Bidding wars are driving up Phoenix foreclosure prices, but many houses still available under $70,000
July 21, 2009 by Joe Martin · Leave a Comment
Bank owned foreclosures are coming on the market at a fast rate in Phoenix, but they are being snatched up as fast as they are coming on the market. It is rare to see a foreclosure under $100,000 come on the Phoenix market and not be under contract in a week. That does not mean there are not deals to be had though.
Many investors right now are looking for houses in the Phoenix market under $70,000. While a home coming on the market at $70,000 is likely to sell above that, there are still plenty of homes to chose from.
At the time of this writing, there were 1,006 active single family detached homes in the Phoenix market with at least 3 bedrooms and 2 baths. These houses are a hot commodity for investors and first time home buyers. You no longer need to go searching, by clicking on this new link we created for single family detached homes with 3/2 you can see all the active listings on the MLS. As the houses are added they will automatically be added here.
Within this search this search you will be able to search even further. So go ahead and book mark this page and come back any time to see what is on the market today.
New National Stabilization Program (NSP) could mean free money for your home purchase
July 17, 2009 by Joe Martin · Leave a Comment
Free money for your new home purchase? If you are buying a Phoenix foreclosure property there could be free money for you as long as you qualify. Under the new National Stabilization Program, if you combine it with an FHA loan not only could you get into the home with less money down, you could save tens of thousands off your mortgage.
You may also hear this called a 1% down FHA loan. FHA guidelines still require 3.5% down, but when combining the FHA and NSP program, you could indeed get into the home for only 1% down up front.
So what are the details and qualifications of the National Stabilization Program?
- You must use a qualified lender.
- You must attend an eight-hour class which will counsel you on purchasing a home.
- You must be purchasing a bank owned foreclosure.
- The property must be used as a primary residence. If you already own a home that home must have been leased for at least 12 months before applying for this program.
- You must meet FHA debt-to-income ratios.
- You can purchase the home with cash, which means you would get up to 22% off the purchase price as a silent second.
- You must be approved for the program prior to submitting an offer on a house.
- Maximum purchase price in Maricopa County is $346,250.
- You must meet income requirements (see below).
Maximum income to qualify in Maricopa County
Family of 1 $55,350
Family of 2 $63,250
Family of 3 $71,750
Family of 4 $79,100
Family of 5 $85,400
Family of 6 $91,750
Family of 7 $98,050
Family of 8+ $104,400
How the NSP works:
- You can receive free money for up to 22 percent of the purchase price.
- All loans are zero percent interest with no monthly payments.
- The balance of the loan is forgivable at compete of the the term.
- All loans are forgivable after a period
- 5 years for assistance of $15,000 or less
- 10 years for assistance between $15,000 and $40,000
- 15 years for assistance of more than $40,000
The program acts as a silent second mortgage on your home and once you meet the timetables above the loan is forgiven. If you do sell early the loan needs to be paid off, but is interest free.
For more details contact a lender or visit YourWayHomeAZ.com
Phoenix median home prices are rising
July 13, 2009 by Joe Martin · Leave a Comment
For those who have been trying to purchase a home over the last few months you have no doubt realized there is a bidding war going on for any decent house priced under $350,000. The number of first time home buyer and investors looking to get in at the bottom of the market is up, while the number of active listings on the market is falling. That leads to one thing, price increases.
The law of supply and demand is working to its full glory in the Phoenix real estate market today. Dr. Jay Butler of ASU shows the median price for a home sold in the Phoenix metropolitan area is on the rise. The median price of a home sold in Phoenix rose by $9,000 from April of 2009 to June of 2009.
Many houses are going for above the asking price. In June, houses under $300,000 sold for 99% of their list price while houses under $150,000 sold for an average of 102% of their list price.
Chandler Arizona continues to grow
July 3, 2009 by Joe Martin · Leave a Comment
Chandler Arizona is looking to nearly double it’s hotel room capacity over the next two years with the addition of 10 new hotels set to open. Four of the hotels are set to open over this fall which will increase the rooms in Chandler from 1,965 to over 2,500.
With its proximity to the I-10, 101 loop and the 202 loop, Chandler will continue to be a growing community for the foreseeable future. Close to Phoenix, Chandler offers lots of entertainment and recreation possibilities.
If you already live in Chandler, here are some Chandler fireworks you may want to consider for the July 4th weekend.
Saturday July 4th
Tumbleweed Park
Southwest corner of Germann & McQueen
Festivities start at 4 p.m.
Fireworks are scheduled to start at 9:30 p.m.
If you are currently looking for a home in Chandler here are the current listings for Chandler foreclosures.
How much earnest money should i put down on a foreclosure
June 22, 2009 by Joe Martin · Leave a Comment
A very common question we get asked is how much money should I put down on a foreclosure property I am trying to buy? And like everything else in real estate the answer is, it depends.
If you are looking in the Phoenix foreclosure homes market you probably understand things have changed a lot over the last 4-5 months. If you were putting in an offer in January of this year $1,000 would have been a pretty standard answer for earnest money, but not any more.
The first thing you need to do is find out if you are up against other offers. If there are not any other offers on the house then a $1,000 earnest offer or 1% may be okay.
If there are other offers on the house and you are in a multiple offer situation then things change and you need to become much more aggressive. You need to ask yourself, how bad do you want this house and if it is one you really want your offer is going to need to be competitive.
If you are a cash buyer in a multiple offer situation then 10% should be your bare bone minimum. I have some investors right now that are offering 50% as earnest money. If you are financing then you may want to talk to your lender and figure out what you are planning on making as a down payment. If you are planning 3.5% down, 20% down or anywhere in between then you may want to put that as your earnest money to be credited towards your down payment.
The Phoenix foreclosure house market is a very competitive market right now for buyers, you need to be willing to put your best hand on the table and earnest money is one of your tools. And please never forget, there is always risk with earnest money, if you are not comfortable with the deal and the situation then be cautious about a large earnest money because you could lose it if the deal falls apart.
Mortgage rates are up, but are they too high?
June 10, 2009 by Joe Martin · Leave a Comment
Anyone who has been home shopping over the last month knows that mortgage rates have been going up. A month ago the national average for a 30 year fixed conventional loan was close to 4.8% while today it is closer to 5.65%. So mortgage rates have jumped up, but is that to high to consider purchasing now?
While we may have been spoiled by those sub 5% rates over the last month, in no way is that indicative of what we should be expecting for interest rates. We won’t even go back to 1979 and 1980 when interest rates were close to 20%, we will just look at the rates from 1987.
- From 1987-1990 each year the average 30-year mortgage run above 10%
- From 1991-2000 the average 30-year fixed mortgage ran 7.9%, and only once was it below 7.3%, that was in 1998 when it was 6.94%.
- From 2001-2007 the lowest average rate for a year was in 2003 when the average rage was 5.83%.
So as you can see from recent history if a lender tells you they can lock you in at 5.7% it may seem high compared to what you saw on the news over the last few months, but historically we are still talking about low interest rates.
$8,000 first time home buyer tax credit for down payment
June 1, 2009 by Joe Martin · Leave a Comment
The HUD has given approval for first-time home buyers to use their $8,000 tax credit for additional down payment money or to help with your closing costs.
So how will this work? You will need to obtain an IRS Form 5404 from the IRS website to get started. The money will be credited towards your down payment or closing costs at the close of escrow then you will be required to pay the money back when you get your tax credit.
Yes you need to pay it back. This is not money going directly from the government to the lender, it is money being promised by the government to the lender. After you purchase the house you can amend your 2008 tax return and get a credit of up to 10% of your home purchase price up to $8,000.
Once you receive the check from the government you will need to use it for what it was intended for. If you choose to use it on furniture instead of the purpose that is okay, but the money you had promised as a down payment of to help cover closing costs will not be turned into a second mortgage on your house.
You will still need your 3.5% down for your FHA loan, this additional money will be added on top of that 3.5% if you choose, not in replacement of. When you are talking to your lender about your FHA loan tell your lender you are interested in using the tax credit for additional down payment money and they will get you started.
You can also use the money toward your closing costs. Again you will need to tell your lender you plan on using the first-time home buyer tax credit for your closing costs and they will get you started on the paperwork.
Investors are not the only ones cashing in on Phoenix foreclosure market, first-time home buyers get their share
May 28, 2009 by Joe Martin · Leave a Comment
April of 2009 was one of the busiest months ever in the Phoenix real estate market, spurred by low prices and low interest rates the market went from ice cold earlier this year to as hot as the Phoenix summer in April.
It seemed just a few months ago we were talking about how the Phoenix housing market was in trouble, with over a year’s worth of inventory it could take years to bounce back. Year’s has turned into months as there is now just over three months supply of houses on the market, and less than one month supply of foreclosures.
So what happened to spur on the market? Investors came out of the woodworks as they say a great opportunity to buy houses at what appeared to be the bottom of the Phoenix housing market. But investors were not alone. First-time home buyers did not want to get left in the dark and they jumped in both feet too.
According to a recent article in the Arizona Republic, first-time home buyers are the fastest growing group of home buyers in the Phoenix area. Some believe that first-time home buyers will soon make up almost half of the buyer’s in the Phoenix housing market.
In today’s Phoenix foreclosure real estate market you need to be educated
May 20, 2009 by Joe Martin · Leave a Comment
If you are thinking of purchasing a Phoenix are foreclosure there are a few things you need to keep in mind:
- The list price is a starting point
- You need to move quick
- Cash is king
- Don’t expect it to go quick
- The buyer’s market you heard so much about, is over at least for now
- When selecting a buyer’s agent make sure they have worked foreclosures
- Be patient, don’t force it
The Phoenix foreclosure market has changed drastically over the last two months. Two months ago you would give your agent your criteria and they could pull up dozen’s, if not hundreds of listings that matched what you were looking for. Today, if that list is a handful it’s good.
As of 6:42am on 5/20/2009 5,437 active foreclosure listings in the central Arizona MLS. That may sound like a lot, but it is a fraction of what it was a couple months ago. What that means for you today is if you see one you like, be ready to get aggressive.
One of our agents had an investor look at a house in South Phoenix a little over a week ago that was on the market for $39,900. After looking at the property both the agent and the investor thought the home was worth closer to $60,000, not $39,900. After running some comparables, their suspicions were confirmed.
Using techniques we teach our buyers agents the investor put in a bid at $39,900 and used language to ensure they would get the property if it did not go over $60,000. They were able to win the house by outbidding the highest bidder and landing the deal for $56,000. Did they overbid for the house? Not when you consider the actual value was close to $60,000. The list price of $39,900 was irrelevant and just a tool the banks used to get it sold quickly.
If you are thinking of putting an offer in on a house you need to act quickly. This weekend we got a call from a new buyer who was interested in looking at some properties. She gave our buyers agent a list of 11 she wanted to see and set an appointment for 9am on Wednesday. The agent warned her they may not still be available, but the new buyer did not seem concerned. The agent called for availability on those 11 Tuesday, and 8 of the 11 had already been awarded to buyers.
Just because the houses are going quick does not meant the process will go that quick. Banks are taking their time, partially because they are overwhelmed by the amount of work they have. When you consider all the factors that are going on in this market now one thing you really need to consider is how much experience does your agent have working in today’s market. Do they know how to get the most information possible from the sellers agent that will help you secure the home? Make sure you are picking an agent that has been in the trenches for the last few months and has seen the market change and can educate you.
One last thought, if you do not see the home you want, don’t force it. Wait, there is a good chance this market will be turning around again shortly. We recently wrote about how the market may seem to be at a bottom, but a new bottom may be around the corner. If you don’t see the deal right now you want just be patient.
Phoenix foreclosure market, it is not the end
May 13, 2009 by Joe Martin · 2 Comments
We have been reading numerous blog posts over the past three weeks on how the Phoenix foreclosure market has hit rock bottom. If you were to pull up the MLS today you would see roughly 5,800 active foreclosure units on the market and over 6,000 sold in the last month meaning the supply of foreclosures is less than one month.
Those numbers have been slipping over the last couple of months, but that does not mean it is a trend that will be staying that way. While the number of foreclosure homes in the Phoenix market may be way down in the MLS, that does not mean the number of trustee sales in Arizona has taken a large drop.
Many of the largest banks in the nation agreed to put a temporary moratorium on foreclosures to give home owners a chance to work out loan modifications. There are some estimations that only one third of foreclosed homes are being marketed in the MLS right now.
So what is next? The Phoenix market will more than likely see a very sharp increase in the amount of bank owned foreclosures on the MLS in the very near future. There is even a chance that if all of the foreclosed properties in Phoenix are released quickly another drop in home values could happen.