Gilbert Real Estate Blog
~ by Randy Hooker of Dreamcatcher Realty
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Greater Phoenix Real Estate ~ May 2010 vs. May 2009
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
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.
Greater Phoenix Real Estate ~ December 2009 vs. December 2008
Here ya go, boys and girls. Take a look at the charts below, courtesy of the Arizona Regional MLS. They provide a quick overview of the greater Phoenix real estate market for the past year, with particular interest and focus on the period of December 2009 as compared to December 2008.
I have a personal conviction that real estate should not be micro-analyzed, so I’m electing to not draw any conclusions or speculations from the latest “averages.” It’s clear that prices, on the average, are on the rise. Other than that, all indicators point to a bottoming of the residential real estate market in greater Phoenix.
As always, 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 accountant.
Greater Phoenix Real Estate ~ Snapshot of Current Market Conditions
Most of you know that I’m not a big fan of mathematical ‘averages’, since they can really distort the truth about a specific market segment. Once in a while, however, ‘averages’ can provide a quick overview of basic trends in certain markets and areas.
Take a look at the charts below, courtesy of the Arizona Regional MLS. They provide a quick snapshot of the greater Phoenix real estate market for the past year, with particular interest placed on the period of November 2008 thru November 2009.
On this first graph, notice the upturn the past few months in Active listings. Part of that is due to the seasonal nature of the greater Phoenix market. Others would speculate that it’s an increase in bank owned listings. But notice the recent downturn in new listings, seemingly running contrary to the uptrend in total listings (inventory). What’s your take on that observation? I’m wondering if it’s not a result of the upper end of this market, particularly above $350K, where prices are continuing to decline and properties are staying on the market considerably longer than the lower end of the market.
One other note: sales have been relatively consistent and stable, on the average, for the past 8-9 months. Seasonality would predict that we’ll see a slight downturn in the next few months, so it will be interesting to watch it play out.
On the following chart, notice that total inventory just up-ticked to slightly over 5 months – coinciding with the increase in total inventory. What I’m really watching for is any hint of an avalanche of bank owed listings that many people are predicting. I have my personal doubts about this so-called ‘shadow inventory’ of bank owned homes, and even greater doubts that the banks will decide to dump them in one fell swoop. And even though I’m not EVEN a fan of banks, or their real estate acumen, I still have a very difficult time believing they will shoot themselves in the foot and dump all of their residential properties onto the market in one lump. Your thoughts?
As always, 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 accountant.
How To Buy A Bank Owned Home
This is a very funny video on the state of the current bank-owned/foreclosure market, and it applies to the greater Phoenix real estate market. And yet, while cartoon funny, it’s sadly an indictment of the insanely ridiculous and out-of-touch asset managers that control the sale of bank owned properties. Where is the Department of Real Estate when you need them the most?
Greater Phoenix Real Estate ~ Snapshot of Current Market Conditions ~ 10/6/2009
Take a look… below are a couple of graphs that are worth checking out. They provide a quick picture of the greater Phoenix real estate market for the past year, September 2008 thru September 2009.
On this first graph, notice the significant drop in Active listings over the past 6 months. Then take note of the increase in Sold listings over the past 6 months.
On this next chart, you can easily see that we’ve gone from a 13 month supply of inventory (listings) in November 2008 to less than 5 months of inventory for the past 5 months.
On the following graph, do you see the upturn in average prices in the greater Phoenix market over the past 6 months? Bottom line >>> the laws of supply and demand are still as powerful as ever. Significantly change supply OR demand, and we’ll always see and feel the effect. Change BOTH supply and demand, and we’ll see and feel MAJOR effects. Where will we be 6 months from now? My crystal 8 Ball says, “Undecided”.
The other point I’ll make is that these graphs and charts are based on ‘averages’ in the greater Phoenix real estate market. ‘Averages’ based on such a huge area can really skew an accurate picture of an individual town or neighborhood – especially if you’re attempting to project future trends. If you have need of similar information for your subdivision or city, just let me know.
All information, graphs and charts are derived from the Arizona Regional MLS, and while believed to be reliable, cannot be guaranteed.
Greater Phoenix Real Estate ~ “Is this property still available?”
At least 2-3 times every day we receive an online inquiry, email or phone call regarding a listing. The question is typically phrased, “Is this property still available?”
My initial answer is always, “It depends!“ I’m not trying to be a smart-ass; I’m simply attempting to lay the groundwork for what is often a complex and confusing answer to many home buyers in the greater Phoenix real estate market.
“On WHAT does it depend?”
The first issue is whether or not the listing is showing as Active in the Arizona Regional MLS. If it is, then it means the property is indeed available to purchase – correct?!?! Not necessarily so! These days, we often see comments in the confidential Realtor Remarks section of a listing saying the bank/seller has received multiple offers on a home, they’re not receptive to any more offers, and they are simply waiting on the bank to notify them which offer they will be accepting. That waiting process can take up to two weeks, and all the while, the listing remains in Active status. In effect, however, the property is not available.
Another example is when the listing is in AWC status. An AWC status is considered to be an “active” status, and the listing will continue to be picked up by Realtor IDX sites, secondary search engines, etc. However, what the AWC status means is that a contract has already been accepted, but the seller is willing to consider back-up offers. So is the buyer willing to enter into a contract that will be in second position, at best? And if there are already 2 other back-up offers accepted, is the buyer willing to take the number 4 position? Back to the point of this post ~ even in AWC status, the property is not available for a first position contract.
MLS status is the first thing we look at, but are there any other factors? You guessed it! What if the buyer is pre-approved for an FHA loan, but the property is not available via FHA financing? That happens all the time. If the property’s condition will not make it past an FHA appraisal, then it is not FHA-friendly. What if the present owner is an investor who just purchased the property at trustee’s sale (foreclosure)? The property must be owned by the seller (“seasoned”) for at least 90 days before FHA will approve the purchase/loan. What if the owner/seller is not receptive to a Conventional loan? Yes, that happens as well. If the type of financing a buyer is using does not fit the type of payment terms required by the seller, then the property is not available.
Finally, what if the buyer is paying cash? Answer — it depends on whether or not s/he can provide “proof of cash funds“. I’ve lost count of the ‘assets’ folks have brought to me to cover the purchase price of a house, but those assets were not liquid, couldn’t readily be converted into US dollars or were under the control of another person or company. I once had a client who was expecting to receive a large insurance claim settlement from the courts – “sometime withing the next 6-9 months.” You get my drift?. If the buyer does not have hard, cold, US dollars, or cannot furnish evidence of sufficient funds, satisfactory to the seller, then the property is not available.
A mortgage lender that I consider to be one of the best in the state, Jeremy House, sent me the following chart of the major loan products and guidelines that are out there right now. He was careful to note that many things in the mortgage lending industry change on a daily basis, and can be outdated/changed in a heartbeat. So before you make any decisions about mortgage loans, I would heartily recommend that you check with Jeremy or another local, reputable, experienced lender. In the meantime, his chart does provide a fairly good overview of what’s out there and available, at this moment, in this room. And the next time you’re tempted to contact your Realtor/Broker to ask if a particular property is available, be sure to smile and laugh when s/he says, “It depends!”
Short Sales: Reality or Mirage?
Those of us that are experienced, professional real estate Brokers, tend to have very strong feelings about them, pro or con, so I decided to share with you some of my personal attitudes toward and feelings about “short sales”.
I remember as a kid when my family would be on a road trip across the hot summer highways of West Texas. As I would watch the horizon, and the road ahead, I would see what I would always swear was water on the highway. I knew it HAD to be water, because I could see it with my own eyes. The reality was that it was hotter than hell, and dry as a bone – and what I was ‘seeing’ was in effect a mirage, an illusion, a distortion of perception created by the heat. That, my friends is exactly how I feel about short sale listings. They are nothing more than a mirage.
Lenders do what they want, when they want, if they want ~ and there is no way to predict their behavior or decisions. I’ve facilitated short sales, consulted with short sale and bankruptcy attorneys about it, dealt with asset managers, loss mitigators and bank negotiators, and otherwise kept informed and abreast of the market and the so-called experts and short-sale-gurus’ claims. The seller’s lender(s) hold all the power, and control, and their actions have proven time and time again that they do NOT care one iota about the homeowners, agents, brokers or buyers that are involved in the attempted transaction.
The fact is that only about 10% of all short sale listings in the greater Phoenix real estate market ever make it to closing. Period. And considering that the processing time on short sale transactions is typically 6-18 months, my question is, “Why would any home buyer or investor want to subject themselves to such an ordeal?”
The answer? As one of my clients put it this week, “I want to buy a house and get a smoking deal, i.e., make a good investment!” The unfortunate but realistic truth is that roughly 90% of all short sale properties are ultimately going to end up back on the market as bank owned (foreclosure) properties. Most short sale listings are unrealistically priced below a price point that the seller’s lender(s) will ever seriously consider accepting – which in my opinion is why most of them fail.
But before a lender will even take a serious look at the purchase contract, they will evaluate and scrutinize the homeowner/seller. The seller’s lender(s) will, in their sole discretion and timetable, decide:
- if the seller is truly in “financial hardship”;
- if the seller has the capability to pay their mortgage loan(s) in full;
- if the investors behind the mortgage loan(s) will agree to take the short sale loss (and amount) right now;
- if the contracted sales price is a number they will accept;
- if they will agree to the rest of the contract terms and conditions, costs, liens, property taxes, etc.;
- if they would rather just foreclose and sell the property themselves.
Lenders do NOT pre-approve short sales or lay out in advance the sales price that they will accept, so the listing/asking price is nothing but a “phantom” or imaginary price that the listing agent and seller use to attract a prospective buyer and secure a contract. After the contract is in hand, then and only then is when the submission and negotiations begin with the seller’s lender(s). I could go on and on, but I’ll stop here for today. My hope is that all of my readers and clients will see the insanity, futility, false hopes and unrealistic illusions of pursuing short sale properties.
Personally, I would much rather go to Vegas and roll the dice or play the slots. Odds of success are about the same.
The seller’s lender(s) will, in their sole discretion and timetable, decide if they think:- if the seller is truly in “financial hardship”
- if the seller has the capability to pay their mortgage loan(s) in full
- if the investors behind the mortgage loan(s) will agree to take the short sale loss right now
- if the contracted sales price is a number they will accept
- if they will agree to the rest of the contract terms and conditions, costs, HOA fees, liens, property taxes, etc.
- if they would rather just foreclose and sell the property themselves.
