Author Archive
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.
FORECLOSURES–BANKS BEST INTERESTS??
What is the government doing to stop/slow them
down? While the admininstration continues to grapple with the enormity of the housing crisis vis a vis foreclosures, lenders are not helping people stay in their homes by modifying their loans. Some lending institutions feel that letting the home go into foreclosure is actually cheaper for them. Out of the 1.5 million foreclosures, a mere 200,000 loans have been modified….less than 3%. The banks are of the mind that even if they modify a loan there’s a chance that the homeowner will eventually default even with a smaller payment. (Washington Post, July 28, 2009 by Renae Merle)
The unemployment rate is contributing to that scenario as well. People are struggling to stay in their homes, but when they lose their job(s), they don’t have a choice but to walk away. The news was good for June that the real estate market has ticked up, however, we still have a long way to go. The foreclosures will continue to drive down value and until we can clear the inventory, we have to play the waiting game. In the end, I don’t think anyone knows how this will turn out.
SB 1271
Good news on the anti-deficiency legislation
in Arizona. Senator Steve Pierce (who was the sponsor of the bill in question) has requested that the legislature revisit the bill to address the unintended consequences to homeowners that this bill carries. Mr. Pierce met with the Arizona Association of Realtors yesterday to discuss how best to help Arizona’s small banks who are suffering from the mounting number of foreclosures and the lack of TARP funds to help the banks.
Thank you to Mr. Pierce for taking the time to listen to our concerns for homeowners in the State of Arizona.
SUMMER IN PHOENIX
I have a friend who wishes he was in San Diego.
Frankly, I think Arizona is pretty terrific. Yes, summers are hot. It’s the desert. We’ve lived here 12 years and you do not get used to it, you tolerate it. It’s the same every year, people complain about how hot it is. It’s this hot every year! We suffer through several months, because the remainder of the year is wonderful…..
The days are getting shorter. This means that the desert has more time to cool down. It’s only the end of July. We don’t start getting cooler nights until September. We had a really wonderful June. I don’t ever recall having to shovel sunshine. And, if you want to get out of the heat, you only need drive to Show Low or Flagstaff to experience cooler temps….what more could we want?
To that end, I saw an article in the local paper this past weekend that the prices for “summer homes” is amazing in the mountains….great time to buy up there……we did 3 years ago and it is wonderful…..even in the winter!!
JULY REPORT ON PHOENIX HOUSING MARKET
Phoenix real estate market report for June, 2009
shows the following statistics according to The Cromford Report: Regarding active listings in Phoenix beginning in March-July 2009, actives went from approximately 9,000 down to 6,000 …. about one-third. In Scottsdale for the same time period March-July, 2009, active listings decreased by slightly less — 4,100 to 3,100 about one-fourth.
In addition, the number of pending listings has dropped a little in most major cities within phoenix. This is most likely attributable to the economy and the fact that the inventory is down a little. We will still need to see some movement upward to give us hope that we have indeed turned the corner in the downward spiral and are heading up.
Overall, there’s about a 9 month inventory of homes. This will vary slightly from city to city and the higher end homes (over $500k) are sitting longer as the pool of buyers for those properties is smaller. The pending sales are down a little from last month, however, sales are up. This is a good sign. We want fewer homes on the market. This creates “need”.
There are many investors still coming in and buying homes, fixing them and either renting them or turning them around and making a few thousand dollars. This is a good thing in that fixing the properties that have been foreclosed on only improves the value within an entire neighborhood.
There continues to be good news on the home front as people’s confidence levels come back. I believe that the jobless rate will keep things in check, but overall the news is positive. First time homebuyers and investors continue to drive our market. The higher priced homes move slower, but there is great opportunity out there.
PHOENIX DEFICIENCY AMENDMENT
Recently, the Governor of Arizona, Jan Brewer
is getting ready to sign legislation that is supposed to take effect on September 1, 2009 eliminating our current anti-deficiency policy in the State of Arizona. This is HUGE. The banks, who are the ones on the band wagon here, have lobbied the Governor to change this law. Essentially, SB1271 would allow banks to go after homeowners for the balance owned on their home after foreclosure…..the difference between the amount they received for the foreclosure and the amount owed on the house. This also will affect investors because in order to be covered by the anti-deficiency law, the investor will have to prove that they have lived in the home(s) for a period of not less than 6 months.
Here’s a quote as described in layman’s terms:
Cause: One of the problems Arizonans facing foreclosure have is the very short timeline involved. We have one of the shortest in the nation – only 90 days from default. And now we are going to let banks chase defaulting borrowers for recovery above and beyond that which is recouped when the bank sells off the foreclosed house.
Effect: So suddenly the banks no longer have any incentive whatsoever to work with a borrower to resolve delinquencies. Now the bank can quickly foreclose, sell the house below market value and then go after the defaulting owner for the difference! This will in turn drive down Arizona real estate prices even further. Perpetuating falling real estate prices will only worsen our struggling economy. Furthermore, the relationship between the lender’s rights and the borrower’s rights will be seriously imbalanced by this change to the current law. The only winners here will be the banks who got us into this financial mess in the first place.
Our real estate market has taken enough of a hit, this will virtually kill it. If you can, call Governor Brewer’s office and express your concern about this terrible piece of legislation and tell her you support the Arizona Association of Realtors plea to her to revisit this decision as soon as possible through the special session.
I don’t know about you, but I’m getting worn out from all this government intervention and having to put my 2 cents in!
PHOENIX HOUSING MARKET UPDATE
While the number of closings has been creeping up
over the last several months, we should not get too excited just yet. We still have a long way to go. While the foreclosures tend to dominate the market, we still need to pull in traditional buyers to get the market up out of the hole. We are still seeing investors purchasing the really low end properties. Hopefully, they will repair them and hang on to them for awhile while the market stabilizes. The only way we’ll see an increase in value is when the demand is higher than the inventory.
I’m not an advocate of runaway price increases…..that is what contributed to putting up in this mess. We need to see a gradual increase in prices as buyers gain confidence in the marketplace once again. Let’s see what the next report brings.
CAP AND TRADE
All homeowners should be worried about the
latest government push to pass cap and trade (cap and tax). Notwithstanding the huge tax burden this will put on companies and individuals, there are other things within this legislation that will affect each and every homeowner in America. Do your research. There is a provision in this bill that will allow the State to come into your home and ascertain whether or not it meets Federal standards for efficiency. Yes, you heard right…..they’ll be able to tell you what you need to do to bring your home up to their “standards”.
This is a huge deal for homeowners. Say, for instance, that your home needs $8,000 worth of “updating”. If you are unable to pay this amount, a lien will be placed on your property. If you think I’m joking, you need to research this. The States have all the information on your property now whether residential or commercial. They will be able to come into your residence to check on your windows, A/C, heat supply, etc.
We should ALL be outraged. This is a huge farce. The only people benefiting from this legislation are companies like Goldman Sachs and people like Al Gore. If you think the housing industry is suffering now, just let this go through and we’ll really be in a world of hurt. In addition, while the powers that be here in the US are so concerned about “global emissions”, China, India and Mexico REFUSE to participate….how’s that going to work? It’s an all or nothing game here. The only ones that will lose are the American homeowners.
REAL ESTATE SALES STATISTICS-PHOENX
Real estate sales statistics, according to the
Cromford Report are down from the same time last year and last month. I am going by normal transactions….this meaning that this particular statistic does not include foreclosed properties or short sales. Active listings are down, which is good for keeping over saturation in check, pending listings are down slightly from last month and up from last quarter.
As far as percentage of all types of transactions, number of active listings are down across the board; pending sales are down slightly from last month, but up overall. We can attribute most of the activity to first time home buyers and the fact that the prices are low enough to entice them into the market. The sale of townhomes and condominiums is down significantly.
I believe people are still cautious. Consumer confidence is down, credit is available, but not like it should be. I don’t think you should be able to buy a home without a downpayment. Homeowners need to have some “skin in the game” in order to feel compelled to make it work. We will most likely continue to see foreclosures for some time to come.
Should you be interested in a statistical report for your particular zip code or city, please feel free to contact me.
