The most common question I get from homeowners is,"Where will Real Estate values be in 2-3 years?" I wish I had a crystal ball. For now, I will just have to make an educated guess.
Seeing that the volume of foreclosures is barely slowing in Maricopa County, I think that, in 2-3 years, we will be in approximately the same market as we are in now...a market fueled by distressed properties. I believe the small slowdown we have seen in the number of foreclosures is due to the increase in the number of short sales and the fact that some lenders have been postponing auctions. I believe the general public is now better informed as to the benefits of short sales and is now more inclined to pursue one.
I think that those homeowners who are underwater and are "on the fence" about short saling or strategically defaulting will take the plunge and attempt a short sale. The more distressed homeowners are talking to each other regarding their financial difficulties, the less the negative stigma of a short sale or foreclosure. The higher the number of homeowners defaulting, the more those "on the fence" will see a short sale as a viable solution and a wise market opportunity.
I believe that in the future we will see another wave in the West Valley...an onslot of bankruptcies. Just as we begin to see a slight tapering in the number of short sales and foreclosures in the years ahead, the swell of bankruptcies will begin. Consequently, we will have a market with a steady supply of distressed properties for at least the next 2-3 years. And, with a wealth of inventory, comes low, affordable prices.
If you have any questions about the value of your home and/or know of anyone who is considering capitalizing on this market, give us a call at 623-694-0354 or visit our website. www.MaryDrefs.com. We are here to help.
Thursday, December 2, 2010
Monday, November 15, 2010
BANKS CRY FOUL! LET'S ALL CRY.........
Yesterday, the Arizona Republic ran a story about Real Estate "Flopping" in Arizona. Basically, the story relayed that "flopping" is when a buyer purchases a foreclosed or short sale property and then immediately lines up another buyer to purchase the property at a higher price. Apparently, it is big news because banks are crying "Foul!" Banks are saying that if they knew that another buyer would pay a higher price, they would have sold directly to that party...or would they?
Banks call this flopping. I call it capitalism. Show me a business that does not have a middleman that gets paid for his knowledge and service. If the buyer of the foreclosed home is cunning enough to line up another buyer who is willing to pay more, so what? Personally, I would never go to the court house steps to purchase a foreclosed property because I don't know all of the intricacies of purchasing a foreclosed property. I am too afraid that I would purchase a house with a huge tax lien or structural or environmental defects. Would I purchase a house from an experienced court house step buyer? Yes. And I realize I would have to pay more for the house for utilizing his expertise.
Some buyers right now want to purchase properties but cannot get financing using traditional lending companies because of increased loan requirements. Are these buyers willing to pay more for a home that offers seller financing? Absolutely. Should those sellers who are carrying the note and the financial risk receive more for these homes? Yes!
The lenders are crying Foul. But is the average Joe feeling sorry for the lenders? Please note that if a house forecloses or is short saled and has a loan that is government insured, the lender is handsomely financially rewarded after the transaction closes. This is where the billions of dollars to solve the housing crisis is going. It is not going directly into the hands of any homeowners. Ultimately, we will all contribute to these billions by paying taxes. So, in the end, the banks win again...and again...and again.
Banks call this flopping. I call it capitalism. Show me a business that does not have a middleman that gets paid for his knowledge and service. If the buyer of the foreclosed home is cunning enough to line up another buyer who is willing to pay more, so what? Personally, I would never go to the court house steps to purchase a foreclosed property because I don't know all of the intricacies of purchasing a foreclosed property. I am too afraid that I would purchase a house with a huge tax lien or structural or environmental defects. Would I purchase a house from an experienced court house step buyer? Yes. And I realize I would have to pay more for the house for utilizing his expertise.
Some buyers right now want to purchase properties but cannot get financing using traditional lending companies because of increased loan requirements. Are these buyers willing to pay more for a home that offers seller financing? Absolutely. Should those sellers who are carrying the note and the financial risk receive more for these homes? Yes!
The lenders are crying Foul. But is the average Joe feeling sorry for the lenders? Please note that if a house forecloses or is short saled and has a loan that is government insured, the lender is handsomely financially rewarded after the transaction closes. This is where the billions of dollars to solve the housing crisis is going. It is not going directly into the hands of any homeowners. Ultimately, we will all contribute to these billions by paying taxes. So, in the end, the banks win again...and again...and again.
Thursday, November 4, 2010
PHOENIX AREA REAL ESTATE MARKET FORECAST
It has now been two and a half years since we started to see a marked increase in foreclosures in Maricopa County. Since April 2008, there have been 232,456 Notices of Trustee's Sale filed in Maricopa County. 115,214 of those homes have actually ended with a recorded trustee's deed indicating foreclosure. The other homeowners have either gotten current on their loan, successfully sold the house as a short sale or are attempting loan modification. Since January 1, 2010, the number of notices filed in Maricopa County stands at 87,747. However, while fewer properties are entering into the foreclosure process, the banks have picked up the pace at which they are foreclosing.
It has now been two and a half years since we started to see a marked increase in foreclosures in Maricopa County. Since April 2008, there have been 232,456 Notices of Trustee's Sale filed in Maricopa County. 115,214 of those homes have actually ended with a recorded trustee's deed indicating foreclosure. The other homeowners have either gotten current on their loan, successfully sold the house as a short sale or are attempting loan modification. Since January 1, 2010, the number of notices filed in Maricopa County stands at 87,747. However, while fewer properties are entering into the foreclosure process, the banks have picked up the pace at which they are foreclosing.
In October, due to legal pressure, several of the big lenders placed moratoriums on their foreclosures. Bank of America, GMAC, and Wells Fargo were several lenders who stopped foreclosures. Now, Wells Fargo has quickly ended their moratorium and is back to foreclosing. The court system did have testimony from several bank employees who stated that they had given their approval on directives to foreclose without actually reviewing the files. This was due to the overwhelming number of files the employees were assigned. Fearing more lawsuits, the lenders ordered the moratoriums.
Currently, the bank owned inventory of homes for sale is rising. Of the approximate 4,800 homes auctioned at the trustee sales, approximately only 1,000 are being purchased by investors. This means approx. 3,800 are returned to the banks for them to sell. Of these returned homes, approx. 2,600 are actually being purchased thru the MLS. This means the REO or lender owned properties inventory for sale is increasing by approx. 1,200 homes per month. Excess inventory means lower prices. All of this inventory needs to be absorbed, or purchased, for us to see prices rise again.
At this time, experts are predicting the next big wave of foreclosures to hit just after the first of the year. In the meantime, mortgage interest rates are remaining low and lenders are reporting that refinanced loans are up.
Need to sell or looking to purchase?? Give us a call. We can help you make sense out of the current market and choose the path that is best for you.
It has now been two and a half years since we started to see a marked increase in foreclosures in Maricopa County. Since April 2008, there have been 232,456 Notices of Trustee's Sale filed in Maricopa County. 115,214 of those homes have actually ended with a recorded trustee's deed indicating foreclosure. The other homeowners have either gotten current on their loan, successfully sold the house as a short sale or are attempting loan modification. Since January 1, 2010, the number of notices filed in Maricopa County stands at 87,747. However, while fewer properties are entering into the foreclosure process, the banks have picked up the pace at which they are foreclosing.
In October, due to legal pressure, several of the big lenders placed moratoriums on their foreclosures. Bank of America, GMAC, and Wells Fargo were several lenders who stopped foreclosures. Now, Wells Fargo has quickly ended their moratorium and is back to foreclosing. The court system did have testimony from several bank employees who stated that they had given their approval on directives to foreclose without actually reviewing the files. This was due to the overwhelming number of files the employees were assigned. Fearing more lawsuits, the lenders ordered the moratoriums.
Currently, the bank owned inventory of homes for sale is rising. Of the approximate 4,800 homes auctioned at the trustee sales, approximately only 1,000 are being purchased by investors. This means approx. 3,800 are returned to the banks for them to sell. Of these returned homes, approx. 2,600 are actually being purchased thru the MLS. This means the REO or lender owned properties inventory for sale is increasing by approx. 1,200 homes per month. Excess inventory means lower prices. All of this inventory needs to be absorbed, or purchased, for us to see prices rise again.
At this time, experts are predicting the next big wave of foreclosures to hit just after the first of the year. In the meantime, mortgage interest rates are remaining low and lenders are reporting that refinanced loans are up.
Need to sell or looking to purchase?? Give us a call. We can help you make sense out of the current market and choose the path that is best for you.
Sunday, October 31, 2010
MORTGAGE PAYMENTS TODAY CAN BE CHEAPER THAN RENT
Mortgage Interest rates are so low that renters should definitely be considering purchasing a home. For example, for a $150,000 house at 20% down and an interest rate of 4.25% on a 30 year fixed rate mortgage, the payment including tax and insurance is only $746 per month. Cheaper than most 4 bedroom rentals.
In addition, homeownership brings great tax write offs.
If you would like to see a list of homes for sale for $150,000, give us a call at 623-694-0354.
In addition, homeownership brings great tax write offs.
If you would like to see a list of homes for sale for $150,000, give us a call at 623-694-0354.
Tuesday, October 12, 2010
A Moratorium on Foreclosures....What Does It Mean?
This past weekend, Bank of America announced that it is placing a temporary moratorium on foreclosures. What does this mean? It means that those homeowners who have received their Notice of Trustee Sale from Bank of America due to non-payment of their mortgage, may not have their homes auctioned any time soon. This does not mean that all Bank of America customers can stop making their mortgage payments without consequences. It simply means that those homeowners who have imminent auction/foreclosure dates have received a postponement of the inevitable.
Other lenders such as JP Morgan Chase and GMAC Mortgage, have announced a moratorium on foreclosures in 23 states. Arizona is currently not included on this list. Why the moratoriums? It has come to light in a court of law that lenders are not paying close attention to the homeowner's documents and that many bank officials are overwhelmed by their workloads. Consequently, they are not diligently investigating before approving foreclosures.
These moratoriums do currently not affect short sales. Short sales are proceeding as usual.
If you have any questions regarding alternatives to foreclosure, give us a call at 623-694-0354. We are here to help you through a difficult time with grace and dignity.
Other lenders such as JP Morgan Chase and GMAC Mortgage, have announced a moratorium on foreclosures in 23 states. Arizona is currently not included on this list. Why the moratoriums? It has come to light in a court of law that lenders are not paying close attention to the homeowner's documents and that many bank officials are overwhelmed by their workloads. Consequently, they are not diligently investigating before approving foreclosures.
These moratoriums do currently not affect short sales. Short sales are proceeding as usual.
If you have any questions regarding alternatives to foreclosure, give us a call at 623-694-0354. We are here to help you through a difficult time with grace and dignity.
Monday, October 4, 2010
FORECLOSURES ON HOLD? COULD THIS BE TRUE??
In the past several weeks, JP Morgan Chase, GMAC Mortgage and Bank of America have placed foreclosure filings on HOLD in 23 states. Currently, AZ is NOT one of these states.
In a February deposition in Mass., a Bank of America Executive said she signed as many as 8,000 foreclosure documents in a month without reviewing them. The statement was taken by lawyers for homeowners contesting the seizure of their homes.
Why not in AZ? The 23 states where the foreclosure holds are taking place require a court order before a home can be seized. This requires more extensive documentation before they can foreclose. AZ does not have the same foreclosure procedure.
HOWEVER,with the upcoming elections, this has become a hot issue for politicians. Perhaps they may mandate Federal Guidelines to ease the foreclosure crisis. Stay tuned.................
In a February deposition in Mass., a Bank of America Executive said she signed as many as 8,000 foreclosure documents in a month without reviewing them. The statement was taken by lawyers for homeowners contesting the seizure of their homes.
Why not in AZ? The 23 states where the foreclosure holds are taking place require a court order before a home can be seized. This requires more extensive documentation before they can foreclose. AZ does not have the same foreclosure procedure.
HOWEVER,with the upcoming elections, this has become a hot issue for politicians. Perhaps they may mandate Federal Guidelines to ease the foreclosure crisis. Stay tuned.................
Tuesday, September 7, 2010
Forced to Relocate......
Lately we have been getting quite a few calls from homeowners who have been notified by their employers that they are scaling back or shutting down their Phoenix operations. This leaves homeowners with equity in a quandry. Should they sell at the current market price and barely break even, or in some cases, bring money to the table at closing OR should they hang on to their house and rent it out?
Obviously, circumstances vary from homeowner to homeowner. Being an out of state landlord can supply a nice flow of cash...if the rent adequately covers the mortgage payment and HOA dues, etc. But, if you are waiting for prices to return to the '05 prices, you will need to rent your property for a very long time. (i.e. at least 10-15 years)
It is best to look at the real estate market you are moving to and see how prices are there. If you sell your AZ property at a slight loss, but are able to pick up a great bargain in your new locale, then it may be worth bringing a few dollars to the closing.
Also some owners do not have the temperament to be a landlord. If you are the type that is bothered by a scuff on the wall or a few leaves in the yard, then you will probably be an agitated landlord. And, some things are just not worth the aggravation.
We are finding that the majority of those relocating are moving to Washington State and Oregon. In this case, the grass is greener where it actually takes minimal effort to grow.
Obviously, circumstances vary from homeowner to homeowner. Being an out of state landlord can supply a nice flow of cash...if the rent adequately covers the mortgage payment and HOA dues, etc. But, if you are waiting for prices to return to the '05 prices, you will need to rent your property for a very long time. (i.e. at least 10-15 years)
It is best to look at the real estate market you are moving to and see how prices are there. If you sell your AZ property at a slight loss, but are able to pick up a great bargain in your new locale, then it may be worth bringing a few dollars to the closing.
Also some owners do not have the temperament to be a landlord. If you are the type that is bothered by a scuff on the wall or a few leaves in the yard, then you will probably be an agitated landlord. And, some things are just not worth the aggravation.
We are finding that the majority of those relocating are moving to Washington State and Oregon. In this case, the grass is greener where it actually takes minimal effort to grow.
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