Setting aside dire circumstances where you can’t purchase a property, if you have a credit score in the 600s, you can probably purchase a home in today’s market. If you are close to that, there are things you can do to get in the right position.
But, I like to point out now and again the benefits of buying a property over renting. This might be because I waited far too long to purchase a property for myself. I look in awe of clients of mine who are buying in their early 20s. I don’t think they even know what a good thing they are doing for their futures, if they stay conservative about their finances and keep those houses for the long term.
Anyway, I love the calculator at the Money-zine website that helps you calculate what you save by buying a home –not even taking in to account the historically low prices.
Have a look and let me know if you have any questions about this calculator.
Here’s a good article about the role that home appraisers had in the housing bubble.
The problem I’m having as an agent is that the appraisals are coming in much lower the the price the buyers and sellters agreed to, and much lower than the comps that I find in the area.
We are not allowed to communicate with the appraisers, which is a good thing. We should not be able to so that we can have an impartial perspective and eliminate corruptions in the market.
However, right now, appraisers seem to be viewing the market as it was 6 months ago, not they way things are moving up and moving quickly right now.
In the last three months, I negotiated three closings in which the appraisals came in at least 12% lower than the agreed price. Luckily, I got the sellers to reduce their prices after much effort and saved my clients money.
It’s been a few months since I’ve just laid out the market conditions in the Phoenix market.
1) Prices are still slowly increasing, probably because the tax credit was extended.
2) Sales volume is still high, even though volume typically falls off around the holidays.
3) Watch for prices to climb upward faster starting in January as people start looking in greater numbers.
Conclusion: Prices are going up, but we are still at the lowest point for picking up a property. If you are looking to sell, wait just a little longer or expect to price aggressively.
Exhibit A: Monthly average sales prices have been going up since April. We are now above the lowest point from 2008. While that was a harrowing year and nobody wants to be compared to it, we can at least feel like we are going the right direction. Prices will continue to climb as people take advantage of the extended tax credit.
Exhibit B: Months Supply. This is a measure of how long it would take to sell the current homes on the market today at current monthly sales rates. This is very interesting. The months supply decreased near the beginning of the year as people started to scramble for the cheapest prices ever (April). But it has not gone down any further, I suspect because the banks have figured out how to slowly and methodically release foreclosed homes so that they don’t flood the market. I suspect that this will stay relatively the same through next summer.
Exhibit C: Sales Per Month. Notice how the sales per month are higher than the last two years, still. So, fears that the market would be flooded with more foreclosures never materialized and we just keep selling at a good clip. Check out how sales volume goes up after October, when volume usually slows, thanks to the tax credit and low prices. Add to this that banks are getting better at processing short sales and people are closing quicker.
I’m all giddy to tell you about these two homes for rent in Garfield. In both cases, the owners have improved the properties and will maintain a close relationship with the neighborhood as we transition in to a renaissance of renovation in downtown neighborhoods.
Folks are buying foreclosed homes in historic neighborhoods at historically low prices and are doing an incredible job bringing them back to their former glory
This is a property with two small houses on it, each about 800 square feet. They are perfect for the downtown and/or ASU lifestyle, with everything updated, security and a beautiful courtyard between the homes. You can walk to First Friday in about 10 minutes from here.
I was the buyer’s agent for this property. The listing agent was Sherry Rampy and the man responsible for the renovation is Kurt Krutak, who has done a number of similarly meticulous transformations. According to Rampy, “This property stands as an example of what is possible in Garfield and it is right next to everything going on downtown.”
Both units are for rent right away. Please contact Ruben at email@example.com or 602-368-6832.
Second, 747 E. McKinley is a 1925 bungalow, renovated in 2006 with a new bathroom, new kitchen, laundry, security, all new landscaping and an inviting updated front porch. I even renovated most of the old double-hung sash windows so you can open the place up the way it was meant to be. It is about 1,100 square feet with 3 bedrooms and 1 bath.
You can walk from the front porch to the center of First Friday activities in about 5 minutes. I know. I timed it. I live here. I’m moving up the street to my old stomping grounds, but I will leave my heart in Garfield!
This property will come open in January. Please contact me at firstname.lastname@example.org for inquiries.
1) Downtown is the Real Deal. OK. This is an opinion piece, but it really speaks to the fact that there is a general perception of progress, despite the economic downturn. Oh, and they mention the Urban Grocery and Wine bar of which I am a fan!
2) New Nursing College Building Opens in Downtown Phoenix. A new 84,000 square foot building in downtown, serving thousands of students means that ASU is progressing on plans that they set in motion before the economic crash.
3) More Students are Flooding in to Downtown. Slightly more than 7,000 students took at least one class downtown this fall, up from 4,963 in fall 2008.
So, if you are thinking about investing in real estate for a business or a home, CenPho, in my opinion is the safest place to be in Arizona. It is beyond safe with prices this low. It is a smart move.
But, beyond the real estate side of things. Feel free to invest in the human capitol, as well. We aren’t going anywhere!
I want to share this great post with you (especially all of you who tell me that prices are still going down). This is unashamedly lifted directly from the John Hall web site because I think they explain it best:
How can some experts say Phoenix home values are going up and others say they are going down?
Don’t answer that…yet. First we need to remove some variables.
Let’s pull out the possibility that we’re talking about two different markets – like nationally vs locally. For this question we’ll only analyze the Greater Phoenix real estate market.
We also need to remove the possibility that we’re looking at different data sets – like townhouses vs single family homes. So let’s look at the exact same data – from the exact same system – filtered almost identically.
Next we want to make sure both statements are from similarly educated individuals. I tell you what, to remove all doubt – I’ll say them both. Home values in Phoenix are going up. Home values in Phoenix are going down.
Now that we’ve removed said variables – which statement is more correct?
Uno momento – real quick let me show you a couple of charts from the Cromford Report to help you get the more correct answer.
Here is a chart showing the annual median price of homes sold in greater Phoenix.
Prices are going down-right? This next chart is showing the monthly median price of homes sold in greater Phoenix.
Prices are going up!! It’s hard to see the exact numbers, but hopefully you can make out the trends. If you only look at the top chart (Annual Median) it would be correct to say values are coming down.
However, if you look at the second chart (aka monthly median). You can see that values bottomed in April and have been bumping along since.
You might recall that I wrote about anti-deficiency a couple months ago.
It is a dry topic, but incredibly important to the market in Arizona. Had the law stuck, we would have seen a huge disruption in the sale of homes through the end of the year. Well, here’s the latest.
The House of Representatives passed SB 1004, the anti-deficiency fix, on November 23rd in a special session with a vote of 53-0. SB 1004 included the repeal and replacement of ARS§ 33-814 essentially returning the statute to its original status prior to the passage of SB 1271. With this fix, Arizona will continue to operate as a deed of trust state with the protections that have been in existence since 1971.
SB 1004 did pass both the Arizona State Senate and House of Representatives with an emergency clause, and it will go into effect upon Governor Brewer’s signature.
The Arizona Association of Realtors promises to continue to work on language to address “speculative builders” in the upcoming session in order to resolve this issue entirely.
Of course, it begs the question of where they were when all of this originally happened!
Check out this news, below, tracking the enrollment downtown.
After only four years, ASU downtown is up to 11,503 students. They are expecting upwards of 20,000 by 2012.
I am thrilled. Downtown students tend to be serious students and graduate students. These folks, along with faculty and staff, are going to make up the neighborhoods around downtown.
For those of us in Garfield, I think this is great. I think it means that we are going to have a vibrant community of people who are engaged as home owners or land lords. I think it will result if homes being renovated and people being active in the neighborhood.
It is a great time to invest in Garfield as the next campus community.
I’d love to hear your thoughts on it all.
[Source: Arizona State University] — Enrollment at ASU this fall has reached a record 68,064 students, a thousand more than last year’s 67,082. ASU’s enrollment has grown by nearly 13,000 students since 2002, when it adopted the mission of becoming a high-quality, high-access university.
- The Downtown Phoenix campus grew to 11,503 students in its fourth year. Last year there were 8,431 enrolled. (26.7%)
- Enrollment at the West campus grew to 10,380 from 9,572 last year. (7.8%)
- At the Tempe campus, 55,552 students are enrolled, increasing over last year’s 52,734. (5.1%)
- Enrollment at the Polytechnic campus in Mesa is 9,146, down from last year’s 9,614. (-5.1%)
More students are attending ASU full-time, almost five percent more than last year. Of the total enrollment, 13,787 are graduate students. The number of ethnic minority students increased more than seven percent, from 17,334 to 18,600. The proportion of ethnic minority students among first-time freshmen increased from 31.5% to 34.2%.
Campus enrollment figures total more than the overall unduplicated count of 68,064, as ASU students take advantage of the courses that are offered by departments throughout the university, not just at the campus that is the academic home of the student.
There were an astounding 8,000 closings in October 2009. That’s 50% above last year.
Didn’t I predict this buying spree six months ago? (Say “yes.”)
Expect even more closings in November, as everybody races for the tax credit.
Notice also that there is a greater trend toward short sales over foreclosures. The percent of foreclosures continues to drop both as Closed transactions (44%) and in the Pending category (35%). 25% of the active listings were short sales. 31% of the pending sales were short sales.
Unlike a few months ago when short sales were active, but did not close, we are averaging 20% closed. Further, short sales are staying on the market for less time. So, the banks are doing better at processing them.
The price numbers are continuing to ‘bump around’ with no consistent trend line. October’s Average Sales price was down about $4000 to $171,000 and the Median Sales price was down $2000 to $128,000. Both of these numbers are considerably above the yearly lows of $159,000 and $115,000 respectively, but the Average has been up and down for the past 4 months, with the Median down for the first time since April.
What does all of this mean?
It means that everybody is rushing so hard for the tax credit that they are buying whatever they can.
What does it mean if you want to buy?
It means that you should try to buy during the holidays when everybody else has either already captured the tax credit, or has given up. The holidays usually see less activity, so that might increase your power as a buyer.
Please give me a holler if I can help you with more market analysis.
Data compiled from report by my broker, Jim Sexton of John Hall and Associates.
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