What is a short sale? It's a sale where the bank or lender holding the note, or mortgage on the property, accepts less than what is owed. Some of my clients jokingly ask why it's called a short sale because it oftentimes takes weeks, even months, for the lenders to approve the short sale. Kind of an oxymoron. But the term "short" is because the seller is coming up short of what they owe.
Short sales have been on the rise since the housing market started its downward spiral. A lot of property owners -- due to loss of income and financial hardship -- are attempting short sales as an alternative to foreclosure or just walking away from the home.
Consider this...in September, 2008, approximately 2% of closings were short sales or 1 out of every 50 closings. In October, 2008, about 3% or 1 out of every 33 closings was a short sale. In January, 2009, short sales rose to 9% or one out of every 10 closings. In October, 2009, short sale closings were 19% or 1 out of every 5 closings. In June 2010, short sales accounted for 24% or 1 out of every 4 closings. It is expected that sometime in 2011, short sales may rise to 33% or 1 out of every 3 closings in the greater Phoenix market.
This statistical information provided courtesy of Fletcher Wilcox, VP of Business Development at Grand Canyon Title Agency in Scottsdale, Arizona.
Monday, August 9, 2010
Friday, June 25, 2010
Home Buyer Tax Credit Extension All But Dead!
The home buyer tax credit extension bill appears to have failed.
The grab-bag bill many home buyers have been on tenterhooks about -- because it had an amendment extending the closing deadline for the $8,000 federal tax credit -- is officially dead.
Supporters in the Senate have given up trying to pass the American Jobs and Closing Tax Loopholes Act, so the deadline to settle on a tax-credit deals remains June 30. The Senate had approved an amendment to the bill that would had tacked on an extra three months for the estimated 100,000-plus buyers who are still waiting for paperwork to go through.
Lucien Salvant, a spokesman for the National Association of Realtors, said the measure might still come to be through another bill. But with just a few days left, "it's coming right down to the wire."
"The anxiety level among home buyers who have to wait to close ... is very high," he said.
If Congress decides to pass an extension in, say, July and make it retroactive, some of these deals might have already fallen apart in the meantime, Salvant noted.
The grab-bag bill many home buyers have been on tenterhooks about -- because it had an amendment extending the closing deadline for the $8,000 federal tax credit -- is officially dead.
Supporters in the Senate have given up trying to pass the American Jobs and Closing Tax Loopholes Act, so the deadline to settle on a tax-credit deals remains June 30. The Senate had approved an amendment to the bill that would had tacked on an extra three months for the estimated 100,000-plus buyers who are still waiting for paperwork to go through.
Lucien Salvant, a spokesman for the National Association of Realtors, said the measure might still come to be through another bill. But with just a few days left, "it's coming right down to the wire."
"The anxiety level among home buyers who have to wait to close ... is very high," he said.
If Congress decides to pass an extension in, say, July and make it retroactive, some of these deals might have already fallen apart in the meantime, Salvant noted.
Friday, April 9, 2010
Traditional Sales on the Rise in the Phoenix Area
One can't listen to the news these days without hearing about short sales or foreclosures of homes. But if the numbers are any indication, there is good news on the horizon in the Phoenix area housing market.
According to data provided by First American Title Agency, traditional sales accounted for 40% of all Phoenix area home sales last month. That's up 18% from March of 2009. Of the 7,568 homes sold in Phoenix last month, 3,043 were traditional sales, meaning neither a foreclosed/bank-owned property nor a short sale. A short sale is a pre-foreclosure where the lender has to agree to sell the home for less than the amount owed. In March of 2009, traditional sales accounted for 22% of all home sales.
Of the 7,568 home sales in March, 40% were REO or bank-owned properties and 20% were short sales. Seventy two percent of sales were priced at under $200,000 and 21% were priced from $200,000 to $399,999. That means 93% percent of homes sold were priced under $400,000.
March of this year also saw an increase in sales of 27% over February, when 5,499 homes closed. Compared to March of 2009, sales were up just under 10% from 6,828.
We are seeing an increase in the number of short sales and a decrease in the number of bank-owned properties. And even though "traditional" or "normal" sales are on the rise, we still have a long ways before we're out of the woods.
As of this morning, there were a total of 34,637 single family homes for sale in the greater Phoenix area and a total of 13,740 "pending" which means there is an accepted contract on the home and it should "close" shortly. As the inventory goes down, demand increases, which is what we want if we want to see home values rise. Unfortunately, the short sales often take months to close while the seller waits for a response from the lender, so that keeps the inventory from being depleted in normal time frames.
If you have any further questions or comments on the Phoenix area housing market, please don't hesitate to contact me.
According to data provided by First American Title Agency, traditional sales accounted for 40% of all Phoenix area home sales last month. That's up 18% from March of 2009. Of the 7,568 homes sold in Phoenix last month, 3,043 were traditional sales, meaning neither a foreclosed/bank-owned property nor a short sale. A short sale is a pre-foreclosure where the lender has to agree to sell the home for less than the amount owed. In March of 2009, traditional sales accounted for 22% of all home sales.
Of the 7,568 home sales in March, 40% were REO or bank-owned properties and 20% were short sales. Seventy two percent of sales were priced at under $200,000 and 21% were priced from $200,000 to $399,999. That means 93% percent of homes sold were priced under $400,000.
March of this year also saw an increase in sales of 27% over February, when 5,499 homes closed. Compared to March of 2009, sales were up just under 10% from 6,828.
We are seeing an increase in the number of short sales and a decrease in the number of bank-owned properties. And even though "traditional" or "normal" sales are on the rise, we still have a long ways before we're out of the woods.
As of this morning, there were a total of 34,637 single family homes for sale in the greater Phoenix area and a total of 13,740 "pending" which means there is an accepted contract on the home and it should "close" shortly. As the inventory goes down, demand increases, which is what we want if we want to see home values rise. Unfortunately, the short sales often take months to close while the seller waits for a response from the lender, so that keeps the inventory from being depleted in normal time frames.
If you have any further questions or comments on the Phoenix area housing market, please don't hesitate to contact me.
Monday, March 15, 2010
Phoenix Area Home Sales Continue to Rise in February
Phoenix area home sales rose nearly 13% in February as compared to January of this year; and just over 14% from February of 2009.
A total of 5,559 single family detached homes were reported sold in the Phoenix area MLS, Multiple Listing Service, this February as compared to 4,929 in January of this year and 4,869 in February of 2009.
Of those sales, 5,152 or 93% were priced up to $399,999 and 407 were priced at $400,000 and above. Bank-owned or foreclosed properties accounted for just over 40% of those sales; short sales or pre-foreclosures, 23%, and just under 37% were traditional sales (not bank-owned or pre-foreclosures).
We are seeing a drop in foreclosed property sales, an increase in the number of short sales or pre-foreclosures and also an increase in the number of traditional sales.
As of today, there are 30,368 active lsitings in Maricopa County; 35,263 if we add western Pinal County and Queen Creek and there are 13,356 properties pending, which means under contract.
At the peak, we reached about 62,000 active listings about two years ago and in 2005, when prices peaked, we had only about 9,000 active listings. Real estate prices, as with most purchases, are very dependent on the law of supply and demand; the great the demand, the higher the prices and the greater the supply, the more prices are driven down.
A total of 5,559 single family detached homes were reported sold in the Phoenix area MLS, Multiple Listing Service, this February as compared to 4,929 in January of this year and 4,869 in February of 2009.
Of those sales, 5,152 or 93% were priced up to $399,999 and 407 were priced at $400,000 and above. Bank-owned or foreclosed properties accounted for just over 40% of those sales; short sales or pre-foreclosures, 23%, and just under 37% were traditional sales (not bank-owned or pre-foreclosures).
We are seeing a drop in foreclosed property sales, an increase in the number of short sales or pre-foreclosures and also an increase in the number of traditional sales.
As of today, there are 30,368 active lsitings in Maricopa County; 35,263 if we add western Pinal County and Queen Creek and there are 13,356 properties pending, which means under contract.
At the peak, we reached about 62,000 active listings about two years ago and in 2005, when prices peaked, we had only about 9,000 active listings. Real estate prices, as with most purchases, are very dependent on the law of supply and demand; the great the demand, the higher the prices and the greater the supply, the more prices are driven down.
Monday, March 8, 2010
Fifty-three Days Remaining for Home Buyer Tax Credit!
As of today, March 8, 2010, current and prospective home buyers have 53 days left to obtain an executed purchase contract to meet the First Time Tax Credit or Move Up Tax Credit. That means if one has an accepted purchase contract on a home by April 30th of this year, and it closes by June 30th of this year, first time home buyers can file for a tax credit of up to $8,000 and step up buyers can file for one of up to $6,500.
The Worker, Homeownership, and Business Assistance Act of 2009 tax credit was extended late last year and added the step up buyer program. The tax credit applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 to qualify.
The Worker, Homeownership, and Business Assistance Act of 2009 tax credit was extended late last year and added the step up buyer program. The tax credit applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 to qualify.
Tuesday, February 23, 2010
Are Mortgage Interest Rates on the Rise?
There's been speculation for several months that mortgage interest rates will rise because 1.) they've been artificially low for some time and 2.) because the Fed can't continue to fuel our economy by buying our own mortgage-backed securities in mass. Typically, we depend on foreign and other investors to invest in our economy but with the recent downturn, there's been an effort by our our Fed to help our ailing economy by purchasing our own mortgage-backed securities, a move that many have predicted will cool down starting next month.
Last week, the Federal Reserve raised its discount rate, the rate at which banks can borrow money directly from the Federal Reserve. While at least one local mortgage banker tells me this move has very little immediate impact on rates, the action was viewed as the first step towards the removal of emergency measures to stem the economic downturn.
Also, Fed Chairman Ben Bernanke recently said that the Fed is likely several quarters away from raising rates and draining stimulus money.
Housing starts, which are a key indicator of how the housing market will fare, have been positive as of late. And many are considering home improvement mogul Lowe's fourth quarter earnings as another sign that the housing market is making a move in the right direction. The retailer announced double digit profit gains during the last few months of 2009. Home Depot is expected to release their figures any day now.
This week, and in weeks to come, we could begin to see mortgage rates become more volatile as the market takes in all the news coming out of the Fed. We'll also get new and existing home sales data this week. With housing and employment as the weakest link, any positive news could have an impact on rates.
As of Feb. 22 - early afternoon -- the 30 yr. fixed conforming loan rate was 5.125% with an APR of 5.169%; 15 year fixed conforming rates were 4.500%, APR 4.570%; 5 yr. ARM (Adjustable Rate Mortgage) Conforming, 3.875%; APR, 3.334% and the five year I/O ARM Conforming 4.125%, APR 4.101. Keep in mind that these rates are a moving target but this gives you a ballpark of where they currently reside. Check with your lender for more detailed rate information.
Last week, the Federal Reserve raised its discount rate, the rate at which banks can borrow money directly from the Federal Reserve. While at least one local mortgage banker tells me this move has very little immediate impact on rates, the action was viewed as the first step towards the removal of emergency measures to stem the economic downturn.
Also, Fed Chairman Ben Bernanke recently said that the Fed is likely several quarters away from raising rates and draining stimulus money.
Housing starts, which are a key indicator of how the housing market will fare, have been positive as of late. And many are considering home improvement mogul Lowe's fourth quarter earnings as another sign that the housing market is making a move in the right direction. The retailer announced double digit profit gains during the last few months of 2009. Home Depot is expected to release their figures any day now.
This week, and in weeks to come, we could begin to see mortgage rates become more volatile as the market takes in all the news coming out of the Fed. We'll also get new and existing home sales data this week. With housing and employment as the weakest link, any positive news could have an impact on rates.
As of Feb. 22 - early afternoon -- the 30 yr. fixed conforming loan rate was 5.125% with an APR of 5.169%; 15 year fixed conforming rates were 4.500%, APR 4.570%; 5 yr. ARM (Adjustable Rate Mortgage) Conforming, 3.875%; APR, 3.334% and the five year I/O ARM Conforming 4.125%, APR 4.101. Keep in mind that these rates are a moving target but this gives you a ballpark of where they currently reside. Check with your lender for more detailed rate information.
Sunday, February 21, 2010
Stormy Weather in the Desert
We've been having a lot of rain in the Valley of the Sun lately. I love the way the storm clouds hover over the mountains before, during and after the desert rains. Today I was able to escape the hectic pace of life for a while and take in some of the magnificent sky and desert beauty right after one rain storm and just before another. These were taken at the McDowell Sonoran Preserve Trail in Scottsdale at the Gateway Loop Trailhead.
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