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Real Estate Market Update

September 7th, 2008
Categories:Real Estate News

A buddy of mine sent me a few articles today, his summary was simply this: On the supply side, inventories remain excessive, with builders holding on to 10 months’ worth of sales. More foreclosures are hitting the market every day. On the demand side, prices are still too high, and financing is still too hard to obtain.

Here were my thoughts on the above statements:

First, most articles published online cover the nation and the media decides which 7 out 50 states to report on.

With Regards to New Builders in Arizona:

I have personally spoken with the regional sales managers of the top five home builders in Arizona and they all say they have little to no inventory. It’s already been cleared out and they aren’t holding on to anything. Everything from here on out will be built to order. DR Horton is the only one going against the crowd, but they are a different company entirely because they are known for selling the same home 6-8 times before ever getting a deal to close.

With Regards to Arizona Foreclosures:

I’ll agree we have an issue with foreclosures, especially in the outlying areas such as Queen Creek and Maricopa. And we can expect to see foreclosures effect the industry for at least the next two years. However banks are starting to respond to the overwhelming number and are getting hit hard by congress to move on the properties quicker… it’s because of the foreclosure market that any home under $150,000 doesn’t last more than a few days on the market and anything under $200,000 doesn’t last more than 2 weeks. Yeah, there are a lot of them on the market, but they are the ones fueling the movement in this industry.

Congress is also making it clear they are going to start forcing the bank’s hands and making them negotiate and rewrite loans. That will help a bunch, but it won’t kick in until mid next year, because everything right now is optional, and not all the banks are willing to take the hit.

With Regards to Prices in Arizona and the East Valley:

Prices aren’t too high… we are bouncing along the bottom for first time and this is the time for buyer’s to buy… anyone waiting too long is going to look back and say “I should have bought back then” … Here is the best way to look at determining when we hit the bottom of the market… “You won’t know the bottom has hit until its already going back up” – ain’t that the truth?

With Regards to Financing in this Industry:

As far as financing… sellers can contribute 6% towards the buyer’s down payment and closing costs… which allows the buyer to essentially do 103% financing how much easier do you want it to be?! … In fact it’s too easy and it’s this crazy 103% financing that got us here in the first place. FHA loans allow great debt to income ratios making it easier to qualify and the 6% seller contribution is a breeze…

Now, you want to talk about not knowing it’s the bottom until it’s already going back up??

FHA just passed a bill that will end ALL seller contributions on October 1st… And 3% down payment will no longer be the minimum, it will be 3.5% and possibly higher. Banks are turning around and moving foreclosure homes faster and dealing with them quickly. They know what it takes to get top dollar on every home and they are doing just that… it’s rare for anyone to get a bank owned home for a penny less than listing price, in fact most will pay over the list price and no bank will pay seller contributions.

To my friends and all who end up reading this… the days of finding a great home at a steal of a price and with easy financing are almost gone!

But… you won’t hear the media talk about that for another 6-9 months… mark my words… better yet, put it on the calendar and we’ll discuss it then…

Tags: Market News

Posted by Marcus Fleming | Comments: Please leave a comment.

Yes on 100 – Protect Our Homes

September 2nd, 2008
Categories:Real Estate News

While, Arizona currently does not have a real estate transfer tax, there is nothing that prevents a tax from being enacted at any time. With our current slow economy and budget crisis, it won’t be long before cities, counties, and the state start looking for new sources of revenue.

Enacting a real estate transfer tax is gaining momentum in Arizona. Just last year a bill was introduced in the state legislature proposing such a tax. Countless citizens’ commissions and county reports mention a transfer tax as a possible source of revenue for the state.

With the momentum for a real estate transfer tax growing, we must act now to put an end to this debate before it is too late!

Join us in passing a constitutional protection that will stop real estate transfer taxes. Click here to get involved today.

Vote YES to PROTECT YOUR HOME on November 4th!

F.A.Q’s

What is a Real Estate Transfer Tax?

A real estate transfer tax (RETT) is a state or local government imposed tax that is collected when you transfer ownership of your home, land or commercial real estate. Typically, once the tax is initiated, the rate can be increased by the state, county or city at any time.

Why are Transfer Taxes Proposed?

Too often, this form of taxation serves as a new source of revenue to balance a government’s bloated budget caused by overspending. Once this type of tax is put in place, no matter how low the tax rate is in the beginning, it always ends up being raised.

What are the Problems with a Transfer Tax?

• IT’S DOUBLE TAXATION!
  Governments already collect taxes on your property based on the property’s value. This new tax would unfairly cause a second tax to impact your home or property.
• DAMAGES YOUR EQUITY!
  Since the tax is assessed against the total value including the amount you owe on your mortgage(s), the overall equity earned by the seller is decreased.
• SLOWS AN ALREADY SLOW MARKET!
  In the current slow market, a transfer tax would make it more difficult for people to buy or sell homes. Once a transfer tax is put in place, it can be raised at any time. This costs people buying or selling their homes even more money.
• PUNISHES THE HOME OWNER!
  A home is often the biggest and most important asset a person has in life. A transfer tax reduces the equity people have worked hard building. People already pay multiple taxes and fees on their homes. This tax will layer on one more significant closing cost you will have to pay.
• IMPACTS LOWER INCOME THE MOST!
  This tax imposes the higher tax burden on lower income households that typically spend a larger percentage of their income on their home.

Posted by Marcus Fleming | Comments: Please leave a comment.

ADRE Posts List of Builders in Trouble

August 10th, 2008
Categories:Real Estate News

Posted by Marcus Fleming | Comments: Please leave a comment.