By: Payam Raouf
Owner/Designated Broker
Arizona Property Management and Investments
888-777-6664 ext 110
info@azezrentals.com
This year renters will be scurrying for shelter in Phoenix Metro Area until the ball drops in NY in 2011.
• Stranded speculators who bought homes for a quick flip at the peak of the market in 2005 and 2006 have been struggling to pay their mortgages. They have simply ran out of resources and no matter what they get for rent is not enough to cover their debt obligations. As the result they are either short selling or having the bank foreclose on them.Bara bing, bara boom and have nice day.
• Many of the homeowners living in their homes currently have thrown in the towel as well. They are too upside down in their homes and they aren't not simply worth keeping, knowing it would take 10 years before they can sell for what they owe on them. Meanwhile they are milking it to the last drop by not paying their mortgages, taxes, HOA fees etc saving as much as they can till they save enough money to move or rent. Short selling seems to do just that for them, so every hour we are having one more. Haleluya and thank you very much.
• Hispanics are vacating homes overnight leaving behind homes full of furniture, appliances, toys and kids bikes! Those homes will be lined up for sales as well. Hasta la vista baby and muchos gracias.
• New home builders such a s Pulte, Centx, KB etc are offering a better solution (kissing the papers again) to first time home buyers. They are sucking a good portion of buyers off the resale market, about 6000 of them last month. The resale inventory keep piling up as the result. Thank you for your contributions.
• The DOW bouncing one thousand points up and down on a monthly basis, long-term bonds losing their desirability, Two hundred and twenty two banks failing since the beginning of 2008, fighting two wars simultaneously, having a un experienced president is not helping the housing crisis in America specially in Arizona. "Xie xie" means "thank you" in Chinese.
Here is what we see happening in the Phoenix Metropolitan housing market.
Rents will continue to go up in most areas and home prices will continue to fall valley wide with no reasonable exit strategy at sight.
Here is economist Dean Baker's solution, proposed more than three years ago. I still haven't heard a good argument against it.
Instead of foreclosing on a loan and evicting the family, the lender should take ownership of the house and rent it out to them at a market rate for an extended period. In many areas, rents are much lower than mortgage payments, so the family can afford to stay put. Eventually, once the market recovers, the bank could sell the house.
What are the benefits of the Baker plan?
• It would reduce the supply of foreclosed homes for sale.
• It would keep neighborhoods intact and maintain home values by avoiding the blight of boarded-up, abandoned houses.
• It would not bail anyone out.
• It would keep families off the street, but wouldn't force them to pay more than the going rate for rents.
What are the drawbacks to the plan?
• It wouldn't work for everyone. Not every homeowner could afford to rent the house they now live in. Many wouldn't want to rent it.
• Banks don't want to be landlords. And they could potentially lose money by not selling the house now. Or not: dumping millions of houses on the market right now wouldn't be prudent, anyway.
• It would be a retreat from the idea that all Americans, regardless of their finances, should be home owners.
Currently as of 8/8/2010, there are 43,560 homes for sale in the phoenix metro area, up 26% since June 1, 2010. We shall see this number reach 55000 and by this year’s end and if no cure possibly 100,000 by end of 2012. There are 17,232 homes in short sale that number is increasing by the minute.
Homes in more desirable area are renting faster. Most desirable rentals are in Surprise, Goodyear, Litchfield Park, North side of Glendale, South part of Peoria,North side of Avondale. Scottsdale, Gilbert, Chandler, Tempe, as well as some parts of Mesa.
The factors affecting rent increases are as follows:
(1) Location, (2) number of bedrooms (4 to 5 bedrooms), (3) amenities, and (4) school district. There is ONLY 3,609 single-family homes in the market today … consisting of 1,803 three-bed rooms, 1,040 four-bed rooms, and 232 five-bed rooms. We are quickly running low on 4/5 bed room homes.
Over a year ago, under $1,000 rentals were very popular. Now, if we get a $2000 to $3000 rental it is gone within hours. We have never seen so many successful business people losing their homes and renting as in the past few months. We shall see a huge drop in luxury home prices valley wide soon.
If you are an investor, it is a good time for picking in certain areas. Stay away from short sales as 70% of them will be bank owned soon. Since there are so many short sales at unreasonably low prices, REOs (bank owned properties) are staying in the market longer and you can get them at a good discount.
Coming October, November, December, there will be thousands of renters in the market. If you start buying now, your house will be ready for rent by then.
If you are planning to rent, don’t wait until the last minute to find a home. It is going to get very difficult to find what you want and if so, you will pay a lot more for it. If you have the financial ability and your house is in the process of a short sale try to rent by the end of October
This is only my opinion based on changes I see in the inventory, requests for showing and application coming to my office. As renters and Investors, you are to do your own due diligent.
Sunday, August 8, 2010
Wednesday, July 7, 2010
Renters in Foreclosure: What Are Their Rights?
Renters in Foreclosure: What Are Their Rights?
Short Sale Seller's Advisory. please copy paste the link below into your address bar. http://www.aaronline.com/documents/ssseller_advisory.pdf
Federal legislation signed in May 2009 gives important rights to tenants whose landlords have lost their properties through foreclosure.
Renters and tenants are now being affected by foreclosures almost as often as homeowners. The mortgage industry crisis that started in 2006 has resulted in thousands -- no, make that millions -- of foreclosed homes. Most of the occupants are the homeowners themselves, who must scramble to find alternate housing with very little notice. They're being joined by scores of renters who discover, often with no warning, that their rented house or apartment is now owned by a bank, which wants them out.
Who Are the Renters?
Renters who lose their homes to foreclosures don't fit a single profile. Many of them live in smaller buildings, condos, and single-family homes. They're located in cities and surrounding suburbs, in low-income and upscale neighborhoods. In short, foreclosed homes are everywhere, and they're rented by people with widely varying incomes, including some with "Section 8" (federal housing assistance) vouchers.
Who Are the Defaulting Owners?
The typical foreclosed home may have originally been owner-occupied, but more often it's owned by investors and speculators who were hoping to profit from the rents. Caught between the slump in housing values and the rise of mortgage interest rates, these owners could not feasibly sell or extract enough rent to cover their monthly costs. In droves, they lost their investments. For example, in Minneapolis and its surrounding suburbs, 38% of the 2006 foreclosures involved rental properties; in Minneapolis alone, 65% were rentals.
Who Are the New Landlords?
When an owner defaults on a mortgage, the mortgage holder, often a bank, either becomes the new owner or sells the property at a public sale. If the bank becomes the owner, it may pay a servicing company to handle the property. But don't expect close attention -- these companies are focused on financial matters, not mundane things like maintenance.
Some renters find themselves with a new owner even before the foreclosure. Lawyers in Massachusetts, for example, contend that many new rental property owners are investment trusts that specialize in purchasing troubled loans directly from banks, then foreclosing, evicting, and selling.
New Owners Means No Maintenance
Many tenants have no idea that their building has been taken at foreclosure. They continue to pay rent to the former owner, who often pockets the money but is hardly inclined to maintain the building it no longer owns. In the meantime, the new owners simply refuse to be landlords, never making repairs or even paying utility bills. Because the banks are stuck with increasing numbers of foreclosed properties that they can't sell, they remain non-landlords for some time, making life impossible for their tenants until those tenants are evicted.
Renters in Foreclosed Properties No Longer Lose Their Leases
Before May 20, 2009, most renters lost their leases upon foreclosure. The rule in most states was that if the mortgage was recorded before the lease was signed, a foreclosure wiped out the lease (this rule is known as "first in time, first in right"). Because most leases last no longer than a year, it was all too common for the mortgage to predate the lease and destroy it upon foreclosure.
These rules changed dramatically on May 20, 2009, when President Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This legislation provided that leases would survive a foreclosure -- meaning the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days' notice before having to move out (this notice period is longer than any state's non-foreclosure notice period, a real boon to tenants).
An exception was carved out for the buyer who intends to live on the property -- this buyer may terminate a lease with 90 days' notice. Importantly, the law provides that any state legislation that is more generous to tenants will not be preempted by the federal law. These protections apply to Section 8 tenants, too.
Importantly, tenants who live in cities with rent control "just cause" eviction protection are also protected from terminations at the hands of an acquiring bank or new owner. These tenants can rely on their ordinance's list of allowable, or "just causes," for termination. Because a change of ownership, without more, does not justify a termination, the fact that the change occurred through foreclosure will not justify a termination.
Does It Make Sense to Evict Tenants?
New owners may want to terminate existing tenants because they believe that vacant properties are easier to sell. Common sense suggests otherwise. In many situations a building full of stable, rent-paying tenants will be more valuable (and command a higher price) than an empty building. Emptied buildings are also prone to vandalism and other deterioration -- after all, no one is on site to monitor their condition. When entire neighborhoods become a wasteland of empty foreclosed multifamily buildings, their value drops even further. It's hard to understand why new owners choose to pay lawyers to start eviction procedures instead of paying a modest fee to a management company to collect rent and manage the property while they wait to sell.
"Cash for Keys"
To encourage tenants to leave quickly and save on the court costs associated with an eviction, banks offer tenants a cash payout in exchange for their rapid departure. Thinking that they have little choice, many tenants -- even Section 8, protected tenants -- take the deal. It doesn't help them much as they join the swelling ranks of newly displaced tenants (and former homeowners) who are competing to find an affordable new rental.
What Can a Foreclosed-Upon Tenant Do?
Thanks to the 2009 federal legislation, most tenants with leases will keep their leases, and month-to-month tenants will have at least 90 days to relocate. Tenants with leases have no legal recourse against their former landlords, because they are in the same position vis a vis the new owner as they were with the old: The lease survives and ends as it would had there been no foreclosure. Similarly, month-to-month tenants always know that they can be terminated with proper notice, and 90 days is longer than any state's termination period.
However, a lease-holding tenant whose rental has been bought by a buyer who want to move in to the property ends up less fortunate than before the new law -- he may lose his lease with 90 days' notice, a result that probably would not have happened had the owner simply sold the property to a buyer who intended to occupy the property. (Normally, the new owner has to wait until the lease ends, absent a lease clause providing for termination upon sale, though such clauses may not be legal in all situations.)
Suing in Small Claims Court
A lease-holding tenant who has to move out so that new owners may move in might consider suing their former landlord in small claims court. Here's how it works.
After signing a lease, the landlord is legally bound to deliver the rental for the entire lease term. In legalese, this duty is known as the "covenant of quiet enjoyment." A landlord who defaults on a mortgage, which sets in motion the loss of the lease, violates this covenant, and the tenant can sue for the damages it causes.
Small claims court is a perfect place to bring such a lawsuit. The tenant can sue the original landlord for moving and apartment-searching costs, application fees, and the difference, if any, between the new rent for a comparable rental and the rent under the old lease. Though the former owner is probably not flush with money, the awards in these cases won't be very much, and the court judgment and award will stay on the books for many years. A persistent tenant can probably collect what's owed eventually.
For more information on suing a landlord in small claims court, see Everybody's Guide to Small Claims Court or Everybody's Guide to Small Claims Court in California, by Ralph Warner (Nolo).
by: Janet Portman, Attorney
Short Sale Seller's Advisory. please copy paste the link below into your address bar. http://www.aaronline.com/documents/ssseller_advisory.pdf
Federal legislation signed in May 2009 gives important rights to tenants whose landlords have lost their properties through foreclosure.
Renters and tenants are now being affected by foreclosures almost as often as homeowners. The mortgage industry crisis that started in 2006 has resulted in thousands -- no, make that millions -- of foreclosed homes. Most of the occupants are the homeowners themselves, who must scramble to find alternate housing with very little notice. They're being joined by scores of renters who discover, often with no warning, that their rented house or apartment is now owned by a bank, which wants them out.
Who Are the Renters?
Renters who lose their homes to foreclosures don't fit a single profile. Many of them live in smaller buildings, condos, and single-family homes. They're located in cities and surrounding suburbs, in low-income and upscale neighborhoods. In short, foreclosed homes are everywhere, and they're rented by people with widely varying incomes, including some with "Section 8" (federal housing assistance) vouchers.
Who Are the Defaulting Owners?
The typical foreclosed home may have originally been owner-occupied, but more often it's owned by investors and speculators who were hoping to profit from the rents. Caught between the slump in housing values and the rise of mortgage interest rates, these owners could not feasibly sell or extract enough rent to cover their monthly costs. In droves, they lost their investments. For example, in Minneapolis and its surrounding suburbs, 38% of the 2006 foreclosures involved rental properties; in Minneapolis alone, 65% were rentals.
Who Are the New Landlords?
When an owner defaults on a mortgage, the mortgage holder, often a bank, either becomes the new owner or sells the property at a public sale. If the bank becomes the owner, it may pay a servicing company to handle the property. But don't expect close attention -- these companies are focused on financial matters, not mundane things like maintenance.
Some renters find themselves with a new owner even before the foreclosure. Lawyers in Massachusetts, for example, contend that many new rental property owners are investment trusts that specialize in purchasing troubled loans directly from banks, then foreclosing, evicting, and selling.
New Owners Means No Maintenance
Many tenants have no idea that their building has been taken at foreclosure. They continue to pay rent to the former owner, who often pockets the money but is hardly inclined to maintain the building it no longer owns. In the meantime, the new owners simply refuse to be landlords, never making repairs or even paying utility bills. Because the banks are stuck with increasing numbers of foreclosed properties that they can't sell, they remain non-landlords for some time, making life impossible for their tenants until those tenants are evicted.
Renters in Foreclosed Properties No Longer Lose Their Leases
Before May 20, 2009, most renters lost their leases upon foreclosure. The rule in most states was that if the mortgage was recorded before the lease was signed, a foreclosure wiped out the lease (this rule is known as "first in time, first in right"). Because most leases last no longer than a year, it was all too common for the mortgage to predate the lease and destroy it upon foreclosure.
These rules changed dramatically on May 20, 2009, when President Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This legislation provided that leases would survive a foreclosure -- meaning the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days' notice before having to move out (this notice period is longer than any state's non-foreclosure notice period, a real boon to tenants).
An exception was carved out for the buyer who intends to live on the property -- this buyer may terminate a lease with 90 days' notice. Importantly, the law provides that any state legislation that is more generous to tenants will not be preempted by the federal law. These protections apply to Section 8 tenants, too.
Importantly, tenants who live in cities with rent control "just cause" eviction protection are also protected from terminations at the hands of an acquiring bank or new owner. These tenants can rely on their ordinance's list of allowable, or "just causes," for termination. Because a change of ownership, without more, does not justify a termination, the fact that the change occurred through foreclosure will not justify a termination.
Does It Make Sense to Evict Tenants?
New owners may want to terminate existing tenants because they believe that vacant properties are easier to sell. Common sense suggests otherwise. In many situations a building full of stable, rent-paying tenants will be more valuable (and command a higher price) than an empty building. Emptied buildings are also prone to vandalism and other deterioration -- after all, no one is on site to monitor their condition. When entire neighborhoods become a wasteland of empty foreclosed multifamily buildings, their value drops even further. It's hard to understand why new owners choose to pay lawyers to start eviction procedures instead of paying a modest fee to a management company to collect rent and manage the property while they wait to sell.
"Cash for Keys"
To encourage tenants to leave quickly and save on the court costs associated with an eviction, banks offer tenants a cash payout in exchange for their rapid departure. Thinking that they have little choice, many tenants -- even Section 8, protected tenants -- take the deal. It doesn't help them much as they join the swelling ranks of newly displaced tenants (and former homeowners) who are competing to find an affordable new rental.
What Can a Foreclosed-Upon Tenant Do?
Thanks to the 2009 federal legislation, most tenants with leases will keep their leases, and month-to-month tenants will have at least 90 days to relocate. Tenants with leases have no legal recourse against their former landlords, because they are in the same position vis a vis the new owner as they were with the old: The lease survives and ends as it would had there been no foreclosure. Similarly, month-to-month tenants always know that they can be terminated with proper notice, and 90 days is longer than any state's termination period.
However, a lease-holding tenant whose rental has been bought by a buyer who want to move in to the property ends up less fortunate than before the new law -- he may lose his lease with 90 days' notice, a result that probably would not have happened had the owner simply sold the property to a buyer who intended to occupy the property. (Normally, the new owner has to wait until the lease ends, absent a lease clause providing for termination upon sale, though such clauses may not be legal in all situations.)
Suing in Small Claims Court
A lease-holding tenant who has to move out so that new owners may move in might consider suing their former landlord in small claims court. Here's how it works.
After signing a lease, the landlord is legally bound to deliver the rental for the entire lease term. In legalese, this duty is known as the "covenant of quiet enjoyment." A landlord who defaults on a mortgage, which sets in motion the loss of the lease, violates this covenant, and the tenant can sue for the damages it causes.
Small claims court is a perfect place to bring such a lawsuit. The tenant can sue the original landlord for moving and apartment-searching costs, application fees, and the difference, if any, between the new rent for a comparable rental and the rent under the old lease. Though the former owner is probably not flush with money, the awards in these cases won't be very much, and the court judgment and award will stay on the books for many years. A persistent tenant can probably collect what's owed eventually.
For more information on suing a landlord in small claims court, see Everybody's Guide to Small Claims Court or Everybody's Guide to Small Claims Court in California, by Ralph Warner (Nolo).
by: Janet Portman, Attorney
Sunday, May 23, 2010
In foreclosure crisis, demand for family homes in Phoenix rises
Arizona Republic
CATHERINE REAGOR
People looking for family-size houses to rent in Phoenix-area neighborhoods have far fewer choices.
Since September, the number of available rental homes in metropolitan Phoenix has dropped by 40 percent, and probably even more than that when it comes to three- to four-bedroom homes in desirable neighborhoods.
The sharp drop is another ripple effect of the foreclosure crisis.
At first, foreclosures increased the number of houses in the rental market. And people who lost homes to foreclosure or short sales, or who just walked away from underwater mortgages, found they could rent similar-size houses, often in the same neighborhood, for less than their mortgage payment.
In many of the region's newer neighborhoods, even tenants with bad credit could negotiate lower rents and how long they wanted to stay.
The sharp drop is another ripple effect of the foreclosure crisis.
At first, foreclosures increased the number of houses in the rental market. And people who lost homes to foreclosure or short sales, or who just walked away from underwater mortgages, found they could rent similar-size houses, often in the same neighborhood, for less than their mortgage payment .
In many of the region's newer neighborhoods, even tenants with bad credit could negotiate lower rents and how long they wanted to stay.
But in the past few months, as more of those former owners became renters, demand for those three- to four-bedroom rental homes climbed. And as lenders foreclose on more homes but are slow to resell them, the number of available houses has dropped. When houses do come on the rental market, rents are rising and landlords of family-size homes are receiving multiple offers and filling houses in days.
"The demand for single-family rentals is clearly outstripping the supply, causing an unprecedented fall in the inventory of available rentals," said metro Phoenix housing analyst Mike Orr, who publishes the Cromford Report. "The trend shows no sign of stopping."
Orr said many Phoenix-area apartment complexes still are having a tough time attracting tenants, but rental agencies managing homes have waiting lists.
Rental search
Melissa Flores is a mother of three who lost her Avondale home to foreclosure in January. Ever since then, she has been looking for a house near her children's elementary school. Flores has made offers on more than a dozen three-bedroom homes in Avondale and Surprise. But each time she lost out to other renters who were either willing to pay more or had better credit records.
"I knew people who lost homes and rented houses blocks from their old home," she said. "I thought at least I could keep my kids close to their school and friends."
Eight months ago, according to Orr, there were 5,460 rental houses listed on the Arizona Regional Multiple Listing Service. Now, there are about 3,100. Not all metro Phoenix rentals are listed on the MLS, but market watchers say rental activity on the Realtor-run site is representative of the overall market.
"The rental market is really tight for decent-sized homes now," said HomeSmart real-estate agent
Brett Barry.
Barry recently searched north Phoenix for a family who lost a home in the area to foreclosure. There were only four houses available with monthly rents that the family could afford. Six months ago, Barry said, the family would have been able to choose from at least 20 rentals in the area.
The rental market isn't nearly as competitive for small houses or condominiums, market watchers say.
Dave Zundel, co-owner of Phoenix rental-management firm HomeLovers, said many investors immediately opt to buy lower-end homes, thinking those houses will draw the most renters.
In fact, he said, the upper- to middle-income type of home currently is considered the rock-solid investment for landlords.
"We don't have enough of those homes available for rent now," Zundel said.
Forecast
Metro Phoenix foreclosures and short sales hit a record in March. But the number of rentals available for the displaced homeowners from those deals isn't climbing at the same pace.
Flores heard that more three-bedroom homes may soon be up for rent in her old neighborhood as investors like the one who bought her home turn houses into rentals.
A year ago, investors were buying a few thousand homes each month and turning them into rentals. But now, lenders are holding on to more of their foreclosure homes as they work to catch up on a backlog of delinquent mortgages. So, the number of houses in the pipeline to possibly become rentals has dropped.
What had only recently become a pattern among displaced homeowners - renting in their old neighborhood - is now far less of an option. And even when houses come on the rental market, rents are now running close to or above comparable mortgage rates.
"If the rental inventory continues to fall in this way," Orr said, "it is very likely that average rents for homes will start to rise in the not-too-distant future, something that hasn't happened for a very long time."
CATHERINE REAGOR
People looking for family-size houses to rent in Phoenix-area neighborhoods have far fewer choices.
Since September, the number of available rental homes in metropolitan Phoenix has dropped by 40 percent, and probably even more than that when it comes to three- to four-bedroom homes in desirable neighborhoods.
The sharp drop is another ripple effect of the foreclosure crisis.
At first, foreclosures increased the number of houses in the rental market. And people who lost homes to foreclosure or short sales, or who just walked away from underwater mortgages, found they could rent similar-size houses, often in the same neighborhood, for less than their mortgage payment.
In many of the region's newer neighborhoods, even tenants with bad credit could negotiate lower rents and how long they wanted to stay.
The sharp drop is another ripple effect of the foreclosure crisis.
At first, foreclosures increased the number of houses in the rental market. And people who lost homes to foreclosure or short sales, or who just walked away from underwater mortgages, found they could rent similar-size houses, often in the same neighborhood, for less than their mortgage payment .
In many of the region's newer neighborhoods, even tenants with bad credit could negotiate lower rents and how long they wanted to stay.
But in the past few months, as more of those former owners became renters, demand for those three- to four-bedroom rental homes climbed. And as lenders foreclose on more homes but are slow to resell them, the number of available houses has dropped. When houses do come on the rental market, rents are rising and landlords of family-size homes are receiving multiple offers and filling houses in days.
"The demand for single-family rentals is clearly outstripping the supply, causing an unprecedented fall in the inventory of available rentals," said metro Phoenix housing analyst Mike Orr, who publishes the Cromford Report. "The trend shows no sign of stopping."
Orr said many Phoenix-area apartment complexes still are having a tough time attracting tenants, but rental agencies managing homes have waiting lists.
Rental search
Melissa Flores is a mother of three who lost her Avondale home to foreclosure in January. Ever since then, she has been looking for a house near her children's elementary school. Flores has made offers on more than a dozen three-bedroom homes in Avondale and Surprise. But each time she lost out to other renters who were either willing to pay more or had better credit records.
"I knew people who lost homes and rented houses blocks from their old home," she said. "I thought at least I could keep my kids close to their school and friends."
Eight months ago, according to Orr, there were 5,460 rental houses listed on the Arizona Regional Multiple Listing Service. Now, there are about 3,100. Not all metro Phoenix rentals are listed on the MLS, but market watchers say rental activity on the Realtor-run site is representative of the overall market.
"The rental market is really tight for decent-sized homes now," said HomeSmart real-estate agent
Brett Barry.
Barry recently searched north Phoenix for a family who lost a home in the area to foreclosure. There were only four houses available with monthly rents that the family could afford. Six months ago, Barry said, the family would have been able to choose from at least 20 rentals in the area.
The rental market isn't nearly as competitive for small houses or condominiums, market watchers say.
Dave Zundel, co-owner of Phoenix rental-management firm HomeLovers, said many investors immediately opt to buy lower-end homes, thinking those houses will draw the most renters.
In fact, he said, the upper- to middle-income type of home currently is considered the rock-solid investment for landlords.
"We don't have enough of those homes available for rent now," Zundel said.
Forecast
Metro Phoenix foreclosures and short sales hit a record in March. But the number of rentals available for the displaced homeowners from those deals isn't climbing at the same pace.
Flores heard that more three-bedroom homes may soon be up for rent in her old neighborhood as investors like the one who bought her home turn houses into rentals.
A year ago, investors were buying a few thousand homes each month and turning them into rentals. But now, lenders are holding on to more of their foreclosure homes as they work to catch up on a backlog of delinquent mortgages. So, the number of houses in the pipeline to possibly become rentals has dropped.
What had only recently become a pattern among displaced homeowners - renting in their old neighborhood - is now far less of an option. And even when houses come on the rental market, rents are now running close to or above comparable mortgage rates.
"If the rental inventory continues to fall in this way," Orr said, "it is very likely that average rents for homes will start to rise in the not-too-distant future, something that hasn't happened for a very long time."
Friday, April 30, 2010
RENTS ARE GOING UP IN PHOENIX, ARIZONA.
By: Payam Raouf
Designated Broker
Arizona property Management and Investments
www.AzEzRentals.com
888-777-6664 EXT 110
Hang on to your seats folks….put on your seat belts and sit tight. Rents are going up.
I do feel kind of bad for some tenants but it is time for homeowners to see some positive cash flow or at least not to go as deep into their pockets to pay their mortgages each month.
If you have a desirable home, you are in the drivers seat to pick and choose your tenants!
Most desirable homes:
Desirable SCHOOL DISTRICTS Such as: Surprise, Peoria, Litchfield, Goodyear, Glendale, Scottsdale, Gilbert, Chandler, Mesa and a few others depending on their zip codes.
2400 to 3000 sq ft
4 to 5 bedrooms + loft ( preferable one bedroom/full bath down stairs)
Nice curb appeal and landscaped in the back
Upgrades and all appliances included
POOL a big plus.( $150 to $200 added value)
I see these homes going $400 or $500 over asking prices. We are seeing more lawyers, doctors, successful business people and even high ranking military generals renting now and betting on these homes driving rents through the roof. Homes renting for $2400 today rented for $1700 last year if that!
If you have a similar house in a not as much desirable school district, rents have gone up slightly maybe by $50 to $100 per month.
On the flip side, we are seeing tenants in lower end rentals (under $800, 3 bed rooms, far out places) moving back into cheaper condos or two families moving into a bigger house (5 bed rooms) together.
Condos are still suffering....but not for too long. I see a turn around soon.
Last month I was astounded by the number of calls I got from investors wanting to buy 20, 30 homes in Glendale. Looks like the frenzy is back…..BUT, let me warn you, stay away from multifamily (under 20 units and less than 70% 2 bed rooms) and small cheap old homes in run down areas….THEY DON’T RENT AS WELL....AND MAY TAKE YOU DOWN WITH THEM.
As I have said again and again, your best buying opportunity is 4 to 5 bed room,(2400-3000 sq ft) homes in good school districts between $130,000 to $170,000 (built after 1991 in established areas or 2000 and newer in semi established neighborhoods). You get the biggest bang for your buck. They rent faster and for a lot more, better tenants and higher appreciation. Instead of buying thirty, $40,000 to $50,000 homes buy ten $150,000 homes. IT IS YOUR BEST BET, in my humble opinion.
DO NOT SELL, SHORT SALE OR FORECLOSE ON YOUR HOME YET! THIS IS THE LOWEST POINT OF THE MARKET. WAIT IF YOU CAN. BUT IF YOU HAVE TO, LET US HELP YOU. WE SELL IT WITH OUR TENANTS IN PLACE TO OTHER INVESTORS.
We have extended most of our leases and it seems going forward they renew again. THIS IS NOT A GOOD TIME TO SELL, IT IS A GOOD TIME TO BUY AND AVERAGE OUT YOUR LOSSES IF YOU BOUGHT AT THE HIGH.
WE ARE IN THE FRONT LINE OF THIS__(whtaever it is!)__. WE SEE WHAT IS RENTING FOR MORE OR NOT AT ALL. WE SEE GOOD BUYS ALL DAY LONG. IT IS TIME TO GET BACK INTO THE WATER, IF YOU ASK ME. PLAY IT SAFE AND GOOD LUCK.
Designated Broker
Arizona property Management and Investments
www.AzEzRentals.com
888-777-6664 EXT 110
Hang on to your seats folks….put on your seat belts and sit tight. Rents are going up.
I do feel kind of bad for some tenants but it is time for homeowners to see some positive cash flow or at least not to go as deep into their pockets to pay their mortgages each month.
If you have a desirable home, you are in the drivers seat to pick and choose your tenants!
Most desirable homes:
Desirable SCHOOL DISTRICTS Such as: Surprise, Peoria, Litchfield, Goodyear, Glendale, Scottsdale, Gilbert, Chandler, Mesa and a few others depending on their zip codes.
2400 to 3000 sq ft
4 to 5 bedrooms + loft ( preferable one bedroom/full bath down stairs)
Nice curb appeal and landscaped in the back
Upgrades and all appliances included
POOL a big plus.( $150 to $200 added value)
I see these homes going $400 or $500 over asking prices. We are seeing more lawyers, doctors, successful business people and even high ranking military generals renting now and betting on these homes driving rents through the roof. Homes renting for $2400 today rented for $1700 last year if that!
If you have a similar house in a not as much desirable school district, rents have gone up slightly maybe by $50 to $100 per month.
On the flip side, we are seeing tenants in lower end rentals (under $800, 3 bed rooms, far out places) moving back into cheaper condos or two families moving into a bigger house (5 bed rooms) together.
Condos are still suffering....but not for too long. I see a turn around soon.
Last month I was astounded by the number of calls I got from investors wanting to buy 20, 30 homes in Glendale. Looks like the frenzy is back…..BUT, let me warn you, stay away from multifamily (under 20 units and less than 70% 2 bed rooms) and small cheap old homes in run down areas….THEY DON’T RENT AS WELL....AND MAY TAKE YOU DOWN WITH THEM.
As I have said again and again, your best buying opportunity is 4 to 5 bed room,(2400-3000 sq ft) homes in good school districts between $130,000 to $170,000 (built after 1991 in established areas or 2000 and newer in semi established neighborhoods). You get the biggest bang for your buck. They rent faster and for a lot more, better tenants and higher appreciation. Instead of buying thirty, $40,000 to $50,000 homes buy ten $150,000 homes. IT IS YOUR BEST BET, in my humble opinion.
DO NOT SELL, SHORT SALE OR FORECLOSE ON YOUR HOME YET! THIS IS THE LOWEST POINT OF THE MARKET. WAIT IF YOU CAN. BUT IF YOU HAVE TO, LET US HELP YOU. WE SELL IT WITH OUR TENANTS IN PLACE TO OTHER INVESTORS.
We have extended most of our leases and it seems going forward they renew again. THIS IS NOT A GOOD TIME TO SELL, IT IS A GOOD TIME TO BUY AND AVERAGE OUT YOUR LOSSES IF YOU BOUGHT AT THE HIGH.
WE ARE IN THE FRONT LINE OF THIS__(whtaever it is!)__. WE SEE WHAT IS RENTING FOR MORE OR NOT AT ALL. WE SEE GOOD BUYS ALL DAY LONG. IT IS TIME TO GET BACK INTO THE WATER, IF YOU ASK ME. PLAY IT SAFE AND GOOD LUCK.
Sunday, March 28, 2010
Arizona Rental and Investment Market Condition March 2010.
Houston, we have a problem!
by: Payam Raouf, Associate Broker
There is no rim or reason what the market will do these days. You put a house for rent for $1200, it rents for $1500. You think you can get $1500 for this other one for sure, it brings $1200.
A house in El Mirage brings multiple offers and goes for $10,000 plus over the asking price, A similar one in a much better neighborhood in Surprise, sells for $10,000 less!
Oh, before I forget, I am approaching 50, Big banks are now renting their foreclosed inventory. Bank of America has been in it for a while, Chase is to follow and I heard Freddie Mac is taking applications from Property Management Companies.
In the rental market we see larger homes 2000 to 3000 sq ft, with extra amenities and preferably a pool in desirable neighborhoods flying off the shelves for few hundred more than the actual market price. Furnished rentals with two or three bed rooms are renting quickly as well. On the opposite end, the less expensive inventory need a lot more marketing to rent. We are talking about the 3 and 4 bed room homes in the outskirt of Phoenix. Condos only if they are in good neighborhoods and have tons of amenities, other wise it is a very tough market. Small cheap apartments, forget about it! You have to get really creative on those to rent.
First time home buyers are leaning more towards new homes in good neighborhoods where prices have gone down substantially like Stetson Valley, North Phoenix and Surprise.
As the result investors are now focusing more on the $130,000 to $200,000 price range in more established neighborhoods with better school districts, staying away from the small 3 bedroom homes, condos and apartments. The rule of thumb is, you should get 1% rent of your purchase price per month. For example: If you pay $150,000 for a property, you should get $1500 a month for it to make sense.
We also see a lot of buyers from the East Coast and Canada buying homes here now to move into when they retire. Prices went up by approximately 3 to 5 percent from November 2009 to February 2010. It seems they are going side ways in March.
My recommendation is:
if you are a seller, wait if you can.
If you are a qualified first time home buyer, get on it today and close before April 31, 2010.
If you are an investor, take it slowly, do not rush. find the right property. You a have 90 day window till the dust settles. BACK TO , LOCATION, LOCATION, LOCATION.
If you are a tenant,
Find the right property that fits your life style for the next few years. Ask your Realtor to check the foreclosure status of the property and secure a long term lease as the rents are going up.
by: Payam Raouf, Associate Broker
There is no rim or reason what the market will do these days. You put a house for rent for $1200, it rents for $1500. You think you can get $1500 for this other one for sure, it brings $1200.
A house in El Mirage brings multiple offers and goes for $10,000 plus over the asking price, A similar one in a much better neighborhood in Surprise, sells for $10,000 less!
Oh, before I forget, I am approaching 50, Big banks are now renting their foreclosed inventory. Bank of America has been in it for a while, Chase is to follow and I heard Freddie Mac is taking applications from Property Management Companies.
In the rental market we see larger homes 2000 to 3000 sq ft, with extra amenities and preferably a pool in desirable neighborhoods flying off the shelves for few hundred more than the actual market price. Furnished rentals with two or three bed rooms are renting quickly as well. On the opposite end, the less expensive inventory need a lot more marketing to rent. We are talking about the 3 and 4 bed room homes in the outskirt of Phoenix. Condos only if they are in good neighborhoods and have tons of amenities, other wise it is a very tough market. Small cheap apartments, forget about it! You have to get really creative on those to rent.
First time home buyers are leaning more towards new homes in good neighborhoods where prices have gone down substantially like Stetson Valley, North Phoenix and Surprise.
As the result investors are now focusing more on the $130,000 to $200,000 price range in more established neighborhoods with better school districts, staying away from the small 3 bedroom homes, condos and apartments. The rule of thumb is, you should get 1% rent of your purchase price per month. For example: If you pay $150,000 for a property, you should get $1500 a month for it to make sense.
We also see a lot of buyers from the East Coast and Canada buying homes here now to move into when they retire. Prices went up by approximately 3 to 5 percent from November 2009 to February 2010. It seems they are going side ways in March.
My recommendation is:
if you are a seller, wait if you can.
If you are a qualified first time home buyer, get on it today and close before April 31, 2010.
If you are an investor, take it slowly, do not rush. find the right property. You a have 90 day window till the dust settles. BACK TO , LOCATION, LOCATION, LOCATION.
If you are a tenant,
Find the right property that fits your life style for the next few years. Ask your Realtor to check the foreclosure status of the property and secure a long term lease as the rents are going up.
Tuesday, February 23, 2010
Los Angeles and Phoenix posted the largest price increases in December 2009.
Home prices rise 0.3 percent in December, the 7th monthly gain
On Tuesday February 23, 2010, 9:28 am EST
MIAMI (AP) -- Home prices rose for the seventh straight month in December, a sign of price stability as the U.S. housing market continues its bumpy road to recovery.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday rose 0.3percent from November to December, to a seasonally adjusted reading of 145.87. The index was off 3.1 percent from December last year, nearly matching analysts' estimates that it would fall by 3.2 percent.
Only five of 20 cities in the index showed declines from November to December. The index is now up more than 3 percent from its bottom in May, but still 30 percent below its May 2006 peak.
Los Angeles and Phoenix posted the largest price increases. The worst performer was Chicago with a 0.6 percent decline.
Rising prices are a key to the nation's economic recovery because they make homeowners feel wealthier and more comfortable to spend money. Consumer spending accounts for more than two-thirds of all economic activity.
Price increases also help rebuild equity for homeowners who currently owe more on their mortgages than their properties are worth. Roughly one in three homeowners with a mortgage are now in that position, according to Moody's Economy.com.
The housing market is seeking stability as it bounces back from a four-year recession. Sales of previously occupied homes fell almost 17 percent in December, the largest monthly drop in 40-years of record-keeping, the National Association of Realtors said. Data for January will be released Friday, with analysts forecasting a 1 percent rise.
Sales of newly built homes are expected to rise 5.3 percent in January, after declining sharply a month earlier. The Commerce Department will release new data on Wednesday.
On a quarterly basis, U.S. home prices fell 2.5 percent compared with the fourth quarter of 2008.
The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.
On Tuesday February 23, 2010, 9:28 am EST
MIAMI (AP) -- Home prices rose for the seventh straight month in December, a sign of price stability as the U.S. housing market continues its bumpy road to recovery.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday rose 0.3percent from November to December, to a seasonally adjusted reading of 145.87. The index was off 3.1 percent from December last year, nearly matching analysts' estimates that it would fall by 3.2 percent.
Only five of 20 cities in the index showed declines from November to December. The index is now up more than 3 percent from its bottom in May, but still 30 percent below its May 2006 peak.
Los Angeles and Phoenix posted the largest price increases. The worst performer was Chicago with a 0.6 percent decline.
Rising prices are a key to the nation's economic recovery because they make homeowners feel wealthier and more comfortable to spend money. Consumer spending accounts for more than two-thirds of all economic activity.
Price increases also help rebuild equity for homeowners who currently owe more on their mortgages than their properties are worth. Roughly one in three homeowners with a mortgage are now in that position, according to Moody's Economy.com.
The housing market is seeking stability as it bounces back from a four-year recession. Sales of previously occupied homes fell almost 17 percent in December, the largest monthly drop in 40-years of record-keeping, the National Association of Realtors said. Data for January will be released Friday, with analysts forecasting a 1 percent rise.
Sales of newly built homes are expected to rise 5.3 percent in January, after declining sharply a month earlier. The Commerce Department will release new data on Wednesday.
On a quarterly basis, U.S. home prices fell 2.5 percent compared with the fourth quarter of 2008.
The Case-Shiller indexes measure home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.
Wednesday, February 10, 2010
Significant drop in pre-foreclosures posted in January, raising hopes for positive trend
Correct, the numbers right now are, "follow the bouncing ball" and will continue to change in either direction for the next eight to ten months. By Q4 2012 we will begin full recovery mode. This for now will be the normal trend, but indicators show we have hit a soft market bottom that will build a bumpy base for the next 18-24 months. Payam
Feb. 9, 2010 04:37 PM
by Catherine Reagor
The Arizona Republic .
January's significant drop in pre-foreclosures is the indicator many metropolitan Phoenix housing-market watchers have been anxiously looking for during the past several months.
For the first time since November 2008, the monthly tally of Valley homeowners to fall behind on their mortgages and face foreclosure is below 7,000. Actual foreclosures dropped as well, although their decline wasn't as dramatic.
Last month, there were 6,762 pre-foreclosures, or notice-of-trustee-sale filings, against Phoenix-area homeowners, according to the real-estate data firm Information Market. That is a 14 percent drop from the 7,879 pre-foreclosures filed by lenders in December. Pre-foreclosures hit a record 10,689 in March.
Metro Phoenix foreclosures, or trustee sales, dipped to 4,452 during January. That's down from the 5,244 homeowners who lost houses to foreclosure in December.
Monthly foreclosures have been hovering between 3,800 and 5,300 during most of the past 18 months, except in April, when they fell to 3,100. That drop was due mostly to a short-term federal moratorium on foreclosures.
Last month's drop in foreclosures could signal more successful loan modifications. The drop in pre-foreclosures could signal that more homeowners were able to make their payments or that lenders are being more proactive and working with struggling homeowners before they fall behind on their payments. February's foreclosure activity could cement or reverse either trend.
Loan legislation
A bill has been introduced to prohibit excessive fees on mortgages and the issuance of certain types of high-cost home loans in Arizona.
Senate Bill 1288, introduced by Sen. John Nelson, R-Glendale, calls for limiting negative-amortization mortgages as well as balloon payments and pre-payment penalties on most other mortgages. The Arizona attorney general backs the legislation, which is aimed at preventing another foreclosure crisis in the state.
Feb. 9, 2010 04:37 PM
by Catherine Reagor
The Arizona Republic .
January's significant drop in pre-foreclosures is the indicator many metropolitan Phoenix housing-market watchers have been anxiously looking for during the past several months.
For the first time since November 2008, the monthly tally of Valley homeowners to fall behind on their mortgages and face foreclosure is below 7,000. Actual foreclosures dropped as well, although their decline wasn't as dramatic.
Last month, there were 6,762 pre-foreclosures, or notice-of-trustee-sale filings, against Phoenix-area homeowners, according to the real-estate data firm Information Market. That is a 14 percent drop from the 7,879 pre-foreclosures filed by lenders in December. Pre-foreclosures hit a record 10,689 in March.
Metro Phoenix foreclosures, or trustee sales, dipped to 4,452 during January. That's down from the 5,244 homeowners who lost houses to foreclosure in December.
Monthly foreclosures have been hovering between 3,800 and 5,300 during most of the past 18 months, except in April, when they fell to 3,100. That drop was due mostly to a short-term federal moratorium on foreclosures.
Last month's drop in foreclosures could signal more successful loan modifications. The drop in pre-foreclosures could signal that more homeowners were able to make their payments or that lenders are being more proactive and working with struggling homeowners before they fall behind on their payments. February's foreclosure activity could cement or reverse either trend.
Loan legislation
A bill has been introduced to prohibit excessive fees on mortgages and the issuance of certain types of high-cost home loans in Arizona.
Senate Bill 1288, introduced by Sen. John Nelson, R-Glendale, calls for limiting negative-amortization mortgages as well as balloon payments and pre-payment penalties on most other mortgages. The Arizona attorney general backs the legislation, which is aimed at preventing another foreclosure crisis in the state.
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