Low availability of resale Homes in the Phoenix area enable quick sales for home Sellers as Buyers compete for Homes!
The residential real estate market is changing quickly in the Phoenix region. Many Sellers are finally able to sell their homes, but qualified home Buyers are having difficulty acquiring a home. The following article helps explain why.
------------
by Catherine Reagor - Mar. 10, 2012 11:25 PM
The Republic | azcentral.com
Phoenix-area homebuyers squeezed out by investors
Many potential homebuyers who sat on the sidelines watching metro Phoenix's house prices fall during the past five years are back in the market, ready to take out a mortgage and move in.
But many are finding they cannot buy.
Armed with a preapproved mortgage and even enough cash for a hefty down payment, they bid on foreclosed homes and houses up for short sale -- but are outbid by investors buying houses for cash on the spot.
Traditional homebuyers, who typically make an offer contingent on other steps such as an appraisal and securing the loan, find they can't compete with someone who is willing to pay up front the entire asking price or more.
Tight supply makes the competition even stiffer.
Home resales, averaging 7,500 a month, are at their highest level since the peak of 2005-06. But the number of homes for sale is at the lowest level in more than a decade. There currently are about 23,000 homes for sale in metro Phoenix, one-third of the area's housing inventory in 2009.
With demand for houses high and supply so low, many are drawing multiple bids.
That is not to say the bidding wars are driving up prices in the overall housing market nearly as much as they did in boom times. Median resale prices remain near the bottom of the lows to which they fell after the housing crash and wave of foreclosures that began in 2007.
But those low resale values have kept many traditional sellers out of the market, too, experts say. Many homeowners don't have enough equity to sell, or just don't see enough profit to make selling and moving worth it.
The result is that much of today's bidding is on foreclosure homes or short sales, where banks approve a sale for less than the current borrower owes.
And in these cut-rate homes, cash is king.
Foreclosures have declined in recent months, as banks increasingly approve short sales to help residents avoid foreclosure. The drop in foreclosure inventory is working to push up home prices a little each month.
Most metro Phoenix homes for sale are still considered great deals. Market watchers agree that long-term investors paying cash will lead to fewer empty homes and a better market overall.
But for the housing market to truly recover, they say, it must see a return of the regular participants: homeowners confident enough to put their houses on the market, and perhaps more importantly, regular buyers with mortgages and jobs who can afford to buy homes of their own.
"Phoenix's housing market is in a state of fast changes," said Mike Orr, real-estate analyst for Arizona State University's W.P. Carey School of Business.
"Prices are ticking up, and buyers are getting more and more frustrated they can't find homes," said Orr, who also publishes daily real-estate analysis called the Cromford Report.
Traditional buyers
Nakisha and Lenny Williams heard about the great deals for Phoenix foreclosure and short-sale homes more than a year ago. The couple began searching online. The low prices for homes built just a few years ago helped them decide it was time for a move.
The young couple quit their jobs, sold their Chicago-area home for a modest profit and relocated to Phoenix, where they found new jobs fairly quickly and rented an apartment while they shopped for a home. But the Williamses have been outbid on at least five homes so far and have been waiting for more than a month to hear back on their latest bid on a Litchfield Park house.
Nakisha Williams works for a water company. Though Lenny Williams recently lost his construction job, the couple have been saving for a down payment and are preapproved for a mortgage they can afford, if their offer of $120,000 for the home is approved.
"It's crazy for buyers now," said the couple's real-estate agent, Yvette McDonald of Monopoly Realty. "The Williamses are still looking for other homes while they wait to hear back from the lender on the Litchfield Park home, but we can't find anything that is still available by the time we make an offer."
She has several other potential buyers in the same position, making multiple offers that aren't accepted or are topped by other bidders, especially investors.
Investors
Andy Rysdam has $10,000 for a down payment and is preapproved for a mortgage to buy a home for as much as $175,000. Recently, his real-estate agent found a potential house listed late in the afternoon. They went to see it first thing the next morning, and already there were seven other offers on it.
"It's the investors getting the best homes. They have cash," said Rysdam, who is renting and not giving up on buying a home despite already being beaten out by investors several times.
Cash buyers, who are typically investors looking to resell the properties or use them as rentals, account for nearly 60 percent of all Phoenix-area homebuyers now, according to data compiled by AZBidder.com, an online foreclosure-auction service.
"We are seeing multiple offers on any decent home," said Rysdam's agent, Brett Barry of Phoenix's HomeSmart. "These are different than the bidding wars from the boom, but buyers are getting more and more aggressive as the inventory of homes for sale continues to shrink."
Scottsdale real-estate agent Diane Watson is working with a Canadian investor who wants to spend $10 million on metro Phoenix homes that can be turned into rentals.
Wealthy investors can make more money buying foreclosure or short-sale homes in growing areas like Phoenix and renting them for seven to 10 years until prices rebound than they can on most other investments now.
Watson can't find enough homes for her Canadian investor and is considering approaching homeowners underwater on their mortgages and late on their payments to sell through a short sale even before their lender suggests it.
"I am about to go door to door," she said. "People don't realize they have the short-sale option because the deals have been so hard to do in the past, but not now."
Laura Gonzales thought she had found the home of her dreams in Phoenix. The elementary-school teacher has been renting a house in north Phoenix's Desert Ridge area since she moved from California in 2007.
As foreclosures have climbed in her neighborhood and home prices have fallen, she has slowly saved for a down payment. In January, she found "the perfect home" listed for short sale just a block from where she's renting. The house was bigger, and her monthly mortgage payment would be less than her rent.
She made an offer the day it was listed for sale. But already a dozen other offers had been made. She upped her offer by $10,000, but at least two investors upped their offer by twice as much.
The home ended up selling for almost $200,000 -- more than $50,000 over the asking price.
"It was heartbreaking," Gonzales said. "And last month, the same thing happened to me on a house I didn't want nearly as much, but I felt like I had to keep bidding because the homes I like are going so fast in this area."
Diane Brennan of Scottsdale's Keller Williams Integrity First Realty said the housing market is crazy now. "It's nearly impossible to buy a home in the $100,000 range," she said. "I've got tons of buyers and no properties to sell them. One home in south Scottsdale got 43 offers."
A rush to avoid higher prices
Metro Phoenix's median existing-home price has been steadily ticking up since last August when it fell to a 12-year low of $113,000. In February, the median price for the region was up to almost $123,000, according to a monthly analysis from AZBidder. All types of homebuyers see metro Phoenix's prices finally rising and want to close a deal before they go higher.
Some first-time buyers with Federal Housing Administration financing have a bit of an advantage now, said real-estate agent Barry.
Those buyers are required to put down only 3.5 percent, so they can often keep bidding with investors, knowing that if they win and the appraisal doesn't come in that high, the lender will have to lower the price to meet the housing agency's requirements.
Banks might boost supply of homes
Banks still hold many of the homes they took back through foreclosure in recent years; the rush to buy could push them to put more on the market.
"If lenders are holding back on foreclosures and waiting for a sign the homes will sell, well, the time is now," said Jim Sexton of Phoenix's Realty ONE Group. "Real-estate agents and buyers are all frustrated. The demand for homes is real."
Lenders did slightly increase the number of new notices of foreclosure they sent last month, which could mean more short sales or foreclosures for buyers to choose from in the next few months.
Housing analysts say the current buying frenzy may run its course in six months and not create a lasting recovery. Experts say the region's housing market won't really recover until regular homeowners, who can afford their mortgages, feel like they can sell and make a decent profit -- not the profit of 2006, but enough to pay off their mortgage and net a slight profit if they bought before 2000.
Regular buyers, who have to put down 10 to 20 percent for a mortgage, might have to wait for those regular sellers to put their homes on the market, creating enough supply to ease the bidding frenzy. When demand is strong enough that multiple bids are made on houses owned by homeowners, not lenders, that will be a strong sign of a return to a normal market.
"Once sellers begin to realize the market is recovering, and they can actually make some money on their home, then the market will truly start to stabilize," said ASU housing analyst Orr.
Home Owners in Phoenix, Scottsdale and surrounding cities... you can SELL YOUR HOME NOW, even if debt is greater than value! You may wonder, why do home owners who could not sell their homes for years, finally have the opportunity to sell NOW!
The answer is simple:
First, and most important, there are not enough homes for sale in the Phoenix area to meet current Buyer demand.
That's right, with historically low interest rates, and a large number of investors with cash in the market, there simple are not enough homes in the Phoenix, Scottsdale region for both investors and traditional buyers. When demand exceeds supply, prices go up as well, setting the conditions for folks to sell the home they've been wanting to sell, and enabling them to move on with their life plans.
Second, Lenders have changed their practices and are now cooperating with Home Owners to allow Short Sales to succeed.
In other words Lenders are willing to recoup less than the amount that is owed to them. Lenders are realizing they can get a better return of their money through a short sale as opposed to a foreclosure. So, if you're home is worth less than the debt on it, the timing may be right for you to sell the home as a Short Sale NOW!
What to do in 2012
The first step in deciding when to sell your home is to get an accurate home valuation. Click here for a FREE Home Valuation report on any property you own.
If you have equity in your home you can sell it in a "traditional" mannor. If you have negative equity you can still sell your home as a "short sale". The short sale process is different than a traditional sale and requires a Realtor who is specially trained to manage the entire transaction. As a CDPE designated Realtor (Certified Distressed Property Expert), I am uniquely qualified to assist you through through the short sale process to a successful close. Click here to learn more about short sales and other home owner options you may want to consider this year.
For a personal, private consultation with regard to your real estate options in 2012, please feel free to contact me.
John Ciallella
Realtor, CDPE
Licensed in Arizona
Phone: 480-220-3275
email: jciallella@cox.net
Changes are occuring quickly in the Phoenix area Real Estate Market. Here's a recap of what has happened in 2011, and where we are now!
The median price of a metro Phoenix home rose to $120,000 in December, its highest level since November 2010, according to the Information Market, a real-estate data firm. That was the first December since 2005 that the region's median price didn't drop.
"The housing market definitely saw the bottom in August or September of last year," said Mike Orr, new director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University. He continues as publisher of the "Cromford Report," an online daily real-estate market analysis. "I talked to 200 Realtors the other day, and almost all were much more positive about Phoenix's housing market then they were just two months ago."
Experts agree on roughly what a healthy market looks like: The number of home listings holds steady, and sales keep pace. Foreclosures are few, and median sales prices inch up steadily, but not so quickly that they become volatile. The end of 2011 began to look more like that ideal than it has in recent years.
Home sales climbed to almost 95,000 in 2011, a near-record for annual resales in metro Phoenix. During the boom, annual sales climbed above 150,000, although more than 60,000 of those deals were for new homes. Now, new-home sales are averaging about 600 a month. Arizona homebuilding analyst R.L. Brown said the construction of new houses won't pick up until the supply of inexpensive foreclosure homes dries up. New homebuilding could increase this year if foreclosures continue to slow.
The number of homes listed for sale in metro Phoenix is down to 25,000, compared with 43,000 a year ago, according to Cromford. Only 9 percent of the homes on the market are lender-owned foreclosures. A year ago, 20 percent of the homes were foreclosures that lenders were trying to sell inexpensively.
Foreclosures started to climb in late 2007 and peaked in 2010 at almost 50,000. Last year, the number of homes taken back by lenders fell by 16 percent from the year before. Pre-foreclosures steadily fell in 2011, so foreclosures could fall again this year.
It has been a year of ups and downs for the region's housing market, making it more difficult to predict or time a recovery. One month, home sales were down and prices were up, while the next month foreclosures might tick up as home sales climbed. Metro Phoenix's housing market became fragmented during the crash. Inexpensive homes sold more quickly than luxury houses during the past few years, keeping the area's median home prices lower.
The market has also reverted to being driven largely by location. A house in north Phoenix might go for the asking price, while a house farther out in Queen Creek or Buckeye might sell in a short sale for half of what the owner owed.
Early in 2011, the Arizona Regional Multiple Listing Service's pending- sales index showed metro Phoenix's median home price would fall to $100,000. It didn't drop that much, although it did fall to $112,000 after hovering around $115,000 for the first six months of last year. But now that the region's median is climbing up, foreclosures and listings are down and sales are at a nearly record pace, a growing number of real-estate analysts say the market recovery has started.
"Six months ago, we saw a drop in prices coming. But based on other indicators, it was obviously going to be temporary," said Tom Ruff, analyst with the Information Market. "Now, we are finally seeing year-over-year gains in pricing and sales. The housing market's recovery is on track."
--------------------------------------------------------------------------------------------------------------------------
This writing is an excerpt taken from The Arizona Republic | azcentral.com, published Jan. 6, 2012
Need help with your housing situation? Click links below for help NOW.
www.AZShortSaleHelpforYou.com get help with short sales, Avoid Foreclosure
Searh the AZ MLS - Get help buying your next home
Phoenix Real Estate Market Update for Buyers and Sellers … What’s really happening!
Following is a statistical summery of the Phoenix area Real Estate Market as of September 10, 2011. If you are considering buying a home or selling a home you need to understand what is really going on.
Statistics that can help you plan your next real estate move…
These statistics suggest we are in a Seller's Market! However, all real estate is LOCAL, so we need to look at specific areas, to understand what is happening in communities you are interested in. Following are the months of supply by key areas of the Phoenix Valley.
MONTHS OF SUPPLY
East Valley: 2.5
NorthWest: 3.4
Paradise Valley: 8.9
Luxury ($1mil+): 18.6
Southwest: 2.8
Peoria/Glendale: 2.2
Camelback Corridor: 4.0
Cave Creek: 4.8
Ahwatukee: 3.2
Scottsdale: 5.0
Apache Junction: 2.6
Fountain Hills: 6.1
Buckeye: 2.7
Desert Ridge & Tatum Corridor: 2.3
What does this information mean ...
Now that you see the local months of supply, you can adjust your plans to buy or sell a property taking into account whether your property of interest is in a “Buyer’s” or “Seller’s” market.
Here are a few summary highlights to consider.
Sellers:
Good news! You can sell your home quickly if your property is in an area where months of supply are below 3, and if you list the property at today’s fair market value. If your home is in an area where months of supply is significantly above 3, you will need to wait longer to sell your home, but it can be SOLD!
Call me to learn how I can help you sell your property at the highest possible price: Call John at 480-220-3275
Buyers:
Good News! It’s a great time to buy a home, even if your area of interest is in a “Seller’s” market trend (below 3 months supply). Why…. because fair market value PRICES are LOW relative to peak prices of past recent years. Great values exist, but you will need to be prepared to make purchase offers at or above the home’s list price.
If your area of interest is in a “Buyer’s” market trend (above 3 months supply), you have an opportunity to purchase the property at a price below the seller’s asking price, depending on location, property condition, days on market, type of sale, etc.
Call me to learn how I can help you purchase the right property at the lowest possible price: Call John at 480-220-3275
Investors:
Opportunity is here to receive an excellent rate of return on your investment in rental property, or by implementing a buy and quick sell (“flip”) business model.
Call me to learn about my Investor Services. My team is ready to help you acquire property at Trustee Sale Auctions, or from Lender Owned or Short Sale opportunities: Call John at 480-220-3275
If you find this article of value, please pass it on to others you think can also benefit from it.
Best wishes,
John Ciallella
Phoenix area housing market gaining ground, new data shows
Are you wanting to take advantage of today’s housing market but are concerned about home values going forward? Well folks, it’s time to get “un-stuck”, as new housing market data for the Phoenix AZ area shows an increase in home prices.
Frenzied home-sales activity in June proved earlier speculation about a third dip in metro-Phoenix home prices to be untrue.
The median price of an existing home in the region climbed to $118,950 last month, after hovering at a real-estate crash low of $115,000 for six straight months, according to the Information Market, a realty-data company.
"Supply continues to drop while demand is extremely strong," said real-estate analyst Mike Orr, who publishes the online daily "Cromford Report."
Click here to read the full article
Learn how to invest in Phoenix area real estate with a safe strategy and a team of professionals ready to make it happen for you. You do not need to live in the Phoenix area to successfully invest in Phoenix area real estate... and you can use IRA or 401k money to do it!
Call or email me for more information.
John Ciallella
Phone: 480-220-3275
Email: jciallella@cox.net
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2012 ActiveRain Corp. All Rights Reserved
