Real Estate Information

With all the wild swings of the stock market and worries about recession, you might have missed some of the mildly encouraging developments on interest rates, capital availability for loans, and the direction of the economy overall.

Tops on the list: Mortgage rates last week took a quarter-point drop, according to the Mortgage Bankers Association. Rates were down to an average 6.28 percent for 30 year fixed rate loans and 6.05 percent for 15 year. The quarter point decline came on the heels of an unusual half point increase the week before that had been tied to the wild gyrations on Wall Street.

Now it's true that six and a quarter percent for 30 year mortgages is still higher than rates were several weeks back. But in a volatile market environment like we're in, you've got to welcome ANY drop in the cost of money.

Another economic sign that got crowded out of the news by all the stock market craziness: The Conference Board's bellwether Index of Leading Indicators -- which points to the direction of the economy immediately ahead -- just took a jump UPWARD for the first time in five months! The index examines ten key metrics related to future economic growth or decline, and in the last month six out of ten were POSITIVE .

Most economists continue to forecast a recession, but the leading indicators index seems to suggest something slightly different: Slow, slogging, minimal economic growth in the months ahead. That's not great, but it doesn't fit the classical definition of a recession, which is two straight quarters of negative growth.

Add in the recent sharp declines in the cost of gasoline and heating oil, and who knows? Maybe the national economic outlook is slightly less grim than we're expecting. Maybe we're all being too pessimistic.

Also in the works that you ought to know about: A new economic stimulus package from Congress aimed at increasing employment and pumping billions of additional dollars into key segments of the economy.

On that score, one of the items already included in some versions of that stimulus package: Larger, non-repayable federal tax credits for purchasers of homes.

This time around, the credit -- which could go as high as $10,000 to $12,000 per buyer if some housing industry lobbyists get their way - will be open to all purchasers of homes in the coming year, not just first-time buyers.

Source: Realty Times

Meanwhile, median price of a new home drops to four-year low, $218,400

Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.

Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.

The median price of a new home sold in September declined by 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.

The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades.

The report on a rise in new home sales followed news last week that sales of existing homes rose in September by 5.5 percent, the largest monthly gain in more than five years.

Source: MSNBC

Edward Gately, Tribune

Existing home sales in the Valley jumped a staggering 70 percent last month compared with September 2007, overshadowing a 5.5 percent increase in national home resales for the same period.

Home resales in Maricopa and Pinal counties rose to 5,749 units last month, up from 3,383 in September 2007, according to the latest Phoenix Housing Market Letter by analyst RL Brown. For most of the past year, existing home sales have been in the minus ranges from the same pace last year, off by as much as 46 percent last September.

"The bottom of the (Valley) resale market was sometime about a year ago," Brown said. "It went on for about six months, and we were down into the 3,000 (resales) level. So the fact that we're up is great news, but that's why the percentage is so high."

The National Association of Realtors reported that sales of existing homes nationally rose by 5.5 percent last month, the best showing since a 5.7 percent increase in July 2003 during the five-year housing boom.

"The West was up 34.4 percent," said Walter Malony, association spokesman. "A lot of the gains were in California, but also in Arizona and Nevada, and we're also seeing some pickup in Colorado. In areas like Phoenix ... where there was a lot of subprime mortgage exposure and then consequently big price corrections, that's where the buyers are responding."

The unprecedented home price surge meant the Valley had further to fall when the real estate bubble burst, prompting a flood of foreclosures and plummeting values, Brown said. These are prompting higher sales, he said.

The national improvement demonstrates that buyers who have been sitting on the sidelines want to get into the market to make a long-term investment, Malony said.

"Our survey data is showing that 80 percent of these purchases are owner-occupants and other data indicates that as many as half of the buyers are first-time buyers," he said.

Of the 5,749 Valley resales last month, 2,859 were bank-owned properties, Brown said. The median price of resales last month was $170,000, while the median price of bank-owned properties was $143,000.

Median resale prices last month fell 6.6 percent from August, 20 percent from a year ago.

"What it really comes down to is there is a demand in the price point of the foreclosed units, and that's what we're seeing demonstrated," Brown said. "It's proof that the buyers are out there and the buyers will come out of the woodwork when they see what they perceive to be appropriate values. If the buyers weren't coming out of the woodwork for the foreclosures, we would be in a much, much deeper world of hurt."

Yalda Alawi, a short-sale negotiator with WestUSA Realty Revelation in Chandler, said a turnaround is a year or two away.

"In the specific area I specialize in, I've actually seen a slowdown in buyer activity," she said. "It's slow in our end of it, especially because it takes so long."

Still, Alawi said that progress is being made toward recovery.

Source: Easy Valley Tribune

Due to falling real estate prices and rising foreclosures on the West Coast, sales of existing homes rose to its highest level in 13 months and highest percentage increase in five years, according to a report issued today by the National Association of Realtors (NAR). The increase resulted from buyers responding to improved housing affordability conditions, the organization stated.

Existing-home sales-including single-family, townhomes, condominiums and co-ops-rose 5.5% to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August, and are 1.4% higher than the 5.11 million-unit pace in September 2007.

Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04% in September from 6.48% in August; the rate was 6.38% in September 2007.

Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”

Total housing inventory at the end of September fell 1.6% to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.

The national median existing-home price for all housing types was $191,600 in September, down 9.0% from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40% of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80% of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”

Single-family home sales increased 6.2% to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8% above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6% below September 2007.

Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7% below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2% from a year ago.

Regionally, existing-home sales in the West jumped 16.8% to an annual rate of 1.25 million in September, and are 34.4% higher than September 2007. The median price in the West was $253,600, down 18.5% from a year ago.

In the Midwest, existing-home sales increased 4.4% to an annual pace of 1.19 million in September, but are 2.5% below a year ago. The median price in the Midwest was $152,500, which is 7.9% lower than September 2007.

Existing-home sales in the South rose 2.2% in September to a pace of 1.90 million but remain 7.8% below September 2007. The median price in the South was $167,200, down 4.1% from a year ago.

In the Northeast, existing-home sales slipped 1.2% to an annual pace of 840,000 in September, and are 7.7% lower than a year ago. The median price in the Northeast was $246,800, down 5.4% from September 2007.

For more information, visit www.realtor.org/.

Source: RISMedia

Mortgage rates reversed course in a big way this week, with the average 30-year fixed mortgage rate dropping from 6.74 percent to 6.32 percent. According to Bankrate.com’s weekly national survey, the average 30-year fixed mortgage has an average of 0.39 discount and origination points.

The average 15-year fixed rate mortgage nosedived to 5.93 percent, while the average jumbo 30-year fixed rate dropped to 6.32 percent. Adjustable mortgage rates were moderately lower, with the average 1-year ARM now 6.14 percent and the average 5/1 ARM sinking to 6.49 percent.

One week after posting the biggest one week increase since April 1987, mortgage rates staged the largest one week decline since May 1995. Tentative signs that the credit freeze is beginning to thaw, as evidenced by a drop in 1-month and 3-month LIBOR of over 100 basis points in the past week, sparked the reversal in mortgage rates. In addition, yields on benchmark 10-year Treasury notes also dropped as worries about a deep and prolonged recession predominated. Mortgage rates move in relation to Treasury yields, but at a spread-or markup-over the risk-free government debt. With Treasury yields falling and mortgage credit spreads narrowing, mortgage borrowers had two factors working in their favor. This is in stark contrast to one week ago when both factors were working against them.

The major retreat in mortgage rates over the past week has a direct impact on a homebuyer’s affordability. At last week’s rate of 6.74 percent, a $200,000 loan carried a monthly payment of $1,295.87. This week, with the average rate at 6.32 percent, the monthly payment on a $200,000 loan is $1,240.55.

Survey Results:

30-year fixed: 6.32% — up from 6.74% last week (avg. points: 0.39)
15-year fixed: 5.93% — up from 6.40% last week (avg. points: 0.42)
5/1 ARM: 6.49% — up from 6.61% last week (avg. points: 0.54)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

Source: RISMedia

By Mary Ellen Podmolik

With home values falling and a rough economy denting people’s wallets, it doesn’t take much for a homeowner to get underwater on a mortgage, owing more on the loan than the home is worth. Toss in a personal dilemma or two and the situation can become even bleaker.

During the year’s second quarter, one in seven homeowners, regardless of when they bought, had negative equity in their homes, according to Zillow.com. The statistics were worse for people who bought their homes during the market’s peak in 2006; 45 percent of those homeowners were upside down.

Kenneth Baldwin is one of those statistics, and it took him months to decide that it was better to walk away from his home with his dignity and credit-worthiness relatively intact than to continue struggling to keep it.

In July 2006, with a good credit history but no down payment to make, the then-42-year-old bought a $236,500 three-bedroom, bi-level home in Lake in the Hills, Ill., for himself and his fiance. He received an interest-only 80/20 loan. An 80/20 loan is typically two loans-a primary loan for 80 percent of the value of your home, and a secondary loan, sometimes called a piggybank loan, in lieu of a down payment that covers the remaining 20 percent at a much higher interest rate than the first.

Then his relationship soured and the terms of the loan reset. Instead of a $1,800 monthly payment covered by two incomes, Baldwin had to fund a monthly payment of $2,200 by himself. He tried to make it work, and found himself stressed when he couldn’t make a payment.

He also went on short-term disability from his job for eight weeks, and his lower income during that time forced him to break into his 401(k) savings to cover the mortgage payment.

“I couldn’t swing it anymore,” Baldwin said. “It got way out of hand. My savings were totally drained. I was working two jobs. It was nuts.”

By the spring, he’d had enough of the stress and decided to sell his home, with his lender’s permission, for less than the amount he owed on it in a short sale. With that decision, he joined plenty of other delinquent borrowers whose homes are listed for sale at a discount and carry the “lender approval required” caveat.

Despite what can be a time-consuming approval process, the transactions have become an increasingly popular option.

“It’s sad to say, but this is where things are going,” said Eric Booth, an agent with Century 21 MB Real Estate in Chicago. “The hardest thing is finding buyers who are patient. I don’t think I’d be able to wait around for two, three, four months and not know (when) it’s going to happen.”

Short sales are being considered by all types of homeowners in all income ranges who either bought their house during the market’s zenith or bought it a decade ago but in recent years pulled out equity from their homes.

“These are people who had the ability to pay for a certain amount of time and are running out of the ability to do it,” said Marc Shudnow, an agent at Re/Max 1st Class in Skokie, Ill. “Because the value of the home has gone down, they don’t have the ability to sell. These are people that in an upswing market could have gotten out of their homes. They’ve got to be able to come to the table with a check (to pay off the lender). If the market was going up, they might be in a position to come up with the funds.”

In May, Baldwin’s lender, IndyMac Bank, agreed to let him sell his house for $214,000, forgiving $49,659.60 of the loan. The transaction still will dent his credit record but nowhere to the extent it would have if he had let the house lapse into foreclosure. After the closing, Baldwin received a $5,000 check as a sort of “thank-you” from the lender.

“I did not feel good about myself,” Baldwin said of having to resort to the short sale. “I do have pride in myself and it made me feel like I was ripping off the bank. After it was all over, it was like this was probably a better thing for the mortgage company than me going to foreclosure and they don’t get any of their money back.”

Baldwin, who still lives in Lake in the Hills but now as a renter, hopes to again own his own home, but the next time he plans to be better prepared.

“I’ve learned a lot from my mistakes,” he said. “I don’t know how I ever was approved in the first place.”

Source: RISMedia

Real estate has been in the news just about every day as housing prices have fallen in many areas. There are all kinds of opinions about what’s going on and where this is all heading. But these opinions are just guesses and do not take every piece of the puzzle into consideration. History has shown us that the economy goes up and down all the time, and real estate has long coincided with these fluctuations.

Jeff Shore, founder and CEO of ShoreSelect, a real estate consultation firm with offices in California and Texas, says economic cycles of all kinds (stock, macroeconomic trends, housing, etc.) are known for a tendency towards extremes and that market corrections have a way of over-reacting which is exactly what we are seeing today in the real estate market.

“The problem is that there is no one single business cycle. There are major cycles, combined with minor ups and downs, plus small random fluctuations, so if you look at the economy year by year, it looks irregular, but if you see real estate price ups and downs over the past several cycles you can see a clear cyclical pattern,” explains Shore.

So where are we in the current real estate cycle? Is waiting to buy a brand new home a safe option? These are very valid questions that require credible answers in order for home buyers today to achieve the confidence that the future can and will be better than the past.

First, don’t panic over newspaper headlines. Make an informed decision. Run your own numbers. For most buyers, there is no real need to wait for the market as a whole to officially adjust out.

“The bottom of the market is not a date, but a band of time or season,” Shore says, and therefore what constitutes the bottom for the entire country is meaningless for those looking to buy and sell homes in their own communities. “If you sit on the fence and wait for the absolute best deal, you could end up literally waiting for years. And most likely, your guess on market timing would be wrong. But if you choose to buy now, you will not only be in the driver’s seat during the buying process, you will also reap the gains of price appreciation once you become a home owner,” adds Shore.

Waiting for the right time to buy puts you at risk of missing it and getting caught in a market on the upswing. Plus, for some first-time buyers, owning simply makes better economic sense than renting. In such areas as Los Angeles, rents are getting close or surpassing a mortgage payment. And you don’t receive any tax benefits from paying rent, nor do you accumulate any price appreciation, as you would if you owned a home of
your own.

Next, realize there are always some people who need to move because of job relocations, expanding families, or a desire for better schools. In sought after neighborhoods, there’s a price to pay for waiting. You have to ask yourself, “If the price goes down much more, I’ll have other people trying to buy it, even if it’s not the absolute bottom of the market.” In the end, you might erase the savings you thought you had achieved by waiting.

For Linda Brown, a teacher with the Corona/Norco School District, the current real estate market provided the perfect opening for her life’s redirection with her new home purchase at Serafina, a new William Lyon townhome neighborhood in Eastvale.

“I visited many different neighborhoods, but nothing compared to Serafina in terms of financial value, price and the advantages of having everything brand new,” Linda describes. “I was definitely looking for a fresh start and choosing this gated neighborhood was an easy decision. While I certainly preferred the convenience and more carefree ambiance of an attached floorplan, I really liked the idea of being near the middle school and being part of the local community where my students and their families are. Thanks to William Lyon, I ultimately found a new neighborhood that I could afford and also have the opportunity to become more involved in the area where I teach, and that was very appealing.”

Shore’s advice to buyers is simple, “Live in the right home. There’s no reason to compromise in buying the home that is right for you.” Make a priority list of things that are ‘must-have’ versus ‘nice to have’ versus ‘not important.’ Write it all down and use this as a checklist to unlock the reasons about the home you’re searching for, where you want to live, and what it will take to get you there.

Source: RISMedia

Saturday

5186 W. Tortoise Drive, Robson Ranch

$299,000
1644 Square Feet, 2 Bedrooms, 2 Bathrooms
Master planned golf course community of 55+ homes. No waiting, ready for move in. Home barely lived in and loaded with upgrades. Just minutes from new Promenade Mall.

Emma Beyer will be at this home from 11 am to 1 pm on Saturday, October 25. For more information, she can be reached at 520-836-1144 ext. 109 or 520-450-2844.
Click here for a map of 5186 W. Tortoise Drive.

858 W. Crooked Stick

$245,000
1510 Square Feet, 3 Bedrooms, 2 Bathrooms
Open floor plan with 9 ft flat ceilings, master features exit to patio, his & hers closets & master with separate shower & tub, gorgeous backyard with saltwater pebble tec pool, wood blinds & shutters.

Andrea Lane will be at this home from 11 am to 1 pm on Saturday, October 25. For more information, she can be reached at 520-836-1144 ext. 110 or 520-423-8110.
Click here for a map of this location.

Sunday

1682 E. Kielly

$163,200
1493 Square Feet, 3 Bedrooms, 1 3/4 Bathrooms
Capture the exquisite charm of this solidly built home, enclosed Arizona room, swimming pool & spa, corner lot, RV parking, no HOA and conveniently located near all shopping needs. 

Joe and Melissa Yost will be at this home from 12 pm to 2 pm on Sunday, October 26. For more information about this home, Joe can be reached at 520-836-1144 ext 101 or 520-560-0839. Melissa can be reached at 520-836-1717 ext. 119 or 520-431-8130.
Click here for a map of 1682 E. Kielly.

2420 E. Firerock Dr.

$264,900
1908 Square Feet, 2 Bedrooms, 1 3/4 Bathrooms
Bright and open floor plan with covered patio overlooking the golf course makes for enjoyable outdoor living.  Granite counters, tile floors, are also added value features which enhance the carefree lifestyle experience.

Emma Beyer will be at this home from 12 pm to 2 pm on Sunday, October 26. For more information, she can be reached at 520-836-1144 ext. 109 or 520-450-2844.
Click here for a map of 2420 E. Firerock Drive.

2108 N. Sweetwater

$225,000
1652 Square Feet, 2 Bedrooms, 2 Bathrooms
Custom home with wonderful entry, den with large closet, spacious open dining and living room, skylights, kitchen with breakfast bar, covered deck that overlooks lake.

Scott Fisher will be at this home from 12 pm to 2 pm on Sunday, October 26. For more information, he can be reached at 520-836-1144 ext. 111 or 520-208-5805.
Click here for a map of 2108 N. Sweetwater.

1332 N. Oak Street

$115,000
This home is our current Best Buy!
1503 Square Feet, 3 Bedrooms, 2 Bathrooms
Clean & well maintained home in area of no HOA's, within walking distance of new high school, and located close to all shopping, dining, medical facilities.  Priced below others of same size.

Jennifer Srock will be at this home from 12 pm to 2 pm on Sunday, October 26. For more information, she can be reached at 520-836-1144 ext. 113 or 602-743-5100.
Click here for a map of 1332 Oak Street.