Dennis Balthazor

$7500 TAX CREDIT For First Time Home Buyers!!!

Dennis Balthazor — Sun, 24 Aug 2008 03:33:00 GMT

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.

But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible. Use the links below to learn more about the tax credit.

First-Time Home Buyer Tax Credit at a Glance

The tax credit is available for first-time home buyers only.
The maximum credit amount is $7,500.
The credit is available for homes purchased on or after April 9, 2008 and before
July 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
The tax credit works like an interest-free loan and must be repaid over a 15-year period.

For More information: http://www.federalhousingtaxcredit.com/index.html or call Dennis Balthazor @ 623-776-6966

Congress May End Down Payment Assistance!!!

Dennis Balthazor — Mon, 28 Jul 2008 23:16:00 GMT

The housing bill that’s expected to pass in the Senate this week seeks to end the seller-funded down-payment assistance programs that allow home buyers to put no money down on a home loan backed by the Federal Housing Administration. But experts predict a long battle may lie ahead for opponents of the assistance programs, which I wrote about in today’s WSJ.

“The down-payment assistance program has had nine lives,” says Howard Glaser, a former Department of Housing and Urban Development official who argues that the program represents a significant liability for the government.

Indeed, since 1999, the nonprofit groups that provide assistance have mounted a strong political effort to keep the programs intact, something that they succeeded in doing when the House preserved the programs in its housing bill that passed last month.

“These groups are amazingly adroit. They know how to play the game in Washington,” says Brian Chappelle, a mortgage consultant at Potomac Partners who worked at the FHA in the 1980s.

The programs have backing from minority and low-income homeownership groups and several vocal legislators, including Republican Rep. Gary Miller and Democratic Rep. Maxine Waters, both from Southern California.

For its part, the nonprofit organizations say that the FHA has a double-standard. Four years ago, it created its own no-money-down program through the American Dream Downpayment Act, and it relied heavily on groups like Nehemiah Corp. of America for business. “We are the activity that kept FHA alive,” says Scott Syphax, Nehemiah’s president and chief executive.

But the FHA, which has submitted for public comment a regulation that would end the programs, believes that this may be its best chance to end the programs because no-money-down loans have taken much of the blame for the current foreclosure mess and because the housing bill set to pass Congress will ramp up activity for the New Deal-era agency.

One sign that the tide may favor the FHA this time: earlier this year, the House had considered eliminating the down payment needed on an FHA loan, while the Senate had pushed for a 1.5% down payment, instead of the current 3%. The realities of the housing market have forced a change in course. The House is fighting to keep the 3% down payment level, while the Senate would increase the limit to 3.5%.

FHA Recent Loan Changes

Dennis Balthazor — Wed, 16 Jul 2008 17:26:00 GMT

FHA LOAN CHANGES

In February, President Bush signed a bill that made a temporary increase to both conforming and FHA loan limits. The U.S. Department of Housing and Urban Development (HUD) recently released the new limits, which range from $271,050 to $729,750 depending on the county. Previously, they were capped at $362,790.

With FHA loans rising in popularity, especially among first-time homebuyers, these new limits could have a very positive impact. However, the changes are currently set to expire December 31, 2008, so you should act now to take advantage.

Benefits to Homebuyers

Many borrowers who were shopping in markets where entry-level homes were above the FHA loan limit may now be able to obtain an FHA loan. The most incremental change is likely to occur at entry-level and first-time move-up prices. The effects are also expected to have the greatest and most immediate impact in markets where entry-level home prices were above the previous FHA limits, such as California.

According to a statement released by the Federal Housing Administration, the change in loan limits will “give nearly 240,000 additional homeowners and homebuyers a safer, more affordable mortgage alternative.”¹ Because FHA focuses on 30-year fixed rate mortgages, homeowners may be able to avoid some of the risks associated with subprime mortgage products.

Click here to view the new FHA loan limits for counties across the nation.

FHA: Fast Facts

If you are unfamiliar with FHA loans, here are a few facts to know. One important point is that FHA does not actually loan money to the buyer. Financing is obtained through a mortgage company such as HomeAmerican Mortgage Corporation. FHA insures the lender against loss if the buyer defaults on the mortgage. The lender still has the final decision of whether or not to loan the buyer money, but having the FHA insurance can help them in making their loan decision.

In addition to offering insurance to the lender, FHA loan programs can offer many benefits. These are a few of the advantages:

Flexible qualification: FHA programs offer more flexible qualification, allowing more borrowers to obtain financing.
Less than perfect credit: FHA loans are often more forgiving of a buyer’s credit history. For example, buyers may still be able to qualify if they’ve had a bankruptcy as recently as two years ago.
Low down payment: Homebuyers typically only need 3-5% for their down payment, and this money may be a gift from a family member or other acceptable source.

What exactly is a Short Sale??? How does it work?

Dennis Balthazor — Mon, 16 Jun 2008 22:14:00 GMT

With the increase in foreclosures lately you may have heard the term “short sale” and wondered what it was. A short sale is when the lender will accept less than the full amount due on a mortgage when a property is sold. Usually, the lender will accept the short sale to avoid the time and expense of a foreclosure.

When a borrower is in default on a mortgage they not only owe the back payments but also may owe late fees, property inspection fees, attorney fees, etc. This can add up quickly to eat up all the equity the borrower had in the property. If the borrower is unable to bring the account current the lender will then foreclose on the property. With a foreclosure, the lender can lose up to 40% of the mortgage amount because of the extra costs involved with foreclosing on a property: attorney fees, court costs, lost interest, eviction costs, property maintenance costs, and selling costs. Foreclosing on a property can also take up to two years in some states. Therefore, it is sometimes in the best interest of the lender to accept the short sale.

It also can be in the best interest of the borrower. They will not have to endure the time and stress of a foreclosure and their credit may not be as adversely affected as it would with a foreclosure. It is quicker and easier and does not subject the borrower to the embarrassment of a foreclosure.

SIGN UP NOW FOR A SHORT SALE OR FORECLSOURE LIST

How does it work?

The first thing the borrower should do when they can no longer afford a property is to contact the lender immediately. The last thing a lender wants to do is foreclose on the property. Lenders typically have departments that work with people who are behind on their payments to resolve the situation. If you cannot resolve the default with the lender, and you want to see if they will accept a short sale, they will direct you to the department that handles short sales.

The lender will usually require the borrower to submit a lot of information to the lender in order to consider the short sale. The information required may include:
• Income documentation such as W-2s and pay check stubs to verify the borrowers’ income.
• Bank statements to verify the borrowers’ assets
• Hardship letter – this letter will describe for the lender the reasons the borrowers are in the financial position they are in and will ask the lender to accept the short sale. Borrowers should make this letter sound as sad as possible and back up the story with any documentation you may have such as medical bills, etc.
• Fair market value for the property – depending on the lender they may require an appraisal or may accept an opinion from a local Realtor know as a Comparative Market Analysis (CMA).
• Preliminary proceeds sheet from the sale of the property. This will show the proceeds of the sale of the property after the mortgage is paid off and all other closing costs and fees are paid. This will be negative in the case of the short sale and this negative amount is the amount of the shortage.
• Listing agreement and purchase agreement when they are available.

When the lender reviews all of this they may or may not approve the short sale. If they do not approve the short sale they will proceed with the foreclosure. If they do agree to the short sale you will close on the sale of your property and the lender will take the loss.

So, is the borrower off the hook?

Not necessarily. The lender still has options to try to collect this shortage. As a condition of the short sale the lender may require the borrower to sign a note to repay the shortage. They may also file a collection or a judgment for the amount of the shortage. This is something that an attorney with expertise in this area of real estate needs to be consulted.

Also, the IRS may come after the borrowers for income taxes on the amount of the shortage. If the shortage was forgiven, the lender will report the shortage as income to the IRS and the IRS will collect taxes on this amount. Again, for the specifics on this please consult a tax professional.

FHA Makes Exception to Anti-Flipping Rule For Foreclosed Properties

Dennis Balthazor — Mon, 16 Jun 2008 21:47:00 GMT

Bush administration officials on Friday said they had made a major change to existing U.S. Department of Housing and Urban Development regulations for mortgages endorsed by the Federal Housing Administration, lifting a key anti-flipping provision that lenders and disposition firms have long said limits their ability to resell distressed real estate.

HUD officials said a newly-introduced temporary policy will now extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties. FHA regulations currently prohibit insuring a mortgage on a home owned by the seller for less than 90 days, a limitation designed to prevent property flipping activity.

FHA’s new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing, HUD said in a press statement.

For one year, the FHA will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders; properties must purchased by owner-occupants, however, HUD said.

“A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery,” said Brian D. Montgomery, the FHA’s commissioner. “The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.”

Montgomery said that FHA’s new temporary policy will help stabilize neighborhoods experiencing high rates of foreclosure by reducing the inventory of unsold properties.

The FHA action comes ahead of a major announcement from HOPE NOW, the industry coalition organization by Treasury Secretary Henry Paulson late last year, that will see the industry group adopt new measures for loss mitigation.

The group has scheduled a press conference for tomorrow afternoon to detail the changes.

For more information, visit http://www.fha.gov.

4 new rules for home buyers in this Market!!

Dennis Balthazor — Thu, 15 May 2008 18:55:00 GMT

There's no guarantee that prices have hit bottom yet - but that doesn't mean that you can't get a great deal now.

There's no telling how long the housing crisis will drag on. Here's what you need to know before you start shopping in a rocky market.

Rule 1: You can't time the bottom

Face it: The house you buy today will more than likely be worth less next year. That could get you thinking about trying to time the bottom. Resist. It's harder to do than you think, and this is the best buyers have had it in two decades, with inventories up and mortgage rates low. Pace yourself, find the perfect place and drive a hard bargain: Ignore the seller's asking price and bid 10% below what comparable homes are selling for. If the seller balks, move on. Remember that if you're trading up, your home could sit. So sell before you buy.

Rule 2: One reason to buy now - mortgage rates

Homes are plentiful and will remain so, but financing will be getting more expensive. True, the Federal Reserve has slashed interest rates, but fixed mortgages don't directly follow the Fed. They reflect the bond market's expectations about inflation, which remains a concern. The 30-year, now at 6.1%, will likely reach mid-6% by December and 7% in 2009, says Celia Chen of Moody's Economy.com. That means there could be a penalty for waiting to buy even if prices fall more. Today a $250,000 loan would set you back $1,500 a month. At 7%, a $1,500 payment gets you only a $225,000 mortgage. As for variable-rate loans,

the spread between conforming ARMs and fixed loans is too narrow to do you much good.

Rule 3: Another reason to buy - rates on big mortgages

Mortgages in amounts greater than $417,000 - the limit for buying by federally sponsored mortgage agencies – usually run a fifth of a percentage point above conventional products. But investors are shunning jumbos, which now average 7.2% and are unlikely to drop much this year, according to HSH Associates.

Certain jumbo borrowers could get relief, however. A new law allows Freddie Mac and Fannie Mae to buy loans as large as $729,750 in 71 high-priced areas. So far "jumbo conforming" loans average 6.6%. The program has gotten off to a slow start; you'll need to shop around. And unless Congress acts, this bargain will disappear at year-end.

Rule 4: Don't buy cheap; buy good schools

By now you've heard from somebody who knows somebody who got a great deal on a foreclosed property. But when you buy a house, you're also buying into a neighborhood. And foreclosures tend to be bunched in areas where residents and speculators alike took out exotic mortgages to get into homes they subsequently found they couldn't afford. That's not a recipe for stability. Prices and quality of life could both decline further.

Similarly, avoid developments that popped up in the past few years. They too likely have a lot of owners with risky loans and little equity, says Mike Larson of Weiss Research. Instead, go for areas with highly rated schools. They generally fare better during downturns, and that pattern is holding today

Latest real-estate fad: Hunting for foreclosure deals

Dennis Balthazor — Wed, 07 May 2008 13:18:00 GMT

During the housing boom, investors flocked to metro Phoenix and climbed onto buses that took them to the Valley's fringes, where they checked out affordable new homes they could buy low and sell high.

Now, the bus tours to those edge suburbs are starting again. But this time, home buyers are looking for foreclosure properties they can flip for a fast profit.

The Valley's foreclosure-buying spree started with auctions last fall. Late-night infomercials turned from buying homes with little down to foreclosure-investing. Daylong foreclosure-investing seminars in Valley hotel conference rooms, including sessions held by Trump University, began filling up in January. Smaller bus tours put on by local real-estate agents are going on most weekends now, and a national group called Foreclosure Bus Tours today will hold its first daylong event in the Phoenix area.

"Foreclosure-investing is the real-estate buzzword now," said Eric Brown, a former Phoenix home builder who is a managing director of real-estate consulting firm Robert Charles Lesser & Co. "Huge investment companies and individuals are looking to pick up properties cheap."

Foreclosure Bus Tours has shuttled investors around Detroit, Fort Lauderdale, Fla., and Boston, and it has tours planned in Dallas and Houston as well as Maryland and Connecticut. For $97, investors get lunch and check out several foreclosure properties. Usually, a local real-estate agent and mortgage broker is on the bus to get deals going.

"There's a lot of interest in Arizona foreclosures," said Rodney Townsend, who started Foreclosure Bus Tours in Detroit with partner Ralph Claxton. He said a man and his sister from Boston are flying to Phoenix for this weekend's tour to try to find a home for their mother.

(Interested in the latest Foreclosures or Short sale list of homes in the Phoenix Area? Email me now at db@azrealtypros.com or call 623-776-6966 for an immediate list)

Foreclosures on rise

Last month, 2,500 homes in metro Phoenix were foreclosed on, the highest monthly tally since the real-estate recession of 1990.

"I don't see foreclosures peaking in metro Phoenix until after the second quarter this year," said analyst Tom Ruff of Information Market.

A big auction held in Sun City earlier this month marketed almost 400 foreclosure properties in the Valley. Most sold at bargain prices.

Jim Sexton, president of the Phoenix-based real-estate firm John Hall & Associates, said more real buyers who are ready to make deals are going to foreclosure auctions now instead of watching curiously.

One bidder at the auction, Saul Grotstein of Los Angeles, said there was more competition for the properties than he expected. He is partnering with some other investors buying two foreclosure homes in the southwest Valley.

"We aren't done buying in Phoenix," said Grotstein, who was heading to Florida for another foreclosure auction. "There are going to be more deals as the foreclosure inventory grows."

There is some concern that novice investors will get in over their heads aske many did during the boom of 2004-05.

"Last time around, it was the amateurs who believed the infomercials and used all the home equity in their own homes to buy rental properties," said Jay Butler, director of Realty Studies in the Morrison School at Arizona State University Polytechnic.

"Now, many of those houses are in foreclosure and selling to a similar group of investors."

Townsend said his group works with real-estate agents to counsel potential foreclosure buyers so they are ready. Foreclosures have always been popular investments in metro Phoenix, but in the past, most buyers bid on them at trustee-sale auctions on the Maricopa County Courthouse steps. Most investors did their homework and checked out the house and how much was owed on it before the auction.

But now, most Valley homes in foreclosure don't have any equity left because of falling home values. More than 95 percent of the houses going into foreclosure are going back to the lender because no one wants to bid on the houses with upside-down loans, which are worth less than what is owed on them.

Lenders are trying to sell them at other auctions or through real-estate agents for sometimes less than half of what they are owed.

Some homeowners are trying to avoid foreclosure by doing short sales. But Brett Barry of Realty Executives said many lenders aren't willing to negotiate, particularly on home-equity loans or second mortgages, and that is forcing more people into foreclosures.

Lenders won't deal

"Lenders just won't deal, and it makes no sense because it's only going to cost them more money, particularly when the houses are going for so cheap at auctions," Barry said.

Diane Drain, a Phoenix bankruptcy and foreclosure attorney, is seeing the same thing. She said she is working with two to three investors a day who are going to lose homes to foreclosure because lenders won't negotiate with them.

She cautions people investing in foreclosures to spend only money they can afford to lose.

"If it's money you would take to Vegas and drop on a table, then invest it in foreclosure properties," Drain said. "But if it's your retirement account or home equity, don't touch it. I am seeing too many people now who are losing everything because they invested in homes they thought they could flip for a profit."

(Interested in the latest Foreclosures or Short sale list of homes in the Phoenix Area? Contact me now @ db@azrealtypros.com)

Catherine Reagor
The Arizona Republic
Mar. 29, 2008 12:00 AM

HUD New Loan Amount Increase- Great for 1st time Home Buyers and less than 5% down buyers!!

Dennis Balthazor — Fri, 07 Mar 2008 14:11:00 GMT

HUD just announced today the new loan limits for Arizona. Maricopa County now has a max base loan amount of $346,250 which translates to a purchase price just under $357,000 for a 1 unit SFR. As you know, FHA still requires a 3% down payment. Nehemiah and Ameridream is still available for down payment assistance. This is great news considering the restrictions that have been placed upon Conventional loans recently with declining markets and FICO score requirements. FHA does not have a minimum FICO requirement and is a great program for first time home buyers or clients putting less then 5% down.

Under-$200,000 Phoenix Real Estate market gives Phoenix home sales a push

Dennis Balthazor — Sun, 02 Mar 2008 14:07:00 GMT

Affordability lures first-time buyers, investors

The real-estate slump has an upside for first-time home buyers looking to spend $200,000 or less.

As median-home prices continue dropping, the supply of homes for sale in the much-coveted low-end market is swelling.

Consider Marshall and Wendy Kauffman,who recently picked up the keys to their first home: a 1,150-square-foot three-bedroom, two-bath house in a nice Gilbert neighborhood. They paid $185,000.

The Kauffmans, who are both 29 and have three children, are among home buyers fighting over a growing inventory of homes in the Valley's sub-$200,000 market. The subprime debacle, foreclosures and "short sales" in which a buyer offers less than what is owed the bank, continue to drive Valley real-estate prices down. That, in turn, makes more homes than ever affordable for first-time home buyers and investors.

But those who want to get the deals face:

• Competition from investors.

• Bidding wars on "short-sale" homes with multiple offers.

• Waiting games for lenders to respond to "short-sale" offers.

"We saw a house that we liked, but it needed a lot of work," Wendy Kauffman said. "It had eight offers on it. It was a short sale, and there was a bidding war on it."

The Kauffmans found their dream home relatively quickly by limiting how far out they were willing to look. They also disregarded short-sale and foreclosure homes, said Audrey Hickman, the Kauffman's real-estate agent at WestUSA Realty.

Wendy Kauffman described their house hunt as "a wonderful experience."

"But the key was having people on your side, from Audrey to our mortgage broker," she said.

The other key was not having to sell another home first. The couple have been renting a 1,460-square-foot, three-bedroom, two-bath home in Ahwatukee.

Homes that sold for less than $200,000 grew to 34 percent of the market in January, up from 16 percent of the market in January 2007, according to Jay Butler, director of Realty Studies at the Morrison School of Management and Agribusiness at Arizona State University's Polytechnic campus.

Butler's data doesn't break down where the less-expensive homes are selling or how many of the buyers are investors.

Real-estate agents and brokers said they see a growing number of homes listed for sale for $200,000.

"I'm working with a handful of buyers under $200,000, and I'm not having trouble finding them properties," said April Starr, a broker for All Starr Property in Phoenix. "It's the lenders who are making these people jump through hoops and then jump through them again."

Of the 46,148 single-family homes listed for sale in Maricopa County as of Thursday, about one-quarter of them are priced at $200,000 or less, Starr said.

Linda Booker, a real-estate agent with Realty Executives' Arrowhead branch, said the under-$200,000 market is a sweet spot for first-time buyers and investors.

"There's a decline in property values, and it's what's affordable for people to purchase," she said.

Several real-estate agents said many of the buyers in this market are investors.

Also, Dave Green of Century 21 Arizona Foothills said many of the homes listed for $200,000 or less tend to be in far-flung areas of the Valley, such as Queen Creek or Maricopa. Those closer to metro Phoenix often rise above the $200,000 mark.

Bradley Crutchfield, an assistant technician at the Gila River Indian Casino and a part-time ASU student, said he paid $243,900 for his first house, a foreclosure near Clemente Ranch in Chandler.

"It was in the (price) range of what I was looking for, but it was my top end and I was only willing to pay that if I could be closer," Crutchfield, 23, said. "I've been looking for about two years now when the market was really high, and I had the urge to buy. Then the market went down, and I seriously wanted to buy."

Crutchfield and his real-estate agent, Sonia Carver of Keller Williams Realty East Valley, said they also found themselves competing with investors.

"The sub-$200,000 market is superhot," Carver said.

Shawn and Charlene McNeely, who live in Mesa, jumped into the low-end market to generate retirement income. They have bought three homes, ranging in price from $200,000 to $220,000, with the help of real-estate agent Marie Nowicki of Re/Max Elite in the past six months. Two of the homes are in Gilbert, and one is in Chandler.

One of the Gilbert homes was owned by a 65-year-old woman whose 95-year-old mother has Alzheimer's disease and lives with her. The women were about to lose their home because they couldn't keep up with their mortgage payments, which ballooned to $3,000 a month on an adjustable-rate loan.

The McNeelys said they now rent the home back to the women for $1,200 a month.

"She was very happy because for months, she was in fear of losing her home and being displaced," Shawn McNeely said. "Unfortunately, somebody's misfortune becomes somebody else's opportunity."

Kerry Fehr-Snyder
The Arizona Republic
Feb. 29, 2008 12:00 AM

Downturn hits hard in West Valley Phoenix Home market - Prices Down 25% in some areas

Dennis Balthazor — Sat, 23 Feb 2008 14:28:00 GMT

Theresa and Tom Love are in a spot.

They've been separated six months, as he relocated to Washington for a job while she and their two children remain in El Mirage to sell their three-bedroom home.

They are just a few of the everyday people caught up in an ongoing story of housing woes, as foreclosures rise and markets tumble. Most recently, the county assessor reported that for the first time in years, 94 percent of home valuations in Maricopa County dropped. The county assessor's valuations, sent out last week, show the West Valley being hit the hardest.

Three communities in the southwest Valley top the devaluation list: Buckeye valuations plummeted nearly 25 percent, Avondale dropped nearly 22 percent and Goodyear fell 20 percent.

In the northwest Valley, valuations in El Mirage dropped 17.9 percent. Surprise's valuations dropped 17.5 percent, while Sun City and Sun City West were in the 15 percent range.

"We didn't think the whole housing thing would be as complicated as it's been," Tom Love said via telephone from Vancouver, Wash.

He started a new job there. A jazz musician, 32, he hopes to launch a music ministry.

It's been two months since he last saw his family. He recently missed his daughter's fourth birthday.

"The only thing keeping my family away from me is my house," he said.

The Loves bought the home for $110,000 in 2002. Their equity grew in the once-hot market, so they refinanced and upgraded.

Their Redfield Road home went on the market six months ago for $199,000. Their asking price now is $179,000.

Love said that would pay off the mortgage and leave $2,000 for his family to rent a U-Haul and head north.

Real-estate agents say a major reason the West Valley has felt the sharpest sting from tumbling housing valuations is that its affordable housing was driven up in price during the buying frenzy a couple of years ago.

The region's success became its downfall.

"At first, buyers were lured because of the affordability, but as the months went by, there was very little difference in price between homes in the outskirts and those in Phoenix," said Margie O'Campo de Castillo with Arizona Dream Realty.

Many of those home buyers now are faced with long commutes and rising monthly payments from adjustable-rate mortgages, she said.

As home values adjust, more prospective home buyers can afford to purchase homes closer to workplaces.

"If the East Valley is employing more people, then they're going to have more sales," Re/MAX Realtor Bridgette Gavagan said.

Buckeye, on the outskirts of the West Valley, largely sprang from the desert during the housing market's run-up.

"There really wasn't anything established in Buckeye prior to the boom, and they are still lacking in infrastructure," Gavagan said.

"It's got to re-adjust."

Buckeye resident and home builder Michael Marler, 35, knows that all too well. Not long ago, the small builder couldn't knock out homes fast enough.

He said he recently sold a home, after nine months on the market, on a one-acre lot between Goodyear and Buckeye, for $290,000. The exact model in the same area sold for $385,000, or $95,000 more, a year ago.

"It's horrendous," he said.

He added, "It was definitely a bubble."

The high number of foreclosed homes, which usually sell below market value, are lowering home values further.

In El Mirage, nearly 21 percent of home listings are foreclosures, Gavagan said.

In Surprise, nearly 14 percent are foreclosures, she said.

Gavagan said those who put their homes on the market should realize latitude to "pad" the price no longer exists.

For homeowners who aren't selling, sit tight and the market will re-adjust, she said. She just can't predict when.

The drawback is if they were looking to refinance. They will find they no longer have the equity they once had.

On the brighter side, the assessor's valuations, which lag about 15 percent below the market, are used to calculate tax assessments.

Lower valuations could mean homeowners eventually pay less property tax.

Of course, the recently mailed assessments won't come due as a tax bill until 2009.

Meanwhile, any such tax breaks could get eaten up if Valley municipalities raise their tax rates to offset their own deficits stemming from the economic slowdown.

Carrie Watters
The Arizona Republic
Feb. 22, 2008 07:08 PM

Foreclosures hit the Phoenix home market wealthier areas the hardest

Dennis Balthazor — Sat, 23 Feb 2008 14:16:00 GMT

The Valley's growing foreclosure problem is hitting the upper and middle class the hardest.

Metro Phoenix homes in neighborhoods where prices range from $400,000 to $450,000 now have the highest foreclosure rate.

Almost 90 out of every 10,000 homes in that price range are in foreclosure, which is more than double the rate for homes costing below $200,000, according to an Arizona Republic analysis of data from the Information Market. Homes in areas in the $200,000-to-$250,000 range have the second-highest foreclosure rate, with 63 out of every 10,000 homes in foreclosure.

All segments of the Valley's housing market have been hurt by falling home prices and rising interest rates and payments on adjustable-rate and subprime mortgages. But the problems are worse for homes in the $400,000-to-$450,000 range because many speculators bought in those neighborhoods, some families moved up beyond their means, and the recent credit crunch has made getting mortgages for more than $400,000 tougher.

Valley foreclosures have been steadily climbing this year and are at their highest level since the real-estate crash of the late 1980s. So far this year, foreclosures are up 566 percent.

Based on figures from the past few months, as many as 10,000 homeowners across metro Phoenix will lose their homes this year. Last year, there were fewer than 2,000 foreclosures.

Foreclosures are on track to keep climbing because more people in neighborhoods with homes priced at $400,000 to $450,000 are behind on their mortgage payments than any other segment of the Valley's housing market. The median price of a metro Phoenix home is about $250,000.

"The two groups of homeowners hit the hardest now are investors and those who overextended themselves," said Jay Butler, director of realty studies at Arizona State University's Morrison School. "That's why more people in higher-end neighborhoods are struggling now."

Also, there are more loan programs to help lower-income homeowners, while fewer lenders are eager to make loans above $417,000. Mortgage giants Fannie Mae and Freddie Mac are restricted to mainly investing in loans below $417,000.

"Often, people with lower incomes are better prepared to survive tough times and look for help," Butler said.

"People with higher incomes and bigger homes have a harder time telling neighbors and co-workers they can't afford their mortgage anymore."

Catherine Reagor
The Arizona Republic
Nov. 22, 2007 12:00 AM

Recent Phoenix Area Employment and Population Statistics - Market is Still Going and Growing Strong!!!

Dennis Balthazor — Tue, 12 Feb 2008 15:08:00 GMT

EMPLOYMENT

Arizona's economy added 14,400 jobs in November 07 to reach a record total of 2,753,500 non-farm jobs.
Over the year employment growth for Arizona (1.5%) remains above the U.S. growth rate of 1.0%.
Arizona's service-providing industries added 17,600 jobs.
Government gained 1,700 jobs in Nov 07, setting a record at 433,800.
Overall unemployment for the Phoenix Metro area was 3.5% in Nov 07 compared to 4.7% for the U.S. and 4.1% for all of Arizona.

POPULATION

From July 2006 to July 2007 the overall population in the US grew by approximately 1.0%
Various regions across the US posted moderate changes in this time period (Northeast +0.2%, Midwest +.4%, South +1.4% and West +1.4%) while Arizona's population jumped by approximately 2.8% (from 6,165,689 to 6,338,755).
Over that 12-month period Arizona needed approximately 75,000 housing units to absorb that growth!

In short, these two factors indicate some fundamental strength in our market. We still have a large number of homes for sale, and prices continue to adjust to handle this excess supply situation, yet the outlook for our market remains favorable.

Phoenix Metro Area West Valley hit hardest by home price drops in 2007

Dennis Balthazor — Sun, 20 Jan 2008 13:50:00 GMT

West Valley hit hardest by home price drops in 2007

Click Here To Search For Phoenix Metro Area Homes: www.AzRealtyPros.com

Not surprisingly, median prices for existing homes fell throughout most of the Phoenix area from 2006 to 2007, especially in the West Valley, according to a report released today by Realty Studies at Arizona State University.

Avondale, El Mirage, and Goodyear saw declines of nine percent or more in median prices for the whole year.

Phoenix had no change, and Tempe, Chandler and Scottsdale had drops of three percent or less.

However, the numbers show the median prices for the whole year and don't show how prices have been dropping in recent months, which tends to be a slower time anyway.

Medians dropped from November to December in every community except Tempe and Goodyear, where they rose a little.

East Valley

Chandler

Median 2007: $290,000

Change from 2006: -2.7%

Gilbert

Median 2007: $295,000

Change from 2006: -9.8%

Mesa

Median 2007: $235,000

Change from 2006: -3.5%

Scottsdale

Median 2007: $579,000

Change from 2006: -2.7%

Tempe

Median 2007: $276,000

Change from 2006: -3%

Phoenix

Phoenix

Median 2007: $220,000

Change from 2006: 0%

West Valley

Avondale

Median 2007: $225,500

Change from 2006: -12%

Goodyear

Median 2007: $255,500

Change from 2006: -9%

Northwest Valley

El Mirage

Median 2007: $192,600

Change from 2006: -10%

Glendale

Median 2007: $237,500

Change from 2006: -5%

Peoria

Median 2007: $257,830

Change from 2006: -4.5%

Sun City

Median 2007: $195,000

Change from 2006: -7%

Sun City West

Median 2007: $220,000

Change from 2006: -8%

Surprise

Median 2007: $237,000\

Change from 2006: -5%

Click Here To Search For Phoenix Metro Area Homes: www.AzRealtyPros.com

Source: Realty Studies, Arizona State University

Betty Beard
The Arizona Republic
Jan. 10, 2008 01:17 PM

Many Phoenix Home sellers slash prices to sell homes

Dennis Balthazor — Sun, 13 Jan 2008 06:53:00 GMT

A Chandler man slashed his price by $60,000 to sell his home so he and his wife could move to Ahwatukee.

An east Mesa women accepted about $25,000 less than her original asking price even after installing carpet, remodeling a bathroom, upgrading the swimming pool and adding a $7,000 hot tub and a $2,000 shed.

Their tactics weren't extraordinary in the ongoing housing downturn, where prices are falling by double-digit percentages in some cases.

"Most of the homes for sale are hanging on or in the middle of the road" for the time it takes to sell, said Debi Gotlieb, a residential-real-estate agent with Coldwell Banker.

In one case, Gotlieb advised her client to take his home off the market until conditions rebound. But when that will happen is anyone's guess, she said.

"Realtors need to have a discussion with sellers because appraisal value and market value are two different things now," she said.

In nearly every ZIP code in the Southeast Valley, median home prices fell on a percentage basis over the past year, according to Information Market.

The biggest percentage drop was 19.4 percent in the 85297 ZIP code in Gilbert. Another Gilbert ZIP, 85296, saw a 15.2 percent drop. Its remaining two ZIP codes saw smaller declines.

But there were some bright spots, too. Four areas in Mesa saw a percentage increase ranging from 0.8 percent to a whopping 21 percent. The 21 percent jump occurred in 85207, which includes Las Sendas and other tony east Mesa developments.

Still, in Mesa, nine of its 13 ZIP codes posted a decline in the percentage change for the overall median price.

Susan Estes, an east Mesa resident, was among those in 85208 who saw her home value fall.

The median home price fell by 8.1 percent over the past year in her area, making it hard for Estes and her husband to sell their 1,589-square-foot, four-bedroom, two-bath home near Southern Avenue and Signal Butte Road.

"I figured it would take four months," she said.

Estes and her husband put their home on the market in December, took it off for one day in June and put it back on the next day.

It was expected to close Friday, 270 days after it went on the market.

She originally asked $255,000 for it, dropped the price to $240,000 and sold it for $229,500.

The deal came after Estes sunk $7,000 into a hot tub, $2,000 into a shed and thousands more into remodeling a bathroom, putting in new carpet, painting the garage, draining the pool, adding a heater to it, upgrading its pump and installing a new home water heater.

"And we're making $5,000 off the sale," she said.

The Estes had bought a larger, 4,000-square-foot home near Baseline and Crismon roads in the 85209 ZIP code, which experienced a 5.8 percent drop in the median price.

That worked to the Estes' advantage because they got the home for $525,000, well below the $560,000 asking price.

Some real estate agents argue that home prices have been inflated for so long that a market correction is overdue.

"I had a family that couldn't accept an offer, but as the market continues to decline a little bit, they probably wish they had," said Cindi Dewine-Barebo, a residential real estate agent specializing in the Southeast Valley for Century 21.

For Gary Brown, selling his two-story home in Chandler was a chore that he and his wife were anxious to finish.

They put their 3,000-square-foot home near Ray and Rural roads on the market last Octoberfor $520,000 and sold it - twice.

The first deal fell through because it was contingent on the buyers selling their home, and that sale fell apart.

After nine months of agent showings and open houses, the Browns sold the home in July for $60,000 less than their original asking price.

Brown blames himself for not following the advice of his real estate agent, Coldwell Banker's Gotlieb, who urged him to price the house at $480,000.

"You know, you get delusions of grandeur," he said.

Brown also blames his timing, adding, "We thought about selling six months earlier, and we should have acted on it."

Like others, Brown said he was able to save money, $10,000, when he bought another home in the original section of Ahwatukee. The home is in the 85044 ZIP code, which saw values fall 6 percent.

Kerry Fehr-Snyder
The Arizona Republic

High Density Housing( Condos, Lofts, Condo conversions)in the Phoenix Metro Real Estate Market

Dennis Balthazor — Fri, 11 Jan 2008 00:03:00 GMT

High Density Housing in Metro Phoenix

Articles from the Experts…

As part of our expanded coverage of high-density housing, including lofts, condos, and condo conversions, we are providing these links to articles that deal with this area of the Phoenix area real estate market. Please let us know if any of these articles are meaningful by clicking here.

PR-USA.net, January 10 - The Phoenix Condo Market Expected to Recover
According to NewCondosOnline.com, the Phoenix Condo market will recover quicker than other markets.
http://www.pr-usa.net/index.php?option=com_content&task=view&id=56061&Itemid=9

The Arizona Republic, January 4 – Condos under construction catch fire twice; arson suspected
The Phoenix Fire Department on Friday was investigating two possible arson-caused fires that resulted in $190,000 worth of damage to an unfinished three-story condominium building.
http://www.azcentral.com/news/articles/0104abrk-arson0104.html

East Valley Tribune, January 2 - 8 Scottsdale topics expected to make news in '08
Light rail is at a crossroads. Fights are brewing over downtown Scottsdale's density and the height of its buildings. A mayor and a majority of the City Council have their jobs - and the city's direction - on the line. And will Scottsdale finally secure a long-term deal with its lucrative car auction? Or does Las Vegas hold the trump card?
http://www.msnbc.msn.com/id/22468368/

Courtesy of :Ultimate Information Systems, Inc.