Although prices aren’t quite at the high experienced prior to the housing recession, low inventory in the Phoenix area has contributed to the market being competitive – thus a “sellers’ market”. If you find the homes you want, strike right away because the good houses are going fast!
With low inventory buyers are scrambling to get what they want and driving prices up. Fortunately, interest rates remain low.
As spring approaches, and temperatures rise, so does real estate activity. Currently, we are seeing an increase in showings and offers. Will this translate to increasing prices? Absolutely, already, from February of 2014 to February of 2015, there has been over a 4% increase in listing prices. This is clearly an effect of inventory that has been steadily decreasing over the last few months. We had been in a relatively balanced market, but the view to the next few months is looking like a steady trend to a sellers’ market when inventory becomes scarce and more buyers competing for the best available homes.
According to REALTOR.com, it is the small projects that provide the biggest return on value. Click on the link below for details.
According to realtor.com, Phoenix is one of the top-ten hot real estate markets to watch this year. Why? Because it still has affordability compared to other major metropolitan areas. Whether you are looking to relocate locally or move from another state, great values are available in every price range. For more detail, click on this link: http://www.realtor.com/news/top-10-hot-housing-markets-watch-2015/
Another reason to consider buying a home in 2015 is the opinion of economists that mortgage interest rates are expected to inch up during 2015. Currently, we still have ridiculously low rates hovering in the 4% range. I remember (and I am dating myself) when I purchased my first home the rate was over 7%. They inched up to 10% and then went crazy – up to 18%. For many years no one ever expected to see single-digit rates again. Why not act on this incredible opportunity that might vaporize over the course of the next year or two?
Rent rises to outpace home-value growth: Rents likely will continue to rise in the new year, and an increase in rental costs in 2015 could outpace annual home-price gains. Expect the rental market to remain a “landlord’s market” in 2015, with vacancy rates expected to stay below 5 percent in the new year, according to the National Association of REALTORS®. That should lead to demand pushing rents up even higher and keeping them above inflation, notes NAR Chief Economist Lawrence Yun. Apartment rents are projected to increase 4 percent in 2014 and 4.1 percent in 2015.
The time to buy is now!
Spread the Word: Mortgage Rates Below 4%
“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later,” Frank Nothaft, Freddie Mac’s chief economist,
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Mortgage Rates Up, Still Below 4% Sweet Spot
Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 30:
- 30-year fixed-rate mortgages: averaged 3.98 percent, with an average 0.5 point, rising from last week’s 3.92 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
- 15-year fixed-rate mortgages: averaged 3.13 percent, with an average 0.5 point, rising from last week’s 3.08 percent. A year ago, 15-year rates averaged 3.20 percent.
- 5-year hybrid adjustable-rate mortgages: averaged 2.94 percent, with an average 0.5 point, rising from last week’s 2.91 percent average. Last year at this time, 5-year ARMs averaged 2.96 percent.
- 1-year ARMs: averaged 2.43 percent, with an average 0.4 point, up from last week’s 2.41 percent average. A year ago, 1-year ARMs averaged 2.51 percent.
Source: Freddie Mac
Daily Real Estate News | Friday, October 24, 2014
Ex-Owners Bounce Back
Many of these sidelined buyers were unable to buy two to seven years after. Now, four years following the Great Recession – which sparked the largest wave of foreclosures and short sales – millions of former borrowers are now eligible to buy again, but only a trickle are returning.
Of about 5.43 million owner-occupied homes that were foreclosed on after 2007, only 2.1 percent of the borrowers – or 114,100 – had purchased a primary home by the end of 2013, according to Experian’s research, which reflects findings from 10 percent of its 220 million credit files. Of nearly 809,000 short sales on owner-occupied homes after 2007, about 44,300 – or nearly 5.5 percent – of owners have repurchased another home by the end of 2013.
The numbers are still low, but some mortgage lenders are reporting a gradual increase. For example, senior mortgage loan officer Deb Klein with Cobalt Mortgage in Chandler, Ariz., told The New York Times that 10 to 15 percent of the loans she closes are for borrowers who’ve had a distressed home sale. In Orlando, Fla., Rick Cason with Integrity Mortgage says two to three loans out of every 10 are for borrowers with a foreclosure or short sale in their past.
Indeed, some of these former home owners are re-emerging. “I see a lot of people coming back into it with eyes wide open,” Angel Johnson, a real estate professional with Redfin in Phoenix, told The New York Times. “They can get a loan, but they are still spooked.”
The pool of potential “boomerang buyers” is big. About 3.5 million borrowers lost their homes to foreclosure between 2006 and 2010, while 757,500 more went through short sales, according to RealtyTrac data.
“The behavior of these potential boomerang buyers will be a big part of shaping the U.S. housing market going forward,” says Daren Blomquist, vice president at RealtyTrac. “The bigger question now becomes how many have the stomach for home ownership again and how many will stay as long-term renters.”
Source: “Years After Market Collapse, Sidelined Borrowers Return,” The New York Times (Oct. 22, 2014)
Daily Real Estate News | Tuesday, October 21, 2014
The mortgage-financing environment for households could improve as a result of a rule federal regulators put in place Tuesday. The Federal Deposit Insurance Corporation is the first of six financial regulators to release the final version of the long-awaited qualified residential mortgage (QRM) rule, which stems from the big 2010 banking reform bill the federal government enacted after the financial crisis.
For details, go to http://realtormag.realtor.org/daily-news/2014/10/21/qrm-rule-opens-more-doors-for-consumers?om_rid=AAOu$6&om_mid=_BURrQ8B89I-c6R&om_ntype=RMODaily