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Market Notes April 10, 2010: Active listings jumped by more than 30 units this last week to 622, listed at an average of $56.17 per square foot, there are currently 358 homes pending close of escrow, and only 20+ homes closed escrow last week bringing that number now to 603 closings year to date. The snowbird activity is waning as temperatures across the country begin to increase, and this weeks numbers certainly reflect that, however there is still a lot of buyer activity in the market, no doubt driven by the selection of foreclosure inventory and the depressed values. All market indications also suggest that this current foreclosure market will persist for quite some time. 5,500 homes were foreclosed on in Phoenix this March, which is a record for any month in any year, default rates continue at a record pace, with FHA defaults leading the pack at 14%, and if unemployment remains at 9.7%, defaults will likely increase. However, the administration has announced another plan to help people modify thier loans, or stave off the foreclosure, but like so many efforts in the past, this will most likely will not achieve the desired results. Less than 3% of all mortgages nationwide have been successfully modified. On the lending side, interest rates climbed from 5% to 5.3% on the average 30 year note, which may price some borrowers out of the market. The rule of thumb is that for every 1 percentage point increase in mortgage rates, a buyer's purchasing power is reduced by about 10 percent, and it is also anticipated that the FHA will reduce seller contributions from 6% to 3%, but that now appears to be delayed and may not be implemented until June. On the new build side, home builders are feeling more confident as new builds are now once again becoming a factor in many markets. In fact the Queen Creek area will soon be home to one the Valley's largest subdivisions, and overall home sales Valleywide are enjoying a slight increase over last year, however on the aggregate, overall home prices in the Valley have dropped .7% since December. These are definitely interesting times, but the fact remains that there has never been a better time to take advantage of the Arizona housing market. Interest rates continue to remain low, the tax credit is still in effect with only a few weeks left though, and the supply of low valued homes remains 10%-15% stronger than last year, so if you are looking for an investment, or that primary residence, give us a call today to discuss your options. There are currently 125 bank owned homes on the market, 208 investor owned & HUD homes available, and 286 short sale homes. The Maricopa Real Estate Co. is the number one listing office in the area, so if you have had difficulty securing that second home or primary residence, give one of us a call, we'd be happy to help. And remember, don't miss your chance to get a piece of the Valley of the Sun
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