Phoenix Area Real Estate Blog

High Street at City North is Now Open for Business

Steve Belt — Thu, 20 Nov 2008 23:11:12 +0000

It’s been a week now, but High Street at City North in Phoenix opened on November 13, 2008. I walked the High Street from end-to-end on Tuesday and snapped the photos for this post. As I did I made mental notes of the businesses that were open and those coming soon. Among the open stores were Pioneer Electronics, White House/Black Market, Kona Grill, Press Coffee, Ocean Prime, Coldwater Creek, and Ann Taylor Loft. In total, it looked like more than half of the retail locations were currently open, and several were close.

I paid closer attention to restaurants, as it was 1pm and I food on the brain, and other than the coffee shop and a yogurt shop, the other restaurants I found were of the finer dining variety. These weren’t your typical food court locations. Being an almost daily coffee shop visitor, I’m personally interested to stop in at the Coffee Press location. I’m also keen to see what Arizona Coffee thinks of the shop, or heck, maybe the crew that meets on Friday afternoon for coffee can be convinced to come north.

This is a wide shot of the corner of High Street and 52nd Street. This is one of the residence over retail buildings. This end of the building is the portion that they are turning into high end rentals, so all of the units are currently vacant and without window coverings. If memory serves, the end units are the large 3 bedroom units that begin at roughly $1,000,000. I have yet to get a hold of rental rates.

Arizona Mortgage Rates for November 14, 2008

Justin McHood — Fri, 14 Nov 2008 20:54:33 +0000

Arizona Mortgage Rates for November 14, 2008

Mortgage Related News This Week

This week, the new loan limits effective January 1, 2009 were announced by the government. For conforming loans, the loan limit stayed at $417,000 for all of Arizona. For FHA loans, the loan limit went down to $271,050 for all counties except for Coconino where the FHA loan limit is $333,500.

In addition to the new loan limits, there was much discussion this week about the federal government using some of the 700 billion bailout package to incentivize lenders to modify mortgages at record numbers and possibly guaranteeing up to 50% of the losses.

This mortgage-modification plan is a hot topic right now - so hot in fact that KTAR contacted us to speak about it on the air where we had a brief question and answer session with callers moderated by KTAR superstar Darrell Ankarlo.

Will the mortgage modification plan pass? Stay tuned. In today’s financial world, I have learned that you can’t rule anything out - particularly if the government is thinking about getting involved.

What percentage of the list price should you offer on a foreclosure property?

Steve Belt — Wed, 12 Nov 2008 20:41:30 +0000

Recently, a Trulia Voices user asked the question:

How much less than the offer price can you offer on a foreclosed home?

This seems like something any Phoenix area real estate agent should easily be able to answer with something straight-forward, like 90% or 95% or 80% or . But here’s the thing, banks and many foreclosure listing agents can be just as bad at pricing foreclosed homes as the neighbor down the street with a home listed 25% above fair market value that refuses to lower the list price, because “that’s our break-even price”.

The simple answer to what price a buyer should offer is: Offer what you think the property is worth. That might be 75% of the list price or it might be 110% of the list price or it might even be the prevailing 90% of the list price. Whatever the case, having a strong grasp of the property’s true market value is what is key. Then, with your offer, you will want to demonstrate/substantiate your offer price with comparables and estimates for repairs/updates. This will lead to a far greater success rate than a blanket, “just offer 90% of the list price and see what happens”.

Let’s look at a simple example for a home that has a true market value of $150,000. Let’s say a savvy agent prices the home at 115% above market value, because of the tendency for buyers to offer 90% of the list price. Thus the home is listed at $172,500 and an offer comes in for $155,250. Ooops…the 90% rule may have baited someone into paying $5,250 above fair market value, and the savvy agent looks like a hero in the eyes of the bank.

Another scenario that is happening with more and more frequency, is the savvy agent that lists the home below fair market value…perhaps at 95% of fair market value. Going back to the $150,000 house, the home gets listed at $142,500. This agent knows the home is priced hyper-aggressively, and is looking to get above asking price. Low ball offers of $128,250 (90% of the list price) are flat rejected, while knowledgeable buyers agents bring offers above the asking price. Again, the savvy listing agent looks like a hero to the bank, for securing an above list price offer.

I might add, that for years I have had a personal guideline with regard to list prices and offer prices. I find it unusual that a buyer and seller will agree on a price that is more than 5% away from each other. I’ve called this the 5% rule. Buyers and sellers do agree on deals that are wider than 5%, but those deals were quite rare. More recently, this range is getting a little wider than 5%. Running stats for the 42,000+ single family home sales in Maricopa County for the last year, the average price paid was 95% of the list price, which means there are about as many deals done wider than 5% as there are narrower than 5%, and that’s also why the prevailing advice tends to be, “offer 10% less”.

Getting back to the headline, I’ll repeat my advice that as a home buyer you educate yourself as to a home’s true value, and that you always offer a price near, but never over that value. Also, with the pace of activity in parts of the foreclosure market, a strategy of “leaving some wiggle room” in your offer price may result in your highest and best offer never being considered, because a better offer was initially present by a different buyer. That wiggle room lessen can be an emotionally painful lessen to learn. I hope it never happens to you.

Arizona Mortage Rates For November 7 2008

Justin McHood — Fri, 07 Nov 2008 17:37:58 +0000

Arizona Mortgage Rates For November 7 2008

Mortgage Related News This Week

After talking to hundreds of homeowners who owe more than their house is worth over the last year about FHA Secure, FHA Hope for Homeowners and Loan Modifications - we have come up with another possible solution for people who currently owe more than their house is worth — the FHA Short Refinance.

The FHA Short Refinance works much like a short-sale except that the current homeowner stays in the home, the current lender agrees to write down the principal balance of the loan so that the current homeowner can get into an FHA fixed rate loan.

We are not the first loan originators to dip our toes into this water (h/t to Brian and Paul for sharing their wisdom with us) but because we talk to so many people each week who are in this situation, we have decided to see if we could help them.

So there is the earth-shattering news for the week: we can possibly now help some of those people who currently owe more than their home is worth.

Oh, and I guess I should mention that we elected a new president as well since that doesn’t exactly happen every day… Congratulations to President-elect Obama and his staff. Could you please now wave your magic wand and fix everything that is wrong in the world? I think I saw on MSNBC that you had a plan for that.

Cooperation among REALTORS is the key to success

Steve Belt — Thu, 06 Nov 2008 19:14:02 +0000

Earlier this week I was on a conference call regarding the possibility of REBarCamp LA, sometime around February of 2009, which will be an un-conference for REALTORS that are interested in social media, blogging, podcasting, technology, etc., located in Los Angeles. FYI, the name BarCamp stems from its origins as a free all day meet-up in the back of a bar, thus it is an event that seeks to be as low budget and/or no budget as possible, in the hope to get the most people in attendance. The scope and size of the event planned in LA means it actually won’t be free to put on, but the hope is that sponsors will step forward to significantly offset costs. Plus, they’ll likely charge a small fee.

At any rate, on the conference call were 10-20 people, including fellow REALTORS as well as industry partners, that could potentially be sponsors. During the call, an agent in the LA area (whom I really don’t know), responded to a question that a sponsor asked, regarding “what’s in it for me?” This particular sponsor is well known in the RE.NET industry, and he noted that if the only people in attendance were people he already knows, and knows his product, he really didn’t need to be there. That’s a very valid point, and so the discussion moved toward looking for a way to get REALTORS outside the current RE.NET to attend. Along those lines, were then questions about what the topics would be and whom the target audience would be. If the event was targeted toward real estate agents that aren’t plugged in, the LA area agent stated, “If I attend, and help to improve my fellow agent, how is that good for me?”

At face value, the question appears to have a lot of merit. In a competitive business, why help your competition get better? But here’s the thing about real estate: this business absolutely requires cooperation. I don’t know the exact figures, but the number of transactions in which the listing agent also finds the buyer is actually quite low. All of the marketing that we do as listing agents results in a pitifully low number of buyers contacting us directly to buy the home. Far more often, a cooperating agent represents the buyer. This cooperation is fundamental to the successful close of almost every real estate transaction, and is the basis for the MLS (without an offer of cooperating compensation, a listing cannot be entered in MLS).

So, why should I help my fellow REALTOR gain greater success at an un-conference like REBarCamp LA? Because if I know I’m going to have to cooperate with somebody in the REALTOR community, I sure would like to work with people I know, that I like, and that are like-minded. Nothing beats working with people you like. It’s so much more pleasurable. And by and large, every agent I know that is involved in social media is an agent I like. And I don’t just like my fellow RE.NET agent a little bit, I like them a lot. The transparency of our online reputation almost ensures that we aren’t taking advantage of clients or other agents, that we provide superior customer service, and that any transaction we do together will probably be smoother.

So, what’s in it for me, when I help an agent new to social media and blogging? Hopefully, as social media begins to creep into a larger and larger percentage of the overall real estate landscape, it means I have a better chance of cooperating with an agent that I know and like, and who wouldn’t want that? I know I do.

Photo credit: e-magic

I Voted Today

Steve Belt — Tue, 04 Nov 2008 09:13:36 +0000

I voted today. I chose. I stood up and was counted. I took part in the Democratic process.

Tomorrow, regardless of who wins or loses, I’ll work to support those elected officials. A city, a county, a state, and a country united will make this country strong, and more than any other time in my adult life, we need a strong united country.

Please vote. Please be counted. I read we may have as high as 80% turn out in Maricopa County. That’s awesome, but we can do better.

Arizona Mortgage Rates October 31, 2008

Justin McHood — Fri, 31 Oct 2008 19:16:51 +0000

Arizona Mortgage Rates for October 31, 2008

Mortgage Related News

On Wednesday this week, the Fed lowered the federal funds rate .50% to 1% — matching the lowest level for the overnight bank lending rate since June of 2004. While some investors were hoping for a .75% or even a 1% cut, this cut has an impact on a variety of loans including home equity lines, credit cards and business loans.

But as others have pointed out, a rate cut by the Fed to the federal funds rate doesn’t necessarily mean that overall mortgage rates go lower.

The Fed cutting the federal funds rate is one tool that the Fed uses to try to spur economic activity in the economy - and with the holiday season right around the corner and with consumers tightening their spending only hindsight will be able to tell for sure how much help the rate cut will be.

Scottsdale & Tempe among most bicycle friendly cities in US

Steve Belt — Wed, 29 Oct 2008 17:51:14 +0000

The League of American Bicyclists has a Bicycle Friendly America Program to help businesses and communities promote safe cycling, and toward that end, they rank the most friendly states and cities in America. The state of Arizona ranks 3rd in the nation:

Arizona is one of the few to promote protection of cyclists through a 3-foot minimum passing law, and was one of the early adopters of a bike-friendly rumble strip policy. The state has also taken a leading role by including increasing bicycle trips in their statewide carbon emission reduction plan.

The cities of Scottsdale and Tempe each earned a Silver star for being particularly bicycle friendly thanks to the vast bicycle lane/path networks and promoting the use of cycling as an alternative to commuting. As many of my readers know, I’m an avid cyclist, and while I personally favor the mountain bike, this time of year is road bike season for me, as I train for the annual El Tour de Tucson (scheduled for November 22, 2008 this year). This 109 mile ride (not race) is such a great event to be a part of, that I leave the safety of the dirt and mix it up with the cars for a couple of months each year. This year my personal goal is to be a gold finisher, and finish in under 6 hours.

Of course, I should note that Tucson garners a Gold star as an exceptionally bicycle friendly city. Honestly, Tucson really does rock for cycling. As many know, Lance Armstrong called the city home for a while each year to train by riding the 30 mile climb up Mount Lemmon. He didn’t ignore Scottsdale, either, spending a day or two here at the Scottsdale Princess resort, and riding to Bartlett Lake and back.

FYI, Dru Bloomfield and I were chatting recently about showing property while riding a bicycle. I have never had a client suggest a cycling tour to look at homes, but I would absolutely love the day, morning, afternoon, hour, whatever, spent riding from home to home.

Phoenix Area Real Estate Blog is upgraded behind the scenes

Steve Belt — Wed, 29 Oct 2008 03:52:44 +0000

I spent much of today (when I wasn’t managing two short sales that are in the process of being approved by their respective banks, showing a rental property, on a listing presentation, and/or meeting with a landlord that is moving to Dubai on Saturday), working under the covers of the blog. The incomparable Chris Pearson developed the theme Thesis, which this blog has been using since the release of version 1.1 in August. Chris has steadily improved the theme with the releases of versions 1.2, 1.3, and most recently 1.3.1. I haven’t kept up with the theme releases, because quite frankly, when nothing’s broken, I believe you don’t fix it.

Today, for some reason, I thought it would be a good idea to quickly throw Thesis 1.3.1 at the blog. I didn’t have a compelling reason to do so, but rather, it simply seemed like I was falling too far behind. So I did, and completely broke the blog. And not just a little…it was completely down and out. If you attempted to read the blog during parts of today, there’s a good chance you saw nothing. Or an error. Or partial content. If there was a menu bar, and you tried to navigate around, that probably didn’t yield any success either.

The problem stemmed from how I customized the theme under version 1.1. In that version, I had made a number of significant changes to the core theme files. And then Chris decided that changing the core theme files was a bad thing, so in 1.2, Chris implemented a way to separate customizations out of the theme files, so that anyone can easily upgrade the theme in the future, without breaking the customizations. Great stuff by Chris, but dang, did that mean I had to relearn, rethink, and redo every customization I had incorporated to the blog. It’s the little things, like the header image, the location of the menu bar, the search area, the avatar-style byline, the footer notes, the related posts, the MLS search page, etc. Minor things like that, which help make this blog feel like home to me.

Fortunately, I possess a few technical skills along with the guidance in the Thesis support forums that led me piece to the correct way to customize Thesis in version 1.3.1. That said, if you now notice anything that is odd, or looks broken, or lost, please, please, please, leave a comment, so I can set it right. This was honestly far more difficult an upgrade than I had budgeted for, and something in hindsight I wish I had done in my sandbox, rather than on the live blog. I mean, that’s why I have a sandbox after all, right?

Along the way, I also took the time (maybe 30 seconds) to upgrade Wordpress to version 2.6.3. Long ago, I started using the Subversion checkout process for all of my blogs, and if that process is available to any of my fellow Wordpress blog owners, let me say it is by far the easiest way to upgrade your blog. It’s not push button easy like upgrading plug-ins is today, but it’s the next closest thing.

Photo Credit: Paul Worthington on Flickr

Arizona Mortgage Rates October 24, 2008

Tammy McHood — Fri, 24 Oct 2008 16:17:09 +0000

Arizona Mortgage Rates for October 24, 2008

Mortgage Related News

The theme for this week seemed to be “tightening guidelines”.

Fannie Mae released some upcoming changes to its automated underwriting engine scheduled to be effective on December 13, 2008. The biggest updates to the Fannie Mae automated underwriting engine include:

For cash-out refinances on primary residences, the new maximum loan-to-value will be reduced to 85% from 90%.
For cash-out refinances on second homes, the new maximum loan-to-value will be reduced to 75% from 80%.

Freddie Mac also announced tightening guidelines, stating that as of February 9, 2009 they will no longer be buying any “stated income” loans.

How many zeros are in a “Billion”?

The next time you hear a politician (Republican or Democrat) use the word ‘billion’ in a casual manner, think about this. A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of it’s releases.

A. A billion seconds ago it was 1959.

B. A billion minutes ago Jesus was alive.

C. A billion hours ago our ancestors were living in the Stone Age.

D. A billion days ago no-one walked on the earth on two feet.

E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it.

– From an email I received this week.