Wednesday, April 22, 2009

U.S. home prices rose 0.7 percent in February from January

April 22 (Bloomberg) -- U.S. home prices rose 0.7 percent in February from January, the first consecutive monthly gain in two years, a sign that low interest rates may be moderating declines in real estate values.

Prices fell 6.5 percent in February from a year earlier, the second-smallest drop in six months, led by a 19 percent decrease in the region that includes California, the most populous U.S. state, the Federal Housing Finance Agency in Washington said today. The gain in February from a month earlier matched the average of 10 estimates in a Bloomberg survey.

Mortgage rates have tumbled 1.6 percentage points in six months, making houses and condominiums more affordable. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan increased 5.3 percent last week as Americans took advantage of interest rates near record lows. Home sales rose 5.1 percent in February from a month earlier, the National Association of Realtors said March 23.

“As demand firms, and once inventories of houses and a broad range of goods are brought into line with sales, economic activity should begin to stabilize,” Federal Reserve Vice Chairman Donald Kohn said in an April 20 speech in Delaware.

The inventory of properties on the market fell to a 9.7 month supply in February at the current sales pace, down from April’s high of 11.3 months, and sales rose 5.1 percent from a month earlier, the Realtors group said.

The number of Americans signing contracts to buy previously owned homes rose 2.1 percent in February, led by a 14.5 percent jump in the Midwest and a 10.6 percent increase in the Northeast, the National Association of Realtors said in an April 1 report.

Mortgage Rates

The FHFA’s February house price index is down 9.5 percent from its peak in April 2007. The Mountain region of the U.S., including Arizona and Nevada, had the second-biggest decline in home prices from a year ago, dropping 9.2 percent, the FHFA said in today’s report. The South Atlantic area, including Florida, fell 8 percent.

The average U.S. rate for a 30-year fixed home loan dropped to 4.82 percent last week from 4.87 percent a week earlier, according to Freddie Mac, the McLean, Virginia-based mortgage buyer. The rate has averaged 5.02 percent this year, compared with 6.21 percent during the five-year housing boom that ended in 2005.

The difference between 30-year mortgage rates and 10-year Treasury yields has narrowed to about 2.2 percent from 3.1 percent in December, which was the widest since 1986. The spread remains almost 0.7 percentage point above the average of the past decade, data compiled by Bloomberg show. Rates for 15-year mortgages are about 1.8 percent above 10-year Treasury yields, compared with an average 1.4 percent since 1999.

‘Glut of Homes’

U.S. banks owned $11.5 billion of foreclosed homes in the fourth quarter, up from $6.7 billion a year earlier, according to the Federal Deposit Insurance Corp. in Washington. California and Florida metropolitan areas led the U.S. in foreclosures in the first quarter as unemployment and falling property values deepened the housing recession, according to RealtyTrac Inc., based in Irvine, California.

“Whatever damage has been done in California is only going to get worse because there is a glut of homes owned by lenders that aren’t yet on the market,” said Bruce Norris, a principal with the Norris Group, a Riverside, California-based real estate investment firm. “These homes are like a shadow inventory that is likely to drag down prices further when they come onto the market.”

Price Forecast

Freddie Mac, along with larger rival, Washington-based Fannie Mae and banks including New York-based Citigroup Inc., have slowed or delayed foreclosures using various moratorium plans in the hopes that homeowners in default will be able to modify their loans.

U.S. home prices probably will fall 5.1 percent this year to $188,500, less than the 9.3 percent plunge in 2008, according to the real estate group. Home resales probably will rise 1 percent to 4.96 million after a 13 percent drop last year, NAR said in a forecast posted on its Web site.

The housing market may be buoyed by improvements in the banking sector. Treasury Secretary Timothy Geithner said yesterday in testimony to a congressional oversight panel that most banks now have “more capital than they need.” Geithner also said there were signs of “thawing” in credit markets.

The U.S. has pumped more than $590 billion of public money into troubled financial institutions over the last six months through the $700 billion Troubled Asset Relief Program. Geithner said in a letter to the oversight committee yesterday that $109.6 billion remains of the funds authorized by the Emergency Economic Stabilization Act last year.

Saturday, April 18, 2009

Welcome to the bottom of the Phoenix Real Estate Market.

Buyers are taking advantage of foreclosure deals, especially in the outlying Phoenix metro area. As predicted, areas hardest hit by the foreclosure market are rebounding.

In a recent trip with investors to Buckeye and Maricopa we found several great investment opportunities on the golf course under $80,000. However, every one of them was in a multiple offer situation. Multiple offers that drove the prices up. This is likely to lead to higher prices in these areas. We ended up getting two offers accepted at steal prices!

Prices are showing signs of leveling off as foreclosures decline in some areas. Home sales soared in March, surpassing March of 2005 sales (the height of the sales boom).

However, sales in Scottsdale and Paradise Valley aren’t seeing the same buying frenzy and prices there are likely to continue to fall. In Paradise Valley there are currently about 550 homes for sale with only about 6 sales on average per month. At that rate it would take over 7 years to sell every home compared to about one years worth of inventory in other parts of the Valley.

In March, pending home sales in the Valley hit 7,550 which was a 70% increase over last year at this time. Pending sales are the major indicator of the housing market. Interestingly, about 2/3 of all Valley home sales are foreclosure properties which is causing those foreclosure deals to evaporate.

When the foreclosure deals are gone, it will be great news for home sellers…not so great news for home investors trying to catch the bargains they’ve heard about.

Foreclosure homes are selling twice as fast as they did last fall. Today a foreclosure sale is taking about 117 days compared to 227 days in November. There were 3,377 foreclosure homes active on MLS in March compared to over 5,000 in February.

The average price per square foot of a foreclosure investment homes in the the outskirt of the Valley is $40. $80 less than what they were only two and half years ago. But they are now going back up daily.

The Valley’s overall average price per square foot fell from $89 in February to $83 in March. Median home prices fell from $136,000 to $129,000. However, with our shrinking inventory, that number is likely to stabilize and even begin to rise. April is likely to be the turning point.

Welcome to the bottom of the Phoenix Real Estate Market. It’s good to be here.

We sell and Manage Investment properties Valley wide. Please feel free to give us a call for a free consultation and a tour of of most popular investment properties! Thank you.


Payam H Raouf
Lead Investment Advisor
Arizona Property Management and Investments
www.azezrentals.com
5723 West Glendale Ave
Glendale AZ 85301
Direct: 623-776-5774
Toll Free: 888-777-6664
Fax: 888-777-3711

Saturday, April 11, 2009

Investment Homes are flying off the shelves in Arizona.

Arizona Property Management and Investments
AzEzRentals.com April 11, 2009
Investment Homes are flying off the shelves in Arizona.
Lead Investment Advisor: Payam Raouf

This is the best market we have seen since the middle of 2006. Multiple offers 10 to 20 percent over the banks asking prices are being turned down! Bad inventory is gone. Good stuff is flying off the shelves. According to MLS, SFR for sale is down 25% since last year in April from 54000 units to 34000.

We dominate Phoenix metro real estate investment opportunity (REO) market. We have investors from all around the world, Canada, England, Germany, Italy, France, Spain, Belgium, China, Hong Kong and Japan.

Recently we are noticing a large number of investors are also coming from Hollywood and South Orange County in California, Seattle Washington, Boston, Massachuset, Rhode Island, New York, Minnesota, Ohio and Virginia.

These are not your 2005-07 speculators. They know the game, know what they want and they already have a large portfolio of residential investment properties across the country.

What are they buying?
http://azezrentals.com/investmenthomes.htm

SFR 2000 sq ft and up, 4 bed, 3 bath, 2000 and newer in certain pockets of new home developments.

Where are they buying?

The school is moving from the west to the east side of the valley as the inventory is diminishing and prices increasing in the west.

What price range?

$70,000 to $120,000, cash flows well, 6% to 8% net.

How long is the hold?

Between 3 to 5 years. They hope to triple their investment portfolio value.

How do they pay for it?

Mostly cash.

Who is leasing and managing it for them?

We do. We are a full service Property Management company with the most advanced computerized system and well trained and experienced staff. 3 regions, 7 districts valleywide.

Please visit us at: www.azezrentals.com or call us toll free 888-777-6664 for more information.

Lead investment advisor: Payam Raouf 623-435-6633 ext: 110