There’s always time.

If we don’t buy now, we always can do it next year (or next millenium.)

We’re waiting for the market to hit bottom.

If you’re north of the border and have heard yourself uttering any of these phrases, I invite you to take a look at the widget in the left sidebar for representative exchange rates. As I write this, the Canadian dollar is running at 97 cents to the American dollar.

What does this mean? It means the $200,000 home you might have been looking a week or so ago is going to cost you $206,000. And I almost can guarantee you the value of the property hasn’t decreased three percent in 10 to 14 days to balance the equation.

Purchasing power is your weapon but it’s not an eternal one. History is not on your side in the balance between Canadian and American dollars.

Relatively low prices. Relatively high inventory. Relatively strong exchange rates.

Purchasing a second home or vacation home isn’t for everyone but if you’re in the position to make the plunge, there may not be a better time. Unless you want to gamble that the widget will move violently in you favor once again, that any economic problems here in the U.S. and around the world will not invade Canada.

Technorati Tags: Phoenix real estate, Canadian buyers, real estate investment

Popularity: 6% [?]

Share This

Tags: Canadian Buyers, Phoenix Market, General Real Estate, Tips for Buyers by Jonathan Dalton
5 Comments »

Sometimes there’s temptation to use percentages here. For instance, I could tell you that sales of single-family detached homes in Maricopa County over the past 30 days jumped 10% over last week’s report.

Sounds really cool, huh? But it’s only 200 homes.

Percentages often lack perspective. Something to keep in mind the next time you hear about the percentage increase in foreclosures either here in Phoenix or in other real estate markets around the country.

Sales did increase to 2,286 from 2,201 a week ago (covering the preceding 30 days) while inventory rose by a grand net of 36 homes. The result is an absorption rate figure of 17.36 months; if no new inventory came to the market, at the current sales pace that’s how long it would take for all the inventory to clear out.

I’ll have the map in a second but wanted to share this with you first. Let’s take a closer look at the city of El Mirage, just west of Sun City and to the south of Surprise.

As of the moment there are 414 single-family homes for sale in El Mirage. Of those, 83 are short sales and 89 are bank-owned homes - this accounts for 41% of the inventory.

There have been 33 sales in El Mirage over the past 30 days. Four of those were short sales and another 18 were REOs (real estate owned, the bank’s euphemism for a home that was foreclosed.) That accounts for 67% of the sales.

Have prices been declining in El Mirage? Absolutely. But at the same time, the bottom is being defined by these sales of foreclosed homes. This isn’t to say we’ve reached bottom, but if you believe as I do the bottom will be defined less by price than by activity, then it’s being defined by these bank-owned homes carrying a 4-month absorption rate (18 sales with 89 homes in inventory the last 30 days.)

Someone recently asked on Trulia how you compete with the pricing on a foreclosure down the block? Easy. Price your home to match the foreclosure. And as my friend Thomas Johnson in Houston adds, make sure to advertise that your copper pipes haven’t been stripped from the premesis.

Two last notes before the map. The absorption rate for bank-owned homes overall fell to 7.6 months - 443 sales with 3,383 active homes. Short sales actually are selling at a worse rate than the overall market at 18.04 months of inventory.

As always click on any of the below markers for details on a given city or town. And also as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.

Technorati Tags: Phoenix real estate, absorption rate, bank owned homes

Popularity: 7% [?]

Share This

Tags: Phoenix Foreclosures, Phoenix Inventory, Phoenix Market by Jonathan Dalton
1 Comment »

I haven’t posted much because I’m still locking all mortgage rates at application. The market is so volatile because some on Wall Street believe that we’re NOT going to have a recession and that the Fed will reverse course and start raising the Discount and Fed Funds rates.

Say What? Well, I don’t make the rules, I follow them. While I expect to see lower rates in 6 months, today, they’re rising faster than a popstar’s audience grows. Of course, what goes up can come crashing down (ask Britney Spears) but today, we’re dealing with higher mortgage rates.

The strategy I recommend is to obtain a 10/1 ARM at 5.375% (5.62% apr) with no discount points. You can lower the rate on that loan to 5.125% by paying a point upfront but it will take over 5 years to recoup that cost; I think you’ll sell or refinance during that time (or have an opportunity to do so). I just can’t understand why anyone would want a 30 year fixed AT EXACTLY 1% HIGHER than the 10/1 ARM.

Okay, let’s get back to Britney Spears; she’ll illustrate my point about the 10/1 ARM. In 1999, she was 17 years old and the hottest thing since Elvis. She released her debut album, Baby One More Time, and was the darling of kings and Presidents. Today, Britt’s struggling in rehab and dealing with custody issues. In ten years, she will find God, get re-married, remake her career, and be considered one of the most influential artists of all time (only in America). Now, I’m exaggerating to reduce the ten year time frame to the ridiculous. I only wish the best for Britney and certainly wish the best for you.

That’s why I’m so adamant about the ten year ARM.

PS- Want the fastest response in this volatile market? Apply online and call me at 858-777-9751 right after you apply online.

Popularity: 6% [?]

Share This

Tags: Real Estate Financing, Tips for Buyers by Brian Brady
No Comments »

One of my clients marked a home in Avondale’s Garden Lakes subdivision as one of their favorites today. The search I set for them is designed to skip past short sales since these homes aren’t actually for sale at the prices listed.

This one slipped through because the agent didn’t note the listing correctly. And the marketing copy is enough to make one believe this is the deal of the century:

!!! Short Sale !!! Bankruptcy, Pre-Forclosure! … This is a Steal being on the water with a pool. This will not last long! Make an offer today before it is gong (sic). Nobody know when the bottom of this market is and we may never see this home again for this price. Don’t let it pass you buy (sic)!

Spelling aside … we’re not even seeing this home now at this price.  The owner owes the bank about $117,000 more than the list price this agent has chosen. Read that one again - $117,000! That’s about a 33% hit the bank will take if they accept a full price offer on this house as a short sale.

Even under the oft-mistaken impression that the bank doesn’t want to own the home (the idea the bank doesn’t want to own it is correct; the idea will do anything not to own it is pure myth), it’s fairly unlikely the bank will willingly accept a 33% loss to sell this home at a substantial discount to current market value.

Market value may be where buyer and seller meet but in this case, the seller’s not willing to meet at the price this agent’s advertising.

RE 2.0 good - buyers being able to search for properties online. RE 2.0 bad - buyers not realizing what they’re seeing isn’t always the full story and finding themselves on the wrong end of a bait and switch list price.

Technorati Tags: short sales, Phoenix real estate

Popularity: 8% [?]

Share This

Tags: Bad MLS/Trulia Remarks, Phoenix Market by Jonathan Dalton
1 Comment »

If you’re looking to purchase a bank owned home here in Phoenix or elsewhere, there are a few givens with which you’ll have to deal:

1) There will be no Sellers Property Disclosure Statement. While occupancy is not necessary for the form to be required, the lenders truly don’t know what has happened in the home’s history. And while they should know if anything’s happened since they took ownership, the knowledge is sketchy at best.

2) The property is being sold As Is.

What does As Is really mean? I’m glad you asked.

There’s a 10-day inspection period built into the Arizona Residential Resale Purchase Contract, during which a buyer should have the home inspected by a professional home inspector and also checked for termites by a termite inspector. This also is the time for any specialty inspections the buyer may want - roof, pool, mold (most home inspectors can say if there’s evidence of a problem but they’ll almost universally suggest bringing in a specialist for the final verdict.)

At the end of the 10 days, the buyer has the option of accepting the house as is, canceling the contract and regaining their earnest deposit or asking for repairs.

Wait, Jonathan. This is an As Is purchase. The bank already said they won’t make repairs.

Yes, that’s true. Unless it’s not. While rare, some lenders have made repairs to ensure the deal gets done. These usually aren’t the “light bulb in the kitchen’s burned out” variety but it can happen.

Bank owned homes are a gamble in the sense that you never know if the previous owners took their misfortune out on the house before they left. But that doesn’t mean someone buying the property is completely helpless in the buying process.

Technorati Tags: Phoenix real estate, AAR Purchase Contract, bank owned homes

Popularity: 9% [?]

Share This

Tags: Phoenix Foreclosures, AAR Purchase Contract, General Real Estate, Tips for Buyers by Jonathan Dalton
4 Comments »