Thursday, March 29, 2012

8 Metros Where List Prices Are on the Rise

A number of housing markets nationwide have been seeing modest increases in median list prices. In the last year alone, median national list prices ticked up 6.82 percent year over year in February, according to data of 146 metro markets. And a number of markets have seen increases in just one month by 3 or 4 percent.

The following are the eight metro areas that saw the highest median list price increases from January to February:

1. San Jose, Calif.
Month-over-month increase: 4.20 percent
Median list price: $468,888

2. Washington, D.C.-Md.-Va.-W.Va.
Month-over-month increase: 4.17 percent
Median list price: $384,950

3. Detroit
Month-over-month increase: 3.92 percent
Median list price: $84,900

4. Corpus Christi, Texas
Month-over-month increase: 3.89 percent
Median list price: $165,700

5. San Francisco
Month-over-month increase: 3.77 percent
Median list price: $611,700

6. Punta Gorda, Fla.
Month-over-month increase: 3.35 percent
Median list price: $185,000

7. Atlanta
Month-over-month increase: 3.27 percent
Median list price: $154,900

8. Phoenix, AZ
Month-over-month increase: 3.23 percent
Median list price: $146,000

And where have median list prices fallen the most in the last month? Iowa City, Iowa, where median list prices have declined 4.95 percent, and Toledo, Ohio, where list prices dropped 4.31 percent from January to February, according to data.

Short Sales Get Shorter: New Deadlines to go into Effect

As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.
Here are some of the new requirements for servicers under the settlement:

Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.

  • Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request. 
  • Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale. 

  • Servicers are also required to form an internal group to review all short sale requests. Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests. Violations can carry fines of up to $1 million and $5 million for repeat offenses. 

"If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That's not a bad deal.”

Have Home Prices Finally Reached Bottom?

“Prices are bottoming now,” according to a Bank of America Merrill Lynch forecast, released this week.

In the fall, the analysts had predicted home prices would drop by 8 percent from the second quarter of 2011 through the first quarter of 2013 — but now they’re revising that forecast, realizing the housing market is stabilizing faster than they originally thought.

The analysts now predict that prices will remain flat for the next two years, as the excess foreclosure inventory is absorbed. They then expect to see a pickup in home prices by 2014.

And in the long-term, they see a big rise in housing prices. From 2012 through 2020, analysts forecast a cumulative growth of 42 percent in home prices (at 4 percent on an annualized basis).

Phoenix Arizona real estate prices have started to increase due to increase demand from investors and home buyers looking for a good deal. The Phoenix real estate market is currently in a transition phase where buyers are now submitting offers over asking price. The days of the sellers have to lower their prices to sell their homes is now over. Phoenix real estate agents are advising their client to submit offers over asking price so that their buyers can purchase a home at the bottom of the market.

New Changes To FHA Lending Guidelines ~ Will You Be Impacted?

This is very important news about the recent changes to FHA loans, the new FHA guidelines. Especially since 95% of new financing is being originated as FHA loans. The changes in mortgage insurance really wont impact borrowers as much. For example, on a $150,000 purchase, the monthly insurance payment will increase by $18.00 a month.
However, the following notice to the FHA loan requirements is going to knock out a lot people from the market. This is FHA’s solution to motivate borrowers to clean up their credit and negotiate payment plans.
Collection Accounts and Judgments:
Open collection accounts and judgments must be addressed in following ways:
If the total outstanding balance of all collection accounts is equal to or greater than $1,000 the borrower must resolve the accounts (e.g. entered into payment arrangements with a minimum of three months verified payments made as agreed in payment plan) or paid in full prior to closing. Documentation must be provided to show that each account was resolved or paid in full. Any payments arranged for the collections must be included in the calculation of the borrower’s debt-to-income ratios.
If the total outstanding balance of all collection accounts is less than $1,000, the borrower is not required to pay off the collection accounts as a condition of mortgage approval.
Note: Paying “down” of balances on collections to reduce the singular or cumulative balance to below $1,000, is not an acceptable resolution of accounts.

Tuesday, March 13, 2012

Phoenix Residential Market Report ~ March 2012

This data includes single family detached homes, patio homes, condos, and townhomes provided by the Arizona Multiple Listing Service. The monthly charts above are based on trailing twelve monthly averages from March 2011 to February 2012 which shows the total activity in the Phoenix Metropolitan real estate market over a twelve month period. The yearly charts above are based on a yearly average for 2005 to 2011 but a trailing twelve month average from March 2011 to February 2012 for the year 2012. Without the trailing twelve month average for the year 2012, the charts would be substantially skewed and would not portray an accurate view of the market on an annual basis.

As you can see from the first chart above, Position Realty Market Index, the first time home buyer tax credit created a great deal of demand in the market similar to the real estate boom from 2004 to 2006. When the government withdrew the first time home buyer tax credit on April 30, 2010, the average sold price and number of transactions decreased and the average days on market increased. Currently, the residential real estate market is experiences another buying frenzy that is caused without government intervention or relaxed mortgage underwriting standards. Consumers are jumping into the real estate market because market statistics are indicating the market has hit bottom and investors can purchase homes at rock bottom prices where they can rent the homes out to receive a 10% to 15% or more return on investment. As found in the Average Sold Price chart above, real estate prices have been increasing steadily since October 2011 due the increase in demand. The current supply of homes for sale on the market is 22,081 where a year ago there were 48,000 homes for sale.

 Since March 2011, the average sold price has increased approximately +5.6% (up from last month), the average days on market have decreased approximately -20.4% (down from last month) and the number of transaction has decreased approximately .27.2% (up from last month). It should be noted that approximately +35% of all transaction are cash purchases either by investors or homeowners due to tighter lending requirements. The volume of REO purchases since January is down -63.3% and the volume of short sale is up +7.1%. The volume of REO purchases are shrinking due to the increased volume of trustee sales, more banks are accepting short sale transaction and existing supply of inventory is getting absorbed at a faster rate.        
The real estate market has reached a level of equilibrium where demand is exceeds supply and all buyers are rushing into the market to take advantage of low prices. Once the supply of residential homes is exhausted and demand continues to increase, real estate prices will increase at a faster rate (depends on the sustained level of demand). Trying to “time the market” for the perfect time to buy is nearly impossible but there is no better time than now to purchase. Real estate prices are at an all time low, mortgage rates are at a historical low and the market appears to be improving both in terms of prices and the overall economy. Time to buy is NOW!! Give us a call to discuss your best buying strategy, TODAY!!