Jessica Steele

And I mean, we knock it out of the park. As much as I wish we were talking about the Diamondbacks (I'll pretend to be a fan), what I am really referring to is . . . da da da daaah . . . THE HOUSING MARKET. Just when you thought Phoenix was falling far behind in the game of real estate, she is coming out first in one arena. Phoenix has taken the largest hit in the home price index out of 20 major U.S. cities. That's right people. We here in the Valley of the Sun have made a grand slam. And we aren't talking baseball.

But that's not good, right? Well no, by most people, it isn't. Although Phoenix has the sour distinction and salty taste of first in this category, however, this report dates back to January, and we have seem some slight market changes since then. Further, the S&P Case-Shiller Home Price Index notes that across the nation in general, home prices were down 2.8 percent from December of 2008, and down 19 percent from January of last year. There isn't a city that isn't suffering. And here in the Valley? We are up to a 35 percent annual drop in home values in the greater Phoenix metro area. Cities falling close behind? Las Vegas with a 32.5 percent drop, followed by San Francisco and Miami. (Prices are now comparable to where we were in late 2003.)

So, with all 20 major cities included in the survey showing a negative home value, is there hope? Well, as I have stated many times, it isn't all the doom and gloom it is cracked up to be. For those on the buyer's side of the spectrum, this market, that has home owners and would-be sellers scrambling, has the opportunity to change their lives. Those in the lower-income bracket are now receiving an opportunity at home ownership for the first time in their lives, which we see as more and more first-time home buyers begin to flood the market. And what are they buying? Try to put a bid on a decent foreclosure or short sale in this market and tell me if you don't find yourself up against multiple offers. There IS real estate happening out there, it is just all about your attitude, perspective, and how you choose to find it.

The news isn't all entirely bad.

Finally, a step in the right direction! After all of the media hype we are all drowning in with regards to the failing economy and the foreclosure crisis, it is about time that someone helped us start whistling to a different tune. We understand where we are at economically (not in a good way), but instead of dwelling on how horrible it is, we need to do something about it. The city of Surprise is doing just that. Finally - a call to action.

Surprise, AZ is currently experiencing one of the worst foreclosure situations in the Valley of the Sun. In fact, recently, the number of foreclosures inundating the market here grew to 1,400 - an alarming number. For the reason, Surprise City Council has recently approved what they are calling the Abandoned and Foreclosed Property Action Plan, hoped to help current and future residents plaqued by the foreclosures in the area.

So what does this plan entail? City officials will begin working directly with the banks who own foreclosed properties in the area, remind them to keep their REO (real estate owned) properties up to code. Yards and landscaping must be maintained, or the banks could face up to a $2,500 daily fine per violation. Further, banks and property owners are being asked to sign what is known as an arrest form to help police who are cracking down on squatters, or people who un lawfully occupy abandoned properties. It is the hope that these aspects of the plan will help eliminate the crime that often comes to an area when a surplus of abandoned houses are on the market.

Another great aspect of this plan is helping to reduce the number of foreclosed properties in the area by addressing the current inventory of foreclosed homes. Having recently received approximately $2.2 million from the Neighborhood Stabilization Program, the city will have the ability to purchase at least 12 foreclosed properties in the area to refurbish, and then resell to residents who qualify with the help of the Homebuyer's Assistance Program. Although certain income stipulations do apply, this is a great way for homeowners to assist in ameliorating the current foreclosure crisis. For more information, feel free to visit the city of Surprise's website, www.surpriseaz.com, and click on "Foreclosure Help".

In a market inundated with foreclosures and short sales, there is a common misconception from consumers that almost anything qualifies as a short sale. Although these transactions are much more common than in the past, and banks and agents alike are becoming more experienced in how to handle them, there are still several issues that arise in a short sale that do not in the "normal" re-sale transaction. Here are some important questions for both buyers and sellers to consider when thinking of listing or writing an offer on a short sale.

1. How many months are you (they, if you are the buyer) behind in your payments? If the seller is not far enough behind, most banks will not be willing to negotiate a short sale, and may instead attempt to do a loan modification, or some other workout plan with the homeowner.
2. When is the Trustee's Sale? Is there going to be enough time to list the property and get offers? If you are the buyer, you want to make sure you have time to negotiate with the bank before the actual sale date. Often, upon receiving an offer, banks will postpone the sale date if it is in the near future, but agents must be aware of when the sale date is and address this with the bank immediately.
3. Have you (the seller)kept in contact with the bank about your current financial situation? The Loss Mitigation department will typically be your contact department in the short sale process. They will require a short sale package, including a financial worksheet, hardship letter, and other important financial documents before approving any offer.
4. How many loans are on the property, and with what banks? One loan is easier to negotiate than two, and some banks facilitate the short sale process more than others. If there are two loans, if they are with the same bank, the approval process is also much quicker. Time is always of the essence in any real estate transaction, but especially with a short sale. The number of loans on a property can significantly influence this time line, and is a matter worth investigating.
5. Did you (the seller) re-finance or take out a line of credit on the home? If so, many times the bank will not negotiate a short sale. The loan does not fall under the Anti-Deficiency law, and debt CAN be collected legally after a short sale or foreclosure.

Once these initial questions are answered, there are many other things to consider, especially on the part of the seller. For example, are you prepared to have an accepted offer on your home? Are you making plans to move out? These will be questions to address with your agent after these initial questions are answered.

Over the past few weeks, quite a few clients have encountered about the First-Time Homebuyer Tax Credit. Who does it apply to, and what exactly does it mean? Here is a simple breakdown of the credit, and who it affects.

The First-Time Homebuyer Tax Credit was recently expanded as a part of the new economic stimulus bill (The American Recovery and Reinvestment Act of 2009). It is hoped to assist new homebuyers who are currently on the fence, debating on whether now truly is "the time to buy". But who does this credit apply to? What is the definition of a first-time homebuyer?

By law, a first-time homebuyer is any individual who has not owned a home in the past three years. Only single taxpayers with an income of up to $75,000, or married couples with a combined income of up to $150,000 qualify for the full credit, however. Further, if married, both partners must not have owned a home in the past three years. If two non-married individuals are purchasing the property, the credit can be split amongst the individuals who qualify for the credit, but the total credit cannot exceed $7,500 for homes purchased in 2008, and $8,000 for those in 2009.

For homes purchased between January 1, 2009 and December 1, 2009, the credit is equal to 10% of the purchase price of the residence, but cannot exceed $8,000. This credit will not need to be paid back if the owner continues to live in the home for 3 years without selling it. For buyers who purchased a home between April 9, 2008 and December 31, 2008, the credit works the same, but cannot exceed $7,500. The tax credit, however, works like an int erst-free loan, and must be paid back over a 15-year period.

So, how does a tax credit work? How are shown the money, right? Let's talk income tax time. If you are liable for $8,000 when filing a tax return, for example, the credit would wipe out that liability. You owe nothing, but you do not gain anything either. If you already had the $8,000 deducted from your pay check throughout the year, however, you would receive the $8,000 as a refund. If you owe less than $8,000, and qualify for the tax credit, the IRS will write you a check for the difference.

As always, for specific questions on taxes and how new laws and legislation apply to you personally, it is always best to consult a specialist in this area. This is just a rough outline of what you can expect from this credit as we move through 2009. Happy buying!

It seems that everyone is in a tiff about what is going on with the Phoenix real estate market. On networks all across the Midwest they are broadcasting how horrible things are here in Phoenix, and what an awful time it is to be in the housing industry. While I typically scorn the dramatic, teenage-like news drama, in this instance, it has actually brought me some business. As old friends call to see how I'm doing, they often mention a friend or two who are heading west. Not only do I get the rare opportunity to converse with people back home, but I get a little business in the process - an added bonus. Keep broadcasting doom and gloom, I say! This week, I will support it!

But is it really all doom and gloom here in Phoenix? And, the million dollar (or $150,000) question: Is it the right time to buy? Here are a few statistics, and pointers, to answer some of my most frequently asked questions.

Is Phoenix real estate really as horrific as the nation is making it out to be? I think that question highly depends on your perspective, but I will share with you that there are currently less homes listed in the MLS (approximately 38,000 single-family homes) than at this time last month. So, one can assume, to a certain extent, that people are buying. My partner and I are currently closing short sale transactions in approximately 30-45 days, and the banks seem to be more on target than in the previous months. Even with two different buyers canceling on various short sale listings this past week, we still managed to get them back under contract within five days. There are people house hunting. Buyers do exist.

So how do youknow that now is the right time to buy? Financial analysts and mortgage brokers can advise you in this area (yes, mortgage rates are historically low, and there is an $8,000 new tax credit for first-time home buyers), but in the long run, no news report or statistics can assist you in answering this question. It needs to be personally pondered by no one other than lil o YOU. (Doesn't being an adult suck?) Here, however, are some questions you might consider to help you reach your conclusion.

1. What is your current financial situation? Is it stable? Do you have job stability? Are you running a single, or dual-income home, and could that change at any point in time?
2. Where and what do you want to buy? Looking for a 3,000 sq. ft. home with gorgeous granite counter tops and up-teen upgrades in a private, gated community in North Scottsdale, for example, is still going to cost you some money. You might find the same in Buckeye, however, for $120,000. There are bargains to be had, but not everything out there is a steal.
3. What condition do you want your new home to be in? You can find some great deals out there right now, but how much money are you willing to put into a property before you can truly call it your own?

Buying a home is an incredibly important, personal decision, and should depend on a great deal of factors before you launch into the home-buying process. Only you can truly know how the Phoenix real estate market can help (or hurt) you.