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.

A Simple Explanation Of The Federal Reserve Statement / Casa Grande real estate

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Posted on 27th April 2011 by Anthony in Federal Reserve | Industry News

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Putting the FOMC statement in plain EnglishEarlier today, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was 10-0 — the third straight meeting after which the FOMC vote was unanimous.

In its press release, the FOMC noted that since its March 2011 meeting, the economic recovery is proceeding “at a moderate pace” and that labor markets conditions are “improving gradually”. Household spending and business investment “continue[s] to expand” but the housing sector remains “depressed”.

Furthermore, the FOMC’s statement discussed the Federal Reserve’s dual mandate of (1) Managing inflation levels, and (2) Fostering maximum employment. The statement acknowledged recent inflation pressures on the economy, but it expects those pressures — because they’re related to oil and food prices — to be “transitory”. Unemployment remains “elevated”.

The FOMC statement also re-affirms the group’s plan to keep the Fed Funds Rate near zero percent “for an extended period” of time, and to keep its $600 billion bond market support package — more commonly called “QE2″ — intact.

The statement’s verbiage suggests that a third support package may be created after QE2 ends in June 2011, depending on the needs of the economy.

Mortgage market reaction to the FOMC statement has been positive thus far. Mortgage rates in Casa Grande are unchanged, but leaning lower. And, as always, market sentiment could shift quickly. If you like today’s mortgage rates, consider locking in.

The FOMC’s next scheduled meeting is a 2-day event, June 20-21 2011.  If you are looking for casa grande real estate visit www.pru1re.com.  If you need an Arizona mortgage click here.

/ Homebuilders Expect More This Year / Arizona

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Posted on 17th March 2011 by Anthony in Housing Analysis

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NAHB Housing Market Index (April 2009-March 2011)Homebuilders are optimistic about the housing market this spring, relative to recent months.  Maricopa Home building had been steady for Maricopa real real estate.

According to the monthly Housing Market Index as published by the National Association of Homebuilders, after 4 straight months of reading 16, March homebuilder confidence ticked 1 point higher to 17.

It’s the highest confidence reading in 10 months.

A value of 50 or better indicates “favorable conditions” for home builders; with more builders viewing sales conditions as “good” than “poor”.

HMI hasn’t read higher than 50 since April 2006.

Regionally, the Housing Market Index showed mixed results. Confidence fell 1 point in the Northeast, held firm in the Midwest, and rose in the Southeast and West regions by 2 points and 4 points, respectively. Maricopa real estate has been embracing the well priced new homes.

As an index, the monthly survey is actually a composite of three separate homebuilder surveys — a report on single-family sales; a report on current buyer foot traffic; and a projection for single family sales in the next 6 months.

March’s HMI breakdown shows that builders expect sales to be brisk over the next few months. Projected Single-Family Sales is running at its highest level since May 2010 — right as the $8,000 federal homebuyer tax credit was ending.

  • Single-Family Sales : 17 (Unchanged from February)
  • Buyer Foot Traffic : 12 (Unchanged from January)
  • Projected Single-Family Sales : 27 (+2 from February)

For home buyers in Maricopa and across the country , the March Housing Market Index may signal the end of “builder discounts” and free upgrades. As home sales increase, builders are often less likely to make concessions.

In conjuction with rising mortgage rates and new, mandatory loan costs, buying a newly-built home may never be as inexpensive as it is right now.

If you expect to buy a newly-built home this year, consider moving up your time frame. The longer you wait, the more it may cost you. If you are looking for Maricopa real estate visit Prudential One Realty.  Are you looking for an Arizona mortgage?  Click here

Maricopa real estate / Casa Grande real estate / Loan Fees Set To Rise

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Posted on 10th March 2011 by Anthony in Industry News | Mortgage Guidelines

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LLPA rising April 1 2011Beginning April 1, 2011, Fannie Mae is increasing its loan-level pricing adjustments. Conforming mortgage applicants in Maricopa Arizona should plan for higher loan costs in the months ahead.  This will affect your buying power for Maricopa real estate and Casa Grande real estate alike.

If you’ve never heard of loan-level pricing adjustments, you’re not alone; they’re an obscure mortgage pricing metric and, thus, are rarely covered by the media. That doesn’t make them any less relevant, however.

LLPAs are mandatory closing costs assessed by Fannie Mae and Freddie Mac, designed to offset a given loan’s risk of default. LLPAs were first introduced in April 2009.

This April’s amendment is the 6th increase in 2 years. LLPAs can be costly.

In addition to an up-front, quarter-percent fee applied to all loans, there are 5 additional “risk categories” in the LLPA equation:

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

Adjustments range from 0.25 points (for having a 735 FICO score) to 3.000 points (for buying an investment property with just 20% downpayment). And they’re cumulative. This means that a borrower that triggers 3 categories of risk must pay the costs associated with all 3 traits.

Loan-level pricing adjustments can be expensive — up to 5 percent or more of your loan size in closing costs. The fees can be paid a one-time cash payment at closing, or they can be paid in the form of a higher mortgage rate.

The loan-level pricing adjustment schedule is public. You can research your own loan scenario at the Fannie Mae website, but you may find the charts confusing.

Phone or email your loan officer if you’re unsure of what you’re reading.  If you are looking for Maricopa real estate or Casa Grande real estate visit Prudential One Realty we specialize in Maricopa, Casa Grande, and many other Pinal County and east valley cities.

FHA mortgages / Maricopa real estate / buy a home in Maricopa

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Posted on 4th March 2011 by Anthony in FHA Mortgages | Industry News

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FHA Mortgage Insurance Increase April 18 2011For the third time in 12 months, the FHA is changing its mortgage insurance costs.   You should check with your mortgage lender about these insurance premiums when you look to buy a home in Maricopa.  These changes will take place i April and will affect Maricopa real estate and nationwide.

Effective for all  case numbers assigned on, or after, April 18, 2011, annual mortgage insurance premiums (MIP) will increase 25 basis points.

The change will add $250 to an FHA-insured homeowner’s annual loan costs per $100,000 borrowed, and applies to all borrower’s equally. Current  borrowers are unaffected.  So if you are already in the process to buy a home in Maricopa and you have secured your FHA loan, then there would be no increase.

To understand the FHA is to understand why premiums are rising.  During the past 5 years They have played a major role in Maricopa real estate most people that wanted to buy a home in Maricopa during this time bought using FHA backed funds.

As an institution, the Federal Housing Administration plays a much larger role in the U.S. housing market today than it did just 5 years ago. According to its own records, the FHA’s percentage of purchase money business in Arizona and nationwide expanded from 4 percent in FY 2006 to 19 percent in FY 2010.

Rapid growth like this has strained the FHA’s capital and, indeed, in its official statement, the they allude to this, stating that the MIP increase will “significantly strengthen” its reserves. By law, the FHA must maintain a certain minimum level of reserves.

Mortgage insurance varies by loan term, and by loan-to-value and, beginning April 18, 2011, the new insurance premiums are as follows:

  • 15-year loan term, loan-to-value > 90% : 0.50% per year
  • 15-year loan term, loan-to-value <= 90% : 0.25% per year
  • 30-year loan term, loan-to-value > 95% : 1.15% per year
  • 30-year loan term, loan-to-value <= 95% : 1.10% per year

To calculate your monthly mortgage insurance premium, multiply your starting loan size by your insurance premium, and divide by 12.   The truth is that this is small in comparisonm to Maricopa real estate prices, and the overall picture still looks very good for buyers of Maricopa real estate.  If you are looking to buy a home in Maricopa, or need a loan for your real estate purchase click here.

There is no change planned to the 1 percent upfront mortgage insurance premium charged by the FHA.

Pending Home Sales Drop / buy a home in Maricopa Arizona

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Posted on 1st March 2011 by Anthony in Pending Home Sales

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Pending Home Sales July 2009 - January 2011After a strong run to close out 2010, the market for home resales softened a bit in January.  This could be great news for people looking to buy a home in Maricopa Arizona.  Maricopa real estate was strong to end out the quarter with strong home sales, but the first of the year has steadied out.  But with this news , the time to buy a home in Maricopa Arizona is now!

On a seasonally-adjusted basis, the Pending Home Sales Index dropped 3 percent last month, and December’s figures were revised downward for a loss, too, according to the National Association of REALTORS®.

A “pending home sale” is defined as a home under contract to sell, but not yet closed. 

The forward-looking index is now at a 3-month low on a national level, but still well ahead of its rolling 6-month average.

Unfortunately, national data isn’t overly helpful for buyers and sellers of real estate. The National Association of REALTORS® knows this, of course, and makes an effort to get more granular, supplementing the Pending Home Sales Index report with a region-by-region breakdown. 

Between December and January, only the South Region increased in sales volume. The Midwest led the losers:

  • Northeast Region: -2.4%
  • Midwest Region : -7.3%
  • South Region : +1.4%
  • West Region : -5.2%

Maricopa real estate is in the west bracket, down, but still selling a high volume of homes. Even still, however, regional data remains too broad to be practical. The South Region, for example, is comprised of multiple states with thousands of cities and town. The housing market dynamics of a specific neighborhood in a specific regional city will differ from that of another neighborhood in another regional city.

Real estate data must be local to be relevant.

Overall, then, what may be most telling from January’s Pending Home Sales Index is how weather can influence results.

Most of the country faced drastic weather conditions in January, ranging from raging snowstorms to bitter cold. Events like that tend to put a damper on home sales, a contributing factor in why the number of new contracts fell.

Another reason is rising mortgage rates. Conforming and FHA rates rose week-by-week in January, robbing home buyers of 10% of their purchasing power. This, too, can slow down purchase activity as buyers adjust their expectations.

Looking forward, we should expect the Pending Home Sales Index to resume rising. Inclement weather doesn’t kill demand; it just delays it. And mortgage rates have settled somewhat. These two factors should help release pent-up demand just as the Spring Homebuying Season gets underway.

As more buyers enter the market, negotiation leverage will shift to home sellers, pressuring Queen Creek home prices higher. The lowest prices of the year — and the cheapest financing — could be what you see today.  If you are looking to buy a home in Maricopa Arizona, or are looking to get a loan for Maricopa real estate 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

Maricopa Real Estate / Maricopa Mortgages / Rates changes

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Posted on 8th February 2011 by Anthony in Company News | Mortgage Rates

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ARM adjustment rates for 2011

If your ARM is due to adjust this spring, your best move may be to allow it. Don’t rush to refinance, evaluate all of your options for your Maricopa mortgage, including staying with your adjustable rate – your rate may be adjusting lower. What to do with your financing is a key question when investing in Maricopa real estate.    The reason that they are adjusting lower?

It’s because of how adjusted mortgage rates are calculated.

First, let’s look at the lifecycle of a conventional, adjustable rate mortgage:

  1. There’s a “starter period” of several years in which the interest rate remains fixed.
  2. There’s an initial adjustment to rate after the starter period. This is called the “first adjustment”.
  3. There’s a subsequent adjustment until the loan’s term expires. The adjustment is usually annual.

The starter period will vary from 1 to 10 years, but once that timeframe ends, and the first adjustment occurs, conventional ARMs enter a lifecycle phase that is common among all ARMs — regular rate adjustments based on some pre-set formula until the loan is paid in full, and retired.  These can be very beneficial for certain types of buyers of Maricopa real estate.  They can also be very hurtful if not used properly.  When applying for Maricopa mortgages be aware of what your goals are.

For conventional ARMs adjusting in 2011, that formula is most commonly defined as:

(12-Month LIBOR) + (2.250 Percent) = (Adjusted Mortgage Rate)

LIBOR is an acronym for London Interbank Offered Rate. It’s the rate at which banks borrow money from each other. It’s also the variable portion of the adjustable mortgage rate equation. The corresponding constant is typically 2.25%.

Since March 2010, LIBOR has been low and, as a result, adjusting mortgage rates have been low, too.

In 2009, 5-year ARMs adjusted to 6 percent or higher. Today, they’re adjusting near 3.000 percent.

That’s a big shift. 

Therefore, strictly based on mathematics, letting your ARM adjust this year could be smarter than refinancing it. You may get yourself a lower rate.

Either way, talk to your loan officer. With mortgage rates still near historical lows, Maricopa homeowners have interesting options. Just don’t wait too long. LIBOR — and mortgage rates in general — are known to change quickly.  If you are looking into Maricopa real estate, or shopping to apply for a Maricopa mortgage, contact Prudential One Realty at 520-836-1001, or visit www.pru1re.com .  We look forward to serving your real estate and mortgage needs.

HUD Homes for sale Maricopa Arizona / Benefits of HUD Homes

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Posted on 5th February 2011 by Anthony in Uncategorized

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 HUD home…  What are they?  Why should I buy a HUD home?  These homes have many benefits, and are unique in many fashions.  We will be covering the benefits, and what they mean to the Maricopa real estate market.  Here in Maricopa Arizona HUD homes can account for up to 10% of the total homes for sale.  With such a large portion of the inventory being, they truly have become a must know part of the real estate market in Maricopa.  With the recent changes in strategy and the new processes that have been established, buying a HUD home has never been easier.  Check with your local Prudential One Realty agent for all of the HUD homes for sale in Maricopa Arizona, and all of Pinal County.

What is a HUD Home?

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. They become the property owner and offers it for sale to recover the loss on the foreclosure claim.  With so many FHA loans in Maricopa and other cities in Arizona during the boom years of 2004-2007, it is only natural that a lot of these types of loans are starting to default, thus becoming a HUD home.  Maricopa, Casa Grande, and a lot of other rural areas in Arizona have been exposed to FHA defaults.  At least it is with a reliable source , with a reliable process.

Benefits of buying a HUD home

  1. HUD homes are priced to sell
  2. The process to buy a HUD home is simple and straight forward.
  3. Government backed, thus great programs, leading edge processes, and solution based ideas!
  4. Creative financing options for buyers including:
    1. low down payment programs
    2. Competitive rates
    3. FHA insured financing
  5. Creative purchase programs  (GNNP)
  6. Great one stop shop resource in www.hushomestore.com
    1. HUD Home Store is the listing site for HUD real estate owned (REO) single-family properties. This new site provides the public, brokers, potential owner-occupants, state and local governments and nonprofit organizations a centralized location to search the inventory of HUD properties for sale. In addition, registered real estate brokers and other organizations can place bids on behalf of their clients to purchase a HUD property. HUD Home Store also includes many informative user-friendly features providing advice and guidance for consumers on the home buying process.

With the foreclosure market in Maricopa staying steady, HUD is positioned to play a major role in the real estate market going forward.  HUD homes for sale in Maricopa Arizona have increased in listing share, and total sales.  Here at Prudential One Realty we have taken the steps necessary to train our agents to be efficiently take you through the process.  HUD homes for sale in Maricopa Arizona are great homes to buy, priced right the first time around, and give you creative financing options to use.  What are you waiting for? For more information on HUD homes for sale in Maricopa Arizona, and other cities in Arizona, please contact your local Prudential One Realty agent.

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