In The News

FHFA's new program to help underwater homeowners

Today the Federal Housing Finance Agency announced a new program designed to help even more underwater homeowners refinance their mortgages at today's low rates. The plan hopefully will allow homeowners to lower their monthly mortgage payments, thus freeing up money to be spent in the broader economy and help the US from slipping back into recession again.


Previous programs had been restricted to homeowners who were no more than 125% upside-down on their homes. The new FHFA program places no cap on how much the borrower owes, or how far underwater they are.  Only mortgages backed by Fannie Mae and Freddie Mac will be eligible. Need to know if your mortgage is owned or managed by Fannie/Freddie? Check here and then here. Then call us for a loan officer recommendation.


Helpful links -

Does Freddie Mac own your mortgage?

Does Fannie Mae own your mortgage?

AMC Esplanade 14 movie theater will re-open as posh Fork & Screen

fork and screen logoBiltmore-area movie-goers have undoubtedly noticed that the  AMC Esplanade 14 movie theater at 2512 E Camelback Road has been closed down this summer.  In August, the Esplanade will reopen as the latest site of AMC’s newest concept, the upscale Fork & Screen.

With this renovation, AMC is trying to attract the posh “dinner and a movie” crowd to the Biltmore location. The new movie venue will offer luxe décor, top-shelf cocktails, wait staff and bartender service and even private suites in which to watch the movies.

Oh, and for all you jobseekers out there, AMC is currently hiring wait staff, bartenders, back-of-house people (dishwashers, cooks, etc), and even a theater manager. Search available openings on CareerBuilder.com, using the employer name “TD-AMC Dine-In Theatre”.

Sources & Links for this story:

http://www.amctheatres.com/dinein/forkandscreen/

http://blogs.phoenixnewtimes.com/jackalope/2011/05/amc_esplanade_14_fork_screen.php

California says "no" to lender lawsuits after short sales

Holy cow! The California legislation just passed a law preventing banks and other lenders from suing homeowners for unpaid mortgage balances after the lender agrees to a short sale. (hat tip, Kris Berg of the San Diego Castles blog). The way I read it, the new California law also prevents the lender(s) from requiring the homeowners to pay a lump-sum settlement at the short sale closing.



[The California legislature just passed into law] Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. ....  Both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.

Click here for Reuter's coverage of the event


Click here for a roll-call vote tally of the California Senate, to see who voted for, and against


Will it ever happen here, in metro Phoenix? Don't count on it. Politically, Arizona is far more "red" than California. Some years we're purple, but we've got a very, very long way to go until we're as blue as California.


Note to Arizonans:  Arizona does not have a law on the books yet that protect homeowners in these kinds of situations. In Arizona you can be sued by your 2nd lender for the unpaid 2nd mortgage balance, for up to several years after a short sale, even if the lender gave permission for the short sale! So what should you do if you're underwater, considering a short sale, and have a 2nd mortgage or equity credit line/loan? Call an attorney! Call or email me and I'll be happy to refer you to the attorneys who handled my short sale.


 

Phoenix not in Top 10, but investors still buying here

Inman News reports on "The 10 Best Markets for Real Estate Investors" and here's some takeaways from that report:




  • Tucson is in the Inman "top ten" best real estate markets for investors, but Phoenix is not.

  • Investors usually pay cash for homes (61% compared to just 20% of owner-occupant buyers who pay cash

  • Most investors plan to own their investment home for about 10 years, and 52% say it's likely they'll buy another property soon

  • Investors are optimistic about the future of housing: 77% say "now is a good time to purchase real estate."


You can view Inman's full report here: http://www.inman.com/reports/10-markets-invest/



Real estate is local, so let's see what's going on in metro Phoenix...


Valleywide MLS statistics show that investors are buying in metro Phoenix, and they're buying a lot of homes. The Cromford Report shows investors are purchasing 24% to 26% of Valley homes sold so far in 2011.



Nationwide, Inman says distressed properties account for 40% of existing home sales, but you can see in the chart above that metro Phoenix area stats are much higher: investors bought 64% of all metro Phoenix area homes sold in May. (6,316 distressed sales out of a total 9,845 homes sold in May 2011).



How's buyer demand in metro Phoenix?


In a word: healthy. Check out this chart, also from the authoritative Mike Orr at the Cromford Report which shows that February 2011 was the third highest buyer demand month since January 2001. Only June and August 2005 -- the peak of the peak of the market -- had more homes sold.




[caption id="attachment_9173" align="alignleft" width="300" caption="Feb 2011 second-highest sales volume for Metro Phoenix since Jan 2001"][/caption]


Are you thinking about buying a home? Either for yourself or as an investment? Contact us before you do anything! We've been helping buyers and sellers in metro Phoenix since 2004, before the boom and bust brought our market to it's knees.


We know how to find and negotiate the best possible deal for you, and our customer service is top notch. Check out what our clients say behind our backs and give us a shout when you're ready to chat with a professional Realtor.

Metro Phoenix: cheaper to buy than rent

[caption id="" align="alignright" width="242" caption="Image credit Shuttermon via StockExchange"]Image ID 1020195 by user Shuttermon[/caption]

Trulia regularly tracks the buy vs. rent equation and reports again that it’s cheaper to buy a home than to rent in metro Phoenix. See full story here: http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/


Meanwhile, mortgage rates are in free-fall, according to an Inman.com interpretation of Freddie Mac’s rate survey…




Rates on fixed-rate mortgages declined for a seventh week in a row to new lows for the year ... Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.



It’s not the ideal time for everybody to buy a home, and mortgages are still a bit difficult to obtain. But it could be a great time for you to buy:




  1. Home prices just double-dipped according to Case-Shiller numbers (they're down over 50% from their Summer 2006 peak)

  2. Sellers are frequently willing to pay the buyer's closing costs,

  3. There's talk in Washington about increasing the minimum cash down payment of the FHA mortgage program from 3.5% to 5% sometime soon, so buying now could save you a couple thousand dollars over waiting


A few questions can help you decide if you should consider buying a home now, or not...

  • Are you emotionally & financially ready to be a homeowner?

  • Do you have stable employment?

  • Do you plan to stay put in your home for 5 to 10 years into the future?

  • Do you have a couple months’ worth of salary in savings?

  • Have you planned your future budget to account for costs of home ownership like maintenance & property taxes?

  • Do you consistently pay your bills on time or even early?

  • Do you know what your credit score is? (studies show that people who know their score tend to have better credit ratings than people who don’t know their score)

  • Have you talked with a lender to find out how much home you’ll qualify for? (In Arizona, buyers *must* submit a loan approval with a purchase offer)


If you answered yes to all or most of these questions, you’re probably a great candidate to buy a home. Contact your Realtor. Don’t have a Realtor yet? You’re in luck, we’re Realtors. Winking smile Read what our clients say about us behind our backs, and then give us a shout by email, phone or even text or Facebook.

Ready to start browsing listings online? We provide you a direct link to the private, Realtors-and-appraisers-only Multiple Listing Service. That's the most up to the second, accurate information consumers can get their hands on. Use our map based home search, or use our Detailed home search to really dial in on your housing wants and needs.

How many Realtors in Phoenix?

The Arizona Department of Real Estate reports that it's count of licensed agents and brokers has dropped 22% since 2007. Currently there are roughly 51,000 licensed real estate agents and brokers in Arizona. Of course, they're not all in metro Phoenix, but most of them are.

In 2007, the Department tracked about 65,000 licensees.

How safe is nuclear energy?

I’ve never been wildly pro or anti nuclear energy, mostly because I’ve never spent the time to really understand it.  But with the Palo Verde plant (the largest energy producer in the country!) in our own backyard, it’s something I’ve always wondered about.

paloverde

Well…

Today I saw a graph depicting the relative safety of various kinds of energy, and I have to say WOW!

Death Rate per Watts of Energy Produced

coal-nuclear

Click through to Seth Godin’s post on the topic, where he gives credit to additional sources and information.

I’m not here to start political arguments, but to me this is just mind-boggling.

Your loving energy efficiency, and efficiency of all kinds for that matter, Realtor,

Chris Butterworth

Are 70% of Phoenix homes at risk of foreclosure?

Are 70% of Phoenix homes at risk of foreclosure? The Associated Press says so. But it’s not actually true.  Of homes sold in the Phoenix area recently, 70% were distressed. That means the homes were either bank owned or short sales.

See below for a press release just issued by the local MLS data provider, the Arizona Regional Multiple Listing Service (ARMLS)…

Yesterday, two writers from the  Associated Press put out a story that said that 70% of the homes in Phoenix are at risk of foreclosures. By the end of the day the story had gone viral on the Internet and was picked up by multiple large media, including the Wall Street Journal. 

Of course, the information is flat out wrong, and unfortunately, it was attributed to ARMLS. We are reaching out to the original writers and others who re-circulated it to get the information corrected.

The statement was a result of the writers’ misinterpretation of the correct information put out in the February issue of STAT.  In that issue we stated that distressed properties accounted for 70.2% of total sales.

ARMLS is reaching out to our Subscribers to make sure they understand the error, and do not inadvertently re-circulate the wrong information in their blogs and on their social media platforms.

Some mortgage executives face criminal charges

Image ID 1020195 by userTaylor, Bean & Whitaker’s former Treasurer will enter a plea agreement for federal criminal charges tomorrow (Feb 24, 2011). The mortgage firm imploded in Fall 2009 and investigators are still sifting through the ashes. So far, they’ve discovered a trail of fraud amounting to as much as $2 billion.

TBW’s Treasurer, Desiree Brown, is widely believed to be cooperating with prosecutors in their attempts to prosecute the mortgage firm’s former Chairperson, Lee Farkas, with 16 counts of conspiracy, securities fraud and bank fraud.

While Brown and Farkas negotiate over how much prison time each is likely to do, former Countrywide financial CEO Angelo Mozilo will not face criminal charges at all, having paid off the right people paid a hefty civil fraud settlement of $67.5 million.

According to the WSJ:

People familiar with the federal criminal probe say that the general collapse in the mortgage market made it more difficult to pinpoint the actions of any particular executive as something that could be prosecuted.

Read more: http://www.businessinsider.com/feds-end-criminal-inquiry-on-angelo-mozilo-countrywide-2011-2#ixzz1EbxFdEmP

I wonder, can the authorities successfully “pinpoint the actions of any particular executive” only when the executives are women, or only when the executives don’t have $67.5 million under the couch cushions? Or did federal investigators just forget to read this book that spells out who caused the mortgage crisis?

image credit, StockExchange user shuttermon

Buy Phoenix foreclosures 30% below market!

Riffing off what Chris posted yesterday

In Phoenix, the winter tourist season is here. Every year this means a new wave of newbie real estate investors who are convinced that you can buy investment property in metro Phoenix for 20% or 30% below market value. Here’s the real deal…

I’ve been helping investors in the metro Phoenix real estate market since before the boom of 2005-06. This is my fulltime gig and I’m a happy workaholic, so I feel reasonably sure you can trust me on this. Don’t trust me? Trust my clients, who talk about me behind my back.

As of 2009 through 2011, there is no way to purchase property on the open market for 20% or 30% below market value. It simply cannot be done.*

Why? By my count of the last 12 months, banks were involved in 64% of metro Phoenix property sales.  One national estimate puts Fannie Mae and Freddie Mac in charge of 80% of American real estate.

**Metro PHX homes sold, Feb 2010 to Feb 2011:

































# of Sales% of total sales
Total Sales91,425100%
REO sales38,08341.65%
Short Sale or other pre-foreclosure19,36521.18%
HUD homes6570.72%
Total sales involving banks58,10563.55%

With 6 of every 10 Phoenix-area homes sold involving banks at some level on the seller side, the banks are so huge they move the market. In fact, in metro Phoenix right now, the banks are the market. Whatever prices banks let their homes sell for is the new market value.

This is just Econ 101 from your freshman year of high school.


  • Thousands of buyers + thousands of sellers = happy, healthy, free market economy. Market values float up&down according to supply and demand.


  • Thousands of buyers + handful of sellers = lopsided marketplace where sellers rule and the price they want is the price they get.


Banks aren’t colluding to fix home prices. At least I don’t see any evidence of that (finding evidence of that would be waaay above my pay grade). But banks do have a bottom line on every home they sell and they stick to it without fail. I’ve seen banks turn away an offer for $61,000 when their bottom line was $62,000.

Sometimes, a few investors get lucky and find homes that need paint, carpet and a few handyman repairs and are then worth 15% or 20% more than the purchase value (but closing costs eat up as much as 12% of that ‘profit’). Almost without exception, these buyers go directly the foreclosure auctions and pay cash. The auctions aren’t designed for rookies. I hear they’re literally throwing elbows down there. Our brokerage has an agent who will go to the auctions with you. Contact me for his info.

If you’re an investor who still insists that a “good” Realtor can find you a property for 30% less than market value, please don’t call me. I’m a very good Realtor, but I’m not a magician.

Charting 2010

The Calculated Risk Blog published a post using a number of charts to show & tell the economy’s story of 2010.

Keeping in mind these are from a national view, and that Arizona’s numbers will be different, I still thought a few of them were worth sharing, especially since they tell a story of being through the worst of things…

Existing Homes – Months of Supply

Take a look at the blue line in this chart.  Inventory (nationally) has been above 7 months (the balanced market number) since mid-2006, but it looks like the number might have peaked.

image

.

Mortgage Delinquencies and Foreclosures

We’re still in record territory, but it looks like we might have peaked.  We’ll have to stay tuned to this one over the next couple of quarters.

image

.

Percent Job Losses

I’ve shared this graph before, but I still can’t get over how much worse this recession is than anything we’ve experienced since World War II.  That being said, it looks like we’re heading in the right direction.

image

.

Obviously things aren’t going to get back to “normal” overnight, but I like seeing the big picture heading in the right direction.  I’ll work on some similar charts specific to Arizona to see how things compare locally.

Your hoping the glass is half full Realtor,

Chris Butterworth

Bank of America posts earnings loss

Bank of America just posted a big loss.

Bank of America, among many other things the #2 residential mortgage lender and #1 servicer, reported a second straight quarterly loss, driven by write-downs in the value of its mortgage business.

The bank lost $1.57 billion, or 16 cents a share, compared with a loss of $5.2 billion, or 60 cents a share, a year earlier. Last year's results included a one-time TARP charge of $4 billion. Without the mortgage business write-down, the bank earned $756 million, or 4 cents per share.**

See also my broker Jay Thompson, a.k.a. The Phoenix Real Estate Guy, wrote a blog post the other day, grouching about Chase’s earnings for the 4th Quarter. Chase earned a whopping $52 million per day in profit in the 4th quarter of 2010.

Meanwhile, I’ve been thinking about Bank of America’s new billboard advertising campaign. Have you seen these? The basic message is “we’re everywhere” with billboards like these:

Where you live. Where you work. Where you play.

So many ATMs it’s like they’re following me. (with a pretty, smiling woman in the picture)

More ATMs than anyone else in the history of the world.

OK, I made that last one up. But the point is, they’ve spent a busload of money to remind us how big they are.

2008: BofA spent $319 million in U.S. advertising (source, BankInvestmentConsultant.com)

June 2009: B of A spent $125 million on U.S. advertising to date. (source, BrandWeekc.om)

January 2010: B of A plans to spend between $15 million and $20 million on a new marketing campaign aimed at the IRA rollover market. (source, BankInvestmentConsultant.com)

What happened to “too big to fail”? Did we all forget that saying already? It’s only been about a year and a half since we realized that some U.S. banks were so ginormous that if they failed the world would explode.

And now, Bank of America’s entire billboard ad campaign is centered on the idea of “we’re so huge, you can’t escape us.” Doesn’t that make them too big to fail, by definition?

.

**As an aside, I love how we all let corporations get away with spinning their earnings reports. BofA gets to say “without that loss of 3/4 of a billion dollars, we had positive earnings.”   I’d like to be able to say to my creditors, “well, without that pesky mortgage of mine that’s underwater by $100,000, I’m fine. Really. Give me some more credit, I think I need to take a vacation this month.”

When pigs fly.

Mortgage fraudster found guilty (and rich)

From one of the more entertaining feeds in my Google Reader, CreditBloggers:

A lawyer who helped a gang of mortgage scammers steal $23 million from banks pleaded guilty to seven felonies on Wednesday as part of the federal government’s larger crackdown on loan fraud.

[He] faces a maximum of 210 years in prison for his role in the scam, and he will be forced to repay the money he stole. He will be sentenced in April.

For once, somebody who got rich through scams gets what’s coming to him. Good!

del.icio.us Tags:

44 Monroe converts to apartments

In a nod to the general bad economy and the extra-bad resale condo market in Metro Phoenix, the hi-rise known as 44 Monroe in downtown Phoenix will convert from condos to apartments.


Why? Many, many reasons. The economy continues to be sluggish. Condo financing has all but dried up. The condo rental market has been hurt too, by the easy availability of single family detached housing rentals. Condos always fare worse than detached housing in a real estate-led recession...


See the article in the Arizona Republic about the 44 Monroe condo-to-apartment conversion.


We have a good deal of experience helping buyers and sellers in the Metro Phoenix condo market here at The Phoenix Agents. If you need guidance condo-shopping or condo-selling in Phoenix, Scottsdale, Peoria or Glendale, contact us. Not quite ready to talk with a Realtor? Totally understandable. A, we're not "salesy" and B, you can read what our clients think about us on our Tribe page.


Snow in Phoenix



Although it’s rare, sometimes we Phoenicians have to protect our desert plants from freezing temperatures. Our Tucson branch manager, The HouseChick, a.k.a. Kelley Koehler wrote about prepping your cactus for the few freezing nights. Click on over to see  cups on cactus and the new trend, bags on cactus.

Thinking of visiting the Phoenix-Scottsdale area to get away from cold, snow and ice? Don’t despair. It’s rarely this cold in the Valley of the Sun. Weather.com predicts we’ll be back to our usual sunny and warm 75 degrees by about the first full week of January 2011.

Need a vacation rental? Thinking about buying a winter vacation home and want to look at a few Phoenix or Scottsdale homes while you’re here?

Contact us. We’re Realtors, we’ve been helping buyers and sellers in the metro Phoenix area for a combined 10 years. We routinely help buyers find vacation homes, and we help investors choose appropriate rental homes, as well as handling typical residential real estate sales. Check out client testimonials, then give us a call.

video courtesy of AZfamily.com (“Snow Falls on Phoenix Suburbs”, by Jennifer Thomas of AZ Family.com and originally published December 30, 2010 at 3:14pm)

US home prices hit new lows. Not Phoenix.

The mainstream media are at it again. Chris and I have written about mainstream media and their panicky screamy headlines more times than I can count. Today the media are at it again.

The Washington Post ran a screaming headline this morning: “U.S. Home Prices Drop 1.3% from September to October”. They were almost gleeful when they noted that 6 of Case-Shiller’s 20 major metro markets hit all-time price lows. Oh the humanity!

Case Shiller story, Dec 28, 2010

 

But wait, let’s look at local statistics, not national headlines designed to sell newspapers. Actually, in Metro Phoenix, home prices have been essentially flat since November 2009.

Case Shiller story REFUTED, Dec 28, 2010

Look at the far right hand side of this chart, taken from the local Statistics God Mike Orr at the Cromford Report. This chart shows the median sold price of all home types in the entire Metro Phoenix region.

The numbers are awfully small, even when you click to embiggen the chart. So, so here are the median sold home prices by month, in Metro Phoenix.
$125,000 – November 2009
$125,000 – December 2009
$125,000 – January 2010
$125,000 – February 2010
$125,000 – March 2010
$126,000 – April 2010
$127,500 – May 2010
$127,900 – June 2010
$127,000 – August 2010
$126,000 – September 2010
$125,000 – October 2010
$125,000 – November 2010

Again I say to you my readers: Oh the humanity! The median sold home price has been essentially flat in Metro Phoenix since November 2009. While critics still claim that the federal home buyer tax credit artificially inflated home prices, way back in September 20101 I said that was a silly argument.

Now, the statistics show prices rose by a a mere $2,900 over 12 months. (what the federal government’s tax credit actually did was create buyer demand, which is what this market has needed more of since late 2006)

We’ve said it before and we’ll say it again: remember that the media screams sensational headlines because that’s their job. Rely on your local Realtors and other industry professionals to get you the truthful information without the hype.

Need a Realtor’s advice? Doesn’t matter if you’re ready to buy or sell this instant, or just thinking out loud about your options. Contact us at The Phoenix Agents. We’re here to help. Real Estate. Real People. Real Simple. The Phoenix Agents.

Fannie Mae: 2010 sucked, 2011 better

Image ID 1128001 by svilen001 at StockExchangePer Fannie Mae, the fourth quarter of 2010 will not wind up being a memorable time for housing sales.
Fannie projects that existing home sales will increase slightly, but that new home sales will drop significantly. Fannie’s number crunchers say we should expect 2010 housing sales to be down 7% from last year, and with slightly lower median prices across the nation. But it expects things to pick up in 2011.

Well “thank God!” is all I can say to that! Summer and Fall  2010 were some of the slowest times I’ve had in nearly 6 years of selling residential real estate in metro Phoenix Arizona. I’m ready for 2011 to be a happier & busier year than 2010.

image credit: Image ID 1128001 by svilen001 at StockExchange

Related Posts -