What Does the Bottom of the Real Estate Market Look Like, Anyway?

If you look at the current real estate market statistics,  it sure looks like things are starting to turn around here in Phoenix.  Sales volume is up, equivalent to 2007 levels, and the inventory of homes on the market is down - about an 8 month supply.  Things look even rosier of you take the short sales out of the picture - those zombie listingsthat bloat the inventory levels - and you will see areas where homes are selling in a matter of days, often with multiple offers.  OK, so it's not all good news.  Prices are way down, 40% less than they were last year, with median homes prices about where they were in 2005.  But it looks like the … [Read more...]

Toxic Assets – The Ultimate Short Sale

There is a lot of talk in the news these days about toxic assets...but what in the world does that term mean? And why is everyone so worried about them? Toxic assets are a direct result of the decreasing home values applied to some bad loans.  Let's say the bank loans Joe Homeowner $100,000 to buy a $125,000 house.  The house acts as collateral for the loan.  If Joe defaults, the bank takes back the house that is worth $25,000 more than the note on the home. Even though they do not want to own real estate, at least it is worth MORE than what was owed to them.  But let's say that Joe's house starts to devalue and one day, it's only worth … [Read more...]

Making Home Affordable – Website Helps Homeowners Struggling with Mortgage Payments

Coming on the heels of the Obama Administration's recent launch of a new program to help troubled homeowners, the government has launched a new website to offer assistance to those seeking relief from mortgage payments they cannot afford.  The website Making Home Affordable offers several resources to help troubled homewowners determine if they are eligible for assistance with their mortgage.  There programs are aimed at homeowners struggling to remain current on the mortage payments on their primary residence. Since President Obama announced the Making Home Affordable program, lenders have been flooded with calls from homeowners … [Read more...]

Home Shopping with Kids – A New Perspective on Real Estate

I happen to have four boys - very energetic ones, I might add - so I always enjoy it when my clients bring their kids along when we are shopping for homes.  I probably enjoy it more than my clients do because house shopping with the kids in tow can make the experience a little more stressful, and who needs more stress when you are shopping for a new home!  Over the years, I have learned that kids add their own perspective to real estate and their input can be helpful when trying to make a decision. Here are few things I have observed: Teenagers are all about location, location, location. And this is sage advice that any real estate expert … [Read more...]

Is it a Recession or a Depression?

Have you heard the old saying: "A recession is when your neighbor loses his job...a depression is when you lose your job." Yeah, that used to be kind of funny until we all found ourselves in a position where we had to decide between the two.  Face it, we are all in one category or the other these days. This saying comes to mind as I read different blog posts and comments about the recent announcements of the Obama Stimulus Package and the Homeowner's Assistance Plan dubbed Making Home Affordable  (for information on this program, check out the official site at www.financialstability.gov).  Clearly, our nation is facing some unprecedented … [Read more...]

What As-Is Really Means – REO Buyers Beware

I recently worked with a Buyer on an REO (bank-owned) transaction.  Her budget was tight so we had been slugging it out with all the other bargain hunters here in Gilbert to find a great home at a great price.  Because we hoped to close the deal sometime in 2009, we decided to forego short sales and that left mostly REO's.  It was tough to find a home within my Buyer's budget that met all of her criteria.  We were outbid several times, when we finally thought we hit pay dirt with a great little home in Neely Farms. Here's how the property was described in the listing: BANK OWNED PROPERTY. THIS IS A GREAT PROPERTY FOR A FIRST TIME HOME BUYER … [Read more...]

Bank-Owned Homes – Selling like Hotcakes!

I recently posted about the zombies of real estate - the short sales.  At the opposite side of the spectrum are the foreclosed homes, commonly known as REO's (Real Estate Owned) or homes owned by the bank.  REO's are being listed at very competitive prices and often sell in a matter of days. In many areas, the majority of homes sold are REO's. Here are some interesting statistics from February: In Gilbert, 51% of homes sold in February were REO's. Only 16% of homes listed were REO's.  Months of inventory of REO's: 2.5 In the City of Phoenix,  81% of homes sold in February were REO's. Only 36% of homes listed were REO's.  Months of inventory … [Read more...]

Are Short Sales Worth It?…The Zombies of the Real Estate Market

Short sales are the most misunderstand real estate transaction out there.  A short sale, or "pre-foreclosure" sale occurs when the Seller is selling the home for less than what is owed to the bank, or banks, if there is a second mortgage on the property.  The transaction can only take place if the bank (or banks) approve the sale, and believe me, this makes for a very difficult transaction that can stretch out for many, many months. With the growing number of homeowners in financial distress, it is no surprise that the number of short sales on the market has increased dramatically.  There is even a cottage industry of companies to support … [Read more...]

Homeowner Bailout Plan – Good, Bad or Ugly?

As a Realtor, I get asked lots of real estate questions. The question of the day is most certainly "What do you think of the Obama's Homeowner Bailout Plan?" And I have to say, it is not an easy question to answer. There are so many levels to the current housing situation, and effects from other areas of the economy that will certainly influence the direction of the housing market. But here are a few things that I do know: Too Many People Are Losing Their Homes Who Shouldn't: I have personally worked with a number of homeowners who got behind on their mortgages and tried to work with their banks to get caught up. Guess what? The banks … [Read more...]

First Time Homebuyer’s Tax Credit – Update

The Housing and Economic Recovery Act of 2008 authorized a $7,500 tax credit for qualified first-time home buyers - those buyers who have not owned a home in the last three years. The homes had to be purchased on or after April 9, 2008 and before January 1, 2009. Although the $7500 would be fully refunded when you filed your tax return - either as a credit to your tax bill or as a refund - the tax credit that had to be paid back over a period of 15 years or when the house was sold, whichever occurred first. For more details on the Bill, check out the National Association of Homebuilder's Summary at … [Read more...]