Sunday, December 6, 2009

How is the Rental Market in Arizona?

How is the Rental Market in Arizona?
December 6 2009
Arizona Property Management and Investments
PAYAM RAOUF, Owner/ Associate Broker


Rents are going up specially in most areas of the central valley. There is a bidding war going on out there! There is about 25% less single family residential rental homes on the market than a year ago but apartment rentals are still suffering so are the condos. Rent for homes in the outskirt of Phoenix Metro have not changed much either.

Banks are foreclosing on properties much faster, "you don't pay in three months, you better find a place to live quickly" policy. With the dollar value falling so rapidly against most major currencies, Dubai maybe forced to sell off 20% of London Stock Exchange and credit card defaults being on the rise, a lot of banks have to cash out quicly to pay off their debts or they will go under.

Loan modification aren't happening like they used to either. According to a loan modification officer in Arizona,"It is getting tougher. Some national banks like Chase used to be a lot easier but not any more".

Fannie Mae "deed-for-lease" program is already falling apart. Chase and some other major financial institutions were also considering it but it doesn't seem they are moving forward with it. 90% of homeowners don't qualify, they have hefty second and third mortgages and the ones that do, don't want to go through with it. It's more in favor of the banks than homeowners.

On the other hand, some smaller banks that guaranteed the notes, have no choice but to hang onto their homes untill the market turns, meanwhile, they have to rent them but they have much restricted guidelines.

Several troubled financial institutions are turning and burning their foreclosed inventory at the court steps at fire sale prices. Investors are making a killing in the process by putting them back on the market for a hefty profit and surprisingly they appraise! The $8000 tax credit has also been extended for six more month and interest rates should remain low for a while longer. We should see home prices continue to rise through first half of 2010 and so should the rents. But Zandi, lead economist at ecomony.com predicts home prices going down or at least going side ways in the second half of 2010 in Arizona, Nevada and florida.

With the Fed printing money 24/7, we should see the real inflation kicking in sooner than later, increasing home values substantially in a few years. Meanwhile, Rents will continue to rise, maybe you will have a good residual income to retire on or pay for your kids college or etc. In my opinion, anything is better than keeping your cash in the bank or investing in securities right now. Dow at 10500 is 2500 points below what it was 10 years ago! With real estate, you are always in charge of your own finances, not a market maker or a fund manager gambling with your future.

THIS IS A GREAT TIME TO BUY. You will have positive cash flow going in and hedging against inflation at the same time. Hasn't real estate been the the safest bet throughout the history? What did you pay for your house 20 years ago? What is it worth now? I rest my case. Any other Ideas?

LONG LIVE CAPITALISM AND HAPPY HOLIDAYS.

This is just my opinion, you should do your own research when making any investment decision.

Monday, November 9, 2009

Fannie Mae Announces Deed for Lease™ Program

Fannie Mae Announces Deed for Lease™ Program

WASHINGTON, DC -- Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender.

"The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities."

The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income.

Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.

For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

Thursday, October 29, 2009

Home values could soon turn consistently positive

RISMEDIA, October 26, 2009—Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®. Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.

Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.

Northeast
Regionally, existing-home sales in the Northeast increased 4.4% to an annual level of 950,000 in September, and are 11.8% higher than September 2008. The median price in the Northeast was $234,700, down 7.0% from a year ago.

Midwest
Existing-home sales in the Midwest jumped 9.6% in September to a pace of 1.25 million and are 7.8% above a year ago. The median price in the Midwest was $147,600, which is 1.0% below September 2008.

South
In the South, existing-home sales rose 9.0% to an annual level of 2.06 million in September and are 10.8% higher than September 2008. The median price in the South was $153,500, down 7.6% from a year ago.

West
Existing-home sales in the West surged 13.0% to an annual rate of 1.30 million in September and are 5.7% above a year ago. The median price in the West was $219,000, which is 15.0% below September 2008.

Friday, October 2, 2009

Rental Market in Arizona Sept. 2009

Rental Market in Arizona Sept. 2009

Speeches of Federal Reserve Officials


Federal Reserve Banks objective is let the market correct itself going forward. Financial institutions are liquidating their inventories rapidly and as the result tons of foreclosures are coming into the market daily. Government has done all it can to stimulate the economy. It is do or die time.

In the past two weeks ( Sept 15 to 30 ) we have been bombarded with phone calls for rentals. These are mostly very stable families losing their homes to foreclosure. There is a betting war for rental inventories in good neighborhoods with good schools.

Due to our massive marketing efforts, advertising on over 40 web sites, we have rented most of our invesntory or have a waiting list for our new ones. Should your tenants move out, we have an immediate replacement for them.

Stock market has not been able to cope with the rapid rate of inflation, Dollar is losing its value fast, Gold is over $1000 an ounce, Silver is pushing $16, there is a T-Bond Bubble and forget about CDs. Where do you invest these day? This is an easy answer, Real Estate in Arizona where you can buy 30% below builder's cost! Rent it. It should yield 6% for the next five years then sell it at almost twice as much! Let me know if I can be of any help. Payam Raouf, Sr. Investment Advisor. payam@azezrentals.com or 888-777-6664 ext 110.
I am not an economist...this is my opinion only. You must do your own Due Deligence.

Friday, September 18, 2009

Arizona Rental Investing

Investing in real estate in Arizona, much like any state, comes down to certain vital aspects such as location, convenience, amenities and the earning potential of the property. When considering any property make sure that you run through a checklist to ensure that the property in question will fulfill all of your requirements as an investor and the needs of your potential renters. The first thing that a smart investor should consider in a rental property is location.

The statement that real estate is all about location was made for good reason. The location of a rental property has a huge impact on the financial viability of an investment. If the home is located in a largely rural area it will not be as easy to rent on an ongoing basis as a property that is centrally located in a city or town. Also consider other major drawing points such as schools and colleges and major business centers. Try to keep your rental investments to areas where there is a big call for rental suites or homes in order to ensure that you are never without tenants, or income.

Earning potential of any property should be foremost in an investor’s mind. After all this is the whole point of the investment. Home quality is a big part of a home’s earning potential. Run-down homes that don’t offer much in terms of living quality may be easily rented; but at what cost? Try to keep in mind that the quality of a rental property will figure largely into the quality of renters. Good quality homes attract good quality long-term renters.

Finally, amenities that are included both in the home and by the community where the property is are important factors in the rental of a home. While things like laundry access, internet and cable and dishwashers speak volumes about the quality of the home, access to public transit, shopping and entertainment, education and recreation are the community aspects that draw renters in.

Payam Raouf is a REALTOR:® specializing in Phoenix residential real estate investment. Payam has extensive knowledge in the world of real estate investment and is dedicated to providing you with an elite level of service and information. For more info on Arizona homes and investment properties contact Payam at Payam@azezrentals.com or call 623-776-5774.

Phoenix metro housing is on steroid. Take refuge! 7 to 9 percentage mortgages are around the corner.

A+ with BBB CALL TOLL FREE: (888)7776664 Get a free Quote Payam Raouf Designated broker Phoenix metro housing is on steroid. Take refuge! 7 ...