WHERE THE MARKET IS NOW – GREATER PHOENIX AREA
- and, in the USA, “Highest pending home sales since March 2006”

Below are the residential resale figures for the greater Phoenix area from the Cromford Report.

The key figure is the rise from $170,769 to $173,923 in the Average Price for Monthly Sales. Greater Phoenix prices are rising. Also, the Months Supply of inventory had declined from 5.0 to 4.8 months.

Looking at the “bigger picture,” just look at where we are now compared to a year ago. In December 2008, we had 10.9 months of inventory and sales at only 4,324 units. We have come a long way! True, the Average Price a year ago was $203,775, but prices are coming back!

Don’t miss this positive move in the Greater Phoenix real estate market!

 The main niche area is still distressed and REO properties. For those interested in higher-priced properties, there are great bargains in high-end properties.

Distressed and REO properties continue to push prices down in all areas – good for Buyers. Look for bargains under $250,000. Also, look for bargains on the high-end, the “million dollar” properties – which you may be able to pick up at a major discount.

A word of advice: many bank-owned properties (REOs) are more attractive than short sales as you can still get below-market prices, but without the lengthy time delays and unpredictability. Generally you will know if your offer on an REO has been accepted within a week – short sales can take much longer.

There is good news for Sellers, as prices are going up.

But not everywhere! In Paradise Valley, property prices have decreased by close to 20% over a year ago. Bargains are to be had for the high-end Buyer. REO lender-owned properties accounted for 21% of last month’s sales at  $203/SF; pre-foreclosure sales accounted for 29% at $288/SF, as compared to “normal” properties at $330/SF (62% higher than REOs) – an opportunity – and a niche for the high end Buyer/Investor!

Prices in Cave Creek are increasing rapidly to $147/SF.

On the low end, prices in Surprise are doing surprisingly well, and are on the rise to $75/SF.

WHERE THE MARKET IS NOW – NATIONWIDE

Pending home sales - Highest since March 2006!

October pending homes sales rose for the ninth straight month and hit their highest levels since March 2006. Pending home sales measures the number of contracts signed, not actual closings – but most do close.

According to the National Association of Realtors (NAR), pending home sales nationwide were up 3.7 percent in October, compared to September, and up 32 percent versus October 2008 – the biggest annual increase in history!

Even though Arizona lags behind, the national average in pending homes sales, it is a leading indicator of great things to come.

Resale home sales - the biggest monthly increase in a decade!

The nationwide resale market of homes sold is also strong. The NAR reported that home resales rose 10.1 percent from September to October, the biggest monthly increase in a decade. Along with the tax credit, buyers are being attracted by low prices and mortgage rates.

The big incentive for the surge in home-buying is still the government-subsidized first-time home buyer's tax credit which has been extended through April 30, 2010, along with a tax credit for people who have owned their current homes for at least five years of the last eight (see below for complete details).

IF YOU ARE BUYING:  This is the time to catch the market while prices are affordable and interest rates are low. Mortgage rates are still declining (see below).

Be sure to talk to a lender before you start your home search.  You want to be ready with an LSR (loan status report) which is necessary to accompany an offer. Feel free to ask me to recommend a loan officer who can help you.

IF YOU ARE SELLING:  The market is showing more than just a glimmer and sales are up. In addition, lower mortgage rates will be a big help to both sellers and buyers (see below).

We handle all types of listings, from short sales to high end properties in general Phoenix, Scottsdale and Paradise Valley.

The 800 Pound Gorilla in the living room - to walk or not to walk

Brent T. White, a University of Arizona law school professor, has written a paper, titled “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.”

In it, White contends that far more of the estimated 15 million U.S. homeowners who are underwater on their mortgages should let the property foreclose.

Doing so, he suggests, could save some of them hundreds of thousands of dollars that they “have no reasonable prospect of recouping” in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume, he says.

Sure, credit scores suffer when you walk away, he acknowledges. But as long as you stay current with other creditors, "one can have a good credit rating again -- meaning above 660 -- within two years after a foreclosure." That may be optimistic as others say it takes up to five years, maybe seven for your credit to recover.

“Most individuals should be able to plan in advance for a few years of limited credit,” White said, with minimal disruptions to their lifestyles.

In so-called anti-deficiency states such as Arizona, mortgage lenders have limited or no legal rights to pursue defaulting homeowners' assets beyond the house itself.

As of June 30, 2009, 51 percent of mortgage borrowers were underwater in Arizona, with 68 percent in the Phoenix-Mesa-Scottsdale area.

Mike Mullan

www.timmullangroup.com