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Market Notes May 2, 2010: The home buying tax credit expired this last week, and not surprisingly, homes pending escrow jumped by more than 15%, and now stand at 383 homes pending close. Active listings subsequently fell to 623, listed at an average of $54.43 per square foot, which is the second week in a row that the average listed price has dropped, and homes that have closed escrow now stand at 795, closing at an average of $51.97 per square foot. The expiration of the tax credit will obviously result in many homes closing escrow in the next 30 days, but may also result in the supply of homes increasing over the summer as often times these programs simply move up buyers timelines, rather than bring new buyers to the market. 1 out of every 38 homes in the Phoenix area were foreclosed on in the first quarter of 2010, and that number in Maricopa is close to 1 in 20 homes. Strategic defaults have increased as well over the first quarter, and with many of the 5 year ARM loans set to adjust this year, defaults are expected to rise, increasing the banks shadow inventory of homes, which should put downward pressure on prices later this year. The State of Arizona has announced their plans on how they will use Federal money designed to being some relief to the market, and hopefully that will help some home owners, but as we have seen in the past, the results of these programs often fall well short of their intent. Also, Arizona representative Raul Grijalva has proposed a unique approach to the housing crisis, a "Right to Rent" program, which will effectively turn banks into landlords, and because of that, will prbably not gain much traction. On a positive note, retail interest rates held steady last week to an average of 5.07%, and consumer spending rose 3.6% in the first quarter, up from a 1.6% growth in Q4 of 2009, and with three consecutive months of GDP growth, the recession can officially be declared over. If you are a seller, and are having trouble making your mortgage, the new HAFA program may be of some help, and our office has helped many home owners over the last couple of years successfully short sale their home, so give us a call to explore your options. There are currently 149 bank owned homes on the market, 194 investor owned & HUD homes available, and 304 short sale homes. The Maricopa Real Estate Co. is the number one listing office in Maricopa, 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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