One Arizona Real Estate Broker's Perspective

What is Happening With Chandler Home Prices?

2010-12-21T16:11:00.007-07:00

It’s funny. I turn on the news one day and they tell me a recent study shows that home prices are stabilizing. The next day I turn on the news and they report about a study that says they are falling and will continue to fall! Well here are my thoughts on the matter…

Why did prices fall so far so fast? I like to blame it on foreclosures resulting in short sales. The banks sell properties below market value either in a traditional real estate transaction or on the courthouse steps in a Trustee’s sale. After the sale, this becomes a comparable property or “comp” for appraisers. So because the banks sold these properties below fair market value, they have driven market value down! It also resulted in much disparity between the amount that homes have been listed for and the price which they sell for. Unfortunately we saw this snowball.

Many banks have stopped foreclosing on properties and even stopped “short selling” properties. This results in the snowball coming to a screeching halt. This can be evidenced in the fact that the list price and actual sale price for Chandler real estate were very similar for the 3^rd quarter of 2010. Take a look:

So what will happen next? There is a chance that prices could start falling again when the banks resume foreclosures and short sales. In fact, many experts say that this is what will happen. Well I too am an expert, and I don’t agree with that prognosis! Looking at the same chart, I see that prices pretty much leveled of before the banks put the skids on their foreclosures. In fact, I look at the Maricopa and Queen Creek real estate market trends and I see that the tide has already turned in the outlying communities. That’s where prices fell first, and that’s where I think we will see (or should I say we are seeing?) the first signs of recovery. It is my opinion that home prices in Chandler have stabilized.

Hey Inactive Real Estate Licensees – Is it Time to go Active Again?

2009-08-23T10:45:00.009-07:00

I’m not going to sugar coat things. Being a full time Chandler real estate agent has been tough over the past few years. I know that I have personally found myself tightening my belt on more than one occasion. When the real estate sales numbers drop like they did, those of us making a living by selling real estate find ourselves income challenged. Ha! Income challenged – I sugar coated things after all!

Many Realtors decided to get out of the business at least for now. Let’s face it, being a Realtor can get expensive. Many brokerages charge monthly fees in order to hang your license there. If you are not selling houses, it makes no sense to pay these fees. And then there are association fees, MLS subscription fees, lockbox subscription fees, and so on… I know several people who are now inactive licensees and have found employment in other sectors because of this.

But the tide has turned. Just as an example, Chandler real estate stats show that home sales have more than doubled in the past few months. I reported on that a few weeks ago (click here). It might be a good time for inactive licensees to think about launching a comeback. And if you don’t want to pay a monthly “desk fee” or clubhouse dues as I like to call them, there are companies out there that offer commission splits instead of monthly fees.

Property Tax Letter is a Scam!

2009-08-15T12:48:00.006-07:00

A few days ago I got a letter in the mail that was labeled as “Property Tax Information Enclosed.” When I first pulled it out of my mail box I thought it was the annual valuation letter that the county sends out to property owners. It looked official and was from the “Property Tax Review Board.”

But before I was even back inside my house from the walk to my mailbox I saw the first tell-tale sign that this was a scam. In fine print by the return address it stated that this was not from the county tax assessor’s office. When I got inside I opened up the letter and gave it a quick read.

It said that I was paying too much in Chandler Arizona real estate taxes. Well I’m not going to disagree with that, but that isn’t a soap box that I’m going to climb up on in this forum. Anyway, this company claimed that if I were to hurry (good scams always create a sense of urgency) and beat the assessor’s deadline, this company could reduce my annual property taxes by a significant amount. They went as far as to put a specific dollar amount that I could expect the reduction to be. All I had to do was send them a check.

Whoa… So I was supposed to write them a check, and then they would do their magical mojo dance and my property taxes would go down? Yea, I don’t think so. It just reeked of scam! And now the Attorney General, Terry Goddard has hopped on this by filing a law suit against this company can not do anything to lower your property taxes.

Existing Home Sales Have More Than Doubled Recently

2009-08-09T10:37:00.004-07:00

One of the biggest indicators that we can look at to determine what is happening in any given real estate market is the number of homes that are actually selling. And as you know, these numbers have been dismal. Homes simply were not selling.

But are we seeing a change in the east valley? Since the numbers don’t lie, let’s take a look at the actual Chandler real estate stats for the number of homes sold each month over the past year based on data from the Arizona Regional Multiple Listing Service (ARMLS):

Can you believe that fewer than 200 residential properties sold in Chandler in both January and February? Those are some of the worst numbers we have seen in recent history! But in contrast to those awful numbers, look what has happened over the last three months. Sold numbers have climbed over the 400 mark for May, June and July.

So it looks like the storm clouds that have been hovering over east valley home sales are clearing. And with sales numbers on the rise we can likely expect home prices to follow suit. The housing crisis did not happen overnight; it’s not going to get fixed overnight either. It is good that the Chandler real estate market is going in the right direction now though.

A Twist of Events for Arizona’s New Anti-Deficiency Law

2009-07-29T13:28:00.000-07:00

After realizing that the new anti-deficiency law would have unforeseen consequences, the original sponsor of SB 1271 has asked that the legislation be immediately repealed. When Senator Steve Pierce, an Arizona Republican initially sponsored SB 1271 the objective was to help small community banks in Arizona which did not receive any of the $700 billion dollars in TARP funds to help ease their foreclosure losses. But after the backlash from consumers and lobbyists he feels there would be better ways to help these local banks that would not hurt homeowners facing foreclosure.

While SB 1271 does have provisions that would have protected homeowners who occupied a home for six months it would not protect people who also owned a vacation home or rental property. This would have allowed banks to go after a homeowner’s personal residence if a vacation home or rental property was to be foreclosed upon.

This is a great example of a political leader listening to and working with the people he serves. The Arizona real estate community will continue to work with the Governor’s office and the legislature on this important issue until it is resolved. But right now, Senator Steve Pierce of Arizona deserves an “Atta-boy” for stepping up to the plate on this issue!

Truth In Lending Changes – Designed To Help Borrowers, But…?

2009-07-25T11:06:00.002-07:00

The rules that lenders have to follow are complex. And starting July 30, 2009 those rules get even more complex. Lenders will be subject to new Truth In Lending Act (TILA) disclosure requirements. This could affect home buyers and sellers, their Realtors and people trying to refinance a home by causing delays. And while this is not as big a deal as SB 1271, it is worth taking a look at. Here are the basics:

1. Only applies to a borrower’s home. Investment properties are exempt.

2. Lender has 3 days from loan application to supply a Good Faith Estimate (GFE).

3. Lender may not charge any fees (except for credit report) prior to GFE.

4. Mandatory 7 day waiting period between GFE and closing date.

5. If Annual Percentage Rate (APR) goes up more than 0.125% lender must issue new GFE.

6. If a new GFE is issued there is another 3 day waiting period.

The borrower can have these waiting periods waived if there is a financial or personal emergency. But the borrower must receive these disclosures no later than the time of the modification or waiver.

From the perspective of someone buying or selling a home (or a Realtor), delays in closing can cause serious headaches. Yet delays in Arizona real estate closings are already more common that one might think. We don’t need more things that will cause delays. These new TILA disclosure requirements were created with the best of intentions. Hopefully they will cause more good than harm.

Pool Barrier Basics For Home Buyers

2009-07-20T10:02:00.001-07:00

It’s that time of year here in Arizona when we can’t seem to go for more than a week without hearing about a child drowning in their family pool. An often times these drownings could have been avoided if the home owners would have been in compliance with pool barrier laws. Arizona does have a state law requiring that all residential pools have a barrier and that families with children under six have an additional barrier between the pool and the house. Many cities also have their own laws which are more stringent.

So if you are buying a house with a pool, what should you do? First, when you make an offer on a house with a pool your Realtor is going make you acknowledge as part of the contract that you are aware of these laws. The seller is also required to give you a copy of the pool safety notice from the Arizona Department of Health Services. The seller is also required to let you know of any code violations as part of the Seller’s Property Disclosure Statement (what we call the SPDS).

So whose responsibility is it to make sure the pool is up to code? Is it up to the buyer or the seller? Well here’s what it says in boilerplate Arizona real estate contract: "During the Inspection Period, Buyer agrees to investigate all applicable state, county, and municipal swimming pool barrier regulations and, unless reasonably disapproved within the Inspection Period, agrees to comply with and pay all costs of compliance with said regulations prior to possession of the Premises." So it is you, the buyer that is responsible to make sure everything is up to code in regards to pool barriers.

When Will We Hit the Bottom?

2009-07-16T10:14:00.003-07:00

Markets like real estate tend to go through cycles. They go up, and they go down. These cycles can easily be expressed as bell shaped curves. So when are we going to hit the bottom of this bell shaped curve that is killing us now? It sure seems like we have been riding this rollercoaster downhill for a long time!

Well at the beginning of July, I compiled quarterly data from the MLS just like I always do. Then I plugged these numbers into an Excel spreadsheet. And when I started printing up my graphs, I got a pleasant surprise!

And there are more interesting charts on my Jeff Hunt website too. At the beginning of July I posted my opinion saying I thought we were either at or very near the bottom of this bell shaped curve.

Today, July 16th the results of a major university study were unveiled. The local news channels were quick to hop on this story, but overshadowed the study with another federal report on foreclosures. This university study claims that we hit the bottom in May. And that is really refreshing news for homeowners. It is also a wake up call for those of you thinking about buying a home.