JIM'S SOAP BOX
Real Estate Newsletter Aug 09

TIME IS RUNNING OUT….

November 30th is the last day to take advantage of the $8000 tax credit available to first-time homebuyers. Qualified first-time home buyers may claim a tax credit of ten percent of the purchase price of their home, up to $8,000. In order to meet that deadline, first-time homeowners need to select a home and begin the loan process as soon as possible!

Surveys show that fewer than 1 in 5 homebuyers currently shopping for a home know about the tax credit, which is why I am actively trying to spread the word. Please let me know if I can assist you any way!

The goal of this newsletter is to provide educational material mixed with Jim’s unsolicited yet fascinating opinion on the Arizona housing market and real estate ownership in general. If you would like me to address a specific topic in the future, please email it to me and I will respond in the following newsletter.

It's Getting Easier to Go Green

I am proud to announce that I am a local provider of a new mortgage product called myEnergyLoan. I am one (of only two) providers in Arizona who are registered to provide and finance myEnergyLoan. The other registered Loan Officer is my green partner Jim Tulin, also with Nova Home Loans.

myEnergyLoan provides these core benefits to green real estate buyers and investors:
Provides the funds to make your energy efficient upgrades

Provides an efficiency credit to reduce closing costs
May be applied to lower your long term interest rate
Helps reduce your monthly utility bills
A certificate validating your myEnergyLoan Efficiency Credit

I urge that you call me if you are considering a purchase of an Energy Efficient home - or - if you are considering adding solar features to you current home. Ther are several Streamline Refinance programs that will allow you to add solar energy to your home without an appraisal. Something to think about.

Appreciation in Your Home's Value on the Way!

If you read the last edition of Jim’s Soap Box you saw that the sales in Maricopa County for May were very good, 9,284 homes to be exact. Well I am happy to announce that this was not a fluke, and the sales for June came in at 9,350 homes. These are both near record months and definitely suggest that the market is ending the cycle of depreciating property values. The numbers have not been verified for July or August yet – but on the 22nd of July there were over 16,000 pending sales – which is a staggering number.

So, what does that mean?
Your property value has been greatly affected by the sales of foreclosed properties. Appraisers can only compare your home’s value to similar homes that have sold in the last 60 to 90 days. Being that bank owned, foreclosed, and short sale properties make up 77% of the homes that have sold over the last quarter – the chances are high that you can only compare your home’s value to foreclosed properties being sold at great discounts. So, if you think your home should be around $200K in value – you might be shocked to know that the highest home sale in the last 60 days was a short-sale for $130K a few blocks away.

The biggest event (in my opinion) that will help your property value return to realistic levels, is to have privately owned (not foreclosed) properties begin to sell again. Considering that foreclosed properties are usually sold well under market value, why would someone (any buyer) choose a privately owned home for thousands of dollars more? Well, they actually wouldn’t chose that option unless,… there were no more foreclosures left to sell.

So, when 9,350 houses sold in June, that left only 26,000 homes left on the market at month’s end. Logic would dictate that we would be basically "Sold Out" of homes within 3 months if no new listings appeared. Realistically, people list houses every day and the supply will never really run out - but the demand for houses will definitely go up due to a lack of inventory – and that is when the average price of houses (foreclosed and private) will go back up.

Sounds great! When do I call to refinance?
Not quite yet, because the rest of the story goes like this. There are currently 47,000 houses in Foreclosure in Maricopa County that are not listed for sale yet. It is my guess that the banks would like to see the market tighten up a little to fetch a higher price for these houses. I have already seen higher competition over newly listed foreclosures in Metro-Phoenix. If you want to buy an under-priced foreclosure – be prepared to outbid a handful of other buyers.

So what are you trying to say?
The number of houses selling per month is very strong (nearly 10,000) and appears to not be slowing down. There are roughly 30,000 active listing with another 47,000 foreclosures available to be listed. Also, there are tens of thousands of people who want to list their house as soon as we "turn the corner" on property values. This translates into 10 months of housing supply rather than 3! However, I believe (in Phoenix) we have already hit the bottom of the curve and you will begin to see a tight market with signs of appreciation by the holidays. In the spring of 2010 there should be more optimistic press available than what I am prognosticating today. My friends, we have all made it through the storm.

Good News on American Home Sales

(CNNMoney.com) -- More Americans signed sales contracts to buy homes in June than in May, the fifth consecutive month of increases, according to a report released Tuesday.
The National Association of Realtors said its Pending Home Sales Index rose 3.6% during the month. That was 6.7% higher than June 2008. It was the fifth straight month of increases, the first time that has happened since July 2003..

The report followed several other recent pieces of good news for the housing industry, including a substantial rise in new home sales, a jump in existing home sales and the first home price increase in nearly three years.

The jump was also much higher than expected. A consensus of industry experts put together by Briefing.com had forecast an increase of just 0.7%

Low-end sales have been the strongest segment of the market, an indication that the first-time homebuyers tax credit, worth up to $8,000, is contributing to the rise. The clock, however, is quickly running out on this offer and may have buyers stepping up their shopping to get their purchases in under the wire.

Jim Cunningham
Loan Officer
Nova Home Loans8800 E. Raintree Drive, Suite #180Scottsdale, AZ 85260
480 614-6413 off
602 434-8261 cell
602 680-4664 eFax
jim@novahomeloans.com
www.NovaHomeLoans.com/Jim.Cunningham

Jim's Soap Box (June 09)

JIM'S SOAP BOX

Real Estate Newsletter June 2009

SUMMER IS HERE!!

I really thought we would all be cooked by early June, but the Phoenix weather has been outstanding. It must be the reason for the record number of sales in May. I will admit that I have been a housing optimist over the past couple years, and some accuse me of howling at the moon. However, in this edition of the soapbox, I actually have some statistics to maybe get excited about.

Also, I would like to welcome all of my Facebook contacts that I have recently included to the Soap Box mailing list. My thought is that if I can see what you've had for breakfast - you can read about my industry once a month. (facebook joke). Enjoy!!

The goal of my newsletter is to provide educational material mixed with Jim's unsolicited yet fascinating opinion on the Arizona housing market and real estate ownership in general. If you would like me to address a specific topic in the future, please email it to me and I will respond in the following newsletter.


How Did Wall Street Go Bust?

As a mortgage professional and educator, I have read countless pages on how the credit crisis evolved. Frankly, most of the things I read were position pieces that pointed the finger of blame at a specific industry or political party. Had I seen the following 10 minute video sooner, it would have saved weeks of reading.

So - if you don't have a full grasp on what happened to mortgage financing, and why Wall Street banks went bust - this is about the simplest explanation ever! ENJOY!!


What's Your Rate, Dude?

Here is a pet peeve of mine that I need to share with you in regards to interest rates. On occasion, I will have a potential client call me, and in their first breath of air, ask me what my rates are today. When I begin to explain that I need to know more about their situation before I can even begin to quote rates, they sometimes get a little frisky, and accuse me of not disclosing my rates upfront. Then the conversation spins into a dissartation by me on the dozens of factors that effect interest rates, and the potential client who now has tunnel vision on the rate I eventually quote him. This is not a desired scenario for a first contact with a new client.

These people are called rate shoppers and they usually make uninformed decisions on who their lender should be. Truth be told, there are dozens of factors that can effect your interest rate and they need to be explored before anyone can start quoting rates.

Look at the list below of 26 different criteria that affect your mortgage rate. How can anyone quote you an interest rate you can trust without a thorough knowledge of your unique financial situation?

1. Loan Amount 2. LTV 3. CLTV 4. Credit Score 5. Credit History 6. Escrow Preference 7. Closing Date 8. Loan Type 9. Property Type 10. Occupancy Type 11. Residency 12. Available Assets 13. Asset Seasoning 14. Co-borrowers 15. Debt Ratio 16. Housing Ratio 17. Improvements Needed 18. Employment Type 19. Employment History 20. Documentation Type 21. Paying Points 22. Length of Loan 23. Relocation 24. Seller Contributions 25. Gifts 26. Cash-out

My friends, please beware of anyone who quotes you an interest rate over the phone or the Internet without asking anything about you, your family, your finances or your lifestyle.


May Residential Sales - Highest Number Since August 2005!

May residential sales for Greater Phoenix were 9,290. The last time there were more residential sales was 45 months ago in August 2005 when sales were 10,031. I am pretty sure it was Mark Twain who said " there are lies..., there are damn lies..., & then there are statistics." As much as I agree with this philosophy, these numbers are pretty impressive. Even though 76% of the homes purchased in May 09 were either bank owned or short-sales, we are reducing our inventory at a record pace.

Feel free to contact me by phone or email for any purchase, refinance, or general mortgage advice.

Jim Cunningham
Sr. Loan Officer
NOVA Home Loans
8800 E Raintree Dr. #180
Scottsdale, AZ 85260
480 614-6413 office
602 434-8261 cell
jim@novahomeloans.com

Jim's Soap Box April 2009

JIM'S SOAP BOX

Arizona Real Estate Newsletter - April 2009

First things first - Sorry for the huge delay in this newsletter, but I have been a little busy. I am proud to announce that I have a new home to hang my mortgage hat. I have officially returned to NOVA Home Loans, and couldn't be happier!

The advantages I had operating as a mortgage broker eventually paled in comparison to what NOVA offers as a Mortgage Banker. The best way to summarize the motivation for this move is that I now have more control over each transaction, more support, and better rates. Please take note of my new contact info.

The goal of my newsletter is to provide educational material mixed with Jim's unsolicited yet fascinating opinion on the Arizona housing market and real estate ownership in general. If you would like me to address a specific topic in the future, please email it to me and I will respond in the following newsletter.


If you are looking to buy now, you should be looking FHA.

Most people who are looking to buy in this market would like to have a small down payment (who wouldn't - right?). Conventional lending in Arizona has become unattractive to the first time home buyer. With a conventional loan you are looking at a minimum of a 10% down payment, and a FICO score of 680 or higher. If your credit score is currently below a 680 (you cannot qualify to purchase mortgage insurance) and will need a 20% down payment. Unless you recently hit the Powerball - I'm guessing you don't have 20% down.

A FHA loan (Insured by the Federal Government) has a down payment of just 3.5%. And, buyers can still qualify for a FHA loan with FICO scores as low as 580. The rates for FHA are very competetive to conventional rates, and the monthly mortgage insurance is cheaper as well. Another strong advantage is that your 3.5% down payment can be a gift from a third party.***

There are additional FHA programs and features that are getting a lot of attention.

There is a $100 down payment program if you are buying a HUD owned home.
There is a FHA Rehab program (203K) that allows you to buy and fix-up a property at the same time. This will allow you to buy the $75,000 fixer-upper and finance $25,000 in upgrades at the same time. The rate is so competetive on this program that you will not have to refinance when the repairs are completed.

All FHA loans allow up to 6% in seller concessions to pay for your closing costs. This allows you to get into the home for only the 3.5% down payment & not a penny more. Many people use this money to buy their interest rate down as well.

FHA is no longer considered the "other option" if you do not qualify for a conventional loan. It is actually the preferred loan program for Arizona and probably financing 80% of today's purchases.



*** Moms & Dads - today is a great day to help your kids buy their first home. With thousands of homes for sale in Maricopa County for well under $100,000 - It's cheaper than renting & you can finally get them out of your house.



Jim Cunningham
Sr Loan Officer
NOVA HOME LOANS
8800 E Raintree Drive #180
Scottsdale, AZ 85260
480 614-6413
480 434-8261 cell
jim@novahomeloans.com