Scottsdale AZ Real Estate | Bill Duffey | REMAX | Carefree, Cave Creek, Paradise Valley and North Phoenix - Homes, Land and Commercial Properties

RE/MAX Excalibur REALTORŽBill Duffey, Scottsdale AZ 480-585-2904

Scottsdale / Carefree / Desert Mountain / Paradise Valley / Cave Creek / North Phoenix

July

MONTHLY NEWSLETTER

JULY 2008

HAVE A GREAT Summer VACATION!

from Bill Duffey

RE/MAX Excalibur 480- 585- 2904

Hope you are having a great summer. Happy Independence Day! Thanks for the referrals! I really appreciate serving your friends and relatives.

We are still in a "Buyer's Market" and it will continue for some time, in my opinion. Days-on-market are still very high. We now have a 12 month supply of homes on the market, a far cry from the 1-2 month supply we have had, in the past. New listings are finally going down (a bit), and sales increased slightly (relative to the same time, last year). We need to get to a 5 month supply, nationally, to come out of this housing crisis. See Charts and articles, below. None of the national data is encouraging, except for Texas. Local sales with our company (week ending 7/12) are running about 63% bank sales and short sales. Essentially, repo's. Only about 30% of all short sale contracts are being accepted by mortgage holders, according to some sources.

No doubt, we are in an "extreme" historical market cycle. Prices will decrease in the Valley, but in the North Scottsdale area, values are actually holding up to their historically higher values. We are the least affected by these dramatic trends and eventually demand should force prices up, sometime within the next 6-18 months. There will clearly be some deterioration in prices, during this timeframe. Not good news for Sellers, but great news for Buyers!. There are some small signs of improvement over the past weeks, however. The real market test will be this Fall and Winter, of course!

It is time to tell your friends to "BUY" in the North Scottsdale area. You may recall that the same market conditions were present in 2004, just before homes shot up in value! These market forces can change very fast! Your friends don't want to miss these "value" prices. Prices may go up, dramatically, in the next 3-5 years, in my opinion. Remember, with all the commercial developments in the area, North of the 101, demand for housing is sure to follow. Most of N Scottsdale is already built-out and they are not making any more land, as the saying goes. There are some signs that we are starting to bottom-out (see article, below).

On the commercial side of the equation - frankly, it has been off the scale, but has started to be affected by the "recession" (see below). Downtown Phoenix, however, has new build-out regulations that will allow for larger developments, per parcel. Commercial has been on fire in the Valley for the past several years. This trend will continue, but at a slower rate! As you know, I am also a commercial Realtor. I only handle purchases and sales, however. Have had numerous requests for rentals but I always turn them down, unless they are for very large buildings/spaces - for extended periods of time.

The bottom line is that all those "interest only" loan folks and "want-to-be" investors are still dumping properties. It will take an extended amount of time for that inventory to adjust. The "financial engineering" involved with our current mortgage market is discussed below. The underlying economics of the country are sound, but for the energy and mortgage arenas.

Finally, some folks are taking the equity from their existing homes and buying new ones, to catch this Buyer's Market - then renting their existing homes, until the market improves. Many are over $1M. Rentals are getting harder and harder to find. Just so you know, I have a firm that handles all of the renting details for you. Call me if you are interested. (see articles, below) As always, I do not take money, or anything else, from any vendor.

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******************************* LISTING DATA ******************

Listing and sales charts <<click here for more information

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Huge Reduction: $200,000 reduction - Was $1,750,000 - tell your friends.

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***************You have to watch those numbers (see my comments, in my last newsletter)**************************

Valley home-sales reports are at odds

Trustee-sales figures skew real-estate picture

J. Craig Anderson - May. 20, 2008 12:00 AM
The Arizona Republic

One sign of the Valley's troubled housing market is the growing incidence of lenders assuming ownership of homes.

Ironically, the increasing number of those transactions has led to a false perception that the real-estate market may be showing signs of recovery.

The confusion stems from a report on April home sales by Jay Butler, director of real-estate studies at Arizona State University's Morrison School of Management and Agribusiness.

Butler compiles a report each month on home-resale transactions in Maricopa County.

The report said home resales were up 15 percent compared with the same month in 2007, the first year-over-year increase since July 2005.

That, conflicts with a report released Monday by the Arizona Regional Multiple Listing Service indicating a 12 percent decrease in home sales in the same period.

The reason is Butler's report does not differentiate between "trustee sales," in which banks take over properties from borrowers in default, and routine home resales.

More than one-third of the sales reported by Butler for April, or 2,025 of the 5,585 total, were trustee sales.

When real-estate consultant Scott Smith saw Butler's latest report, Smith said he knew something was wrong with the numbers. Smith, who owns a real-estate services firm and tracks area home sales "on a daily basis," said Butler's April sales figures were simply too high.

"After checking the data several times . . . there is no doubt that Mr. Butler made a big mistake," Smith said.

Smith's opinion was based on information from the multiple-listing service, which records every home sale involving a professional real-estate agent.

Usually, monthly home-sales figures from the multiple-listing service run higher than those reported by Butler.

Unlike Butler, the listing service includes new-home sales, some pending-sale transactions and sales in certain areas of Pinal County.

But since January, Butler has been painting the rosier picture, reporting higher sales figures than the listing service for each of the year's first three months.

Butler said he agrees that trustee sales should not be lumped in with routine resales and would be reported separately from now on.

The market has changed so rapidly, he said, that the methodology he once relied on for accurate sales data suddenly has become obsolete.

Until recently, Butler said, trustee sales represented a very small portion of overall sales activity and often involved an actual sale, such as at a foreclosure auction, which is why he has always included them.

But as the foreclosure rate began to climb in late 2007, more and more cases involved lenders simply assuming ownership of the home, still considered a trustee sale and still included in Butler's reports.

On Monday, ARMLS reported 4,874 home sales in April. Butler's revised figure would be 3,565 sales, he said.

********************************* Land Listings **************

LOST CANYON ESTATE PROPERTY

$1,395,000 4.39 Acres

Call me for more information!

Two parcels

********Foreclosure Searches and Landlord Screening**********

Interesting new services Click on hyperlink, below.

http://online.wsj.com/article/SB121501183835523159.html?mod=djemRealEstate

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***************************I am not sure about this one....but....it is The Wall Street Journal ************************

The housing crisis is over By Cyril Moulle-Berteaux The Wall Street Journal 06.06.08

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 or seven months of supply by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to sub-trend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

************************* MORTGAGE NEWS - How did we get into this mess! *******************

If you really want to know what is going on with the mortgage and residential market, watch this interview with Gretchen Morgenson. She is a Pulitzer Prize winner and she knows what she is talking about. Mortgages are now really a matter of "financial engineering". (about 15 minutes).

Click here to watch>> http://www.pbs.org/moyers/journal/06292007/profile3.html <<click here

With U.S. mortgages entering foreclosure at a record pace, the crisis has far reaching implications, from the financial markets to the financial health of ordinary Americans. For the latest, Bill Moyers interviews assistant business and financial editor at THE NEW YORK TIMES Gretchen Morgenson, who has been covering the story.

Gretchen Morgenson is assistant business and financial editor and a columnist at the NEW YORK TIMES. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her "trenchant and incisive" coverage of Wall Street.

Clearly, one of the best explanations of our current mortgage market. Air date: June 29, 2007 PBS A year ago....

***************** New Mortgage Lender ****************

Guaranteed Rate Mortgage BANK

Click Here>> https://www.guaranteedrate.com/matthewmckean <<<Click Here

Click above, to see their rates (updated daily) and apply, online, for a loan - if you like.

Their rates are compared to other major mortgage BANKS (on their website).

There is a big difference when working with a mortgage BANK vs. a mortgage agent, especially when it comes to the fees they charge.

Matthew McKean, Senior VP and Regional Manager (many years of experience)

Mortgage Bank Residential and Commercial lender with a very fast turn-around!

Email: Matthew.mckean@guaranteedrate.com

**********************COMMERCIAL NEWS ********************

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Local millionaires

As it turns out, global economic growth and stock-market rallies have been good for many Valley residents: A new report by financial giant Merrill Lynch has found that there are now more than 53,000 households in the Valley with a net worth of at least $1 million. That's a 7.4 percent increase over the previous year and is in line with an even larger 8.3 percent up-tick in millionaire households worldwide. 2007 Data

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YOUR CREDIT RATING

Anyone who has ever had a bank account, a mortgage, a credit card, a car loan, an account with a retail store etc. will almost definitely have a credit rating.

Most information in your credit rating comes from companies you have credit with, such as the banks, department stores, finance companies, etc. as well as from certain public records such as lawsuits, tax liens, judgments and bankruptcies.

If you have been denied credit, insurance, a job, or rental dwelling opportunity because of information contained in your credit report, you are entitled to a complimentary copy of your report within 60 days. If after checking you believe the information to be incorrect you may file a brief statement explaining why. Inaccurate information on your credit may be removed, but no one can have accurate, current or verifiable information removed from his/her record.

Credit reports are usually divided into five sections:

1) Your credit history

2) By whom your history has been reviewed

3) By Information you have given to the credit information company

4) Specific Identification information on you

5) Explanatory notes and comments

Different States have different conditions, and it is important that you check with your circumstances especially in California, Colorado, Connecticut, Maryland, Massachusetts and Washington.

Two leading Consumer Credit Companies are:

Experian 800-422-4279
Equifax 800-685-1111

As of December 2004, you can get a free copy of your credit report.

You can request a free credit report on the Web at www.annualcreditreport.com . This is a site set up by the credit reporting companies pursuant to Federal Law. There's also a toll-free phone number (1-877-322-8228), as well as a mailing address. You have to pay a small fee to actually get your FICO score, however.

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Do you have a shop-vacuum? Easy way to clean the filter!

They help clean up spills, drain a hot tub, or vacuum the cars. Oh, and they work in the shop, too.

Have you looked inside your ShopVac lately? The filter inside is probably made of paper. How can that filter hold up with all the different tasks that it must perform in its lifetime? The answer is, you need a helping hand to extend the life of your shop vacuum. Chances are you have the solution in your wastebasket.

Would you believe that cutting off the legs of an old pair of panty hose provides a perfect 'pre-filter?' Just tie the ends in knots, and slide the waistband portion over the top of the filter. The suction of the vacuum won't be reduced, and you can clean your new 'filter' anytime, just by rinsing it out!

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Don't you wish there were such a simple solution for every job around the house? Well, when it's time to deal with buying or selling real estate, I promise to make it as easy as possible. You can call me anytime you need me!

Regards,

William Duffey

GO TO MY CONCIERGE PAGE FOR A LIST OF VENDORS. <click here

Hope you enjoyed this newsletter...let me know if you have suggestions or if you would like me to write an article on any real estate subject.

Please remember that selling or buying your home is not a "do-it-yourself" project.

Call me, and I'll handle all the details. I also have a "Moving Coach"! The service is free for my clients.

*Please consult your tax adviser.

Please note: This email and any attachments contain confidential and/or privileged information for the sole use of the intended recipient. If you are not the intended recipient you may not read, disseminate, distribute or copy this email message or any attachments. Please notify the sender immediately (by reply email or phone) if you have received this email message by mistake and delete this email message, along with any attachments from your system. Email transmission cannot be guaranteed to be secure or error-free, as information could be intercepted, corrupted, lost, destroyed, delayed or may be incomplete. The Sender does not accept any liability for any errors, omissions or viruses in the contents of this email message or any attachment. This email also conforms with the Arizona Commercial Electronic Mailing Act of 2003. Your Privacy is important to me. I do not share your email information with any other party. If you do not wish to network in this way and desire to be removed from my newsletter email list, simply send me an email with "remove" in the subject line (click on the "email Bill" link. You will be excluded from the list, in a few days. Copyright 2008 Bill Duffey. All Rights Reserved.

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Regards, Bill Duffey

Send e- mail to wmduffey @ yahoo.com - questions or comments. >>> <<< Click on this icon to send e-mail)
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