HOW TO USE THE HOME BUYER TAX CREDIT

Although the tax credit is available, many 

people are either unaware of it’s existence or don’t know how to use it.  First and foremost, buyers need to have a relationship with a lender who is knowledgeable with regard to what the requirements are to take advantage of this.  

This is a first time home buyer tax credit….it doesn’t have to be your first home.  You would qualify if you’ve not owned a home in the last three years.  This credit has increased to $8,000 from $7,500 and it does not have to be paid back.  People should be jumping up and down about this.  However, there are many people who have no idea that this exists.  I’ve mentioned it to people and they were surprised.  This is “free money”!  What are you waiting for?

The credit is $8,000 or 10% of the purchase price whichever is less.  You also have to stay in the home for a minimum of three years.  This is not for investors.  This is for folks who have been wanting to buy a home and now is the perfect time before the rates increase, while the prices are at these levels and while this tax credit is available.

Aimee & Jayden Update

It’s been awhile since my last update.  I will be spending time with Aimee & Jayden tomorrow.  They would like to go to the science center…..I don’t think I’ve been there in 8 years!  

Aimee has hooked with a group called Open Table.  Their mission is “From Homeless to Wholeness…”  They are going to help her find new housing and hopefully get her started on getting back to school.  She wants to be a paralegal.  As I’ve mentioned, I’m very impressed with this young woman and how much she is getting accomplished with her limited resources at this point.  I have made contact with the group and am hoping that I can be of greater help.  

This is a faith-based organization that is sponsored within churches and perhaps synagogues within the city.  They form a committee — an Open Table — of consultants to help a young person strive for a better life.  It’s a process and Aimee is moving along.  Her Open Table has 15 members which is great.  That means 15 more people are there to help her.  

She’s been working a lot which means Jayden is in daycare a lot.  He’s a very happy boy, so I don’t see any ill effects.  She was living in a 2-bedroom place — then the case worker moved a 17 year old pregnant girl in with her and Jayden (not too fun for them!).  However, they’ve moved her into a 1-bedroom and she’s happier that once again it’s her and Jayden.  

I’m going to try to figure out how I can raise money to get her a car….or to get a donated car.  I think that would be her salvation.  A car means a freedom that nothing else does.  She’s a little concerned about insurance and upkeep, but we’ll work though that as well. 

It will be a beautiful day tomorrow and I want to take advantage of every nice day before the heat gets here and stays here…..

PHOENIX HOUSING MARKET NEWS

The sky isn’t falling after all….there’s good news to be had

out there in the form of statistics and housing sales within the Phoenix metropolitan area.  This information from Grubb & Ellis commercial, timely none the less:  ”the first quarter of 2009, we saw an improvement in almost ALL markets including housing (sic)…..most experts predicting the bottom to form in the next couple of quarters.”

Other interesting statistics:

• Phoenix ranked #1 in most affordable of western cities.
• Phoenix is now #9 in foreclosures.
• Active listings dropped below 50,000 since February, 2007.  
• New home closings up 16%, resales up 42%.
• Builders are reducing their inventory which is a critical step toward recovery.

All of these indicators are just a bright spot that need to be watched over the remainder of 2009.  It’s still a great time to buy as the prices are competitive and the interest rates are still low.  All indications are that the rates will begin to climb throughout the summer.  Because we’ve never seen anything like this before it is still anyone’s guess as to how this will all play out.

BUYERS–FORECLOSURE QUESTIONS

In the current marketplace, buyers are very curious

about foreclosures and bank owned properties.  How do you maneuver through the quagmire?  What are the potential pitfalls?  Here are a few questions you as a buyer should be asking a real estate professional which will help you decide if foreclosure is the route to take.  (Information gleaned from Realtor Magazine - April, 2009)

• Is now a good time to buy?  This varies from market to market — different parts of the country as well as different parts of each State.  For instance in Phoenix, there are many areas with higher rates of foreclosure than others.  While no one community in metropolitan Phoenix has been immune to this, there are more foreclosures in certain valley cities.  
• What do I do first?   As a realtor, I request that my buyers see a lender and get pre-approval.  Have at hand a Loan Status Report completed that can be presented with any offer.  It will show the bank that you are  serious and qualified which will up the chances of having the offer accepted.
• What is the difference between a bad foreclosure and a good one?  Be sure that you know about any liens on the property, which would include mortgage debt, lines of credit, construction loans, and/or 2nd or 3rd mortgages — these could be transferred to you, the buyer if you don’t do your due diligence.  However, if the property has gone through auction and become bank owned (REO), that debt has most likely been addressed.
• If you’re a qualified borrower, can you negotiate better loan terms?  Arizona is one of the harder hit areas, so lenders are trying to get these properties off their books.  If you have a good credit score, the bank may be willing to cut you a deal.  It doesn’t hurt to ask.
• What costs are associated with buying a foreclosed property?  If you are considering buying a property as an investment and want to rent it out, consider that there are costs associated with the upkeep and marketing of the property whether as a rental or sale.  These costs include paying a sales commissions, marketing costs for rent or sale, taxes, insurance and maintenance and upkeep.   
• Will the choice of neighborhood will affect the foreclosure investment?  Of course it will.  If there are many, many signs up and down the streets of a certain neighborhood, this should be a red flag.  A lot of foreclosures in a single neighborhood would indicate there may be further decline in value in order to sell them all.  

Bottom line, be sure that your do your homework.  While there are great deals out there, they are not without their issues.  The days of fix and flip are over for awhile.  If you’re going to buy a foreclosed property and live in it, great or if you’re going to rent it, great.  Remember you must be patient.  

I’ve heard many different stories from various realtors about buying and selling foreclosures.  I would prefer a foreclosure to a short sale.  At least the process is far enough along which will allow you to get an answer from the bank in a reasonable amount of time.

PHOENIX REAL ESTATE SALES STATISTICS

Statistics as of April 3, 2009–Good News

Positive trends continue to improve as the dynamic change in our market is still steady.

Single family detached home availability dropped 4% to 35,394.  Closing experience a strong upward trend in the last month at 7,461 to decrease overall supply to 4-3/4 months.  January, 2006 was the last time we were below a 5 month supply.  

A 10% increase was seen in pending sales in one week, as they continued to climb to 13,859!

The best marketing in the Valley at the present time are Phoenix and the West Valley, now at 3 ¾ months each. Close behind is the SE Valley at 4 ¼ months. These are definitely sellers markets!

A 50% increase in the number of pending sales over the last 6 weeks is a positive sign for Scottsdale. Under $ 1M market rose from 351 to 527, and we should begin to see an increase in closings soon.

Over $1M is at just over 3 years supply for Scottsdale!  PV is at 7 years. Pendings have increased and the slow closing rate should improve for PV over the next 90 days.

Our market is continuing to experience rapid improvement.  Media coverage should lean more toward the positive side soon.  A headline on the front page of the Arizona Republic last Saturday was positive for a change!

MLS Statistics
Area Breakdown

Overall Market Since last week, inventories down 4%. Active listings totaled 35,394 with 7,461 closings over the last month. This is approximately a 4-¾ month supply.

In Phoenix over the last week, inventories down 5%. Active listings totaled 7,880 with 2,140 closings over the last month. This is approximately a 3-¾ month supply.

In the west valley  last week, inventories down 6%.  Active listings totaled 8,482 with 2,218 closings over the last month.  This is approximately a 3-¾ month supply.

In the NE valley last week, inventories down 2%. Active listings totaled 5,510 with 354 closings over the last month. This is approximately a 15-½ month supply.

In the SE valley last week, inventories down 3%. Active listings totaled 8,048 with 1,848 closings over the last month. This is approximately a 4-¼ month supply.

In Scottsdale last week, inventories down 2%.  Active listings totaled 1,423 with 36 closings over the last month. This is approximately a 39-½ month supply.

Scottsdale under $1m last week, inventories down 2%.  Active listings totaled 2,419 with 225 closings over the last month. This is approximately a 10-¾ month supply.

Paradise Valley last week, inventories down 1%.  Active listings totaled 574 with 6 closings over the last month. This is approximately a 96 month supply.

MORTGAGE NEWS - PHOENIX

Here’s what’s happening in the lending business 

these days.  While interest rates are at historic lows it seems that money is still somewhat hard to come by.  February saw a tremendous increase in applications for refinancing.  However, many homeowners are still running up against roadblocks from banks.  Does anyone else think that the banks are all laughing at us once we leave?  

Apparently, it is still difficult to get the banks to loan money even though they’ve gotten lots and lots of it from the government — no wait, from us!  What are they doing with it?  Investing?  Putting it away for a rainy day?  

I digress.  Perhaps you are one of the lucky ones who is able to get some of that cash.  But, there are many who are not getting too far.  I know that there are people out there with stellar credit and they are having trouble.  

Until the financial institutions are willing to give up the green we will continue to see slow recovery from this meltdown.  Hang in there…..better days are ahead.  And, remember cash is king….this is still a great time to buy and lest we forget about FHA!

HOW TO STAGE ON A BUDGET

You’re putting your home up for sale.  How can you

shine?  How do you compete with your neighbors and make your home stand out?  STAGING!!!  It is a proven fact that people who stage their homes sell faster than those who don’t.  I’ve posted about this before so I won’t bore you with the same information.  However, I will suggest how to stage on a budget.  You don’t need to spend a lot of money.  The vast majority of staging can be done with what you already have and perhaps adding small things to change the feel in the home.

Here are a few tips from me and the REALTOR, April 2009 publication:

CLOSETS:  Here’s the thing, people tend to hide all manner of sins by throwing stuff into closets thinking that potential buyers are not looking in there.  HELLO, buyers have stuff and need to know if a home has enough space to store it in.  Clear the floor,  put things in bins or start to pack all together and put the boxes into the garage or a storage locker.  Make sure your belongings are neatly on the hangers; take things out if it looks overstuffed.  If there are items on the top shelves, make nice neat stacks, use boxes.  Remember, it does matter.

CLOSE ALL OPEN DOORS, ETC:  Believe it or not, people don’t want to walk into a room with the closet doors open, the garage cabinet doors open, the toilet lids up, etc.  The only doors that should be open are the ones leading into the room(s).  Open the window treatments; if you have curtains, pull them to the sides….let the sun shine in!

CREATING A FOCAL POINT:  Stand at your front door.  What is the first thing you see?  For example, if you have a fireplace, that is the focal point, highlight it….this is especially true in a home that has a family room and/or great room.  If you first walk into your home and you have the living room/dining room, clear them up.  Make the table in the dining room the focal point.  Put a nice center piece on the table with a runner.  Perhaps set the table as if waiting for your dinner guests.  

LIGHTS:  When showing your home, put ALL the lights on add wattage if necessary.  Even in the day time.  Light up the space.  People have more positive thoughts when it’s light inside….if it’s a dark space, it’s not happy!  Light is uplifting.

SITTING AREA:  Make sure that either in the living room or the family room there is a “sitting area” so that potential buyers can sit down and chat……this type of set up encourages people to feel comfortable in your home….they can better feel how the home fits them.   Have a space with sofas and/or chairs facing each other and no clutter around.  Clear off that coffee table.  This says “come in, sit down and relax”….very important.  You want your home to be welcoming.

BATHROOMS:  Put away all your stuff!  Nobody wants to see your toothbrush or deodorant.  Get a little basket and put all that stuff in that and then place it under the sink or in the linen closet.  Use one of your towel bars and put up “nice” towels that you don’t use.  Tie a ribbon in the center or use rafia to tie a bow.  Place little soaps in a little dish on the counter to add fragrance.  Make sure the bathroom is clean!  That means the tub/shower.  If you only have a plastic shower curtain, pull it to the side.  Remove all dirty/used towels and wash clothes.

REFRESH PAINT:  You may not need to paint the whole house, but perhaps the door frames, baseboards and painted doors need a little touch up.  It’s amazing what a little paint can do for a home.  You don’t want to have any marks on the walls, it makes the home looked abused or ill cared for….you don’t want that to be the first impression.

PETS:  We love our pets.  It’s ok to have pets and their beds and bowls.  Find a space where these items are out of the way.  Make sure the food dishes are clean and that there’s no food or water mess around.  If you have a cat, make sure the litter box is always clean.  When we live with animals, we get used to the odors.  Have someone you know walk into the house and tell you if they smell your animal.  If they do, deal with it….right away!

FIRST IMPRESSIONS:  Whether driving up or walking up to a home, the front entrance is the first impression.  No turning back on this one.  You cannot take back what a person’s initial impression is of your home.  Make sure the front lawn is neat and mowed; all bushes and trees trimmed and not overhanging the walkway.  Do you have a bunch of live plants by the front door?  Is it blocking the entrance?  Move them…..put them in the back in a nice area.  Is the door and door frame clean and/or freshly painted/stained?  Is the hose out?  Roll it up and put it off to the side.  Are there toys lying about?  Put them away.  Make sure the garage door is closed and clean.  If you have a carport, clear up the clutter.  Get a planter (they are inexpensive at WalMart or Target)…plant seasonal flowers and place the pot at the walkway or if there’s room by the front door…..adding color to the front of a home is huge…..people love flowers.  

All in all you might have some of these supplies on hand.  If not, these are inexpensive fix-ups.  Get creative.  Be careful not to add more just take away clutter and enhance what you’ve got.  Step out of the home you’ve created and look at it like a house (a commodity) for sale.  If you were looking at houses would you buy your home?  Do you have expectations for a home you are seeing for the first time?  Well, buyers for your home are expecting the same thing!!

If you’re unsure of being objective ask a friend or relative.  Tell them to not worry about hurting your feelings…..remember you’re trying to sell the house…..strangers will be much more critical.  Be proud of what you’ve created and most of all have fun!

CAUTION - OVERLY OPTIMISTIC REAL ESTATE NEWS

I’m the first person to say YEAH!!! to positive news 

with regard to real estate.  However, I caution you that while there are some things that are good, we still have a long way to go.  Housing starts are up…..yes, because the prices of new homes have dropped substantially to allow people to be able to afford them.  More homes in escrow….yes, this includes all foreclosed properties, short sales and non-distressed properties.  This is good because it gets more homes off the market and starts to level the playing field a bit.  

We must keep in mind that while there’s a tidbit here and there of good news, we are far from seeing the end.  People continue to lose their jobs.  And, while I don’t think Phoenix is hurting as bad as other parts of the country, we do have job loss.  

The fact remains, if you don’t need to sell, DON’T!  If you have money and want to buy an investment property then go for it.  I would love to have a bunch of listings, I’d love to have your listing, but I still say wait if you can.  

The affordability of this market is bringing new buyers in.  First time buyers….that is good.  I hear that there are multiple offers on properties….we are talking properties that are priced mostly below $200,000.  Don’t get me wrong this is a good thing, because as these multiple offers come in, that drives up the price because there is demand.  

All in all, this Country is amazing and we shall overcome this housing isse.  It’s just unfortunate that the house of cards came tumbling down so hard on so many.  My heart goes out to those who have lost their homes due to job loss or perhaps were in an ARM and the payment just got out of control. 

We need to, as responsible members of this society, take responsibility for our own destiny.  If it sounds too good to be true, it probably is.  Think about what you are doing.  Can you afford it?  Do you have the required down payment?  Is your job secure (is anybody’s)?  Americans are smart people and we love that we can work hard, save our money and buy our own home.  This is true pride of ownership.  Why would you put yourself in a situation that causes you stress?  Home ownership is both hard and wonderful.  Do it for yourself and your family.  Do it because you love the home, not because you think you’re going to make a quick buck.  Those days are over for awhile and anyway isn’t that part of what got us in this mess in the first place????

Come Out West–We’d Love To Have You!!

Those of you on the east coast that are 

getting socked with all those new State taxes, come on over.  With all the new taxes that the governments of various east coast states are going to or already have imposed on their residents, it’s only a matter of time before they all flee to other parts of the country.  Unfortunately for these states, the government spending is clearly out of control and so the people are forced to get the politicians out of their jam.  

Arizona is a great place to live.  We have sunshine 360 days a year.  Winters are fabulous and the way we look at summer is:  you don’t shovel heat!  Housing is reasonable and there are plenty of wonderful homes on the market.  You can live in the valley and visit the high country where you can get a quick fix communing with pine trees and birch…in the winter we even have snow in Pinetop and Flagstaff.

There are several lakes here as we always see people driving around with their boats on the back of their SUV’s looking for water.  In addition, the beautiful California coastline is close enough to drive for a long weekend.  

Arizona is home to many midwesterners.  There are a lot of Chicagoans here as well as many from Minnesota.  Many residents call Arizona home only during the winter months.  But, since I moved here 12 years ago, there are fewer “snowbirds” and more full timers.  

We need more entrepreneurs here in the Valley of the Sun….come along, we’d love to have you.  Homes are plentiful and interest rates are amazing!

VALLEY OF THE SUN RE SALES UPDATE

There are signs that the Valley’s real estate market is beginning to rebound.

According to realtor, Don Keys, as of mid-March, over 4,700 homes have sold, compared to 5,400 for all of Februay, 2009.  March of 2008 sales were just over 2,500.  Keep in mind that the foreclosure and short sale market factor into 2009 numbers.

Keys says it is not unusual lately to see multiple offers on one property.  With the abundance of homes for sale, the drastic drop in prices as well as low interest rates have brought more buyers to the table.  Over 11,000 homes are under contract and going through escrow.  That’s more than 2x’s the number seen in recent months.

That being said, perhaps up to 20% of the sales will not close due to unqualified buyers, however, we are still looking at about twic as many pending sales as we normally have and most definitely a sign of a shift in the market.