Tucson, Arizona MLS Statistics for June 2008

MLS Statistics as of June continue to improve on a month to month basis.  Although overall volume is down 34% from June ’07, we’ve seen a slight increase of 3.55% over May of ’08.  It’s the same with average sales price.  The average price of a home in Tucson dropped from $293,443 to $257,449, up from $250,803 the previous month.  The number of active listings is down, both compared to last June and last month. There are still over 8,000 active listings, with only around 1,000 units sold.  Basically, we have eight months of inventory and an average market time of 78 days.  For sellers, pricing is EVERYTHING in this market.  For buyers, now is the time! Click here for the full report.

 

On the national front, the NAR (National Association of Realtors) welcomed the strong response from the Treasury Department and Federal Reserve regarding the status of Freddie Mac and Fannie Mae. The health of our economy depends on these institutions and their ability to provide fair and affordable mortgage loans to home buyer and homeowners.  NAR’s president Richard F. Gaylord issued this statement: “We ssupport the federal government’s actions and authorization to help ensure the ability of Fannie Mae and Freddie Mac to promote the availability of home mortgage credit during a period of stress in the financial markets.  Fannie and Freddie play a central role in our housing finance system, and we agree that they must continue to do so as we work through the current housing correction.”

 

Denise

 

First Magnus and RESPA: If it looks like a duck and acts like a duck…

The Department of Housing and Urban Delvelopment reported on July 14 that now bankrupt First Magnus violated the Real Estate Settlement Procedures Act by providing incentives to lenders for making certain FHA insured loans.  HUD reports that First Magnus paid $58,571 in incentives from 2003 to 2006 to seven brokers for 169 FHA insured loans totaling 24 million.  The report recommended that HUD pursue administrative actions against the owners and management of First Magnus, in addition to other sanctions. 

The law, known as RESPA, is designed to protect consumers from paying undisclosed costs in real estate transactions.  Under RESPA, it is  illegal for a mortgage lender to give or accept any fee, kickback, or anything of value, to anyone–real estate agents, mortgage brokers, escrow companies–involved in a real estate settlement.  This can be very serious; HUD has the right to pursue fines, cease and desist order, and there can even be criminal charges levied. 

First Magnus, a mortgage company with a national presence, suddenly collapsed last August, and left 5,500 employees without paychecks and numerous other creditors unpaid.  Inspite of this,  former First Magnus chief operating officer Karl F.W. Young is reopening another mortgage company, StoneWater Mortgage, at the same location on Wilmot Road previously occupied by First Magnus.  He stated that “First Magnus did not believe the program to be a violation of RESPA.”  Interesting…

At the time of the First Magnus collapse, I can recall feeling sorry for the company’s demise.  Then the stories began circulating in the real estate community about the employees being stiffed by the owners.  It sounded too similar to reports of other big corporations such as Enron going belly up and leaving their own people holding the bag.  Now we learn that these deadbeats are opening up under a different name.  I would hope that Mr. Young will make good with the past before he creates another mess for our community.  Unless this happens, I won’t be sending any of my clients his way.

Denise

Tucson’s Commercial Real Estate Market

Christie Smythe of the Arizona Daily Star reports that the economy is showing an impact on the comercial real estate market.  However, the office market, according to Tucson Realty and Trust Co., is improving.  The office-vacancy rate for Tucson is on the way down after a rise in recent months.  Currently, it’s at about 13%, but incentives like a free month’s rent are starting to disappear. Does this mean the office market has bottomed out and is recovering?  This change in status contrasts with the markets for industrial space, retail space, apartment buildings, and commercial and residential land, Tucson Realty and Trust representatives said.  Vacancy rates for retail and industrial properties are rising, at least partly as a result of more space being built in both those categories.    Although retail vacancy is around 8.5% with greatly varying rents, about 1.7 milllion square feet of retail space is to be built in Tucson this year.  But some of that building may be delayed because of a slower economy and tighter standards for borrowing.  George “Hank” Amos III, president and chairman of TRT thinks that conditions in those markets may start to improve by the middle of next year, depending on whether the housing market picks up in the spring.  The National Association of Realtor (NAR) forcasts a market recovering in the latter half of this year.  Currently in Tucson, sellers and landlords are willing to negotiate.  Whatever market you may be interested in, according to our local statistics, now is the time to buy or lease. 

Denise

Is the Housing Crisis Really a Crisis?

CNBC’s Dennis Kneale crunches the numbers in this video.  I watched it a couple of times and took notes.  We have to remember that real estate markets are cyclical, and Dennis Kneale suggests the current downturn is, in fact, a much needed correction from skyrocketing prices and easy lending.  We are experiencing ”necessary pain for a return to rationality”. Consider there are 120 million homes in the US, 1/3 of which are owned free and clear. No need to worry about them.  Of the rest, half of those were purchased before the year 2000 and are enjoying a  net 34% increase in value. Is it possible that we can’t get anything done unless we call it a crisis?  Home values fell a mere 1.4% in a year! And inspite of the news that foreclosures are up 65% over last year, only 2% of all homes are actually in foreclosure. Congress is planning a $300 billion bailout, but by the time this actually comes to pass, the free markets will probably have taken care of the situation.

My beloved Dad, the eternal optomist, the guy who got me started in this business, passed away peacefully from this world on July 9th. He taught me to expect markets to rise and fall and to keep a positive mental attitude no matter what the circumstances.  Have we hit the bottom?  Probably not.  But let’s not get swept into panic, gloom, and doom.  Instead, let’s keep working hard, support the economy, and expect the best! 

Denise

Realty Executives Announces Redington Home Loans

My company, Realty Executives Southern Arizona, a top locally owned real estate firm, has just announced its newly created relationship with Redington Home Loans, a region-wide mortgage lender affiliated with Wells Fargo Home Mortgage, a division of Wells Fargo Bank.  Redington Home Loans will provide origination and funding of mortgage loans for clients of Realty Executives Southern Arizona.

This new venture will offer our clients a wide range of home-financing products and services available from Wells Fargo Home Morgage, including options for first-time buyers as well as loan products for high-end (luxury) clients.  This “value-added” approach recognizes the growing client preference for a simplified home buying experience, with real estate, financing and title insurance services all under one roof.

“In choosing Wells Fargo, we are staying true to our commitment to provide our agents and their clients with the best products available and delivered with the highest level of customer service,” said Anthony Azar, CEO of Realty Executives Southern Arizona.  “Wells Fargo’s expertise, work ethic and customer service complement those of Realty Executives Souther Arizona and reflect the dedication each of us shares to find the best alliances possible.”

Realty Executives Southern Arizona is the largest locally-owned real estate brokerage in southern Arizona (with twelve offices and over four hundred real estate agents) and ranks in the top 137 out of nearly 90,000 real estate brokerages nationwide.  An industry leader in agent training and use of technology to better serve clients, the company reached a milestone $1,323,755,137 in 2005.  Realty Executives Southern Arizona is a member of an international network with offices and service partners across the US and in fourteen foreign countries.

I think it’s a great move on our part.  Glad to be affiliated with a strong company such as Wells Fargo.

Denise

Happy Independence Day!

In Wisconsin with my family celebrating the 4th of July weekend. Experiencing beautiful midwest weather–a nice break from the 100+ temperatures of Tucson.  (Although I am looking forward to our monsoon season, one of my favorite times of year.)  While enjoying each other’s company, barbeques, sparklers, and firework displays, we took the time to reflect on our American heritage, freedom and independence, which should never be taken for granted.  Enjoy the weekend, be safe, and don’t forget to give thanks for the founding fathers and their contribution to our incredible United States of America.  And above all, pray for and acknowledge the young men and women in service to our country who are working day and night, under sometimes brutal conditions, to ensure the safety and freedoms we so dearly cherish.

Denise

New Homes Could Get New Warranties

Under the terms of an intitiative apparently headed for the statewide ballot, buyers of new homes would be entitled to a 10 year warranty, reports the Arizona Daily Star today.Backers of the measure filed petitions with more than 262,000 signatures, far more than the 153,365 signatures needed in order to put the issue before voters.  This measure would also allow for homeowners to help choose the contractors hired by the builders to make the repairs.  Additionally, buyers would be given the right to cancel within 100 days and get back most of their deposit.  The real clincher is this: homeowners would be allowed to sue without fear of having to pay a builder’s legal fees if they lose.  The big winners, obviously,  if this measure is passed, will be the trial lawyers.  I’m wondering how the homeowner’s responsibility of required routine maintenance will figure into all of this.  And what if the buyer chooses a not-so-reputable subcontractor to do repairs?  Who is repsonsible then? One person commented on AzStarnet, “Oh great…more litigation!  Sounds like the answer because lawyers need more work.”  My sentiments exactly.

Denise