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Scottsdale AZ Short Sale Information

Friday, September 3rd, 2010

Foreclosure is a fairly well understood process, but as “short sale” signs sprout like weeds all over the metro Scottsdale/Phoenix area you may wonder what it’s all about.

When a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner, it’s called a short sale. The lender forgives the remaining balance of the loan.

Everyone loses — or wins

Short sales are a mixed bag for the buyer, the seller and the lender.

If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You’ll also walk away from your home without a penny from the deal, making it difficult for you to find another place to live.

The buyer gets the property at a reduced price, but the property in all likelihood has its share of problems — think fixer-upper — and will need to go through considerable red tape in order to make the deal happen.

The lender takes a financial loss, but perhaps not as large a loss as it might if it forecloses on the property.

Before you even start considering getting involved in a short sale, there are two situations in which an attempt at a short sale is almost certain to fail.
Two short-sale killers

No default on loan — Lenders almost never will accept short sale offers or requests for short sales until the borrower is far behind in payments and a notice of default has been issued.

Bankruptcy — If the seller has filed for bankruptcy, forget it. Few, if any, lenders will consider a short sale when the seller has filed for bankruptcy because negotiating a short sale is considered a collection activity and collection activities are prohibited in bankruptcies.

Can it work for you?

Buying a home in a short sale can be a hassle, so why should you consider it? Mainly, it boils down to the bottom line. You will get the property for a substantial discount. Since the lender is eager to continue to get paid back the money it loaned out. Since the seller plays an active role in the short sale process, you will probably have their complete cooperation. This is not always the case with a property that has gone through foreclosure.

Whether you’ve become aware of the distressed situation on a property through your agent, a FSBO ad or word-of-mouth, this is not a do-it-yourself project. A short sale is one real estate deal where you really need to get help from an experienced agent or attorney. Not all real estate agents know how to handle a short sale, so make sure you consult with one who can demonstrate special training or a good track record with short sales. You may want to select an agent who holds the Certified Distress Property Expert (CDPE) designation or the Short Sale and Foreclosure Resource (SFR) designation. These agents have the knowledge and experience to assist you.

Why lenders (might) agree

It might seem counterintuitive for a lender to go along with a short sale. After all, a lender is legally entitled to pursue the full balance of the loan. When a homeowner falls behind on payments, the lender can (and often does) hold the borrower responsible for every penny owed.

And yet more and more lenders are willing to consider approving a short sale.

Lenders are painfully aware of just how bad the current foreclosure crisis is. They know the cold reality is that a large number of struggling borrowers will end up losing their homes and often see the advisability in accepting the inevitable and trying to minimize their losses. Yet, some lenders seem to remain in denial.

Foreclosure is an expensive and time-consuming process for a lender. By agreeing to a short sale, the lender wraps up this little mess quickly, and perhaps with less of a loss than it would have incurred with a foreclosure.

Remember, after foreclosing, the lender owns the home and has to maintain it, insure it and pay taxes on it. So instead of receiving payments each month, the lender is now forking out money every month. Plus, short sales help the lender look good on paper — the property never gets listed as an actual foreclosure, which helps the lender’s numbers. They see it as the lesser of two evils — if the numbers make sense for them

The entire process gets far more complicated and uncertain of success if there is more than one lender involved. Second or junior lien holders often are the ones absorbing most of the loss. If there is a second mortgage or a home equity line of credit, you’ll need approval from all. In addition, you may find your mortgage loan was sold to an investor and therefore you also need approval from that company.

Short sale properties appear to be the norm in our real estate market and will probably be around for several more years. It is unfortunate that individuals are loosing their homes to either foreclosure of short sale, but on the other side of this ugly mess are buyers/investors who are taking advantage of this housing market.

If you would like more information about the short sale process from either the buyer’s side or seller’s side, please feel free to contact us at 602-620-2164 or visit our Scottsdale Real Estate website  and check-out the drop down menu for Short Sale Help!

It’s a Good Life

Stephen & Alice Proski

Posted in Local Market Conditions, Scottsdale AZ Short Sales, Scottsdale Real Estate News | No Comments »

Phoenix Housing Prices Starting to Decline

Tuesday, August 17th, 2010

Home prices in metro Phoenix are falling again, and new data about upcoming sales suggest that they are likely to keep falling over the next few months, bringing concerns of a housing-market “double dip” closer to reality.

Home prices had fallen to a median $119,900 back in April 2009, marking the low point of the region’s housing crash. Recent months showed small but steady increases, keeping the price above $130,000. 

But in July, the median sales price of a metropolitan Phoenix house fell more than 2 percent, according to the real-estate research firm Information Market. It was the first time the area’s median has fallen below $130,000 this year, and the second month in a row that home prices fell.

Pending home-sales data provided to The Arizona Republic show the downward trend continuing.

Thousands of Phoenix-area homes are in escrow. If those deals close at the sales prices listed in their contracts, the region’s overall home-sales price will tumble nearly as far as April 2009′s low point.

If home prices drop below that mark, most analysts will consider it a double dip. With prices below their previous low point, a housing recovery will be even further away.

July is traditionally a slow month for the Phoenix-area housing market. But there is little data to contradict what pending home sales indicate about where prices are headed.

Instead, several other factors also point to a continuing decline.
 

The region’s recession-battered job market is still weak, meaning few new buyers.

The number of foreclosed homes, which often end up being resold at bargain prices, continues to rise.

And most people who were considering buying anytime soon have likely already bought, getting in on a federal tax credit for homebuyers before it expired in June.

Also concerning to some in the industry is Arizona ‘s crackdown on illegal immigration, which has spurred some people to leave the state.

New residents, who help fuel home buying in metro Phoenix , are no longer moving to the area like they were before the real-estate crash and recession.

“The market is much weaker now than it was a few months ago, with demand down severely almost everywhere,” said Mike Orr, who publishes a daily online analysis of Phoenix-area housing called The Cromford Report. “I am currently expecting the average square-foot sales price to fall about 1 percent a month during the next two months. It’s anybody’s guess after that. It could get quite ugly.”

He tracks average square-foot prices because they are less skewed by a few high or low prices. The current average is $87 a square foot, down from $91 a month ago.

Last month changed that. The 2 percent decline was the largest this year.

Valley home sales neared record-high levels during the past 18 months as buyers snapped up inexpensive foreclosure homes and houses discounted for short sales. But last month, sales of existing homes dropped 24 percent from June’s robust pace. New-home sales in July fell to 534, half their pace in June.

Investors continue to buy Valley homes, particularly from lenders who have recently foreclosed on them. In July, investors were behind more than 21 percent of all home sales, up from 17 percent the month before, reports Information Market.

“If you aren’t selling an inexpensive home, it can be tough to sell in this market,” said Jay Butler, director of realty studies at Arizona State University .

Interest rates are near record lows, but it’s more difficult to obtain a mortgage now. Also, potential buyers who own homes and can’t sell them are stuck until home prices climb.

Rising supply
 

As demand from homebuyers dropped, the inventory of homes for sale in metro Phoenix climbed. Too many homes for sale and too few buyers will continue to drive down home prices.

“Demand for housing is directly related to population,” said Ruff, the Information Market analyst. “If there’s an exodus due to SB 1070, expect home prices and sales volume to drop dramatically.”

Despite the housing market’s current setback, many analysts still expect a return to a normal market of steady annual growth by 2015.

For now, market watchers are tracking home sales and foreclosures to determine if prices will drop as far as expected in September and whether they climb again in October as the Arizona Regional Multiple Listing index predicts.

So if you are considering buying a home in the metro Scottsdale/Phoenix area in the near future, this could be a perfect time to find a deal!

Thanks for visiting our blog and look forward to hearing from you.
It’s a Good Life!

Stephen & Alice Proski

Posted in Local Information, Scottsdale Real Estate News | No Comments »

Banks Need To Fix The Mortgage Crisis

Saturday, May 22nd, 2010

The banks need to start working with homeowners now. If they don’t we are going to see a ripple effect in the economy that made the last meltdown look tame. We can see no reason why the banks are forcing homeowners to go 60 to 90 days late on their mortgage just to get a loan modification which doesn’t really solve the problem.

The banks should be willing to short sell properties back to property owners at market rate instead of forcing the homeowner to do a short sale to a third party and have to move out. We can see reasons why the banks haven’t done this, but at this point with home prices continuing to drop and foreclosures on the rise we believe it will be in everyone’s best interest if the banks start working out deals on principle reductions. They were bailed out by our government with “our” tax dollars and have done nothing but some token maneuvers to placate those who really need help.

The mortgage crisis is dragging on the economic recovery as more homeowners fall behind on their payments.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That’s a record high and up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier

Around 4.3 million homeowners, or about 8 percent of all Americans with a mortgage, are at risk of losing their homes.

 
Should loan modification programs fail to help, their homes will go up for sale either as a foreclosure or short sale — when the bank agrees to sell the property for less than the original mortgage amount.

Many analysts have been forecasting home prices will dip again as more of these homes go up for sale at deeply discounted prices.

 
The Obama administration’s $75 billion foreclosure prevention program has barely dented the problem. More than 299,000 homeowners had received permanent loan modifications as of last month. That’s about 25 percent of the 1.2 million who started the program since its March 2009 launch.
About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during a trial phase that lasts at least three months.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, poor lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier. The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

We have seen signs of improvement this year thus far with inventory going down and sales totals have increased.  We have also seen a slight increase in the median price home values, but if this small improvement doesn’t last, then we can be ready for another melt down
 
If you are having difficulities making your mortgage payments and don’t want to let the bank foreclose on your home, give us a call at 602-620-2164 or email us a  and we will help you explore short sale options.

 Regards

 Stephen & Alice Proski

 

 

 

Posted in Home Sellers, Local Market Conditions, Scottsdale Real Estate News | No Comments »

Canadian’s Investing in U.S. Real Estate!

Friday, March 5th, 2010

 candianmoney

 

With the Canadian dollar above US90¢ and real estate prices in the United States at a historical low, successful Canadian entrepreneurs who may have surplus funds in their business or may even have sold it may be planning to invest in U.S. property.

Business owner’s who may be weighing the costs and benefits of purchasing a condo or home, or other U.S. property such as shares, must remember to factor in any applicable U.S. taxes.

Business travelers to the United States have the opportunity to see places first-hand. Although business owners should be familiar with U.S. business tax rules, they may not necessarily know about personal tax rules.

Generally, income from certain U.S. investments, including real estate, is subject to U.S. tax even if you are not a U.S. citizen or resident. U.S. investments are usually taxed in three ways: on the income they generate, on their sale or gift, and on the death of the owner.

 

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There are complicated U.S. and Canadian tax implications business owners need to consider if they plan to buy U.S. property through their company, especially if they plan to use the asset personally. However, this article focuses on the tax implications of buying U.S. property personally.

But if you are a business owner who, planning ahead to retirement, decides to buy a condo in say, Arizona, and rent it out. Assume you receive US$10,000 in rent in 2010 and our mortgage interest, maintenance costs, property taxes and depreciation total US$8,000.

A 30% withholding tax normally applies to rent paid to a Canadian resident for real estate in the United States. As such, your tenant should withhold 30% of the rent paid to you, or US$3,000, and remit it to the Internal Revenue Service. That can be eliminated by giving the tenant or agent a form that states you will file a tax return and pay tax on the net (rather than gross) rental income. You must file a personal U.S. tax return, separate from any business returns, by the end of the year. U.S. tax on the net rental income in the example would be US$2,000 ($10,000 rent minus $8,000 expenses). If the tenant withholds tax, you can receive a refund, to the extent the withholding tax exceeds the tax payable. State tax (and possibly a small amount of city or county tax) may also apply to U.S. rental income.

Once you elect to pay tax on net rental income, this election will apply to any U.S. rental real estate you hold now and in the future.

 

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You should file a return even if you have a rental loss so you can carry the loss forward to offset future gains and to claim your deductions, including depreciation, which is not a discretionary deduction (in fact, it will reduce the cost base of the property even if you don’t claim it).

If you decide to sell your condo, a withholding tax of 10% of the sale price normally applies under the Foreign Investment in Real Property Tax Act of 1980. You must also file a U.S. tax return to report the sale for income tax purposes. If you realize a capital gain on the sale and the FIRPTA tax withheld is more than the U.S. income tax you owe on the capital gain, you can get a refund for the difference. Again, state tax (including withholding) may apply.

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You may be able to reduce the FIRPTA withholding by applying to the IRS before the sale for a “withholding certificate” if your expected U.S. tax liability is less than 10% of the sale price.

You must also report rental income and capital gains from your U.S. condo on your Canadian tax return. You can generally claim a foreign tax credit for the US tax you paid to reduce your Canadian tax.

When you’re considering selling U.S. real estate, remember the U.S.-Canadian exchange rate will affect the amount of a capital gain taxable in Canada because the cost of the property is converted to Canadian dollars at the exchange rate at the time of purchase and the proceeds are converted at the exchange rate at the time of the sale.

 

If you still own your condo when you die, U.S. estate tax may apply. This tax was repealed for 2010, but it will be reinstated for 2011 (and possibly some or all of 2010) and will continue to impose a potential burden on the estates of Canadians who own U.S. real estate and other property. Some states also have their own estate taxes.

There are ways to reduce your estate’s potential U.S. tax. However, this type of tax planning is complicated and professional advice is advisable.

If you choose to give your condo to a family member during your lifetime rather than in your will, U.S. gift tax will apply. You may also have to pay Canadian tax if a capital gain has accrued, but no foreign tax credits are allowed in Canada for U.S. gift tax. Due to the different tax treatment of gifts in Canada and the United States, gifting real property in the United States is rarely advisable. Tax consequences are different for other types of U.S. property.

Like rental payments, dividends and interest paid by U.S. corporations to Canadian residents are subject to U.S. withholding tax. The Canada-U.S. tax treaty limits the tax to 15% for dividends and zero for interest in most cases. You do not have to file a U.S. tax return to report dividend income on which the correct tax has been withheld or for interest that is exempt from U.S. income tax.

When you sell your shares in a U.S. corporation, Canadian tax will apply to any capital gain but U.S. tax will normally not apply as long as you are not, nor have been, a U.S. citizen or resident. U.S. tax may apply if the shares are in a private company with a majority of its value derived from U.S. real estate. U.S. gift tax does not apply to gifts of U.S. securities by Canadians even though U.S. estate tax may apply to them.

Tax implications should not discourage Canadian entrepreneurs from buying property in the United States. If you pay careful attention to meeting your tax obligations and take advantage of any opportunities to reduce U.S. liabilities, you can reap the benefits of owning the property while minimizing your costs.  (article supplied by Benita Loughlin of the NationalPost.com

We hope this information was helpful.   When deciding to purchase real estate here in Scottsdale, please contact us at 866-620-2164 or visit our website at www.myhomeinscottsdale.com

 

It’s a Good Life!

Stephen & Alice Proski
office@myhomeinscottsdale.com

Posted in Home Buyers, Living in Arizona, Local Market Conditions, Scottsdale Real Estate News | 8 Comments »

Home Values Still Going Down

Friday, February 12th, 2010

 housing-market-crisis

Maricopa County homeowners will begin to receive their latest property valuations in the mail today. Most will see a third straight annual drop in home values.

Residential property values fell an average of 15.2 percent in 2009, according to the latest report from the Maricopa County Assessor’s Office.  Values fell 23 percent in 2008, following a 13 percent drop in 2007.

“It’s still bad but not as bad,” county Assessor Keith Russell said.

Last year, the overall median value of homes in the county fell to $131,700 from $155,300.

Some Valley cities fared better than others. For example, home values in Tempe declined 13.4 percent in 2009, while they dropped 27.3 percent in Tolleson.

 

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County homeowners have yet to see declines in property taxes similar to the drops in property valuations, and they won’t again this year.

Many Phoenix-area municipalities and school districts are facing budget gaps and will likely have to raise property taxes this fall.

Property-tax bills lag valuations by 18 months in Arizona and are based on a complex formula that includes funding for multiple municipalities and school districts. Most property-tax money goes to education.

The tax bill homeowners receive this September will be based on 2008′s valuation. Assessments going out now will be reflected in 2011 tax bills.

declining-home-prices

 

To save money, the Assessor’s Office is now printing property valuations on a single sheet of paper that is folded to postcard size for mailing.

County property valuations were previously sent in standard business envelopes that also contained several public-information inserts.

The Assessor’s Office saved 40 percent in printing costs by switching to the single-sheet valuation report.

“We want people to know about the new format for their valuations so they don’t mistake them for something else and throw them away,” Russell said.

If property owners think their valuations are too high or low, they must lodge an appeal with the Assessor’s Office by April 13.

 

decling-homes 

Last year, 20,000 people appealed their real-estate valuations in Maricopa County, double the number of appeals from 2005. About 1.5 million properties were valued by the Maricopa County assessor during 2009.

For more information about your home value, check with www.maricopa.gov

It’s a Good Life!

Stephen & Alice Proski

Posted in Home Buyers, Home Sellers, Local Market Conditions, Scottsdale Real Estate News | No Comments »

Scottsdale Golf Country Clubs Woo New Members With Cut Rates

Friday, January 15th, 2010

 

 

 

press-news

 

It’s a buyer’s market for golf-club memberships according to a recent report by Peter Corbett of the Arizona Republic.

At most of Scottsdale’s country clubs, a lingering recession has cut the number of new members coming in the front door while financially strapped current members are going out the back door, industry officials say.

And potential new members know they are in the driver’s seat, said Matthew McIntee, a vice president for Crown Golf Properties, which owns and operates Golf Club Scottsdale”There are a lot of bargain hunters,” McIntee said. “People are coming in expecting a pretty deep discount.”

Golf Club Scottsdale is trying the hold the line on its $110,000 membership with $800 monthly dues. But other clubs have slashed membership costs, opened their courses to non-resident play and have otherwise gotten creative to lure golfers with deep pockets in their plaid pants.

Golfers, meanwhile, are trading down from luxury golf to more affordable courses, said Tim Eberlein, director of the Golf Academy of America-Phoenix.

 

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Golf Club Scottsdale, the city’s newest Country Club at 122nd Street and Dynamite Boulevard, is about halfway to its limit of 350 members, McIntee said.

The 5-year-old course, which has no homes surrounding it, has seen its sales slow.

To some extent, that is due to a downturn of people relocating to Scottsdale or buying second homes here, McIntee said.

The Country Club at DC Ranch cut its golf membership last year from $135,000 to $75,000 in the wake of the economic downturn. Monthly dues are $950. Clubhouse memberships start at $5,000.

That price cut helped boost sales to 49 new members in 2009, up from 30 the previous year.

The club saw the biggest dropoff in membership in 2008 when the economy first started to tank, said Melanie Halpert, membership director.

The Country Club at DC Ranch has picked up new members from golfers living outside DC Ranch, she said.

 

dc-ranch-golf

Terravita Golf Club has also added non-resident members, said Steve Mallory, Terravita’s golf director.

Now the club southwest of Scottsdale Road and Carefree Highway is offering one-year trial memberships.

“Like other private clubs we’re being creative to attract new golfers to the industry,” Mallory said.

Terravita’s full membership is $40,000 plus monthly fees of $554. A trial membership is $5,000. That up-front fee is applied to a full membership for those who join within the first year.

Terravita’s members can use their own golf carts, which keeps players’ costs down.

Mallory explained Terravita’s strategy of being the smallest house in a wealthy neighborhood, or in this case, a more affordable country club among some very pricey neighbors.

“When the economy takes a downturn, people are watching their disposable income and a golf club may not be their highest priority,” he said.

Terravita differs from many other clubs in that it is not an equity membership. Some clubs allow members to recoup a percentage of their initiation fee when they choose to leave the club.

“But sometimes that refund doesn’t come to fruition as quickly as the seller would hope,” Mallory said.

 

 

teravita-golf

 

Members put their name on an exit list and wait their turn to sell their membership. Sometimes the clubs sell three or four of their memberships for every one membership that an exiting member is allowed to sell.

That can lead to a long wait, especially in a recession.

McIntee of Golf Club Scottsdale said his club’s exit list is not as long as he feared it might be, but added that the economy has steamrolled over some of his members.

“The golf business is in a tough spot now,” McIntee said. “But each segment of the market will survive. The challenge is to be one of the best in your segment.”

With that being said, you can see the struggling economy has affected some of the most wealthest of people, those who can afford a pricy golf club members.  Maybe that is why we are seeing more people flock to public courses these days.

Again, thanks for reading our blog and if you would like information about golfing course communities, please feel free to give us a call anytime at 866-620-2164 or send us an email at office@myhomeinscottsdale.com

 

It’s A Good Life!

 

Stephen & Alice Proski

 

 

 

Posted in Just For Fun, Local Market Conditions, Outdoor Activities, Scottsdale Real Estate News | 10 Comments »

Federal Recession Aid-Get It While You Can

Friday, December 18th, 2009

 

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Time is running out to take advantage of some of the government programs set up to help consumers during the economic meltdown.

Among them are programs meant to shore up the credit markets, which allow for more available credit and lower interest rates on loans for homes and automobiles, as well as tax benefits to entice consumers to buy that new house or car

 

Real Estate

Mortgage-Backed Securities Purchase Program. This Federal Reserve program is slated to end in March. Since its implementation in January — and expansion in March — of this year, the Fed has been buying up mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae in an effort to keep the mortgage-securities markets afloat. By the program’s scheduled end, a total of $1.25 trillion in mortgage-backed securities is expected to be acquired.

The upshot for consumers has been mortgage interest rates at or near historic lows, says Paul Ballew, senior vice president, customer insights and analytics for Nationwide, an insurance and financial-services firm.

Once the program ends, however, rates most likely will rise, says Keith Gumbinger, vice president at mortgage-education firm HSH Associates.

The question is, how much?

“By our reckoning, rates are about three quarters of a percentage point lower with the Fed’s program,” Mr. Gumbinger says. “Not that we expect interest rates to go screaming off into the night, but rates half or a full percentage point above where they are now isn’t unthinkable” once the program ends.

A one-percentage-point rise could add more than $150 to a monthly mortgage payment for a $250,000 30-year fixed-rate loan.

For homeowners thinking about refinancing, it’s probably best to act now. After the program ends, “there will be more uncertainties in the marketplace than there are now,” Mr. Gumbinger says. “Rates may be affected and the availability of credit might be affected.”

handshouse

 

Home Affordable Refinancing Program (HARP). HARP, part of the Making Home Affordable initiative, is slated to end in June. It assists homeowners with little or no equity in their homes, who otherwise wouldn’t qualify for refinancing, to refinance their mortgages backed by Fannie Mae and Freddie Mac. HARP is aimed at homeowners whose houses have lost value and who now have a mortgage that’s higher than the house’s value.

Homeowners who qualify for HARP should take advantage of the program before it ends because later on they might not be able to qualify for a refinance without it, says Greg McBride, a senior financial analyst for personal-finance site Bankrate.com.

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Home-Buyer Tax Credit. Consumers also have less than five months to take advantage of the home-buyer tax credit, which originally was part of about $288 billion in tax benefits in the $787 billion economic stimulus package. The credit has been extended — and expanded — through June 2010, though you must have a contract in place by April.

First-time homebuyers get a tax credit of up to $8,000, while existing homeowners may qualify for up to a $6,500 credit if they’ve lived in the same home for five consecutive years in the eight-year period ending on the date of the new home purchase. It must be a primary residence.

You’ll need to show proof of purchase and income limits apply. See the Internal Revenue Service Web site, www.irs.gov, for more information.

Automobiles

Term Asset-Backed Securities Loan Facility (TALF). Slated to start winding down in March, TALF is a loan program meant to help thaw credit markets. Investors were reluctant or unable to buy loans from lenders, and lenders that didn’t want to keep those loans on their own books stopped making loans.

TALF was “designed to provide financing so that those transactions could take place,” says Mr. McBride. “Investors could buy those loans, lenders could sell those loans and then pump more money back into additional loans.”

Consumers have been seeing TALF’s effect on their ability to get auto loans and on interest rates, says Karen Dynan, vice president and co-director of the Economic Studies program at the Brookings Institution.

According to Federal Reserve data, the average rate for an auto loan from auto finance companies was 6.41% in October 2008. Over 2009, however, rates have come down significantly, with an average rate of 3.42% in October.

If the program ends in March, there’s a chance rates could go up, Ms. Dynan says.

Mr. McBride says if the markets are in working order when TALF ends, there shouldn’t be a spike in interest rates. But a hiccup in the credit markets could cause them to tighten up again, which could cause rates to rise again in the absence of TALF.

Sales-Tax Deduction for New Vehicle Purchases. There are only a few weeks left to take advantage of a tax deduction meant to entice would-be car buyers.

You can deduct state and local sales and excise taxes on your 2009 tax return for up to the first $49,500 of the price of a new car, light truck, motor home or motorcycle. The eligible vehicle must be purchased between Feb. 17 and Dec. 31, 2009, and there are income limits.

“If you’re on the fence about…buying a car, this is a good time to go ahead and do it” because you could save hundreds of dollars on your taxes, says Nick Rizzi, CEO of tax-preparation firm Smart Tax.

As you can see from the information posted above, the Federal Government is trying to stimulate the economy and keep us out of further banking problems…….we may not fully support some of these programs, but we have seen a significant increase in housing sales this year which should hopefully start us back to a road of recovery in the metro Scottsdale/Phoenix marketplace. 

So if you are a First Time Home Buyer, we would welcome the opportunity to assist you with your home purchase and help you receive a hefty tax credit in the process.  Give us a call anytime at 602-620-2164 and we can start the process immediately.

Until next time, hope you enjoy the post.

 

Stephen & Alice Proski

 

 

 

Posted in First Time Scottsdale Home Buyers, General, Home Buyers, Scottsdale Real Estate News | 3 Comments »

Good Time To Buy A Condo!

Monday, December 14th, 2009

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The Federal Housing Administration puts its long-awaited new financing rules for condominium units into operation last week — immediately affecting sales in hundreds of condo projects across the country.

 

Among the key make-or-break rules that condo marketers, buyers, lender and realty agents now need to know about are the following:

FHA won’t insure mortgages in buildings or complexes where less than 30 percent of the units haven’t already been sold.

At least 50 percent of the units in a project must be owner-occupied or sold to purchasers who intend to occupy them.

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No individual owner or investor can hold title to more than 10 percent of the units in the entire project.

No more than 25 percent of the square footage of a condo project can be non-residential — in other words, used for commercial purposes.

No more than 50 percent of the units can have FHA insured financing on them. FHA doesn’t want to “concentrate its risk” in any single project.

No more than 15 percent of the units in a project can be 30 days or more delinquent on their monthly payments to the condo association.

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Although some developers and in urban areas welcomed the new rules, industry critics say they will actually curtail the availability of low down payment FHA financing for many individual buyers. Others say some of the percentage thresholds are off the mark.

 

 

For example, we recently lost two of our sales in a condo development project because there were too many renters and not enough owner occupied units to meet the FHA requirements.   The developer needed cash flow so they decided to lease a large majority of their condo units rather than wait for sales and closing.

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Andrew Fortin, vice president for government affairs at the Community Associations Institute, which represents condominium, cooperative and planned unit developments across the country, told Realty Times that the 25 percent commercial-use cutoff is “problematic” because many projects have been designed for “mixed use” in urban areas.

Fortin’s group also is critical of the new 15 percent delinquency ratio on association dues. Not only is a 30-day delinquency measure “a very arbitrary standard,” he said, but it’s also not a good indicator of the association’s underlying financial health.

The bottom line is this, since the decline to the market and the overwhelming number of apartment complexes that tried to go condo- conversion, it has been hard to get FHA financing for a number of condo projects in the metro Scottsdale/Phoenix area. This new change that was just implemented last week, will significantly help with our future condo sales and hopefully make that segment of our market more desirable.

 

Until next post, have a good one,

 

Life is Good!

 

 

Stephen and Alice

 

p.s. Don’t forget to head over and take a look at our home away from home:  www.myhomeinscottsdale.com website for anything you need related to buying or selling your home!  Enjoy.

Posted in First Time Scottsdale Home Buyers, Home Buyers, Local Market Conditions, Scottsdale Real Estate News | 1 Comment »

When Will This Roller Coaster Ride End?

Monday, October 5th, 2009

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“Sales are up.” “Sales are down.” “Prices are up.” “Prices are down.” So what is it? Actually all of these statements are true. One our favorite phrases “it depends” sums up what is going on in our current real estate market. Whether sales are up or down or whether prices are up or down, it just depends on what segment of the market you are looking at. The residential market in the Greater Phoenix area is a mixed market of homes. Hopefully the following information will help bring some clarity to the confusing opening statements.

The number of residential sales for August was down to just above 8,000 homes sold in August for a decrease of 11.6% from July Sales. Still this was the fifth consecutive month in a row with sales of homes over 8,000 with three of the five months having sales over 9,000 homes sold.

Lender owned sales have dropped somewhat while on the other hand short sale transactions have increased. This maybe due to the fact the lenders are willing to wait for a homeowner to try and sell their property versus foreclose on the property and take it back and then place it on the market for sale. We are seeing this to more of the trend that banks are following.

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In August 2008 there were 357 sales of homes between $50,000 to $99,9999 price range compared to 1,457 homes sold in August 2009 in the same price range. Yes things are looking up.

The home sales median price went up $1,000 in August over July. The median price of $126,000 (Greater Phoenix area) in August is up 9% or $9,000 over the median price of $116,000 in April of this year. Have we already bottomed out?

On the other hand, the median price of $126,000 in August 2009 is down 30% or $59,000 when compared to August 2008 when it was $185,000. So I am confused, are things getting better or getting worse? “It depends.”

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Demand for lender owned properties has been hot and the supply for these homes has decreased on the other hand, short sale supply continues to increase. The values of these properties however may decrease as well. If this happens, short sale lenders may further drop the dollar amount they will take on a short sale to get their short sale properties sold. If short sale prices fall far enough, buyers will perceive the purchase of a short sale as a great value and the competition for them will go up, just like it did on lender owned properties.

Lender owned property sales has dropped as a percentage of the total number of monthly sales for the fifth month in a row (April thru August). In March, 2 out of 3 sales were lender owned while in August 1 out of 2 sales was lender owned. The number of short sales closings went up every month so far this year.

So we are seeing inventory declining and sales going up in most cases but why is there still no relief in site? Our guess is we appear to be stabilizing the market somewhat and by doing so, we should start to see some appreciation of values on recent sales. If whatever goes up, must come down, hopefully we’ve been down long enough and its time to go up again.

Listing supplies are down because as stated above, buyers perceived the purchase of lender owned properties as a great value. The Arizona Regional Multiple Listing Service shows residential sales for the last 6 months (March thru August) at 51,913 or 8,652 per month. The home sales median price for this time period was $121,733. The last 6 month period in which there were more sales was June 2005 thru November 2005 at the peak of our real estate frenzy which there were 54,286 or 9,048 sales per month. The home sales median price at that time was $254,833.

So have things gotten better or worse, well again it depends. If you purchased a home at the top of our market in 2005 you have probably seen a dramatic decline in its overall value because of the bank owned and short sales properties that have flooded the market.

The majority of sellers out there are people who must sell because of some sort of distress. They lost their job; the value of their home has dropped; their mortgage exceeds the value of the home; their interest rates have climbed to an unaffordable payment and the list goes on as to the many reasons why most sellers have some form of distress going on and that is why they are trying to sell their home.

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We have lived in the same community for the past 8 years and during the last 18 months the only homes that have sold are the distressed bank owned or short sales properties. A normal seller, ones without any distress going on seem to not have a chance these days. Again, because buyers are looking for the perceived deals and they seem to only focus on short sale and bank owned properties. Hopefully by years end or the first quarter of 2010 the shift will occur and sales will increase across the board within all price ranges and the stabilization we are seeing now will turn into a market increase and the world will be a better place to live in. Okay, sometimes you have to dream.

Until next post, have a good one,

Life is Good!

Stephen and Alice

p.s. Don’t forget to head over and take a look at our home away from home: www.myhomeinscottsdale.com website for anything you need related to buying or selling your home! Enjoy.

Posted in Home Buyers, Home Sellers, Local Market Conditions, Scottsdale Real Estate News | 2 Comments »

Foreclosures On The Rise

Thursday, August 13th, 2009

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The economy maybe showing some signs for recovery, but thousands of homeowners across Arizona moved closer to losing their homes last month.

Arizona had the third-highest foreclosure rate in the United States in July, with one in every 135 housing units receiving a foreclosure filing, according to the latest market report from RealtyTrac, an online marketplace for foreclosure properties.

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Foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 19,694 properties statewide, up 17 percent from June and 47.5 percent from July 2008.

There was some evidence that the rate of increase slowed a little in June, but that wasn’t the case last month, said Daren Blomquist, RealtyTrac spokesman.

“There was a short period where they weren’t increasing quite as quickly, but at least in July they’re back to pretty sharp increases on a year-over-year basis,” he said. “We’re hearing that home sales are up in Phoenix right now, and there are some signs that home prices might be stabilizing, which is good news. So Phoenix would be one of those markets that we might expect to see a turnaround in the foreclosure numbers. But we haven’t seen it yet.”

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Scheduled auctions, the first public record in the Arizona foreclosure process, jumped 25 percent from the previous month, while bank repossessions stayed flat. Only Nevada and California had higher state foreclosure rates.

“We’re putting more into the foreclosure pipeline even as we’re still trying to deal with the large numbers that are already in the pipeline,” Blomquist said.

Among metropolitan areas, Phoenix-Mesa-Scottsdale had the ninth-highest foreclosure rate, with one in every 109 housing units receiving a foreclosure filing.

Nationally, foreclosure filings were reported on 360,149 properties, with one in every 355 U.S. housing units receiving a foreclosure notice. That’s up nearly 7 percent from June and 32 percent from July 2008.

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There’s no evidence yet that national foreclosure prevention programs have affected foreclosure filings, Blomquist said.

“We don’t see a quick end to this anytime in the next few months,” he said. “We expect the numbers to continue to be high through at least the end of this year.”

The Government mortgage intervention has had little impact on the locale real estate market. Yes, there has been a significant amount of sales thus far this year compared to last year’s sales, but we continue to see potential buyers only looking for the “deals” and they think deals are only with distressed properties either short sale, pre-foreclosure or bank owned properties.

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We have seen some improvement with the short sale process taking less time to get an answer from the banks. Hopefully in the future the banks will try and move those transactions along at a quicker pace, thus clearing up inventory and reducing the amount of time a buyer must wait to get an answer.

There maybe light at the end of the tunnel for the overall economy, but we feel the housing market still has some significant challenges ahead.

As Certified Short Sale Negotiators, we can help you if you are behind with your mortgage payments and want to avoid the foreclosure process. Give us a call or send us an email, we would be happy to discuss your situation. We are here to help you.

Until next post, have a good one,

Life is Good!

Stephen and Alice

p.s. Don’t forget to head over and take a look at our home away from home: www.myhomeinscottsdale.com website for anything you need related to buying or selling your home! Enjoy

Posted in Home Sellers, Local Market Conditions, Scottsdale Real Estate News | 7 Comments »

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