Phoenix Real Estate Market Keeps Tanking (bad credit, purchase, deed)

[TiredOfyycCold]

Originally Posted by whodiman

Can we get an update on number of available listings excluding AWCs? I saw something saying we are down to 12,500 homes but how can that be? We were at just under 16,000 on Mar 1.

I just searched "single family homes" "active" on the Captains site and it comes up 11,791

15,150 when I remove "single family" to include all active listings (adds in townhomes, patio homes, condos, etc).

[Captain Bill]

Originally Posted by TiredOfyycCold

I just searched "single family homes" "active" on the Captains site and it comes up 11,791

15,150 when I remove "single family" to include all active listings (adds in townhomes, patio homes, condos, etc).

Right, and the reason for this was shown in my post about Contract Ratio a couple of posts back.

The demand is remaining about the same, but the supply is decreasing because of the decrease in NOTS and REO's since more homes are being sold to 3rd parties at the trustee sales instead of reverting to the banks.

As we get more into the buying season we "should" see some stronger demand, and some more traditional sales come on the market as prices get closer to where sellers are willing to sell. I'm beginning to see signs of that in my primary market area.

[bgray9]

Originally Posted by Zippyman

The second transaction doesn't necessarily cost that much- many rehabbers are agents, or have a relationship with one. Title insurance is discounted if it's purchased from the same agency in a short period of time, and, if the rehabbers have a clue, they've factored the cost into the deal. I suspect you are giving "regular" buyers too much credit, in a large majority, they don't want to do any repairs or renovations. Even if they do want to do them, they frequently lack the funds. So, even though theoretically, they could save money by doing their own repairs, they won't, they'll pick another property.

To be truthful, even relatively minor damage ( torn carpet, or a missing light fixture) can make it impossible to finance a property. I had the closing of my own home delayed for several weeks because of a broken garage door spring - a $75 repair! I had to submit a (paid) receipt for the work, and pay for a second inspection to verify the work was done. It's silly, but that's how the big banks work now.

I noted in earlier comments, that this scenario obviously isn't for everyone, but if someone wants to take on managing the projects and/or doing them themselves, they can save significantly over buying from a rehabber, and one of the savings is not having any costs from a second transaction, amongst other things. I've just gone through this very scenario myself. Bill didn't seem to agree that such savings existed, which puzzled me.

[rjrcm]

Originally Posted by bgray9

...and one of the savings is not having any costs from a second transaction, amongst other things. I've just gone through this very scenario myself. Bill didn't seem to agree that such savings existed, which puzzled me.

Bill's point is that there will usually be a 2nd transaction at some point in time with associated costs. Granted, it may be far out enough that it's not as much immediate concern to the buyer as it would be for a rehabber. But, you shouldn't dismiss the 2nd transaction costs when comparing both alternatives to determine savings.

[Captain Bill]

Originally Posted by bgray9

I noted in earlier comments, that this scenario obviously isn't for everyone, but if someone wants to take on managing the projects and/or doing them themselves, they can save significantly over buying from a rehabber, and one of the savings is not having any costs from a second transaction, amongst other things. I've just gone through this very scenario myself. Bill didn't seem to agree that such savings existed, which puzzled me.

I do agree that savings exist for anyone who can rehab their own home.

I don't agree that there is no cost for a second transaction, unless the buyer never sells the property. It's just a delayed expense.

What I said in my earlier post is that the individual owner will not be able to do it cheaper than a rehabber. That's because the rehabber has contractors that s/he knows, and will be able to get things done for less than a one time rehab by an owner.

I agree that anyone who is capable and has the time to manage a rehab project can save money over buying a rehabbed home, provided that they buy the home at a price that allows them to rehab. Plus as you state, they will have the ability to put their own personal touches to the home.

I think we're on the same page.

Rehabbers usually know how to buy homes cheaper than a regular buyer. They need to buy the home cheaper so they have room for the ever happening cost overruns and still make a profit. Zippyman and Khuntrevor are investors who can attest to that.

[ReadyFreddy]

...and one of the savings is not having any costs from a second transaction, amongst other things. I've just gone through this very scenario myself. Bill didn't seem to agree that such savings existed, which puzzled me.

I see it more your way. The cost of getting you (for example) into a rehabbed house includes two transactions' costs if you go through a rehabber (assuming he passes his own costs on to you, which he does) but only one if you buy it and rehab it yourself. In both scenarios, you will eventually sell the house someday so it's not relevant to today's decision of 'buy rehabbed or DIY?'

From the rehabber's perspective, his cost of selling the house is about the same as your cost of selling the house. But cutting out the middleman means one less sale transaction in total, so one less whole set of transaction fees is generated. Given how expensive transactions are (~8%?), you'd think the DIY method would win out mathematically every time. I think it doesn't due to the (in)availability of cash for most average Joe home buyers and most peoples' aversion to risk.

Bill- Thanks for the info on short sale rules.

[sh9730]

Ready -

You actually made me see this differently than I had (isnt C-D great!). You are right!

As the homebuyer will eventually sell at some point REGARDLESS of whether they buy and rehab themselves, or buy an already rehabbed home, there actually IS an extra transaction in there when buying an already rehabbed home. It wasnt that clear to me initially, but now I get what Bgray is saying.

[whodiman]

I hate constantly bugging the realtors here like Bill but I think I am a bit behind the times and am hoping someone can tell me if I am out to lunch.

Below is a listing of a house that is on the same street and exact same footage, year and model that a friend of mine bought last year in May. He paid $106k. It says here on zillow that it sold for 135k. I find it very hard to believe this house could have sold for 135k in November and think that Zillow must have made a mistake. Can someone verify this? If it really did sell for this much either the market really is on fire or there is something super special about this specific house.

17648 W Banff Ln, Surprise, AZ 85388 - Zillow

[Captain Bill]

Originally Posted by whodiman

I hate constantly bugging the realtors here like Bill but I think I am a bit behind the times and am hoping someone can tell me if I am out to lunch.

Below is a listing of a house that is on the same street and exact same footage, year and model that a friend of mine bought last year in May. He paid $106k. It says here on zillow that it sold for 135k. I find it very hard to believe this house could have sold for 135k in November and think that Zillow must have made a mistake. Can someone verify this? If it really did sell for this much either the market really is on fire or there is something super special about this specific house.

17648 W Banff Ln, Surprise, AZ 85388 - Zillow

Zillow only showed the Listed price. But at least they did show it sold.

It was Listed at $135k
Sold at $137k in nine (9) days on 11/21/2011

On my site, there is a feature called Nosy Neighbor. You can click on that icon, then click on any house and it will bring up the mls numbers. Click on the number and you'll get the mls sheet giving you the Sold info.

There is a brief instruction video that shows exactly how to do that.

[azriverfan.]

Originally Posted by MN-Born-n-Raised

The reality is there are tens of thousands local non-investment folks that CANNOT buy until their credit heals. The foreclosures and short sales have that 5-7 year cycle before they can participate. The 1st hatch will be coming up shortly (pun intended

The market began to tank in the third quarter of 2007. That is when the foreclosures and short sales started. The first batch is still 1-3 years away. So they won't be coming up shortly unless you consider 1-3 years away as being "shortly" Not only that, unemployment in the state is still high and while job growth is improving, there are still many jobless. Again, perhaps we are being "doom and gloomers" but some of choose to live in reality and we recognize that the housing market is not going to magically fix itself overnight and it's going to take some time for these measures to take place. Like I said, I'm not a realtor, I'm not married to a realtor, I'm not an aspiring real estate investor so I have no incentive to create a sense of urgency in the market so unlike many, I have no incentive to have an opinion either way.