Mid-Year Review : Were The Experts Right About The Market? Maricopa real estate

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Posted on 8th July 2011 by Anthony in The Economy

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Predictions are risky businessThe year is half-over. It’s an opportune time to take stock of analyst predictions made at the start of the year, and to recognize that the “experts” can be wrong as often as they are right. Maricopa real estate

For as much experience and authority an expert brings to the conversation, though, nobody can accurately predict the future.

As such, there’s often disagreement.

Looking back to December, some housing analysts called for a market rebound this year; while others called for a fall. With respect to mortgages, some said rates had nowhere to go but up; while others expected more dips.

As a layperson, how do you know who will be right?

In short, you can’t.

Predictions are a tricky business because they’re guesses about the future based on the world as it exists today. When the predictions listed earlier were made, the world was a different place.   

A lot has changed since January:

  • Slowing job growth has suggested to slower U.S. economic growth
  • Food and energy costs have spiked, adding inflationary pressures to the economy
  • Eurozone debt issues have grown, punctuated by a near-Greek default
  • Tsunamis have caused widespread damage in Japan
  • Earthquakes, floods and volcanoes have harmed economic output

None of these events had occurred as of December, when the original predictions were made. Yet, each of these developments has made a deep impact on housing, and on the economy.  

So, what’s a Casa Grande homeowner to do? Think of the present instead.

First, mortgage rates are low today — extremely low by historical standards. Second, home values have been slow to rebound through most U.S. markets. Combined, these factors have made homes more affordable than it any time in recorded history. It’s not only cheap to buy a home right now, it’s cheap to refinance one, too.

Analysts are saying the home prices will rise this year, and mortgage rates will, too. Those predictions may ultimately be proven true. Until the future arrives, though, those predictions are just guesses. If you are looking for Maricopa real estate please visit www.pru1re.com for more information about the city of Maricopa and the great state of Arizona.

Foreclosures Drop 35 / Arizona real estate / Maricopa real estate

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Posted on 15th April 2011 by Anthony in Housing Analysis

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Foreclosure concentration by stateForeclosure activity is much slower this year than last. That is a great sign for home owners in the Maricopa real estate market.  Of course Arizona is leading the way along with other states in the foreclosure market, but a slow down in foreclosures at the national level is a good sign.

According to foreclosure-tracking firm RealtyTrac, the number of national foreclosure filings plunged 35 percent in March 2011 as compared to March 2010, a statistic that reflects a more healthy housing market and more robust outlook for 2011.

A “Foreclosure filing” is defined as any of the following : a default notice, a scheduled auction, or a bank repossessions. Foreclosures filings were down in all but 8 states last month.

Activity remains concentrated, too. More than half of all bank repossessions can be tied to just a handful of states.

In March, 6 states accounted for 51% of activity.

  1. California : 15% of all repossessions
  2. Florida : 9% of all repossessions
  3. Arizona : 7% of all repossessions
  4. Michigan : 7% of all repossessions
  5. Texas : 6% of all repossessions
  6. Nevada : 5% of all repossessions

At the other end of the spectrum is Vermont. With just 5 repossessions for all of March, Vermont accounted for 0.008% of repossessions nationwide.

Distressed homes remain in high demand among today’s home buyers, accounting for almost 40% of all home resales. It’s no wonder, either. Distresses home typically sell at a steep, 15 percent discount as compared to non-distressed properties.

Buying foreclosures can be a great “deal”. However, make sure you’ve done your homework.

Buying homes from banks is different from buying a homes from “people”. Contracts and negotiations are different, and homes are often sold with defects.

If you plan to buy a Maricopa foreclosure, therefore, make you you speak with a licensed real estate professional before submitting a bid. You can research a home online and learn a lot of the process, but when it’s time to purchase, put an experienced agent on your side. If you are looking for Maricopa real estate or need an Arizona home mortgage please visit www.pru1re.com.

New Home Sales down In January / Maricopa Real Estate / Maricopa foreclosures

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Posted on 25th February 2011 by Anthony in New Home Sales

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New Home Sales (Jan 2010 - Jan 2011)

Not all housing reports are sunny, it seems.

In its monthly New Home Sales release, the U.S. Department of Commerce showed a 13 percent drop-off in annualized new construction sales between the months of December and January.  Maricopa real estate has had some new homes built and for sale in the recent months.  There is no doubt that foreclosures in Maricopa have driven the Maricopa real estate market.  New homes in Maricopa have been competative, but foreclosures and bank owned property are driving the home sales here in Maricopa, Arizona.

This has been one of the biggest one-month drop in New Home Sales since May 2010.

In addition, the supply of new homes for sale spiked higher to 7.9 months last month.  ”Home supply” is defined as the amount of time it would take to sell the complete “for sale” inventory at the current pace of sales.

In December, the supply measured just 7.0 months,

Don’t fret the news, however. For buyers of new construction in Maricopa , falling New Home Sales figures can be terrific. Weaker markets put pressure on the nation’s home builders to sell their respective homes more quickly. To reach that goal, builders often discount prices and/or offer free upgrades to buyers.  If you are looking to buy a new home, this may be the time to make a move to get qualified, and start looking for your new home in Maricopa.

Some of that action may already be in effect.  It is evedient by the amount of Foreclosures in Maricopa that have been recently purchased.

Despite falling volume, the Maricopa New Home Sales report showed that new homes are selling faster than in recent months. The median time required to sell a newly-built home dropped to 7.8 months in January – a figure well below January 2010’s reading of 13.9 months.  Locally the months of inventory has fallen to about 5 months, but there are more maricopa foreclosures that are being released on the market, thus the housing inventory will go up moderately.

It suggests that builders are getting better at locating buyers, and moving property.

Therefore, if you’re shopping for a new construction and see one worth buying, get to it. Not only will the home likely sell soon if it’s priced right, but an increase in mortgage rates will make the home more expensive to finance.

Every 0.250% increase to rates adds $15 monthly per $100,000 borrowed. For maore information about Maricopa real estate or Maricopa foreclosures please visit www.pru1re..com.

Maricopa real estate / Maricopa foreclosures / homes for sale Maricopa

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Posted on 17th February 2011 by Anthony in Homebuilders | Industry News

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Homes for sale in Maricopa have been dominated by foreclosures.  Maricopa foreclosures have held the market down, and the newest news for single family starts, means that Maricopa may have an opportunity to slowly sell these homes for sale in Maricopa.  Housing starts September 2008 - August 2010Annualized Single-Family Housing Starts dropped 1 percent in January to 413,000 units nationwide, it’s lowest reading almost 2 years.

A “Housing Start” is defined as a home on which construction has started. 

Maricopa real estate has never been more affordable.  In Maricopa foreclosures have driven the market, and anyone who wants to buy a home in Maricopa, the affordability is at an all time high. Now, if you had only seen the Housing Starts story in the headlines today, you wouldn’t have known that single-family starts fell at all. It’s because of how the story is being reported. 

Most commonly, newspaper headlines are reading something similar to “Housing Starts Jump 14.6%” with the lead paragraph making mention that “housing starts are at their highest levels in 4 years”.

It’s a true statement, but it’s misleading, too.

This is because, despite the Census Bureau reporting Housing Starts by property type — single-family, multi-family, and apartments — the media often lumps them into a single data set.  For home owners in Maricopa, it is only good news that the single family starts are down.  Maricopa Arizona has been and will be a heavy foreclosure real estate market, and the less amount of New homes they build, the quicker we will sell the homes for sale in Maricopa.

It’s a categorization that helps investors in homebuilder stocks, but it does little for everyday Maricopa home buyers. The huge majority of buyers aren’t buying multi-units or whole apartment buildings — they’re buying 1-unit homes.

Here’s how January’s Housing Starts broke down by type:

  • Single-Family Homes : Down 4,000 units, or -1%
  • 2-4 Unit Homes : Negligible change
  • Apartment Buildings : Up 46,000 units, or +80%

Clearly, the surge in Housing Starts can be attributed to the rapid rise in the 5-unit-or-more sector. Single-Family Starts were weak, by comparison.

Even with all of this noted, however, we can’t even be certain that the January Housing Starts data is accurate anyway. A footnote in the government’s report shows that, although single-family starts are said to have decreased 1 percent, the data’s margin of error is ±8.6%.

This means that the true Single-Family Housing Starts reading may be anywhere from -9.6% to +7.6%. The data is throw-away. Housing Starts may have actually increased in January, but we won’t know until revisions are offered later this year.  For more information about Maricopa real estate, or Foreclosures in Maricopa please visit www.pru1re.com. Need a loan to buy a home in Maricopa?  Click here

Foreclosure Activity Down Second Straight Month, Not in Arizona

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Posted on 13th January 2011 by Anthony in foreclosures

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Foreclosure concentration December 2010According to foreclosure-tracking firm RealtyTrac, the number of foreclosure filings nationwide dropped for the second straight month in December. After falling 21 percent in November, filings were down by an additional 2 percent in December.  The fillings keep decreasing, however in states like Arizona the foreclosure activity is till high.  Outskirt cities like Queen Creek, and Maricopa Arizona were hit hard.

“Foreclosure filing” is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions.

Like most months, a small number of states dominated December’s national foreclosure figures. 6 states accounted for more than 50 percent of all bank repossessions.

  1. California : 17% of all repossessions
  2. Florida : 11% of all repossessions
  3. Arizona : 6% of all repossessions
  4. Michigan : 6% of all repossessions
  5. Texas : 6% of all repossessions
  6. Nevada : 4% of all repossessions

December’s  filings fell to its lowest levels since June 2008, but we can’t read into the report too much just yet. Foreclosure volume continue to be dampened by lawsuits and moratoriums related to controversy surrounding the so-called robo-signers.

Foreclosure activity may have lessened in December anyway, but we can’t know for certain. 

Distressed properties are in high demand among home buyers, accounting for one-third of all home sales; typically sold at a steep, 15 percent discount as compared to non-distressed properties.  In places like Maricopa Ariozna distressed properties account for over 50% of all the real estate sales.

Buying foreclosures can be a terrific “deal”.

That said, buying a foreclosed home is different from buying a non-foreclosed home. Specifically, because you’re buying from a bank and not a person, contracts may vary from what’s “customary” and negotiations may be drawn-out.

It’s one reason why buyers in Queen Creek Arizona – first-timers and investors alike — should talk with a real estate agent before writing an offer for a foreclosed property. You can learn a lot from the internet, but when it comes time to actually purchase a home, you’ll want an experienced professional on your side.  Contact Prudential One Realty.  We serve the Arizona real estate market with pride.

Arizona real estate /Loan Costs Increasing April 1/Casa Grande, Maricopa, Phoenix

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Posted on 6th January 2011 by Anthony in Industry News | Mortgage Rates

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Arizona real estate news: LLPA rising April 1 2011Starting April 1, 2011, loan-level pricing adjustments are increasing. Most conforming mortgage applicants will face higher loan costs.  This means its time to check your loans Arizona home owners.  Alot of home owners, in places like Maricopa, Casa grande, and Phoenix Arizona, have loans that are getting ready to adjust, it is imperative to check this out and see if it is in your interests to look at a new loan program for your real estate purchase

Loan-level pricing adjustments are mandatory closing costs. They’re assigned by Fannie Mae and Freddie Mac, and based on a loan’s specific risk to Wall Street investors.

First constructed in April 2009, loan-level pricing adjustment are a means to help Fannie Mae and Freddie Mac compensate for “riskier loans” by bolstering their respective balance sheets.

Since the initial roll-out, Fannie and Freddie have amended adjustments five times. The pending April adjustment will be the 6th revision in two years.

No class of conforming borrower is exempt from LLPAs. Each loan delivered to Fannie Mae is subject to a quarter-percent “Adverse Market Delivery Charge”. That cost is often absorbed by the lender.

The remaining adjustments are grouped by category:

  1. Credit Score : Lower FICO scores carry bigger adjustments
  2. Property Type : Multi-unit homes carry bigger adjustments
  3. Occupancy : Investment properties carry bigger adjustments
  4. Structure : Loans with subordinate financing may carry bigger adjustments
  5. Equity : Loans will less than 25% equity carry bigger adjustments

LLPAs are cumulative. A borrower that triggers 4 different categories of risk must pay the costs associated with all four traits.

Loan-level pricing adjustments can be expensive — as much as 3 percent of your loan size in dollar terms.  As an applicant, you can opt to pay these costs as a one-time cash payment at closing, or you can to pay them over time in the form of a higher mortgage rate. 

The loan-level pricing adjustment schedule is public. You can research your personal scenario at the Fannie Mae website. However, you may find the charts confusing. Especially with respect to which route makes the most sense for you — paying the adjustments as cash, or paying them “in your mortgage rate”.

Phone or email your loan officer for help. Prudential One Realty serves the real estate market for Phoenix Arizona, Maricopa, and Casa Grande Arizona.  For more real estate information please visit www.pru1re.com.

Foreclosure Activity Plunges (But With An Asterisk)

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Posted on 21st December 2010 by Anthony in foreclosures

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Foreclosures per household, November 2010

According to foreclosure-tracking firm RealtyTrac, the foreclosure filings fell 21 percent in November to 262,339 units nationwide. A foreclosure filing is defined as default notice, scheduled auction, or bank repossession. 

November marked the first time since February 2009 that the number of monthly filings failed to surpass 300,000 units.

There were other notable November statistics, too, included:

  • November’s 21 percent month-to-month decrease was the largest in RealtyTrac’s recorded history
  • November’s 14 percent year-to-year decrease was the largest in RealtyTrac’s recorded history
  • Nevada led the nation in foreclosure activity for the 47th straight month

However, we can’t read into November’s RealtyTrac report too much; ultimately, history may treat it with an asterisk. Controversy surrounding the so-called robo-signers forced some of the biggest banks to institute a temporary halt to foreclosures in November. Foreclosure activity did fall last month, but the moratorium makes the figures look better for housing than if there had been no interference.

The halt in foreclosures is also why Utah leaped into the #2 state for foreclosures nationwide. Perennial foreclosure-leading states like California, Michigan and Arizona posted double-digit improvements in November whereas Utah did not.

Banks have since resumed foreclosure activity so December’s results may be a better gauge for how the market is truly performing.

Foreclosures tend to be sold at discount and low home prices can entice home buyers to make an offer. If you’re such a buyer in Maricopa and want to look at foreclosed homes, talk to a real estate agent first.  Maricopa Arizona has some great deals on foreclosed homes, to view a complete inventory of foreclosed homes visit www.pru1re.com .

Although there’s a host of online search engines that specialize in foreclosures, a licensed agent may have access to broader inventory, plus the ability to negotiate it more effectively.  Prudential One Realty in Maricopa and Casa Grande Arizona are local agents with local Arizona real estate knowledge.

For more information about Prudential One Realty or our foreclosure services, please visit www.pru1re.com or call 520-413-2070 for Maricopa and 520-836-1001 for Casa Grande.

Statistics from the National Association of Realtors

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Posted on 1st September 2010 by Anthony in Industry News

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The NAR Research staff now gives you a weekly analysis of the economic data released during the past week, and how current economic conditions are affecting the real estate market. For daily economic forecasts, visit NAR Research’s Facebook page.

August 23, 2010:

  • The National Activity Index an indicator of economic activity from the Federal Reserve Bank of Chicago, the moved up to zero in July, from ‐0.70 in June. An index value of zero points to national economic growth along historical trend rates; a negative value indicates growth rates that are below‐average, while a positive value denotes above‐average growth.
  • The 10-year Treasury rate declined in August and continues to be at historic lows. As of August 20, the rate was 2.62 percent. In July of this year the rate was 3.50 percent, while a year ago the rate was 3.62.
  • The low rate bodes well for the cost of borrowing in other financial markets, and points to continued low mortgage rates.

August 24, 2010

August 25, 2010:

  • Mortgage purchase applications were up 0.6 percent for the week ending August 20, continuing the weakness in the home buying market seen post-tax credit. The level of mortgage activity remains near 13-year lows. However, purchase applications do not take into consideration all-cash purchases which according to the June REALTORS® Confidence Index made up roughly one-fourth of transactions.
  • Year-over-year purchase applications were down 39.2 percent. The weak job market continues to weigh heavily on the housing market.
  • Refinances made up 82.4 percent of mortgage activity increasing 5.7 percent as mortgage rates fell to the lowest level in 20 years of the survey’s data. The average rate for a 30-year fixed mortgage was 4.55 percent
  • New Home Sales were down to a historic low of 276,000 in July (the Census Bureau’s numbers for new homes go back to 1963). This is a 12.4 percent decrease from June’s 315,000 home sales.
  • The median price for a single-family home fell to $204,000 the lowest since 2003.
  • Durable goods orders increased 0.3 percent in July, however this was below expectations.
  • Motor vehicles continued to be one of the few bright spots in the report.

August 26, 2010:

  • Seasonally adjusted initial jobless claims declined by 31,000, or 6.2 percent, to 473,000 for the week ending August 21, 2010. This stops a streak of three consecutive weekly increases in initial claims.
  • Continuous claims also declined by 62,000, or 1.3 percent, to 4.46 million claims for the week ending August 14, 2010. However, this most likely reflects the expiration of benefits for some claimants rather than actual employment gains.
  • According to the Mortgage Banker’s Association, the seasonally adjusted percentage of loans that began the foreclosure process in the second quarter 2010, nationally, remained unchanged from the previous quarter at 1.17 percent. However, the second quarter rate is 30 bps below the 2009 rate of 1.47 percent.
  • The west exhibited the biggest year-over-year decrease in foreclosure starts. In the second quarter 2009, 1.78 percent of all loans began the foreclosure process. In the second quarter 2010, 1.27 percent of all loans began the foreclosure process. This represents a 51 bps decline.
  • Overall, there are two countervailing forces at work. Unemployment levels, although lower than the previous week’s level, still remain higher than they were in June. The lack of more robust job creation has hindered consumer confidence and housing demand. In contrast, foreclosure rates have declined from their peak levels in 2009, thereby decreasing the amount of housing inventory put back on the market.

August 27, 2010:

  • The Commerce Department revised the second quarter growth down. Gross domestic product, the value of all goods and services produced from April to June, rose 1.6 percent annualized, which is down from the initial 2.4 percent estimate.
  • The downward revision was mostly due to much higher imports and a smaller
    gain in business inventories. On the other hand, there was some improvement in residential fixed investment, an increase in nonresidential fixed investment, an improvement in state and local government spending, and an increase in federal government spending. In terms of inflation, the GDP price index was pushed up to 1.9 percent from the initial 1.8.
  • On a positive note, personal consumption was strong and increased 2.0 percent in the second quarter, compared with an increase of 1.9 percent in the first. However, according to the University of Michigan’s consumer sentiment index, also released today, confidence among consumers increased only slightly in August to 68.9 from 67.8 in July which was the lowest index since November. The weak consumer confidence may raise a risk of decline in consumer spending which accounts for about 70 percent of the GDP.