Short Sale FAQs
(Don’t miss it!)
{ 1 comment }
All 124 zip code real estate charts available in the right-hand column have now been updated through JANUARY 2010 with the number of home sales, the median home price and the median home price per square foot.
Video Comments - Phoenix median home prices by zip code through January 2010
Phoenix home PRICE trends - Continued flat
Despite January usually being the weakest month of the year for home prices, prices remained generally flat in January. In some areas the price trend is clearly up.
{ 1 comment }
My Queen Creek page has been whacked ever since the US Postal Service changed it’s zip code from 85242 to 85142. (Thank goodness the USPS didn’t change the boundaries of the zip code! That really causes a mess.)
After spending most of my Saturday on it, my Queen Creek real estate page looks great (and is accurate) now.
My zip code real estate pages (sometimes called mash-ups) take a bunch of data from different sources and put it all together for easy analysis. But as I add information, the complexity increases. And as the complexity increases, making changes becomes tough.
Yesterday I had to change a lot of HTML code in this website, change a lot of the Perl code used to generate some of the zip code specific features of this website, dive into MySql and make hand changes to 85242/85142 data (which I hate to do because anytime you open it up you have the potential to screw up the entire database), and change the code in ChartDirector that creates my custom graphs. Even after the zip code changed last July, home sales would still show up for the old zip code, 85242, so I added some error checking code to my programs to convert those 85242s to 85142s. For my e-newsletter, I had to create a new email list in my Lyris program for 85142 and copy all the subscribers from the 85242 newsletter to the new 85142 newsletter list program.
Whew! I think I got everything right but I wouldn’t be surprised at all if a few bugs are hiding out there. Let me know if you find any bugs.
And by the way, prices look stable in Queen Creek 85142.
(Well, that blew most of my Saturday, now I need to work on sending out my weekly newsletters on Arizona real estate.)
{ 0 comments }
Interest Rates
Retail mortgage rates remained stable in a narrow range around 5% again. This week both the Bank of England and the European Central Bank kept their rates constant at .5% and 1.0% respectively. In contract The Australian Central Bank raised its key rate Tuesday by .25%. The increase is based on the surprisingly good economic recovery in the country and it is expected that there will be further increase before the end of 2010. Australia is far ahead of most rich nations where key rates are at 1% or lower. Finally, some indicators of possible rising rates would be increasing prices in commodities like oil, gold, the Dollar and the 10 year Treasury yield.
When Rate
This week N/A
1 Month Ago 5.01
1 Year Ago 5.15
2 Years Ago 6.03
Note that actual market rates vary geographically and by lender, credit score and Loan to Value.
Source: Federal Reserve Statistical H.15.
Mortgage Industry Update
• The Making Home Affordable Refinance Program has been extended until June 30, 2011. This program allows a homeowner to refinance up to 125% of the home’s value. However, note that very few lenders will go to 125%.
• Fannie Mae reported fourth quarter loss of $15.2 Billion down slightly from its third quarter loss of $18.9 Billion. The loss resulted in negative equity which triggered a request to the Treasury Department for $15.3 Billion so the firm could stay technically solvent.
• In another announcement Fannie Mae said it would start purchasing up to 200,000 loans per month that are more than four months delinquent. The total could be between $40 and $50 Billion per month. They say this will help reduce their expenses.
• Barney Frank the House Financial Services Committee Chairman said Friday that he agrees with the Administration’s decision to fully support Fannie Mae and Freddie Mac bondholders. He went on to say that he did not want the bondholders to think they were without risk however unlikely that might be.
• Freddie Mac has indicated it will stop buying interest only loans on September 1, 2010.
Good News
• The Labor Department reported that productivity in fourth quarter was a higher than expected 6.9% and for all of 2009 was up 3.8% the biggest annual increase in 7 years.
• Consumer spending increased .5% in January according to the Commerce Department. This increase following December’s increase of .3% and 1.7% for the fourth quarter 2009.
• The ISM Services Sector Index for February rose to 53.0 from January’s 50.5. February’s reading was the highest since December 2007. Readings above 50 indicate expansion in the service sector which makes up about 70% of the economy.
Statistics of Interest/Concern
• According to the NAR pending home sales declined 7.6% in January.
• The Commerce Department said construction spending was down .6% in January following decline of 1.2% in December. January was the third monthly decline in a row.
• The ISM Manufacturing Index fell to 56.5 in February from 58.4 in January. Anything below 50 indicates contraction in the manufacturing sector. The index had been above 50 for seven consecutive months.
Foreclosure Headlines
• Last November 30th the government announced the Home Affordable Foreclosure Alternatives (HAFA) Supplemental Directive 09-09 to help address the foreclosure crisis. The program outlines how borrowers can do short sales or Deed-in-lieu to avoid foreclosure. This program applies to primary homes for loans originated before January 1, 2009. There are some additional qualifying criteria that both borrowers and lenders must meet. The program is effective April 5, 2010 but some servicers may have already signed up. This is another option for homeowners who are struggling with their mortgage. To explore this option you should contact your lender. Finally, if you would like a copy of the Directive please let me know.
Job Market Headlines
• February jobless rate came in at 9.7% unchanged from January according to the Labor Department.
• Initial weekly jobless claims were down 29,000 to 469,000 in line with forecast.
• The four week moving average for jobless claims was down 3500 to 470,750.
• Continuing jobless claims came in at 4.5 million down 134,000 from previous week. Note that this does not include the 5.9 million receiving extended unemployment benefits.
• The outplacement firm Challenger, Gray and Christmas reported that February planned layoffs declined 41% to 42,090 the lowest number since June 2006.
Comments/Observations
There is no question jobs will be important to the full recovery of the economy. So understanding the challenges in getting people back to work is important. Recently in Kiplinger’s Personal Finance Magazine it was reported that if 100,000 new jobs are created each month for the remainder of 2010 the economy will grow at 3% and the unemployment rate will be 9.5%. While meaningful for the folks getting back to or finding work the fact is these numbers only get us back to break even. During the current recession the economy has lost 8.5 million jobs give or take. At 100,000 per month how long will it take to get all of those folks back to work?
A report from Realpoint on the commercial real estate market shows continued weakness in the market. In their report for January delinquency increased to $45.94 Billion up from December’s $41.64 and well above a year ago when it was $10.79 Billion. The distressed loan category (90 days plus delinquent) increased to $7.42 Billion in January and up some $27.95 Billion from a year ago.
This week two Federal Reserve Officials came out with somewhat contradictory comments highlighting the difficulty in predicting the future for interest rates. Kansas City Fed President Hoening told CNBC the Fed should raise rates sooner rather than later and his view is “raising rates is not creating tightening but removing a substantial easing policy”. Also in a CNBC interview Dallas Fed President Fisher said “I expect we’ll see low interest rates for some time”.
{ 0 comments }
Woohoo! Only 52% of homes sold in metro Phoenix in January were foreclosures. Things were so bad last year that 52% is a big improvement.
In January, 52.1 percent of the houses and condos that resold had been foreclosed on in the prior 12 months, virtually the same as 52.2 percent in December and November but down from 65.9 percent in January 2009. Such foreclosure resales hit a high of 66.2 percent of all homes resold last March.
{ 2 comments }
Cannibalizing future home sales with the incredibly expensive home buyer tax credit.
When you take away all the support from the housing market, the underlying demand for housing is a lot weaker than we thought,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway. The housing recovery is going to be very, very slow.
He’s talking about the national housing market, not Arizona, but it’s good to know what’s going on elsewhere.
Nevertheless, if you were planning to buy an Arizona home soon, BUY NOW and get the tax credit. To qualify, you have to have the home under contract by the end of April and some other requirements.
{ 0 comments }
Back on the market - Price reduced $26,000!
Located near the Camelback Corridor, Arcadia and the Biltmore, and a few doors from the hippiest corner in Phoenix, La Grande Orange, this fixer-upper on half an acre is waiting for your creativity to become the dream house your family will always remember.
3945 E. Roma Ave. Phoenix, 85018
- $299,000
- Half acre
- Fixer-upper
- Not a short sale
- Not bank owned
Here are all current listings on near half-acre lots (18,001-24,000 square feet) within one mile. This home is priced $97,000 less than the second least expensive home shown which is also a fixer-upper! Potential!
Ask your Realtor to show you the home or call me for more information at 480-463-4475. John Wake, Associate Broker, HomeSmart Real Estate
{ 0 comments }
Visits
Total (since June 2006) ….. 804,482
Average per Day ………….. 1,077
Average Visit Length ……… 2:53
This Week ………………….. 7,537
Page Views
Total (since June 2006) ….. 1,930,859
Average per Day ………….. 2,467
Average per Visit …………. 2.3
This Week ………………… 17,268
I consider any week with over 7,000 visits a big week. We’re in the middle of the high season for Arizona home sales so a lot of people are looking online for Arizona homes for sale and information on Arizona real estate.
Home Sale News
A major source of the traffic to this website comes from my email newsletter, Home Sale News. I have been publishing Home Sale News weekly since 2001. If you want to see all home sales in your zip code, you can subscribe to the free weekly e-newsletter at HomeSaleNews.com.
That Home Sale News website looks muy 2001. It needs a complete makeover for sure but I spend so much time each week with the technical requirments of sending out the newsletters that after that I don’t have time to do a remodel.
Here is a sample issue. (The newsletter itself needs a makeover too, obviously. That would be kinda fun to do. Just gotta find the time.)
{ 2 comments }
***Smart Financial Weekly Mortgage & Business Update February 25, 2010***
Food for thought: Clearly one of the challenges to economic recovery is getting people back to work. You may want to check out the Job Market Headlines below. Note the reference to the 318,000 people who are no longer getting extended unemployment benefits. Did these people find jobs or, more likely, are they still looking for work and are no longer getting unemployment benefits? Gentle readers these jobless statistics are for one week.
Interest Rates
This week’s retail mortgage rates remained at the 5% level and maybe a tick below. Some analysts are now saying that the Fed’s support of mortgage rates which ends in March may not mean higher rates in the near term. This is due they say to the markets calm response to the increase in the discount rate (what the Fed charges banks for emergency loans) and the pull back of some other liquidity measures. Some argue that the Fed’s exit from the mortgage market is already “priced in” and the Fed has indicated that it might start the support again if warranted. On the other side of the equation is the Fed has not indicated when it will start selling the billions of dollars of MBS it currently has on its books. The good news may be that demand is down at the moment but that could lead to higher rates at some point as the Fed attempts to attract buyers of its MBS.
When Rate
This week 5.05
1 Month Ago 4.98
1 Year Ago 5.07
2 Years Ago 6.24
Note that actual market rates vary geographically and by lender, credit score and Loan to Value.
Source: Federal Reserve Statistical H.15.
Mortgage Industry Update
• Freddie Mac reported a larger than expected fourth quarter 2009 loss of $6.5 Billion up from last year’s loss of $5.4 Billion. For all of 2009 the mortgage giant lost $21.6 Billion much less than its 2008 loss of $50.1 Billion. The company ended the year with $4.4 Billion in net worth which means for now it will not need a capital infusion from the government/taxpayers. Since it was put into receivership in September 2008 (essentially taken over by the government) it has received $50.7 Billion in tax payer funding.
• Rates on jumbo loans have declined in recent months from high’s of well above 7% to just below 6% recently says Informa Research Services. However, the qualifying and down payment requirements while slightly better still remain stringent.
Good News
• Friday the Commerce Department reported fourth quarter revised GDP was 5.9% up slightly from the previous number and the highest increase in six years. However, inside the numbers the consumer portion shrank from 2% to 1.7%. Consumer spending makes up about 70% of GDP.
• The Case Shiller U.S. Home Price Index declined .2% in December and declined 3.1% for all of 2009. The trend in downward home prices is improving as indicated by Q1 2009 decline of 19%, Q2 2009 decline of 14.7% and Q3 decline of 8.7%.
• The Federal Housing Finance Agency (FHFA) said Thursday that home prices in the U.S. declined 1.5% in 2009.
• The National Association for Business Economists (NABE) says it expects the economy to “remain firmly on track” and grow at 3.1% in both 2010 and 2011.
• The FDIC said that in the fourth quarter 2009 bank profits were $914 million compared to fourth quarter 2008 losses of $37.8 Billion.
Statistics of Interest/Concern
• New home sales fell to a record low in January according to the Commerce Department. Sales of newly built homes declined 11.2% to the lowest level since 1963. It was the third consecutive monthly decline.
• Existing home sales fell 7.2% in January but year over year they actually increased 11.4% according to the National Association of Realtors (NAR).
• The Commerce Department said that durable goods (ex transportation) fell .6% in January after posting an increase of 2% in December. The forecast was for an increase of 1%.
• According to Real Capital Analytics across the country at the end of 2009 there were 340,000 apartments units worth about $28 Billion in delinquency or foreclosure.
• According to the East Valley Tribune there are 70,000 developed vacant lots in the Phoenix metro area but only 8,000 new homes were sold in 2009. In December there were only 479 new homes sold in the metro area.
• The Conference Board’s Consumer Confidence Index fell sharply in February to 46.0 from January’s 56.5. This was the lowest level in 10 months.
Foreclosure Headlines
• Fiserv and Moody’s Economist.com forecast home prices will decline another 6% in 2010 and be mostly flat in 2011. The reason Economy.com founder Mark Zandi says is foreclosures. The latest estimate for foreclosures in 2010 is 4.5 million this after 2.8 million in 2009.
• First American Core Logic reported that 11.3 million or 24% of homeowners with mortgages were upside down at the end of 2009. Nevada led all states with 70% and Arizona was second with 51% of homes upside down.
Job Market Headlines
• Initial weekly jobless claims were up 22,000 to 496,000 the forecast was for 455,000. Note: Since the recession began in December 2007 payrolls have declined every month except for November 2009.
• The four week moving average of initial claims was 473,750 up slightly.
• Continuing jobless claims were up slightly to 4.617 million.
• The number of people getting extended unemployment benefits declined by 318,000 to 5.5 million.
• About 2.7 million jobless workers will lose unemployment benefits by the end of April and 6.3 million have been unemployed for more than six months.
• A Gallup report released this week said that almost 20% of the U.S. workforce lacked adequate employment in January (government data says it is 16.5%) and was struggling to make ends meet.
• The number of jobs needed to absorb new entrants into the labor force (population growth and immigration) has been estimated between 100,000 and 125,000 per month. This would neither add nor subtract from the work force it would simply keep pace with normal economic conditions. The National Association for Business Economists (NABE) forecasts about 50,000 jobs will be added per month in the first quarter of 2010 and will average just over 100,000 for the remainder of 2010. The current estimate for unemployed is 15 million and underemployed 8 million.
Comments/Observations
The data suggests that the housing market remains fragile even with the extension of the buyer tax credit and continued historical low mortgage rates. Don’t be fooled by the strong GDP number as consumer confidence struggles, the job market is a mess and the outlook for more foreclosures is ugly. Policy makers need to focus their attention on creating programs that generate jobs and soon because time is our enemy.
If you have any mortgage or related questions please contact me at burt@gosfm.com.
{ 0 comments }
Looking at actual home price appreciation, not median home prices, we see in the last few months of 2009 (through November);
- Appreciation returning to Glendale,
- Continued depreciation in Scottsdale / Paradise Valley, and
- An end, more or less, to the home price depreciation in the other cities shown.
Click on Graph
Carl Guntermann at ASU uses a modified Case-Shiller statistical technique to look at home price appreciation within metropolitan Phoenix. Case-Shiller only looks a home price appreciation in metropolitan Phoenix as a whole. I (John Wake) created the graph above based on ASU data.
{ 6 comments }
“Millions of Americans are now deeply underwater on their mortgage. If you’re among them, you need to stop living in a dream world and give serious thought to walking away from the debt.
No, you shouldn’t feel bad about it, and you shouldn’t feel guilty. The lenders would do the same to you—in a heartbeat. You need to put yourself and your family’s finances first.”
The amazing thing about that quote is that is comes from the Wall Street Journal!
With this article, the recent move toward social acceptance of “walking away” from a mortgage seems to have hit the tipping point. Socially, walking away is coming to be considered somewhat like divorce, it’s unfortunate but sometimes it’s the best thing to do.
{ 11 comments }
Although the general consensus is (was?) that mortgage interest rates will increase after the Federal Reserve stops buying mortgage backed securities at the end of March, some believe the end of the Fed buying MBS will have little effect on mortgage interest rates.
But with the relatively calm market reaction to last week’s hike of the discount lending rate and the pullback of a few other Fed liquidity measures, the consensus has changed to seeing little or no move in mortgage rates.
And here’s an interestig (scary) tidbit, bank lending is at its lowest point in nearly 70 years.
{ 1 comment }
The 156-room Scottsdale Courtyard hotel set to open in 2012 will be on Pima road between Camelback Road and McDonald Drive on the Salt River Pima Maricopa Indian Community side of Pima Road.
{ 0 comments }
John Burns Real Estate Consulting is a well respected national real estate economic consulting firm that focuses on new home builders as clients. They released a study last week estimating the United States has a “shadow inventory” of 5 million houses that will hit the market over the next few years.
Interestingly, they estimate that 80% of homeowners who are currently delinquent on their mortgages will end up losing their houses.
Us: Your study says that five million of the 7.7 million delinquent homes will go through foreclosure or a “foreclosure-related procedure.” How is this likely to occur?
Wayne: Most shadow inventory will get out onto the market as an REO or short sale. In any event, it results in the homeowner losing their home, and that home being added to the supply of homes available for sale.
Us: Do the remaining 2.7 million borrowers get their loan payments caught up?
Wayne: Of the 7.7 million delinquent homeowners, we actually think that only about 1.6 million will be able avoid losing their homes, and that the remaining 6.1 million will lose their homes. We say that there is 5 million units of shadow inventory because we estimate that about 1.1 million delinquent homeowners already have their homes listed for sale, and we would not classify those homes as “shadow.”
Us: When will this wave of foreclosures hit, and how will this shadow inventory affect home prices?
Wayne: We don’t believe that the shadow inventory will be dumped onto the market all at once. Although we don’t believe modification efforts will truly save a lot of homeowners from losing their homes, we do believe that these programs are effective in delaying foreclosures and pushing out the additional supply to later years.
In terms of pricing, as long as the economic recovery continues and mortgage rates remain low, we do NOT expect another leg down in pricing, despite the looming shadow inventory problem. However, if the economy takes another dip and mortgage rates spike, we’re certain to see another decline in prices. [emphasis mine]
{ 4 comments }
