The Worst Real Estate Investment ever?
January 29, 2010 by Joe Martin · Leave a Comment
The Worst Real Estate Investment Ever?
In 1974, the Pontiac Silverdome was brand-spanking new. Shiny and impressive in size, it was the new standard for sports venues.
Opened officially in 1975, it was home to the Detroit Lions, the Detroit Pistons and hosted Super Bowls and other huge spectacles, such as a mass by the pope that drew the largest crowd ever at the dome, more than 93,000 people.
The Silverdome cost about $55 million to build, and taxpayers anted up. In today’s dollars, that’s about $220 million – not a huge amount, compared to what the new Yankee Stadium or Cowboys Stadium cost recently, but still a lot of money.
It recently sold for $583,000.
Yes, $583,000. You don’t have to be a math genius to figure out that’s slightly more than 1 percent of what it cost to build, which means it lost nearly 99 percent of its value over the years. We hear about homes that have lost 60, 70 percent off their peak values of the housing boom, and we cringe. But how about 99 percent?
That might make it the worst real estate investment ever. It’s at least the poster child for the real estate problems in Detroit. According to an article in the Detroit News, a broker estimated the 127 acres the Silverdome sits on to be worth at least $10,000 an acre, which means the land alone was probably a steal for the new owners of the site.
Such is what is going on with distressed property sales in the area. The auto industry, long a source of jobs in Motown, has struggled. Unemployment is high, foreclosures are high, and real estate is going at bargain-basement prices.
Of course, 35 years ago it would have been difficult to foresee all the factors that led to the Silverdome’s fate: the move of the Lions in 2002 to brand new Ford field – ironically named for a struggling automaker that itself has become a symbol of Detroit’s woes – the loss of manufacturing jobs, the overall decline of the area.
With no crystal ball for those responsible for the investment, it’s hard to call it the worst investment decision of all time. Heck, all the speculation during the real estate boom that ended only three years ago led to decisions that probably qualify as much worse.
But even if it was a good decision at the time, the numbers don’t lie. Statistically speaking, by losing nearly all of the original $55 million, it might be the worst real estate investment of all time.
Short sales in the Phoenix housing market
January 29, 2010 by Joe Martin · Leave a Comment
The number of active short sale listings in the Phoenix MLS is on the rise every month. As more people look to sell their home and realize they are underwater, they are turning to short sales as a possible solution. Over the next 2-3 years short sales will likely become as common of a word for home sellers and buyers as foreclosure has been over the last two.
What is a Short Sale?
A short sale is program that allows the homeowner to sell their home
for less than the amount owed on their mortgage.
How do I qualify for a Short Sale?
If you have an involuntary hardship and can no longer afford the monthly payments or you’re unable to sell your home for the full amount owed on your mortgage.
How can I benefit from a Short Sale?
You can benefit by avoiding foreclosure and/or minimize the effects on your credit.
How does a Short Sale work?
We will be in close contact with your existing bank to obtain a Short Sale approval, upon listing your home.
What other details should I be aware of?
Be sure to contact us directly to go over all the details you should be aware of with a short sale.
How can the Homestyle Team help with your Short Sale?
Our “Home Rescue” Team are Certified Distress Property Experts who will do what it takes to get results.
New FHA anti-flip rules could help Phoenix real estate market, but has catches
January 17, 2010 by Joe Martin · 2 Comments
Investors have been a large part of the housing recovery over the last year in the Phoenix real estate market. Investors have dominated the market for foreclosure properties coming on the market under $100,000 during the last year. Investors are buying the distressed properties, putting some money into fixing up the exterior which keeps the values up in the neighborhood and making the interior of the homes liveable.
One problem the investors have been facing is putting these homes back on the market and selling them quickly. Many home buyers who are looking for move-in ready homes under $120,000 are first-time home buyers who are purchasing the homes with an FHA loan. FHA has an anti-flipping rule which does now allow you to purchase a home with an FHA loan if the house has been purchased by the investor in the last 90 days. This is causing many turn-key homes to sit on the market longer than they should need to.
Friday HUD lifted the FHA 90-day ban for a one year period:
HUD Secretary Shaun Donovan said – “As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers. FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”
- The home purchase must be an arms-length transaction meaning you cannot have your father, daughter, husband or immediate relative purchase the home from you if you are the investor.
- If the property is sold for 20% more than what the investor purchased the home for a waiver must be obtained which include a 2nd appraisal and a property inspection report. The appraiser must provide appropriate explanation of the increase in property value since the home was purchased.
- Property must be inspected by a licensed inspector and the inspection report must be provided to the lender.
So if an investor was going to purchase a house for $70,000, put $10,000 into the property which is very reasonable, they are going to need to hope the two appraisers will justify the house being sold for anything under $84,000.More information can be found here.
What to do if you owe more than your home is worth
January 6, 2010 by Joe Martin · Leave a Comment
If you have a Phoenix area home that you owe more than it is worth, welcome to the club. You are actually in the majority of home owners in the area. But what do you do? We are going to be holding a free Real Estate Awareness Luncheon on January 14th to discuss your options. Here is what we will be discussing.
Cutting edge industry professionals will be at your fingertips at
NO COST to you!
* Learn how to unlock your IRA/401K to purchase real estate *
* Learn how to buy properties at pennies on the dollar *
* Learn what 5 short sale mistakes you must avoid *
* And…much, much more! *
* See agenda below… *
Presenters: Real Estate Attorney–Mary T. Hone , Tax Expert–Paul B. Sundin, Certified Distressed Property Expert–Joe Martin, Sr. Finance Strategist–Ron J. Kuhn, and Commercial & Residential REO Specialist–Dean J. Essa unveil how you can reduce, if not totally eliminate your liability and capitalize on the benefits of today’s distressed market!
Seating is limited and you do need to register for the event.
The event will be held at Fidelity Title in Tempe from 11-2 on January 14th. Register here.
Can I get a house in Phoenix for less than a car?
October 26, 2009 by Joe Martin · 1 Comment
The average price of a new car in 2009 was $28,400. The average price of a house sold in the Phoenix are in 2009 to date has been $169,118, but that does not mean you cannot get a house for less than the price of a new car.
As of 10/25/2009 there have been over 2,050 houses that have sold for less than the price of an average car. While prices in the Phoenix area have gone up an average of about 12% since April, that does not mean there are not plenty of opportunities to still pick up these low price homes.
Today as I write this there are more than 300 properties in the Phoenix MLS for sale for less than $28,400. You can check here for houses that you can buy for less than the price of an average new car.
2009 Gilbert Days Parade back on, Gilbert foreclosure housing market on fire too
October 6, 2009 by Joe Martin · Leave a Comment
After 30 years the Gilbert Days Parade looked to be in trouble in 2009 as it was cut for budget reason. The parade is back on after parade organizer Michelle Bullard and other volunteers helped raise over $33,000 to save the parade from budget cuts. The Gilbert Days Rodeo will be held Nov 18-23 and the Parade will be on the 14th.
The Gilbert Days Parade has been a hot topic over the last few months after it was announced it would become a victim of budget cuts. The debate over the parade has not been the only hot topic over the last month, foreclosure properties in Gilbert have been on fire too. If you are looking at foreclosure homes for sale in Gilbert you need to jump quick.
In Gilbert right now there are 112 active foreclosure properties. In September 120 foreclosure properties that were for sale sold and there are another 190 right now that are pending or under agreement. With less than a one month supply of foreclosure properties on the market, Gilbert homes are selling quick.
If you want to see a list of all the Gilbert foreclosures homes for sale you can see them here.
For single family homes for sale in Mesa, foreclosures dominate Mesa home sales
September 17, 2009 by Joe Martin · Leave a Comment
Looking for a single family house for sale in Mesa? There are plenty of them, but if you want to know what is actually selling, those are the foreclosures.
There are currently 1,726 active single family homes for sale in Mesa according to the MLS at time of this writing. Of those, only 290, or only 17% are foreclosure properties. So if I told you that there were 602 single family homes in Mesa that sold in the last month, that should mean roughly 102 of them were foreclosures. Not even close.
Of the 602 Mesa homes that sold last month, 294, or nearly 50% were foreclosures. The main reason foreclosures are selling is because of their price. The homes are generally listed below what a private sale is listed and is setting the market value for all homes on the market.
Another interesting statistic from these numbers is the very low supply of foreclosure properties on the market. with only 290 active and 294 sold in the last month, there is only a one month supply of inventory which is leading to a seller’s market.
There has been a lot of talk about a "shadow inventory" or foreclosures being held off the market on purpose by the banks. These numbers show the market could be flooded with this "shadow inventory" if it exist and still not crash. There are more than enough buyers out there right now for the inventory available.
If you want to see all the Mesa foreclosure homes for sale on the market right now check out our Mesa foreclosure properties for sale page.
Buying a HUD home in Phoenix
August 19, 2009 by Joe Martin · 1 Comment
We have buyers who often ask us how to buy a house in the Phoenix housing market with no or very little money down. One of the most popular programs right now is the no money down USDA loan, but that is not going to work for most of the Phoenix market as it has to be a rural property.
One possibility to get into a Phoenix home with no money or very little money down is a HUD home. A HUD home is a a 1-4 unit residential home that was insured for an FHA loan program that has been foreclosed on.
Right now in Phoenix there are roughly 20-30 HUD homes a week coming onto the market, not only can you get into these homes for as little as $100 down, often times you will walk away from closing with money to repair the HUD home with.
What are some advantages in HUD homes?
- $100 down plus closing costs not paid by seller
- HUD will allow up to 3% seller concessions to help pay for closing costs
- There is no appraisal fee needed
- Electronic bidding
- Closing in 45 days or less
HUD homes are sold as-is, much like other foreclosure properties. A big difference is a HUD home has an estimated cost of repair for each property and the seller gives a rebate at closing for that mount.
For more information about buying a HUD home you can check out http://mcbreo.com/ who handles the HUD properties in Arizona.
Arizona foreclosure rate still among highest in the country
August 13, 2009 by Joe Martin · Leave a Comment
According to the latest report from RealtyTrac, Arizona has the third highest foreclosure rate in the country last month. One in every 135 homes in Arizona received a foreclosure notice in July.
Foreclosure filings reached 19,694 in July of 2009 which is up a whopping 17 percent from Arizona foreclosures in June of 2009 and up 47 percent from the previous year.
The Phoenix metropolitan housing market was hit extremely hard with one in every 109 homes receiving a foreclosure filing.
Nevada and California were the two states who had a higher foreclosure rate than Arizona in July. Add in Florida and those four states contributed for half of the foreclosures in the country.To see a list of current Phoenix area foreclosures and search them go here.
$8000 Tax Credit: The End Is Near
August 11, 2009 by Joe Martin · 1 Comment
The end is near.
The end of the $8000 tax credit (as it currently stands) is approaching and everyone who is considering taking advantage of it should be actively looking for a home in order to get it done by the deadline.
The $8000 tax credit program is scheduled for termination as of December 1, 2009 – which doesn’t leave as much time as you may think. I know, I know – you might be thinking “December is a long ways off – I can wait a while…” but consider this:
- Due to current market conditions, houses in the sub-$300k range are getting multiple offers – which means you may need to “bid” on multiple properties before “winning” one.
- It “normally” takes 30 days to get your financing arranged once you have a sales contract.
- According to the IRS, you must actually close on the home home for it to be considered occupied and qualified for the credit.
Will The 8000 Tax Credit Be Extended?
Yes. That is my official prediction. And now that I have said that, you must know that I am wrong about these things more than I am right.
So don’t take my word for it.
No one really knows whether or not the $8000 tax credit will be extended – but it will take an act of Congress to get it extended — so my best advice is that if you are even considering buying a home and taking advantage of the $8000 tax credit then don’t count on it being extended.
Act fast!
Thanks to Justin McHood for contributing to this article.