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Great vacation home opportunity in the Valley of the Sun!! September 22, 2010

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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Great Vacation Property Joint Ownership opportunity in Ahwatukee AZ.

FREE Joint Ownership Document Package with a property sale through us, a $999 Value.

Asking $165,000

Built: 1983/ 3 Bedrooms/ 2 Bathrooms/ 1,818 SQFT Updated Kitchen, NEW Whirlpool Stainless steel appliances, NEW Carpet, NEW tile, NEW landscaping, NEW paint, NEW fixtures and no popcorn ceilings. 2 car garage, large backyard, view fence, awesome location!

Don’t miss this little gem. Low HOA fees. Award winning Kyrene school district. Close to dining, shopping, freeway access. Just a short hop to central Phoenix.

With furniture this vacation home is Turn Key ready to occupy during a the cold Canadian and US winters and would be an investment of approximately $200,000 OR with 4 joint owners only $50,000 a piece to break free from winter! 🙂

Contact us to learn more about this opportunity in the Valley of the Sun!

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National numbers released and December wasn’t pretty January 25, 2010

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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The December numbers were released for home sales and the numbers were a little unsettling. A 17% drop in sales from the previous month, this is the largest monthly decline in the last 40 years.

In the Metro Phoenix area I am seeing properties listed at 1/3 off their peak sale prices in 05/06. The questions are how low can prices go and when will we hit the bottom?

December home sales down nearly 17 percent
Home sales plunge nearly 17 percent in December after tax credit deadline extended

By Alan Zibel, AP Real Estate Writer , On Monday January 25, 2010, 12:32 pm
WASHINGTON (AP) — Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.
The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.
“It’s ‘exit stage left’ for first-time homebuyers,” wrote Guy LeBas, an analyst with Janney Montgomery Scott.
December’s sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged …….

January numbers will be interesting.

Michael

2010 looks to be an interesting real estate year for Phoenix January 19, 2010

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After 19 days into 2010 I have noticed a couple of disturbing trends coming about. Or exciting trends depending on which side of the real estate fence you are on, the buying real estate 🙂 or selling real estate side :(.

Keep in mind that all of the below is unscientific and we will have to wait for the official numbers from the real estate boards to quantify my observations.

Firstly, I am subscribed to a number of automatic new listing and REO feeds that are sent to bme by email daily, I have noticed that the quantity of homes and the number of emails I am receiving daily is growing dramatically. The listing count seems to be increasing at a higher rate than I have ever seen before and the number of bank owned properties or REO’s listings is also growing. Has the dam burst for the lenders and they are now releasing the growing inventory they had shelved in 2009?

We played golf and bumped into a gentleman who knew of a person who’s job was to post foreclosure notices on homes, he stated that this person had a 160 notices backlogged on his desk, is this a sign of a future increase in inventory?

Prices appear to be dropping. I am following a couple of Metro Phoenix areas for activity and a few homes we have had our eye on, and in the last 30 days we have seen asking prices start to drop as inventory increases. These drops in asking prices have been substantial, especially for some higher profile condo complexes. Asking prices for homes in nice, stable, white collar neighborhoods are 40 to 50% off what they sold for in 2005.

Finally the last point in my unscientific analysis of the Metro Phoenix real estate market is that I have noticed a growing percentage of new listing notifications that are not new homes to the market but homes that have come back on the market after the purchaser has backed out or the short sale was not approved by the lending institution.

Is this just a minor blip in the Phoenix real estate market recovery or is it the next wave of downward value readjustment some of the previous articles I posted made mention of?

Before you decide maybe take a look at the next piece of uncomfortable news in the following link:

JANUARY 19, 2010

Souring Mortgages, Weak Market Force FHA to Walk a Tightrope

By NICK TIMIRAOS

David Stevens bought his first home almost 25 years ago, paying just 3% down with a loan backed by the Federal Housing Administration. “I had no money in the bank,” he says. “If it weren’t for the FHA, I wouldn’t have gotten that home.”

Now, as FHA commissioner, Mr. Stevens has to decide how many others to let through that door. Souring FHA-insured mortgages are threatening the agency’s finances. Congress is pressuring him to tighten the easy-money standards that once helped people like him, and he is expected to announce revisions as early as this week……..

It looks like the glass is either half full or half empty depending on which side of the Phoenix real estate fence you are on, hope you are on the right side. 🙂

Cheers,

Michael

2010 Phoenix Real Estate Crystal Ball December 17, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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We all try to predict, guess, prognosticate … what is going to happen in the future. Whether it is the outcome of a game, Tiger’s future in golf and divorce court, the price of gas next week, when the economy is going to recover and of course one of the most popular water cooler discussions is the future of the housing market.

I came across an interesting article today titled ‘Foreclosure backlog estimated at 1.7 million’.

What caught my eye were the following facts from this article and other past articles;

  • 1.7 million homeowners were on the verge of foreclosure in the fall of 2009
  • This is up 1.1 million from the previous year
  • Distressed sale properties will flood the market in the next 12 months (banks have held a high percentage of properties off the market to try to mitigate the value free fall we have been experiencing over the last 3 years and will finally be forced to move these assets off their books)
    .
  • 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process
    .
  • About 20% of owners of single-family homes with mortgages owe more than the current estimated value of their homes, according to Zillow.com, in the third quarter of 2009 almost 10.7 million households had negative equity in their homes
    .
  • Option ARM Silent Bomb: $189 Billion in outstanding option ARMs with $134 billion recasting in 2 years, 94% of the borrows made the minimum payment

My personal observations include an increase in short sale listings and aggressively price properties in fringe communities. I define fringe communities as great places to live but they are a bitch to commute from. I have seen listings for 2000+ sq ft, 4 & 2 or 4 & 3 with granite & stainless appliances, freshly painted, pebble tech pool, nice community with an historic sales price of $350,000 now listed in the high 100’s, which is only the asking price. If you go into a market that is above $250,000+ then it is more aggressive with houses that have been on the market longer. Jump to the high six figure or million plus and you can write your own ticket as it seems that half of Paradise Valley has a for sale sign on the property…..

Bottom line my crystal ball says now is not the time to sell but a great time to carefully observe the market and look at jumping in sometime in 2010.

Cheers,

Michael

Phoenix Trustee Auctions – make sure you are ready to play with the big boys December 11, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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I did a post some time ago about auctions with a link to a great article that explained the process titled Buyer Beware,  but there is a new article out that goes into the details of how these auctions work. The only problem with the article is that the average non professional investor will read only one thing, how much one professional made in a quick one week flip.

This article can be found here and is titled House Flipping Makes a Comeback. Great article and make sure to look at the slide show but and it is a big but… these people that work the trustee sales are professionals with years of experience and teams in place. They have the cash or the access to cash to close in the required 24 hour period, they have done their research on the properties they bid and purchase via drive bys and walk arounds and even may have had access to the property to assess the repairs it will need. Another issue in the property/ investment flip game is that everyone is now getting into it and the competition for great deals is much greater than it use to be 2 or 3 years ago.

On a  $75,000 to $150,000 flip you will need at least $20,000 net profit on the purchase to turn around a $10,000 net profit on the sale. That is if you have a good Realtor and the all of the market factors of the home are aligned. Properties can drop in value by 25% overnight, (if comparable sale properties in a couple of block radius drop their prices due to being banked owned or going into foreclosure this will affect your ability to sell at your planned price) I have experienced it first hand thus you need to be well healed and have all the necessary resources at hand.

Properties of great value might produce greater margins but will also have greater costs associated in the transactions and are tougher to resell, more first time buyers than those looking for a $250,000 family home. Then when you get into the luxury market you can steal properties but good luck trying to sell it unless you have it on the market substantially below current market prices like the example in the last article.

On a positive investor note it is anticipated that there will be a new wave of properties entering the Phoenix market in the spring, not good if you purchased a home and will be trying to slog it off in the next couple of months but good if you are waiting to enter the market in the early spring.

In any case if you decide to venture down the path of playing the trustee auctions then best of luck in swimming with the sharks. 🙂

Have a great weekend wherever you are!

Michael

Real Estate News Headlines…. Are you as Confused as I am?? November 24, 2009

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Well the newest real estate articles are posted below and once again they can educate and also add to our daily confusion on what the hell is going to happen to the real estate market in the US.

One thing is for certain, if you don’t like the market prognosis today you will only have to wait a couple of hours to have it change to your liking. 🙂

October home sales rise 10.1 pct from September
October home sales up 10.1 percent, beating expectations as tax credit spurs sales

* By Alan Zibel, AP Real Estate Writer
* On 4:18 pm EST, Monday November 23, 2009

WASHINGTON (AP) — Home sales surged for the second month in a row in October, climbing to the highest level in 2 1/2 years as first-time buyers rushed to take advantage of an expiring tax credit…  Link to full article

Home prices up slightly in September

Home prices up slightly in September; analysts expect declines as foreclosures rise

  • By Alan Zibel, AP Real Estate Writer
  • On 11:59 am EST, Tuesday November 24, 2009

WASHINGTON (AP) — The summer’s trend of rising home prices is ebbing as the traditional home shopping season ends, two reports Tuesday showed… Link to full article

10 Questions on the Volatile Housing Market

James R. Hagerty
Wednesday, November 18, 2009

Lower prices have spurred home sales, but looming foreclosures and high unemployment are clouding the outlook

The U.S. housing market has been in a slump for the past four years. When will it ever end?

In recent years, real estate has proven as jittery and unreliable as any other market.

Link to article and the 10 answered questions

1 in 4 Mortgage Borrowers is Under Water

Posted by David S Morgan

Nearly a quarter of U.S. mortgage holders owe more on their loans than their houses are worth, according to a report today in the Wall Street Journal.

Data from First American CoreLogic, a Santa Ana, Calif.-based real-estate information company, shows that in the third quarter of 2009 almost 10.7 million households had negative equity in their homes.

Link to the full article

Housing Bottom? “Not Even Close,” Barry Ritholtz Says

Posted Nov 24, 2009 02:07pm EST by Aaron Task

A fifth-straight monthly gain for the Case-Shiller Index Tuesday and Monday’s stronger-than-expected existing home sales report is giving renewed hope to the housing bulls.

“Disregard them,” says Barry Ritholtz, CEO of Fusion IQ,….

Link to video and article

New US home sales rise 6.2 percent

October new US home sales up 6.2 percent in sign of stability for housing

  • By Alan Zibel, AP Real Estate Writer
  • On 10:55 am EST, Wednesday November 25, 2009

WASHINGTON (AP) — Sales of new homes rose last month to the highest level in more than a year as strong activity in the South offset weakness in the rest of the country.

The Commerce Department said Wednesday that sales rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Economists surveyed by Thomson Reuters had expected a pace of 410,000….

Link to full article

Arizona second in underwater loans

Phoenix Business Journal – by Jan Buchholz

Arizona has more homeowners who are underwater with their mortgages than any other state, save one.

About 48 percent of homeowners here owe more on their mortgages than the home is worth. That is second only to…

Link to full article

When will the market hit bottom??? November 16, 2009

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The elusive question everyone is asking, ‘When will we hit the bottom of the real estate market?’ has no definitive answer but the tells point to the fact that we are still moving towards the bottom an not there yet.

Here is a decent video with Dan Alpert of Westwood Capital who sides with the real estate bears and puts the bottom in perspective with some economic fundamentals to consider when making our own guess.

Video and article

 

To be a real estate analyst….. November 13, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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To be an analyst it todays market means that you would never be wrong… all you need in your predictions is the word ‘but’.

The market has stabilized but … The market is up over last (choose your date) but … Recovery is just around the corner but …..

We have hit bottom but ….

Bottom line is the Valley housing market has a long way to go before it is in a ‘real’ recovery phase that shows sustainable positive numbers and real upward trends across all classes of homes and all areas of the Valley. We are close to the bottom and will bounce along it now until the economic recovery takes hold. When will that happen? Your guess is as valid and as good as anyone elses as it is a crap shoot now.

House resale values in some market segments still have a way to fall, some analysts are calling for another 24% + drop, some market segments have stabilized and some small pockets in the Valley are even seeing an uptick in value. But … make sure you compare apples to apples, something that is not always done.

We are even seeing the new home construction now compete with resale in the same areas as builders have to keep their businesses afloat and need to move product to do so, deals are to be had if you have the kahoonas to risk investing with a developer that might not be around after you have put up half the money and your dream home is only 1/3 completed. Make sure you work with a stable developer that has a long history in the Valley and a well sold development, there are many out there but caveat emptor.

Foreclosure properties are still a very BIG wild card, how many are sitting on the desks of the lenders not yet processed, how many will be coming on to the market in early 2010 once the economy tightens a little more and the next wave hits, how many investors will be walking away from portfolios of properties that will then go into the foreclosure mill?????

Below is a decent but very vanilla overview on the market, an interesting read at least.

I think my next post might rant about REO properties a little more but until then have a great weekend.

Phoenix Housing Market Showing Signs of Recovery, but Still Has Issues

Published: November 12, 2009 in Knowledge@W.P. Carey

t’s Indian Summer in the Phoenix real estate market: Like a replay of the traditional high sales months, resale activity increased in October — from 9,070 sales in September to 9,955. But although the level of activity appears strong, it’s not necessarily a sign of recovery, as foreclosures continue…….

 

 

AZ Real Estate News Articles November 5, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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The first article reviews some of the signs of a false bottom for the AZ real estate market and the second might be an indication of how the foreclosure supply might see an increase when underwater owners just throw in the towel and walk away. Is the recent Vally real estate good news a dead cat bounce phenomena? Time will tell and 2010 will definitely be interesting.

Unseasonably high home sales in October linked to tax rebate
Arizona Republic – Phoenix,AZ,USA

Phoenix real-estate agent and property manager Melinda Murphy attributed the relatively … Phoenix real-estate analyst Jim Belfiore of Belfiore Real Estate …

UA prof to some homeowners: Consider walking away
AZ Central.com – AZ,USA
She’s the keynote at Lambda Alpha International’s Phoenix real-estate conference on Tuesday. The event starts at 7:30 am at the Sheraton Phoenix Downtown …

More walk away from homes, mortgages
By Stephanie Armour, USA TODAY
When Sharon Sakson was laid off recently from her job as a television writer and producer, she burned through her savings to pay the $2,400 monthly mortgage on her home. But she soon decided it didn’t make sense: Her home was worth thousands less than the mortgage she carried on it.

 

Fannie Mae seeks $15 BLN in US aid after 3Q loss
By Alan Zibel, AP Real Estate Writer

WASHINGTON (AP) — Fannie Mae is asking for an additional $15 billion in government aid after posting another big loss in the third quarter as the taxpayer bill from the housing market bust keeps rising.

The government-controlled company continued….

What is a real estate purchaser to believe???? October 21, 2009

Posted by mkuhbock in Arizona Vacation Property, AZ Real Estate News.
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I recently came across 2 separate articles that focused on the future of the real estate market. One was a national publication with grounded statistics while the other article was a local Phoenix publication that also was based on relatively hard numbers.

The funny thing is that both articles screamed the opposite opinion of where the market is going. The Phoenix based article speaks of a recovery and that the real estate slump is over while the national article talks about more pain and how real estate prices are about to go much lower.

My take is that the market will bounce along the bottom for another 36 to 48 months, great deals will be had and some insulated pockets in the Valley will actually see a decline in properties for sale and realize a marginal appreciation in value.

Check out the articles for yourself:

Phoenix-area consultants contend local real estate slump is over
Bizjournals.com – Charlotte,NC,USA
Two Phoenix real estate consultants are claiming the local residential real estate meltdown is over. Karl Guntermann, the Fred E. Taylor professor of real …

Housing Prices: Expected to Drop More in the Next Year?Home values are predicted to fall in 342 out of 381 markets in the next year, according to a new forecast. Learn why and find out which cities could buck the trend…