1. The Treasury Department has made it clear that the purchasing of Mortgage Backed Securities (MBS’s) will come to an end in the spring. Mortgage interest rates will increase.

2. Fannie and Freddies’ lending standards have increased significantly.

3. Lenders taking their REO inventory out of the ’shadows’ and dumping the homes on the market. Agents, this IS HAPPENING NOW.

4. Expiration of the (surprisingly) effective home buyer tax credit. Agents, the ...

<< MORE >>

Is it immoral for an upside down homeowner to simply_walk-away_from their under water home?

The effects of the so-called "Strategic Foreclosures" are the wild card for housing in 2010-2012. Millions of homeowners are now upside down in their homes. According to Moodys roughly 31% of homeowners are under water on their 1st mortgage. There are many reasons to believe that their homes will remain under water for years to come. Through out 2009 we reported that we were hearing from area realtors that the short sales they were closing  were largely on the behalf of sellers who ...

<< MORE >>

The government is set to stop their support of lower mortgage rates. People may not realize that a major reason we have survived this recession is the housing market has stabilized. The reason the housing market has stabilized is mortgage rates have stayed low. Mortgage rates are closely tied to government bonds. Bonds are sold to keep money flowing. In order to keep bonds attractive to investors they must be given at higher rates of return. Well, for the past year the government has been buying the heck out of bonds. This in turn drove prices down which ... << MORE >>

Please read the following press release

Press Release: Home Inventory in the Phoenix area dwindling ... << MORE >>

There are a lot of folks that rent in this world. Many of them don't know what their rights are. THey just assume because of what others may say or what they have experienced. Notices, evictions, pets, deposits, and all of the requirements in between. These are the things I want to educate you on. It will help make the world a better place. Each week I will publish 5 new facts until I have covered them all. Also, if anyone would like clarification on any fact, please use the comments because they are checked daily. I will respond with ...<< MORE >>

Home sales are up! That is commonly seen in the news articles these days.That is great news and most people think business as usual once that information is thrown out there. I am a little disappointed when the full picture is not laid out.
We must be cautious when it comes to prices and volume. According to September2009 data the median price of a home or condo in the Phoenix area was $137,000.That is 1.5% higher than the $135,000 from August 2009. Prices have been slightly increasing since May. The September volume was actually higher than the August volume. That has only happened one other time since 2000. It appears that the effort of banks to stave off foreclosures is working because trustee deeds are not as prevalent as they were one year ago. Instead, lenders are looking to short sales or modification. I tend to lean more towards the short sale route. Think about it, if you are a lender, would you rather the house go to someone with a 700 credit score (which is good) or would you rather modify the loan at 3% interest rate and keep it with the person who hasn't paid in 10months? Well, I can tell you that I have seen both sides and if it is my money I am all over the short sale side. Yes they take a much lower price but if they modify someone's loan it is just going to end up in foreclosure again 6 months later. People aren't leaving their mortgages because they are jobless and their rate is 6.75%. No way! They are leaving because they owe $200,000 more than it's worth. That is the huge bottom line that the lenders are pushing aside because if they lower one, they have to lower them all. It is a crazy idea. I will have to save this subject for more discussion later because it can take some time.
So prices are up a little and sales have increased, just like the news has exhaustively reported. The real story is we are just burning up the inventory that has amassed over the last 2 years. The media has reported our inventory getting up to 12 months recently. That means that if there was not a single house listed for sale from that moment on, it would take 12 months to get rid of all the houses that are already listed (given the current sales volume per that given month). So, the lower the inventory the better. Here is my problem.We have some serious foreclosures coming in the next 12 months. So, I don't want to community to get comfortable and then we get slammed with a bunch of bad news again. We need to be prepared for the inventory to jump back up. Even though prices are up, we must still remember that the median price is down 24%from last year alone. It is 48% down from the peak in 2006.
The other thing is the type of transaction that is happening. As of September,the number transactions that involved a foreclosure were 56.5%. It has been as high as 66%. So the normal high price seller gets a false sense of security when they go to sell their home thinking that home sales are up. They think if sales are up that means their home will sell quickly. They may hire a less experienced real estate agent that doesn't know to tell them the difference between a normal and distressed transaction. Yes homes are selling. Yes they are mostly foreclosures. Will your full price home sell? Not any time this century. That is the main point I want to get across. Take it with a grain....real estate is greatly helping our GDP, but we MUST NOT assume that means we can raise rates soon or let the now extended tax credit expire in April. My fear is everyone gets "RECOVERED" engraved in their heads, then when it comes time to continue these economy saving policies we just ah we don't them anymore.
My Jr. High teacher always said, “Don’t be complacent.” Let's be happy that foreclosures are moving. Let's be happy that the worst is over (if we don't change policy). We MUST be aware that more foreclosures are coming now than we have seen even so far. We must be aware that unemployment will remain very high for the time being. It doesn't mean the end of the world. This isn't a dooms day prophecy. It just means we must keep it mind that our values are not going to shoot up any time soon, or even go up at all. It is still not a great time to sell a full price home. Everyone is out for a deal and rightfully so. Finally, if you don't HAVE to sell right now, it would be wise to hold it another 24months. If you are positioning yourself to buy, get ready SOON. Get your credit cleaned up, save the little down payment that you actually need, and you will get a great deal. There are so many out right now. Call me and I will talk to you about the particular area you would want to be in.

        

Well you heard it here first. Yes unemployment has topped 10% for the first time since 1983. Even crazier is it will likely go higher.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. Look I am the last person to be negative on our society. However, I have had it up tp here with the media talking about recovery and great news stocks and great news Obama. I know they have their agendas so I try to take it subjectively. I just laugh when I hear media say we are out of the recession and everything looks much better.  The Labor Department said Friday that the economy shed a net total of 190,000 jobs in October, less than the downwardly revised 219,000 lost in September. August job losses were also revised lower, to 154,000 from 201,000.

That is just bitter sweet though. I pains me to hear these stories about folks moving to tent cities. That should be a whole series of entries by themselves. It just means it is going to get worse before it gets better. We all have to be prepared. During our holiday season we need to all keep in mind the many people who are down and out. I do have complete confidence that we will eventually recover from these harsher times. To credit the government, they are really trying to help with programs like the first time homebuyer tax credit and at least trying to bring down the rediculous health care cost. We may not agree with having them run our health care system, but at least they are trying to help. Keep it up Team Obama.

As a side note, the unemployment has been over 10% in many regions of our country. The main thing to note here is that it has reached 10% nationwide for the first time in a long time. It really just makes it official.

        

All right, so I wanted to start a new theme. Some times the real estate news can be slow. I know you all want to know what the markets are going. A lot of us have stress in our day and we need to be able to unwind or even reflect. I know sometime when I am complaining I hear someone else complain and it makes me think I am being silly.
Which brings me to the new category. "RANTS" is the new category. This is where I will post everyone's latest gripe with another individual or the world in general. I am even thinking of incorporating the Bill Engvall "Here's your sign." Not in the sense that they said a one liner that warrants the sign, but an occurrence of a situation that forces us all to stand back and wonder what the heck that person or group was thinking. I want to get emails from you all so I am going to create a "Submit Your Rant" tab. For now I would like to be the 1st one to start it off.

So a person close to me tells me of an occurrence that happened just the other day. He has kids and he decided to stay home on this day because his daughter wasn't feeling all that well, not horrible but just not great. So, he said she likes to go outside and walk around (who doesn't right?). They were walking on the sidewalk. They happened upon a particular house that has small dogs. I like small dogs myself but I do know that they tend to bark a little more than the bigger dogs. No big deal though. Well the dogs would not stop. The dad wanted to move from this particular house by encouraging his daughter to move forward. Well, kids know what they want and she wasn't ready to just go full blast. No big deal, you would think. Oh yes! Big deal. Out comes grumpy lady. She proceeds to ask the dad if he realizes the dogs are barking. Now lets try to imagine the tone he is hearing. We all know it is in the tone. You can imagine he felt bombed. He felt all he could tactfully utter was "Are you serious?" She repeats, "Do you realize the dogs are barking?" All right he simply states the obvious, which is he is just walking his daughter around the cul de sac. I left that detail out until now but it just makes it worse. She tells the dad there is a lot of sidewalk and they could move somewhere else. He also stated the windows and outer security door were all open so the dogs were sitting at the window on some what of a couch. They could see all around. So back to the grits, he just held his tongue. I know it is hard to do. So this is where I wander. I think about myself in that situation. Could I really ask some one on a public sidewalk to move somewhere else (no forget that I mean specifically when they are with their toddler children)? I would feel like the biggest ohhh you know what. How does this person function? Do you remember that this is a cul de sac? Now amazing to me there will be people who disagree with my side. There are some children less dog lovers that will say "Rude daddy take a hike." I have to think there are maybe a handful of people out there that would say that. Anyway, that is the first installment in the new category. Please comment and start submitting your "RANTS" to my email for now. Always remember, "BREATH DEEP!"

        

So the Senate just voted this bad boy in 98-0 also would extend and expand a tax benefit for businesses with losses. I don't know the benefits there but the tax credit is really helping the real estate rebound. That is why the GDP is so high. Well, that and the clunkers deal. The House is expected to vote a big yes within days, and President Obama is expected to sign it into law.

  Just to add some more facts, the $6,500 tax break for existing homeowners who want to move up to a new home, states they will have to live in their current residence for five consecutive years out of the last eight.

The bill also would increase the level of qualifying incomes to $125,000 for individual tax filers and $225,000 for joint filers. Those earning up to $145,000 individually or up to $245,000 jointly would get a smaller credit that decreases as income rises.

The tax credits apply to home purchases of $800,000 or less.

Great news!!!!!

        

Senators agreed today to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.