Arizona Economy

Why Phoenix Metro is the #1 Turnaround Town

May 18, 2012 By Arizona Home Group Leave a Comment

How did Phoenix manage to take over the # 1 spot on Realtor.com’s list of Turnaround Towns?

Investors Scooped up the Bargain Priced Foreclosures.

Phoenix metro was one of the hardest areas hit by foreclosures. As a result the areas list prices were at record lows and attracted many cash buyers such as investors who purchased rental property. The influx of investors resulted in the rapid reduction of distressed property inventory.

The Phoenix foreclosure market was helped by cash Investors from Canada, seeking to purchase their winter homes and/or rental properties.

Now Phoenix is experiencing a Sellers market where the supply of homes for sale is less than that of the buyers demand. The median list prices are up 26.94% in the first quarter of 2012 compared to the first quarter in 2011. Phoenix experienced the largest increase in list prices of all of the metro areas monitored by Realtor.com

Helping the housing market recover faster here in Phoenix is the unemployment rate of 7.8% which is below the national average.

If the buyer demand continues at the pace it is now and inventory remains in check, it’s only a matter of time before Phoenix stabilizes and has lasting home value appreciation.

As the housing recovers, so does the job market.

Some Stats:
Year/Year MLP Appreciation up 26.94%
Year/Year Median Age of Inventory down32.94%
Year/Year Inventory down 48.04%

Filed Under: Arizona Economy, Arizona Home Buyers, Arizona Homes, Buying Homes in Arizona, Canadian Buyers, Cash Flow Property, Foreclosure, Foreign Investors, Housing Analysis, Investors, Investors in Arizona, MLS Search, Phoenix Home Sellers, Phoenix Homebuyers, Phoenix Homeowners, Phoenix Market Report, Real Estate, Real Estate Investors, Rental Property, Second Homes, Sellers, Vacation homes, Winter Homes

Mortgage Rates Drop to 60 Year Lows

May 14, 2012 By Arizona Home Group Leave a Comment

Mortgage loan rates are touching new 60-year lows, but many won’t be able to take advantage of them.

The lower rates will likely spur some homeowners to refinance, economists say. But mortgage standards remain so tight that many people won’t qualify for a loan if they want to buy a house.

Disappointing economic growth helped drive fixed 30-year mortgages down to an average of 3.84% this week, says mortgage giant Freddie Mac. That bested the previous record low of 3.87% in February.

Low rates are traditionally good for housing demand, but this time may be different. Rates are dropping on signs of slowing economic growth, which isn’t good for consumer confidence or housing demand.

“We should not be excited about lower rates for home purchases,” says Jed Kolko, economist for housing website Trulia.

The housing market has been showing signs of improvement. Existing home sales were up 5.2% in March from a year ago, the National Association of Realtors says.

Declines in home prices are smaller, and there are signs of bottoming in some markets.

Strong demand and tighter inventories sparked a nearly 2% rise in asking prices on homes for sale February through April, compared with the prior three months, new Trulia data shows.

After adjustment for seasonal factors, 92 of the USA’s 100 largest metro areas showed increases, Trulia says.

Demand for home loans is also up. The latest data from the Mortgage Bankers Association shows applications for home purchases on the upswing for the week ended April 27.

That shows people who need mortgages are beginning to add to improving home sales, says economist Paul Diggle of Capital Economics.

Consumers shouldn’t hold out for lower rates, says Guy Cecala of Inside Mortgage Finance.

“We’re near the lowest you’ll ever see,” he says.

Despite the latest drop, Freddie Mac still expects 30-year-fixed-rate loans to rise later this year to 4.25% or even 4.5%, Freddie Mac economist Frank Nothaft says.

Source: USA Today

Filed Under: Arizona Economy, Arizona Home Buyers, Home Financing, Mortgage Rates, Phoenix Homebuyers

RE/MAX Report:Phoenix Home Prices up 18.2% From Last Year

April 18, 2012 By Arizona Home Group Leave a Comment

RE/MAX issued a report that home prices in the 53 largest cities increased 5.8% in March from the same month last year, according to a report from real estate association RE/MAX. Phoenix is the fourth city in the list with an increase of 18.2%.

The homes sold in March had a median sales price of $184,525. It was the second-straight month prices rose higher than the year-ago period. Before February, home prices landed below year-ago levels for 18 consecutive months. But home sales steadily picked up over the last nine months.

In March, home sales climbed 1.5% from last year and jumped more than 25% from February, according to the report.

“With buyers starting to jump into this market, this year’s selling season is shaping up to be the strongest we’ve seen in years,” said Margaret Kelly, CEO of RE/MAX. “Although we don’t expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold.”

The homes sold in March spent an average 101 days on the market, down from 104 last year.

Inventory also dropped to a 5.3-month supply, a roughly 2% dip from February and the 21st consecutive monthly decline. The shadow inventory of foreclosed homes or those on the verge of repossession spans into the millions, and is anticipated to begin growing again as the robo-signing freeze thaws.

But RE/MAX anticipates housing to rebound through the selling season.

“Following these trends, the spring and summer months should experience increased activity. With falling inventory and many markets witnessing multiple offers with bidding competitions, prices are likely to continue to rise in many areas,” according to the report.

Source: John Prior, Housingwire

Have you seen our latest Housing Market Video Report for Phoenix?

Filed Under: Arizona Economy, Arizona Homes, Buying Homes in Arizona, Homeowners, Housing Analysis, Phoenix Home Sellers, Phoenix Homebuyers, Phoenix Homeowners, Phoenix Housing Market, Real Estate, Sellers

Is it Smarter to Buy or Rent?

March 30, 2012 By Arizona Home Group Leave a Comment

In the past couple of years it may have been cheaper to rent than buy. This may not be the case today. In this current market where 71 percent of the cities in the U.S., owning is now cheaper than renting.

Due to the record number of foreclosures brought on by the housing bust, millions of homeowners became renters. The demand for rentals increased and so did the rental prices. Many experts are predicting that rents will continue to increase as much as 5 to 10 percent over the next 5 years.

If you are on the fence about buying vs. renting, you may want to consider the following:

What’s the best hedge against inflation?
Real Estate has keeps pace with or exceeds the rate of inflation. Everyone today is concerned about the level of federal spending. A key concern is inflation. Hard assets — real estate, gold and silver, among them — have historically served as hedges against inflation. In fact, even in the areas hit hard by foreclosures, virtually all of them have shown substantial increases in real estate values when viewed in the long term.

Record low interest rates
A major reason to consider purchasing now is that interest rates are close to all-time lows. Increasing interest rates add up fast. An interest increase of 1 percent results in about a 25 percent increase in interest costs over the life of a 30-year fixed-rate loan. An increase of two percentage points in interest results in a whopping 50 percent increase in the amount of interest paid. That’s why it’s smart to buy now when rates are at historic lows.

Waiting for the Market to Bottom Out?
The market may have already bottomed with the decrease in Inventory now vs. six months ago. If the number of months of inventory is declining, that lets you know that you may have already reached the bottom of the market. On the other hand, if the number of months of inventory is still increasing, then there’s a good chance you haven’t hit bottom yet. Not sure? Ask your local Realtor for the latest market report in your city.

Build your wealth, not that of your Landlord.
When you purchase, you lock in a payment at today’s interest rate. Assuming that there is inflation at the average rate of 2.54 percent per year (the U.S. average), 10 years from now your monthly payment will be the equivalent of 75 cents on the dollar.

In other words, a $2,000 payment 10 years from now would be the equivalent of $1,500 in today’s dollars. In 20 years, it would be the equivalent of $1,000 in today’s dollars. In contrast, renters may continue to receive rent increases.

An additional benefit of homeownership: each month you pay your mortgage, you accumulate equity. In contrast, renters are paying down their landlord’s mortgage, allowing the landlord to accumulate the wealth rather than them.

Thus, in the long term, for some individuals it’s almost always smarter to buy rather than rent.

Filed Under: Arizona Economy, Arizona Home Buyers, Foreclosure, Home Buyers, Homeowners, Housing Analysis, Mortgage Rates, Personal Finance, Phoenix Homebuyers, Phoenix Homeowners, Phoenix Housing Market, Real Estate, The Economy

Phoenix Home Prices Are Up & Foreclosures Are Down

March 26, 2012 By Arizona Home Group Leave a Comment

Metro Phoenix home prices are up. Fewer inexpensive homes are for sale, and the number of pending foreclosures is down.

The positive housing-market update comes from Arizona State University’s newest real-estate report.

It’s the first monthly housing analysis from Mike Orr, who was recently named director of the Center for Real Estate Theory and Practice for ASU’s W.P. Carey School of Business.

“Single-family home prices overall in the Phoenix area have been moving up since they reached a low point in September,” Orr said in his debut monthly housing report.

“Also, looking forward, I expect a declining trend in foreclosures.”

Orr also publishes a daily online analysis of Phoenix-area housing indicators called the “Cromford Report.”

The median price of all home sales, including new homes, reached $120,500 in January of this year, Orr reports. That compares with $113,166 a year earlier.

The average price per square foot of Valley houses has climbed 3 percent since last year.

There were approximately 8,000 new and used homes sold in January, up from 7,500 in January 2011.

Orr said investors have snatched up the oversupply of homes for sale under $300,000.

“Many people think there’s a glut of homes the banks are hiding somewhere, and that may be the case in other markets, but not here in the Phoenix area,” he said.

“We’ve gone through so many foreclosures that the system has been working itself out for about five years.”

In January, there were 2,450 single-family foreclosures in both Maricopa and Pinal counties, compared with 4,200 during January 2011, according to the ASU report.

The supply of homes listed for sale in metro Phoenix is down 42 percent from a year earlier.

Source: by Catherine Reagor – Feb. 23, 2012 06:35 PM
The Arizona Republic | azcentral.com

Filed Under: Arizona Economy, Arizona Home Buyers, Buying Homes in Arizona, Foreclosure, Home Buyers, Homeowners, Investors, Investors in Arizona, Phoenix Home Sellers, Phoenix Homebuyers, Phoenix Homeowners, Phoenix Housing Market, Phoenix Market Update, Real Estate, Scottsdale Homes

Phoenix Foreclosures Expected To RiseThis Spring

March 19, 2012 By Arizona Home Group Leave a Comment

Total filings have started to rise again, says RealtyTrac.

In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.

A “foreclosure filing” is defined to include any one of the following foreclosure-related events:

The serving of a default notice
A scheduled home auction
A bank repossession.

Nationally, the number of foreclosure filings fell 2 percent from January. However, it’s a trend that may reverse. Foreclosure volume is expected to rise over the next few months.

This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance.

Like all things in real estate, though, foreclosures remain local.

For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.

Nevada : 1 foreclosure for every 278 housing units
California : 1 foreclosure for every 283 housing units
Arizona : 1 foreclosure for every 312 housing units
Georgia : 1 foreclosure for every 331 housing units
Florida : 1 foreclosure for every 341 housing units

Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include :

Atlanta : 1 foreclosure for every 244 housing units
Chicago : 1 foreclosure for every 302 housing units
New York : 1 foreclosure for every 3,439 housing units
Seattle : 1 foreclosure for every 1,229 housing units
Washington : 1 foreclosure for every 1,198 housing units

One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It’s no wonder foreclosed homes are in high demand among today’s home buyers.

However, if you plan to buy a foreclosure in Arizona , be sure to work with an experienced real estate agent. Foreclosed homes are often sold “as-is”, and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections.

Filed Under: Arizona Economy, Arizona Home Buyers, Buying Homes in Arizona, Foreclosure, Home Buyers, Housing Analysis, Investors in Arizona, MLS Search, Phoenix Homebuyers, Phoenix Housing Market, Real Estate

Phoenix Monthly Market Report March 2012

March 9, 2012 By Arizona Home Group Leave a Comment

For March, 2012

Market is now officially “Off the Hook.”
Inventory still shrinking (Under 16,000 Homes)
New Inventory down again…
3.35 Month Supply
Average sale price up again in Feb (166k)…almost 10% since August.
Trends: REO’s/ Short Sales shrinking…now only 48% of market
Trends: Mid range (100-300K) pricing even stronger….51% of Sales
Rentals, rentals, rentals…why?
Buffett, Grant, others say “BUY” Sunbelt Real Estate = Income, Fixed Asset, Inflation Hedge
Rental Absorption rate now up to 57%…very strong
NEW TREND TO WATCH = NEW HOMES: Pre-built “Specs” are gone! New home starts on the rise…
National Housing recovery happening…Phoenix leading the way.

Let’s look at the numbers Month over Month (MoM)

(All Data provided by Arizona Regional MLS)

Filed Under: Arizona Economy, Arizona Home Buyers, Foreclosure, Home Buyers, Homeowners, MLS Search, Phoenix Housing Market, Real Estate

Expect Mortgage Rates to Rise on Strong Jobs Report

March 8, 2012 By Arizona Home Group Leave a Comment

Here in Arizona we have been experiencing all-time high home affordability, buoyed by the lowest mortgage rates ever, it’s been a terrific time to buy or refinance a home using a mortgage.

The good times may not last, though, so today marks an ideal time to lock a mortgage rate. Friday brings risk. Here’s why.

Since 2010, weak economic conditions have been a primary catalyst for low mortgage rates in Arizona. Over the last 12 months, though, manufacturing output has been rising, consumer spending has been climbing, and business investment has increasing.

In other words, the economy is improving. However, it’s the jobs market that’s believed to be the economic recovery keystone. When jobs come back, analysts say, so does the economy.

Assuming that’s true, a recovery may already be well underway.

According to the Bureau of Labor Statistics, the U.S. jobs market has grown for 16 straight months now, adding 2.5 million net new jobs along the way. It’s one reason why the February jobs report matters so much to housing.

Rate shoppers would do well to pay attention.

Friday, at 8:30 AM ET, the government will release its Non-Farm Payrolls report for February. Wall Street expects the report to show 210,000 new jobs were created in February, a figure slightly higher than the rolling, 6-month average for job growth. This would be a positive economic indicator.

If the analysts are correct, mortgage rates are likely to rise on the news, harming home affordability.

Furthermore, affordability could be harmed by a lot if the number of net new jobs created exceeds the 210,000 tally expected. It’s not a far-fetched scenario. Wall Street’s “whispers” put the actual jobs figure somewhere between 250,000-300,000. A reading like this would cause mortgage rates to spike and would add money to a prospective monthly mortgage payment.

If the idea of rising mortgage rates makes you nervous, consider taking your nerves out of the equation. Call your loan officer today. Lock your rate ahead of Friday’s Non-Farm Payrolls release.

Filed Under: Arizona Economy, Home Buyers, Loan Fees, Mortgage Rates, Real Estate, Refinancing

Boost Your Credit Score

March 1, 2012 By Arizona Home Group Leave a Comment

Whether you are buying a home, refinancing your home, getting a new job or renting an apartment, your credit score will be used as a determining qualifying factor.

When buying a home your credit score will be used to help determine whether or not you will get a loan and what you will pay for it. Your credit score may even determine the cost of insurance.

Many of you may be considering refinancing with the new HARP 2 program which will be available to underwater homeowners this month, and most likely your credit score will help you qualify for this refinance.

In this difficult economy it’s critical to know what’s on your credit report. It is especially important to know how to rebuild your credit report history after a financial setback.

You can request a free copy of your credit report from:

Equifax
Experian
TransUnion

You can order your free report from any of the companies above here: www.AnnualCreditReport.com. Your report may vary slightly which each company, so be sure to review each report carefully.

What factors are likely to influence your Credit Score:

Whether you repay your loans on time.
How much you currently owe on each account compared to it’s original loan amount or credit limit.
How long have you had your current loans and credit cards.
What types of credit cards you have, and how many recent “credit inquiries” you have.

How to improve your credit report and scores:

Pay your current loans and other bills on time.
Don’t automatically close accounts that have been paid in full or haven’t been used in awhile as this will lower your available credit.

Filed Under: Arizona Economy, Arizona Home Buyers, Buying Homes in Arizona, Canadian Buyers, HARP, Home Buyers, Personal Finance, Phoenix Homeowners, Real Estate, Refinancing

Phoenix Real Estate Poised for Turnaround in 2012

February 15, 2012 By Arizona Home Group Leave a Comment

Phoenix is ranked # 2 the list of the 6 TOP Turnaround Towns in Real Estate in 2012. We may be on our way out of the worse Housing Market Phoenix has ever seen.

Phoenix Median home price: $129,000
Growth: Homes sold 27 percent faster in the fourth quarter compared to the same period in 2010.
A factor in the recovery:An improving job market: Unemployment dropped to 7.7 percent in November, which beats the national average and is a 1.1 percentage point improvement over 2010‘s rate in the city.

Read about how we rank along side the other Top Turnaround Towns…..

Source: “Top 10 Turnaround Towns,” CNNMoney (February 2012)

Florida cities are expected to see some of the biggest recoveries in housing prices in the coming months, according to a new report by Realtor.com that reveals the top turnaround towns. In fact, the signs are already there with drops in inventories and distressed homes, as well as higher listing prices and increases in sales.

The following are the top six housing markets expected to see the biggest turnaround, according to Realtor.com.

1. Miami, Fla.
Median home price: $185,000
Growth: Sales volume of existing single-family homes has jumped 51 percent in the third quarter compared to 12 months prior.
A factor in the recovery: International clients are snagging up Miami homes: In May, they purchased 60 percent of existing houses and condos and 90 percent of newly built homes.

2. Phoenix
Median home price: $129,000
Growth: Homes sold 27 percent faster in the fourth quarter compared to the same period in 2010.
A factor in the recovery: An improving job market: Unemployment dropped to 7.7 percent in November, which beats the national average and is a 1.1 percentage point improvement over 2010‘s rate in the city.

3. Orlando
Median home price: $145,000
Growth: Inventory of for-sale homes dropped 44 percent in the fourth quarter and homes that were on the market sold 37 percent faster than they did a year earlier.
A factor in the recovery: A strong tourist destination, Orlando is attracting international buyers, such as from South America, Canada, and Europe. Also, the job market is improving there, particularly aided by the development of a major medical complex.

4. Fort Myers, Fla.
Median home price: $115,000
Growth: Median listing prices here had the biggest increase in the nation last year, soaring 31 percent year-over-year.
A factor in the recovery: This retirement hot-spot is getting more attention from Canadians, who are taking advantage of a strong Canadian dollar and the fallen home values here.

5. Sarasota, Fla.
Median home price: $181,000
Growth: Sales volume here increased 17 percent during the three months ended Dec. 31 compared to year-over-year. Plus, home prices rose 2 percent in that time period.
A factor in the recovery: A drop in bank-owned homes and distressed sales is helping the housing market to recover, as well as an improving job market.

6. Boise, Idaho
Median home price: $120,000
Growth: A big drop in inventory: The number of homes for sale during the fourth quarter dropped by 40 percent compared to a year earlier.
A factor in the recovery: The metro area is seeing a growth in the diversity of its employers and the number of jobs its attracting, particularly in the tech industry and a growth in agricultural-based companies.