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Old 06-13-2009, 09:12 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,725,255 times
Reputation: 3876

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If one is looking for a home priced over $350,000 then they'll have a fairly easy time finding one.

Over $500,000 and they'll find many more homes to choose from.

However, if they are looking for a home under $350,000 then it's likely that there will be competition on each available home.

A client of mine recently placed 3 homes priced from 300k to 349k on their short list.

One was a regular sale; one an REO; and the other a Short Sale. The REO was priced in the ball park and had 2 offers, but did require a lot of work. The regular sale was priced higher, on a square foot basis, than the others.

The Short Sale had one offer, and the agent was already working with the Loss Mitigator, so it appeared the process would be quick. We submitted an offer and expect an answer within a couple days.

Don't overlook Short Sales because of the usual extended time. If the sale has been approved already and the listing agent is working with the Loss Mitigator, the process can go as fast as a regular sale.

Have your buyers agent talk to the Listing agent to see what stage the short sale process is in.

On my City-Data blog, I've posted some statistics on what's happening in the Phoenix area with homes priced under $350k. My time is really limited now, so I'll post more as I can find the time.

http://www.city-data.com/blogs/184571-captain-bill.html

As usual, I advise that anyone considering buying a property do a lot of research and study. Understand what is going on in the market in general, your market in particular, and what is happening in the economy, as well as your personal needs. Weigh all the information available prior to making any buy/no buy decision.

Last edited by Captain Bill; 06-13-2009 at 09:50 AM..
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Old 06-14-2009, 12:01 AM
 
Location: Scottsdale, AZ
426 posts, read 1,300,781 times
Reputation: 251
I ran into this over the past two days while looking for houses.

One house we were interested in up in Anthem was listed at $250k, comps were in the $360k area for this house. It was listed for a week, had 12 offers on it. We bid $295k and were outbid by two cash offers by investors.

Two other houses we liked up in Carefree Crossing, both had multiple offers above the asking price near $300k.

We lucked out in finding a house that was just listed a couple days ago and have a verbal acceptance of our offer. Formal offer is being faxed to the listing agent tonight.
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Old 06-14-2009, 04:34 AM
 
Location: St Louis,MO
307 posts, read 951,059 times
Reputation: 85
Question Strange

All of this seems soooo strange... I'm in a home we bought in 2005 - we are probably "underwater" by maybe $100K. I remember back in 05' people were getting multi-bids, which then drove up prices.

Are we headed for the same kind of cyclical disaster?
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Old 06-14-2009, 07:44 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,725,255 times
Reputation: 3876
Quote:
Originally Posted by JDish2000 View Post
All of this seems soooo strange... I'm in a home we bought in 2005 - we are probably "underwater" by maybe $100K. I remember back in 05' people were getting multi-bids, which then drove up prices.

Are we headed for the same kind of cyclical disaster?
I don't think so. The sales back then were made to speculators, not investors, who bought simply because the houses were increaing in price. They could buy today, sell tomorrow and make money without doing anything.

Also, the easy money loans added to that fury.

Today the buyers are buying because the homes are more affordable for first time home buyers who get a tax break of $8000, and low interest rates.

I believe prices overshot on the down side, and while are seeing some increase in price, I don't think that will continue. It may stay relatively flat with ups and downs for a time. We'll just have to keep watching the market closely to see what's happening as it happens.

As far as investors outbidding regular buyers, I believe it's the other way around. Investors have to buy for less than a person who is going to live in the property can pay.

I'm getting outbid by regular buyers because, as an investor, I have to pay contractors to fix the house up and then incur the holding cost expenses, plus sales commissions to sell the property after it's rehabbed, and have room for a profit.

I'll keep posting statistics on my C-D blog http://www.city-data.com/blogs/184571-captain-bill.html
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Old 06-14-2009, 08:58 AM
 
611 posts, read 1,985,243 times
Reputation: 234
I read this on Housingdoom blog:

Real-estate investors have returned to the Valley in a big way, prompting concerns that the housing market is becoming too speculative to sustain the recent buyer activity.

The lure of once-in-a-lifetime deals on bank-owned homes is driving investor purchases, which experts say account for 50 to 70 percent of recent home-buying transactions. Still, it’s the ability to generate revenue by renting the homes to tenants - in some cases, previous owners - that makes the properties such attractive investments.

The Phoenix-area housing market has been flooded with homes for rent in recent months, raising concerns about whether there will be enough tenants to keep the Valley’s estimated 130,000-and-growing rental properties out of financial jeopardy.

Even some longtime supporters of the home-investment market say they’ve noticed a disturbing return of the can’t-lose mentality that got so many speculators and house-flippers into trouble a few years ago.

"Investors are starting to look at the market from a speculative standpoint," said Alan Langston, who runs the Arizona Real Estate Investors Association. "We could end up with an oversaturated rental market."
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Old 06-14-2009, 09:12 AM
 
611 posts, read 1,985,243 times
Reputation: 234
All these homes with multiple offers, are they bank owned or short sales? The banks are purposefully listing below comps to generate a false sense of urgency in some cases. These people are ruthless when it comes to getting other peoples money and holding back inventory, pricing below market value and creating a false sellers market is well within their power with so many owned homes.

There are many sellers who are holding their homes off the market as well as record numbers of homes entering the foreclosure process since the moratorium expired. Employment continues it's decline. Interest rates are up a full point in the past two weeks . The tax credit only applies to a closed sale by 12/1/2009 so sales initiated after October 1st could very well fail to close by the deadline. We all need to be very careful and while I appreciate Bill's efforts I remain negative for the time being because the price range I am looking at has much more downside potential. That being said, buying a 4 bedroom newer home in Surprise for under $100k for cash or with a decent down payment seems like a no lose scenario for either an investor or first time buyer. Low taxes and rates below 6% would mean a monthly carrying cost well below rental comps.

Personally, I'm waiting until early 2010 mainly out of the necessity to get an idea where we want to settle. Got our tickets to PHX and will be arriving July 4th.
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Old 06-14-2009, 11:49 AM
 
930 posts, read 2,416,360 times
Reputation: 1006
This really needs to get away from real estate advertisement central and get back to question/answer forum.

Bill, did you have a question?
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Old 06-14-2009, 12:06 PM
 
Location: Casa Grande, AZ (May 08)
1,707 posts, read 4,318,719 times
Reputation: 1448
Beena,

I really try to stay our of the frays on this board, but didnt we decide this last week democratically? Not this EXACT post, but the posting of stats etc. Bill has decided to post those on a seperate blog for easy comparison, but the general feeling I got from the posts in that thread were that MOST people appreciated the time and effort Bill puts in to provide us with information he has, and as he views it.

We are (mostly) all adults here and can "filter" the information he presents with whatever bias we would like to attach, and for that matter as many indicated in that poll thread last week, we can just scroll right on by his posts should we wish.

I have never ONCE seen him publicly advertise his business directly on this forum, where many others have, and again, there is clearly a large portion of readers who WISH to have these discussions (as long as they are held in a civil manner) here on these boards.
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Old 06-14-2009, 01:06 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,725,255 times
Reputation: 3876
Short sale List prices are determined by the Seller and the Agent, not the bank. The agent has to list at a price to get an offer, because an offer is usually required before the bank will determine if they will do a short sale. The bank may need a higher than list price in order to do the short sale.

The banks set a list price for REO's after receiving at least 2 bpo's from brokers. In the past they were listing them too high to get sold. Today they are listing them at prices where they will get sold, and they're selling them.

The bank inventory is getting pretty low and currently we can absorb a lot more REO's in the valley. If they do release a bunch that we're not expecting, I don't expect it to negatively affect the prices. There will just be less multiple offers because there are more to choose from.

While there are a lot of first time home buyers out there, we need to realize that they are not the only ones. In addition to the landlord and rehab investors, there are many non-first-time buyers moving into the state; many fence sitters that are now buying, and also many parents buying homes for their children because the prices are so low.

I purchase a special report that gives stats on all the REO's by zip code, along with the percentage bought by investors; rent $/sf; Gross Rent Multiplier, and a lot more info.

There is less than one months supply of REO's in most all valley zip codes, and that is because chasing REO's has become the "in-thing" for buyers to do. So much so that it's almost become De rigeur.

In most of the valley the percentage of investor buyers is below 15%. In some areas of Phoenix, and especially Maryvale the investor percentage is very high because of the low GRM.

The Average GRM in the valley is 11.1. The average is 11.2, and in Maryvale the GRM is 3.5 to 4.2.



The overall (not just REO's) $400 to $500k range is still moving slow, however, they are down to an 8.8 months supply valleywide (which is pretty close to a balanced market). There will always, in my opinion, be a difference in price of homes that are custom built, and in more desirable cities, zip codes and communities. If the gap between that type home and the lower end home prices become too great, then there are several things that may happen.
  • The lower price ranges can move up to reduce the gap between those properties.
  • Those higher end homes can decline in price to reduce the gap.
  • A combination of the above can happen. (This scenario seems to be more likely.)
I would not expect to be able to purchase a $500k custom home in a more desirable zip code at the same price that I could purchase a $300k tract built home in a less desirable zip code, or community. There will always be a gap in prices, and the sellers will see to that. Unless they are forced to sell for some reason, they're just going to hold them off the market, as many are doing, until they can get the price they want.

I know a couple of buyers who would like to buy a home on the water in Val Vista Lakes or the Islands, but they want to buy it at the same price that they can buy a home off the water. It just isn't going to happen, in my opinion.

A 3400 square foot home in a standard Gilbert neighborhood can be purchased for under $300k.

But a 3400 sf custom built home on the waterfront in a gated Val Vista Lakes community is going to cost more than twice that amount.

I believe many people have lost sight of the difference in the costs of the features and amenities of various homes and communities.
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Old 06-14-2009, 03:19 PM
 
Location: San Antonio
4,468 posts, read 10,563,583 times
Reputation: 4239
The sales back then were made to speculators, not investors,

Having lived in 4 bubble markets so far in my lifetime, I have to ask....what's the difference between investor and speculator?
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