The old days at the county court house foreclosure auctions.

Somebody asked me the other day where all of the foreclosure deals went.

“Away,” I said.

We are now at or below normal levels for foreclosures. Its an interesting thing and amazing how time flies.

Our friends at the Cromford Report had an interesting quick analysis of where we are in comparison to other states. Here’s an excerpt:

“The Black Knight Financial Services Mortgage Monitor Report for March 2015 shows a sharp reduction in home loan delinquency for Arizona. The percentage of first loans with a late payment but not in foreclosure has dropped to 3.3% from 3.9% in February. The percentage of first loans in foreclosure remains at 0.6%, a level which has remained constant since May 2014. We can see the improving trend by examining the percentage of loans with a late payment but not in foreclosure for the last 6 months of March:

    •    March 2010 = 11.3%
    •    March 2011 = 8.6%
    •    March 2012 = 6.1%
    •    March 2013 = 4.9%
    •    March 2014 = 3.8%
    •    March 2015 = 3.3%

Arizona ranks 38 out of 50 states for delinquency pre-foreclosure, 45 out of 50 for loans in foreclosure and 42 out of 50 for overall non-current loans.

Black Knight Financial Services estimates that 9.6% of Arizona loans are underwater. This is the highest level for any state west of the Mississippi except for Nevada which is estimated at 16.4%. However there are still plenty of eastern states with higher levels:

    1.    Florida = 15.1%
    2.    Maryland = 14.0%
    3.    Illinois = 13.7%
    4.    New Jersey = 13.7%
    5.    Rhode Island = 13.5%
    6.    Connecticut = 12.3%
    7.    Ohio = 12.0%
    8.    Delaware = 11.4%
    9.    Michigan = 10.8%
    10.    Georgia = 10.8%
    11.    Wisconsin = 9.8%

Arizona’s loan delinquency is now well below the long term average, but negative equity remains a problem for about 1 in 10 borrowers.”

So, if you are thinking of finding distressed properties, we are back to the days when you had to be on the inside with banks so you can get those lists when they take the homes back.

I cut my teeth as a realtor on foreclosures and short sales. I have strong teeth.

Call me if you have any questions about the market today. We are here to help. 602-456-9388.

This post follows on a post that I did back in March, in which I discussed that there is such a tight rental market right now. Surprisingly enough, it was called “What Does a Tight Rental Market Mean?” I’m clever that way.

So, our friends at the Cromford Report have added an interesting thought to this conversation the lack of supply of entry-level homes:

“The most obvious source of new supply would be the large number of homes that are currently owned by landlords and used as rentals. However vacancy rates are low, rents are rising and these landlords would probably buy more properties if they could rather than sell them off. There are remarkably few new homes being built below $200K and if this situation persists, it is going to remain a very competitive struggle for buyers. Prices are likely to rise faster than earnings. This is good for current homeowners but bad for those currently renting and wanting to get started in home ownership. This could become even more of a problem if mortgage interest rates rise, adding to affordability problems for the first time home buyer.”

To put it another way, those folks who bought when the market was low and created cash-flow rentals have no incentive to sell. They are making money!

Unfortunately, this is shutting a lot of moderate-income buyers out of the market. It may be worse when interest rates begin to rise again at the end of this year.

So, if you are thinking of buying and if you are in this range, we need to talk! Call me at 602-456-9388.

Oh, and why “llamas” in the title? Well, I like alliteration.

Our friends at the Cromford Report are always great about allowing us to share their analysis. As an agent, their information really gives me an edge that will benefit you.

Here’s are some highlights from they have to say about why we have seen a sudden shift to a seller’s market:

April continued the trends we saw in March with significant improvement in demand and volumes, though different price ranges are experiencing very different supply dynamics.

Currently the supply situation is the most important thing to watch and this is what determines how much competition buyers will experience.

Here are the basic ARMLS numbers for May 1, 2015 relative to May 1, 2014 for all areas & types:
    •    Active Listings (excluding UCB): 21,512 versus 26,205 last year – down 17.9% – and down 3.5% from 22,303 last month
    •    Pending Listings: 7,951 versus 7,199 last year – up 10.4% – and up 1.2% from 7,853 last month
    •    Monthly Sales: 8,363 versus 7,572 last year – up 10.4% – and up 6.0% from 7,887 last month
    •    Monthly Average Sales Price per Sq. Ft.: $135.88 versus $130.27 last year – up 4.3% – and up 2.9% from $131.99 last month
    •    Monthly Median Sales Price: $202,000 versus $190,000 last year – up 6.3% – and up 1.0% from $200,000 last month

From a seller’s perspective there is a lot of encouragement in this batch of numbers, though buyers might be dismayed to see price per sq. ft. rise by almost 3% in a single month.

For the sub-$200K price bands we are seeing mostly unexceptional demand, but exceptionally low supply, which is leading to multiple offer situations and strong upward price pressure.

As we move upmarket from $250K, things become a little easier for buyers because supply is less scarce. Once we get above $400K there are more active listings than last year and most buyers are having a much easier time with less competition from other buyers. In other words, demand is good but supply is plentiful at these higher price points.

Personally, I would add my own analysis here to mention that homes in the historic areas and CenPho tend to command higher prices than most areas. So, our experience with our clients right now shows that this tightness in supply goes up closer to $300k. In other words, it is difficult to get offers in quickly enough for nice listings in historic areas, even at the higher prices.

If you are thinking of buying or selling, please give me a call and I’ll help you put a strategy together, which takes these trends in to account. Call me at 602-456-9388.