A TALE OF TWO HOMES -Recently an agent in my office related a personal home selling experience of her own. Earlier this summer, this Realtor had her own home to sell in the Southwest Phoenix valley. It turns out that a neighbor with the same model home a few doors down the street was also selling.
The Realtor determined the market price for her home to be $324,000. She listing her home at $319,000 and sold it in 34 days for $309,000.
Her neighbor initially listed her home for $332,000. It stayed on the market month after month as she stair-stepped the price down in $5,000-$8,000 increments.
The neighbor's house finally sold for $287,000 after over 200 days on the market.
What is the lesson here?
Trying to follow the market down in small increments will NOT attact the buyer traffic you need to sell a home. Making the home a "good deal" price wise (hopefully at the outset of the listing) will attract what buyers there are and get you into meaningful negotiations resulting in a much quicker sale.
I have seen this happen time and again with my own listings in this market. Using this approach will get you more money for your home faster than the stair-step approach to pricing.
Richard
Thursday, October 25, 2007
Monday, October 08, 2007
The Real Estate Picture
Well, we continue to get less than favorable news from the real estate market. New and resale sales are down nationally and things are pretty slow in the Phoenix market as well (see the news posts on the right hand side).
Developers are still offering big discounts. That may be changing in the not too distant future (see the earlier post "Light at the End of the Real Estate Tunnel?").
Yet, local Realtors are seeing more people show up at open houses. Phoenix is its own market and always has been. We still have a positive 100,000 people moving to Arizona every year. That is a big plus that not all states share. Population projections out to 2050 show the overall population increasing by a factor of 4 times.
Local Real Estate analyist R.L. Brown has a little optimism in his September report - the first in over four months. I'll keep you posted.
Developers are still offering big discounts. That may be changing in the not too distant future (see the earlier post "Light at the End of the Real Estate Tunnel?").
Yet, local Realtors are seeing more people show up at open houses. Phoenix is its own market and always has been. We still have a positive 100,000 people moving to Arizona every year. That is a big plus that not all states share. Population projections out to 2050 show the overall population increasing by a factor of 4 times.
Local Real Estate analyist R.L. Brown has a little optimism in his September report - the first in over four months. I'll keep you posted.
Wednesday, September 26, 2007
Computer home buying and selling?
There is a new service about to be launched that is being touted as a way for a buyer and seller to get together on a house deal on line. The details are in the news section on the right side of the BLOG (Current Real Estate News) and the company is called Real Umbrella.
Understandably people who have had a bad experience with a Realtor might welcome this approach. And, if both parties are seasoned real estate investors or people who have bought and sold many homes over the years, it might work out.
Even though you are hearing this from a Realtor, let me give you a couple of things to consider before plunging ahead with a computer house sale.
To protect yourself you are going to need several qualified professionals to help even if you don't use a Realtor. Two that come to mind immediately are a home inspector and a reputable title company.
The home inspector will alert you to potential or actual problems with the home that you might miss and the title company will ensure that you get clear title to the property (necessary for any mortgage).
Also, without a way to check on comparable home values or to see other similar homes that are for sale, you will miss out on really thoroughly shopping the market for possibly even a better deal. Besides, if you are a buyer, Realtor services are at no cost.
I'll keep an eye on this and let you know how it pans out.
Build a better mouse trap . . .
Richard
Understandably people who have had a bad experience with a Realtor might welcome this approach. And, if both parties are seasoned real estate investors or people who have bought and sold many homes over the years, it might work out.
Even though you are hearing this from a Realtor, let me give you a couple of things to consider before plunging ahead with a computer house sale.
To protect yourself you are going to need several qualified professionals to help even if you don't use a Realtor. Two that come to mind immediately are a home inspector and a reputable title company.
The home inspector will alert you to potential or actual problems with the home that you might miss and the title company will ensure that you get clear title to the property (necessary for any mortgage).
Also, without a way to check on comparable home values or to see other similar homes that are for sale, you will miss out on really thoroughly shopping the market for possibly even a better deal. Besides, if you are a buyer, Realtor services are at no cost.
I'll keep an eye on this and let you know how it pans out.
Build a better mouse trap . . .
Richard
Monday, September 24, 2007
You May Not Need To Repaint
Sooner or later our homes begin showing signs of the humans who live there. One of these signs is scuffs and marks on the walls. Nothing serious, just dirty corners, wall marks from furniture and whatnots, you know.
Many homes come with flat latex paint in all but the kitchen and bath areas. This is the paint that marks the easiest. You can't wash it so you are stuck with the marks or doing a repainting.
Not necessarily.
I don't often talk about household products here but this one is good enough to mention. It works on flat latex painted walls, cleans up marks, fingerprints and scuffs. And, unless you rub really hard, it doesn't damage your paint. Just follow the directions on the package.
It is called Magic Eraser and is available in your local grocery store. Try it. I'll think you will be as surprised as I was. The old hacienda never looked better and no painting!
Richard
Many homes come with flat latex paint in all but the kitchen and bath areas. This is the paint that marks the easiest. You can't wash it so you are stuck with the marks or doing a repainting.
Not necessarily.
I don't often talk about household products here but this one is good enough to mention. It works on flat latex painted walls, cleans up marks, fingerprints and scuffs. And, unless you rub really hard, it doesn't damage your paint. Just follow the directions on the package.
It is called Magic Eraser and is available in your local grocery store. Try it. I'll think you will be as surprised as I was. The old hacienda never looked better and no painting!
Richard
Wednesday, September 19, 2007
Will Fed Interest Rate Reduction Affect Mortgages?
Yesterday, the Federal Reserve voted to decrease the discount rate by half a point (50 basis points). Wall Street responded with a 300+ increase in the Dow Jones Industrial Average. (DJIA). Good news for the economy but is it good news for mortgages and the housing situation?
In a couple of words, not directly.
Mortgage rates are determined more by the Bond Market prices rather than the Stock Market (or interest rate reductions per se). However, when Stocks go up Bonds usually go down. This is because investors see a better opportunity to make money in the stock market and switch their money from bonds into stocks.
Also, when the stock market goes up, the value of 401Ks and other investments increase, improving the creditworthiness of potential borrowers.
So there is a beneficial effect but not a direct one.
It will take a couple of weeks to see how much of an effect the interest rate reduction will have on the availability of mortgage money. But it certainly is better than nothing.
Unfortunately, new home builders are still offering steep discounts on their new inventory homes if you can close quickly. Until that stops, resale homes will have to compete in this unusual market (see my post "Light At The End Of The Real Estate Tunnel?" on this Blog).
Comments welcome.
Richard
In a couple of words, not directly.
Mortgage rates are determined more by the Bond Market prices rather than the Stock Market (or interest rate reductions per se). However, when Stocks go up Bonds usually go down. This is because investors see a better opportunity to make money in the stock market and switch their money from bonds into stocks.
Also, when the stock market goes up, the value of 401Ks and other investments increase, improving the creditworthiness of potential borrowers.
So there is a beneficial effect but not a direct one.
It will take a couple of weeks to see how much of an effect the interest rate reduction will have on the availability of mortgage money. But it certainly is better than nothing.
Unfortunately, new home builders are still offering steep discounts on their new inventory homes if you can close quickly. Until that stops, resale homes will have to compete in this unusual market (see my post "Light At The End Of The Real Estate Tunnel?" on this Blog).
Comments welcome.
Richard
Monday, September 17, 2007
Preserving Your Water Heater
We often take our water heaters for granted. That is until they spring a leak or stop working for some reason.
One of the inexpensive things we can do ourselves to prolong the life of the water heater is to replace what is called the "Sacrificial Anode" in our tanks. This anode attracts the the rust that would otherwise attack the lining of the tank. It gets used up over a 2-3 year period and then stops working
This is a do-it-ourself task as these anodes are usually accessible from the side of the tank. They cost around $15.
You can also flush the tank (using the garden hose fitting at the bottom) to get rid of any corrosive debris in the tank - do this once a year. Be sure the electricity is off before trying this (do this at the breaker box for your house). Call a trusted plumber for advice if you have any questions.
If you get a new tank, they now have them with plastic liners that last a lot longer than the glass-lined steel tank we all have been using for years
One of the inexpensive things we can do ourselves to prolong the life of the water heater is to replace what is called the "Sacrificial Anode" in our tanks. This anode attracts the the rust that would otherwise attack the lining of the tank. It gets used up over a 2-3 year period and then stops working
This is a do-it-ourself task as these anodes are usually accessible from the side of the tank. They cost around $15.
You can also flush the tank (using the garden hose fitting at the bottom) to get rid of any corrosive debris in the tank - do this once a year. Be sure the electricity is off before trying this (do this at the breaker box for your house). Call a trusted plumber for advice if you have any questions.
If you get a new tank, they now have them with plastic liners that last a lot longer than the glass-lined steel tank we all have been using for years
Tuesday, September 11, 2007
Monitor Your New Home Construction
Buying a new home is an easy decision for some people these days. With huge discounts and other incentives (like paying your Realtor additional commission), many are opting for a longer wait to take advantage of these deals.
Its always a good idea to have your own Realtor representing you even with the helpful & amiable builder sales reps helping you out (I know this sounds self-serving coming from a Realtor, but it's true nevertheless).
The picture here represents a mistake in placing a bathroom drain that had to be redone after the main house slab had been poured. I took the picture at a client's home that was under construction by a reputable builder. "Well", you might think,"at least they got it in the right place".
That is true but all is not right here.
Your slab is one of the main termite barriers for your home. By filling in the cut with random pieces of broken concrete they have provided a direct pathway for termites to enter your home. This needs a repour of the concrete (and possible redo of the chemical barrier UNDER the slab) to restore that barrier to full effectiveness.
Subcontractors are not what they used to be. Keep a Realtor (and even a home inspector) in your back pocket even when dealing with a friendly new home builder.
Richard
Richard Haworth
Light At The End Of The Real Estate Tunnel?
With the bad news about real estate permeating the news lately and homeowners still waiting for signs that the housing market is nearing its bottom - here is a bit of good news.
The "free" land that developers have been enjoying for months may be coming to and end. That means an end to developers offering these insane deep discounts to lure buyers to their new home developments (and away from resale homes).
Here is the how"free" land deal for developers works. It takes about three years for raw land to go from "desert to doorknobs". So, land being built on today had to be purchased about three years ago. Developers have most likely written off the value of that land long ago to compensate for their profits in 2004 & 2005. They are carrying it on their books at "zero" value.
The average cost of a residential lot in the Phoenix area is about $50,000. Thus it costs the builder essentially nothing to offer a $50K discount on his new homes.
That supply of "free" land is about used up and hopefully builders will soon no longer be able to afford to offer homes at these deep discounts.
This is good news indeed for all of us residential home owners who have seen the price of our homes depressed by new home builder discounting.
Maybe there is a light (of sorts) at the end of the tunnel.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
The "free" land that developers have been enjoying for months may be coming to and end. That means an end to developers offering these insane deep discounts to lure buyers to their new home developments (and away from resale homes).
Here is the how"free" land deal for developers works. It takes about three years for raw land to go from "desert to doorknobs". So, land being built on today had to be purchased about three years ago. Developers have most likely written off the value of that land long ago to compensate for their profits in 2004 & 2005. They are carrying it on their books at "zero" value.
The average cost of a residential lot in the Phoenix area is about $50,000. Thus it costs the builder essentially nothing to offer a $50K discount on his new homes.
That supply of "free" land is about used up and hopefully builders will soon no longer be able to afford to offer homes at these deep discounts.
This is good news indeed for all of us residential home owners who have seen the price of our homes depressed by new home builder discounting.
Maybe there is a light (of sorts) at the end of the tunnel.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
Tuesday, July 31, 2007
Free Credit Reports Available
There is a law that says you are entitled to a free copy of your credit report each year.
You can get the report at http://www.annualcreditreport.com/. It is easy to do.
If you want credit reports more than just once a year, there are a large number of businesses that will provide that service for a fee. Just search for "free credit report" on line.
The main point is that you can (and should) get a copy of your credit report at least once a year. The law gives you rights to correct any errors you find (or at least submit your side of the story).
Richard
You can get the report at http://www.annualcreditreport.com/. It is easy to do.
If you want credit reports more than just once a year, there are a large number of businesses that will provide that service for a fee. Just search for "free credit report" on line.
The main point is that you can (and should) get a copy of your credit report at least once a year. The law gives you rights to correct any errors you find (or at least submit your side of the story).
Richard
Tuesday, July 17, 2007
Troubled Borrower's Solution
With more and more people having trouble meeting mortgage payments, there is a solution that will avoid such homeowners getting a foreclosure on their credit record.
It is called a Short Sale and available from most lenders as a preferred alternative to a foreclosure. It is less damaging to the homeowner's credit rating and saves money for the lender. These days most banks are willing to discuss this alternative.
Here are some rules to follow if you decide to take this route:
1) You must be able to show the bank why you are behind on payments and can't catch up.
2) A Realtor must find a buyer for the property and then negotiate with the lender for an acceptable price (this can often be determined before listing the property although any offer will probably be subject to final lender approval). Real estate commissions may be limited.
3) The homeowner should not expect to get any money (equity) from the sale. Although, several years ago, I handled a short sale and the owners ended up with a $1,000 bonus - from Wells Fargo Bank (other banks may differ).
4) A short sale is still a negative credit score entry but less serious than a foreclosure.
5) The homeowner may be required to pay income tax on any forgiven amount.
6) The homeowner should not sign over the property to any group prior to closing. A short sale closes just like any other real estate transaction.
If you or someone you know is faced with this situation you can contact me for further details.
Thanks.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
602-370-1450
It is called a Short Sale and available from most lenders as a preferred alternative to a foreclosure. It is less damaging to the homeowner's credit rating and saves money for the lender. These days most banks are willing to discuss this alternative.
Here are some rules to follow if you decide to take this route:
1) You must be able to show the bank why you are behind on payments and can't catch up.
2) A Realtor must find a buyer for the property and then negotiate with the lender for an acceptable price (this can often be determined before listing the property although any offer will probably be subject to final lender approval). Real estate commissions may be limited.
3) The homeowner should not expect to get any money (equity) from the sale. Although, several years ago, I handled a short sale and the owners ended up with a $1,000 bonus - from Wells Fargo Bank (other banks may differ).
4) A short sale is still a negative credit score entry but less serious than a foreclosure.
5) The homeowner may be required to pay income tax on any forgiven amount.
6) The homeowner should not sign over the property to any group prior to closing. A short sale closes just like any other real estate transaction.
If you or someone you know is faced with this situation you can contact me for further details.
Thanks.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
602-370-1450
Thursday, July 05, 2007
Tax savings for energy saving improvements
Homeowners - Save Energy & Cash
The Energy Policy Act of 2005 lets homeowners claim up to $500 on their federal income taxes for qualified energy-saving improvements placed in service through December 31, 2008. Here are some tips to help clients cut costs while cashing in on tax credits:
Central air conditioning units that qualify for the credit must meet the highest tier standards set by the Consortium for Energy Efficiency (CEE; http://www.cee1.org/). Note that this is higher than the Energy Star (energystar.gov) standard.
Upgrades such as insulation, replacement windows and sealing ducts -- which retain cool air -- can earn the credit if using qualifying products. (Visit naima.org, www1.eere.energy.gov, efficientwindows.org and energystar.gov for more information.)
Fans for cooling (and heating) systems that consume no more than 2% of the system's energy use qualify. The Gas Appliance Manufacturers Association marks such units with an italicized "e" in its Consumers' Directory of Certified Efficiency Ratings (http://www.gamapower.org/).
Appliance manufacturers must certify that their equipment meets the necessary specifications. Clients should obtain a copy of this certification upon purchase and keep it on file in case the Internal Revenue Service has questions.
Also, the $500 credit applies to each improvement made over the two-year period, so if clients take a $350 credit the first year, they can still take a $150 credit in the second year. (The cap remains $500, however.)
To learn more, visit the Tax Incentives Assistance Project at http://www.energytaxincentives.org/.
Monday, July 02, 2007
Mortgage Payment Help
Dear Friends,
If you or someone you know is having trouble making their mortgage payment, help may be on the way.
This longish post is an article I received from Inman Real Estate News and gives the details of where to turn for help.
If you or someone you know is having payment trouble . . . read on.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
Three-year TV, radio, print Internet campaign kicks off in July
Friday, June 29, 2007By Matt Carter Inman News
Borrowers facing difficulty making their mortgage payments will be urged to call their lenders in a TV, radio, print and Internet public awareness campaign produced by NeighborWorks America and the Ad Council.
The public service announcements -- which cost about $1 million to produce -- urge homeowners in financial trouble to call a hotline maintained by the Homeownership Preservation Foundation, 888-995-HOPE.
The announcements were paid for by lenders who stand to lose $30,000 on every mortgage they are forced to foreclose on. With some estimates predicting that more than 1 million homes will enter the foreclosure process this year, the cost to lenders could approach $30 billion, NeighborWorks estimates.
According to research by government-sponsored mortgage repurchaser Freddie Mac, half of families who end up in foreclosure never call their lenders for help.
For lenders, funding the production of the announcements -- and counselors who advise troubled borrowers -- "is a public service, as well a business decision," Doug Robinson, a spokesman for NeighborWorks, told Inman News.
The Homeownership Preservation Foundation says the hotline is currently getting more than 500 callers a day. The public service announcements are intended to boost calls to the hotline and put more families in touch with their lenders and financial counselors.
Current statewide campaigns by NeighborWorks' Center for Foreclosure Solutions are credited with boosting calls to the 888-995-HOPE hotline from about 700 per month in July 2006 to nearly 15,000 this month.
The spots will run on stations around the country beginning in July. How many people see them depends on how many media outlets agree to run the free public service announcements.
NeighborWorks has partnerships with 236 nonprofits around the country, Robinson said, whose members will make pitches to TV and radio broadcasters, as well as print and Internet media outlets.
"You don't just post them on the satellite and hope it gets pulled down for TV and radio," Robinson said. "You make personal pitches to the stations manager and ad manager."
The television spots -- also available as QuickTime videos for viewing over the Internet -- are shot in stark black and white. In one, a family is gathered around the dinner table, laughing and talking. When the phone starts ringing, the laughter stops. Nobody moves to answer it.
"Every year, 1 million families face losing their homes to foreclosure," the narrator intones. "If you're ignoring your mortgage issues, things will only get worse. Call 888-995-HOPE. Because nothing is worse than doing nothing."
Robinson said the public service announcements are part of a three-year public awareness campaign. New ads may be produced as needed if more money becomes available from NeighborWorks' partners.
"We're continuing to look for new supporters," Robinson said. "If you talk to the Mortgage Bankers Association or the Center for Responsible Lending, anyone will tell you the foreclosure problem has not peaked."
The list of partners in NeighborWorks' Center for Foreclosure Solutions reads like a who's who of mortgage lending. It includes Countrywide Home Loans, Washington Mutual, Bank of America, Option One Mortgage Corp., Chase, Citi, EMC Mortgage Corp., GMAC ResCap, HSBC North America, Ocwen Loan Servicing LLC, National City Mortgage, American Financial Services and SunTrust Mortgage.
Government-sponsored mortgage giants Fannie Mae and Freddie Mac are also partners, as well as the law firm Barrett Burke Wilson Castle Daffin & Frappier LLP, and industry groups like the Mortgage Bankers Association and the Housing Policy Council.
In addition to conducting public outreach campaigns, the NeighborWorks Center for Foreclosure Solutions helps counseling centers around the nation build their staffs. The Center has launched foreclosure prevention initiatives in Ohio, Georgia, Delaware, Baltimore, and St. Louis, and plans dozens of similar local and state initiatives that will "leverage the influence" of the Ad Council campaign, the group said in a press release.
NeighborWorks America provides financial support, technical assistance and training to nearly 4,500 communities nationwide through a network of 236 nonprofit organizations. The group claims its members have generated more than $12 billion in reinvestment in the last five years, helping more than 845,000 families purchase or improve their homes, or obtain rental or mutual housing.
If you or someone you know is having trouble making their mortgage payment, help may be on the way.
This longish post is an article I received from Inman Real Estate News and gives the details of where to turn for help.
If you or someone you know is having payment trouble . . . read on.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
Real Estate Articles from Inman News
Lenders pony up $1M to produce foreclosure-prevention PSAs
Lenders pony up $1M to produce foreclosure-prevention PSAs
Three-year TV, radio, print Internet campaign kicks off in July
Friday, June 29, 2007
Borrowers facing difficulty making their mortgage payments will be urged to call their lenders in a TV, radio, print and Internet public awareness campaign produced by NeighborWorks America and the Ad Council.
The public service announcements -- which cost about $1 million to produce -- urge homeowners in financial trouble to call a hotline maintained by the Homeownership Preservation Foundation, 888-995-HOPE.
The announcements were paid for by lenders who stand to lose $30,000 on every mortgage they are forced to foreclose on. With some estimates predicting that more than 1 million homes will enter the foreclosure process this year, the cost to lenders could approach $30 billion, NeighborWorks estimates.
According to research by government-sponsored mortgage repurchaser Freddie Mac, half of families who end up in foreclosure never call their lenders for help.
For lenders, funding the production of the announcements -- and counselors who advise troubled borrowers -- "is a public service, as well a business decision," Doug Robinson, a spokesman for NeighborWorks, told Inman News.
The Homeownership Preservation Foundation says the hotline is currently getting more than 500 callers a day. The public service announcements are intended to boost calls to the hotline and put more families in touch with their lenders and financial counselors.
Current statewide campaigns by NeighborWorks' Center for Foreclosure Solutions are credited with boosting calls to the 888-995-HOPE hotline from about 700 per month in July 2006 to nearly 15,000 this month.
The spots will run on stations around the country beginning in July. How many people see them depends on how many media outlets agree to run the free public service announcements.
NeighborWorks has partnerships with 236 nonprofits around the country, Robinson said, whose members will make pitches to TV and radio broadcasters, as well as print and Internet media outlets.
"You don't just post them on the satellite and hope it gets pulled down for TV and radio," Robinson said. "You make personal pitches to the stations manager and ad manager."
The television spots -- also available as QuickTime videos for viewing over the Internet -- are shot in stark black and white. In one, a family is gathered around the dinner table, laughing and talking. When the phone starts ringing, the laughter stops. Nobody moves to answer it.
"Every year, 1 million families face losing their homes to foreclosure," the narrator intones. "If you're ignoring your mortgage issues, things will only get worse. Call 888-995-HOPE. Because nothing is worse than doing nothing."
Robinson said the public service announcements are part of a three-year public awareness campaign. New ads may be produced as needed if more money becomes available from NeighborWorks' partners.
"We're continuing to look for new supporters," Robinson said. "If you talk to the Mortgage Bankers Association or the Center for Responsible Lending, anyone will tell you the foreclosure problem has not peaked."
The list of partners in NeighborWorks' Center for Foreclosure Solutions reads like a who's who of mortgage lending. It includes Countrywide Home Loans, Washington Mutual, Bank of America, Option One Mortgage Corp., Chase, Citi, EMC Mortgage Corp., GMAC ResCap, HSBC North America, Ocwen Loan Servicing LLC, National City Mortgage, American Financial Services and SunTrust Mortgage.
Government-sponsored mortgage giants Fannie Mae and Freddie Mac are also partners, as well as the law firm Barrett Burke Wilson Castle Daffin & Frappier LLP, and industry groups like the Mortgage Bankers Association and the Housing Policy Council.
In addition to conducting public outreach campaigns, the NeighborWorks Center for Foreclosure Solutions helps counseling centers around the nation build their staffs. The Center has launched foreclosure prevention initiatives in Ohio, Georgia, Delaware, Baltimore, and St. Louis, and plans dozens of similar local and state initiatives that will "leverage the influence" of the Ad Council campaign, the group said in a press release.
NeighborWorks America provides financial support, technical assistance and training to nearly 4,500 communities nationwide through a network of 236 nonprofit organizations. The group claims its members have generated more than $12 billion in reinvestment in the last five years, helping more than 845,000 families purchase or improve their homes, or obtain rental or mutual housing.
Monday, June 25, 2007
Economic Update for June '07
Real Estate has been in the news almost continuously for months. Here is a quick summary of where we stand currently.
We still have a large number of resale homes for sale in the Phoenix area. The time needed to sell a home here is averaging over 90 days. Prices are still soft and buyers are not bashful about offering less than the listing price (even if it has been reduced) and asking for a seller's contribution to the buyer's closing costs totalling thousands of dollars.
Buyers are in the driver seat and most of them know it.
However, homes are selling , even if the prices are lower. We are still above the average market value for homes before the 2005 run up in prices.
Economically, the Phoenix area is doing pretty well. Growth is still going on, although at a slower pace. Unemployment is still so low we are considered to be at full employment. Good jobs are out there.
One hallmark of the Phoenix real estate market for years was, we did our own thing. Our market was strong for years. These days we are more closely following national trends.
The big question is "When will the housing market turn around?" Opinions are somewhat mixed with the veteran advisors saying it will be sometime next year before we see an overall change back upward.
Some neighorhoods are doing pretty well, others are still struggling. It is a bit of a mixed bag with regard to prices. Contact me for an analysis of where your neighbhood stands.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
602-370-1450 cell
http://www.freephoenixhomeinfo.com/
We still have a large number of resale homes for sale in the Phoenix area. The time needed to sell a home here is averaging over 90 days. Prices are still soft and buyers are not bashful about offering less than the listing price (even if it has been reduced) and asking for a seller's contribution to the buyer's closing costs totalling thousands of dollars.
Buyers are in the driver seat and most of them know it.
However, homes are selling , even if the prices are lower. We are still above the average market value for homes before the 2005 run up in prices.
Economically, the Phoenix area is doing pretty well. Growth is still going on, although at a slower pace. Unemployment is still so low we are considered to be at full employment. Good jobs are out there.
One hallmark of the Phoenix real estate market for years was, we did our own thing. Our market was strong for years. These days we are more closely following national trends.
The big question is "When will the housing market turn around?" Opinions are somewhat mixed with the veteran advisors saying it will be sometime next year before we see an overall change back upward.
Some neighorhoods are doing pretty well, others are still struggling. It is a bit of a mixed bag with regard to prices. Contact me for an analysis of where your neighbhood stands.
Richard
Richard Haworth
Coldwell Banker Residential Brokerage
602-370-1450 cell
http://www.freephoenixhomeinfo.com/
Monday, November 20, 2006
Real Estate overview for November '06
We certainly have had our share of dispiriting market news for Arizona lately.
Well, today the American Association of Realtors dropped the lastest bomb on the our local real estate market. Arizona was include in the three most heavily impacted real estate markets in the country.
Negatively impacted that is.
So, according to the Association, Arizona, California and New Mexico are experiencing the deepest market corrections.
If you have been trying to sell or buy a home, this is not new news for you.
Almost everyone who owned real estate in the Phoenix area experienced a 50% or so increase in the value of their home during 2005. Now it appears, we are having to give some of it back.
If you are down in the dumps because of curent prices, here is one way to look at it. Before the big surge in 2005, home prices were increasing a predictable 1 - 1 1/2 percent per month. Investor money changed all that last year.
But in evaluating what your home should really be worth, take its value at the beginning of 2005, factor in a 1% per month increase (12% for the year), add that to the initial value and that is close to what you home would be worth without last year's artifical run up.
Now, you can probably currently get more than that amount for your home but until prices fall below that recalculated amount, you are still ahead of the game.
So cheer up. No one has actually lost money in Phoenix area real estate over the past 18 months or so, nor are they likely to. Unless you house burned down or a car drove into the living room, you are still in a pretty good investment.
If you borrowed against all that new equity, do your darnest to get that equity loan paid down or paid off. You will sleep better at night.
If you want help establishing the current value of your home, give me a call or email me and I'll help you sort it out.
Richard
Well, today the American Association of Realtors dropped the lastest bomb on the our local real estate market. Arizona was include in the three most heavily impacted real estate markets in the country.
Negatively impacted that is.
So, according to the Association, Arizona, California and New Mexico are experiencing the deepest market corrections.
If you have been trying to sell or buy a home, this is not new news for you.
Almost everyone who owned real estate in the Phoenix area experienced a 50% or so increase in the value of their home during 2005. Now it appears, we are having to give some of it back.
If you are down in the dumps because of curent prices, here is one way to look at it. Before the big surge in 2005, home prices were increasing a predictable 1 - 1 1/2 percent per month. Investor money changed all that last year.
But in evaluating what your home should really be worth, take its value at the beginning of 2005, factor in a 1% per month increase (12% for the year), add that to the initial value and that is close to what you home would be worth without last year's artifical run up.
Now, you can probably currently get more than that amount for your home but until prices fall below that recalculated amount, you are still ahead of the game.
So cheer up. No one has actually lost money in Phoenix area real estate over the past 18 months or so, nor are they likely to. Unless you house burned down or a car drove into the living room, you are still in a pretty good investment.
If you borrowed against all that new equity, do your darnest to get that equity loan paid down or paid off. You will sleep better at night.
If you want help establishing the current value of your home, give me a call or email me and I'll help you sort it out.
Richard
Tuesday, June 27, 2006
Current Market Outlook June 27th
There have been lots and lots of real estate headlines. If you read them all, I won't blame you for being confused.
Here are some basic facts about the Phoenix real estate market.
We currently have a surplus of inventory new homes. New home builders are offering large discounts to sell these homes. Best estimates of how long this oversupply will last is 6 months (it could be shorter).
This situation is unbalancing the housing market for resale homes as well. Buyers can afford to be more choosy.
Recent newspaper reports have created the impression that home prices may be declining. If buyers don't have to buy, they are waiting until prices stabilize rather than buy a house and risk loosing value in a declining market.
According to a recent Census Bureau review, Maricopa County has gained 313 people a day since 2000. This translates into more people needing places to live which will tend to keep an upward pressure on housing prices. This is a MUCH longer trend than recent ups and downs in the housing market and is the best guarantee that we will shortly return to a steady upward trend in home values that has been the hallmark of the Phoenix housing market for the past decade.
If you have questions about your particular housing situation, send me an email through www.freephoenixhomeinfo.com or give me a call at 602-370-1450.
Richard
Here are some basic facts about the Phoenix real estate market.
We currently have a surplus of inventory new homes. New home builders are offering large discounts to sell these homes. Best estimates of how long this oversupply will last is 6 months (it could be shorter).
This situation is unbalancing the housing market for resale homes as well. Buyers can afford to be more choosy.
Recent newspaper reports have created the impression that home prices may be declining. If buyers don't have to buy, they are waiting until prices stabilize rather than buy a house and risk loosing value in a declining market.
According to a recent Census Bureau review, Maricopa County has gained 313 people a day since 2000. This translates into more people needing places to live which will tend to keep an upward pressure on housing prices. This is a MUCH longer trend than recent ups and downs in the housing market and is the best guarantee that we will shortly return to a steady upward trend in home values that has been the hallmark of the Phoenix housing market for the past decade.
If you have questions about your particular housing situation, send me an email through www.freephoenixhomeinfo.com or give me a call at 602-370-1450.
Richard
Wednesday, June 07, 2006
New Home Builders Cutting Back
Several recent articles in the local newspaper have indicated that several major home builders are expecting a 25% or greater sales dip.
While that may be true, what is crucial here is which years are being compared.
2005 was a very different year. If we are to have a meaningful comparison, this year's housing figures must be looked at from a 2004 (or earlier) perspective.
So, when you see these scary headlines, read the article to find out which years are being compared. Don't let the headlines scare you.
Literally EVERYTHING in the housing industry is down from last year but we are close to the 2004 housing sales figures. That is a much more meaningful comparison.
Email me or call me if you have specific questions about your own situation.
The only people who are really hurting are those that bought new or resale homes last year (2005) between May and December.
Richard
While that may be true, what is crucial here is which years are being compared.
2005 was a very different year. If we are to have a meaningful comparison, this year's housing figures must be looked at from a 2004 (or earlier) perspective.
So, when you see these scary headlines, read the article to find out which years are being compared. Don't let the headlines scare you.
Literally EVERYTHING in the housing industry is down from last year but we are close to the 2004 housing sales figures. That is a much more meaningful comparison.
Email me or call me if you have specific questions about your own situation.
The only people who are really hurting are those that bought new or resale homes last year (2005) between May and December.
Richard
Sunday, June 04, 2006
Phoenix Market Update-June 2006
There are still plenty of (confusing) newspaper headlines about the housing market. From new home permits being down 20% (they are), to the Pinal County housing market cooling (it is), to the Northwest Valley home prices holding their own (they are), one could get confused by it all.
Our basic situation is an oversupply of new home inventory that is being offered with large buyer incentives and Realtor commissions topping out at 8%! A year ago, most builders were not paying any Realtor fees! Now I am seeing almost daily offers of Realtor fees of 6% - 8% with large buyer incentives to boot.
We (the housing market) need to work our way through this excess new home inventory before we get back to "normal" ( defined as the way the market was in 2004). How long will it take to do this? No one that I know of is predicting how long it will take. My own educated guess is no longer that 12 months.
New home permits are down, so builders are reigning themselves in until the excess new home inventory is down. The nice thing is that we still have far more people moving here than are leaving, so there is a continuing demand for housing, both resale and new.
The best indicator of returning to normal will be when I stop receiving the blizzard of emails offering 6-8% Realtor fees. I will definitely let you know when that happens.
Resale homes are selling. I sold one last week in 10 days. However, it was a very very nice home with a heated pool & spa that backed up to a common area. We priced it just below the market and it sold quickly. I have other listings that are languishing a bit.
THERE ARE BUYERS OUT THERE. They are just being choosy now because they can be.
Stay tuned for the next update.
If anyone has specific questions on their home, please email me through my web site at www.freephoenixhomeinfo.com. Or just give me a call at 602-370-1450.
Richard
Our basic situation is an oversupply of new home inventory that is being offered with large buyer incentives and Realtor commissions topping out at 8%! A year ago, most builders were not paying any Realtor fees! Now I am seeing almost daily offers of Realtor fees of 6% - 8% with large buyer incentives to boot.
We (the housing market) need to work our way through this excess new home inventory before we get back to "normal" ( defined as the way the market was in 2004). How long will it take to do this? No one that I know of is predicting how long it will take. My own educated guess is no longer that 12 months.
New home permits are down, so builders are reigning themselves in until the excess new home inventory is down. The nice thing is that we still have far more people moving here than are leaving, so there is a continuing demand for housing, both resale and new.
The best indicator of returning to normal will be when I stop receiving the blizzard of emails offering 6-8% Realtor fees. I will definitely let you know when that happens.
Resale homes are selling. I sold one last week in 10 days. However, it was a very very nice home with a heated pool & spa that backed up to a common area. We priced it just below the market and it sold quickly. I have other listings that are languishing a bit.
THERE ARE BUYERS OUT THERE. They are just being choosy now because they can be.
Stay tuned for the next update.
If anyone has specific questions on their home, please email me through my web site at www.freephoenixhomeinfo.com. Or just give me a call at 602-370-1450.
Richard
Thursday, May 04, 2006
Credit Scoring System May Change
In evident response to consumer complaints, the three main credit reporting agencies have decided to change the way your credit score is calculated and scored. In the past you could have different scores with all three companies (lenders would use the middle score). This system has been a thorn in the side of consumers for years and is largely hidden from view, which is its main problem.
No word yet on when this new system will be implemented (it may already be in place) but here are some details:
"The three major consumer credit reporting agencies recently unveiled a new way of calculating credit scores, introducing A through F letter grades designed to give consumers a better idea of where they stand.
With the new system, a single methodology will be used to create the scores for all three credit bureaus. Credit scores traditionally have been three- digit numbers that lenders used to evaluate the creditworthiness of borrowers. Current scores range from 300 to 850.
The new credit scores will be issued on a scale ranging from 501 to 990, with higher scores being better. To help consumers better understand the scores, they are also assigning them letter grades: A score between 901 and 990 is an A, 801 to 900 is a B, 701 to 800 is a C, 601 to 700 is a D, and 501 to 600 is an F."
Recent information indicates that this change is still a ways off. I'll pass along more information as it becomes available.
Richard
No word yet on when this new system will be implemented (it may already be in place) but here are some details:
"The three major consumer credit reporting agencies recently unveiled a new way of calculating credit scores, introducing A through F letter grades designed to give consumers a better idea of where they stand.
With the new system, a single methodology will be used to create the scores for all three credit bureaus. Credit scores traditionally have been three- digit numbers that lenders used to evaluate the creditworthiness of borrowers. Current scores range from 300 to 850.
The new credit scores will be issued on a scale ranging from 501 to 990, with higher scores being better. To help consumers better understand the scores, they are also assigning them letter grades: A score between 901 and 990 is an A, 801 to 900 is a B, 701 to 800 is a C, 601 to 700 is a D, and 501 to 600 is an F."
Recent information indicates that this change is still a ways off. I'll pass along more information as it becomes available.
Richard
Monday, May 01, 2006
Phoenix Market Update 5-1-2006
We still have plenty of real estate headlines - both good and bad sounding.
My recent personal favorite was "Phoenix loses home-building title but performs well". So, we lost our top billing nationally but overall things are back to what they were before last year's gold rush.
There are buyers out there and mortgage rates, while rising, are not yet too high. Inventory of resale homes on the market is up and is being described as "higher than ever". While true, that fact itself does not portend disaster.
Considering the number of people moving to the area each year and the number of new homes built over a 12 month period, there should be more homes on the market each year. Something would be wrong if there weren't more homes available.
So, overall, we are in about the same situation we were two years ago with a small but steady increase in the average home's value. Don't buy into comparisons of the market to a year ago; 2005 was a special case.
By the way, I still have California investors making offers on the listings I have. They are, I think, here to stay.
My recent personal favorite was "Phoenix loses home-building title but performs well". So, we lost our top billing nationally but overall things are back to what they were before last year's gold rush.
There are buyers out there and mortgage rates, while rising, are not yet too high. Inventory of resale homes on the market is up and is being described as "higher than ever". While true, that fact itself does not portend disaster.
Considering the number of people moving to the area each year and the number of new homes built over a 12 month period, there should be more homes on the market each year. Something would be wrong if there weren't more homes available.
So, overall, we are in about the same situation we were two years ago with a small but steady increase in the average home's value. Don't buy into comparisons of the market to a year ago; 2005 was a special case.
By the way, I still have California investors making offers on the listings I have. They are, I think, here to stay.
Friday, March 31, 2006
Phoenix Market Update - March 2006
If the number of headlines regarding real estate is any indication, it has been an active several months.
But just reading the various headlines could leave one awfully confused. From "Phoenix a buyer's market" to "Don't fret drop in new-home permits" to reports of the average home price still going up, headlines tell a confusing tale.
Here is what is happening in the Phoenix home real estate market from where I sit.
Yes, there are more homes on the market than in the last 12 months. Yes, new home builders are offering an increasing number of incentives to lure buyers for their existing homes (inventory homes).
But, the average price of a resale home is still increasing, and while days on the market to sell a home are up over last year, they still are reasonable (less than 60 days).
Overall, we have slowed down but it is still fundamentally a robust real estate market. Why? primarily because we have 100,000 people moving to Arizona each year, the bulk of whom come to the Valley of the Sun.
The only really valid comparsion for this year's sales figures is from TWO years ago. Last year was an exception. That is behind us now. But every indication I can see is that we have just returned to the way things were in 2004 and earlier - a slow steady increase in home values.
Why are there so many "Price Reduced" signs on homes you ask? More than a few sellers are stuck in last year's market. They begin a listing with an unreal price and, when they get no traffic and no offers, they bite the bullet and reduce the price.
This too shall pass.
Call me for additional information or for a market analysis for your home.
Richard
602-370-1450 cell
But just reading the various headlines could leave one awfully confused. From "Phoenix a buyer's market" to "Don't fret drop in new-home permits" to reports of the average home price still going up, headlines tell a confusing tale.
Here is what is happening in the Phoenix home real estate market from where I sit.
Yes, there are more homes on the market than in the last 12 months. Yes, new home builders are offering an increasing number of incentives to lure buyers for their existing homes (inventory homes).
But, the average price of a resale home is still increasing, and while days on the market to sell a home are up over last year, they still are reasonable (less than 60 days).
Overall, we have slowed down but it is still fundamentally a robust real estate market. Why? primarily because we have 100,000 people moving to Arizona each year, the bulk of whom come to the Valley of the Sun.
The only really valid comparsion for this year's sales figures is from TWO years ago. Last year was an exception. That is behind us now. But every indication I can see is that we have just returned to the way things were in 2004 and earlier - a slow steady increase in home values.
Why are there so many "Price Reduced" signs on homes you ask? More than a few sellers are stuck in last year's market. They begin a listing with an unreal price and, when they get no traffic and no offers, they bite the bullet and reduce the price.
This too shall pass.
Call me for additional information or for a market analysis for your home.
Richard
602-370-1450 cell
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