The Metro Phoenix Area

• Total Active Listings currently for sale – 16,554

• Distressed Properties

- Total Active REO (Bank Owned Homes) – 1676
- Total Active Short Sales – 2206

• Total Unit Sales for January 2012 – 6619

- REO’s sold – 1851
- Short Sales Sold – 1989

• Average List Price – $172,008
• Average Sales Price based on unit sales – $166,134
• Average Days on Market – 79 days

Casa Grande

• Zip Code 85122 – 111 Active Listings – 69 homes sold

• Zip Code 85194 – 59 Active Listings – 7 homes sold

Maricopa

• Zip Code 85138 – 183 Active Listings – 118 homes sold

• Zip Code 85139 – 74 Active Listings – 47 homes sold

Queen Creek/San Tan Valley

• Zip Code 85140 – 87 Active Listings – 84 homes sold
• Zip Code 85142 – 171 Active Listings – 120 homes sold
• Zip Code 85143 – 152 Active Listings – 91 homes sold

The average Sales Price continued to increase over December 2011.  Supply is down almost 1,000 units in comparison to last month.  When supply is down, demand increases and therefore prices increase.  The average Sales Price was up $2,000 per unit.  The number of Active listings is far below the norm of approximately 22,000 units.  If this trend continues, prices will continue to increase.  A few years ago active listings were at 39,957.

Distressed sales are still leading the real estate market. 3840 of 6619 sales for January 2012 were short sales or bank-owned homes. The difference separating foreclosures and short sales is an indication that the number of short sale homes sold surpassed REO’s this month.  This is also a sign that banks are approving the short sale process faster.  It is also an indication banks are continuing to hold their inventory of homes.

For additional information please visit Phoenix homes for sale. Register on our site and a professional, experienced real estate agent will get back to you with any questions or concerns you might have.

The Metro Tucson Area

• Total Active Listings currently for sale – 5107

• Distressed Properties

- Total Active REO (Bank Owned Homes) – 550
- Total Active Short Sales – 638

• Total Unit Sales for January 2012 – 869

- REO’s sold – 338
- Short Sales Sold – 142

• Average Listing Price – $169,739
• Average Sales Price based on unit sales – $162,245
• Average Days on Market – 82 days

Green Valley

• Zip Code 85614 – 286 Active Listings – 27 homes sold

• Zip Code 85622 – 124 Active Listings – 10 homes sold

Marana

• Zip Code 85653 – 41 Active Listings – 10 homes sold

• Zip Code 85658 – 169 Active Listings – 12 homes sold

Oro Valley

• Zip Code 85704 & 85742 – 288 Active Listings – 69 homes sold (Many homes in the 85704 zip are located on larger 1+ acre lots)
• Zip Code 85737 – 176 Active Listings – 27 homes sold
• Zip Code 85755 – 251 Active Listings – 20 homes sold

Sahuarita

• Zip Code 85629 – 101 Active Listings – 35 homes sold

Vail

• Zip Code 85741 – 77 Active Listings – 27 homes sold

The year has started off somewhat sluggish.  Overall total sales volume was down approximately 100 units  from December 2011, but the average Sales Price is continuing to increase.  Numbers at the beginning of the year are usually higher.  We will have to closely monitor activity over the next few months.  For additional information please visit Tucson homes for sale. You may also register on our site and an experienced real estate agent will get back to you with any questions or concerns you might have.

In many of the outlying areas of the metro Phoenix and Tucson housing markets, foreclosures are continuing to drag down home prices and on a national level but only in certain areas.

It is estimated that one in five homes sold are distressed properties.  These homes are selling, on average, approximately 34 % less than normal sales.  Foreclosures accounted for a smaller share of total homes sold, due mainly to the banks holding on to their inventory.  Banks seemingly are slowing down their foreclosure processes until they get rid of the homes already in their inventory.

Many other distressed properties have had weaker sales because of numerous consumer complaints and lawsuits over illegal seizures of homes.  There is currently a comprehensive settlement underway with lenders over their abusive foreclosure practices.  If this settlement in any way protects lenders from potential lawsuits, we could see a higher spike in foreclosures.

During the boom of 2005 and 2006, distressed properties on a national level accounted for approximately 5 % of home sales.  That number jumped to as high as 30% in 2010 but is now hovering around 20% of all home sales.  The percentages are much higher in Arizona (43%) and other states.  California had the highest number of foreclosures at 44%, Georgia at 34%, Colorado at 26% and Michigan at 23%.

According to RealtyTrac, bank owned homes were discounted by as much as 42%.  Normal sales, or homeowners who market their homes, must compete against these distressed properties.  In most cases, normal sales are able to negotiate a higher offer because, 1) They aren’t in a desperate situation to sell and 2) Their home requires much less maintenance.  Many of the “normal” sales are move-in ready.

In the metropolitan Phoenix and Tucson markets many areas have already bottomed out.  Buyers need to understand this.  Yes, there are some areas where they will see continued reductions in price, but many other areas have bottomed out and prices are on the way up.  Buyers also must be aware of the low interest rates. The most important aspect of buying a home, whether as a primary residence or investment, is that it is all about location, location, location.

As most of the general public is aware, the term “short sale” describes when the homeowner owes more on their mortgage balance than the current market value of the home.  Arizona short sales comprise approximately 50% of the market.  With this high number, and the fact many distressed properties are run-down and require lots of maintenance, leaves the buyer little choice in their selection of homes.

Banks and mortgage companies are moving a little faster in their process and short sale approval, but they still lag far behind in this category.  The Dodd-Frank Bill partially is to blame.  There are so many government restrictions put on lenders that banks are more hesitant about loaning money to a buyer.

The new terminology that buyers and sellers are hearing in the market is “distressed”, “short sale”, “REO”, “Bank Owned” and “Foreclosure”.  Buyers and sellers need to understand these terms.  Distressed sales are any one of the above mentioned terms.  REO, Bank Owned and Foreclosure are synonymous with one another.  All of these types of distressed sales are either owned by the bank, Mortgage Company or private investor.  The most important thing for a buyer to keep in mind is that the “short sale” takes longer to close escrow than all the other homes.  It is not unusual for the lender approval to take as long as 6 months.  So if the buyer is not in any hurry, the short sale may be the way to go.

One advantage of making an offer on a short sale is the buyer is usually not in competition with other buyers.  This is not the case with REO’s, Bank Owned or Foreclosures.  The market is seeing multiple contracts on these distressed properties.  When a buyer positions themselves in a multiple offer situation, they can expect the seller to counter back to all buyers with a popular request, “Please submit your highest and best offer”.

This puts the buyer in a bidding war and limits the buyers negotiating power with the seller.  A buyer more than likely will pay a much higher price, and in many instances, will pay more than the “market value” of the home.

As a buyer, make sure the agent representing your best interest is extremely educated and experienced in distressed properties, especially Arizona short sales.  As a seller, be sure your representative has a lot of experience as well.  There are many bank requirements and mandatory documents that must be completed.  If the real estate agents involved in the transaction lack experience, be ready for a world of surprises along the way.

First-time home buyers as well as foreign investors need to pay special attention to the Phoenix home trends over the past year.  Based on the data over the past year and the current interest rates, home buyers, sellers, and investors should continue to be pro-active in real estate investments.

It’s not surprising that in the past decade the highest sales figures in the Phoenix market were at the peak of 2005 with 104,725 sales.  The second highest number of sales was in 2011 with 101,436 sales.

Properties currently on the market play a huge role in supply and demand.  The fewer number of homes for sale increase demand and vice versa.  New homes listed for sale during the calendar year (2011) were 121,041, a great improvement over when the housing bubble spiraled downward in 2006.  At that time new homes listed were hovering around 173,000.  This is another reason why the demand for Arizona homes for sale has increased.

Days on Market, which is the number of days a home is first listed for sale until time of contract from a buyer has also decreased from 113 at the beginning of 2011 to 95 at year’s-end.  The shorter time period a home is on the market signifies an increase in demand as well.

The Valley’s foreclosures were at an all-time high in November 2009, coming in around 51,000.  By December 31st of 2011, home foreclosures were at 19,979.  This is over a 60% decrease from 2009, the worst year in the history of Phoenix.  During 2011, foreclosures continued to decrease every month for the entire year.

In 2011, distressed properties, which include short sales and foreclosures (bank-owned homes), comprised over 70% of the market. Short sales overtook foreclosures for the very first time in the housing crisis.  This tells us homes are selling a little faster, thereby stopping banks from foreclosing on properties.  However, there are still major problems with the amount of distressed homes.

Now, let’s talk pricing.  This is especially where investors should pay close attention.  Without a doubt, it appears the Phoenix housing market has bottomed out.  The median list price increased from $124,000 to $129,900 during 2011.  The average list price also followed suit, starting the year at $204,300 and finishing in December $200,200.  The most important factors however are the sale prices.  Average sales prices began the year at $157,000 and ended the year at $162,200.  Based on these list and sales numbers, although nothing to “write home about”, we are reiterating that, in most likelihood, the market has hit bottom.

Overall, 2011 was somewhat flat but showed improvement for the first time since the market crashed in 2006.  These are all positive indicators that we are on the road to recovery.  Phoenix also is adding jobs faster than the national average, and unemployment is down nearly 2% since the beginning of last year.  2012 should be an even greater year for buyers and investors.

The Metro Phoenix Area

• Total Active Listings currently for sale – 17,493

• Distressed Properties

- Total Active REO (Bank Owned Homes) – 1980
- Total Active Short Sales – 2783

• Total Unit Sales for December 2011 – 7684

- REO’s sold – 2153
- Short Sales Sold – 2434

• Average List Price – $170,507
• Average Sales Price based on unit sales – $164,111
• Average Days on Market – 83 days

Casa Grande

• Zip Code 85122 – 138 Active Listings – 84 homes sold

• Zip Code 85194 – 60 Active Listings – 7 homes sold

Maricopa

• Zip Code 85138 – 201 Active Listings – 134 homes sold

• Zip Code 85139 – 69 Active Listings – 43 homes sold

Queen Creek/San Tan Valley

• Zip Code 85140 – 91 Active Listings – 76 homes sold
• Zip Code 85142 – 170 Active Listings – 110 homes sold
• Zip Code 85143 – 181 Active Listings – 119 homes sold

The average Sales Price is increasing due mainly to the inventory of homes for sale.  When supply is down, demand increases and therefore prices increase.  The average Sales Price has increased approximately $5,000 per unit.  The number of Active listings is below normal.  If this trend continues, prices will continue to increase.  In November 2009, active listings were at 39,957.

Distressed sales are still leading the real estate market. 4587 of 7684 sales for December 2011 were short sales or bank-owned homes. The difference separating foreclosures and short sales is an indication that the number of short sale homes sold are catching up with foreclosures. This is also a sign that banks are approving the short sale process faster.

For additional information please visit Phoenix homes for sale. Register on our site and a professional, experienced real estate agent will get back to you with any questions or concerns you might have.

The Metro Tucson Area

• Total Active Listings currently for sale – 4911

• Distressed Properties

- Total Active REO (Bank Owned Homes) – 665
- Total Active Short Sales – 699

• Total Unit Sales for December 2011 – 966

- REO’s sold – 390
- Short Sales Sold – 143

• Average Listing Price – $171,015
• Average Sales Price based on unit sales – $161,444
• Average Days on Market – 78 days

Green Valley

• Zip Code 85614 – 294 Active Listings – 25 homes sold

• Zip Code 85622 – 113 Active Listings – 7 homes sold

Marana

• Zip Code 85653 – 48 Active Listings – 13 homes sold

• Zip Code 85658 – 169 Active Listings – 20 homes sold

Oro Valley

• Zip Code 85704 & 85742 – 290 Active Listings – 58 homes sold (Many homes in the 85704 zip are located on larger 1+ acre lots)
• Zip Code 85737 – 171 Active Listings – 36 homes sold
• Zip Code 85755 – 231 Active Listings – 25 homes sold

Sahuarita

• Zip Code 85629 – 114 Active Listings – 29 homes sold

Vail

• Zip Code 85741 – 83 Active Listings – 36 homes sold

Total sales volume was up slightly from November, but the average Sales Price increased almost 2% from November 2011.  The number of homes or units sold in December 2011  were up 6% over December 2010.  Numbers in December are usually lower due to the holiday season.  For additional information please visit Tucson homes for sale. You may also register on our site and an experienced real estate agent will get back to you with any questions or concerns you might have.

Effective November 15, 2011, several vastly improved changes have been made to the HARP Program – Home Affordable Refinance Program.  These changes definitely could put the housing market back on track.  The program will be available in March 2012.  To be eligible for the HARP program, the homeowner must meet these two requirements.

•    Your mortgage must be serviced by Fannie Mae or Freddie Mac and
•    Your home loan must have been secured prior to June 1, 2009.

The Federal Government has been trying to ignite the housing industry over the past few years with programs to help homeowners and buyers.  Most of these programs have failed miserably.  HARP was formed in April 2009.  This acronym stands for “Home Affordable Refinance Program”.  It has also been referred to as the “Home Affordable plan, Relief Refinance, or the Obama Refi program.

So if you are “underwater” or behind on your conforming or conventional mortgage, you may qualify to refinance your mortgage without paying down any principal and eliminate paying PMI or premium mortgage insurance. If your home is currently financed as a FHA, USDA or jumbo mortgage, unfortunately you will not be eligible for this program.

To help homeowners, we have listed several questions and answers in a 3-part series to assist you with your potential options rather than walking away from your home.

1.  I don’t know what type of loan I have.  How do I check?

Both Fannie Mae and Freddie Mac have an area on their website to validate if you have your current mortgage through them.  Check Fannie Mae Loan Lookup first, since they are the larger of the two note holders.  Next check Freddie Mac’s site.  You must find your property on one of these two sites to be eligible for the HARP Program.

2.  My Mortgage is with Fannie or Freddie, now what do I do?

Get your last mortgage statement and write Fannie Mae or Freddie Mac on it and start a file folder.

3.  I couldn’t find my property on the Fannie Mae or Freddie Mac websites.  What does this mean?

Most likely you are NOT eligible for the HARP program, but don’t give up just yet.  Talk to a real estate professional or lender about other potential programs you might qualify for.

4.  I am behind on my mortgage payments.  Do I still qualify?

No.  You must be current on your mortgage in order to qualify.

5.  If I’m eligible for HARP, will this deter foreclosure?

No.  The Making Home Affordable Program will neither delay nor stop foreclosure proceedings.  The program is designed to help homeowners who have been current on their monthly payments but have lost equity in their home.  This will give them an opportunity to refinance with today’s lower interest rates.

6.  So what are the HARP requirements for eligibility?

a. You must be current on your mortgage payment for the past 6 months and late on no more than 1 payment in the past 12 months.
b. Your loan must be with Fannie Mae or Freddie Mac and initiated prior to June 1, 2009.
c. This must be the first time you have used the HARP program to refinance your home.

7.  Does HARP have a restriction on the loan I first obtained?   I owe $200,000 more than my home is worth.

No.  If you originally financed your home with no money down and financed it at 100% loan-to-value or higher, you still qualify for HARP.

8.  Is an appraisal required on my home if I apply for the HARP Program?

Maybe.  It really will depend on the lender.  Most lenders will request a document termed an “automated valuation model or AVM on the home.  The value has to meet “reliability standards” as outlined by the lender.  If it does meet the standard, then a physical appraisal would not be required by the mortgage company processing the refinance.

9.  I’ve heard the term “FHA Streamline Refinance”.  Is this the same as HARP?

Although there are similarities between the two types of refinancing, remember, to be eligible for the HARP program, you must have a conforming or conventional loan.  FHA and VA loans are not eligible under the Home Affordable Refinance Program.

If you are now reading this far, there’s probably a good chance, based on these 9 questions, you are eligible for the HARP Program.  Be sure to continue reading HARP – Part 2 and HARP – Part 3.  If at any time you have any questions or concerns, please email us at info@newresalehomes.com.

10. Do I have to use my current lender to apply for the HARP progam?

No.  You may select any lender of your choosing as long as the lender is participating in HARP.

11. I will not be able to put 20% down.  Will I have PMI (Premium Mortgage Insurance)?

It depends.  If your current mortgage does not have PMI, then your “new” refinanced mortgage won’t require it.

12.  If I am required to pay PMI, will the amount increase from what I’m currently paying?

No.  The PMI or mortgage insurance policy might require additional steps to process.  Be sure to inform your loan officer that you are currently paying PMI.  This will help expedite the underwriting process.

13.  Is there a loan limit as to how much I can refinance?

Yes.  HARP refinances are based on the current conforming loan limit of $417,000.

14. If I refinance through the HARP program, can I receive extra cash out for miscellaneous expenditures?

No.  The program only allows for what we call, rate-and-term refinances.

15. Can I apply for HARP on an investment property?

Maybe.  You may be able to refinance if you are considered an “accidental landlord”.  Depending on the lender, certain eligibility standards are required.

16.  Am I eligible under the HARP guidelines to qualify on a second or vacation home?

Yes.  Again, the home must meet certain standards by the lender.

17.  Are condos and town houses eligible for the HARP program?

Most definitely.  HARP is applicable for ALL residential property.

18.  May I combine my current “second” mortgage under HARP?

No.  Any second liens or encumbrances existing on your current mortgage will have to be subordinated to the new mortgage.  Be sure to let your lender know if you took out a second mortgage on your home.

Remember, there is still another section of questions and answers titled HARP Program – The New Home Affordable Refinance Program – Part 3 or perhaps you missed HARP – Part 1.

19. Can I finance the closing costs in the HARP Program?

Absolutely.  Closing costs may be wrapped into the mortgage, including escrow reserves and daily interest.  However the final mortgage amount financed may not exceed the conforming loan limits of $417,000.

20.  I am currently unemployed and have no income stream.  Do I still qualify for HARP eligibility?

Yes.  HARP applicants do not have to qualify for a new loan unless the new principal and interest payments (PI) exceed 20% of the original note.

21.  I originally bought my home using the “stated income” guidelines.  Will my income be verified under the HARP refinance program?

No.  Verification of income is only required if the new principal and interest amount is above 20% of the original loan.

22.  There must be a catch.  Are mortgage rates higher with a HARP Loan?

No.  Interest rates would be the same as traditional financing or what the current market rates are at the time you lock your loan.  LLPA’s or Loan-Level Pricing Adjustments may apply, but are usually waived.  LLPA’s might be a factor depending on the property type or possibly credit scores.

23.  Oh my credit score is sub-par.  Is this going to hurt my chances?

No.  There is no minimum credit score requirement with the Home Affordable Refinance Program.

24.  What does the acronym “DU” Refi Plus mean?

This is just an abbreviation for “Desktop Underwriting”.  This is the department that ultimately approves the loan.

25.  When I refinance through the HARP Program may I remove a spouse or co-signer presently on my current loan?

Possibly.  Most lenders prohibit removing anyone from a note.  However, there are certain circumstances that will allow a person to be taken off the original loan, as long as they would have no ownership interest in the home.

26.  I want to lock in my interest rate as soon as possible, to insure the rates do not increase while waiting for loan approval and closing escrow on the home.  How long does the approval process take?

Lock in your interest rate for at least 45 days.  This should be sufficient enough time to get approval and close on your property.  Most lenders will allow you to do this without any additional costs involved.

27.  How much time do I have before the HARP program is over?

Remember, you must close escrow on the home prior to January 1, 2014.

This new government program is rolling out in March 2012.  Although there still is much to do to improve the housing market, the new HARP eligibility program is a start in the right direction.

This new program for homeowners should reduce dramatically the percentage of distressed properties currently on the market.  It opens the door for many more homeowners to keep their homes in this down economy.

If you meet these qualifications, you will need to start preparing and gathering your paperwork.  To determine what paperwork will be required, please give us a call and our agents will guide you in the right direction.