Buyers market.... really? (to live in, moving, rating)

[lildevil01]

I looked at homes for quite some time before I started making offers. I made offers on 3 homes all of which were foreclosures. 2 of them I was out bid on and I offered more than the asking price. 1 that I made an offer on i`m supposed to close on tomorrow. It also is a foreclosure its taken almost 2 months to close on and i`m paying $ 79,500 my appraisal came in at $ 140,000. It actually was not molested by the former owners and is actually if very good shape. We can basically clean and move in. All the appliances are there and the kitchen is pretty new but the pool was drained and will probably need to be resurfaced. It is an older home neighborhood is nice and lot size is 12,000 sq foot 3 bed 2 bath 2 cg. My realtor claims that investors make offers on several houses and then decide what they want to buy after offers are accepted. So you may get outbid but the may pull out on their offer and the house may be open again. One thing I did notice about buying this house I was over there last week and noticed that a person had signed in that they had veiwed the home Keep in mind my offer was accepted early in July and the home was supposed to be taken off the market but it was being shown so I think some times realtors keep fishing for buyers even when someone else has a contract on it.

[Captain Bill]

Originally Posted by lildevil01

I looked at homes for quite some time before I started making offers. I made offers on 3 homes all of which were foreclosures. 2 of them I was out bid on and I offered more than the asking price. 1 that I made an offer on i`m supposed to close on tomorrow. It also is a foreclosure its taken almost 2 months to close on and i`m paying $ 79,500 my appraisal came in at $ 140,000. It actually was not molested by the former owners and is actually if very good shape. We can basically clean and move in. All the appliances are there and the kitchen is pretty new but the pool was drained and will probably need to be resurfaced. It is an older home neighborhood is nice and lot size is 12,000 sq foot 3 bed 2 bath 2 cg. My realtor claims that investors make offers on several houses and then decide what they want to buy after offers are accepted. So you may get outbid but the may pull out on their offer and the house may be open again. One thing I did notice about buying this house I was over there last week and noticed that a person had signed in that they had veiwed the home Keep in mind my offer was accepted early in July and the home was supposed to be taken off the market but it was being shown so I think some times realtors keep fishing for buyers even when someone else has a contract on it.

When there is a contract, the home goes to Pending status. While it is in Pending, people can still view the home, and they can also submit a "back up" offer. That means that if your contract falls through, then they can entertain the back up offer. (And a lot of contracts do fall through) When escrow closes is when the house is Sold and that takes it completely off the market.

Hope that info helps.

[d2snow]

Originally Posted by Captain Bill

When there is a contract, the home goes to Pending status. While it is in Pending, people can still view the home, and they can also submit a "back up" offer. That means that if your contract falls through, then they can entertain the back up offer. (And a lot of contracts do fall through) When escrow closes is when the house is Sold and that takes it completely off the market.

Hope that info helps.

That's exactly how it works. They can't afford to lose potential buyers if the first one falls through.

[lildevil01]

I am not sure cause I have never bought a home before but Tonite I am supposed to go to the title company to sign everything and they told me then my loan would be funded the next day and the house would be mine ?

[thegirlinaz]

Originally Posted by lildevil01

I am not sure cause I have never bought a home before but Tonite I am supposed to go to the title company to sign everything and they told me then my loan would be funded the next day and the house would be mine ?

We just bought a house and after we signed the papers with the title company it took two days for it to go through and get the keys.

[Captain Bill]

Originally Posted by lildevil01

I am not sure cause I have never bought a home before but Tonite I am supposed to go to the title company to sign everything and they told me then my loan would be funded the next day and the house would be mine ?

You have a scheduled Close of Escrow date. The funding will happen after you sign. It may be the next day, or the following day, depending on what your contract states.

On the day of closing, the closing (in Arizona) officially occurs when the county recorder records the deed. The recorder then notifies the title company, who notifies the buyers agent, and the sellers agent. The buyers agent notifies the buyer. The agent goes to the property and takes the keys from the lock box and gives them to the buyer.

The moment of deed recording is the official Close of Escrow.

[mwwwin]

It's considered a "Buyers market" when there is a high level of inventory...however, this can be misleading because this doesn't exactly mean that the prices are where they should be...if you can get a home for what it would've sold for in 2001 you're getting a decent deal...if not, wait two or three years...the worst is yet to come in AZ...

This is all my opinion of course...

[AZTammy]

Captain Bill - your statistics are correct and I agree with your overall thought process. However, I still do not to my buyers getting involved in the purchase of property with multiple bids. Some home prices, whether set my recommendation of the agent or by the home seller, are being listed well below "market value" to create a bidding war and to artifically inflate the price of a home. Yes, home sales are up however home values are continuing to decline. I simply advise my clients to proceed with caution, especially first time home buyers, when participating in a bidding war.

Originally Posted by Captain Bill

Tammy, I agree that one should not have to get into a bidding situation. But sometimes that is unavoidable if one wants the opportunity to buy that perfect house at a bargain price.

The over priced homes and the REO's with too many repairs and too high a price are sitting for a long time. The bargains are moving, and that's what everyone is searching for. In June 2008, for the first time this year, the year over year total valley sales increased over June 2007, and the inventory in Gilbert dropped to a 6.3 month supply.







I give more weight to the current inventory trend and the Pending/Sales ratio than to the YOY.

• YOY is history.
• The current inventory is today,
• Pending/Sales ratio is what will happen tomorrow.

But some like to see the YOY.







Something that I've said before, and have been heavily criticized by the doomers for saying it, is that the

• buyers of today are buying the best properties out there.
• They are looking for perfection at a bargain price.
• When they find it, they buy it.
• When the inventory declines and more buyers enter the market, those perfect houses will be gone.

Sure there will be others crop up, but it may be a longer wait, and again buyers will be faced with multiple bidders when those bargains surface.

So today, as I'm seeing it, when the perfect house at the right price crops up in front of a buyer they will be faced with competition for that home.

I look at it this way:







There are 42,835 single family homes on the market this morning in the entire valley.

• The majority of the buyers today are in the <200k price range.
• There are only 15,562 of the <200k homes available throughout the valley.
• If one wants to live in Gilbert, they have only 248 homes under 200k to choose from.
• They can find some in Chandler, but they are homes built in the 1970's with no upgrades.

Take a buyer who needs a 4 br 2 ba 2 car garage, and built 1990 or later for under 200k. That means about an 1800sf house. When I plug those criteria in, I get 12 homes in Gilbert.

Two are in Power Ranch area, and one is near Seville, too far for a commute to the city.

One is too close to Williams Gateway.

The others are not acceptable for various reasons which include being too close to power lines, too much repair needed, bad room layout, etc.

What does a buyer do?







There are several options which may be available, depending on their circumstances:

• Wait and watch for the next "right house" to become available and make their offer quickly.
• Lower the expectations. (This is the difficult decision)
• Increase the price range. (Buyers typically will buy at the top of their price range in order to get the amenities in the house they need or want, so increasing the price range is usually not an option.)

I'm just using the example of the under 200k because the majority of buyers today are in that range. Also, as we read on the C-D forums, more people every day are learning about the REO's and they're all chasing them. When a bargain comes out, it's immediately getting multiple offers.

Also, the June statistics show that for Gilbert, the total single family home inventory declined to a 6.26 month supply with a 1.64 Pending to Sales ratio, which is showing market momentum.





The <200k price range for June statistics is even more surprising as it shows only a

• 3.72 months supply of inventory,
• and a Pending to Sales ratio of 2.27.
• That indicates a sellers market in that price range, which is excellerating.

However, we know it's the REO's priced right and in good condition that are the drivers of that market. But the fact is that the good homes at the right price in that price range are getting snapped up with multiple offers as soon as they hit the market.

Surprisingly, even up to the 400k price there is less than a 6 month supply in Gilbert. The 500-600k range is 23 months supply.

I want to make it very clear that I'm not advocating that people should run out and buy a house. My point is simply to show the statictics so people can see what is actually happening in the market today, and why it's happening. I don't try to talk people into buying. My job is to help people, who have made the buy decision, find the right home at the right price.

The prices are still declining because there are more foreclosures coming on the market, and we have no way of knowing when prices will increase, or how fast. Therefore, one must examine their own personal needs before making a decision to buy or to invest in the current market.

Therefore, rather than only looking at national statistics, or at total valley statistics, if you're a buyer or a seller, get your realtor to study the statistis for your city, zip code, and your community. The study can also be done by price range; number of bedrooms; one level; two level; waterfront, school district; etc. Then you will have a much better picture of your local market, and will be able to make a more educated buy/sell decision.

By studying the statics that I posted in the pdf earlier, if one is looking for a home in Gilbert in the 500-600k price range, you can generally expect that you as the buyer are in the drivers seat (with a 23 month supply) and should be able to make some offers that will get you a good price.

If one is looking in the up to 400k range, they can expect some competition for the good properties because there is less than a 6 months supply of those homes.

[jrj2304]

I can find the same house online by different realtors for different prices. omg!

[MN-Born-n-Raised]

Originally Posted by AZTammy

Captain Bill - your statistics are correct and I agree with your overall thought process. However, I still do not to my buyers getting involved in the purchase of property with multiple bids. Some home prices, whether set my recommendation of the agent or by the home seller, are being listed well below "market value" to create a bidding war and to artifically inflate the price of a home. Yes, home sales are up however home values are continuing to decline. I simply advise my clients to proceed with caution, especially first time home buyers, when participating in a bidding war.

Tammy. I like your honest approach. You don't hype things trying to also create a false sense of urgency.

I see from your link that you have your Master's Degree and you are a real estate instructor. Smart, educated, and honest. I don't see that too often in your field.