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