The Phoenix real estate market set a new record in June 2011 with over 10,800 residential home sales. The previous record for home sales, which stood for six years, was set in June 2005 with 10,216 recorded residential housing sales. This is great news for home sellers, but not so good news for home buyers and entrepreneurs looking to spend cash for Phoenix Arizona investment real estate.

When home sales go up and housing inventory goes down (Phoenix -Scottsdale AZ real estate listings – June 2011) we can generally expect prices to start creeping upwards. That’s exactly what’s been happening with our local real estate over the last three months ( Phoenix housing tracker).

Read the chart in this manner: “There were 10,856 residential home sales in June 2011. 3,538 were ‘normal sales’ ( 32.6%) and 7,318 were ‘foreclosure sales’ ( 67.4%). Foreclosure sales continue to dominate the local real estate market. The chart also indicates that late spring and early summer tend to be the higher home sales months.

Record home sales Phoenix real estate market-June 2011

Let’s explore the foreclosure sales in a little more depth. Read the chart in this manner:

7,318 foreclosures were sold in June 2011. 4,605 were REO homes, or bank owned property (62.9% of all foreclosure sales), and 2,713 were short sales ( 37.1% of all foreclosure sales). There were 1,233 canceled short sales which creates a 68.8% success rate in closing short sales when comparing the 2,713 that sold to the 1,233 that canceled (cancellations usually occur when the bank(s) holding the lien(s) would not agree to the short sale price.

Comparison of foreclosure sales - REO homes vs short sales

Short sales are being closed more consistently over the last six months after reaching bottom in September of last year.

Search Phoenix foreclosures

Cash is King or the Norm in Phoenix Arizona Investment Real Estate

Have you been watching the metropolitan Phoenix – Scottsdale AZ real estate listings (Search Phoenix Real Estate) in the Arizona regional MLS? If you’re in a position of either ‘giving or looking for’ real estate financial advice for Phoenix Arizona you will be interested to know home listings have declined 17,781 over the last nine months. We discussed this trend a few months ago and the reason for it in this article: Phoenix Housing Tracker- May 2011.

You can see the decline on the first chart in the column labeled “For Sale.” Although this chart only goes back 12 months, this is the lowest level of listings in the Phoenix real estate market over the last six years. You will also notice that the percentage of foreclosures (depicted in orange) is down to 39.1% to begin July 2011.

Phoenix- Scottsdale az real estate listings to begin July 2011

The second chart illustrates the breakdown of foreclosure listings. Foreclosure listings are defined as either bank owned properties (REO’s) or short sales. Read this chart in the following manner:

To begin July 2011 there were 8,409 foreclosure listings in the Arizona regional MLS. 4,029 (47.9%) were bank owned properties (REO’s) and 4,400 (52.3%) were short sales.

This information can be useful to formulate your own Real estate financial advice Phoenix Arizona

While the number of REO properties has actually decreased, their percentage has increased. This is due in part to the fact that many more short sales are actually closing escrow, effectively reducing the number of short sales on the market. It’s also notable that number of foreclosure listings is only half of what it was only one year ago. Click here to search Phoenix – Scottsdale AZ real estate listings.

The basic laws of supply and demand state that a large demand for a product, coupled with a low supply, creates a higher price. Home prices have been up slightly over the last three months in the Phoenix real estate market as seen in this article: “Phoenix housing tracker – housing prices on the rise.” There is really no reason to panic if you’re in the market for a house. Our Phoenix housing tracker does not predict any significant increases in home values over the next year. Having said that, the biggest factor will be how long the banks will hold onto their shadow inventory. If the term shadow inventory is new to you, click on the 2nd link in the first paragraph.

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Corporate relocation provides executive retreat for the discerning buyer in the Sun Lakes AZ Real Estate area. Owner paid $274,000 and invested approximately $253,000 over six years to make this a resort style home. Top of the line upgrades are too numerous to list and are contained in the PDF link below. Let the upgrade list, pictures, and video do the talking. Scottsdale quality home at a bargain price. There is no other home like it in the area. This retirement community allows residents of 40+ years
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Original article: Sun Lakes AZ Real Estate

See the 37 slide home show: Sun Lakes AZ Real Estate

See the video on You Tube: http://www.youtube.com/watch?v=fTZVlr2

Sample Pictures:

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  Download the 4 page upgrade file in PDF format: Sun Lakes AZ Real Estate

Here is a sample of the document in the above link:

… and is one of the developments largest model homes (the Posada) which is 2,534 sq. ft. with 3 bedrooms and 2 full baths on an oversized resort like lot of nearly 15,033 sq ft. The home has been extensively renovated both inside and out with a total renovation cost of approx. $253,750 and done over a period of 6+ years with all inside renovations occurring in the last 1 – 18 months. Original cost of home $274K.

INTERIOR

Extensive home remodel and high end upgrades throughout the home that include kitchen and adjacent family room, bedrooms, hallway, master and guest baths, utility room, etc. that include changing the overall home floor plan/layout inclusive of adding a third bedroom and moving the kitchen footprint and expanding family room (approx. aggregate cost $106,500)…

Phoenix Housing Tracker statistics and market conditions

When the number of homes on the market falls dramatically and the demand for housing increases substantially you can usually expect prices to rise. That’s what has been happening in our local housing market, as reported in our Phoenix housing tracker.

Prices in the “Overall,” “Normal,” and “Foreclosure” segments have all been on a 3-month increase (as indicated in orange) after steadily dropping for years. This trend has been fueled by the lowest housing inventory in the last 5 years (Phoenix Scottsdale AZ real estate listings: June 2011) and the greatest 3-month demand / sales in our history (Phoenix Housing Tracker: May 2011 sales). We’ll need to wait for the June 2011 sales statistics to see if this trend will continue.

Slight rebound in housing prices: May 2011 Phoenix housing tracker

The decrease in inventory is partly caused by banks who have foreclosed on homes but have not released them for sale. It is also being fueled by the record number of home sales in our local housing market because of record low interest rates and exceptionally low home prices.

The recent increase in prices will most likely be relatively short lived because several larger banks are expected to begin releasing inventory and home sales generally slow down after the summer months.

It’s interesting to note the large difference in price between normal and foreclosure type home sales, which has ranged between $29-$47 per sqaure foot over the last 18-months. That range accounts for a hefty diference in price tags — an average of $89,000 over the same time period. However, this price comparison doesn’t signify the true difference in value between normal and foreclosure homes sales because the two types of sales are not evenly spread across all cities and kinds of neighborhoods. In other words, there are far less foreclosure sales in Scottsdale, Paradise Valley, and Fountain Hills than in El Mirage, Tolleson, and the Town of Maricopa.

The foreclosure segment has been the driving factor behind our price declines. For the last 4 years normal sellers, or those not short selling their homes or banks who own foreclosure, have been forced to compete with foreclosure sales that have been at a significantly lower price level. If they did not want to compete they usually could not sell their homes unless their homes were worth the higher price tag because of a superior location, remarkable upgrades, or some other built in value.

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Search Phoenix foreclosures

Our Phoenix housing tracker reports the 4th highest residential home sales month in the history of our local real estate market. There were 9,913 home sale recorded in the Arizona Regional MLS for the month of May 2011. May 2011 replaced April 2011 as the 4th highest sales month in our history.

The highest number of homes sales in our housing market occurred near the peak of the real estate boom in 2005 when 10,216 sales were recorded in June 2005 and 10,003 home sales were recorded in August 2005 (Phoenix Housing Tracker March 2001).

Home buyers have illustrated their confidence that now is the time to purchase in the Phoenix area by making the last 3 months the strongest consecutive sales months at any time. The chart indicates (shown in orange) that the months of March – May 2011 averaged 9,793 homes sales.

Phoenix Housing Tracker May 2011

Home sales typically begin to pick up steam in March and are strongest during the months of April thought July, then trend downward during August. This year March has set the pace for residential real estate sales.

Investors are still accounting for a large portion of home purchases. According to the Cromford Report 24.4% of May’s sales were made by investors. The record number of foreclosures over the past few years has made renters out of many former home owners, thus making this a prime time to become a landlord.

Our housing tracker reported earlier in the month that the number of homes for sale has been on an 8 month decrease. The 39,309 listings that were on the market last October 2010 has dwindled to 23,621 to begin June 2011 — an amazing 39.9% decline. Read more at (Phoenix Scottsdale AZ real estate listings).

What happens when demand goes us and supply goes down? You guessed it: prices begin to rise. That’s what happened in May 2011 as reported in (Sell My House Phoenix Arizona: prices rebound slightly)

Phoenix housing tracker

Our Phoenix housing tracker reports that the number of homes for sale has dropped to 23,621 real estate listings, a level not seen since 2006. Home listings have been on an 8 month decrease. The 39,309 listings that were on the market last October 2010 has dwindled to 23,621 to begin June 2011 — an amazing 39.9% decline.

June 2011 Phoenix Scottsdale AZ Real Estate Listings

To add some perspective to these numbers let’s go back into history. When I became a realtor in 1999 it was common to see between 20,000 – 25,000 listings on the Phoenix real estate market. During the boom years MLS listings dropped to between 10,000 – 15,000 when homes were flying off the market in mere hours. Residential home listings increased to a whopping 54,000 when foreclosures from the resetting of 3/1 adjustable rate mortgages peaked in 2008. They began a decline to the 30,000 mark in September 2009 but rose to 39,309 in October 2010 as a result of 5/1 adjustable rate mortgages that were resetting.

Everyone has heard the news that there are still an extremely high number of pending foreclosures that will eventually end up as MLS listings because of “Option ARM’s” resetting and because of job losses in a slow economy. So where are all these homes and why aren’t they on the market?

We mentioned in an earlier article (Real estate property listings May 2011) that banks have learned how to play the real estate game and manage their losses. After the first few years of sustained foreclosure losses, banks have begun to control the number of homes on the market in an attempt to control falling prices. That has resulted in what industry insiders call “Shadow Inventory,” or homes under the control of banks but not released into the Arizona MLS.

We all know what happens when sales increase and inventory falls (Phoenix Housing Tracker and May 2011 home sales). Read (Sell My House Phoenix Arizona: prices rebound in May 2001) about rising price in Phoenix real estate.

Real estate property listings: Housing Tracker April 2011

The number of active listings in the Phoenix real estate market remained relatively constant for yet another month. The drop in the number of listings was only 587 listings from March 1st to April 1st. The big news expects to be the total number of homes sold for March 2010. It looks as though home sales may approach the 9,000 mark, making March the biggest residential sales month since last July.

Read the chart this way:
“Residential listings in The Phoenix area totaled 34,461 to begin April 2010, a drop of 587 from March. 14,087 of those listings are foreclosure listings (bank owned or REO properties and short sales). Foreclosures make up 40.9% of the total listings.

Talk of “shadow inventory” still looms on blogs and in the news.

The second chart shows the breakdown between the normal listings and the foreclosure listings. Read the chart this way:
“20,374 listings are “normal listings that have been on the market for an average of 172 days. 14,087 listings are foreclosure listings that have been on the market an average of 102 days.”

Short sales have dragged that number higher as bank owned homes slip off the market much sooner than short sales in Metro Phoenix. Real estate with short sales continues to be an adventure.

Short Sale Roulette

Phoenix Real Estate Blog Feed

I constantly get buyer clients asking me about the pros and cons of short sales. In fact, I’ve received so many questions I created a short sale page on my website and I refer clients to that page.  I’m sure I’m not the only realtor who has done that in this market.

I’ll tell you that I’ve had my share of successful short sales, both on the selling and buying side. I’ve also had my share of short sales that have blown up because 1.) a HELOC demanded a promissory note and the seller refused to sign it OR 2.) a bank wouldn’t let go of an unreasonably high BPO. [Side note: If the realtor who did the BPO for my short sale on Desert Cove Rd in Glendale is reading this -- your BPO WAS too high and the house sold for $10,000 less as a REO] Since I have a fairly analytical mind (which can be a curse in a marriage) I decided to see if I could figure out the statistical probabilities of a short sale closing escrow.

My bachelor’s degree is in business administration and I did well in quantitative analysis.  However, I did not want to create a thesis.  I was just seeking a simple way to convey the success rate of short sales to my clients. Here’s what I came up with: divide the number of closed short sales in one month by the combined total of the closed short sales plus the canceled short sales.  Expressed mathematically:

closed short sales / (closed short sales + cancelled short sales) = % of success

I used only canceled short sales and not those that “expired” or were “temporarily off market.”  I reasoned that expired short sales could simply be re-listed, were generally caused because the listing realtor lost track of time, and that most of them received an extension.  I did not count those that were “temporarily off market” because they would probably end up as either closed or canceled.

Here’s my conclusion based on 12 months of statistics from the Arizona Regional Multiple Listing Service: There is a slightly better chance closing a short sale than winning at a roulette table. Remember that roulette has a 50% chance of winning if you play either “odd/even” or “red/black.”

The 12 month chart shown below illustrates that an average of 53.7% of short sales close. Read the chart in this manner: “4,150 foreclosures sales (bank owned and short sales combined) occurred in February 2010.  1,438 of those sales were short sales.  1,167 short sales were canceled in February 2010.  Therefore, 55.2% of short sales were successfully closed in February 2010.” You will also note that the success of short sales has been greater in the last six months than in the first six months of the period.

As of 3/15/2010

I can already hear all of the short sale experts across America claiming a much higher success rate.  I have a higher success rate too. However, I present these numbers for your information or your humor — whichever you prefer.  Actually, I kind of like the roulette analogy and have already used it twice today.  Next time a client asks you if they should consider buying a short sale say to them “red or black?”

Selling Your Home

Home Buyers, Mortgage, Inspectors, Credit

Phoenix Real Estate sales were up 14% in February 2010.

February only had 28 days, but that was enough time to beat January’s total home sales in Metro Phoenix. Real estate residential sales increased from 5,812 in January to 6,613 home sales in February 2010. Need we ask why? The answer continues to be last minute shopping for the tax credit fueled by low interest rates. Expect more of the same during the next few months.

Read the chart in this manner: 6,613 homes sold in February in Metro Phoenix . Real estate defined as "normal" sales (not bank owned property or short sales) accounted for 2,463 sales, or 37.2% of the total. 4,150 sales were foreclosure related which comprised 62.8% of the total.

Here’s another interesting statistic. Year over year sales, commonly known as YOY (a common industry comparison standard), have been up for 21 consecutive months (not completely shown by the chart ). YOY essentially compares the sales in February 2010 to the sales in February 2009, the sales in January 2010 to the sales in January 2009, and so on. In other words, Phoenix real estate sales have consistently been improved from the previous year.

It’s also interesting to note that foreclosures (bank owned or REO property and shorts sales) officially accounted for over 1/2 all sales in the Phoenix real estate market beginning in October 2008. They have surged as high as 75.9% but have yet to drop below the 50% mark. My chart goes back to June 2007 for anyone who wants a longer term perspective.

My next post will evaluate the number of foreclosure sales and their makeup in terms of how many were lender owned properties and how many were short sales.

Phoenix Real Estate Forum

Tempe, Scottsdale, Mesa, Glendale, Chandler, Gilbert, homes

Homeowner Rights, Phoenix Foreclosures, Eviction Laws, and Forcible Detainers

A Forcible Entry and Detainer is an action that a new property owner (the foreclosing bank) can take if the existing occupant refuses to leave after appropriate notice (90 day notice of Trustee Sale)in Metro Phoenix. Foreclosure occupants could be either a tenant or original owner of property that was sold at a Phoenix foreclosure or trustee’s sale. Foreclosure eviction laws are subject to change, but this article is current In Arizona as of March 2010. This article was prepared with the help of a good friend, Georgi Stratton. Her contact info is on the bottom of the post.

[Note: more research was done after a comment from John, seen below. Reference this article to see how a part of the government may be breaking the law : Fannie Mae blantantly violating protecting tenants at foreclosure act]

The tenant/occupant receives a written demand to vacate the property. The term of the period to vacate is dictated by the type of occupancy – whether commercial or residential and whether a tenant or an owner that was foreclosed on. This term normally is either 5 or 7 days, unless the contract states otherwise. After the 5-7 days expire and the tenant/occupant still refuse to leave then a complaint for a forcible detainer action can be filed. The statutes provide for a very short notice period before a
court hearing.

The sole issue at the court hearing is whether or not the tenant/occupant has the right to possession. If they do not then they will be found guilty of a forcible entry and detainer. The court will enter an order directing the tenant/occupant to vacate within 5 judicial days. After that period has expired the Sheriff’s office can then evict the tenants/occupants, remove their personal property and give the rightful owner possession and control of the property.

It would be wise for the rightful owner to change the locks and take steps to protect the property.

Typically the seller must vacate the home within 7 to 14 days after a Trustee Sale (auction). Often the bank will offer the homeowner a $1,000 – $2,000 relocation fee if the homeowner moves within several days and leaves the home is good condition. If a foreclosed homeowner in the Phoenix area is being forced out without a moving fee or several days to move, the homeowner has rights. Inform the lender’s representative that you request a moving fee or are requiring them to file a Forcible Entry and Detainer Action. If they refuse to comply with either of these or if you feel your rights are being infringed upon, contact the local Sheriff for enforcement of current metropolitan Phoenix foreclosure eviction aws.

If the lender has to file a Forcible Entry and Detainer Action, you will not be able to get any cash for moving expenses.

Georgi Stratton
,Paralegal – Director of Short Sales,
Winsor & Coleman, PLC
Direct: 480.695.6565
Fax: 480.699.8853
Email: georgistratton@yahoo.com

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