Seller's Market in 2009, What's Going On?
April 21st, 2009
Categories:Real Estate News
How do you know the market has shifted? Where is the bottom of the real estate market? If we really are at the bottom of the market, would anyone be crazy enough to say it and risk the potential backlash? Probably not.
But here I go anyways…
What are the signs of a shifting/changing market?
The average Joe Schmo out there would tell you to look for increasing sales, decreasing inventory and increasing sales prices. Unfortunately this is such a simplistic way of looking at shifting trends, anyone taking this approach would only be able to look backwards and tell you “oops its already happened”… Read the rest of this entry »
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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…
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