trend Data Report”; the turnaround trend here in the Phoenix metro area has produced a 23.5% increase in the median home price from a year ago, bringing it to $179,000. The report analyzes data for 146 U.S. metros and includes single-family homes, condos, townhomes and co-ops.

The rise to the #1 market in the nation for rising home prices comes as no surprise to Realtors here in Metro Phoenix. Local Buyers Representatives have been experiencing Phoenix become a Seller’s market overnight. They have been scouring the Phoenix neighborhoods in the last couple of months in an effort to find homes for qualified buyers.

What happened to our inventory?

The glut of Foreclosure inventory has decreased dramatically due to the robust buying activity of investors, and the reluctance of our banks to release more foreclosures to the market at this time.

Sellers who did not have to sell immediately have been waiting until home prices picked up before putting their home on the market.

There are also too few new build homes available to meet demands. Builders are having difficulty finding skilled construction workers to keep up with demand.

As our Inventory of homes has decreased, the buyer’s demands for homes have not. It’s the age-old theory of supply vs. demand. Too few of anything that people want to buy causes the price to go up.

For homeowners who have been waiting to sell their homes, the wait is over. It’s now time to sell. It’s the spring selling season, the buyers are plentiful, and there are not enough homes on the market to meet demand.

Want another reason to expect your home to sell quickly?

How about buyers wanting to still get in on record low interest rates? The Federal Reserve policymakers wrapped up a two day meeting on Wednesday with an announcement that they intend to keep interest rates right where they are. In a statement, the Open Markets Committee said interest rates will likely need to remain at exceptionally low levels through late 2014.

Not convinced?

Here’s more from’s report: “The Phoenix metro area has had a particularly notable shift in fortunes. In March 2011, it was No. 4 in the top 10 metros tracks for year-over-year median list-price declines.

Want to know what your home is worth?

Call us today at:(480) 421-8116 to Get Your Personalized Market Analysis
iStock Housing Market Chart

RE/MAX: Home Prices Increased 5.8% in March

RE/MAX issued a report that home prices in the 53 largest cities increased 5.8% in March from the same month last year, according to a report from real estate association RE/MAX.  Phoenix is the fourth city in the list with an increase of 18.2%.

The homes sold in March had a median sales price of $184,525. It was the second-straight month prices rose higher than the year-ago period. Before February, home prices landed below year-ago levels for 18 consecutive months. But home sales steadily picked up over the last nine months.

In March, home sales climbed 1.5% from last year and jumped more than 25% from February, according to the report.

“With buyers starting to jump into this market, this year’s selling season is shaping up to be the strongest we’ve seen in years,” said Margaret Kelly, CEO of RE/MAX. “Although we don’t expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold.”

The homes sold in March spent an average 101 days on the market, down from 104 last year.

Inventory also dropped to a 5.3-month supply, a roughly 2% dip from February and the 21st consecutive monthly decline. The shadow inventory of foreclosed homes or those on the verge of repossession spans into the millions, and is anticipated to begin growing again as the robo-signing freeze thaws.

But RE/MAX anticipates housing to rebound through the selling season.

“Following these trends, the spring and summer months should experience increased activity. With falling inventory and many markets witnessing multiple offers with bidding competitions, prices are likely to continue to rise in many areas,” according to the report.

Source: John Prior, Housingwire

Arizona’s Sellers Market Bringing in Multiple Offers

Sellers are getting multiple offers on their homes here in Arizona. How can they choose which is best one?

The Phoenix market has done a complete turnaround and become a Seller’s Market. The  inventory of homes for sale here in the valley is suddenly very low and as a result many sellers are receiving multiple offers on their homes.  This is not bad news for the Sellers, however it is important for them to know how to choose the best offer.

Below is an article with great advice on how to make the best decision when receiving multiple offers on your home.

Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers.

You’ve worked hard to get your home ready for sale and to price it properly. With any luck, offers will come quickly. You’ll need to review each carefully to determine its strengths and drawbacks and pick one to accept. Here’s a plan for evaluating offers.

1. Understand the process

All offers are negotiable, as your agent will tell you. When you receive an offer, you can accept it, reject it, or respond by asking that terms be modified, which is called making a counteroffer.

2. Set baselines

Decide in advance what terms are most important to you. For instance, if price is most important, you may need to be flexible on your closing date. Or if you want certainty that the transaction won’t fall apart because the buyer can’t get a mortgage, require a prequalified or cash buyer.

3. Create an offer review process

If you think your home will receive multiple offers, work with your agent to establish a time frame during which buyers must submit offers. That gives your agent time to market your home to as many potential buyers as possible, and you time to review all the offers you receive.

4. Don’t take offers personally

Selling your home can be emotional. But it’s simply a business transaction, and you should treat it that way. If your agent tells you a buyer complained that your kitchen is horribly outdated, justifying a lowball offer, don’t be offended. Consider it a sign the buyer is interested and understand that those comments are a negotiating tactic. Negotiate in kind.

5. Review every term

Carefully evaluate all the terms of each offer. Price is important, but so are other terms. Is the buyer asking for property or fixtures—such as appliances, furniture, or window treatments—to be included in the sale that you plan to take with you?

Is the amount of earnest money the buyer proposes to deposit toward the downpayment sufficient? The lower the earnest money, the less painful it will be for the buyer to forfeit those funds by walking away from the purchase if problems arise.

Have the buyers attached a pre-qualification or pre-approval letter, which means they’ve already been approved for financing? Or does the offer include a financing or other contingency? If so, the buyers can walk away from the deal if they can’t get a mortgage, and they’ll take their earnest money back, too. Are you comfortable with that uncertainty?

Is the buyer asking you to make concessions, like covering some closing costs? Are you willing, and can you afford to do that? Does the buyer’s proposed closing date mesh with your timeline?

With each factor, ask yourself: Is this a deal breaker, or can I compromise to achieve my ultimate goal of closing the sale?

6. Be creative

If you’ve received an unacceptable offer through your agent, ask questions to determine what’s most important to the buyer and see if you can meet that need. You may learn the buyer has to move quickly. That may allow you to stand firm on price but offer to close quickly. The key to successfully negotiating the sale is to remain flexible.

Source: Houselogic

Arizona’s Real Estate Market….The Good, the Bad and the Ugly

The Good:

Real-Estate economists across the country are studying an early but surprisingly broad Phoenix turnaround.

According to the most recent Case-Shiller residential report, Phoenix was the only city showing price INCREASES in recent months.

Jobs are returning, economic indicators are positive and new construction permits are up.  Look around the valley and you can see the signs of construction for both residential and commercial properties.

Watch for the Phoenix metro area to lead the nation in APPRECIATION over the next few years. We ARE recovering and there’s good reason to be optimistic.

The recession has “corrected” the natural market cycle of supply and demand. This recession was without question deeper, more global and a 24 hour news story. But the simple truth was in 2003- 2006 (just 6 short years ago) we were saying “this can’t go on forever, how are our kids going to afford housing?” That has been the correction. The supply is down, ability and demand is up and the natural cycle remains intact.

Golf Communities fared better that most:

While some parts of our valley saw 50% to 70% loss of value, there are always pockets of any market that will hold their value better than other areas. These are the close-in core areas, waterfront, view properties, and golf course communities. This recession has taught those that thought that these areas were “recession proof” were also affected but not to the extreme to the new communities in the outer areas of Maricopa, Queen Creek, Buckeye and Surprise.

Golf communities for the most part saw property values drop but demand for the communities remained strong.

The Bad:

If you have been sitting on the side lines waiting for the housing market to hit bottom, you missed it! However, there is still plenty of opportunity and time to make you move.

According to ARMLS (Arizona Regional Multiple Listing Service) our inventory has dropped dramatically over the last 8-12 months. At the time of this writing we have just over 22,000 homes on the market, down from the high of 53,000 in 2008. When we remove the homes that are under contract waiting lender approval of a short sale or other conditions we have just over 14,000 homes available. Taking a smaller snapshot, Scottsdale has only 1600 homes available!

The Ugly:

The latest recession has devastated many of your neighbors and perhaps your own family’s estate and net worth. There are still many properties worth far less than their mortgage balance. A recent report by CoreLogic showed 48.3% of homes with mortgages in the last quarter of 2011 in Arizona are “under water” (negative equity mortgage).

There are remedies available. You may qualify for a short sale, you may have the opportunity to negotiate a “deed-in-lieu” allowing you negotiate avoidance of foreclosure and return your property to the bank. There may be some that because of age, and loss of value that a strategy of allowing the property to go back to the bank is the best result for your estate.  You may now qualify for the new HARP 2.0 refinance program.  This program is projected to help over 2 million underwater homeowners refinance to lower interest rate by removing the appraisal restrictions.

Please consult a Realtor, tax consultant, and Attorney specializing in real estate.

What’s Next?

Whatever your age, income, and position you should be looking forward to the next cycle. Now is the time for you to pick up properties to look for steady long term appreciation. Yes, I said APPRECIATION!

Is Golf Your Game?

If you live in or would like to live in a golf community and considering a move, we recommend giving us a call. We specialize in golf communities throughout metro Phoenix from Sun City to Sun Lakes and all in between!

Invest in Arizona!
We market to the world wanting to purchase their place in the sun in Arizona!  Call us today for your market analysis and strategy consultation. 480-421-8116 or

The Market for Resale Homes Remains Strong

Despite sparse home inventory, the National Association of REALTORS® reports that 4.59 million resale (existing) homes were sold in February on a seasonally-adjusted, annualized basis.

Last month’s sales data represents a 9 percent improvement from the year prior.

There are now just 2.43 million homes for sale nationwide — a 19% reduction versus a year ago. The complete home inventory would “sell out” in 6.4 months at the current sales pace.

Some analysts believe that a 6-month home supply indicates a housing market in balance.

The real estate trade group’s report contained other noteworthy statistics, too :

  1. 32 percent of home sales were made to first-time buyers
  2. 33 percent of home sales were made with cash (i.e. no mortgage)
  3. 34 percent of home sales were of foreclosed homes or homes in short sale

In addition, nearly one-third of all home sales “failed” last month, the result of homes not appraising at the purchase price; or, the buyer’s inability to secure mortgage financing; or, insurmountable home inspection issues.

Even accounting for last month’s high contract failure rate,though,  the Existing Home Sales report still posted its second-highest reading since May 2010. For today’s Scotttsdale home buyer, the data may be a “buy signal”.

As compared to last fall, home supplies are down and home sales are up. Basic economics tell us that home prices should start to rise shortly — if they haven’t already. After all, the Existing Home Sales data is 30 days old, reporting on February. It’s nearly April today.

The good news is that homes remain affordable. With conforming and FHA mortgage rates in the low-4 percent range, home affordability is at its highest in history. Home prices may rise this spring, but at least your mortgage payment should remain low.

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