By Jay Crandall
Posted on May 6, 2013 at 3:30 PM
Updated Monday, May 6 at 3:40 PM
PHOENIX — It is no surprise housing prices are going up, up, up here in the Valley, which is news we’ve all been waiting to hear. But are we preparing ourselves for another housing bubble?
The short answer is: No. Real estate analysts say our recovery is steady, in large part, because right now there are far more buyers than houses available.
From luxury homes in Paradise Valley to entry-level floor plans in Peoria, real estate agent Robert Joffe said across the state, Arizona homes are once again prized property.
“I’ve been doing this for 28 years, I would say this is the busiest I have ever been,” Joffe said.
A big turnaround from just a few years ago.
“We have actually really turned to a seller’s marketplace,” he said. “Some sellers getting multiple offers on properties; it definitely has changed very quickly. “
Joffe said a number of factors are helping Arizona bounce back from a foreclosure freefall.
“I think a combination of people coming back, wanting to live here, low interest rates, and a great living environment has caused Arizona to really prosper,” Joffe said.
But, he said the biggest factor driving the latest boom is a real estate squeeze.
“What we are really hurting on is low inventory of available homes,” he said.
Kuldip Verma, of Vemaland, agrees.
“And the inventory from 57,000 homes in 2008 has gone down to 16,000 homes in 2013,“ Verma said.
Vermaland is one of the largest landowners in the Phoenix area and Verma said that housing shortage has home builders on the hunt for land.
“And we anticipate the sales this year in raw land should exceed all the sales during 2008, 2009, 2010, 2011 and 2012,“ he said.
And while more homes could help keep prices affordable, especially for first-time buyers, Verma said there is a cost — location.
“The most raw land that is available is either in the West Valley or the southeast Valley.”
And he means far west, beyond the White Tanks or far southeast toward Casa Grande, because while it appears there is a lot of open space around the Valley, very little is open to development.
“Surprisingly, Arizona has only 17 percent land which is private,” Verma said. “The rest a checkerboard of state, local and federal lands, along with Native American reservations, so to find large tracts builders are going further out and driving up prices as they do.
“During the distressed time from 2008 to 2012, the land prices tumbled down to as low as 5 cents to 10 cents to the dollar,” Verma continued. “Now in the last three months, we are seeing land prices jump to 10 to 15 cents to the dollar and I feel we should see the firming up of this market by the end of the year.”
Joffe said the good news is that until that new land is developed there are still bargain-priced homes out there, but he said you need a good Realtor to find them. He also said get pre-qualified and be ready to jump when what you want hits the market.
“I think if someone is on the fence they should get off of it because next year they are going to be saying, ‘Why didn’t I buy this year,’“ Joffe said.
By Jay Crandall
Here is your first look at Principal Reduction Assistance in the form of the Permanent Mortgage Modification or HARP 2.0 Refinance. This video is brought to you by Keith Krone of Keller Williams Realty Professional Partners and Chris Papaccio & Bill Krone, Mortgage Bankers with Starboard Financial -The Right Way-. For more information please email Documents@kroneteam.com.
By: Christopher A. Combs, Esq.
Any forgiveness of debt is generally taxable income. In 2007 during the height of the housing crisis the Mortgage Debt Relief Act was passed. Under this Act any debt forgiveness after foreclosure or a short sale by a mortgage lender on a loan used to purchase a primary residence, or to make improvements to a primary residence, is not taxable income. This Act is now scheduled to expire on December 31, 2012.
The Act had originally been scheduled to expire on December 31, 2010, but was extended for two years until 2012 because the housing crisis still existed. Although the housing market today is stronger, the housing market is still not healthy.
The Senate Finance Committee with bipartisan support has now approved a bill to extend the Act for one year until December 31, 2013. The cost of this one-year extension will be $1.3 billion dollars.
After the election the Senate is expected to approve the one-year extension, but there is significant concern that, due to the $1.3 billion dollar cost and the reluctance to “bail out” homeowners who overextended themselves in their home purchases, the House of Representatives may not agree to the one-year extension.
The website http://www.govtrack.us/ is available to track the potential passage of this bill in Congress.
Peggy Kennedy of the Krone Team reporting on the latest trends in Real Estate with the market report from August 2012. Peggy will give you a behind the scenes look at listings, pricing, closings and various other statistics that are trending in the Real Estate Market today in the Valley of the Rising Sun. Reporting live from the beautiful surroundings in Rio Paseo in Goodyear, AZ. For more information on the latest trends in Real Estate, please email peggy at firstname.lastname@example.org
With inventory down and a high demand from buyers there are signs on the horizon that our Arizona Real Estate market may just be making the turn into more of a traditional real estate market. For example, we are noticing this in areas like the Palm Valley Community in Goodyear, AZ.
After four painfully slow years, Arizona home builders are seeing signs of a long-hoped-for recovery. Home construction starts in March 2012 increased by 60% to 1,036 in Maricopa and Pinal counties, compared with 647 home starts during the same month in 2011, according to data provided by Phoenix-based RL Brown Reports. That’s the highest monthly activity since July 2009, when the market was lifted briefly by the federal tax break for first-time buyers. Home starts for 1st quarter, 2012 increased by 31%.
Michael Orr, director of the Real Estate Center at the W.P. Carey School of Business at Arizona State University said the upward pricing trend that began September 2011 continued to gain strength in March 2012. Overall supply fell 64% compared with 12 months ago, and distressed (short sales and foreclosures) fell by 82%.
Homes on the lower end of the pricing spectrum have the least amount of inventory available. It’s getting to be “a nightmare” for buyers who want to purchase existing homes in the mid-price range. They often are caught off-guard when they get stuck in bidding wars.
Your home may be worth more than you think, if you would like for The Krone Team to do a complimentary Comparative Market Analysis for you, just email email@example.com or give Cheryl a call at (602) 708-2073.
Signs of upturn in Phoenix’s long-suffering housing market
By Julie Schmit, USA TODAY
Updated 2/28/2012 12:31 PM
The Phoenix housing market is showing signs of improvement, even generating bidding wars among buyers for lower-priced homes.
The area was one of the hardest hit by the foreclosure crisis. Prices had fallen 57% from their peak.
Now, “We list a property and, within two or three days, we have multiple offers,” says Keith Krone of Keller Williams Realty in a Phoenix suburb.
While frustrating for buyers attempting to get homes at rock-bottom prices, it’s a healthy sign of healing in a market scorched by the housing bust five years ago, say local Realtors and real estate experts.
The area’s January home sales were up 8.1% year-over-year. Multiple offers are common on lower-end homes, investor-buyers say. And the inventory of homes for sale is now well below the 10-year average, says Michael Orr, real estate expert at Arizona State University.
National data watchers have also seen improvements in Phoenix. In October and November, it was the only one of 20 major cities to see home values rise month-to-month, according to Standard & Poor’s Case-Shiller home price index, which reports December results today.
Phoenix “is probably the best example we have right now of a hard-hit market that’s showing signs of recovery,” says Zillow economist Stan Humphries.
Making money on rentals
Strong demand for rental homes is boosting the market, Orr says.
While home prices plummeted in the downturn, rents haven’t, he says. That’s lured mom-and-pop and institutional investors who are buying single-family homes to turn them into rentals.
In January, more than 25% of homes sold were bought by investors, Orr says. Historically, they account for 10% of Phoenix home purchases.
Investor demand for homes priced below $100,000 is “frenetic,” says Laurie Hawkes, president of American Residential Properties. The real estate investment firm has bought almost 800 Phoenix-area homes in the past three years and turned them into rentals.
Last year, cash buyers accounted for about 94% of purchases for homes that sold for less than $100,000, she says.
The homes are often filled with people who lost single-family homes to foreclosure, Hawkes says.
Job growth in the Phoenix area has also outpaced state and national averages since mid-2011, says a December report on the region by Moody’s Analytics. That drives rental demand, too.
Prices are responding in the lower end of the market, says James Breitenstein, CEO of Landsmith, an investment firm that’s bought 225 Phoenix-area homes in the past year to rent out.
“Houses we used to buy for $50,000 are now creeping up to $60,000 or $70,000,” he says.
Arizona’s relatively fast foreclosure process is also helping to clear inventories of distressed homes. The state is among those that do not require court approvals of foreclosures.
About half the states do, including New York and Florida. In judicial foreclosure states, foreclosures have taken longer to complete. New rules since 2010 to ensure that foreclosures are done properly have extended time frames even more.
In Phoenix, it would take about 20 months — half the national average — to liquidate all homes currently in foreclosure or more than 90 days delinquent on loans, based on current foreclosure sales rates, says mortgage tracker LPS Applied Analytics.
A new government plan launched Monday should hasten the clearing of inventories of distressed homes, says Jim Belfiore, of Belfiore Real Estate Consulting in Phoenix. The government is offering to sell some foreclosed homes owned by Fannie Mae in Phoenix and other cities to investors to turn into rentals.
In addition to investors, first-time buyers are also active, as are vacation home buyers and people who lost homes earlier in the downturn, says Arthur Welch of Realty World Superstars in the Phoenix suburb of Buckeye.
More traditional buyers are also in the market, Belfiore says. “People who have sat on the sidelines sense that the bottom has been hit,” he says.
When compared against median incomes, Phoenix homes are 15% more affordable now than they were on average from 1985 to 2000, Zillow says. Record-low mortgage rates, around 4%, stretch buyers’ dollars further.
Zillow expects Phoenix home values to rise 0.6% this year, vs. a 3.7% drop for the nation. Through November, Case-Shiller data show Phoenix home values down 3.6% year-over-year vs. a 3.7% decline for an index of 20 leading cities.
Phoenix still faces big challenges.
Last year, the region posted the nation’s sixth-highest metropolitan foreclosure rate, based on foreclosure filings by housing unit, market researcher RealtyTrac says.
As those homes hit the market, they’ll drive home prices lower, says Moody’s analyst Daniel Culbertson. Meanwhile, new single-family home construction will remain “lethargic,” he wrote in the December report.
What’s more, almost half the Arizona homes with mortgages were underwater at the end of September, says researcher CoreLogic. That compares with about a fifth of homeowners nationwide who owe more on their mortgage than their homes are worth.
It’s harder for underwater homeowners to sell and then buy other homes. Normal resales in Phoenix aren’t seeing higher prices yet, Orr says.
Still, he says the market is poised for a “significant rise” in prices at the lower end. “We will have to wait and see if this possibility turns into reality,” he says.
With more than half of homes and homeowners “under water” in the Greater Phoenix area, you may be one of thousands of people who are looking for information on how to Avoid Foreclosure in Phoenix. The Arizona Department of Real Estate and the Arizona Association of REALTORS® – suggests these options be explored before deciding to Short Sale your home. These options include:
Deed in Lieu of Foreclosure
Work Out Sale
After reviewing these options, almost in every situation when the homeowner must sell or thinks the only way out is losing the house to foreclosure, there is actually a third option. That third option is a Short Sale, and most often, is actually the best option – even if you also plan to file Bankruptcy. A Short Sale in conjunction with Bankruptcy is a more complicated Short Sale process; however, with the guidance of their Attorney and experienced Short Sale Realtor, Arizona Short Sale homeowners can get the fresh start they are looking for.
Foreclosure should be avoided as it often affects your credit by over 200 points, 7 years and an even impact your security clearance with many employers. The choice of last resort, letting the property go to Trustee Sale in a foreclosure should be avoided by first attempting to Short Sale your Phoenix home.
With so much to weigh out, it’s important to speak to a Realtor that is a Short Sale Specialist and can answer your questions, identify your options and assist you in being proactive. Keith and Cheryl Krone have been Realtors since 1983; and for the last 3 years have specialized in Short Sales in Avondale, Buckeye, Goodyear, Litchfield Park and Surprise.
For more information about Avoiding Foreclosure and Short Sales in Phoenix, please feel free to visit our website at AvoidingForeclosureInPhoenix.com, or for a confidential consultation contact Keith & Cheryl Krone directly at (623) 337-8277 ext. 201 or by emailing Info@AvoidingForeclosureInPhoenix.com.
NOW IS THE TIME TO BUY
Interest rates are still bouncing between 4.5% and 5.25% and are still historically low. The depressed prices in Phoenix make this a perfect time to buy. Investors with lots of cash know this as 42% of the 2010 sales in Phoenix were cash.
On FHA the rates are about 4.75% and Conventional they are about 5%.
We do anticipate interest rates rising. They have been going up in the last few months and with every positive economic indicator they will go up higher.
Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. ~Mark Twain
What does this mean for Real Estate? It means it is time for a fresh start – time to be Proactive! The economy is beginning to show signs of life again and it’s time to revive our own household economics.
If you are under water with your head buried in the sand, it’s time to take a look around, assess the damage, and move on toward being financially healthy again. If that means you need to Short Sale your home in the Litchfield Park, Goodyear or Avondale communities, contact Cheryl at (602) 708-2073 or firstname.lastname@example.org .
Waiting on the fence to Buy? Time to hop off and get in the game! Interest rates are still great, and home prices are incredibly affordable. If you want to find out more contact Peggy at (602) 320-4167 or Mike at (623) 824-6274, they are your Avondale, Goodyear and Litchfield Park Buyer Specialists!
Most homeowners are upside down in their mortgage and want to get out but can’t sell their home to cover what they owe on their mortgage(s). Other life situations happen frequently such as job loss, divorce, medical bills, or an interest rate adjusts. And just like that, the homeowner starts missing payments.
What do we do?
Everyone’s first desire is to try a Loan Modification. Unfortunately, loan modifications have become quite the sham according to the local Department of Real Estate. Many companies claiming to be loan modification specialists have been shut down. Even worse, the multitude of homeowners who paid those companies thousands of dollars upfront to help them couldn’t get their money back.
What about a Loan Modification from my Lender?
Many lenders don’t want to grant Loan Modifications because statistics show, of the Loan Modifications that actually were granted when the economy first began to decline, the homeowner ended up back in default within 6 months, and the bank ended up foreclosing anyway.
Is there anything we can do?
Most people turn to the Short Sale to have their lender approve the sale of their property for less than what they owe, and before the bank forecloses. It is crucial to hire an Experienced Realtor who has mastered the Short Sale process knowing how to work with the lenders and getting approval.
In 2009, the Short Sale process could take 6 months or more. Currently, the Short Sale process can take less than 6 months with experienced Realtors and lenders negotiating and closing in 2 months. Even though this is a huge improvement, it is still not a slam dunk. Just like with a Loan Modification, you will need to provide a lot of documentation and why the mortgage payment can no longer be paid. However, unlike the Loan Modification process, the Short Sale process can create the positive outcome you are looking for. Also important to know, the lender pays the selling commission.
There is hope!
Most importantly, do not wait for a “Notice of Sale” to be posted on your door. Also, it’s important to remember that the Short Sale process is a complex transaction and requires a Realtor that specializes in Short Sales. So, in this situation, your best friend’s uncle’s cousin that works part time in Real Estate is not who you want for this type of transaction. It’s important to speak to a Realtor that is a Short Sale Specialist and can answer your questions, identify your options and assist you in being proactive. Keith and Cheryl Krone have been Realtors since 1983; and for the last 3 years have specialized inShort Sales. The time to contact us is before you have missed a payment, but if you already have, call Cheryl Krone to schedule an appointment to discuss your unique situation at (602) 708-2073 or Cheryl@kroneteam.com.