Archive for August, 2009
PHOENIX HOUSING MARKET
What’s up next for the Phoenix housing
market? Well, all indications are that the prices are leveling off and we’re seeing a “bottom” to the downward spiral. I believe that may be true. However, what is happening with the foreclosure market? When I look at the Multiple Listing Service and check the listings that are coming up for my clients on a regular basis, there are a good deal of short sales. What happens to the homes that are listed as short sales but don’t sell? Right, they turn into foreclosures.
We still have a ways to go in this market. While I’d like to think that we’re done, I don’t believe that is the case. I’m hoping that the marketplace can absorb all these distressed properties. Are the banks holding onto these properties? I would hope that if they are that they will be put back into the market at a slow enough pace to keep things moving.
Only time will tell. I’m still an advocate of “if you don’t have to sell, wait it out”…..if only because all of the short sales and foreclosures are keeping the prices down. Especially in large communities.
On the other side…if you can buy now, get busy! I think we’re going to see huge inflation within the next couple of years…..at that time I don’t think the Fed will have any choice but to raise interest rates. This market is very hard to read…..good luck and let me know if I can help!
LOAN MODIFICATIONS
I blogged awhile back that I was working with a
loan modification company. They are having success. There are a few things you should know about the process. Keep your payments current if possible and if not, don’t wait until you’re 3 months behind to talk to a company that can help you (don’t spin your wheels with the bank unless you get immediate attention–they’ll drag it out). I’ve spoken with many people who have tried to deal with the banks directly and have gotten NOWHERE. It’s such a shame that we cannot call our lender and work something out directly with them. Instead, you may have to become delinquent in your payments and then hire a loan mod company to negotiate for you–check with a professional.
Keep in mind that if you make too much money, you most likely will not qualify for a loan mod. Take your gross income and start subtracting all of your expenses. Now, this does not include fitness memberships, golf club memberships, entertainment expenses and the like. The only thing the bank is interested in as far as hardship is what the bottom line is after you’ve paid your monthly LIVING expenses, i.e., mortgage, insurance, property taxes, payroll, federal and state taxes, groceries, utilities, car payment(s), gas for your car, school loans and similar items — NECESSITIES. If you have huge credit debt, you will be required to go through credit counseling. Bottom line….THE BANK DOESN’T CARE IF YOU’RE UPSIDE DOWN IN YOUR PROPERTY. You will have to prove a hardship, i.e., curtailment of income, loss of job, illness, etc.
The fact of the matter is that the banks don’t care if the property’s value is less than you owe. They just want to be paid. I’ve heard stories of people who’s home value has dropped; the house down the street is for sale for less (and perhaps it’s bigger), so they walk away from their obligation and buy the one down the street….maybe they even take all the nice things out of their current home, i.e., refrigerator, ceiling fans, lights, other appliances, even countertops. I have a problem with this. I think it’s immoral. This has got to stop somewhere and people who are doing this are part of the problem, not the solution.
Most of us are victims of this mess. Just sit tight, pay your bills and hopefully we will see an end to this. If you’ve lost your job or have fallen on hard times because of illness, that is a different story. Just don’t perpetuate the problem by being a quitter. Get a handle on your situation and talk to as many people as you can to get good information.
PHOENIX HOUSING MARKET
There’s some good news for the Phoenix housing
market. Unbelievable that it’s been 27 months of declining prices for homes in the metropolitan Phoenix housing market. Started out slower, then boom! In any event, after 27 months, according to ASU Professor Guntermann, a 3-month period of prices holding, sends indications that we’ve most likely hit the bottom of this decline. There will most likely be certain markets that will continue to see drops in pricing….i.e., luxury home market. Some areas will be harder hit than others, but it’s a positive sign that buyers are once again entering the marketplace.
Most buyers are under $200k and first time buyers, but they are keeping the market going. We’ll most likely continue to see short sales and foreclosures for sometime to come. This can change the scenario because foreclosures drive down the value of the “regular” sales. Stay tuned….I’ll keep you updated as I find information.
WHY ISN’T MY HOUSE SELLING?
This is a common lament from a lot of homeowners.
There are a number of reasons why your home may not be selling. Let’s start with the current market. Owners need to be out of the mindset of several years ago….that is past and hopefully, will stay in the past. Those were way overinflated times and we don’t need that again. Unfortunately, if you bought during the highest point, you may be out of luck. This is why we are seeing, and will most likely continue to see, short sales and forclosures.
You need to objectively look at your home as a “buyer”…..I often suggest that my sellers view similar homes to see where they rank in the “wow” factor. There will be both nice and not so nice listings and it’s good to actually see the homes in person. Don’t just rely on the pictures on the internet…..sometimes photos hide all manner of mistakes.
It’s VERY important that you stage your property. I am a huge proponent of first impressions are lasting ones. Curb appeal is key to getting the buyer into the right mindset once they’ve entered the house. If they don’t like what they see outside, chances are that they’ve already got preconceived notions of what’s awaiting them inside. Some buyers I’ve been with will not even go inside if they don’t like the outside. While there are exceptions to this rule, why take the chance. Make sure your yard is freshly landscaped. Make sure all bushes and trees are trimmed so that potential buyers can see the house. Remove all hoses from the front. Sweep the doorway. Make sure your door is clean and any windows clean as well (this goes for the entire home…no one wants to look through dirty windows–let the light in!). Stand on your curb, look at the house….really LOOK….be critical; pretend you are a buyer! If your home looks tired, spruce it up a little.
You MUST, MUST think of yourself as moving. There’s no use in putting your home “on the market” to test the waters. This is a waste of time for you, your agent and others. If you’re not serious and you cannot wrap your brain around moving, wait until you can. Prior to listing, I suggest starting your packing. Remove personal items, i.e., religious icons, photographs, books that are controversial, etc. This way, buyers will look at the space and not focus on who lives there. People are funny that way, perhaps they won’t buy because of your religion….you just never know; why give them the opportunity to walk away because of that.
Straighten your closets….this doesn’t mean call Classy Closets, it means pick things up off the floor and/or pack. Plastic bins are terrific organizing tools. Make sure that your clothing is neatly on hangars. Also, linen closets need to be straightened up….don’t give buyers a chance to fixate on the messy closets and not the storage space they offer.
If you’re going to pack, stack the boxes — neatly — in the garage. If you have a lot of things in the garage, clean it up. Have a garage sale and get rid of everything you don’t use/need. Call a charitable organization to come by the day or so after to pick up everything that doesn’t sell. Are you going to move and put the same things into your new home that you didn’t use in your current home?
Kitchens need to be clutter free. Clear the countertops as much as you can. Put papers away. Put small appliances away. Let buyers see the space. Make sure surfaces are clean and the sink is sparkling. Also, buyers may open your refrigerator….be prepared. A pantry, if you have one, is also something that needs attention….make sure it looks neat.
If you have children, now is a good time to teach them to pick up their toys. You’re not expected to remove everything, but keep toys to a minimum. If you have a playroom, make sure that the floor is clear for entrance.
Look at the walls, do you need to paint? I suggest a fresh coat if need be…..most buyers will feel differently about a freshly painted home….it feels cleaner. Buyers will like that they can move into a home without worrying about painting.
Don’t take anything that your selling agent says personally. He/she wants to sell your home as much as you do. Better for one of them to tell you about negatives than hearing it constantly from potential buyers. Get a head start on preparing your home properly for sale.
Last, but certainly not least, PRICE is key. It’s better to price competitively in the beginning than to keep dropping the price. Remember, if your home is priced appropriately you’ll get showings. You should have the greatest amount of actively in the first few weeks a listing is on the market……this will tell you if it’s priced right. Be prepared for a lot of competition. You must also be aware of the way appraisers are viewing properties today. If your price is too high, it may not appraise out and then you’ll have to negotiate down or lose the sale.
Ultimately, chose a realtor who is honest, fair and who you like. This is a very personal decision and oftentimes very emotional. Think of your home as a commodity. You’ve decided to sell, it’s time to move on!
PHOENIX LUXURY HOME MARKET
In reviewing the metropolitan phoenix luxury homes
market, I rely on the Cromford Report for the update of inventory as far as days on the market and and inventory in terms of months supply. These statistics are for Paradise Valley homes — all price points. July’s number of months inventor was 26.5 and so far this month we’re down to 19.2. If the month holds out, that is a good indicator that 1) homes are selling and 2) with the inventory down, this will once again stabilize our market.
Homes in the Scottsdale area are about the same from July, however the inventory is down from last quarter. Scottsdale is also a larger area than Phoenix. The month’s inventory is about 7.7 months currently. These numbers reflect all price points and not just high end.
We’ll most likely continue to see foreclosures here and there, however, there’s definitely been a slow down.
ANTI-DEFICIENCY LAW IN AZ
The anti-deficiency legislation proposed by Congress-
man Pierce is inextricably tied to the state budget. In other words, if the budget fails to pass, we will need to find another way to circumvent the legislation that is supposed to take effect on September 30th.
This could really hurt our housing/economic recovery. If investors have to prove that they’ve personally lived in a property for at least 6 months before they qualify for foreclosure protection, this will be a mess! Keep your eyes and ears open for news relating to this subject matter as it will affect ALL of us here in the State of Arizona……
SHORT SALES - DO YOU UNDERSTAND THEM?
Short sales. You see them everywhere. Perhaps
you are thinking of doing this with your property. As realtors, we have been faced with a market that is to put it mildly, crazy! Homeowners who are upside down in their property (owe more than the property is worth) are facing heart wrentching decisions…do I leave my home? What choice do I have. Especially if you bought at the height of the market and perhaps you’ve had a curtailment of income.
Statistically speaking, few homeowners contact their bank directly. However, to be fair, most banks are so overwhelmed that they are not able to take good care of their customers–this is not an excuse, just a fact. The process is getting better because this market is not going away anytime soon. I saw an economist on a news show today that said that if the banks don’t “re-adjust” the mortgage value of the home (when they are so under water), we will have more trouble getting the economy back on track.
The loan modifications won’t do any good if your property value is not increasing. This is particularly true for hardest hit areas. So, people try to short sell their homes. You should always seek appropriate financial/legal counsel when it comes to short sales or foreclosures. The short sale WILL affect your credit.
