Posts Tagged ‘REO’

With Inventory at a low of 29k in Maricopa County (This time last year we had 41k homes on the market); we are beginning to see multiple offers on our properties in just the last few weeks.  The “good” ones are going quick.  Prices continue to defy the law of Supply and Demand and are staying low, at least for now. If you are thinking about buying or selling- NOW is definitely the time.  Please give us a call at 480-243-4242 if there is anything we can do to help you or someone you know with their Real Estate needs.

Bank Owned, REO, Foreclosure; they all mean the same thing. The last person who owned it couldn’t keep up on the payments and it reverted back to the bank in a Trustee Sale.  Now it’s up to the bank/lender to sell it to someone new and there’s a lot of competition out there these days since Lender Owned Active Listings have grown 68% in Just 5 Months!

There were 8,544 lender owned homes offered for sale as active listings on ARMLS as of September 30. As of April 30, 2010 there were only 5,090. This is a 68% growth in just 5 months. In recent weeks we have seen prices start to fall almost as steeply as we did during 2008 as a result of our market getting a huge supply in such a short period of time.

COUPLED WITH INSANELY LOW INTEREST RATES- YOU CAN BUY A HOME for just $200,000 for as little as $7000 down (FHA) & @ barely over $1000 a month (principal and interest).  At the peak of the market, it would have cost you nearly as much as 3 times for the same home (if not more) !!!

For the buyer out there today; there are deals to be had- especially if they don’t mind rolling up their sleeves and doing a little rehab work.  A year ago today there were barely half the amount of REO (Bank Owned, Foreclosures) homes on the marketplace- just look at the top row of the chart above to see those stats. Gone are the bidding wars for these homes, which do make the Short Sales less appealing. 

Typically the Short Sales that are occupied are in better shape than their vacant Bank Owned counterparts, but waiting for the unknown can hurt their appeal in comparison of getting an answer on average within a week on a Bank Owned Home. 

DO YOU NEED HELP NAVIGATING IN THIS MARKET??? CONTACT US AT 480-243-4242 OR START SHOPPING NOW HERE.

We are also happy to send you a custom list of homes that fit what you are looking for, just ask us!

So what in the world has been going on lately??? Foreclosures are on the rise, seems we are experiencing that dreaded “double dip” which is keeping buyers on fences and investors out of our market- what has to happen before that turns around?  We should see first where we were before we try to figure out where we are going next…

Based on the graph provided by The Cromford Report (please click photo for full articles from Mike Orr explaining our current market as well) :

• During the peak of our marketplace in 2005, we had seen annual appreciation rates from 16% up to close to 50%.
• During 2008; we saw a steady decline from just below 0% declining down to below –40%.
• During 2009; we saw our market do the exact opposite and have a steady appreciation throughout the year climbing us almost entirely out of the declining market.
• During 2010; “The Year of Hope” as dubbed by Mike Orr in January 2010; we saw our market have a huge increase in appreciation due to the Obama Tax Credit for Home Buyers.  Unfortunately we now see that was an artificial demand and since it’s expiration, we’ve seen yet another decline and we are now back in the negative as of late August.

Fannie Mae and Freddie Mac have also stopped granting postponements to their borrowers in default working out either loan modifications or short sales, which is increasing our supply of Foreclosure Inventory. Seems contradictory to what our marketplace needs in order to recover.

Interest rates are still in their lowest in years- but there seems to be so much fear out there right now as a result of the lumps and bruises we’ve endured the last few years, those people in a position to purchase seem to be holding out to make sure that pricing isn’t going down further.  Seems the last month we’ve stabilized and we are naturally correcting ourselves; but we do need to have our investors back in our marketplace to drive up demand again.  The job market still seems strong in Arizona, which definitely helps. 

Back before the craziness of 2004-2005; the average appreciation in Phoenix area had always been about 6% since the time I started in Real Estate in the early nineties.  Much of that has a lot to do with the continued job growth overall in Arizona, cost of living and quality of life with our great weather.  It’s just a matter of time before we get back to the normal 6% appreciation; especially as those borrowers re-enter our marketplace that lost their home to short sale or foreclosure in 2006/7—they are already candidates to purchase again.  By next year, the demand will increase just to that because a huge percentage of homes lost went in 08/9.

For those of you hanging on to your homes because you are afraid to Short Sale and damage your credit; we are seeing more and more people get approved to Short Sale and repurchase immediately as long as they stay current on their mortgages, so they can take advantages of today’s low low rates and low low prices.

REMEMBER- THERE IS NO WAY TO KNOW WE’VE HIT OUR BOTTOM UNTIL ITS ALREADY PASSED!  IF YOU NEED HELP WITH REAL ESTATE TO EITHER BUY OR SELL A HOME- CALL US TODAY AT 480-243-4242 OR CLICK HERE TO GET STARTED!