I DID IT!!!

I took advantage of the real estate market

slow down to gain more knowledge and better serve my clients.  I recently completed my GRI certification.  The Arizona Association of Realtors deems GRI graduates as the most prepared and knowledgeable realtors in today’s marketplace.  After taking 10 2-day classes, I thoroughly agree.  When you attend classes to initially become a realtor, you are studying to pass the exams.  When you attend these types of classes, you are expanding your knowledge base.

I had several amazing instructors who are themselves realtors and/or brokers.  Their experience in the industry lent itself to very interesting classes and quite informative.  I was impressed with the detail in which these classes are presented and how thorough the classes are.  There were a couple of classes that targeted marketing strategies and how to grow your business.  Great program.

It wasn’t too long ago that I thought realtors were like used car salespeople.  I still think there are some out there that shouldn’t be in the business.  However, after going through months of classes, I’ve come to respect what we do.  We have a tremendous amount of responsibility with regard to the real estate transaction.  Especially in Arizona where lawyers are not required to write the contract, we are.  This in and of itself means that we really need to be on top of our game, so to speak.  We are at tremendous risk and should at all times take our job seriously.  Statistically speaking, buyers are more likely to file suit against their agents than sellers.  So, especially if you’re a buyer agent, make sure you’re doing everything according to the rules and documenting each and every conversation and saving every email.

I’ve been fortunate in that my buyers have been terrific people.  I love what I do and I think it shows!

INFLATION AND HOW IT AFFECTS THE REAL ESTATE MARKET

As the government continues to spend

in record amounts, the threat of inflation looms ever large.  Continuing the printing of money devalues it, that is an economic reality.  What does this mean to the real estate market?  Most likely rough times will continue.  The cyclical nature of the real estate market is upon us.  There are many things in play here that we haven’t seen before.  The collapse of the housing market, banks, financial institutions and the constant bailouts by the Federal Government of businesses “too big to fail”.

The unrealistic increase in property values which we saw several years ago was not a good thing — it was unrealistic and unsustainable.  The overvalued prices of real estate have left many homeowners upside down with regard to value vs. debt.  Many who are not able to ride it out, are walking out….as in foreclosures and short sales.

In the Phoenix area we are still seeing foreclosures, but sales have picked up lowering the number of homes on the market.  The vast majority of buyers are first time home buyers.  The government induced $8,000 tax credit has spurred much needed interest in homeownership, as well as the affordability and lower interest rates which make it very attractive to buy a home.

The rise in inflation will make it harder for people to purchase a home in the coming years as wages seldom keep up with inflation.  Dennis Torres, a California realtor and adjunct professor at Pepperdine University claims that he predicted what is currently happening about three years ago.  At a conference organized by the University, Torres “spoke of an impending housing market collapse…..we would soon see housing values decline 35 to 40 percent”.  He was not a very popular person at that convention.

In addition, Torres believes that prices will continue to decline throughout 2009 and then we will experience several years — perhaps up to five — of stagnant housing prices.  It’s a dark forecast indeed, but if one is prepared one can dance in the rain.

DOWN PAYMENT ASSISTANCE AND THE $8,000 TAX CREDIT

There were many proponents in favor 

of using the $8,000.00 first time home buyer tax credit as down payment assistance.  This has recently been shut down by HUD.  It seems there were just too many hurdles, IRS issues, the “repayment” issues, ——-

“That tax credit should be savings, not debt,” said Patricia Garcia-Duarte, Executive Director of Neighborhood Housing Services in Phoenix.

Garcia-Duarte said the proposal too closely resembled a now-illegal practice known as seller-funded down-payment assistance, which allowed a home’s seller to “gift” the down payment to a specific buyer through a non-profit organization.  

The FHA loan is still the best way to go as it requires only a 3.5% down payment as compared to at least 10% with other lending institutions.  I am in favor of the 3.5% or higher as forcing people to have a down payment no matter how small gives them equity in their home from the start.  What ever happened to saving to buy something.  That is what got us into this mess in the first place.

PHOENIX FORECLOSURE STATS & UPDATE

According to AZ Journal of Real Estate and

business, “foreclosure activity in March 2009 represented 31% of the sales recorded down from 51% in February, 2009.”  The experts are hopeful that we are at the bottom of this and can start to inch our way up to more traditional sales.  We’re still seeing foreclosures especially as the short sale properties go to auction and have a “status change” scenario.

This foreclosure market, especially in the lower range homes, has brought investors back as well as owner occupants.  The investors are coming back with the hopes that home prices will rise over the next several years.  Greater Phoenix is a large area encompassing many areas where the median home prices have dropped significantly and the foreclosed properties have left many remaining homeowners see the equity in their homes erode.  It’s a situation that those of us who are making our payments are hoping will pass.  This keeps people in their homes and stops more homes from flooding an already overloaded marketplace.  

There are a lot of good deals out there in the foreclosure market if you want to jump into the market.  Especially first time home buyers.  Be aware of the pitfalls when purchasing bank owned properties.  Sometimes the more expensive listings are actually in worse shape than the lower prices homes — price ranges of $120k to $140k — depending upon the community.  

In addition, some listing agents don’t respond very quickly to the offers that are submitted, especially if the offers are just to be emailed or faxed.   Remember, the squeaky wheel gets oiled.  So, stay on top of the submission.  Good luck to everyone as you maneuver your way through this challenging dynamic!

FORECLOSED PETS

I think the saddest thing I’ve heard about is the pets

that have been the victims of the real estate meltdown.  I was reading about a Realtor in California who has taken it upon herself to take these animals to shelters and see that they are given the medical attention they need and hopefully adoption.   This is amazing and she’s doing a wonderful thing.  I hope all realtors who run into this are as compassionate.  

I know it’s the easy thing to do.  Leave a pet behind.  If you cannot afford to take care of your human family, how are you going to take care of an animal.  I do understand, I just don’t agree.  People who leave their pets behind are just too lazy and selfish to take them to a shelter or even their vet and say that they cannot take care of them.  Don’t just leave them in the home to starve to death.  

These animals are so vulnerable.  They don’t understand what is happening.  This agent in California said that when she goes into a home, the animals are so happy to see someone human.  It’s so sad.

I do not work on distressed properties and I know that if I did and found these animals left behind, I’d have so many dogs in my house that my husband would leave!  

Anyway, there are options.  Don’t just leave them.  They are a part of the family as well.

PHOENIX MARKET UPDATE

According the Cromford Report, here are the  

facts concerning sales, pendings and overall statistics regarding the Phoenix real estate market in May, 2009.  This statistical report is provided to anyone who wants to purchase it, however, our board is providing a complimentary trial period through the end of 2009, so I’ll be reporting periodically about what’s going on in the market….statistically speaking.

SCOTTSDALE - ACTIVES:  From a high in March of 4,110 active listings, we are down to 3,882.  Overall the inventory is lower while sales are up.  However, days on the market are up and price per square foot is down.  

PARADISE VALLEY - ACTIVES:  From the highest in March of 581 down to 574.  Keep in mind that the average price is higher and there are fewer homes overall than say Scottsdale.   Pendings are up.  Days on the market are edging toward 1 year.

PHOENIX - ACTIVES:  From a high in early January of 10,871 actives are down to 7,479 this week.  This is due to the lower price point throughout Phoenix which will most likely cater to first time home buyers.  Pendings are up…even from the same time period in 2008, and days on the market are down.

We continue to see positive signs here and there — glimmers of hope if you will.  I would say the  decrease in prices (value) is significant especially if you bought at the high 2004-2006.  However, I am of the mind that if you hold on — can hold on — there will be improvement throughout the next couple of years.  

Should you require more in-depth information, I’d be happy to provide it….just let me know.

LOAN MODIFICATION

Are you in need of a loan modification?  Do you

know if you qualify for a loan modification?  The vast majority of Americans don’t even know if they qualify.  To qualify for a loan modification, you’ll need to prove hardship, i.e., loss of job, decrease in income, illness, etc.  This is not for people who are “upside down” in their mortgage.  My suggestion is that if you are upside down and you can ride this out, hang in there.  Pay your mortgage and deal with it.  There are a lot of people out there in homes all over the valley in all price ranges who are suffering the same unfortunate circumstances.  

Have you tried calling your bank?  Are you getting anywhere?  Does this sound like your situation?  Unfortunately, there are many companies out there taking advantage of people — making promises they cannot keep.  Here’s your clue, if a loan modification company wants money up front, that is a sign that they are not operating above board.  They should not take a dime from you until and unless they can help you.  There are computer programs that honest companies have that allow them to input information which then tells them if you are a “pass” or a “fail” for loan modification.

I am working with a company that employees former bank employees that worked within those banks loss mitigation departments.  They know how to get the information through.  They know who to call.  

In addition, should you not qualify for a loan modification, they’ve done the paperwork to set you on the right track for a short sale scenario.

I’ve linked to the site….great people with your best interests in mind.

NORTH SCOTTSDALE BEAUTY

I was showing property in Scottsdale

yesterday and came across a short sale scenario in North Scottsdale (up by the Boulders).  The home is owned by a decorator and it shows….beautiful wall treatments…granite throughout, stone pillars, travertine flooring, nice pool….$485k asking for a little over 3,600 SF.  I did not speak with the listing agent so I don’t know if there are any offers on the table.  If I could sell mine, I’d be interested in that one!  

Saw several other homes in various zip codes in north Phoenix and Scottsdale.  Viewed a home in Aviano for $417k that was actually a great price for that area.  This is a bank owned property.  We saw a few distressed properties and only one didn’t have a refrigerator or a dishwasher.  I was actually surprised that they were in such good condition.

There’s a home in The Preserve (58th & Dynamite) that is now bank owned.  Former model…beautiful home on an acre…negative edge pool….4000 SF….$589k.   While this is not good for normal resales within this development, it’s a great opportunity for a move up buyer.

There are definitely great deals out there!  If you’re able to buy, this is really the time to move forward, especially while the interest rates are so low.   As mentioned in a previous post, our inventories (here in the Phoenix metro area) are down slightly and the numbe of homes in escrow are up.  While it is still a buyer’s market, at least people who don’t have to sell are staying off the market.  This will clear the inventory quicker and start to stabilize our home prices.

Wall Street Rally - What Does This Mean For You

To think that the numbers on Wall Street have

nothing to do with our economy is just plain wrong.  When the stock market is doing well, it goes hand in hand psychologically with people’s confidence in the economy.  While I don’t think that Wall Street should be the only barometer on how we run our lives, I do believe that the numbers reflect what is happening in the marketplace.  If the investors show confidence, it spills over to the consumer.  Don’t get me wrong we’re still way below the crazy high of 13,000, but at least we’re holding firm with the normal up and down movement that is the stock market.

While the real estate market is showing signs of leveling off, there are still parts of the country that are hurting bad.  Keep in mind that you cannot judge every market by the national news media.  Remember, tragedy sells and therefore it is much better for ratings if they project doom and gloom.  Be sure that you are getting an accurate read on your own market and not listening to the “averages” across the country.   Averages can be dragged down by one low number and in the converse brought up by one high….keeping everything in perspective is important.

It is also important to have a realtor who knows what’s going on in the world.  Knowledge is power and you want an advocate that is able to decipher the information and give you the very best information available at any given time.  

The Phoenix real estate market is going strong.  We continue to see movement in number of homes listed (it continues to decline) and homes that are in escrow (this remains high).  That along with consumer confidence picking up can only mean a win win for us all!