1/4% rate cut - Is that enough to help the Phoenix Housing Market?
April 30, 2008
The Federal Reserve lowered a key U.S. interest rate ( FED rate cut ) by a modest quarter percentage point on Wednesday.
More importantly, the FED hinted the move could be the last in a series dating to mid-September.
The question on the minds of Wall Street and Main street is , “is this enough to stimulate the economy and the housing market” ? - can it help real estate sales in Metro Phoenix ?
Clearly, the President, Congress and the FED are taking action to help stimulate growth and help real estate to prevent either a recession or further recession, depending on who you ask.
However, rate cuts (for the most part) have not helped most of the economy and the all important bond market (which dictates mortgage rates) has not risen much forcing interest rates down only slightly down this year.
The FED meets again in June. The question is on everyone’s mind; Are they done cutting rates? and , w ill rate cuts help stop a real estate market decline?
Opinions differ. Look at these 2 opposing opinions
Rate Cuts May Not End As Soon As Wall Street Thinks - by CNBC
and
5 Reasons the FED is Done - or Should Be! - US News & World Report
personally,.. I like the current position. Certainly , with rising gas and food prices, declining housing prices and consumer spending a weak dollar abroad, we clearly need further cuts.
In Arizona, at least in the greater Metro Phoenix area, we need more than most.
However, the economy needs some time to absorb the massive 2.5% drop in the last 3 months to offer a more clear indication of where we are and where we need to go.
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Copyright © 2008 By James Wexler, All Rights Reserved. *1/4% rate cut - Is that enough to help the Phoenix Housing Market?*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.
Active w/ Contingency in AZ- should you make an offer?
April 29, 2008
often you will find homes listed on the local (ARMLS) Multiple Listing Services (MLS) with the term “AWC-C” or “AWC-I” or “AWC-O” …. what do these Contingency terms mean?
I should point out I am referring to Arizona Real Estate Contracts that would be in use for ARMLS which includes the towns of Phoenix, Scottsdale, Tempe, Fountain Hills, Mesa, Peoria and Glendale.
AWC-C - this is a home for sale, under contract, however, the purchase is contingent upon the sale of the buyer’s property. In this market, I generally advise my clients from taking these type of offers. However, in some cases , this can make sense.
AWC-O means that the home is under contract per a buyer’s ‘option’ to perform. The buyer, has a certain time frame that they may elect to exercise the option to purchase at a set price. Make sure you ask the listing broker when this option expires so you know if and/or when to make your offer.
AWC-I - this contingency provides the seller the ability to continue to market the property for back-up offers, possibly due to doubts of the buyer’s ability to obtain financing.
The AWC-I is very common these days , as REO/ bank owned properties or ’short-sales’ will still entertain offers while the bank is making a decision.
Be careful to look for these contingencies.
If you are a buyer, make sure your Realtor asks the listing broker if the home is Active with any contingencies so you know what is the best way for you to proceed with your offers.
If you are a seller, don’t hesitate to use these contingencies, to protect yourself from questionable buyers and keep your home marketed actively for back-up offers.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Active w/ Contingency in AZ - should you make an offer*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
Will the FED lower interest rates again Tuesday
April 28, 2008
On Tuesday (and Wednesday) the Federal Reserve Bank, the “Fed” and its policy makers meet to announce/decide whether or not to lower key interest rates and more importantly, offer a glimpse into the future interest rate cut decisions by sharing their views of the US economy.
According to several sources , Most investors believe the Fed will lower rates by another quarter percentage point but will also suggest they are gearing up for a pause.
How does this affect mortgage rates? Fist of all, the rate cut is all but factored into the market. Remember the bond (for the most part) market indicates loan rates. The bond market has moved to reflect this 1/4 % point cut.
However, should the Fed give hints of further cuts, bond market would rally , thus causing interest rates to drop; further helping loan rates.
On the other hand, if the FED ‘minutes’ suggest a pause in cutting rates,the bond market will drop and rates across the board will rise (how much depends on a lot of factors).
Depending on why you are purchasing real estate it is not 100% the case. However, in most situations, how you finance your home, can be significantly more important than the price you pay.
If you are a buyer or seller or a causal observer, take a minute, tune into your local news, read the local papers in Phoenix , Mesa, or Scottsdale or read the front page of Yahoo Finance and see what happen.
Remember, information is power. It always helps you make a more educated, well-informed and prudent decision.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Will the FED lower interest rates again Tuesday*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
should the public in AZ know the purchase price & sale price of your home
April 27, 2008
There has been a significant and fundamental change in the display and public recording keeping of home ownership here in Maricopa County (Phoenix|Scottsdale and surrounding townships of Mesa, Gilbert, Tempe) Arizona.
Preciously, on the tax records, anybody, could go to the public records and type in the last name of a friend, family member, business associate.
The search would return records of not only every home or every Real Estate purchase ever purchased in Maricopa County under that name, but also the purchase price or sale price, down payment and loan amount (or cash purchase).
Now, if you search the public tax records, a only homes currently owned will appear. To further hide this information, individuals are ( after purchase) quit claiming their interest and changing title to the name of a corporation or LLC.
Thus if you search the name, there will be no searches found. by the way you can still search by property address and information contained in the tax records will appear.
by no means, am I making a political statement either way.
I am fine with either. However, the real question to ask is why was the information so accessible in the first place or maybe why is it much more hidden now?
Either way, I am a supporter of privacy rights. Individuals should have the choice whether or not that anyone but the tax assessor know your personal information.
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Copyright © 2008 By James Wexler, All Rights Reserved. *should the public know the purchase price & sale price of your home*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
when is a Short Sale actually a Short Sale ?
April 26, 2008
we have never had so many requests from buyers who only are interested in short sales, foreclosures, or (REO) bank owned properties.
However, when it comes to buying these types of properties, there are many differences.
One of the most common and sought after is the “Short Sale“.
However, not all Short Sale are alike.
In fact, not all Short Sale are even a Short Sale at all.
This morning, a real estate investor called and told me that he had put an offer in on a “short sale” home recently. He shared with me that it has been more than 10 days ago and had not heard anything from the bank and that the realtor said to be patient.
He wanted my advice. Here’s what I shared.
Unfortunately, many, if not most “short sale” listed in the MLS are not approved “short sale”
The real estate agents, just take a listing, and market and advertise the home at a price that would net the seller less than the amount owed. Then, when an offer is received the listing broker submits that offer to the bank. I was told by a well respected teacher at the AZ School of Real Estate , Bill Dowdy, that this is averaging about 78 days! yes, almost 3 months.
The more professional way to handle a proposed “short sale”, (I say proposed, because, not all banks will approve a “short sale”) is a step by step process that if approved, the bank will in effect, issue a “short sale”approval.
I can walk you through a detailed and step by step process if you request. However, in a nutshell, you need a hardship letter, and substantiation of financial information that you really cannot afford to pay any further.
Now, when a seller receives this Certificate of “approval” , the property can effectively be marketed and sold as a “short sale”.
These ’short-sales’ are the only kind of properties I recommend to my clients on which to make offers. W
e get a speedy response and if offer is not accepted we can move on to the next“short sale”and not wait 75 days to know whether or not our offer is accepted or declined.
Be careful, speak with your real estate professional, there are many issues such as rights to earnest monies, breach of contract, etc… that buyers face when making offers on “short sale” properties; especially, those that have not yet been approved by the seller’s lending institution.
Short sales are much different than Foreclosures and REO real estate.
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Copyright © 2008 By James Wexler, All Rights Reserved. *when is a Short Sale actually a Short Sale ?*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.
Help your Tenants Buy your Home - Lease Option
April 25, 2008
one of the challenges facing real estate buyers , and thus, home sellers , is the difficulty for home buyer’s to obtain loans. We are suffering in many of the towns of Maricopa County, North Phoenix, Peoria, and Glendale where we have been designated a ‘declining area” ; thus tightening credit further in most of Arizona.
Across the country, lenders have significantly tightened credit and lending standards, making it a challenge for even the most credit worthy buyers to obtain financing.
The biggest space in the mortgage market is the lack of, or virtual disappearance, of 100% Financing.
100% financing or majority financing as it is also know made it possible and for better of for worse to obtain a loan. These days, in Metro Phoenix , Arizona , at least, a buyer needs at least 5% down payment (often more) to get financing.
One way (for those who are willing to rent to a prospective buyer) is to enter into a lease-option …
(not to be confused with a lease-purchase- which is different we will talk at a later time).
Simply put, (please speak with your real estate agent and/or attorney), you would rent your home to a buyer who would deposit monthly rents and apply a portion or all of rental payments to the down payment of the property.
of course, it depends on the rent, however, in many cases, in about 6 months, the tenant would have 5% or so and would then may qualify for the loan.
There are other important issues, such as lease agreement, purchase contract and option contract that are necessary, so again please please speak with your real estate agent and/or attorney.
again, you have to be willing to rent your home. However, you can still accept back-up offers during the term of the option, should the tenant not exercise his right to purchase.
Just another idea to help sellers do just that, Sell your Home!
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Copyright © 2008 By James Wexler, All Rights Reserved. *Help your Tenants Buy your Home - Lease Option*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
Can Price declines be good news for the Real Estate market ?
April 24, 2008
I woke up this morning to Today’s leading business Headlines , ( Real Estate News)
can ‘eye-catching’ news like ….
“New home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years”
according to the Commerce Department , “The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades.”
…. ever be considered optimistic for housing.
don’t get me wrong this is not great news for Real Estate.
In fact, here in Greater Phoenix and its familiar towns of Scottsdale, Paradise Valley, Fountain Hills, Tempe and Mesa, we are hit more than most.
However, can these numbers ever be interpreted to be good news?
One of the major problems facing the ailing real estate market is the difficulty for buyer’s to obtain loans. Due to the sub-prime debacle, lenders have taken major losses, and in many many cases are out of business. Lenders are afraid to loan even to the most qualified of buyers.
However, I strongly believe, amidst all the negative news surrounding Real Estate, there is something significant being overlooked; and that is the reduced risk to lenders to loan on lower valued houses.
Let me give you an example.
let’s say that in 2001 a home priced at $200K would obtain and 80% loan for $160K.
However that same house in 2005 was $400K, this an 80% loan of $320K; a loan 60% higher on the exact same home 4 years earlier. Thus, much less security.
As home prices drop, lenders can more comfortably step into the market providing loans on the same houses. Simply put, lower prices, mean less far to drop (let’s face it, we are not going to zero) and higher prices have more room to go down.
This as a simplified example, though, lenders are in the business of loaning money. That’s what banks do for profit. They are eager to do this if prices (security in terms of equity in the home) are at more reasonable and safer levels.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Can Price declines be good news for the Real Estate market *
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
Pay Full Asking Price for that new home!! In this market ! What???
April 23, 2008
In my area of Phoenix , Scottsdale Arizona, I have real estate buyers who tell me all the time, that they would never pay full asking price.
In fact , almost every client likes to makes offers at least 10% below market , first offer, no matter what the price.
In some cases, this ‘haggling’ / negotiating strategy makes sense. However, there are situations in which, it makes sense to pay full price, if you really love , want , and can afford the home.
Here’s an example
Mr. Buyer found a home in Fountain Hills that he loved;It was priced at $300K and realized what he thought was a great deal for him.
However, we presented an offer at $300K. Unfortunately, another buyer, offered the full asking price and the offer was accepted.
The client was disappointed as he felt $330K was a fair price that he could afford and with which he would have been happy.
The next house in Troon we found was priced at $417K; priced at this amount to be within Fannie Mae buying guidelines.
My client realized the unique home buying opportunity; the home fit all his needs, wants, and desire and he could afford the home.
We offered full asking price with a relatively quick close of escrow. He was accepted ahead of 2 other offers that tried the haggling approach.
Now, don’t get me wrong. Negotiating can be a sound strategy. Always, make sure you are firm with what you can afford.
However, if you find the home you love, at a price that you feel is a great deal and that you can afford, there is nothing wrong with paying full price.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Pay Full Asking Price for that new home!! In this market*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.
Phoenix-Mesa-Scottsdale home prices down 6.36% - last 3 months
April 22, 2008
yes, it’s true….you are reading clearly.
Home prices down in 36 states (not just in Greater Phoenix Arizona) in the last 3 months alone.
In Arizona’s greater phoenix area, Maricopa County, which includes Phoenix, Scottsdale, Tempe, Fountain Hills, Mesa, Peoria, Glendale, Paradise Valley , prices plunged 16.42% in the last year and 6.36% during the past three months.
Despite mortgage rates at historically low levels, the march home sales reported by the National Association of Realtors fell for the seventh time in eight months.
The real question is whether or not this real estate price decline presents unique opportunities for you and your family.
I know everyone hates this phrase, however, , “it depends” !
If you answer “yes” to these questions, this ‘negative’ news may prove to be a positive.
- Have you been considering buying a home in the past?
- Are you currently renting?
- Is the primary reason you are buying a home for just that a home, a residence in which to live?
- Can you afford a fixed rate mortgage payment for the home you want and need if something in your life changes?
- Are you planning on staying in your home for at least 5 years?
Make sure you consider this real estate buying decision carefully and make a prudent decision.
Try and consult friends, family members and professionals whose advice you respect.
If all signs point to yes , you may very well look back years from now and realize that this market turmoil may offered you and your family a unique window to realize the american dream.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Phoenix-Mesa-Scottsdale home prices down 6.36% - last 3 months*
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
Book Review - ABC’s of Real Estate Investing - Ken McElroy
April 21, 2008
if you search at Amazon -Real Estate Investing, you return 8,589
I have not read them all. though, I have read many.
One in particular book for Home buyers and/or sellers and real estate investors that I recommend is
#3 on the search results is a book from the Rich Dad Poor Dad series, this one written by Ken McElroy titled, Rich Dad’s Advisors®: The ABC’s of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss (Rich Dad’s Advisors)
By the way, these books are not geographically based. So you do not need to be a Phoenix or Scottsdale Real Esate buyer or seller to make it well worth your investment.
This is not one of those infomercials touting make money with no money. This is easy to read useful and outlines some simple strategies about buying real estate for investments for all level of real estate investors, beginning or advanced; residential and commercial real estate.
The book concisely dispels the many myths that scare away investors before they start and offers advice on goal setting, assessing value, due diligence and a chapter titled “Finding your diamond in the rough”.
Foremost, the book outlines the idea that if you are going to invest in real estate, the best way to do it, is through the purchase of a rental property (single-family home or multi-family apartment buildings) for the simple reason that you have tenants who are paying a significant amount or possibly all of your monthly mortgage payment.
If you want to ‘fix-n-flip’ properties, this book is not for you.
I recommend this book before you buy. It is a $17.00 financial investment now that , if you learn just one thing, could save you thousands and thousand of dollars later.
I recommend learning from the real estate investing experts; It is always a cheaper way than learning from your own mistakes.
If you are interested in other recommendations, whether it be for investing in real estate, or home buying and selling, email or give me a call.
I would be happy to share my reading experiences.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Book Review - ABC’s of Real Estate Investing by Ken McElroy*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.
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