ARMLS Subscriber Confidence Index Up for January 2013

With the recent Fiscal Cliff behind us, for now, all three indices buoyed in January for the second month in a row. The current Subscriber Confidence Index stands at 83.2%, up 4.6 points from December. The Present Confidence rose 4.4 to 85.7%, while the Expectation Index increased 4.8 to 81.3%. To be sure, more brinksmanship by the Executive and Legislative branches loom on the horizon, but in this now, Subscribers are feeling more optimistic about the present and future of the economy, employment in the Valley and their own personal income in the next six months.

Similar to the Consumer Confidence Index, the SCI mirrors Subscriber reaction to changing market conditions and their experience with current Buyers and Sellers. This sentiment influences Subscriber investment and strategy regarding their professional real estate activities.

Survey Questions:
1.What is your appraisal of current real estate conditions in the Valley compared to six months ago?
2.What is your expectation of real estate conditions in the Valley six months from now?
3.What is your appraisal of current business conditions in the Valley compared to six months ago?
4.What is your expectation of business conditions in the Valley six months from now?
5.What is your appraisal of current employment conditions in the Valley now compared to six months ago?
6.What is your expectation of employment conditions in the Valley six months from now?
7.What is your expectation of your family income six months from now?

Each question is given an index calculated by: (# Better / # Better + # Worse) x 100
•Current Subscriber Confidence Index is the Average of all seven indices.
•Present Confidence Index is an Average of the indices from Questions 1,3, and 5.
•Expectation Confidence Index is an Average of the indices of Questions 2, 4, 6 and 7.

Below is the reading of ARMLS Subscriber Confidence Index for December 2012:
•Current Subscriber Confidence Index: 83.2% up 4.6%
•Present Confidence Indxex:  85.7% up 4.4%
•Expectation Confidence Index:  81.3% up 4.8%

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5 Housing Markets Posting Big Recoveries

With a housing market on the mend in many areas, some cities are experiencing big increases in home prices.

In 2012, prices rose in 82 of the 100 largest metros, compared with just 12 metros seeing price increases in 2011. The 2012 price turnaround was strongest in the West and Southwest, where steady job growth and vanishing inventories lifted home prices by more than 10 percent in many markets.

The following are the five best “turnaround” housing markets in the real estate recovery, including the year-over-year change in asking prices, according to Trulia’s research.

  •  Phoenix – Year-over-year change in asking prices (Dec. 2012): 26 percent
  • Las Vegas – Year-over-year change: 16.3 percent
  • San Jose, Calif. -Year-over-year change: 16.1 percent
  • Oakland, Calif. -Year-over-year change: 12.7 percent
  • Seattle -Year-over-year change: 10.2 percent
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4 Ways To Mess Up a Loan Approval

After jumping through all the hoops, you finally have gotten approved for a mortgage and now you’re just waiting to make it to the closing table. Make sure you or your spouse don’t throw your loan approval into jeopardy by making one of these common mistakes:

  1. Making a big purchase: Never make major purchases, like buying a new car, a flat screen or furniture, until after you close on the home. Big purchases could change your debt-to-income ratio that the lender used to approve the home loan and could throw the approval into jeopardy.
  2. Opening new credit: It is not the time to open up any new credit cards, even if you plan to purchase something with 24 month zero interest and zero payment. It is a financed purchase so it is actually a credit card purchase. The purchase amount rolls into your debt right there and it is very much likely to jeopardize your loan approval.
  3. Missing any payments: You really need to pay extra vigilant about paying all your bills on time, even if you’re disputing one.
  4. Cashing out: Avoid any transfers of large sums of money between your bank accounts or making any undocumented deposits — both of which could send up “red flags” to your lender.

So, do not celebrate it too early. Wait until the escrow is closed, the title is recorded and your agent has released the keys of your new home to you.

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Greater Phoenix Housing Market – November 2012

Some headlines in the newly released Novermber 2012 Greater Phoenix Housing Report:

  • Single family home prices rose sharply between October and November and show very large increases since November 2011:
    • The median sales price is up 35.4% from $120,000 to $162,500
    • Average price per square foot is up 27.4% from $81.92 to $104.34
  • Townhouse/condo prices also moved higher between October and November 2012 and are showing substantial increases over November 2011:
    • The median sales price is up 42.9% from $70,000 to $100,000
    • Average price per square foot is up much less – 20.3% from $87.20 to $104.87
  • Overall supply (excluding homes already under contract) was down 7% at the start of December 2012 compared with December 2011, and distressed supply was down 43% over the same time frame. However overall supply increased by 31% between September and December.
  • Foreclosure starts on single family and condo homes fell by 17% between October and November 2012 and were down 48% from November 2011
  • Recorded trustee deeds (completed foreclosures) on single family and condo homes fell 17% between October and November 2012, and were down 34% from November 2011.
  • With bidders still very active at trustee auctions, 44% fewer single family homes reverted to lenders at trustee sales compared with November 2011.
  • Sales of single family homes were 1% lower than in November 2011.
  • The percentage of residential properties purchased by investors remains high at 27.5% but is now in a clear downward trend having peaked at 35.3% in August.
  • Single family home sales increased dramatically year on year for the most expensive sectors:
    • New homes (up 32%)
    • Normal re-sales (up 84%)
  • Single family home sales reduced year on year for homes sold at discounts to full market value:
    • Investor flips (down 10%)
    • Short sales and pre-foreclosures (down 22%)
    • Bank owned homes (down 53%)
    • GSE (Fannie Mae, Freddie Mac, etc.) owned homes (down 67%)
    • HUD sales (down 50%)
    • Third party purchases at trustee sale (down 23%)

Unless otherwise stated all the statistics shown are for Maricopa and Pinal Counties combined.

The full report of November 2012 Greater Phoenix Housing Report for the W P Carey School of Business at ASU is available here.

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First-Time Home Buyers Face Greater Competition

First-time home buyers are playing a larger role in the housing market, but they’re finding big changes.

Thirty-nine (39) percent of home sales nationwide were from first-time home buyers during the 12-month period ending June 2012, according to the National Association of REALTORS®. That’s up from 37 percent a year earlier.

But while first-time home buyers once had a huge inventory of homes to choose from, now they’re finding tightened supplies and steeper competition for what’s left.

Housing inventories are hovering at record lows in many markets, limiting supply. First-time home buyers face increased competition from investors, who are often trying to snatch up the same bargain-priced housing deals. Investors often make all-cash offers, too, which makes it difficult for buyers requiring financing to compete against them. Also, banks have tightened up their underwriting standards, creating more hoops in just qualifying for financing.

It’s not easy to be a first-time home buyer, some say. But first-time home buyers are critical to a healthy housing market, more than one third of the buyers in today’s market are first-timers. They allow existing home owners to sell and trade up into larger homes.

Also, first-timers shouldn’t automatically settle for a Federal Housing Administration mortgage due to the low down payment requirements (usually 3.5 percent of the purchase price). The FHA can have several restrictions that makes some sellers prefer buyers who offer cash or who are using conventional loans.

First-timers also need to be able to act fast and be able to have their financing processed quickly if they are going to stay competitive. Some banks won’t sign off on mortgages for eight to 12 weeks. But many sellers won’t wait that long.

To respond to the changing housing market, first-time home buyers need agents with greater experience and strong knowledge of the local housing market to help them to compete with investors and experienced home buyers. Agnet of Accredited Buyer Representative (ABR) is certainly a very reliable indicator. Other than that, neighborhood specialist is also a good choice when it comes to hire an agent.

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Landlord Quick Tip – Hold or Fold?

The state of Arizona provides the landlord with 15 days — after a tenant moves out to do an accounting for the security deposit.

Yet, some landlords feel inclined to return the deposit right after the tenant moves out. Occasionally, a landlord will even promise a quicker turnaround as an incentive for a new tenant.

Unfortunately, it’s not uncommon to discover damage after the final walk-thru, especially if the tenant knew about the problem and tried to conceal it. For instance, one landlord shared how a tenant had asked to install a shade over a custom window because the room was  too sunny in the mornings — or so the tenant said. The shade was down during the final inspection. It wasn’t until the landlord happened to be out back that he discovered the window was cracked.

Three common sense for move out walk through:

  • Make sure all utilities are still on or you want to turn them out for the walk through.
  • Bring along the move-in checklist which serves as the baseline of normal wear-and-tear of the property.
  • Invite the tenant to join the move-out walk through. Don’t just do it yourself, you want the tenant to agree on your findings.

Arizona’s Landlord and Tenant Act deal a good hand to landlords by offering a little bit of time to find any damage a tenant may have left behind.

Don’t fold too soon — or you could lose out.

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January 12, 2013

Metro   Phoenix Housing¹ Market   Snapshot
January   12, 2013
City Active Pending Sales DOM² Avg   $/SF
Anthem 151 62 37 60 $114.62
Chandler 691 353 312 60 $115.56
Fountain Hills 229 47 41 114 $178.53
Gilbert 776 490 364 58 $108.06
Glendale 625 414 331 54 $85.39
Laveen 150 122 77 99 $61.86
Maricopa 587 199 125 81 $60.24
Mesa 1,183 659 508 65 $95.63
Phoenix 3,271 1,826 1,388 64 $102.30
Queen Creek 939 382 278 67 $75.52
Scottsdale 1,724 384 356 94 $199.73
Tempe 230 121 106 50 $118.71
Note¹ – Housing = Single Family Homes, Note² – DOM = Days On Market
Data Source: Arizona Regional Multiple Listing Service (ARMLS)
For other cities or area, please call (480)292-8281 or email
Above data was compiled by Gary Chen, Associate Broker, ABR, CIAS, CNE, SFR
Original data complied by The Cromford Report
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Mortgage Rates Up Slightly As Economy Adds Jobs

Mortgage rates were up slightly this week following an upbeat employment report showing that the economy added 155,000 jobs in December, 2012.

At 7.8 percent, the unemployment rate is now at its lowest point since December 2008. If unemployment continues to drop, the Federal Reserve is expected to scale back or end measures aimed at keeping long-term interest rates low.

Rates on 30-year fixed-rate mortgages averaged 3.4 percent with an average 0.7 point for the week ending Jan. 10, up from 3.34 percent last week but down from 3.89 percent a year ago. Rates on 30-year fixed-rate loans hit a low in Freddie Mac records dating to 1971 of 3.31 percent during the week ending Nov. 21, 2012.

For 15-year fixed-rate mortgages, rates averaged 2.66 percent with an average 0.7 point, up from 2.64 percent last week but down from 3.16 percent a year ago. Rates on 15-year fixed-rate loans hit a low in Freddie Mac records dating to 1991 of 2.63 percent during the week ending Nov. 21, 2012.

To keep mortgage rates low, the Federal Reserve is buying $40 billion in mortgage-backed securities (MBS) issued by Fannie Mae and Freddie Mac each month. The Fed has said the open-ended program, which also includes $45 billion in monthly purchases of long-term Treasurys, will continue as long as the outlook for the labor market does not “improve substantially.”

The Fed intends to keep short-term interest rates at or near zero percent for as long as unemployment is above 6.5 percent and its projections show inflation remaining in check.

Due to the low rates, refi applications have been piled up and it takes average of 90 days for most lenders to process the refi applications. If you plan to refi while the rates are still low, we would recommend to talk to your lender today and to start the process sooner the better.

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Monthly Survey of Phoenix Real Estate Agents

Buyers step back as concerns grow over higher pricing levels in metro Phoenix housing market.

Some comments from real estate agents —

  • “Prices are too high and inventory is too low on good properties.”
  • “Buyers aren’t motivated by the current selection of inventory and financing is still pretty tight.”

The result —

  • Traffic misses expectations as prices are once again too high.
  • Prices increase, but inventories and time to sell point to challenges.

Click here for the Credit Suisse’s monthly survey for metro Phoenix.

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Number of Improving Housing Markets Keeps Growing

More metros were added to this month’s Improving Housing Market list, allowing the index to grow in January to 242 metros out of 361 nationwide.

The National Association of Home Builders/First American Improving Market Index identifies areas that have shown growth in housing permits, employment, and home prices for at least six consecutive months. The index was created in September 2011.

Forty-seven new metros were added to January’s list, including areas like Los Angeles; Auburn, Ala.; Des Moines; Nashville; Richmond, Va.; and Cleveland.

The IMI has almost doubled in the past two months as stronger demand during prime home buying season boosted prices across a broader number of metropolitan areas.

Metro Phoenix has been added to the list back in May 2012 after its sixth consecutive growth in permits, employment and home prices. Back then, the numbers of metros in the NAHB/First American IMI list was only 100 out of 361 nationwide. Metro Phoenix has never failed in these 3 respective measures since then.

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