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Market Notes February 11, 2012: Active
listing have fallen to an all time low this last week, now standing at
just 209 available homes in the area, down from 225 the week previous,
and down from the 250, which is the previous 3 month average. Those
active listings are listed at an average of $63.19 per square foot.
Homes pending close of escrow jumped by nearly 10% and now stand at 268,
and 31 homes closed escrow last week, closing at an average of $49.25
per square foot, and bring this year sales total now to 209. Maricopa
has deservedly been identified, by most area home shoppers, as the place
to be in the Phoenix Valley. The relative newness of the community, the
small town feel, the security of a small town, the proximity to the
Phoenix area, the well planned out subdivisions, The up coming
attractions and amenities, and last but certainly not least, the low
home values, have all combined to attract not only primary residence
buyers but many second home buyers as well. Just this last week, another
new addition to our community was announced, as construction will begin in June on a biomass plant in Maricopa
that will produce enough electricity to power 20,000 homes, and will be
the first “green” facility built in the area. The economic development
council of Maricopa has made concerted efforts to attract green
industries to the area, and this facility may be the impetus needed to
attract others. The new biomass facility is just one of many “coming
attractions” which include the College of Central Arizona, the Banner
Health Summit, the new Maricopa City Hall, and the new Ak Chin
Entertainment complex which will be a 126,000 square foot entertainment
complex featuring movie theaters, bowling alleys, shops, restaurants,
arcades, and an out door ampi theater. So it’s not difficult to see why
Maricopa has garnered the bulk of the real estate activity in the
Valley, and with that being said, now is the time to help you secure
your place in the sun. I have many buyers say that they have waited too
long, but that is just not the case, there is plenty of time left to
take advantage of this housing market. Have values risen in the last
year? Yes, but historically these current home values are still
considered very low, and as the economy recovers and expansion
continues, today’s current home value will equate to tomorrows equity,
but don’t drag your feet too much longer. I believe 2012 will be one our
final transition years into a more stable housing market. There is
still some distressed inventory to work through – there is still 201 AWC
short sales, meaning distressed homes with at least one offer submitted
to the bank and historically 50% of those will wind up in foreclosure.
Secondly, nearly 50% of the foreclosure homes have been postponed in the
last 120 days, primarily die to deed issues, but we can still expect
those homes to eventually emerge back on the market, so there is time
left, but the window is closing. If you are currently in the market
trying to secure that primary or secondary residence, I would be happy
to help, just call or email me anytime.
Nationally,
a bill proposed by Senator Menendez may be one of the more common sense
approaches to the national housing crisis. A proposed bill from Sen.
Bob Menendez, D-N.J., would allow underwater borrowers to reduce their
loan principal through a federal shared-mortgage-appreciation program.
The Senate bill announced Thursday would give lenders a stake in the
equity of the home, receiving a fixed share of the increase in home
value when later sold or refinanced. The shared-appreciation
modifications would go through two "pilot programs" for two years at the
Federal Housing Administration and the Federal Housing Finance Agency.
The bill only applies to loans backed by the FHA or securitized by
Fannie Mae or Freddie Mac. It's not known when the bill will reach the
Senate floor, according to a spokeswoman in Menendez's office.
"When
you owe more than your house is worth through no fault of your own,
relief can be hard to come by," Menendez said in a news release. "My
bill aims to break this cycle by giving homeowners the relief they are
looking for by working with banks to find acceptable solutions for
everyone."
Homeowners
in the program would reduce their mortgage principal to 95% of the
home's reassessed value, as determined by an independent appraiser. The
principal would lower to its new value by a third each year for three
years, as long as the homeowner makes payments. The lender would get a
fixed share in the equity of the home depending on how much they reduce
the principal, with a maximum of 50%. Capital improvements later made to
the home do not apply. Only primary residences would qualify. The bill
also places no underwater limit for homeowners. Reducing principle is
the only real way to help underwater homeowners, and this is the first
bill to actually address that issue. We will see where it goes.
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Market Notes February 4, 2012: The
busy season feels like it is just now starting to take hold. The first
quarter of the year, or at least Jan-Apr is historically the busiest
time of the year for AZ real estate and January 2012 was a little
sluggish, but considering last weeks market indicators, the activity has
picked up considerably. 17 homes went pending just yesterday (Friday
Feb. 3) and 50 homes closed escrow last week, closing at an average of
$48.40 per square foot, and bring this years sales total now to 175.
There are currently 248 homes pending close of escrow and active
listings dropped by nearly 10% last week and now stand at 226 available
homes, down from 252, and listed at an average of $62.70 per square
foot. Here are some interesting bullet points on the Arizona housing
market, more specifically the Phoenix area market, which includes
Maricopa:
- In every price range, sales prices in $/SF are now higher than a year ago.
- Inventory is still falling below $200,000 and constraining sales volumes.
- Above $200,000, supply is rising and demand remains relatively weak.
- After a noticeable weak patch during the summer, prices have regained strength.
- Lender-owned inventory is falling fast, especially at the lower price levels.
- Short sales are overtaking foreclosures as the primary mechanism to resolve mortgage debt problems.
There
is a tremendous amount of demand for those homes priced at $100K or
less in Maricopa, in fact if you are currently looking for a home in
that price range you can expect each home to receive multiple offers,
and often sell for over list price. The key is to be the first in the
door with a strong, committed offer. There are currently many cash
buyers on the market, which puts those finance customers at a slight
disadvantage, but with the right strategy and knowledge of the market,
you can secure that home you desire. My team and I live in and work
exclusively in Maricopa and often times know of homes soon to be
available, or just listed, which can benefit you as the buyer, so if you
would like my assistance in securing that new home, please call or
email me anytime. Of the 252 homes currently available, only 58 of them
are priced at, or under $100k, so inventory is tight, and demand is
strong, be sure your agent is working hard for you.
Inventory
at the next level, $100K - $150K is a little more plentiful, with 91
homes listed in this price range, and buyer demand is still strong but
not quite as hectic as the those homes $100K and less. Case in point -
of the 175 recorded sales thus far this year, 99 of them are homes under
$100K, 58 are homes priced between $100K-$150K, and 18 are homes above
$150K.
The
inventory of distressed homes and/or bank owned homes has fallen quite a
bit over the last year, however there is still a fair amount of shadow
inventory remaining (those homes in default but not yet foreclosed on),
in fact there are 196 short sale homes listed as AWC, meaning that they
have at least one offer if not multiple offers, and historically 50% of
that inventory winds up in foreclosure and emerges on the market as a
bank owned home, so we are not quite through with the “housing crisis”
but I believe we are certainly on the back half. In fact, Capital
Economics expects the housing crisis to end this year, and one of the
reasons: loosening credit. The analytics firm notes the average credit
score required to attain a mortgage loan is 700. While this is higher
than scores required prior to the crisis, it is constant with
requirements one year ago. However, other market indicators point not
just to a stabilization of mortgage lending standards, but also a
loosening of credit availability. Banks are now lending amounts up to
3.5 times borrower earnings. This is up from a low during the crisis of
3.2 times borrower earnings. Banks are also loosening loan-to-value
ratios (LTV), which Capital Economics denotes “the clearest sign yet of
an improvement in mortgage credit conditions.” So if you have been
waiting on the sidelines waiting for the right time to buy – it’s now,
and I would like to help. Call or email me anytime.
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Market Notes January 28, 2012: A
busy week on the market, but active listings remained consistent at
252, down from 254 last week, and listed at an average of $60.79 per
square foot. Homes pending close of escrow stand at 238, a mirror image
of last week, and another 35 homes closed escrow last week, closing at
an average of $48.70 per square foot and bringing this years sales
total now to 128 homes. 2012 may be one of our final transition years
from a distressed housing market to a more normal traditional resale
market, but one local observation, and one piece of national news
suggests that the shadow inventory of distressed homes may vary well
bleed into next year. Locally, nearly 50% of the foreclosure homes at
the daily trustee auction have been postponed this last month, most
likely as a result of deed issues or pending short sale contracts, but
that number of postponements is unusually high. The postponement is
usually just a week or two out, but lately we have been seeing 30-60
days postponements which again is unusual. This is also at a time when
the foreclosure starts are down considerably year over year. The number
of foreclosure actions initiated in 2011 was down 38.7 percent compared
to 2010, according to a new report from Lender Processing Services. The
company reported that delinquencies at the end of 2011 were down nearly 8
percent from the previous year and were 25 percent below their peak in
January 2010. However, the overall foreclosure inventory remains near
historic highs, at 4.11 percent as of the end of December.
The
numbers illustrate the impact of foreclosure processing delays brought
on by the robo-signing controversy that surfaced in the fall of 2010,
the impact of which remains strong mostly in judicial states. LPS says
foreclosure inventories in judicial states remain 2.5 times that of
non-judicial, while foreclosure sale rates in non-judicial states stood
at approximately four times that of their judicial counterparts in
December. The company also found that half of all loans in foreclosure
in judicial states have not made a payment in more than two years
compared to 28 percent in non-judicial states. Still, on average, LPS
says pipeline ratios – which is the amount of time it would take to
clear the inventory of loans seriously delinquent and in foreclosure at
the current rate – have declined significantly from earlier this year,
again suggesting that 2012 may finally be the recovery year we have all
been waiting for. The company’s data show that the states with the
largest declines in non-current loans are all non-judicial, including
Nevada, Arizona, Michigan, and California.
Buyers
currently on the market should understand that while the distressed
inventory is waning, the “distressed” values will continue, as real
appreciation will take a while to get a foot hold. This current Arizona
market continues to be a once in a generational opportunity to take
advantage of historically low home values and an improving economy which
will serve your financial interests very well over the long run, and I
think many primary residence buyers have discovered this, and are taking
advantage of that dynamic as well as a more favorable lending
environment. In fact, Capital Economics expects the housing crisis to
end this year, and one of the reasons? Loosening credit. Banks are now
lending amounts up to 3.5 times borrower earnings. This is up from a low
during the crisis of 3.2 times borrower earnings. Banks are also
loosening loan-to-value ratios (LTV), which Capital Economics denotes
“the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now
lending at 82 percent LTV. So conditions are favorable to those first
time home buyers, as well as second home buyers that would like to
leverage their capital. If you would like help navigating this real
estate market, please call or shoot me an email at anytime. I would like
to assist you find your place in the Sun.
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Market Notes January 21, 2012: Active
listings fell slightly over the last week in a market that is starting
to heat back up. Available homes listed now stand at 254, listed at an
average of $60.90 per square foot. Homes pending close of escrow
currently stand at 238, and another 35 homes closed escrow last week,
closing at an average of $48.39 per square foot, and bringing this years
sales total now to 93 homes sold. Our winter weather thus far this year
has been nearly perfect, sunny skies and high 60 degree temperatures
have been the norm, and has facilitated the busy home shopping season
very well. In addition to that, there is a tremendous amount of
excitement about all of the development going on in the area that is
soon to make Maricopa one of the best communities in the Phoenix area to
live in. Intel is completing their new Fab Plant, which is just a ten
minute drive away; the Banner Health Summit is putting the finishing
touches on their 40,000 square foot health facility; the College of
Central Arizona has begun building their new main campus and across the
street from that, the City of Maricopa has begin construction on the new
City Hall; the Ak Chin/Harrah’s Casino group continues to construct
their new and ambitious 126,000 square foot entertainment complex
featuring bowling alleys, movie theaters, restaurants, shops and an
outdoor ampitheater, and the Gila River group has just signed on to
build a large outdoor outlet mall featuring restaurants and lot’s of
shopping – so it’s easy to see why so many people are interested in our
small town. And that being said, values are slightly on the rise, but
that being said, there still remains a fair amount of time for primary
residence, and second home buyers to take advantage of historically low
home values. While the foreclosure market has slowed, the amount of
shadow inventory (those homes still in the foreclosure process) will
ensure that those interested in purchasing still have approximately
12-18 months to secure one of those properties, however the demand in
that area is substantial, so if you are actively pursuing a bank owned,
or short sale home in the $60K to $90K range, it’s important to act
quickly. Most, if not all of these properties receive multiple offers
within the first day or two, so don’t delay in getting your offer in. I
can tell you that in Arizona, the buyer has a ten day inspection period
following the acceptance of a residential purchase contract, during
which they can back out of the deal fro nearly any reason, so there are
protections. If you would like more information regarding the process,
please call or email me at anytime.
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Market Notes January 14, 2012: Active
listings inched up over the last week, now standing at 262 homes
currently available, listed at an average of $61. 52 per square foot,
down slightly from last weeks average of $63.59. 227 homes are currently
pending close of escrow and only 28 homes closed escrow last week,
closing at an average of $47.40 per square foot and bringing this years
sales total to 58 homes. It’s important to mention that the numbers I
compile are strictly for the homes within the defined subdivisions of
Maricopa, so if you would like a market analysis for homes on the
acreage, please call or shoot me an email. As mentioned before, 2011 was
the second best year in terms of residential resales for the Maricopa
market, as 2,585 homes were sold, comparing only to 2009 wherein 2,788
homes closed escrow. I thought I would break down the 2011 sales into
four categories: single level homes under 2000 square feet, and over
2000 square feet to include two sub categories; those with and without
pools. Also, two story homes under 3000 square feet, and over 3000
square feet, with the same sub categories; those with pools and those
without. These numbers will give you a broader understanding of the
current market and demand for these homes:
Single Level: 2000 square feet or less
· No Pool – 924 homes sold
· Avg. Sold price per square foot - $45.34
· With Pool – 120 homes sold
· Avg. Sold price per square foot - $60.31
Single Level: 2000 square feet or more
· No Pool – 304 homes sold
· Avg. Sold price per square foot - $50.91
· With Pool – 82 homes sold
· Avg. Sold price per square foot - $62.59
Two Story Homes: 3000 square feet or less
· No Pool – 665 homes sold
· Avg Sold price per square foot - $36.30
· With Pool – 108 homes sold
· Avg. Sold price per square foot - $47.38
Two Story Homes: 3000 square feet or more
· No Pool – 267 homes sold
· Avg. Sold price per square foot - $34.65
· With Pool – 108
· Avg. Sold price per square foot - $45.12
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Market Notes January 7, 2012: Active
listings have built up, and buyer activity in the first week of the
year has been brisk. The number of active listings in the area
currently stand at 259, listed at an average of $63.59 per square foot,
there is currently 228 homes pending close of escrow, and 30 homes
closed escrow in this first week of the year, closing at an average of
$48.51 per square foot, which is a solid gain from the $43 per square
foot closings just 6 months ago, but still a very attractive number to
buyers currently on the market, especially compared to the $60+ per
square foot average in many other similar Phoenix markets. There is also
still an anticipated wave of more distressed properties to come onto
the market stemming from the “robo signing” debacle of last summer, and
the number of foreclosure postponements over the last four months of
2011 that resulted from that issue. Another source of distressed
properties not mentioned very often are those homes currently tied up in
bankruptcy courts that will eventually be released, which will add to
the volume that banks are still working through. This is all good news
to the many interested buyers looking to take advantage of Phoenix’s
housing market. In fact, the number of homes that resold in the greater
Phoenix area rose for the 12th consecutive month in November, according
to DataQuick.
When
reviewing property sales in the combined Maricopa-Pinal counties, the
data firm said 7,766 new and resale homes and condos closed in escrow.
That is down 3.5% from October, but up 9% from last year, DataQuick
said. Maricopa County houses the city of Phoenix, and is the fourth-most
populous county in the country with more than 3 million residents.
Sales of home priced between $100,000 and $200,000 rose the most in the
region, with closings jumping 11.4% from a year ago. Closings on homes
sold for less than $100,000 increased 4.6% year-over-year, while sales
of homes priced from $200,000 to $600,000 grew a slight 0.7%.
In
addition, sales of homes worth more than $800,000 rose 4.9% from last
year, suggesting renewed interest in luxury homes when compared to
mid-level sales. November's median sales price was at its highest point
in a year, hitting $127,500. Investors and vacation homebuyers acquired
43.4% of the Phoenix areas homes sold during the month, paying a median
price of $103,000, up slightly from $102,000 a year earlier. Cash buyers
represented 40.8% of all November sales, up from 40.3% last year,
according to DataQuick. Those buyers paid a median price of $96,000, up
from $88,500 in October and $95,000 a year ago. Cash buyers and
investors leaned towards distressed properties. Foreclosure resales
represented 38.5% of November sales, while short-sales made up 15.9% of
all resale activity.
During
the month, lenders foreclosed on 3,307 homes, up 16.2% from October and
9.5% higher than a year earlier, and as I said earlier, there are more
foreclosures to come, so if you have been sitting on the sidelines
waiting for the right time to buy – IT’S NOW! Let me know if I can be of
help.
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Market Notes December 18, 2011: Active
listings fell slightly last week, standing now at 232 available homes,
listed at an average of $60.36 per square foot. Homes pending close of
escrow jumped up to 256 from last weeks 238 homes pending, and 29 homes
closed escrow last week, closing at an average of $44.16 per square
foot. So it was a busier week than the week prior, but a slower week
than what we have averaged throughout the year, however that is typical
this time of year as many people turn their attention to family, friends
and the holidays. And that being said I would like to take a minute and
wish all of you a very Merry Christmas and another New Year of health,
wealth and prosperity. I have many blessing to be thankful for – a
healthy and wonderful family and lots of friends, many of whom are
previous clients that I had the privilege to assist either as a buyer or
seller, and I hope and pray that I have the opportunity to meet, and
help out, many more of you in the years to come. This will be the last
market update for 2011, and my next update will be in a couple of weeks –
January 1, 2012. And can you believe it is going to be 2012 already!
Where does the time go? But I believe 2012 will be a very exciting year
as the Banner Health Summit and the Intel Fab plant come on line and
progress continues on the CAC campus and the Ak Chin Entertainment
complex. Maricopa will certainly be a fun place to be.
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Market Notes December 11, 2011: A
very slow week in terms of closings suggests that the Holidays are soon
upon us and most everyone’s focus is now on other matters. Only 14
homes closed escrow last week, quite a drop from last week’s 64
closings, and closing at an average of $44.19 per square foot. Active
listings fell slightly to 242 available homes, listed at an average of
$59.90 per square foot, and homes pending remained consistent at 238.
Year to date, 2,405 homes have closed escrow in Maricopa, which outpaces
last years sale total, but falls short of 2009’s record year. It’s
important to mention that the numbers I compile are for those single
family residences within the defined subdivisions of Maricopa, if you
would like market information for homes on the acreage, or the patio
homes in Province, please call or shoot me an email. As most anyone can
tell you, the Maricopa market has been very busy the last few years, in
fact since 2009, approximately 7,300 homes have exchanged hands, the
majority of those of course being distressed properties either in
foreclosure, or sold as a short sale, and I believe buyers can expect
more distressed properties to come onto the market over the next 12-18
months. However the sign of a changing market is the emergence of new
builds which are once again becoming a market factor. There are
currently 15 actively listed new builds in the area, courtesy of DR
Horton and Meritage, two very good builders who have weathered the
storm, and 25 of those new builds have sold in the last 90 days.
Meritage purchased the Province subdivision form Engle Homes
approximately 2 years ago, and has done a great job bringing stability
and a new focus on green energy homes to what was awarded the best
active adult community in the United States back in 2006, and DR Horton
continues building their subdivision of Homestead, a master planned
community located just southeast of Rancho El Dorado. With the emergence
of new builds, the Maricopa market now has quite a range of product for
the discernible buyer to choose from - foreclosed and pre foreclosure
homes (short sales), investor owned move-in ready homes, and now new
builds complete with warranties and green energy technology. Couple that
with the developing employer base and the soon to be added amenity of
the Ak Chin Entertainment Complex, and it’s not difficult to see that
the City of Maricopa is establishing itself as one of Phoenix’s best
satellite community.
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Market Notes December 4, 2011: An
active week for Maricopa Real Estate – new listings increased by nearly
15% and 64 homes closed escrow last week, so it’s safe to say that our
winter season has officially kicked into gear. Active listings now stand
at 254, listed at an average of $61.55 per square foot, homes pending
did decline a bit, now standing at 232, and as previously mentioned, 64
homes closed escrow last week, closing at an average of $44.47 per
square foot, bring this years sales total now to 2,391. Here are some
interesting bullet points on the Arizona housing market, more
specifically the Phoenix area market, which includes Maricopa:
- In every price range, sales prices in $/SF are now higher than a year ago.
- Inventory is still falling below $200,000 and constraining sales volumes.
- Above $200,000, supply is rising and demand remains relatively weak.
- After a noticeable weak patch during the summer, prices have regained strength.
- Lender-owned inventory is falling fast, especially at the lower price levels.
- Short sales are overtaking foreclosures as the primary mechanism to resolve mortgage debt problems.
90% of the Maricopa market is $200K or less, which helps explain the
flurry of activity over the last couple of years, not too mention the
newness of the community, and the developing employment and
entertainment centers. The employment centers of Intel, Banner Health
Summit and Harrah’s Casino are continuing to bring in more and more
traditional home buyers, and the continued low home values, amenities,
and small town feel of Maricopa continue to attract winter visitors, so I
will admit my bias but arguably, Maricopa is one of the best satellite
communities of the Phoenix area, if not the best and I encourage you to
come visit us if you haven’t done so already. I think it’s also safe to
say that Maricopa has weathered the housing crisis and has reached the
bottom in terms of values
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Market Notes November 27, 2011: The
pace of the Maricopa market has been remarkably consistent over the
last 120 days, with active listings holding steady in the low to mid
200’s, homes pending in the mid 200’s and 35-45 homes closing escrow
nearly every week. This week’s numbers are no different – there are
currently 222 available homes listed in Maricopa, listed at an average
of $60.57 per square foot. Homes pending close of escrow stand at 243,
and another 37 homes closed escrow last week, closing at an average of
$44.06 per square foot, and brings this years sales total now to 2,327
homes, which has already outpaced last years sales total of 2,273, but
off the pace of 2009, wherein 2,788 homes were sold. Because of the pace
of the market, and the strength of buyer demand, values are inching up,
but that shouldn’t deter current buyers, or lead them into thinking
that they have missed their opportunity, as there is quite of bit of
distressed inventory still to hit the market. Aside from the shadow
inventory the banks are still working through, there are currently 213
short sales noted as AWC, meaning that they do have an offer with the
bank, but historically you can expect about half of those short sales to
wind up in foreclosure. I do have to mention though that that dynamic
could change as many banks are now working short sales more effectively,
and with more urgency in approving them, so 2012 could be the year of
the short sale – so if you are a buyer that has shied away from short
sales in the recent past because of the lengthy process, you may want to
rethink that. My team and I live in Maricopa and work this area almost
exclusively, so if you need help as a buyer navigating this market, we’d
love to help. Aside from the central location, newness of the community
and the small town feel, what’s really attractive about Maricopa now is
the continued selection of homes at historic low values and the
developing amenities and employment centers in the area. The Banner
Health Summit is really starting to take shape and will open in 2012,
the College of Central Arizona plans to break ground in December, Intel
continues work on their new fab plant scheduled to open next year, and
the Ak Chin/Harrah’s Casino group has just broken ground on a 162,000
square foot entertainment complex which will include 12 movies theaters,
a 24 lane bowling alley and an outdoor ampitheater, situated amongst
other restaurants and other shops. There has never been a better time to
find your place in the sun and I’d like to help – call or email me
anytime.
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Market Notes November 20, 2011: The
number of active listings fell again last week, now standing at 228
available homes, listed at an average of $60.48 per square foot. Homes
pending close of escrow stayed consistent at 245, and only 21 homes
closed escrow last week, the smallest number of closings in nearly 4
months, closing at an average of $44.02 per square foot. In addition to
the 228 available listings, there are 214 short sale listings noted as
“AWC”, meaning one offer is submitted to the bank for approval, with the
possibility of one or more offers in a backup position, and for buyers
that have been having a difficult time securing a home, either through
the multiple counter process with bank owned homes, or losing short sale
offers to eventual foreclosure, writing a backup offer can be a smart
strategy. Often times the buyer with the first offer withdraws before
bank approval, giving those in the back up position the opportunity to
purchase the home at the bank approved price. There is very little risk
with this strategy, as there is no earnest deposit required, and the
buyer can decline the banks approved price and choose not to perform, so
throwing out a few back up offers is certainly worth the effort. As
many of our clients can attest to, and probably just as obvious to those
of you who have been following the market, home values in the Maricopa
market have increased over the last year or two, and that fact has some
buyers who have not yet secured a primary, or secondary home, a little
distressed, but it’s important to keep some perspective. While home
values two years ago were, on average, 10%-15% lower than they are
today, in the long run, 5-10 years from now, today’s value is still
quite low, and the prospects for substantial equity gains is still in
play, and a huge factor for those buyers considering current purchases.
Maricopa is still a very young community, and as our growth continues,
home values will continue to rise accordingly, and helping a great deal
with that growth, will be the addition of the Banner Health Summit and
the College of Central Arizona next year, the continued expansion of
Intel, and the recent announcement of the Ak Chin Entertainment Center,
which is also planned to open next year. These additions to our
community will not only serve to make Maricopa an even better place to
raise a family, but also a safe and fun community to have a second home
for that “winter get away”. If you would like help navigating your way
through this very active market, please give me a call - I work and live
in Maricopa, and find this community to be second to none.
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Market Notes November 5, 2011: Active
listings fell slightly once again this last week, now standing at 228
available homes, listed at an average of $61.20 per square foot, a
listing average of which is the highest of the year. Homes pending close
of escrow dropped slightly to 241, and 64 homes closed escrow last
week, a very strong number, closing at an average of $44.24 per square
foot. Notice the discrepancy of the listing average per square foot and
the closing average per square foot - this is a result of the current
disparity between the premium homes vs the more distressed properties.
For example, a 3900 square foot, two story home in an average
neighborhood, with little to no improvements, possibly banged up a bit,
and no landscaping, may sell for around $35 per square foot, while a
very desirable home; ie; single level with granite counter tops, above
average neighborhood, pool, tile, etc. will sell for upwards of $75 per
square foot. This is the current state of the Maricopa market, and
while some buyers may shy away from paying upwards of $75 per square
foot, they need to realize that once the market fully recovers, that
home will be valued at north of $100 per square foot, so despite the
increase in values over the last year or so, the Maricopa housing market
is still ripe with historically low valued homes that will bring strong
equitable gains down the road.
The
other factor on the market is the emergence of the primary residence
buyer as a result of a growing employer base. Intel continues it’s
development of their new fabrication plant which is expected to bring
thousands of new people to the area. The Banner Health Summit and the
new College of Central Arizona will also bring more prospective primary
home buyers to the area once their projects are completed, and the
largest employer in the area, Harrah’s Casino, just completed their new 5
story hotel and business is strong. In fact, Harrah’s Ak-Chin Casino
Resort is the largest contributor to the Pinal County economy,
generating more than $205.3 million in economic activity in 2010,
according to a study commissioned by the Ak-Chin Indian Community
earlier this year. Nearly one-half of the total Ak-Chin Indian
Community’s direct and indirect economic output of $437 million comes
from the casino and hotel. So now is the time to secure your footing in
what is arguably Phoenix’s best kept secret – Maricopa.
Nationally,
and even locally, if this stagnant economy continues, the higher income
demographics of the housing market will be the next casualty. Private
investors in residential mortgage-backed securities (RMBS) comprised of
jumbo mortgage loans are dealing with a greater risk of strategic
defaults, according to Moody’s. The company’s analysts base this
assumption on the fact that jumbo RMBS have large populations of current
borrowers with high loan-to-value (LTV) ratios. Although it has by far
the fewest delinquencies among outstanding loans, the jumbo sector has
the potential for the highest volatility in losses going forward,
Moody’s concluded.
“This
is because it features a high number of current borrowers that are
underwater on their mortgages and are more susceptible to default if the
housing market does not turn around,” the agency explained. According
to Moody’s the subprime sector faces the lowest potential for future
performance deterioration because more of its weaker borrowers are
already delinquent or have defaulted, leaving less room for losses to
increase substantially. The company’s RMBS data show that defaults among
always-current subprime borrowers have declined substantially since the
beginning of 2010, indicating that the remaining borrowers are getting
progressively stronger.
The
jumbo sector, on the other hand, still faces the potential for a large
increase in defaults. Unlike in the subprime sector, the stronger
borrowers are the ones that have already left the jumbo pools rather
than the ones that remain, Moody’s explained. Over 80 percent of jumbo
loans are still current, but more than half of those borrowers are
underwater on their mortgages and that proportion has risen
significantly over the past few years, according to Moody’s report.
Since home prices have been fairly stable in 2011, Moody’s says the
increasing proportion of underwater jumbo borrowers likely reflects the
ability of the stronger borrowers to refinance and exit the mortgage
pools. Moody’s notes that default rates among always-current borrowers
have not come down in the jumbo sector as much as in the subprime
sector, meaning the pool of current borrowers has not strengthened as
much over time.
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Market Notes October 30, 2011: Active
listings dropped slightly again this last week and now stand at 234
available homes, listed at an average of $59.13 per square foot, the
lowest level of available homes of anytime during this last year. Homes
pending Homes pending dipped to 246, and 43 homes closed escrow this
last week bringing this year’s sales total now to 2,174, which is not
quite the pace of 2009, but close. The Maricopa market, as with some
other markets in the Phoenix Valley, has been extremely active over the
last few years - in fact since 2008, approximately 9,400 single family
residences have been sold, and considering that Maricopa has
approximately 16,000 rooftops, it’s not difficult to realize that we are
on the back side of this housing crisis, at least for the Maricopa
area. That being said, values will continue to flat line, and there is
more distressed inventory to sort through, so buyers still hoping to
take advantage of the market, have about another 12-18 months to take
advantage of this historically low valued market. One of the factors
fueling this buying activity in the Phoenix Valley, are the baby
boomers, who begin retiring this year, and are looking to secure their
Place in the Sun, and when compared to all other comparable sun belt
states; CA, NV, NM, TX, and even FL, Arizona not only offers the best
values, but arguably the cleanest, newest, and best governed
municipalities.
Phoenix-area
homes sales in September jumped 17.7% from the year-ago period, spurred
by an increase in home sales in the sub-$100,000 market. In September,
the Phoenix area recorded 8,661 new and resale home and condo sales.
Compared to August, sales fell 9.7%. But experiencing sales declines
between August and September is normal, according to Data Quick. The
research firm's market outlook covers home sales in Maricopa County,
which includes Phoenix and is the fourth most populous county in the
country, and Pinal County in the central part of Arizona.
September
sales in the below $150,000 price range jumped 22.8% over September
2010, while deals for homes under $100,000 increased 32.1% over last
year. Sales in the $200,000-to-$600,000 range showed a gain of 9.8% over
last year, while transactions valued over $500,000 fell 3.7%. In the
over-$800,000 market, sales fell 4.6% year-over-year. Buyers paid a
median home sales price of $124,500 in September, up 5.2% from
August. The August median price is 52.9% above the peak sales level of
$264,000 reached in June 2006.
Activities
driven by investors also declined last month. Foreclosure resales,
cash-buying activity and lender repossessions also fell. Foreclosure
homes and short sales, meanwhile, represented 61.2% of the Phoenix area
resale market in September, and will continue to comprise the majority
at least through the next year, but if you have been sitting on the
sidelines waiting for the right time to buy, wait no longer.
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Market Notes October 23, 2011: Last
weeks gains proved to be this week’s losses. Active listing dropped by
10% this last week, after gaining nearly 16% the week before, and now
stand at 242 available homes, listed at an average of $58.72 per square
foot. Homes pending close of escrow held steady at 253, and last week
saw the lowest number of weekly closings for the entire year as only 15
homes closes escrow, bringing this years sales total now to 2,131,
closing at an overall average $43.85 per square foot. All indications
are that banks are on the verge of releasing more inventory, and
following the robo signing scandal of this last summer, have a lot of
inventory that has been backed up in the pipeline. Strong demand over
the last year has pushed values up slightly, but the continued strong
presence of short sales, and the anticipated push of bank inventoried
homes, will keep values flat over the next six months at least. The
national housing crisis has been the primary driving factor of this
recession, and prolonging the resolution of it, is staling any recovery
efforts, therefore the banking industry and the federal government are
looking again at possible solutions.
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Market Notes October 16, 2011: Active
listings dropped slightly, after last weeks rather large gain, and now
stand at 264 available homes, listed at an average of $58.31 per square
foot. Homes pending inched up to 251, and 50 homes closed escrow last
week, continuing that trend, and closings now stand at 2,116 year to
date, closing at an average of $44.17 per square foot. Buyer activity
remains fairly strong, but I do expect the supply of available homes to
trend upwards based on recent reports of foreclosure activity. I don’t
expect us however to reach the large number of available homes that we
experienced in 2010, and early 2011, but buyers will still have a decent
selection of homes to choose from and with values currently flat
lining, prices will remain very attractive as well. There are currently
just 31 actively listed bank owned homes, 13 available HUD homes, 61
short sales listed as “active”, and 214 short sales listed as “AWC,
indicating that they at least one offer on the home. Many of the
currently listed short sales do wind up as foreclosed, and bank owned
properties, but they can be a good strategy for patient buyers, and I do
expect short sale properties to continue to be a large factor on the
market considering the stagnant economy.
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