CAP AND TRADE AND YOUR HOME

I don’t like to bring politics into my real estate blog

except when it will impact the housing market.  Americans need to be informed on the massive Cap and Tax (Trade) bill that squeeked by in the House of Representatives and is headed to the Senate where hopefully calmer heads will prevail.  Be advised that there is a provision in this 1,300 page bill that the government wants to mandate that the California building codes be instituted across the nation.  This has worked so well for California that we all want it, right?

Be sure to check online…there are many sources where this information is available.  This is not a party issue this is an issue that will affect your ability to buy or sell your home.  If you care at all about what’s happening as the politicians slip this under our noses in the dark of night, you’ll become involved and make sure that you are contacting your Senate representative to vote NO to this legislation that will not only impact your ability to sell your home, but will add up to $6,000 per year in additional energy costs to run your home…..do you want the government telling you what temperature to keep your home, mandating the quality of your windows, doors, etc.?

Don’t take my word for it….google Cap and Trade and read all you can….we should be outraged!!!  We must be informed.

TAX CREDIT UPDATE

The President of the National Association of

Realtors recently updated us on the status of the $8,000 first time homebuyers tax credit.  Not only is the association looking to extend this credit to homebuyers, but they are seeking an increase to $15,000 and extending it into 2010.  We do not know the details, but I will keep you posted when I hear any other news to confirm or deny.

Remember, as it stands now, the credit will expire on December 1, 2009.  That means you must have a contract dated by no later than November 30, 2009 to qualify.  I am once again reminding you that you qualify as a first time home buyer if you HAVE NOT owned a home in the last three years and you will not have to pay this money back…..as long as you stay in the home a minimum of 3 years.

GOOD NEWS IN THE PHX HOUSING MARKET

Up from the lowest point in April, 2009, we’ve seen

a rise in the median price from $116k to $124k.  This is a 7.8% increase in sales prices.  Of course, these prices are seen in areas where buyers were seeing homes selling for $50k.  These homes have now cleared the market place and this bodes well for the gradual increase in value…..as we have experienced in years past.  In addition, the market is clearing itself of the bank owned properties according to the Cromford Report data.

There are rumors, however, that the banks will be releasing more toxic assets at the end of this month.  The quantity remains to be seen.  As a realtor, I can only imagine what a large influx of foreclosures would once again do to our market.  I believe that if we continue to see unemployment rise we will continue to see more foreclosures.

I work with a group doing loan modifications and they are having great success.   This may be our only hope of holding the market steady while we wait for the economy to rebound.   While not everyone is a candidate for a loan modification, there are many who are.

FIRST TIME HOMEBUYER TAX CREDIT

I’ll keep hammering this home until it’s almost

at an end.  The first time homeowner’s tax credit, that is.  You are a first time home buyer if you HAVE NOT owned a home in the last 3 years.  This is a true tax credit and not a “loan”…..does not need to be paid back.  However, the one caveat is that you must remain in the home — primary residence — for at least 3 years.

This is a win win situation.  The FHA loan program requires 3.5% downpayment requirement and if you need help with that, say from your parents, they can “gift” you the downpayment by submitting a letter stating that the money is a gift and does not need to be paid back.

This tax credit is set to expire on December 1, 2009.  We don’t know if it will be extended and most likely won’t know until close to the expiration.  If you are entertaining an FHA, you will need approximately 60 days to close.  Of course, if you are paying cash, the closing are typically quicker.  Beware of the bank owned properties as they can sometimes take a little longer especially if there are issues with HOA arrearage.

This is a terrific opportunity for people to get into a home and have the government pay you to do it.  Don’t miss out.  If you need more information, please feel free to contact me.  I have recently closed on a bank owned, first time homebuyer property — cash deal and I am currently working with a first time home buyer in an FHA situation.

In addition, if the home you are looking at is a townhome/condo there are lenders getting spot FHA approvals.  I know two lenders who are having good luck with this scenario.

STATISCALLY SPEAKING-PHOENIX MARKET

Year to date comparative analysis of sales in the

metropolitan Phoenix area.  Comparing June ‘09/May ‘09 respectively.  Active listings are down slightly 19,133/20,839.  Listings sold are up 2,502/2,201 .  Days on the market are down a little 135/140.  Pending sales are 3,381/3,302.  Average annual sale price is down $291,662/$295,682.  All other markers show that we are still down from ‘08 and ‘07.  That is no surprise as the bank owned properties will continue to be a drag on the market for some time to come.

Statistics gained from the Cromford Report.  If you’d like exact anaylisis of your zip code, please feel free to contact me and I’d be happy to comply.

SELLERS NEED TO BE REALISTIC IN TODAY’S

Real Estate Market. I had a telephone conversation

with a seller the other night.  This couple has put their home on the market each of the last three years.  They have yet to sell it.  They recently listed in January, 2009 and the listing just expired.  They wanted to talk to another agent to get a different point of view.  The agent they have been using is a friend.  I agreed to talk to them.  I am nothing if not totally honest.  They live in a desirable community in North Scottsdale and I recently sold a home in there — I like what I do and understand the market.

Their home is about 3,000 sf, they have a lovely yard, no view other than the block wall, but the yard is large enough to make it a paradise….and it is.  The kitchen is not too outdated — although they have two different types of countertop material; one on the island and one on the surrounding counters.  The bathrooms are original and the home is about 15 years old.  In addition, they have several different types of flooring throughout.  They felt that all the different flooring might be the a problem.  I agreed that at the price they were asking as well as the money that a buyer would have to put in the home to update/correct things that they were overpricing the home.

In addition, they shared that they have not had a single offer during any of the three times the home has been on the market — not even a low ball — and they have had very few showings.  This is a definite red flag that the home is overpriced.  The first couple of weeks of a listing cycle (if the home is priced right) are the busiest.  If you’re not getting traffic through especially in the beginning, how are you going to sell?  In addition, their agent held open house after open house to no avail.  I am not a big fan of open houses.  I think it brings in nosy neighbors and only helps the agent sitting the open house meet potential buyers who are not working with an agent.  I feel that they are more “realtor showcases” than an effective marketing tool.

Sellers need to be realistic about this down market.  There are lots of homes — lots of competition.  You must be serious about selling.  You must have a heart to heart to discuss what your bottom line can be whether it’s financial or emotional.  If it’s emotional, perhaps it’s not the time to move.  In addition, homes priced over $500,000 sit a little longer unless they are short sales or bank owned.  Make sure that your agent is keeping you updated on the statistics for your market, i.e, number of listings and average days on the market.

This is indeed a difficult time in real estate.  However, with the right agent who you like and who you think is doing their best, and who’s not just interested in having a lot of listings for appearances, it can be a positive experience.

PHOENIX REAL ESTATE MARKET

We’re continuing to see increased activity

within the Phoenix real estate market.  Of course, the lower priced homes are selling extremely well due to an influx of first time home buyers taking advantage of the $8,000 tax credit.  In addition, we’ve seen some investor activity.  They are buying low, repairing the REO properties and renting until the market improves.  Usually, if they are getting a property for as low as $50k, it’s already increased slightly and then when it’s updated, it will only continue to increase in value.  

I saw a chart on the crazy increase in value that we experienced from about 2005 to 2007.  A normal increase in value has stayed steady at around 25%.  We then saw a spike of increase in value to 80%.  This is part of what did the market in.  There was no support for that.  So, it will take longer than expected to correct.  The experts are saying up to 5 years.  

I’ve had several first time home buyers and they are getting amazing deals.  If you’re fence sitting, it’s time to take the plunge!

THINGS ARE LOOKING UP — A LITTLE

Everytime you watch the news there seems 

to be nothing but bad news.  I agree there’s a lot to be concerned about, however, we are seeing a slight improvement in the housing market as compared to same quarter last year.  There’s no doubt that homes have lost value, we all know that.  But, what is interesting is that there are signs of improvements as far as number of listings, which is down, and the number of closings, which are up.  

The foreclosure market and the first time home buyers has definitely fed that.  I believe we’ll continue to see a little improvement until such time as the interest rates are up and the buyer pool once again shrinks.  These are unchartered waters for everyone and only time will tell.  I’ve always been a very positive person and I still believe that the American people are made of some pretty strong stuff.  I also believe that there is opportunity here in Arizona.  I believe we may see an influx of people to our state because of the weather and the potential opportunity here.  We have terrific universities and hopefully those young people graduating will remain here to help grow our economy.