Phoenix’s housing bust goes boom - Los Angeles Times
- Authored By Adiel Gorel May 26 2009
We got this from Ofir Levy, our Phoenix east-side broker and manager.
This is an article by Nicholas Riccardi from 5/18 published in the LA Times.
As we have been discussing, the low price-point in Phoenix is starting to stir up interest on the part of both homeowners and investors.
Some of the push has been provided by the recent news about Phoenix “Leading the country” in price falls – about 50% from the peak. In reality there are deals in Phoenix that are already there at less than 50% from the peak values.
Needless to say, multiple offers are now de-rigueur for well-priced bank foreclosures.
Foreigners are waking up to this as well. I read articles in foreign media telling the story of both Phoenix’s steep fall and the high interest in buying there. Such articles spur foreign interest and , despite the foreigners’ difficulty in getting loans, the prices are low enough for many people to offer cash.
Funds that buy cash are in a good position these days, as the banks usually prefer to accept an all-cash offer even if it’s lower than financed offers.
I believe other markets that will follow shortly are Las Vegas, Orlando, and other Florida cities.
Phoenix’s housing bust goes boom
By Nicholas Riccardi , May 18, 2009 LA TimesMore homes are selling than at any time since 2006. Buyers find themselves in bidding wars over low-end properties. It’s what a national housing recovery could look like.
Reporting from Phoenix — After four years of renting because they were priced out of the real estate market, Jamia Jenkins and Scott Renshaw concluded the time had arrived for them to buy.
Phoenix leads The Way Down
- Authored By Adiel Gorel May 5 2009
According to the New York Times (article by DAVID STREITFELD and JACK HEALY from 4/28/2009) Phoenix is the leader in housing price reduction since the peak.
Needless to say these are not bad news for real estate buyers. The article mentions how the low price levels are starting to reduce inventories.
As investors we hope for more news like these in the genral media. While we know that the real frenzy will only start after the “recovery” is official, it is good to get the general buyer population into a dark mood. It is also good for the sellers to read such news.
The price levels in the greater Phoenix metro have indeed reached incredible levels. Foreclosures are still contributing to the situation and builders are trying their best to compete with the incredible bank-owned deals (so far unsuccessfully).
Home Prices in Selected Cities NYTIMES.COM
Phoenix has achieved the unwelcome distinction of becoming the first major American city where home prices have fallen in half since the market peaked in the middle of the decade, according to data released Tuesday.
Though historical statistics are scant, experts said the precipitous decline probably had few if any equals in modern times.“Even during the Depression, I’m not sure prices fell this quickly,” said Karl Guntermann, a professor of real estate at Arizona State University.
Low Prices Lead to Bidding Wars in Some Markets
- Authored By Adiel Gorel Apr 24 2009
This is an article by JAMES R. HAGERTY of the Wall Street Journal from 4/23/2009.
As we have been discussing, the low prices are generating accelerated sales activity in some markets.
The prices are still not going up due to the consistent pressure from bank-owned inventory. However as more buyers’ interest is present, it signals that the window to get the best opportunities is showing some finiteness. In my opinion it will still be at least a year as far as a great window to buy bank-owned properties. Nevertheless the data in this Wall Street Journal article stresses the fact that prices are certainly so attractive so as to generate multiple offers.
The excellent table also shows inventory positions in the most relevant markets.
Unfortunately the new “conforming” loans for people with over-4-but-under-10 mortgages are not ready to be delivered by the banks yet. If they were this would make the buying of these properties even more attainable to a lot of experienced investors. We hope this gets rectified in the very near future (banks are saying things like “Any Day Now”.
Cash offers trump most other offers so there is an increasing number of cash buyers. Foreigners who, for the time being don’t get much in the way of loans, are also resorting to buying cash.
Articles such as this, which are cropping up regularly as of late. Show the general direction.
Prices Are Generally Falling, But a Few Markets Have Shortages of Midpriced Homes
By JAMES R. HAGERTY, WSJ.COM, 4/23/2009Bidding Wars Are Emerging on Foreclosures
Falling home prices are starting to ignite bidding wars in a few parts of the U.S. as first-time buyers compete with investors for the same foreclosed properties.
In most of the nation, the supply of unsold homes continues to swamp demand. Home prices in many markets continue to fall, and foreclosures, which slowed in late 2008 as mortgage companies delayed taking action against delinquent borrowers, are picking up again.
But real-estate brokers say multiple offers on certain homes have recently become more common in parts of California and Arizona and the Washington, D.C., and Minneapolis-St. Paul metropolitan areas.
Read full article on WSJ.COM
Increased Sales Activity Continues as Prices Get Low
- Authored By Adiel Gorel Apr 14 2009
Enclosed is the April Market Pulse from Orlando as per the Orlando Realtor Association. It was sent to us by Jean Gillen, our Orlando broker.
The trend continues with increased sales, reduced inventory and increased activity. All these indicators point in the right direction: prices are low enough to generate serious buying activity on the part of both homeowners and investors.
For the market at larger, these are very positive indicators. For the bargain hunters it is a signal to get moving: we can see the window starting to shrink a bit.
We are getting similar reports from Phoenix and Las Vegas as well.
As the new loans for investors with over 4 but under 10 properties become available (many banks are still not done creating the product despite FNMA green light from 3/1/2009), investor buying activity should perk up even more.
Home sales continue to rise as housing affordability hits record high
(April 13, 2009 – Orlando, FL) Orlando area home sales have again experienced an increase in activity, with members of the Orlando Regional REALTOR® Association involved in the sale of 47.59 percent more homes in March of this year than March of last year: 1,653 to 1,120.
Read more on ORLREALTOR.COM
Home Sales Climbing
- Authored By Adiel Gorel Mar 28 2009
Here is an interesting article from Reuters, written by Lucia Mutikani and sent to me by Liam Gillen from the Orlando team.
We have started to see the upswing in sale in various markets. Undoubtedly the low interest rates are helping. The very low price points fostered by bank-repossessed properties are also luring in new homeowners. Investors now have more freedom to pick these bank-owned properties due to the new 10-mortgage limit (up from the 4-mortgage limit as of 3/1/2009). All these factors no doubt help start creating more of a buying stir.
Our window is getting well-defined. Let’s make use of it.
U.S. home sales climb at fastest pace in 10 months
Mar 25, 2009 By Lucia Mutikani
WASHINGTON (Reuters) - New orders for long-lasting U.S.-made goods rose in February for the first time in seven months and new home sales rebounded, government data showed on Wednesday, suggesting the economic downturn might be easing a bit.
Read more on REUTERS.COM
Fannie, Freddie to Include Investment Homes in Refinance Program
- Authored By Adiel Gorel Mar 16 2009
The following is an article by Kenneth Harney published in the San Francisco Chronicle on 3/15. In it, Mr. Harney tells us that the broad refinance program to allow owners to lower payments and avoid foreclosure, will include investment homes (SFHs) that have loans that are on Freddie or Fannie’s existing portfolios. Mr. Harney also gives each agency’s website so owners can see whether their house qualifies. Calling the servicer is recommended as a first step.
This is the first time I see anything coming out of Washington that recognizes real estate investors as an important part of the overall equation. To quote Mr. Harney: “Brad German, a spokesman for Freddie Mac, said second homes and investment properties with one to four units are important because they may “help stabilize neighborhoods and housing markets.” Refinancing investor-owned rental units, he added, can “help reduce renter evictions by putting landlords in a (more affordable) refi that improves their chance of success.””
Many of the usual restrictions will be lifted, providing hope for many overtaxed investors.
I hope many of you succeed in refinancing your investment properties based on this program. The full article is enclosed. Highly recommended reading.
Fannie, Freddie broaden refinance help
Kenneth Harney, SF Gate.com
Sunday, March 15, 2009 (03-15) 04:00 PDT Washington - –Fannie Mae and Freddie Mac have published the rules governing their coming mass refinancing campaigns, and they’re more favorable - especially for owners of second homes and small investment properties - than indicated by the White House and Treasury last month.
Read more on SFGate.com
Orlando Sales Activity Picks Up As Prices Dip Low Enough To Attract New Buyers
- Authored By Adiel Gorel Mar 13 2009
Average Monthly Mortgage orlrealtor.com
This is information sent to us by Jean Gillen, our Orlando broker.
It is clear that since prices in Orlando have gotten to a low enough point, there is an uptrend in buying of existing homes.
We can see that the total inventory of existing houses for sale is steadily going down. This is a very positive trend and signals the beginning of the road towards stabilization in that market.
New home buyers are jumping in in ever increasing numbers. Investors (well-qualified ones) are inching back in as well.
We are seeing similar trends in markets like Phoenix and Cape Coral as well.
From the standpoint of the economy, these are encouraging trends – they signal the road to normalcy.
From the standpoint of real estate investors – this is a signal that the window of the greatest opportunity is starting to show signs that it will close. The length of time is unclear and is most likely measured in months. Perhaps many months. Nevertheless it is important to note this trend: prices are low enough for all kinds of buyers to start engaging. Inventory is starting to diminish. Contracts are rising and new listings are falling.
Those investors with the capacity to buy – this is most likely the time.
Orlando Regional REALTOR® Association (March 10, 2009 – Orlando, FL): Orlando area home sales have again experienced an increase in activity, with members of the Orlando Regional REALTOR® Association involved in the sale of 28.18 percent more homes in February of this year than February of last year: 1,219 to 951. ( Read More)
For a printable version of this report, please click here (.pdf)
- Market Pulse orlrealtor.com
