Gilbert Real Estate Blog » arizona market conditions

Greater Phoenix Real Estate ~ May 2010 vs. May 2009

Randy Hooker — Sun, 20 Jun 2010 05:36:25 +0000

Courtesy of the Arizona Regional MLS, the below two charts offer up a quick overview of the current market conditions in the Valley of the Sun. Whether you’re into comparing consecutive month over month stats (like May 2010 vs. April 2010), or year over year (like May 2010 vs. May 2009), the charts are provided to help us grasp the overall picture.

Greater Phoenix Market Conditions

I’m always extremely cautious about using real estate “averages”, as they can and do often skew the true picture of individual communities and areas. Nevertheless, there are a couple of points that are worth noting in the above charts.

It’s interesting that normally at this time of year we experience an increase in listings – and yet the past 2 months has seen a decrease in listings. Anybody care to speculate on the reason(s) for this anomaly?

The next observation is that the greater Phoenix market is holding fairly steadily in the number of Active listings as well as sales.

Additionally, at roughly 4.5 months inventory, the greater Phoenix market appears to be showing some consistent stabilization. As always, time will tell.

NOTE: The information and statistics contained in the above charts are deemed reliable, but not guaranteed. If you’re contemplating a major financial decision regarding residential real estate, please do yourself a huge favor and consult with a reputable real estate broker, attorney and/or accountant.

FHA Updates

Randy Hooker — Thu, 17 Jun 2010 00:42:37 +0000

The FHA Reform Act of 2010 has passed the House in an overwhelming fashion. The amendments calling for increased FHA down payment requirements have been rejected. A second potentially damaging element that called for FHA exposure to be limited to 10% of the market has been shot down. Bottom line is that FHA loan default rates are down significantly and the program is operating more effectively than it has in quite some time.

Another hot FHA issue still in the “proposal” stage surrounds monthly mortgage insurance premiums (MIP). Right now, FHA’s MIP is calculated at .55% of the loan amount per year. This translates to a $91.67 MIP on a $200,000 FHA loan. The current FHA Reform Act requests a monthly mortgage insurance cap lift to 1.55% (from the current .55%). This represents a nearly 300% increase. HUD/FHA has stated that while it is requesting the “right” to go up to 1.55% they will likely only raise the factor to .90% for the time being. If so, the change would take that same $91.67 MIP payment to $150.

Stay tuned, folks. The FHA ride is likely to be a long and wild one!

Proposal to Extend Federal Tax Credit for Home Buyers

Randy Hooker — Fri, 11 Jun 2010 22:00:17 +0000

There is currently a buzz on Capitol Hill surrounding the possible extension of the closing deadline for the Home Buyer Tax Credit. Currently, eligible transactions that had an executed contract on or before April 30, 2010 must close escrow by June 30, 2010 in order for the buyer to receive the federal tax credit. This proposed change would extend the closing date for eligible tax credit recipients out to September 30, 2010. A buyer would still need to have been under contract by April 30^th. At this point this is just a proposal – nothing official – and let’s hope it doesn’t pass.

The motive behind the extension is apparently that the ‘Government’ feels lender volumes have made it impossible to get transactions closed by the original deadline. They are now estimating that 180,000 people will miss out if the extension is not granted. While this may be true with loans that are being processed by many of the big banks, I know for a fact that there is at least one solid mortgage lender in the greater Phoenix area who can and does fund loans in as little as two weeks. Current volumes have not slowed them down at all, regardless of the type of loan - they are doing as long as they can do it house (Conventional, VA, FHA and Jumbo). If you are one of those buyers whose lender is being wishy-washy about closing your loan before the end of June, or your lender has flat out stated that they cannot get it done for you, then please feel free to contact me. I would be more than happy to refer you to an outstanding lender who would love to have your business and get your loan funded and transaction recorded before June 30, 2010.

Flickr Image by wstryder

I have been an outspoken critic of the federal tax credit for home buyers from the beginning, and I continue to hope that the tax credit for home buyers is not extended or resurrected by Congress. If we are ever to have a real shot at returning to a ‘normal’ market, and hopefully ‘free’ market, then the government intervention has to stop. Don’t you think?