Chandler Home Sales Remain Steady in November

It may not be amazingly great news, but at least it is not bad news. But from November 1^st through December 1^st residential Chandler real estate stats remained steady. And this is a trend that goes back to July of this year as far as prices are concerned. Of course total volume has continued to slightly decline.

The actual numbers look like this. The average home sale price in Chandler for October was $217,781. The average price for a home in Chandler during November rose slightly to $218,520. Volume of home sales in October for Chandler was 392 units while November’s number of homes sold decreased slightly to 375 units.

Home prices did not skyrocket to their high a few years ago overnight. Likewise when the market shifted homes prices did not plummet overnight. I have argued all along that real estate is a cyclical market and can be expressed in bell shaped curves. And now I say again that we are at or very near the bottom of the bell shaped curve. This is the time to buy Chandler real estate!

How Many Times do We Need to Kill AZ SB 1271?

Arizona Senate Bill 1271 would have drastically changed the way that we look at anti-deficiency in the case of foreclosures in Arizona. It would have left many people already in financial distress on the hook for the difference between what they owed on their property and what the bank ended up selling it for. But common sense prevailed and SB 1271 was nullified by HB 2008 which passed several months ago.

So we were out of the woods, right? Wrong! Remember, we are talking about politicians who are often like slaves to the lobbyists. And who has the money to throw at lobbyists? The banks! Yes, the same people who supported SB1271. So it should come as no surprise that anti-deficiency legislation made its way back to the state capitol.

And as of yesterday, in an unopposed vote (53-0) the Arizona House of Representatives passed SB 1004 which includes repeal and replacement of ARS§ 33-814. This returns the statue to the way it was before SB 1271 ever came about. This of course means that Arizona will continue to operate as a deed of trust state with the same protections owners of Arizona real estate have had since 1971.

Your Help is Needed to Extend the First Time Home Buyer Tax Credit

The housing market is one of the key economic forces in the USA. Traditionally it is the engine that pulls us out of bad economies. That is why congress enacted a tax credit for first time home buyers of up to $8000. And in comparing the sales numbers for Arizona real estate to those from before the tax credit was enacted, the plan worked. The tax credit has stimulated sales, and this in turn stimulates the economy.

Ah but all good things must come to an end. In fact, if you don’t get under contract right now (or more realistically if you are not already under contract), you will miss this window of opportunity. The tax credit is only good for homes purchased before the end of November 2009. Once it is gone, it is gone.

We know that this tax credit is encouraging people to buy homes that might not have otherwise. And we know that this stimulates our depressed economy. So wouldn’t it make sense to extend this tax credit?

Now it is up to you - the average citizen to contact your elected representatives and tell them you want the tax credit extended. As a real estate professional I have already contacted my representatives, as many of my colleagues have. But we need your help too so that we may extend the first time home buyer tax credit.

SB 1271 Repealed

In a move that surprised me, Arizona Governor Jan Brewer actually passed HB 2008 instead of vetoing it as I predicted she would. I of course had assumed she would veto the bill because it did not include a tax increase that our so called Republican Governor was calling for. This is good news for all Arizona residents because it means we are now operating with a budget. It is also good news for people who own Arizona real estate because it repeals SB 1271.

Briefly, SB 1271 was poised to change Arizona’s anti-deficiency statutes. While the plan sounded good at first, lawmakers soon realized that SB 1271 would have had unintended yet far reaching consequences that could seriously hurt Arizona home owners facing foreclosure on investment properties and vacation homes.

So as it stands now, a bank can not pursue a homeowner who has been foreclosed upon for the difference between the mortgage amount and the sale price of the home in a short sale situation. Of course this does not mean that Arizona home owners won’t have to treat that difference as taxable income since banks are still able to report this as taxable income to the IRS.

Home Sales are on the Rise!

On Friday the National Association of Realtors (NAR) reported that home sales surged in July. At the same time Ben Bernancky, the Federal Reserve Chairman announced that the economy is “on the cusp of recovery.”  Even homebuilders like Pulte and DR Horton saw their stocks jump because of the increase in home sales (and because of this news).

The actual numbers show that home sales increased just under 7½%. That comes out to a seasonally adjusted annual rate of 5.24 million in July. It has been more than ten years since we have seen an increase like this.

We can owe part of this to the fact that July is traditionally a good month for home sales numbers. But another big boost was the taxpayer credit which buyers are scrambling to use before they miss the opportunity which expires November 30^th, 2009. 

While this is all good news, we are not out of the woods yet. In the same press conference that Bernancky said that we are on this cusp of recovery, he also warned that lending is not back to normal. And without the free flow of credit, lasting economic recovery can not occur. For local information I have already reported on July’s Chandler real estate market trends in another forum (click here) showing that our home sales have more than doubled.

Freeway Closure Information for Valley Newcomers

Newcomers to the Phoenix area may think our freeway system has been around forever. Well that’s not the case. Over the last several years the Phoenix metro area has seen an explosion in growth. In fact from July 1, 2000 to July 1, 2008 the population grew by a net number of 469 people per day. And that number takes into account for people who left Arizona or died! This of course was one of the causes of the Arizona real estate boom we saw.

 

But with this growth, we also had to see a growth in our infrastructure. New freeways had to be built because homes were being built further and further out. A look at the Gilbert real estate stats during that time reveals that Gilbert was actually the fastest growing city in the United States during a few of those years.

 

To this day the freeway system is far from finished. And of course we have to maintain the freeway system we have already built. But here in the Phoenix metro area, we take an unusual approach to fixing our freeways: we close them completely! We don’t just shut down a lane or two; we’ll shut down entire stretches of freeway over weekends to do the work.

 

There is a way to be prepared though. The Arizona Department of Transportation updates their website on a regular basis to inform us of these closures. A quick peek at their maps they post and you can see exactly where the freeway closures will be.

Foreclosures Are No Longer on the Rise in Arizona and Prices Are Going Up!

The Associated Press reported today that the pain Arizonans have felt from the foreclosure crisis is being relieved. That is great news because Arizona real estate investors were some of the hardest hit in this national crisis. Two of the other states also hit the hardest, California and Florida, are also experiencing some relief.

 

This comes on the heels of other good news which we have recently seen in local markets. An Arizona State University study released last month indicated that in general the valley real estate market may have bottomed out back in May. It has also been shown that prices in outlaying communities are even on the rise. All you have to do is take a look at the Queen Creek real estate stats from the second quarter of this year to see that this really is happening.

 

 

 

Of course we are not out of the woods yet. The housing market meltdown did not happen all at once. The bubble never actually “burst” as some would suggest. Instead it was a slow and steady leak. Things did not suddenly turn bad overnight. And things are not going to turn good overnight either. It is going to take time to recover from what some economists have described as a “market check.” At least we seem to be going in the right direction now though.

The Clock Is Ticking For The New Anti-Deficiency Law SB 1271

A new law has created a stir among borrowers, lenders and real estate professionals. Interpretation is difficult, but SB 1271 clearly only benefits the banks. These are the same banks that were making the high risk loans which got us into this financial mess in the first place. The people most hurt by the new law will be individual investors – the little guys.

 

A perfect example is people who own a vacation home in addition to their primary residence. It is not uncommon for somebody to have a chunk of Gilbert real estate as well as a cabin up north. If the homeowner runs into tough times, for example the loss of a job, the first property they will lose will likely be the vacation home. Under the new law the lender for the vacation home could go after the primary residence of the borrower!

 

The same scenario holds true if you own the home you live in as well as a rental property. What if your renters move out and you can’t find new renters quickly? If the rental property forecloses, the banks can come after the home you live in.

 

So real estate lobbyists and the Arizona Association of Realtors are scrambling to get the new law that would make homeowners liable for tens of thousands of dollars on homes lost to foreclosure killed before a Sept. 30 deadline. Let’s hope they succeed.

Delayed Closings Are On The Rise

When you enter into a real estate contract, one of the things the buyer and seller must agree upon is a closing date. And this closing date is set in stone when it comes to Arizona real estate contracts. The reason for this is because people’s lives are hanging in the balance. Although I tell my clients never to find themselves in this situation, sometimes there are moving trucks literally sitting in the driveway! Unfortunately there are many things that can cause a closing to be delayed though.

 

More often than not if there is a delay it is because of the buyer’s financing. There are a lot of hoops that need to get jumped through to get a home loan these days. After all, the banks are still stinging from their eagerness to give home loans a few years ago. Buyers have to provide all kinds of documentation to get a loan these days. And gathering this documentation can take time. Long gone are the days of the banks checking to see if you have a pulse and then giving you a home loan!

 

Sometimes the delays are caused by the lenders themselves though. The banks that are realizing financial losses have had to cut staff. Ask anyone that works in the mortgage division at Bank of America or Wells Fargo, and they will tell you that they are swamped right now! And it may get worse too. Now the Truth In Lending Act just went under some changes that will require the lenders to jump through more hoops that will include waiting periods.

Know What You Are Getting Into – Inspections

Would you be able to tell if a house was infested with termites? Would you be able to spot a double tap in an electrical box? Would you be able to identify polybutylene plumbing? Probably not, but don’t feel bad – most people wouldn’t be able to.

 

Fortunately when you make an offer on a piece of Arizona real estate you get a chance to let experts come in and take a look before you make the final commitment to buy. This is usually a time span of ten days and is referred to as the “inspection period.” And during this inspection period the buyer has the chance to identify latent defects or anything else that would affect their buying decision.

 

It is very important to have a home inspection. Home inspectors, just like realtors have to be licensed. The price is usually based on the square footage of the home plus any extras that will need inspected such as a pool. Another important inspection can be done by a pest control company. They do what is called a “wood infestation report” or WIR (termite inspection) which is then filed with the state. The bottom line is that you do have the opportunity to really see what you are getting into before you buy a home here. You should take advantage of this opportunity.