Patrick Walsh, Realtor, CNE, Green - Tempe Arizona Real Estate

To serve a new wave of computer savvy real estate investors, an Arizona company, called Smart Arizona Foreclosures, has set up a website reminiscent of eBay, which offers online bidding for qualified cash buyers. Now you can bid on bank owned residential properties without even leaving your home! Sound too good to be true? We don't think so.

My associates at Smart Arizona Foreclosures have designed a streamlined website with a number of fail-safe devices (title search, photographs, minimum/maximum bids, etc.) to minimize the risk. In addition, my clients will have my assistance in double-checking property values, resale estimates, rehab charges, and other details.

Here's how it works:

• We have a preliminary conversation to establish your maximum purchase price, city/neighborhood preferences, ‘hold-and-rent' or ‘fix-and-flip' intentions, etc.

• You send $10,000 to be held in escrow for each purchase. (You also need to be able to wire the balance within 24 hours of a successful bid.)

• You sign up at the website for a buyer name and log in. You are now ready to select from a short list of properties coming up for auction in the next couple of days. (I will work with you to establish your parameters and set up your search.) We will request a title search and photos of the selected properties at this stage.

• When you find a property that fits your specifications, you enter your starting bid and your maximum bid, click ‘submit' and wait to see if you are successful. Monday's bids will be auctioned on Tuesday, Tuesday's bids on Wednesday, etc.

Of course, this opportunity is not for everybody but this is a way for ordinary investors to get access to the ‘county steps' auctions of bank owned properties which are normally not accessible to the general public. Bidding at these auctions has historically been a closed shop, with participation limited to a few experts who take all the spoils.

If you're interested, email me at pwalsh@kw.com or call me at 602-369-3224.

Real Estate prices are up for single family homes in the Phoenix Valley but you could have missed it if you hadn't read the end of two articles buried on page D-2 of the Wednesday and Thursday editions of the Arizona Republic.

As I have been saying for some time now, prices bottomed out in March of 2009.

On Wednesday we learned that Phoenix is one of 91 major cities out of 152 nationwide to post an increase in home prices during the past year.

This National Association of Realtors survey showed that prices of existing homes climbed 9.1% in the Phoenix area for the year ended March 31, 2010. You might have expected that kind of good news would have been a headline -- but no.

On Thursday, the following day, there was even better news ... yet again buried on page D-2 of the Republic's Business section: The median resale price for a single family home in April was $144,000, up 15.2% from $125,000 a year ago.

So there you have it. In historic terms, that is a huge increase. Several of my clients who have recently purchased homes at great prices realize that, if they had started nine months earlier, they might have realized even more of an increase. I had to confirm their speculation.

So what does all this news mean? It means the real estate market has officially bottomed out and that home prices are rising. Good news for homeowners hoping to sell in the not-too-distant future. And some homeowners may no longer be upside down.

To investors, I would say "the train is leaving the station." A conversation yesterday with one of the top REO (bank-owned property) realtors in our office confirmed that the number of foreclosed properties coming his way has slowed down to a trickle. At a recent national conference several of the large banks indicated they are severing their relationship with thousands of realtors. Apparently the banks are actively pursuing every possible alternative before going the foreclosure route. So MLS investment properties will be diminishing and those that do appear will create a bidding frenzy and prices at the wholesale end should start climbing again.

Attention investors:
My next blog will cover a new option for bidding on line for bank properties and getting them before they hit the MLS listings. Stay tuned.

Clients often ask me which home renovations, remodels and improvements will add the most value to their home when it comes time to sell. More accurately, the question is: which projects will provide the best return on investment (ROI). I have opinions, of course. But now I have some facts to back those opinions up.

In the January issue of Realtor magazine, an article entitled "Small Projects, Big Bang" summarizes the results of the Remodeling Cost vs Value Report 2009-10. The report outlined a number of different home improvement projects, costed them out in different metropolitan areas around the US and calibrated a percentage ROI on each one. There's a lot of detailed information in the Remodeling Cost vs Value Report 2009-10 article (and helpful hints on smaller projects) but here's my summary for the Phoenix market:

Curb appeal has always been important. A little front yard landscaping can go a long way to making a good first impression on buyers. However, you might also want to give your front door a good look. Replacing the front door with a mid-range product (approximately $1200) had the best ROI of all the improvements at 128%.

Several of the most worthwhile improvements are, not surprisingly, centered on the kitchen:

· add a breakfast bar (this can be as simple as cutting an opening in a wall, adding a bar and a couple of stools)

· upgrade the kitchen counter to granite tile (12" tile is a very affordable option compared with granite slab)

· cabinet fronts (check into refacing or replacing doors or perhaps just the hardware)

· tidy and organize kitchen cabinets (Yes, buyers open them so adding a roll-out tray or lazy susan can create the illusion of more space.)

• retile the backsplash to freshen or brighten or just clean up the look of your kitchen

Updating light fixtures is also a very cost-effective way to add value. Installing recessed canned lights on a dimmer switch can make any room more interesting. Pendant lights over a kitchen island are also appealing.

Look into replacing your single pane windows with energy-efficient dual or even triple pane windows. The energy savings alone make this a great investment while you are living in your home, but buyers also seem to really value this upgrade.

If you need any more information on remodeling or renovations, I keep a list of reliable vendors who could estimate your job for you. And I'm always happy to talk to you about plans for your home with a view to selling at a later date. But remember, don't make a change solely for the sake of resale. This project needs to be something that you and your family will enjoy for the length of time you live in your home.

Last week I attended the Arizona 2010 Real Estate and Business Forecast. Elliot Pollack, Valley economist who has been providing Economic Forecasts for more than 25 years, presented valuable information for homeowners, buyers, sellers, and renters. There was also a panel of real estate experts from both residential and commercial specialties who essentially confirmed what Elliot Pollack reported.

The main message from the seminar was this:

• Economic recovery will be slow... there is no silver bullet.
• Home values may not be on track until 2013.
• The barometers of real estate recovery will be:

1) population growth which will be driven by

2) job growth or vice versa.

• Energy technology (wind, solar, etc.) will be more important than ever for Arizona's economy. The semiconductor industry has gone overseas and don't expect it to be back soon. Aerospace will concentrate in areas of research centers (not Arizona).
• Economic recovery could take four years and thus the 2013 time frame for the real estate market's return to the highs of 2007.

For Renters:

Residential or commercial renters- now is the time to renegotiate your lease. There is a huge oversupply of rentals and landlords should be ready to take any deal they can get or they may have to see their properties empty and subject to vandalism.

For Buyers:

• First time buying a home? Now is the time.
• Buying a home is still cheaper than renting a home, but not for long.
• Interest rates have not been this low in years.
• The First-time Homebuyer Tax Credit will be available until this spring.
• Real Estate Deals are out there but the inventory of smoking deals is beginning to dry up.
• Talk to a mortgage lender and get qualified immediately.
• Affordability indices for the valley are at record lows.

"Buyers -- you can buy more house now you could at any time in the past 11 years." Elliot Pollack, Economist.

If you are considering purchasing a new home from a home builder, please remember it costs you nothing to have a buyer's real estate agent represent you. If you decide to not have a real estate agent represent you, then you have no-one looking out for your best interests. If you want a better deal for you and your family, be sure to call a real estate agent before you go out to look at those new homes.

For Homeowners:

• If you are happy in your home and not thinking of moving and can afford your mortgage, then count your blessings and enjoy your good fortune.

• If you are looking to cash in the equity in your home, then the longer you can wait the better.

• If you are thinking of moving up and you still have some equity in your home, then it is time to sell. (As your home value increases so will the cost of your new home.) And if you have been in your home for five of the last eight years, then there may be a tax credit available to you.

• If you are downsizing, then hang in there until you are good and ready to move.

• If you are upside-down and want or need to move, then a short sale may be a solution. It is a difficult and complicated path but we have some of the top short sale experts at our office and I would be happy to set up an appointment for you with them.

• If you are upside-down and want to reduce your monthly payments, you may want to start a conversation with your lender about loan modification.

Please call me to discuss any or all of the above scenarios. I am happy to help.

Happy Thanksgiving to you and your loved ones.

More of the same... this will be the third month that numbers have remained stable with regard to supply, demand and inventory. If you don't remember or didn't catch my August blog, please scroll down and read "By the Numbers" in the August Tempe Real Estate Market Update.

Home prices are up for the 4^th month in a row:

We have seen a slight up tick in average and median home prices.

Between April and July there has been a 9% increase in median and average price of homes sold in the Phoenix area. (Increasing from $115K to $125k and $160k to 175K respectively). If this continues that would represent almost a 30% increase in a year.

So what will it take till everyone else jumps on board and agrees that the market has turned? Just remember you read it here first....

Is it Time to Buy?

It is clearly still a good time to buy a home. There has only been a one month supply of foreclosures for sale for several months now. But remember, short sales continue to be "long sales" as the 10 month supply stays the same.

As the tax credit window continues to close, prices are starting to increase and I am sure interest rates will be next. Need I say more?

If you know someone who is thinking of buying or selling a home please forward this link to them....