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.

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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.

You might have seen my previous post on this topic of the potential of the $8,000 tax credit.

The National Association of Realtors wants Congress to extend and expand the $8,000 tax credit. Now it will not only be for first time home buyers, but everybody.

As an agent, I would continue to do everything I can to get my clients this credit if it remains in effect.

However, I believe that the cost to the country (over $200 billion) is not necessary. Further, I believe that this could encourage more unrealistic upward pressure on home prices –something that got us in to this mess.

I think the expectation is that the housing market will drive the economy. That is questionable when the commercial real estate market is tanking.  I believe that there will be an imbalance as people obligate themselves to new homes while unemployment might continue to rise and the commercial real estate market might result in more lay-offs.

The result could be many more people buying houses that they cannot afford.

This recovery needs to be driven, not by real estate, but by investment in infrastructure, energy and technology.

For your information, here is the National Association of Realtors Call to Action. I have called and told the Senators and Rep. Mitchell that I do not want to see the extension.

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Dear Arizona REALTOR:

The U.S. Senate will be voting on an amendment this week that would extend the first-time homebuyer tax credit.

NAR is supporting the Dodd-Lieberman-Isakson amendment because this amendment will:

–Provide the $8,000 tax credit to any buyer (not just first time)
–Set income limits at $150,000/$300,000 for single/married buyers
–Make the credit available until June 30, 2010

NAR’s Legislative talking points on the Dodd-Lieberman-Isakson Amendment $8,000 Homebuyer Tax Credit also are attached for your use.

NAR is asking for your help in generating phone calls from Arizona REALTORS to the offices of Senator McCain and Senator Kyl in Washington, DC.

Please request to speak to each Senator’s Tax Legislative Assistant and ask them to support the Dodd-Lieberman-Isakson amendment. We need to generate as many calls as quickly as possible.  Below are the phone numbers for our Senators.

Senator McCain:   202-224-2235
Senator Kyl:       202-224-4521

Thank you for your prompt response on this important issue!

If you are FHA-financed and get an offer accepted by the end of next week, you could get your new home in time to still capture the $8,000 tax credit. The deadline is the end of the month if you are conventional.

However, it’s going to be tough!

Here are some reasons why you should not despair if you do not make it in time.

1) Interest Rates are Even Lower. According to Bloomberg News, interest rates are below 5% now. If you are not new to real estate, you probably can’t believe this. Interest rates 7 years ago were over 7%. Interest rates in 1981 were over 15%. If you are new to home buying you might just shrug, but you shouldn’t.

Compare a loan at 7% with a loan at 5%. On a $100,000 house your monthly principle and interest at 7% is about $665. At 5% it is about $552. That $113 per month savings equals $1,356. You would match the $8,000 tax credit savings in 5.8 years.

You don’t get the tax credit right away, but you will still save tens of thousands of dollars over the life of the loan!

2) Prices May Change after the Tax Credit Goes Away. We don’t know by how much, but prices may change after the incentive of the $8,000 tax credit goes away. With many people leaving the market and the holidays coming up, the market will slow and prices will come down. It slows during the holidays, anyway. But this is a double-whammy. People buying this holiday season could come up with a really incredible deal, just in time for Christmas.

Helluva stocking stuffer, huh?

OK. So, maybe “Love” is a little strong.

However, if you know me, you know that I’ve been advising against buying a short sale home. You also know that I’ve been advising against trying to sell short.

For the buyer, my biggest concern has been that you would wait for months before you hear back from the bank.

For the seller, my biggest concern has been that you are led to believe that your house will sell quickly because your agent under-prices it, then it does not sell in time because buyers don’t trust the process and then you foreclose anyway.

Well, there are some trends that are indicating that things are getting better.

Don’t get me wrong. We should not turn in to a society of short sellers. That is really bad for the market and really bad for home ownership.

However, if you are getting distressed and you are really, really stuck, this might be of interest to you.

First, the number of short sales that are selling has increased. If you look at the chart, below, you will notice that the percentage of short sale homes that have sold has increased, as a portion of all of the homes that sell. These are the latest numbers.

The blue lines represent the short sales and the red line represents all of the sales, total. For you who are tracking the numbers, that equals to about 7,700 sold homes, total and 1,400 of those that were short sales. Compare that to about 4,000 total sales in Sept. 07 with only 20 short sales completed.

In other words, your chances of getting a short sale through the process before it goes to foreclosure is now up by 700% since Sept. 07. Or, by 200% since May of this year.

Second, short sales represent about 48% of the market now. So, it is more difficult to get away from them. My colleague, Leif Swanson and I have been working more on the short sale issue and are confident that we have ways to get through the process in a reasonable time. We are also interfacing with teams of people who are very good at it. If you are thinking that you might have to short sell, please give me a call at 602-456-9388.

Third, your chances of getting a home that has been terribly damaged by vacating owners is greater with a foreclosure. I don’t have any numbers on this. But a short sale requires that the vacating owner work with everybody to sell the property. Sure, they may be upset, but they are not as likely to trash the kitchen on the way out.

In the end, it is not ideal. Far from it. We just have to hope that all of the foreclosures and short sales clear the market over the next year and we can get back to a “normal” market.

But, in the meantime, we may just have to learn to love the short sale.

Just because I’m a Realtor®, does not mean that I am willing to go along with everything the State or National Associations of Realtors says.

Typically, in Arizona, they have attempted to undermine rights residential users of solar energy. Nationally, they don’t typically support environmental laws that I support.

But I am ready to step out and say that we should not extend the $8,000 tax credit past the November 30th deadline. This is sacrilegious to some. Aren’t I undermining my own business? Aren’t I preventing people from buying houses?

Well, my personal business is not as important as the fate of the country. The program has cost the country $15 billion. The National Association of Realtors wants to increase the credit to $15,000 and remove the first time home buyer restriction. It will cost the general fund between $50 and $100 billion. And, over time, we will find all kinds of loopholes, so that will only grow.

We are looking at a bankruptcy of Medicare and Social Security on the horizon, and we are supposed to expand this program? Unacceptable.

As for preventing people from buying houses, I simply don’t accept that the market will dry up.  We have record low home prices in America. The market will do better as the rest of the economy recovers. Further, banks still have many, many foreclosed homes that they have not released into the market (over 40,000 in Arizona). While we don’t want them to release them all at once, a steady stream of homes on the market can keep prices down.

For me, it is a simple equation: we needed the boost in the housing market, but it is not worth creating a permanent new hand-out when the result will just add to our staggering deficit and debt.

Now, here is another idea for you to ponder. It might be high time that we eliminate the tax deduction on the interest on your home. Or, at least we need to replace it with something that is more geared toward new home ownership. Now, that is sacrilege! I’m trying to find the article in my stack of old magazines. It was either in the Atlantic Monthly or the Economist, but this is not a new argument.

It goes like this: the interest deduction encourages people to buy houses that are unrealistically large for their income, it encourages sprawl, it is a huge drain on our general fund when we can’t afford it and it is used by people for second homes. Heck, my parents take an interest deduction on their stinkin’ RV because it is a second home!

Really? You gotta squint really hard and look sideways to call an RV a second home.

Regardless, if the goal is to get first time home buyers in to a home so that they can become stable, why give a credit for a second home? Why not offer a one-time $15,000 tax credit for your first home. After that, you are on your own.

I’ll find that article and link to it. This it a very touchy topic, so I’d love to see some debate on it.

As for this topic, check out a very good article on the issue, here.

Hey, all. Don’t forget that we have two big events this week.

First, drop by the Artist and First Time Home Buyer Workshop tomorrow night at the Alwun House. I will be on a panel discussion with lots of other great people who will help you or somebody you love make that first, all-important home purchase.

http://www.facebook.com/event.php?eid=148132137657&index=1

Second, Get Your PHX at NINE|05 is on Thursday. The good folks at NINE|05 have created a special Get Your PHX cocktail, just for us! I’m told it will or may include rum, strawberries and soda –but they are still playing around with it.

http://www.facebook.com/event.php?eid=141614765792&index=1

You might recall from my previous post about anti-deficiency, that Arizona was just about to find itself in a baaaad place for home owners. Here is the recap:

• Arizona is traditionally an anti-deficiency state. I.e., if the bank takes back your property and sells it at a loss, they can’t come after you for the difference.

• A legislator (Republican Senator Steve Pierce, R-Prescott) attempted to change that law so that people who lost their homes to the banks within 6 months of purchasing (presumably investors), could be pursued by the banks.

Problem: it would have encouraged more foreclosures and bankruptcies. Here is why: Arizona has a relatively short foreclosure period (90 days). If banks know that all they have to do is wait out an owner in order to foreclose and still be able to go after the deficiency, then they are more likely to do that. This will impact more than just people who are flipping homes. This could impact all kinds of buyers, not just “flippers.”

So, the Arizona Association of Realtors (AAR), who did not see the implications when the bill first passed, were successful in moving legislation to overturn the original bill  –with the help of the original author, who should consider thinking through legislation in the future.

Moral of the story:

1. Lawmakers need to think through things a little more thoroughly;

2. The AAR lobbyists might have been a little too busy helping the home builders undermine local cities’ ability to collect impact fees or improve energy efficiency of homes to catch this one early.

I’m just sayin’.

Roosevelt Row and the Alwun house have been leaders in helping to promote home ownership in historic neighborhoods around downtown.

This Homebuyer’s Workshop, hosted at the Alwun House, is for you if you think you can’t qualify for a home, or you are just looking to get a new home before the $8,000 tax credit goes away.

The event is tailored to first time home buyers who want to live in CenPho. Perhaps you are an artist or work in a field where income is inconsistent. There will be plenty of folks available to answer your questions (including me).

A panel of experts will cover the following:

1) Funding programs for first time home buyers.

2) How to afford your first home.

3) Housing market analysis.

4) Historic neighborhoods: Garfield, Coronado, etc.

Please RSVP at the Facebook invite here, or directly to me at clarkreport@kenclarkforaz.com

Sept. 2009

I want to tell you about my first client, Michelle Harrington, as we just passed the one-year anniversary of closing on her house, just around 15th Ave and Indian School.

This was Michelle’s first house and she did an incredible job sprucing up the property on a budget.

The property she bought was built in 1939. Back then, they had race restrictions on who could buy the house! I could actually see them in the title report. Yuck!

The home had been passed from a long-time owner to a person who just wanted to flip the house, but who got stuck in it when the market went “kerplunk.” They just slapped some paint on the walls and that was about it.

Here are the “before” pictures:
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