Thursday, September 27, 2012

Distressed Property Report - September 2012

Distressed Property Report - September 2012

Gathering intelligence on Short Sales and Foreclosures is now easier with the
Distressed Property Report. This report contains three interactive maps: short sales,
foreclosures and a map of all distressed properties. Each map is a snapshot of the active
distressed property aggregated by ZIP Code.
The August 2012 Distressed Property Report can be found here.

There are no "from" and "to" dates on the Distressed Property Report because the data is
Active properties in the system on the day the report is published.
The "Percentage of Actives" shows what percentage of Active listings are distressed
in each ZIP Code. Each map is displayed below:

Clicking a dot on any map will display more information (example).
 Just like a Google Map, the maps below can be zoomed, panned and moved.
SHARE THIS REPORT:
Facebook Twitter More...

Short Sales as of 09/27/2012:


Foreclosures as of 09/27/2012:


All Distressed Properties (Short Sales and Foreclosures) as of 09/27/2012:


Friday, September 21, 2012

Should you Rent or Buy a Home in 2012

Should you Rent or Buy a Home in 2012?

Should you Rent or Buy a Home? Last year at this time I wrote about weather you "should Rent or Buy a Home" (see blog below) Here is the Update One year later. It is cheaper to pay rent on a single family home or pay a mortgage on a single family home? Rental rates have gone up so, yes Buy if you can.
 
This article compares the average monthly rent paid for a rental compared to how much the mortgage payment might be to purchase an average priced single family home in greater Phoenix area.

The average single family Home rental rate is $1,850 and average single family purchase price is now $218,000.00 as of September 1, 2012 for Greater Phoenix. (This information is available from Arizona Regional Multiple Listing Service, Inc.) (2100Sqft. Home, 3-4 Bedrooms, 2-3 baths, with 2 car garage, with or without a pool.)

Now, if we look at a FHA 3.5% down loan, fixed rate of 3.259% for 30yrs at a purchase price of $218,000 the monthly payment with principle, interest and mortgage insurance (M.I.P.), would be $1094. Granted, we have to consider taxes and homeowners insurance; additional cost of 285.00 to $1094.00 = $1,379.00 That’s a savings of $471.00 per month, and a total savings of $5,652.00 per year. What could you do with an extra $5,652.00 per year? Now how do you feel about “Should you Rent or Buy a Single Family Home?”

One benefit of owning is tax deductions. If a home owner itemizes on their federal tax return they may take a tax deduction for the annual mortgage interest paid and annual property taxes paid.

Possible Tax deduction for above scenario

$6,829.00 mortgage interest paid first year on loan, plus $2616.00 in property taxes paid the first year=$9,445.00 x 25% federal tax rate=$2,361.25 tax deduction.

(The actual tax rate will vary according to the owner’s income and is only an estimate for this scenario.)
$2,361.25 may be deducted from federal taxes.
$2,361.25 divided by twelve months is $196.77
$1,182.23 Effective monthly mortgage payment if owner itemizes and able to take deductions.
                 $1,379-196.77 = 1,182.23

OR

$667.77 Less than paying $1,850.00 in rent.
You can also think of it this way over 5 years of paying rent $1850 x 60 months = $111,000 and you own nothing.

Where as $111,000 is used towards Home Ownership

***(PLEASE CONSULT A CPA ON TAX INFORMATION)***

Conclusion:

Should you Rent or Buy a Home?

While there are many reasons to rent or buy; this article compares the average monthly rental amount paid for a single family home in Greater Phoenix compared to the amount of a monthly mortgage payment using a scenario to purchase the average priced single family home in Greater Phoenix. If analyzed only by the amount of the monthly payment buying trumps renting in the example given.

If you’re thinking about buying or renting, please call me for more information.

"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio Cell: 623-810-4824
Executive Sales Associate
Keller Williams Integrity First Realty
Email: joseph.dambrosio@kw.com
Website: www.Arizona-HomeBuying.com
Website: www.Arizona-HomeBuying.kwrealty.com

Phoenix Metro Area Market Report for September 2012

Market Report for September 2012
Here is the Market Report for the period ending August 2012. For a more thorough understanding of how the market is shifting and how this affects you, please give me a call and we can discuss it in more detail.

(click on any picture for a larger image)
Closed Sales Report Analysis:

Sellers:

As is typical in the month of August, we saw a slight increase in the number of sales last month, increasing by 6.2% over the prior month. The statistics show that we had 6,713 residential homes sell in the month of August in Maricopa County. It will be important to watch this trend over the next few months to see if we are following the same patterns of the prior two years that are analyzed in this report.

Buyers:
For buyers, this means that competition for homes still remains very high. We continue to see homes continuing to sell well above list price AND cash buyers being the ultimate winners in the bidding war, especially when homes are priced below $200,000. Buyers should continue to carefully work with me to understand the market AND how they can compete with the market demand and other buyers who may be in a financial position that is more appealing to the seller.

Distressed Sales Analysis:

The market continues to shift, as we saw 56.7% of sales in the month of August classified as “non-distressed” sales. This is the highest number in the 36 month reporting period. Bank-owned sales dropped from 14.1% to 13%, and short sales increased from 29.6% to 30.3%. Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.


Average Sales Price Analysis:

Sellers:
The trend of a lower average sales price continued in the month of August, dropping by 3.5%. However, this follows the trends for the month of August in the prior two years. The month of August showed a decrease in the average sales price from $204,057 to $196,857; this remains the 5th highest average price in the 36-month reporting period. Sellers should continue to watch this trend as they are pricing homes in today’s market. It is now more important than ever that sellers continue to price according to the market and understand how the current market will apply to your individual area and/or home. It will also be important to monitor the impact this trend begins to have on appraisals and finding qualified buyers at these higher prices.
.
Buyers:
For buyers, it is absolutely critical to be aware of this shift in the price of homes. This decrease does not necessarily mean that buyers have more buying power than they did in the prior month – it could simply mean that higher-priced homes are not moving as quickly over the summer months. There is no doubt that the low inventory has created competition for the current inventory, and that this high demand is impacting prices. More than ever, you need to work with me to make sure you have the best possible information regarding the market value of homes and to carefully monitor this trend to see how it will impact the availability, pricing, and terms associated with purchasing a home.
List to Sales Price Ratio Analysis:

Sellers:

From March to June, we saw this ratio steadily increasing and then a drop in July. August saw this number rebound and become the 2nd highest number in the 36-month reporting period –to 97.98%. This is the ratio a seller receives when selling his/her home as compared to the price where the home was. The higher the number, the closer the final sales price is to the listing price. With the competitive nature of the market, this ratio still remains very high, and in homes priced under $150,000, we are seeing this ratio remain ABOVE 100% -- that means buyers in those price ranges, on average, are paying MORE for a house than the list price of the home. Continue to watch this trend, as it will continue to impact how homes should be priced in the current market in order to appeal to the buyers.

Buyers:
Buyers need to pay attention. As this average moves closer to 100%, on lower priced/highly desirable properties, buyers are discovering more and more in the lower price ranges that they may have to pay above list price AND they are competing with investors who are bringing cash to the transaction. Since a home must appraise in order to obtain a loan, underwriters are still looking very closely at prices and making sure that homes are selling at or below market value.
This could mean that investors have an advantage if they are willing to pay higher than the list price. Call me to help you understand the competitiveness of the list price of the home you are wanting to purchase. You also need to be aware of the interest and sales activity in the area where you are wanting to buy and how the offer you are making competes with the market AND with trends relative to the price where homes are selling in the areas you have an interest.

The numbers above represent the entire Phoenix MLS.
Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?


I would be very happy to get you that information. Just let me know.
 
Joseph D'Ambrosio
Executive Sales Associate
Keller Williams Integrity First Realty
18940 N. Pima Road Ste 100
Scottsdale, AZ, 85255
Cell: 623-810-4824
 
 

Wednesday, June 27, 2012

Phoenix Metro Area Market Report for May 2012

Here is the Market Report for the period ending May 2012.  Prices are the highest they have been in 3.5 years, inventory continues to fall, and homes are selling faster than ever.

For a more thorough understanding of how the market is shifting and how this affects you, please give me a call and we can discuss it in more detail.

(click graph for larger view)
Average Sales Analysis:

Sellers: Attention! For 9 months, we have seen the average sales price increase from what appears to be the bottom of the market that we hit in August of last year. May saw an increase in our average sales price by 6.5% to $210,145. This is highest average since November of 2008! For the first time in 3 ½ years, we have broken the $200,000 barrier! It is now more important than ever that sellers continue to price according to the market and understand how the current market will apply to your individual area and/or home. It will also be important to monitor the impact this trend begins to have on appraisals and finding qualified buyers at these higher prices.

Buyers: For buyers, it is absolutely critical to be aware of this shift in the price of homes. This increase means that buyers once again have less buying power than they did in the prior month. There is no doubt that the low inventory has created competition for the current inventory, and that this high demand is impacting prices. The days of buying a $60,000 home may be a thing of the past!  More than ever, you need to work with your real estate professional to make sure you have the best possible information regarding the market value of homes and to carefully monitor this trend to see how it will impact the availability, pricing, and terms associated with purchasing a home.
 

(click graph for larger view)
New Listings Analysis:

Sellers: The month of May saw an increase of 117 new listings entering the market as compared to the month of April. It is actually normal to see new inventory decrease in this month, so the market appears to be varying from the trends of the prior 2 years.  At a time when buyers are competing to find a home, May saw the 4th lowest number of new inventory in the 36-month reporting period. Sellers should monitor this new inventory to see how it might impact the sale of their home. In this great market, it is even more important that sellers need to make sure they remain as the top choice for active buyers in the marketplace. If your home is not selling in this aggressive market, it is more than likely a pricing issue – buyers are still looking for the best value possible.

Buyers: Buyers pay attention! May brought you 8,092 more options!  This is potentially good news as buyers continue to submit multiple offers on available inventory. More than ever, it is essential that you take advantage of this new inventory.  Spend time with me and we can develop your strategy for succeeding in a market that is constantly changing.
 

(click graph for larger view)
 
Months of Inventory Analysis:(This report  has been generated by taking the number of active listings and dividing it by SALES for the past month)

Sellers: The high demand for residential properties in Maricopa continues to have a significant impact on the available inventory. The month of May saw a 5% DECREASE in this number, resulting in only 1.3 months of inventory. This is by far, the lowest number we have seen in the 36-month reporting period. This is a dramatic change from the 22.74 months of inventory we had a few years ago. This statistic means, that on average, we continue to remain in an even stronger “seller’s market” that is identified when this statistic reflects less than 5 months of inventory. Although this traditionally means that sellers will have more control in a sales transaction than the buyer, it is essential that you are meeting with your real estate professional to determine the ACTUAL market in your area. You may find that you have more or less control than the average.

Buyers: Buyers will want to seriously monitor this as well, as it indicates that there is extremely low inventory. We remain in a very strong seller’s market.  A seller’s market traditionally gives less control to buyers and can create significant competition for the current inventory. The current low inventory is resulting in homes selling more quickly, at a higher price, and with fewer concessions for buyers. However, the type of market will vary from price range to price range and even area to area.  Let’s have a discussion to make sure you understand the type of market you are in.
  (click graph for larger view)
Distressed Sales Analysis:
May statistics are having us seeing even more green, as non-distressed sales are becoming more and more prevalent in today’s real estate market! Green is the color of non-distressed sales, and we are seeing these properties become a much larger piece of the pie! We continue to shift toward a more traditional market—May bank-owned sales decreased by 1.7%. Short sales increased by 2.1%, and traditional sales INCREASED by .6%. At one point, traditional sales accounted for only 28.5% of home sales – the tide has definitely turned!

This statistic means that the competition from foreclosure properties continues to decrease while traditional sales from sellers with equity continue to increase the percentage of activity in our current market.

Sellers and buyers need to monitor this trend to see how the market continues to respond to the current inventory.
 
The numbers above represent the entire Phoenix MLS.
Would you like to know what is happening in your neighborhood?
Would you like to know the value of your home?
Do you need help deciding whether to sell or not or would you like to know if now is the right time to buy?

I would be very happy to get you that information.
Just hit the Reply and let me know.
 
 
Joseph D'Ambrosio
Executive Sales Associate
Keller Williams Integrity First Realty
18940 N. Pima Road Ste 100
Scottsdale, AZ, 85255
Cell: 623-810-4824

Thursday, March 1, 2012

DO’s and DON’Ts FOR A SMOOTH LOAN APPROVAL

DO’s and DON’Ts
TIPS FOR A SMOOTH LOAN APPROVAL

Here is a list of helpful tips to ensure an effortless, delay- free loan process.

·         DO continue making your mortgage or rent payments
·         DO stay current on all existing accounts
·         DO keep working at your current employer
·         DO keep the same insurance company
·         DO continue living at your current residence
·         DO continue to use your credit as normal
·         DO call us if you have any questions

·         DON’T use any of your credit cards without a discussion with us first
·         DON’T apply for new credit (even if you seem to be pre-approved)
·         DON’T make a major purchase (car, RV, boat, jewelry, furniture, etc.)
·         DON’T transfer any balances from one account to another
·         DON’T pay off charge offs without a discussion with us first
·         DON’T pay off collections without a discussion with us first
·         DON’T pay off any loans or credit cards without discussion with us first
·         DON’T close any credit card accounts
·         DON’T change bank accounts
·         DON’T consolidate your debt onto 1 or 2 credit cards
·         DON’T take out a new loan
·         DON’T start any home improvement projects
·         DON’T finance any elective medical procedure
·         DON’T open a new cellular phone account
·         DON’T join a new fitness club
If you encounter a special situation, it is best to mention it to us right away so we can help you determine the best way to achieve your goals


For Mortgage Questions or needs contact Jeff Armstein or Real Estate Questions or Needs contact Joseph D'Ambrosio at the number below,

"Opening The Door To Opportunity and Your Future Home..."
Jeffrey Arnstein                        Joseph D'Ambrosio
Senior Mortgage Banker                     Executive Sales Associate
AmeriFirst Financial, Inc.                    Keller Williams Northeast Reality
15111 N. PIMA RD Suite 110             2005 W. Happy Valley Rd #150
Scottsdale, AZ 85260                         Phoenix, AZ, 85085
(602) 363-6030                                   Cell: 623-810-4824
Email: jarnstein@amerifirst.us           Email: joseph.dambrosio@kw.com
                                                            Website: www.Arizona-HomeBuying.com
                                                            Website: www.Arizona-HomeBuying.kwrealty.com

Distressed Property Report - February 2012

Distressed Property Report - February 2012

Gathering intelligence on Short Sales and Foreclosures is now easier with the Distressed Property Report. This report contains three interactive maps: short sales, foreclosures and a map of all distressed properties. Each map is a snapshot of the active distressed property aggregated by ZIP Code. The January 2012 Distressed Property Report can be found here.

There are no "from" and "to" dates on the Distressed Property Report because the data is Active properties in the system on the day the report is published. The "Percentage of Actives" shows what percentage of Active listings are distressed in each ZIP Code. Each map is displayed below:

Clicking a dot on any map will display more information (example). Just like a Google Map, the maps below can be zoomed, panned and moved.
SHARE THIS REPORT:
Facebook Twitter More...
 

 Short Sales as of 02/29/2012:

 Foreclosures as of 02/29/2012:

 All Distressed Properties (Short Sales and Foreclosures) as of 02/29/2012:


"Opening The Door To Opportunity and Your Future Home..."

Thank you
Joseph D'Ambrosio
Joseph D'Ambrosio                             Cell: 623-810-4824
Executive Sales Associate                  Fax: 623-399-9832
Keller Williams Northeast Reality      Email: joseph.dambrosio@kw.com
Website: www.Arizona-HomeBuying.com  Website: www.Arizona-HomeBuying.kwrealty.com

Tuesday, February 28, 2012

IMPORTANT: Information that will affect FHA BUYERS!


Here is some IMPORTANT information that will affect FHA BUYERS!

FHA is Increasing the Upfront MIP from 1.0% to 1.75%.  It is also increasing the Monthly Insurance Premium from 1.15% to 1.25%.  Both increases will take affect with case numbers assigned on or After April 1st.

That means for a Purchase Price of $150,000 the increase will raise the monthly mortgage payment by approx $18 per month.  Although the announcement says the Upfront Premium will add approx $5 per month to the average borrower, it conveniently left out the additional 0.1% increase in the Annual MIP which raises it another $13 per month.

Buyers have to have accepted purchase offers prior to March 31st.


FHA TAKES ADDITIONAL STEPS TO BOLSTER CAPITAL RESERVES
New premium structure will help protect FHA’s MMI fund
WASHINGTON – As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund, Acting FHA Commissioner Carol Galante today announced a new premium structure for FHA-insured single family mortgage loans.  FHA will increase its annual mortgage insurance premium (MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above that amount.  Upfront premiums (UFMIP) will also increase by 0.75 percent
These premium changes will impact new loans insured by FHA beginning in April and June of 2012.  Details will soon be published in a Mortgagee Letter to FHA-approved lenders.
“After careful analysis of the market and the health of the MMI fund, we have determined that it is appropriate to increase mortgage insurance premiums in order to help protect our capital reserves and to continue encouraging the return of private capital to the housing market,” said Galante.  “These modest increases are one of several measures we are taking towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain a valuable option for low- to moderate-income borrowers.”

The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the annual MIP it collects by 0.10 percent.  This change is effective for case numbers assigned on or after April 1, 2012.  FHA is also exercising its statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500.  This change is effective for case numbers assigned on or after June 1, 2012.
The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount.  This increase applies regardless of the amortization term or LTV ratio.  FHA will continue to permit financing of this charge into the mortgage.  This change is effective for case numbers assigned on or after April 1, 2012.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.  These marginal increases are affordable for nearly all homebuyers who would qualify for a new mortgage loan.  Borrowers already in an FHA-insured mortgage, Home Equity Conversion Mortgage (HECM), and special loan programs outlined in FHA’s forthcoming Mortgagee Letter will not be impacted by the pricing changes announced today.
Taken together, these premium changes will enable FHA to increase revenues at a time that is critical to the ongoing stability of its Mutual Mortgage Insurance (MMI) Fund, contributing more than $1 billion to the Fund, based on current volume projections through Fiscal Year 2013.

 

For Mortgage Questions or needs contact Jeff Armstein or Real Estate Questions or Needs contact Joseph D'Ambrosio at the number below,

"Opening The Door To Opportunity and Your Future Home..."
Jeffrey Arnstein                        Joseph D'Ambrosio
Senior Mortgage Banker                     Executive Sales Associate
AmeriFirst Financial, Inc.                    Keller Williams Northeast Reality
15111 N. PIMA RD Suite 110             2005 W. Happy Valley Rd #150
Scottsdale, AZ 85260                         Phoenix, AZ, 85085
(602) 363-6030                                   Cell: 623-810-4824
Email: jarnstein@amerifirst.us           Email: joseph.dambrosio@kw.com
                                                            Website: www.Arizona-HomeBuying.com
                                                            Website: www.Arizona-HomeBuying.kwrealty.com


Wednesday, February 15, 2012

What You Need To Know When Buying Your First Home.

Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.
Before You Start:

  • Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
  • Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
  • Think about your lifestyle and how it might affect your choice of home and neighborhood.
  • Do a little research on current home prices in the neighborhoods you plan to target.

Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.
Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment0% - 20% of purchase price
Home Inspection$200 - $500
Points$1,000 and up for 1% - 3%
Adjustments3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
Summary:

  • Buying a home can mean building significant value through the years.
  • Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
  • Pre-qualifying with your lender is a good way to determine how much house you can afford.
  • You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
  • In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
  • Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
  • Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
  • Remember to consider resale value when buying your home.

Wednesday, February 8, 2012

What's hot and not in home styles this year.

What's hot and not in home styles this year.

 

This year's designated New American Home is being featured as part of the International Builder's Show.
Photo: flickr | International Builders' Show

Modern gets the thumbs up.
Spa-like and eco-sensitive, the  “New American Home 2012” being unveiled in Orlando this week by the National Association of Home Builders in conjunction with the International Builders’ Show, is a warmer take on the classic “White Box” of mid-20th century modern design.
“A lot of people want a spa feeling and a spa look that’s very analogous to modern,” said Luis Juaregui, a Texas-based American Institute of Architects accredited architect. The 4,200 square foot, $3.5 million gray stone and glass home has free flowing entertaining spaces,  floor to ceiling sliding glass doors, a stone staircase with open risers, clear glass balustrades and clean geometric lines, tempered by dark wood cabinets, area rugs and soft furnishings.

Still, to fit into more traditional looking neighborhoods, architects are increasingly going hybrid, mixing distinctly modern, techno-savvy interiors with colonial details, Tudor-style roofs or Craftsman-inspired touches on the exterior.
A home to call one’s own has long been part of the American Dream. But as tastes, technologies and regional preferences change, propelled by demographics and the socio-economic climate, the style, scale and comforts of that coveted real estate evolve.
During the bigger- is-better 1980s and 1990s, homes ballooned in size.  Compact single story ranch and cape cod styles gave way to ever grander two-story neo-colonials. When the economic bubble burst, they retrenched. These days, downsizing is cool; supersized McMansions towering over smaller homes are not.


Stephen Melman, director of economic services at the National Association of Home Builders said that houses shrank about 10 percent from their 2,500 square foot peak in 2007, and are expected “to get smaller and more efficient” with open floor plans, master bedrooms on the first floor and dining rooms distinguished only by a chandelier or architectural detail. One-story ranch homes, post World War II suburbia’s signature easy style, are slowly regaining favor, thanks to first time buyers with tiny tots and aging baby boomers seeking accessibility.
Craftsman style homes, popular before World War II, are also enjoying a revival, said Gary D. Cannella, an architect in Bohemia, N.Y.  “It’s the style not the size.” Adaptable to sizable abodes or small bungalows, these one or one and a half story homes boast  low-pitched rooflines, tapered columns, oversized eaves, gables and the front porches “that everyone wants and no one sits on.”
The split level, a hallmark of suburbia in the Brady Bunch era, is nearly obsolete. Despite the aerobic benefits of tri-level living, “all you do is walk up and down stairs all day long,” Cannella says. “You can’t go anywhere without steps.”
Here are the hot and not-so-hot home styles for 2012:

What's Hot in 2012

Style: Modern
Price: $399,000 to $29 million


The New American Home in Winter Park, FL looks ready for entertaining.
Photo: flickr | International Builders' Show

Description: Aligned with the mid 20th-century counter classic design movement, modern is characterized by no fuss floor plans with combined dining, relaxing and entertaining spaces,  clean, geometric lines, low slung roofs, and technologically advanced materials like concrete, steel and glass.
Why They Are Appealing:  Easy, functional and bright, with walls of glass and open spaces, today’s modern is eco-sensitive and forward thinking, with state of the art kitchens and “smart house” technologies, though developers often prefer modern interiors with more traditional skins.
Where You’ll Find Them: Nationwide, with striking examples in the Hamptons, Santa Monica and other tony beach environs.
Style: Neo-Mediterranean
Price: $300,000 to $6 million-plus


Neo-Mediterranean home styles are becoming the Sun Belt standard.
Photo: Jauregui Architect

Description: Red tile roofs, stucco walls, archways, towers and heavy wooden doors with a Spanish or Tuscan flavor.
Why It’s Appealing: The Southern European style and materials work well in warmer climates and match the landscape. 
 Where You’ll Find It: California, Florida, Texas, Southwest
The Flip Side: While northern European style homes are vanishing from the Sun Belt, in chillier climates such as the Northeast, two story center hall colonials still reign.
Style: Craftsman
Price: $249,000 to $2.8 million


Craftsman-style homes have become an American classic.
Photo: flickr | roarofthefour

Description: Often referred to as Arts and Crafts bungalows, Craftsman-style homes have low-pitched roof lines, overhanging eaves supported by decorative brackets, gables, front porches with tapered square columns,  exposed roof rafters, handcrafted wood and stone flourishes.
Why They are Appealing: This one to one and a half story style shouts cozy. With an emphasis on natural materials and decorative details, it works well for larger homes and small bungalows.
Where You’ll Find Them: coast to coast

What's Not So Hot in 2012


Style: McMansions
Price: $350,000 to $10 million +

McMansion's were a sign of success before the bubble burst.
Photo: flickr | FunnyBiz

Description:  Sometimes called colonials on steroids or oversized neo-eclectic houses, these super-sized jumbles of   styles and decorative details from colonial to Victorian, have  brick, stone,  vinyl or composite veneers.  A product of the  latter part of the 20th century and the knock-down era of the bubble before the burst, they often replaced smaller homes on lots  not suited to their hulking size.


Why they are not appealing: Pretentious, over-sized energy guzzlers, overshadow surrounding homes and out of sync with the economic climate’s downsizing trend. 
 The Flip Side: Well-designed mansions on properly sized lots and in appropriate settings such as golf course or lakefront communities are still hot.



Style: Split Levels
Price: $91,900 to $2,850,000


Split-level homes, with many steps, have lost market appeal.
Photo: flickr | Sportsuburban

Description: A Ranch style house divided into at least three parts by short flights of stairs leading up on one side, down on another, dividing entertaining spaces  from private areas such as bedrooms and separating formal rooms from more casual playrooms and dens. 

 Why they are not appealing: This darling of the 1950s, 60s and 70s is outdated and complicated to maneuver with steps at nearly every turn.
Where You’ll Find Them: 1950s/60s/70s suburban subdivisions nationwide.


 Style: Victorian
Price: $299,000 to $2,850,000


Victorian homes are charming, but almost no one builds them like this anymore.
Photo: TBoard

Description:  Turrets and towers, wraparound  or granny porches and gingerbread trim with Queen Anne, Gothic or  Italianate flourishes  are the hallmark of these turn- of-the-20th-century two and three story homes with plenty of nooks and crannies. Why They Are Not Appealing: While it’s hard not to love their colorful eccentricities, Victorians are challenging to rehabilitate or maintain. Their warrens of small rooms aren’t conducive to 21st century lifestyles.
Where You’ll Find Them: Urban neighborhoods, historic districts, small towns, older suburbs 
 The Flip Side: Newer neo-eclectic homes borrow whimsical features from true Victorians, touting turrets, towers and porches in maintenance free materials.


By Marcelle Sussman Fischler, Yahoo! Real Estate
February 6, 2012

Tuesday, February 7, 2012

Paradise Valley Real Estate Luxury Home Market Update | January 2012

January 2012 Positive News for The Luxury Home Market


Paradise Valley Real Estate Market Update | January 2012

The Two Charts below show Average Sales Price per Sq. Ft. from 2002 – 2012 in all of Maricopa County (Graph 1) and Paradise Valley (Graph 2).

Although we were at the Top of the Market in 2005, there were NEGATIVE SIGNALS of the Leading Indicators (i.e. Inventory) that forecasted a drop in the market in 2006.

The Paradise Valley Market was not hit as hard as the whole of Maricopa County and according to the Leading Indicators (as outlined below), Paradise Valley is in recovery.

Good News!




LEADING MARKET INDICATORS THAT SHOW REAL ESTATE PRICES WILL RISE:

# 1 - 6 have to be in a favorable position for Prices to Rise.

1. Cromford Report Index - this shows Supply & Demand.

2. Days Inventory – 365 x (Active Listing Count) / Sales Per Year - This is the Average Number of Days it takes to sell the current inventory (based on Annual Sales)

3. Pending Listing Count - This is the number of Homes on the Market that have Offers and are due to close escrow. It is the best indicator of increased sales

4. Contract Ratio - 100 x (Pending Listings + AWC Listings (Home that has an offer but has a Contingency)/Active Listings - Contract Ratio of above 50% is a "HOT" market

5. Monthly Sales Volume – Level of Sales/Month

6. Listing Success Rate - # of properties listed vs. # of properties that are actually sold

Numbers 1 - 6 need to be FAVORABLE before prices rise (#7 & #8)

7. Pending $/SF

8. Sales $/SF



#1. LEADING INDICATOR: CROMFORD REPORT FOR ALL OF ARIZONA

**Michael Orr created the Cromford Index which measures Supply & Demand. It is adjusted seasonally and yearly.

An index of 100 = a balanced market
Above 100 = a Seller’s Market (More Buyers than Homes on the Market)
Below 100= Buyer’s Market (More homes on the market than Buyers)

Maricopa County has been in a Seller’s Market since January 2011 with a Cromford Index of 154…the highest it has been since 2005!


CROMFORD REPORT FOR PARADISE VALLEY:

In late June 2010, Paradise Valley became a Seller’s Market, just above the 100 index mark.


Generally it takes 12 - 18 months for prices to Rise after a Change in Supply & Demand, however, since prices went up so steeply and the Real Estate Market was so crazy, it may take a little longer.

The good news, prices in Paradise Valley have remained somewhat stable throughout 2011. And, the Average Annual Sales Price for Paradise Valley is at 2004 levels (with the Price/Sq. ft. at 2003 levels).


As of January 12, 2012, Supply (Inventory) has dropped to an extremely low level (81.6) and Demand has shot up to 125.6, giving Paradise Valley a Current Market Index of 153.9.

Low Supply, High Demand = Prices Increase.

AGAIN, GOOD NEWS!


#2. LEADING INDICATOR: DAYS INVENTORY MARICOPA COUNTY
Calculation: 365 x (Active Listing Count/Sales Per Year)

The graph below shows that the Number of Days it will take to sell all of the homes on the market has been decreasing since March 2011.

DAYS INVENTORY is at the same level it was in July 2006.

In Paradise Valley, Days Inventory was at it's lowest in August 2005....and prices hit their peak in February 2007.

So, we are moving in the right direction.


#3. LEADING INDICATOR: PENDING LISTING COUNT - PARADISE VALLEY

Below we are comparing Pending Listings from 2004 to 2011.

Currently, in Paradise Valley, 2010 and 2011 Pending Listings are at a higher level than in 2008 and 2009 and moving toward 2004 & 2005 levels.


#4. LEADING INDICATOR: CONTRACT RATIO – MARICOPA COUNTY

The Contract Ratio compares how many homes on the market receive offers VS. how many homes remain active.

The higher the number...the HOTTER the market.

A Normal Ratio is 30 - 40. Currently, the Arizona Market is at 95 and has been in a HOT MARKET since April 2011.

FYI - A group of approximately 200 Luxury Agents in Paradise Valley meet every two weeks to discuss the Real Estate Market and Tour Homes. It is apparent in the last year that sales in Paradise Valley and picked up considerably!

More good news!


5. LEADING INDICATOR: MONTHLY SALES VOLUME – PARADISE VALLEY

In May/June 2011, Sales Volume in Paradise Valley almost reached the same level as 2004/2005.

2006 to 2009 Sales were way below 2010, with 2009 dipping down to 6 Sales/month

It looks like 2012 is mirroring 2005 to date.

Because indicators #1 - #4 are favorable…we expect the Monthly Sales Volume to continue to rise.



#6. LEADING INDICATOR: LISTING SUCCESS RATE – MARICOPA COUNTY

This is the number of homes that are listed in the MLS that SELL.

For Maricopa County, at the beginning of 2008, only 1 in 4 homes sold that were listed. TODAY, 3 in 4 homes (approx. 75%) are selling. YIPPEE!



The historic norm is 65%!

For homes between $400,000 and $800,000, the Listing Success Rate is at approx. 55% rising from 12% in 2009.

For homes over $800,000, Listing Success Rate is currently at 44%, and continues to rise.

The Market is definitely on the mend!


CONCLUSION

The previous 6 Leading Indicators all point to a recovery in the Real Estate Market.

As indicated earlier, when there is a change in Supply and Demand…it takes approximately 12 – 18 months before prices start to rise.

The Chart below shows that List Price/ Sq. Ft. of Pending Listings has held steady in 2011. The Paradise Valley Market changed from a Buyers Market in June 2010...18 months ago.


All of the 6 Leading Indicators are FAVORABLE and we should start seeing prices rise in Paradise Valley in 2012.

So, if you are BUYING, BUY NOW.