Archive for the 'Prescott Real Estate Trends' Category
Home Prices Continue To Adjust
July 30th, 2008 categories: Home Sellers, Prescott Real Estate Trends, Real Estate News
Stumble, skid, slide, falter, this is all we hear about the real estate market. This morning I heard on the news “More Bad News For The Housing Market! Prices in Phoenix continue to slide downward, down 26.5% from May of 2007″.
This market correction had to happen and it’s not a bad thing. Lower home prices will help move us from the problem into the solution.
The real estate market conditions that got us here started in the mid to late 1990s. We had a 10 year run of accelerating sales and appreciating values. Home values in Prescott were up 25%, in some cases the appreciation was a staggering 45%. In 2004 through 2006, the average sale price in Prescott for a single family home was $420,000. These are unsustainable numbers for Prescott, Arizona Real Estate. The average annual income for people who work in Prescott is $34,454.00. Prescott does not have the job market to support an average sales price of $420,000. People who work here should be able to afford a home here.
So when I hear prices are down, who’s to say it’s not a good thing?
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Purchasing REO Properties
July 7th, 2008 categories: Home Buyers, Prescott Real Estate Trends
Are you considering buying a REO or bank owned property? Given the current home buying market, many home buyers see this a wonderful opportunity to buy a home for considerably less than market value. This may be true, but it’s important to know the process and understand the paperwork. If you plan on purchasing a bank owned property, read the fine print. There are some contractual differences compared to the standard A.A.R Real Estate Purchase Contract.
Use your Negotiating Power. If the listing is new on the market, the bank may not be willing to deviate from the list price. Look for REO homes that have been on the market for 30 days or more.
Check fees charged by the Title/Escrow company. Banks negotiate bulk rate contracts with Escrow companies. If you decide to use the banks Title/Escrow company they may charge more in order to make up for the discount they are offering the bank.
Banks do not pay for any extras. Banks generally are not willing to pay transfer fees, delinquent home owners association fees, any property inspections or home warranties. Be prepared to pay for these items out of your pocket.
Verbal Agreements. Most banks like to negotiate verbally before putting anything in writing. Generally, this is the number one rule on not what to do, but the bank hold the cards and sets the rules.
Expect the bank to use their own purchase contract or at the very least addendum’s to standard purchase contracts. Many times these contracts are not in the favor of the buyer. Read through everything thoroughly and if you don’t understand something, consult professional advise.
“As Is”. Most banks sell homes in “as is” condition. Make sure your offer contingent upon inspections, and your approval of those inspections.
Patience is a virtue! Most banks take days if not weeks to respond to offers. Be patient. If your offer is rejected, wait 30 days and re-submit the offer.
Have your loan in order and ready to go. Have a pre-approval letter from your lender ready to submit to the bank. Be certain your lender can close escrow on the pre determined closing date. If you run into delays and need more time to close, the bank may charge you for each late day.
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Is The Housing Crisis Over? You Decide
May 8th, 2008 categories: Prescott Real Estate Trends, Real Estate News
I thought this was an interesting article written by Cyril Moulle-Berteaux, managing partner with Traxis Partners LP, a hedge fund firm based in New York. This article was published in the Wall Street Journal on May 6, 2008.
The Housing Crisis Is Over
May 6, 2008; Page A23Wall Street Journal
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Avoiding Foreclosure
March 17th, 2008 categories: Home Sellers, Prescott Real Estate Trends
Many people these days are dealing with the harsh reality of property foreclosure. This is a painful and embarrassing situation, but one that needs to be dealt with. Simply walking away is never the right option. The hit to your credit takes years to correct, not to mention the humiliation it puts your family through. Hanging in there and fighting you way through is tough, but worth it in the long run.
There are options; I’ve helped clients through “short sales“. A short sale is when the lender takes less than what is owed on the property. It is an involved process of negotiating with the bank and lots of paperwork, but a far better option than foreclosure. If you are behind on your payments, or receiving late notices from your lender, take action now. Don’t wait until you are months behind in payments. The further behind you get the harder it is to recover. Your lender does not want you to lose your house. Foreclosures are expensive for you and the bank. It is far beneficial for both parties to work things out.
If you are behind on your mortgage payments, get involved now! Here are some helpful links: HUD, Housing and Urban Development. Hope Now; a non profit organization offering credit counseling.
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Is There Light At the End Of The Tunnel?
February 21st, 2008 categories: Home Buyers, Prescott Real Estate Trends, Real Estate News
Things are picking up, you can feel it. The phone is ringing, Real Estate Agents seem a little more optimistic. Buyers that have been sitting in the stands are stepping into the court, realizing that this is a great time to buy a house. It’s not a surprise that last week brought a 12 percent jump in the number of people applying for mortgages to purchase a home. Could it be a hint that the Spring real estate market could be better than a lot of the pundits believe?
Well, it probably would be a mistake to make too much fuss over a single week’s statistical report from the Mortgage Bankers Association of America.
After all, the National Association of Realtors’ latest pending home sale index — which looks out over the horizon to predict sales activity a month or two ahead — registered a decline of one and a half percent.
But you can’t simply ignore all those new mortgage applications. They’re real. Somethings going on — and it could be that the word is finally getting out to consumers that home loan rates at an average 5.6 percent for a 30-year fixed-rate mortgage — are close to 40-year lows.
Money for home purchases right now is cheap, no question. And we all know housing prices are lower this year than they were last year – sometimes by 10 and 15 percent or more, depending on local market conditions.
So a 12 percent jump in purchase applications could be a significant development … or just a fleeting statistical fluke. We’ll keep you up to date on it.
Another potentially important factor looking forward: The federal economic stimulus package signed into law this week opens the door to more affordable home purchases in some of the hardest-hit, high cost markets in California, New England, Florida and the Mid- Atlantic states.
Rather than being stuck with expensive “jumbo” loans — with rates of one to two percent above standard — buyers will now be able to take out mortgages with lower rates, even if the loan amounts go to nearly $730,000.
Those new “budget-priced” jumbos will be available not only through Fannie Mae and Freddie Mac, whose lower capital costs get passed onto borrowers, but also through the FHA, whose capital costs are even lower.
There’s a hitch, though: These special jumbo deals will only be available this calendar year. They disappear December 31st.
Buyers and sellers who want to benefit from this part of the stimulus package need to get into the game fairly soon.
Who knows? Maybe the economic stimulus package — which most people think of in terms of tax rebate checks — just might bring some heat and energy to the housing market, just in time for Spring.
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Prescott Real Estate; a year in review
February 19th, 2008 categories: Home Buyers, Home Sellers, Prescott Homeowners, Prescott Real Estate Trends, Real Estate News
2007 Prescott Real Estate. A year in review:
Wow! What a transition… To say that Prescott experienced some major Real Estate adjustments in 2007 is an understatement. We enjoyed double digit appreciation for several years, and came to expect it as normal. Although the trend started to slow toward the end of 05, many home sellers, and Realtors didn’t start to feel the burn until 07. In 2007, average home prices adjusted downward in almost all neighborhoods. Days on market adjusted upward along with interest rates. The interest rate increases kept many first time home buyers out of the market all together, or afraid to take the plunge. Buyers looking to up size could no longer afford the larger home and were forced to stay put.
A large listing inventory, and fewer buyers made 07 an especially challenging year for home sellers. 50% of the listing inventory sold, which was down from 79% in previous years. Only 13% of the vacant land on the market sold. Days on market widened to 158 days which was quite a switch from the ” good old days” when homes sold before they hit the MLS. Not to mention the foreclosure market and sub prime lending disaster which we may not see the bottom of until 2009.
2007 brought many changes to our local Real Estate companies. There was simply not enough business to support the growing number of Licensed Realtors in the area. Currently there are 1,643 Licensed Real Estate agents belonging to PAAR (Prescott Area Association of Realtors) that number is down from well over 1,700 in 2005. I predict that in 2008-2009 more of our local Realtors will be forced to leave the Real Estate business. Mortgage companies and well as Escrow companies have seen their share of cut backs, consolidations and lay offs.
Eventhough lost sleep and my graying hair was a big part of 2007, I am always the optimist and hope that 2008 brings sunnier condition to our Prescott Real Estate market. The sooner we all accept “what is” in the Real Estate market, the brighter the sun will shine for all of us. Here’s to a great 2008!
Here are some sales statistics comparing 2006 to 2007.
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Does this Real Estate market make me look fat?
February 19th, 2008 categories: Home Buyers, Prescott Real Estate Trends, Real Estate News
Working in this Real Estate market can make you feel uncomfortable. Like jeans that are too tight, you cannot wait to take them off!
The Real Estate market is in the news a lot these days… Pick up the newspaper, turn on the TV, talk to your neighbor, sadly it’s all pretty negative. There’s no dening it, things are tough out there. I watched a story on the news yesterday about a Real Estate office in Georgia that has converted into a florist, because the phone stopped ringing and houses stopped selling.. I know many Realtors that now work at Home Depot or Lowe’s because there’s simply not enough Real Estate clients to go around..
Many of the people commenting on the state of Real Estate don’t know much about Buyers or Sellers, or what it’s like working in Real Estate;
Here are some observations on the Prescott Real Estate Market….
Homes are selling. Not a lot, but some. What is causing most homes to sell in this market is the price. People are looking for deals. Homes priced at market value may end up sitting in the market for quite a while, simply because there are so many of them. Homes that are selling in under 100 days are usually priced slightly below market value, offering more and costing less than their competition.
Vacant Land. Ouch. About 10 vacant lots are selling in Prescott per month. When there is an abundance of residential properties on the market, vacant land takes a back seat. Right now, the cost of building far exceeds the cost of purchasing re-sale. There are new homes on the market listed at $140.00 to $150.00 per square foot, including the land. The cost of new construction is approxmiately $200.00 +, not including the land. If you are in the market for vacant land, we’ve got some great deals.
Interest Rates are low. They are approacing the 2005 levels again putting more money in buyers pockets. Hopefully buyers will realize that the bottom of the market is now. Anytime this year is a great time to buy a house.
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Existing Home Sales To Hold Steady In Early 2008
February 19th, 2008 categories: Home Buyers, Home Sellers, Prescott Real Estate Trends
Here is an atricle that I thought was interesting and was published in the Arizona Realtor magazine, Feb. 2008 issue.
Over the next few months, existing home sales are expected to hold fairly steady as indicated by pending sales activity, and then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors.
Lawrence Yun, NAR Chief econimist, says there is a pull and tug exerting itself on the market. “One one hand, we have pent up demand from the four million jobs added to our economy of the past two years of sales decline”. On the other hand, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market time their purchase. As a result, the exact timing and the strenght of a home sales recovery is a bit uncertain. A meaningful recovery in existing homes could occur as early as this spring, or further delayed toward late 2008.
The pending homes sales index, a forwared looking indicator based on contract signed in November fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 inOctober, but remains above the August and September readings and indicated a broad stabilization. The index was 19.2 % below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing home sales should hold up in a narrow range before trending up”, Yun says.
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Buyer Tips
February 19th, 2008 categories: Home Buyers, Prescott Real Estate Trends
Prescott, Arizona is definitely a buyers market. There’s a lot of great properties on the market to look at, and simply put, we just need more buyers. I know some are waiting for the bell to ring that indicated the housing market has hit bottom, others may be waiting to see what’s going to happen with the economy. Be that as it may, if you’re looking for a home right now, here’s some tips to make the process easier.
1. Pre-quality with a mortgage lender. Find out exactly how much you quality for. There’s no need to look at homes you cannot afford, or on the other hand, under estimate what you do quality for. In Arizona, a LSR (loan status report) is required from a lender in order to submit an offer on a property. This is the first critical step to buying a home. It’s painless and only takes a half hour or so.
2. Choose a qualified Agent to represent you. There are a lot of buyers driving around looking at homes calling the phone number on the sign, not really working with a Buyers Agent.
An experienced Realtor is wealth of knowledge. They know market values, trends, past sales and so on. Find an Agent you work well with and make it a team effort.
Commit to one Agent, and they will commit to you.
3. Get A Home Inspection. It’s the best $300.00 to $400.00 you’ll ever spend. Uncovering major defects or potential repairs is the purpose of a home inspection. Make sure your inspector checks the roof, furnace, electrical, air conditioning and plumbing. These are items than can be very expensive to repair or replace. Interview your home inspector, ask for a sample copy of their report. A home inspector is an important member of your Real Estate purchasing team.
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The Magic of Pricing Your Home Right From the Start will ensure a timely sale in 2008
February 19th, 2008 categories: Home Sellers, Prescott Real Estate Trends
Selling your home in this market takes more than the wave of a magic wand, it takes experience. Don’t make the #1 mistake that sellers make!
Pricing your home slightly below current market value can produce great results right from the start. In a market saturated with listings, many of them over priced, an appropriately priced home is what buyers and Realtors alike are waiting for. As listing agents, we love to be the third Realtor to have listed the property, after the Seller has made all of the major mistakes.
We Want More Money When The Home Sells in this Prescott market
It’s easy to get caught up in choosing a sales price. The higher the price, the more financial opportunities we have when the home sells. We can pay off all of our credit cards, take a vacation, send the kids to college, buy a more expensive home and so on. Many times, the uninformed sellers will choose the Agent who suggests the highest listing price. This is without question the worst mistake a seller can make.
In Prescott’s Real Estate market it’s imparivite to establish an accurate market value
Many sellers choose a list price based on how much they need to net when the sale is complete, unfortunately that strategy can prove to be a costly mistake. Pricing your home involves several steps. Comparing similar properties, making adjustments for the differences, tracking market movement, and evaluating the competition. As listing agents, we consider all of the facts, and suggest the most realistic price. Some sellers are concerned about setting the price of their home too low. If a home is priced too low, it will generate more activity and chances are the seller will receive multiple offers driving the price back up to the market value. In a buyers market, the danger does not lie in pricing your home too low, it is in pricing it too high. The buyers will ultimately set the price of your home. Their opinion is really the only opinion that matters.
Keep More Money in Your Pocket
How much is it costing to keep you home every month? Sellers often feel that their home is worth more that what we recommend. They couldn’t possibly list their home for $300,000 because they feel it’s worth considerably more. They make payments for an additional year and then sell it for $250,000. Not to mention the hassle of keeping the home in spotless condition while buyers and their agents are in and out of the house. Price your home right from the start, don’t be an expired listing over and over. It will only cost you money.
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