Great time to buy in Phoenix? Yes it is!

IVE GREAT REASONS TO BUY A HOME RIGHT NOW

Written by Blanche Evans on Wednesday, 02 July 2014 12:39 pm

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The nature of market bottoms is that it's hard to tell one's occurred until prices and sales volume start to rise again. That's why the best time to buy is when market conditions suggest a bottom.

That means there's still some risk for homebuyers, since no one has a crystal ball that predicts the future. To take advantage of low mortgage interest rates and home prices still well below previous records, you may have to take a risk, such as riding out another short-term dip in property values.

But the rewards may be well worth it. Here are five reasons to buy a home right now.

1. More jobs are available

Total nonfarm payrolls rose by 217,000 in May, and the unemployment rate is 6.3 percent, according to the U.S. Bureau of Labor Statistics. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.

2. Houses are a great hedge against inflation

The Labor Department also says the May Computer Price Index is up 2.13 percent year-over-year. The index for all items less food and energy rose 0.3 percent in May, its largest increase since August 2011.

The CPI excludes volatile food and energy, so you can bet that the accelerating cost of things, otherwise known as inflation, also includes housing. You may be paying more for goods and services, but if you're a homeowner, you're better off financially. A major asset such as a home, purchased at a fixed cost, becomes more valuable when prices inflate.

3. Housing price increases are slowing

The median existing-home price was $213,400, over 5 percent above May 2013. Considering that the national median existing-home price was $158,800 in January 2011. That's when the PMI Insurance Company said home prices relative to income are below market fundamentals in more than half of U.S. states. Prices overcorrected during the recession, and then they soared by the double-digits in 2013.

Now housing is correcting once again from an overcorrection. Now's the time to take advantage of better homebuying conditions.

4. Mortgage interest rates are still low

During the recession, mortgage interest rates for a benchmark 30-year, fixed-rate loan, averaged 4.32 percent. Now they're close to that and there's no recession. That means mortgage rates have nowhere to go but up.

5. Pent-up demand ready to release

Since the recession, household formation fell dramatically to one percent of the national population. But considering that the leading age of the largest generation ever - 81 million Echo Boomers -- is now over 30, the numbers should be closer to the 2.3% annual growth of the 1970's, when 78 million Baby Boomers reached adulthood.

The National Association of Homebuilders (NAHB) said about 2.1 million households delayed formation due to the recession which allegedly ended in 2011. Now there's pent-up demand for housing that should continue to drive home prices higher.

The takeaway

A housing recovery doesn't occur in a straight line. There are surges and dips. Buyers could wait for better conditions, but the present alignment of falling mortgage interest rates, slower home prices, and larger selection is highly unlikely to reoccur.

This may not be the bottom, but it's close enough.

Happy 4th of July, friends Be Safe

Happy 4th of July

How much of a down payment do you need? Read below

You Don't Need That Much of a Down Payment

DAILY REAL ESTATE NEWS | TUESDAY, JUNE 17, 2014

Many consumers are overestimating  the down payment they need in order to purchase a home, according to Christina Boyle, vice president and head of single-family sales at Freddie Mac.

Consumers believe they need 11 percent to 15 percent in order for lenders to approve them for a loan, according to a survey of renters and non-home-owners conducted by Zelman & Associates in New York. Thirty-nine percent say they need at least 15 percent of the purchase price in order to qualify for financing. Only 28 percent of respondents say they would even qualify for a mortgage.

But in reality, home buyers often can qualify for a conforming, conventional mortgage with a down payment of as little as 5 percent — and sometimes even 3 percent — Boyle writes. Between 2009 and 2013, Freddie Mac’s purchases of mortgages with down payments of less than 10 percent more than quadrupled. So far in 2014, more than one in five borrowers who took out conforming, conventional mortgages put down 10 percent or less.

“Letting more consumers know how down payments are determined could bring more qualified borrowers off the sidelines,” Boyle writes. “Depending on their credit history and other factors, many borrowers can expect to make a down payment of about 5 percent or 10 percent.” However, Boyle notes that any borrower who puts down less than 20 percent will be required to buy mortgage insurance.

Boyle says that buyers should also be encouraged by the abundant down-payment assistance programs that exist to help break into home ownership. Every state in the U.S., as well as many cities and counties, offer down-payment assistance programs for qualified borrowers, such as the American Dream Downpayment Initiative and HOME Investment Partnerships Program.

Source: “Down Payments: Today’s Most Persistent Misconception About Mortgages,” Freddie Mac (June 16, 2014)

Read more:

Low Down Payments for Fewer First-Time Buyers
Buyers Use Larger Down Payments to Offset Rising Rates

INVESTOR FLIPS

As home prices have climbed and foreclosures tumbled in recent years, it’s been increasingly difficult for Phoenix-area home investors to score a bargain.

But new research by RealtyTrac today shows that hasn’t necessarily been a deterrent for house flippers.

In fact, RealtyTrac said the Phoenix area had the second-highest number of home flips in the nation between April 2013 and March 2014.

RealtyTrac defines flips as homes that were bought and sold within one year, and for a profit.

Maricopa County had 4,632 flips during the aforementioned period, second only to the New York-New Jersey metro area’s 7,066 flips, the report showed. Keep in mind the Phoenix metro area has a population of roughly 4.4 million, while it's a whopping 20 million in and around New York.

Phoenix-area flippers raked in a 31.42 percent gross profit on average, based on an average purchase price of $172,547 and an average sale price of $226,761.

According to the most recent Arizona State University data, house flippers made up 7 percent of all Valley single-family purchases in March, up slightly from 6 percent a year prior.

Also, the median price of those March investor flips — $172,500 — was up 18.2 percent year-over-year, which was the biggest jump of any transaction type, ASU said.

RealtyTrac did not, however, consider Maricopa County one of the best places for flipping. But that’s not really a bad thing.

One of the criteria for RealtyTrac’s top 14 list of best counties for flipping was that foreclosures increased year-over-year. These counties also had to have unemployment rates below the 6.7 percent March national average and the flips made at least a 30 percent profit on average.

While Maricopa County met the other criteria, it failed to make the list because foreclosures dropped 52 percent year-over-year.

Kristena Hansen covers residential and commercial real estate.

Phoenix is 8th most affordable metro area for homebuyers

Wednesday, May 21, 2014

Phoenix is 8th most affordable metro area for homebuyers
Phoenix is a relatively affordable market in which to buy a home, according to a report released by HSH.com. The report looks at the salary needed to buy a median-priced home in 27 metro areas around the country. Phoenix ranks 8th with a salary of $41,308.74 needed.
Read article - azcentral.com 

LOOKING FOR A NEW BUILD?

2 subdivisions underway in north Phoenix
One can't help but notice the pattern of house lots outlined on the slope of a hill as motorists travel Interstate 17 in north Phoenix. Stoneledge at North Canyon is projected to have model homes finished by late July. It's south of Carefree Highway and north of North Valley Parkway, and west of 27th Drive, against a hill that developers say will offer stunning views. La Solana is the other new subdivisions underway south of Carefree Highway and north of Dove Valley Road in Phoenix Council District 2. Nearly 1,600 new homes are zoned for the area.
Read article - azcentral.com