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We have an unbelievable grant program for first time home buyers here in Maricopa County and no one seems to know about it! It's called the Home in 5 Program and it provides a 5% grant to first time home buyers to assist with downpayment and closing costs. This is a grant, not a loan. YOU DON'T HAVE TO PAY IT BACK. The grant is based on the loan amount. So, if you borrow $200,000 the grant would be $10,0000. That's ten grand of free money. If you couple the Home in 5 grant with an FHA loan you've got a near perfect combination for a first time buyer. The FHA loan requires 3% down payment, which can come from the grant. The remaining 2% can be used towards the loan costs. So all that's left are some escrow fees and setting up your property tax and homeowners insurance accounts. And in a buyers market like we have today you can usually get the seller to pay those for you. So you can literally buy a home with almost nothing out of you pocket! Of course there are some restrictions. There are income limits based on family size. There are also limits on the purchase price of the home. You can get the details on those limits by visting JohnSellsPhoenix.com, clicking on the First Time Buyer Tab and then clicking the link to the Maricopa County Home in 5 Program. This is an unbeatable deal and people need to be more aware of it. So tell everyone you know. Maybe they aren't first time home buyers but maybe they know someone who is. Prices are down, interest rates are low and there's free money available. Sounds like a good deal to me.
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I was doing a Brokers Price Opinion (BPO) for a bank owned home in Surprise yesterday and this question popped in to my head. When doing a BPO, we evaluate the condition of the home, what repairs it needs, it's marketability and potential sales price. So we visit the home and look it over pretty closely, taking lots of pictures. This particular home was essentially destroyed. No room, no system, no fixture was spared. As an example, the kitchen cabinets and one of the air conditioning units were in the pool! We estimate over $80,000 worth of damage. So I naturally wondered. What makes people do this? It's not an isolated incident. Although this one was extreme. Is it general anger and lashing out? Do they feel they were taken advantage of? That they're getting back at the bank? I'm not dismissing the terrible trauma these people are going through or even condemning what they've done. I'm really trying to understand. I've never been through it myself (Although if this market doesn't improve soon.....). I don't know how I would react. Could I remain my normal , rational self, or would I lose it too? Does trashing the house give some relief? Some feeling of sharing the pain? What strange times we live in that I'm even compleed to think about this kind of thing! Maybe I'll never know the answer to my question. It's probably different in every case. I hope none of you ever go through it and I hope this will all become a distant memory soon.
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In a previous post I said I thought the Phoenix Real Estate Market had reached a tipping point. Well now it look like I'm not the only one! On the front page of yesterdays Arizona Republic there was a big, above the fold, article on taking advantage of the opportunities in todays Phoenix Area Housing Market. The article described how people in different catergories and life stages, First Time Home Buyers, Empty Nesters, Move Up Buyers, Investors etc, should take advantage of the current low prices. Time Magazine featured an article titled "Ignore The Headlines". The premise of the article was that to make money in any investment you need to buy "When there's blood in the street". And that housing had reached that point. Further, the article calculated that as the economy and housing markets recover interest rates will increase. So even if there is a further reduction in prices it would be nullified by higher interest rates on your mortgage. Moral of the story, the combination of low prices and low interest rates is a golden opportunity. Now is the time to buy. Even the Wall Street Journal is getting on the Bandwagon with the article "A Good Time to Buy A House if You Can Afford One". This article also points out the terrific opportunity that low prices and low interest rates provides and cautions against the crazy subprime loans that got so many people in trouble over the last few years. So, I think it's starting. More and more media outlets will start to publish stories like this. As they do, more and more of the public will realize the opportunities and take the plunge. So, what ARE you waiting for?
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Real Estate is my job and my passion. But as much as I love selling homes in Phoenix there is one thing I love more. Travel! I am a travel junkie. I love thinking about it, I love planning it and I love actually doing it. My favorite destination is Europe. I am an absolute Europhile. I love the history, the different cultures, the languages, the sights, sounds and smells of Europe. I was fortunate enough to live in Italy years ago and I think that started my love for Europe. And while I've made many trips to different parts of Europe, I don't think I'll ever reach the point of having seen it all. So I'm thrilled to be planning this years European Vacation. A trip back to my beloved Italy. We'll start in Venice. After enjoying the canals and gondolas we'll take a train to Florence. Art, architecture, and the the beautiful Tuscan countryside will be waiting. Then it's off to Rome. The Eternal City has so much to see that even after three trips there I have a long list. Finally, after enjoying all these great Italian cities, we'll spend a long weekend in London. My favorite city in the world. I can't get enough of the British capital. This will be my eight visit and I get excited about it everytime. The combination of history, theatre, art, museums, and those great pubs just can't be beat. Throw in football (soccer to us), Royals, and Prime Ministers question time and there's just no place like it. So even though it's March and my trip is in October I'm already dying to go. Thinking about my trip gets me through those tough days in Real Estate when transactions are falling apart and I just can't seem to get a break. My European vacations are what recharge and refresh me. And as soon as this one is over. I'll start planning the next one!
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I stumbled across some interesting stats and fact about home ownership yesterday that surprised me a little. I expected Homeowners to have a better net worth than renters but the numbers were shocking. The average net worth of a renter in the US is $4800. The average for Homeowners is $171,700. That's over 35 times! I was even more surprised at the political angle. 77% of homeowners reported voting in recent elections versus 52% of renters. Homeowners also tend to stay put. About 7% of Homeowners move each year, compared to over 30% of renters. So of course I started to think about cause and effect. Are these number better BECAUSE of home ownership. Or do wealthier people who are involved in the community tend to buy homes rather than rent? I guess there's no way to tell really but I have to believe there is at least some relationship. Owning a home is still the American Dream and I think it still strongly effects people. When you own your home you're invested. You worry about the neighborhood, the community, taxes and a whole laundry list of other issues. In these tough times for the real estate market, especially here in Phoenix, it's easy to lose sight of the big picture. Home ownership is one of the things that sets this country apart. We have the highest rate in the world and I think it makes us better citizens. So if you're a Homeowner, be proud of it. If you're a renter, nows the time to grab your piece on the American Dream. It will do you, and all of us a lot of good.
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I was channel surfing last night and stopped on one of those Real Estate staging shows. You know the ones. The house has been on the market for ever and these TV People show up and tell them it's because they're house is presented incorrectly. They then move some furniture around, splash some paint, maybe a plant ot two, and viola, they get an offer. So I'm thinking, where are those people when I need them? If I could get some one to show up at my listings, move some things around and get an offer, all in a half hour, I'd never let them out of my sight! But I guess that's just television. Here in the real world, it's not that easy. Yes you have to stage the house properly. But you also have to price it properly. And you have to market it so people know that it's priced right and staged beautifully. And you have to do all that while calming your worried sellers, complying with disclosure laws, keeping up with what the competition is doing, trying to sort real buyers from lookey loos and staying on schedule and on budget. I guess they can't show all that on TV. No one would watch. That's not entertainment, that's being a Realtor.
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I've been wondering recently if the Phoenix Area Housing Market has finally reached the Tipping Point. I've noticed some interesting signs that it has. It seems that since the first of the year, Banks, Financial Institutions and even the Government Agencies, have gotten very aggressive on the prices of REO (Real Estate Owned) Properties. So much so, that we are often seeing multiple offers above asking price. There are two positive indicators here. One, there is some pent up demand for bargain priced homes in the Valley, and second, unsuccessful buyers in a multiple offer situation usually become more motivated to make a successful offer on the next property they find. Both of these elements will be necessary to chop away at our large inventory of properties for sale. The other interesting sign that we may have reached the tipping point is the price/rent ratio. The prices on existing homes in many suburbs like, Goodyear, Avondale, Tolleson, Buckeye, Surprise and even Peoria and Glendale have corrected to the point that an investor can purchase the property with a small downpayment and expect to rent it for enough to break even. This is the type of favorable ratio investors look for. If they can start at break even, then normal inflation will gradually increase the rent while the mortgage payment remains stable. This will result in positive cash flow a few years down the line. Secondly, normal appreciation will increase the value of the investment over time as well, and remember that leverage has allowed the investor to control a large value asset with a small amount of his/her own money. So are these signs enough to say the end is in sight? Not yet. But maybe they are indicators of the beginning of the end.
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Yes, that's right. I said it's a great day in Phoenix Real Estate. I'm not crazy. I know about the doom and gloom you hear on the news but there are stories that you don't hear too. How about a single mom with four kids who is able to take advantage of the market correction and buy her first home. A five bedroom, three bath beauty that she can be proud of. Where her family can be safe and happy. I know there are a lot of people who are being hurt by this market, and it breaks my heart to hear their stories. But like any tragedy people can survive, and even thrive. And out of tragedy can come great things. My hope is that we will all remember that the things that really matter, our families, our friends, can't be foreclosed on. As a Realtor, I see both the good and the bad sides of The Phoenix Real Estate Market every day. I see prices actually increasing in a few areas. While prices are slashed in Goodyear, Tolleson, Surprise and other former boom areas. And even though this is my business, I try not to to lose sight of the impact it has on peoples lives. If you are someone who has lost or is losing your home. I grieve with you. My hope is that you can see past this. Be confident that you can recover. Keep your family and friends close. Make a new home wherever life leads you and don't give up on the American Dream. If you are someone who has always wanted a home but didn't think you could afford one. Now's the time. Don't feel that you're taking advantage of someone elses misfortune. You didn't create this market any more than they did. But opportunities can be fleeting. I don't know how long this will last but I do know it won't last forever. And that's what we should all remember. This won't last forever.
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