Buyers market.... really? (Mesa, Scottsdale, Tempe: insurance, townhouses, calculation)

[thegirlinaz]

I believe that during the 10-day inspection if there is something wrong with the house or you don't want it, you do have the chance to walk away. However, if you pass the 10-days and decide to walk away then you will lose your earnest money. The seller should respond within the 10 days (unless you try to contact them on like day 10). This is how I understand it, but I am not positive (so don't follow my advice!)

And also, the home we are buying is bank owned and they accepted our offer, which we have a assistance program called Ameridream. Ameridream is where the bank pays 3% down payment for us and $5000 in closing costs. We didn't have any problems with them declining it.

[shelly85]

Originally Posted by Captain Bill

Markas I believe you are speaking of the loans from banks, and Shelly is speaking of banks refusing offers on the house.

Shelly, there is nothing shady about a bank refusing an offer because of a buyer wanting closing assistance. A seller, whether it is a bank selling a home, or an individual, can refuse or accept any offer they choose.

All banks, and all asset managers within the REO department are different. They will accept different things in the offers. If you've made 10 offers on REO's and have lost them all, it may be that your offer price is lower than they want to accept, along with the other things you may be asking for.

The asset managers handle many properties, and the easier you make their job, the better chance you have of getting your offer through.

On the latest house, after asking for the DPA and closing costs, they still would have made over $17,000 off the house. And we have the approval to close within a week.
Another house, which sat on the market for monthes with no offers, on the day we were making an offer, lowered the price tp $119 from $128. We offered $127 so they would still make a profit. They countered with $151 and we told them where to stick it. 2 weeks later, they lowered it down from the $151 to $130. It's not like we're completely low-balling on our offers. All of them are above and beyond the asking price with enough to cover what we're asking, plus some to still make a profit. And still with the closing of the house within a week. It just doesn't make sense that they'd rather sit on a property and lose more money, hoping that one day they might get what they believe the house is worth. Right now and with more ARMs resetting in 2010, one would think that they'd rather get rid of as much as they can before they are completely overwhelmed with a new wave of houses.

[shelly85]

Originally Posted by thegirlinaz

I believe that during the 10-day inspection if there is something wrong with the house or you don't want it, you do have the chance to walk away. However, if you pass the 10-days and decide to walk away then you will lose your earnest money. The seller should respond within the 10 days (unless you try to contact them on like day 10). This is how I understand it, but I am not positive (so don't follow my advice!)

And also, the home we are buying is bank owned and they accepted our offer, which we have a assistance program called Ameridream. Ameridream is where the bank pays 3% down payment for us and $5000 in closing costs. We didn't have any problems with them declining it.

We don't qualify for Ameridream as it's based on income and we make more than they allow. Ameridream is payed for by the government, DPA is where the seller "gifts" you the money for a down payment.

[barryhussein]

17,000 homes for sale in Phoenix. If that isn't a buyer's market--nothing is. I have noticed a few shady dealings, though, on the REOs. They will have one or two, at screaming good prices. You call, they take their time getting back to you; then tell you it's not available (but, they have some others, that happen to be a little more). If I find an REO (pasreo.com or countrywide.com) the first thing I do is go to ziprealty and see what homes are selling for within a half mile. I remember a "scandal" in Phoenix about 10 years ago, where it was determined that HUD home buyers were paying 10% too much. They could have bought the house next door (in better condition) for less money. Some of these auctions have been completely unscrupulous. They set a minimum bid, then they tell the buyer that their "winning bid" did not meet the reserve price. So, only if their is a bidding frenzy, will someone actually get the house. I would only go to an "absolute" auction.

[Bradylady]

The same thing happened to us when we first came out in May. But this is what I found out, a house we like that was pre-foreclosure and listed for $285,000 that was well over 3,000 sq ft., had a pool and three car garage, in a very nice part of Chandler.

But then we were told that bidding had gone $40,000 over the asking price. Guess what? That house was still for sale for $285,000 the last time I checked. Something shady is going on, so we decided to rent until the games stop, or we can smarten up to them.

[Howard Roark]

If it's a buyers market, then the 60,000+ homes for sale would be gobbled up shortly, right?

There are various websites to see just how many houses are for sale in certain areas.

I'm going to wait until 2012 or 2013 when most of the option ARMs have finished their resets. House payments on those loans are going way up. Most of these 1.4 million homes are in California but I imagine a fairly large group is in Phoenix, I would guess 10,000 or more. It means prices are more likely to fall in four years.

Of course, if you find your dream home and can get a fixed loan and you are certain your job won't be outsourced and company won't fold up - then buy!

Originally Posted by thegirlinaz

It seems that every house we are interested in buying they already are in the process of closing or have tons of offers.. with all these houses for sale, it seems there are just as many buyers. We looked at a house that has only been on the market for 2 days and it already has 11 offers, 2 of which are more than the asking price.. this is just stressing me out!

[ArizonaBear]

Originally Posted by Bradylady

The same thing happened to us when we first came out in May. But this is what I found out, a house we like that was pre-foreclosure and listed for $285,000 that was well over 3,000 sq ft., had a pool and three car garage, in a very nice part of Chandler.

But then we were told that bidding had gone $40,000 over the asking price. Guess what? That house was still for sale for $285,000 the last time I checked. Something shady is going on, so we decided to rent until the games stop, or we can smarten up to them.

I smell a rat as well...........

Where I live (85257); housing prices seemed to be firming up a few weeks ago due to some 'investor' activity----------not any more.

I am seeing more and more single family homes going for under $175K now.

realtor.com

[ArizonaBear]

Originally Posted by Howard Roark

If it's a buyers market, then the 60,000+ homes for sale would be gobbled up shortly, right?

There are various websites to see just how many houses are for sale in certain areas.

I'm going to wait until 2012 or 2013 when most of the option ARMs have finished their resets. House payments on those loans are going way up. Most of these 1.4 million homes are in California but I imagine a fairly large group is in Phoenix, I would guess 10,000 or more. It means prices are more likely to fall in four years.

Of course, if you find your dream home and can get a fixed loan and you are certain your job won't be outsourced and company won't fold up - then buy!

Unless the US government steps in with fixed rate loans to cancel out the ARMs----------and, fast.

[markas214]

Originally Posted by ArizonaBear

Unless the US government steps in with fixed rate loans to cancel out the ARMs----------and, fast.

I hope you're being sarcastic. I have my house and an afforable 30 year fixed mortgage @ 6.25%. I qualified for triple what I borrowed. I did not wish to be house poor. I believe all those who over loaned and over borrowed should go under even if it takes a decade to recover. No more tax money for fools or speculators. People need to learn to live within their means.

[Captain Bill]

Here are some stats some may be interested in:




Notes:

• I have used the stats from areas that I am concentrating on for investing for my investor clients and myself.
• I'm comparing them with the overall Metropolitan Valley area.
• Due to time restraints I'm only posting the months supply of inventory.
• Use the information as you wish.
• I computed the numbers from the ARMLS
• They are based on the past 30 days sales.
• Above 300k price will show a larger supply of inventory but I don't have time to post all that.
• 6 months supply is considered a balanced market
• Less than 6 is considered a sellers market
• More than 6 is considered a buyers market
• In December 2007 the Metropolitan area inventory was 18 months.
• If you're working with a realtor, ask him/her to get you statistics for the area/price that you're researching.
• Note that prices are still declining because of the bank owned properties competing, but competition for these properties causes some prices to be leveling off.

ARMLS (entire area)

• 8.1 months supply for all Single Family Residences
• 6.5 months supply for all SFR <200k
• 7.1 months supply for all SFR 201-300k

Gilbert

• 6.1 months supply for all Single Family Residences
• 3.7 months supply for all SFR <200k
• 5.2 months supply for all SFR 201-300k

Mesa

• 7.4 months supply for all Single Family Residences
• 6.1 months supply for all SFR <200k
• 6.5 months supply for all SFR 201-300k

Mesa Zip Code 85209 (East Mesa in Gilbert School District)

• 6.4 months supply for all Single Family Residences
• 4.5 months supply for all SFR <200k
• 6.6 months supply for all SFR 201-300k

Gilbert Zip code 85234 (North Central Gilbert)

• 6.0 months supply for all Single Family Residences
• 3.9 months supply for all SFR <200k
• 4.9 months supply for all SFR 201-300k

It's up to each individual to do their own interpretation of these numbers, and to do their own forecasting. In my opinion, one should also be searching for the answers to these questions.

1. Why did the inventory drop from 18 months supply in December 2007 to around an 8 month supply today?
2. What will the supply be in January 2009?
3. As the supply drops below 6 months in each price range, what will happen to prices?
4. How much of a drop in purchase price will it take to offset a 1% increase in interest rate, if the rates continue to increase?