According to a REALTOR.com study, housing inventories dropped 12% nationally from 2018 to 2019, the largest year over year decline in nearly 3 years. As a result, the U.S. market has a large housing inventory under supply. This is occurring just as 4.8 million millennials are reaching 30 years of age, an age where previous generations have bought homes. Arizona is not immune to the shortage, as according to the study the fifth biggest decline in active listings (-29%) occurred in the Phoenix-Mesa-Scottsdale metro area.
Realtor.com® analyzed medium to large cities for the highest percentage of backyard pools. Six metro Phoenix area cities are in the top 10:
2. Scottsdale, Ariz.: 62%
3. Tempe, Ariz.: 46%
4. Chandler, Ariz.: 40%
5. Glendale, Ariz.: 37%
6. Gilbert, Ariz.: 37%
9. Mesa, Ariz.: 31%
As these stats indicate, sometimes its hard for a buyer not wanting a pool to avoid one in certain neighborhoods in the Valley of the Sun.
Acording to RisMedia (the self-proclaimed leader in real estate information systems), the Phoenix area is the nation’s most popular city for home hunters in 2009. The figures come from ZipRealty, a national brokerage firm, as reported in an article you can read at www.rismedia.com.
Zip Realty produces a Home Hunter Report, which measures the volume of the total number of home searches on www.ZipRealty.com throughout the year. Based on searches made through their system, the metropolitan Phoenix area was by far the most popular for home buyers in all of 2009.
The problem I have with this announcement is that there is no evidence that every person who used ZipRealty’s website turned into buyers. In fact, there is no evidence that they were, or ever turned into, buyers. People may have been curious about our area, but never had any intention to actually buy. So perhaps it should said that the report shows that of people using their site, the most interest was in information on the Phoenix-Scottsdale-Mesa area. I realize that such a title for the report is less sexy, and would probably get much less attention.
In any event, the actual ratings of the most popular cities searched in 2009 were:
- Summerlin (Las Vegas community)
- Henderson – Green Valley (Las Vegas metro)
- Kissimmee (Orlando metro)
What I do know is that home prices have dropped significantly since 2007 in the Phoenix metro area (as well as in Florida and Las Vegas). Since there has been a significant amount of national press reports about those declines, people are likely to be curious about those areas. Because of the decline, buyers should be focusing their attention here, but we all know there are many more lookers than actual buyers.
If you are a home hunter interested in buying in our area, or just need some information about the “Valley of the Sun”, give us a call or contact us through our website, www.simplysoldaz.com.
– N. Mark Kramoltz © 2015
The $8,000 tax credit scheduled to expire November 30, 2009 has been extended. Now a purchase agreement can be entered into up to May 1, 2010, as long as the transaction closes no later than July 1, 2010. It continues to cover first time home buyers, but has also been extended to include certain existing home owners. So now an expanded group of home buyers are eligible for this fanatically popular tax credit.
The tax credit remains at $8,000 for home buyers that haven’t owned a primary residence in the last three years. But now home owners that have lived in their current primary residence for at least five consecutive years out of the past eight years qualify for a $6,500 tax credit. Under the old rules, existing home owners did not qualify.
Here is an example of how the credit works. If you own a home that you have lived in for the past five years, if you decide to buy a new primary residence today, you would qualify for the $6,500 tax credit, based on the fact that you have lived in the same residence as your primary home for at least five consecutive years out of the past eight.
Another crucial change to the credit rule is that the income qualifications of eligible buyers have been increased. The old rule limited the income of a buyer to $75,000, and for married tax payers, $150,000. Now individuals who make up to $125,000, and $225,000 for joint filers, are eligible to receive the applicable credit amount. This is very important in higher income/cost areas, because in those places most first-time buyers wouldn’t qualify for the credit because of their income without the income bump.
There is a limitation on the amount of the purchase price of the new home. The tax credit applies to homes purchased for less than $800,000. This amount should be more than adequate for buyers to get their first or a good “move up” home in the metropolitan Phoenix-Mesa-Scottsdale area.
The credit can even apply to the purchase of a multi-family property. As long as the owner will live in one of the up to four units as a primary residence, the other units could be rented out to provide income!
Of course there is fine print applicable to the eligibility rules. Having a cosigner on your mortgage loan doesn’t exclude you from claiming the credit. But if a married couple, both spouses must qualify (based on their income or past home ownership status) to receive the credit. But if two unmarried individuals buy a home, and only one of the individuals qualifies for the credit, the individual who qualifies for the credit can claim the full credit.
Because of the exclusions and quirks in the law, it is critical that you speak with an accountant or tax professional to get the specifics and to ascertain if you will in fact qualify for the credit. Just receiving the credit can impact other income and tax issues, so proper advice is a must. If you don’t have a tax advisor, we can provide you with the names of people we trust. Whomever you choose to help you with your IRS issues, we will work with them so you can obtain the full amount of credit you are entitled to. Call or contact us at www.simplysoldaz.com to find your new or resale home before the tax credit is gone for good.
– N. Mark Kramoltz © 2015
As of July 1, select home buyers in Maricopa County can take advantage of the Your Way Home AZ program. An offshoot of the HUD for Home Purchase Assistance project, the state version provides eligible buyers with up to 22% of a home’s purchase price.
The statewide program was developed to assist home buyers purchasing foreclosed homes in select areas, help rehabilitate housing developments, and stabilize neighborhoods. There are eleven community partners, each one with a slightly different program: the state of Arizona; and the cities of Avondale, Chandler, Glendale, Mesa, Phoenix, Surprise and Tucson, and as of July 1st, Maricopa and Pima County.
Maricopa County’s variety involves the acquisition and redevelopment of fifty to one hundred existing abandoned and/or foreclosed upon single-family homes. The homes will be sold to the eligible home buyers for an amount equal to or less than the cost to acquire and redevelop the property. The City of Phoenix uses a different approach. It is assisting buyers of foreclosed homes, townhouses or condominiums with $15,000 in down payment and closing cost assistance.
The assistance is in the form of a deferred second mortgage loan with zero percent interest and no monthly payments, that is forgivable if the homeowner remains in the property for the a specified period of time. The length of that time is based on the amount provided. For example: 5 years for $15,000 or less, 10 years for $15,001 – $40,000, and 15 years for amounts in excess of $40,000.
There are of course both other property and buyer qualification requirements.
Buyer eligibility is based on a variety of factors. Income cannot be greater than 120% of median (by county) and there are debt-to-income ratio requirements. A Home buyer Education Class must also be attended.
Home buyers must purchase a foreclosed one-unit detached single family home, condo or town-home which has been foreclosed or abandoned per HUD definitions. The property must also be used as a primary residence, and the purchase price must be discounted at least 5% from current appraised value.
Although the program states that the home buyer must pay at least a 3% down payment (of which at least 1% must be their own money), the actual requirements imposed by the participating lenders may require higher down payments (e.g., FHA loans with 3.5% down)
A recent news release from Michael Trailor, the Director of the Arizona Department of Housing, encourages “all Arizonans to visit www.yourwayhomeaz.com to determine if they are eligible to participate in the state’s program or one of the other nine county and community programs listed on the Web site,”
At SimplySold ND Realty, we agree that obtaining up to 22% in what is effectively free money towards the purchase of metropolitan Phoenix and Scottsdale area real estate shouldn’t be passed up.
Time on the market statistics are an important indicator of the health of a real estate market. One of the indicators of a recovery is when the residential resale inventory falls below a six-month supply. This means, on average, homes listed for sale will accept an offer and be off the active market within that time period. But it doesn’t tell the whole story, and can be misleading as to the number of available inventory, as our current Phoenix area numbers show.
Below are the rankings of the cities in the Phoenix metropolitan area for the month of April:
This means an average home (in good condition, with minor maintenance and condition issues, in an average location and reasonably priced) is taking 14.3 months to sell in Scottsdale. Although that looks bad, in January that number was 19.4!
Why does Scottsdale lead all cities with a 14.3 month backlog? My guess is that in reality it doesn’t. Time on the market statistics only measure homes listed for sale; it doesn’t measure homes owned by sellers that they want to sell but are not currently for sale. There are literally hundreds and hundreds of foreclosed on and vacant homes in the outlying communities. This is because those areas are the hardest hit by the drop in market values and by foreclosures. If those areas have the most unsold homes, the only explanation for the short time on market numbers is that the owners of the homes have decided not to sell at the moment. Since most of those vacant homes are owned by lenders due to foreclosures, it must be that for business reasons those companies have decided to keep that inventory off the market.
Besides the broader economic news isn’t good enough to support a large reduction in unsold properties. As was just reported in the media, bankruptcies increased a staggering 91% in April over the already high rate for such filings a year ago.
– N. Mark Kramoltz © 2015