Way back in March or April, I went to a seminar on how the city was going to use the $39 million in neighborhood stabilization grant money from the feds to help people purchase foreclosed property. One could get $15,000 toward a home.

The general feeling in the room was that the program was far too complicated for most people to take advantage.

That concern has been born out. See this post from the city. It has taken them since March to get one person through the process and another 60 qualified.

Don’t you get the sense that they could have done that a little differently?

If you are putting off  purchasing a home because you are afraid that there might be changes at your job (layoffs, relocation, etc.), there might be an answer in Nova Home Loan’s Safe House Mortgage Protection Plan.

I work with a lot of different brokers. Others may have this, as well. But this is good to know.

Here are the features:

• If you lose your job, they will cover as much as 24 months of your mortgage (up to $1,800 per month). 12 months if you purchase the plan if when you are just refinancing a loan.
• You start the plan when you close on the house or complete the refinance.
• Cost = $770 on a purchase and $595 on a refinance. (You can pay this at close of escrow and maybe work it in to the closing costs that the seller pays!)

Eligibility:

• Ages 18-66
• Must reside in the US.
• Cannot be self-employed.
• Must be employed a minimum of 30hrs per week at time of close.

There are more details here. So, have a look. It might be something that could give you the piece of mind to move ahead and get a house in phoenix now, while you can still get the $8,000 tax credit!

Here is a news article about it.

Or, call Jeannie Bolger at Nova Home Loans at jeannieb@novahomeloans.com.

The Case-Shiller Index is going to come out tomorrow and tell us that home prices are on the rise.

See and article here.

Of course, I’ve been telling you about this since March of this year. We saw it coming because we see the numbers, direct from the multi-listing service (MLS). Here is an oft-repeated graph from the Cromford Report:

Here are some things to remember:

1) Reports like this are always 3-5 months behind because the people who report them want several months behind them before they feel comfortable making any statements, even if the triggering event happened 4 months ago!

2) Prices are not going to rocket up like they did from 2005-2007. The economy is just not that strong. So, today’s market is much like it was in 2001-2003.  It is still a great time to buy.

3) Stratify the market. Homes on the market sell faster the cheaper they are. A $100,000 home that is a foreclosure is going to sell in a matter of days or weeks. A $300,000 traditional sale may stay on for a few months. However, the over-all market is very close to equilibrium, which means homes sell in about 5 months. Homes over $1 million have an “absorption rate” of 848 days!

4) The Case-Shiller Index looks at the market nation-wide. Every market is different. Stay tuned for the best local information.

I don’t know if there is anything you could do about this, but wouldn’t you hate be the person trying to sell the house at this address. When your buyers go to check out Google Street View to check out the neighborhood, this is what they see.

Tip of the Day. Google Street View is a great way to check out the neighborhood before you drive around.

Caution of the Day. Google Street View can be a couple years out of date. Things might have changed

The economy seems to be making those little signs that indicate some kind of recovery. Whether it will be like a man coming out of a coma or a volcano erupting is yet to be seen.

But, here are two stories that illustrate how recovery happens: when prices get so low that investors and consumers can’t help but get back in the market.

First, from the Arizona Republic, this article illustrates how developers have started building homes out in the burbs again. However, instead, this time they are doing it more cheaply because they are building homes where previous builders had to abandon ship.

Okay, set aside for a second what a bad idea it is to keep sprawling out in the desert. Also set aside just what a negative influence some developers are on the state. In my experience when I was in the Energy Office, they resisted all attempts to make more energy efficient homes and are currently going to far as to trying to undermine local ordinances that require more energy efficiency.

But, aside from that, this activity is a really good indicator of how the market is moving. First they make money on the cheapest property. Then they move on to scraping new land, etc.

Obviously these builders are watching the existing home market and are seeing that the current inventory will exhaust soon. We had an inventory of over 56,200 homes  last November. Now we are down to 31,400 homes, with a monthly sales rate of over 9,000 per month.  These guys know that it won’t be long before people are looking for new homes.

Obviously, I would like to see more incentives for smart in-fill. But I don’t expect to see that soon.

Second, the rage of multiple offers indicates where we are headed. Check out this article from Inman News.

Five months ago, you could low-ball an offer for a home. But not now. If the home is at all good looking and well-priced, you can expect to see multiple offers within 48 hours. I don’t know for certain, but I don’t think as many of those are full-cash offers because prices have gone up. But, they are definitely more aggressive.

So, this is a turning  point. A few months ago I told you how the prices started going up (the second week of April) for homes under $200,000. Now, you are seeing multiple offers on those lower-priced homes. Next you will see quicker sales on homes over $200,000.

It begs the question of whether we need another $8,000 tax credit package next year.

If one is to believe that there are a whole bunch more foreclosures coming down the pipe, then we might need that. However, I think talk of a second wave are over-rated. There certainly are more short sales on the market, but only proportionally. They are not moving and the banks don’t seem to be interested in moving them all in to foreclosure all at once.

My colleague, Leif Swanson, publishes market stats for the Phoenix metro area once per month. Have a look here to see them thar updates.

Here is the Cliff’s Notes Version:

1) It is now a seller’s market in Phoenix! The inventory of homes in July 2009 was 4.2 months.  It was much better than July 2008’s absorption rate of 9.1 months, but a small bit higher than June 2009’s 4.1 months.  (Absorption rate = the # of months’ inventory available for sale.) A balanced buyer-seller market is six months.  The absorption rate in July 2009: 3.8 months for homes, 6.7 months for condos, and almost 14 months for manufactured homes.  Therefore, it is now a seller’s market for homes in the Phoenix metropolitan area.

2) Sales of homes in July did not go up from June. However, both months saw a 52% increase of home sales (about 9,000 homes) over last year (about 5,900 homes).

3)  Bank-owned foreclosure properties accounted for 53.3% of the sales in July 2009 down from June 2009’s 57.4% and May 2009’s 63.1%.  More and more buyers are purchasing homes from regular sellers.  While nearly 36% of the total sales in July 2009 were cash, 33% of the sales were with FHA or VA financing.

4) The average sales price in July 2009 increased for the FOURTH CONSECUTIVE MONTH to $175,345.

There is plenty more to geek out on in Leif’s report. He always does a thorough job in his report.

I want to give a little shout-out to Tazmine and Paul over at Blooming Rock Developments. Have a look at this post about a renovation project that they did earlier this year. It demonstrates that even the most drab and uninspiring structures can be sharp, fresh and unique. Their project, 3 Palms, is over on Cheery Lynn, east of 16th St. They are in a great place to serve as a catalyst to residential property redevelopment.

I’m waiting for more photos of the work they did inside and some information on the costs and lessons from the project. I’ve seen inside, but you should, too. They did a great job of balancing modern and warm.

There is an intriguing situation playing out at the legislature, and I’m not talking about the budget.

A little background: In AZ, if you go in to foreclosure,  the bank takes back your property and sells it at a loss, they can’t come after you for the difference. The act of coming after you for the difference is called “deficiency.” Therefore, Arizona is an “anti-deficiency” state.

In other words, let’s say you bought a house for $200,000, but could not make the payments and the bank forecloses. They can only sell it for $150,000. They can’t come after you for the balance of $50,000.

That is why Arizona is such a great place to get a fresh start. We’ve been that way for a while. Banks don’t like it, but people do.

So, along comes freshman Republican Senator Steve Pierce, R-Prescott. He passes a bill that makes Arizona a deficiency state, so that banks can come get the balance from people. Well, actually, the bill allows deficiency only in those cases where the owner has owned the property for less than 6 months. He was trying to target people who flip houses.

Well, the bill has caused quite a few problems. Most importantly, it will encourage 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, have jumped in to action. They asked the governor to put the topic in the call for special session (which we are in now). They also convinced the original bill sponsor to advocate for the repeal of his own bill –a pretty impressive feat, if you ask me.  See the letter to the governor here.

So, now we are in a real pickle. The original bill goes in to effect on Sept. 30th of this year. Yet, despite several attempts, the AAR has not been able to get the repeal through the legislature. See the Arizona Republic article here.

What does this mean for you? Well, if the repeal does not go through, watch for more foreclosures starting in about December. I don’t expect a dramatic increase in foreclosures, but this will add to the mix. There will also be a suppression of investment purchases.

In my opinion, we’ve done well with anti-deficiency in Arizona. Sure, there are folks who should not be lending money. But, perhaps the banks should look inward to consider why they keep lending to people who default within six months of purchasing a property.

I encourage you to call your legislator and ask them to support a return to our traditional anti-deficiency status.

Stay tuned.

Hey all,

I just wanted to give a quick shout-out to some folks who help get the word out about the Get Your PHX monthly mixers.

The ladies at www.NetworkingPhoenix.com are really great about posting Get Your PHX. I like to think of the event as more of a downtown civic support group than straight “here’s my card, where’s yours?” networking. But there is also more to www.NetworkingPhoenix.com than just that. So, have a look.

Also check out www.eventification.com. This one is more specifically tailored to CenPho. If you are looking for a good list of industry-related networking events, this is a good rolling list. Thanks to Brian Shaler for this one.

The City of Phoenix today announced that Entrepreneur.com named out little town as one of the top ten best places in America to start a new business.

Like Las Vegas, some of this has to do with the very cheap rents that resulted from the commercial real estate market crash and the very low home ownership costs right now. See the article here.

But in poking around on that article, they had a very nice series on how to start your own business. This would have come in handy! Why didn’t anybody tell me that I should have done a logo first, before I started selling homes?

Still, useful…