The Phoenix Area Foreclosure Experts

Canadians buying up homes in the U.S.

A business associate  and friend recently sent me a clip from the Montreal, Q.C. Gazette. The article was run on September 11, 2008. 

The story talked about how Arizona and Florida are popular with Canadian buyers.  The most common reasons: The depressed U.S. housing market, the devalued U.S. dollar, and record snowfall in Canada last year. 

According to the 2008 National Association of Realtors (N.A.R.) annual profile of international home buying activities in the U.S., Canadians have replaced Mexicans as the top foreign buyers of U.S. properties. 

A survey conducted by the N. A. R.  Found that, in the last twelve months ending in May, 2008, nearly one quarter of foreign buyers of U.S. properties were from Canada - double the proportion of the year earlier. 

Condominiums were the most popular among Canadian buyers.  Nearly half of all properties purchased by Canadian buyers were condominiums. 

The article also went on to say that buyers from Canada or more than twice as likely to purchase a U.S. home with cash than any other method.  69 percent of Canadians bought properties with cash. 

PMI Group pays 25 cent quarterly cash dividend

I've been watching the progress of the PMI Group over the last few months.  They provide a large share of the mortgage insurance in the U.S..  They have been selling off assets to improve their cash position.  After all, most of their cash is going towards paying claims on defaulted mortgages.

Here is an excerpt from a press release dated September 18, 2008:

"The PMI Group, Inc. (NYSE: PMI) today announced that its Board of Directors has declared a quarterly cash dividend in the amount of 0.25 cents per common share. This represents a reduction of one cent per common share from prior quarters. This quarterly dividend is payable on October 15, 2008 to shareholders of record on September 30, 2008."

Since they're obviously undergoing some of their worst financial losses in their history, it makes you wonder if this just isn't an attempt to persuade the world they are stable.   

Expanded search capability for bank owned properties

I made it a lot easier to search Phoenix area bank owned properties on this site.  Click here to see how comprehensive the searches can be.  You can now find Phoenix area  bank owned properties arranged in the following manner for both the metro Phoenix area and for outlying areas:

• bank owned homes under $125,000
• bank owned homes under $150,000 with four bedrooms
• bank owned homes under $150,000 with a pool

There are over 600 properties you can search very easily on this site.  I didn't make any searches available over $150,000 because there is so much inventory under $150,000. 

However, if you feel so inclined, send me an e-mail and I will send you Phoenix area  bank owned properties over  $150,000 that include your specific criteria.  You can even request property based on a specific subdivision, school, or geographic area. 

Banks adapting on short sales

The rules keep changing in this foreclosure-based market.  I previously posted that there are some things you should never do when submitting an offer on a short sale.  One of those things was to ask the bank to pay some of your closing costs. That was the hard and fast rule because the banks were already taking a huge loss by selling below the mortgage amount.  Taking additional losses by paying buyer's costs were out the question. 

I currently have one deal in escrow in which the bank has agreed to pay three percent of the purchase price towards the buyer's closing costs.  Here is an even bigger surprise.  I have another deal where the buyer is using  a down payment assistance program.  The buyer requested that the bank pay their three percent down payment -- and the bank agreed to do it!

Only time will tell how many more concessions banks will make.  However, if you are currently sitting on the fence and trying to decide if you will buy a house, you probably shouldn't wait too much longer.  The deals are really getting good. Just check the link on my right-side navigation bar titled "Bank-Owned Homes UNDER $150,000."   

How low can you go in Chandler?

Here is a profile of two homes in Chandler to give you an idea of the pricing on today's market.  The first home is simply "the" lowest priced single-family home in Chandler. 

The house, built in 1951, was purchased in April of 2001 for $86,500.  It was taken back by U.S. bank on June 11, 2008 for $72,949. I have no idea why the owner didn't sell the property, or at least short sale the property.  Nonetheless, it is offered for $59,900. The house has two bedrooms, one bathroom, and a one-car carport.  It's no Taj Mahal but, hey, at 965 square feet it's bigger than many apartments.

Now let's take a look at the lowest price home built after 2000.  This house, built in 2001, was purchased on November 22, 2006 for $234,000.  Deutsche Bank National Trust reclaimed it at the trustee's sale on May 22, 2008 for $174,250.   It's 1,243 square feet, has three bedrooms and two bathrooms, and a two car garage.  The list price is $144,900. 

This home is even in decent shape. The house has been repainted and the carpets cleaned.  Its virtually move in ready. 

Want to save $100,000? Buy a foreclosure-type property

The following chart looks at the cost of buying a "normal" home verses  a "foreclosure-type" home.  A normal sale is described as one where "the owner is selling their home (in an arm's length transaction) simply to move to another location." A foreclosure-type home can be described as one where the owner is "moving towards a trustee's sale or, due to financial hardship, is short-selling the home for less than the mortgage balance."

ARMLS (Arizona Regional Multiple Listing Service) allows Realtors to classify foreclosure-type properties as either "short sale,"  "lender owned property," or lender/corporate approval required.  That is how the foreclosure-type numbers can be obtained. 

I think you'll find the these results very telling (disclaimer: foreclosure-type properties often need work and can also be in undesirable areas).

YOY price per-square foot drops $48 in Phoenix area

I track a variety of statistics and update many reports during the first few days of each month. Here is another: year over year price per-square foot. Click here to learn why price per-square foot is a more solid indicator than average price.

This chart shows the total number of homes sold each month and the corresponding price per-square foot. The price per-square foot is obtained by dividing the average sales price by the average square footage of all homes sold in a calendar month.

The average price per-square foot was $175 in August of 2007 and is $127 for August 2008. The August number was actually higher than July's. There was a similar spike from December 2007 to January 2008, but the downward trend did not stop.

This downward trend has not given any solid signs off easing off. A decrease in the the number of foreclosures on the market will be the beginning of the end of dramatic price declines.

Note: Information obtained from the Arizona Regional Multiple Listing Service 9/2/2008

Total listings down by over 700 in Arizona Regional MLS to begin September 2008

Listings are down and foreclosures are up. The number of listings to begin September 2008 decreased by 770, but are down 2,914 from May 2008. The number of those listings that are foreclosure-type properties increased 1,100 from August 1st, 2008. 27% of all listings on the ARMLS are foreclosure type properties. As reported yesterday, 47.2% of all sales are foreclosure-type properties.

44,668 of the listings are in Maricopa County and 4,511 are in Pinal County. Maricopa and Pinal Counties comprise the Greater Phoenix selling area. 2,515 listings are from other counties in Arizona or other regions from across the country. The ARMLS allows Realtors to post listings in areas other than our selling area.

Total sales down 142 from July to August; foreclosure sales up

The string of "consecutive increases" in total homes sold in the Arizona Regional MLS came to an end today when sales for August 2008 were down 142 from July. There were 5,829 homes sold in August -- compared to 5,971 in July.

Reporting was made difficult last month when the ARMLS launched it's new and improved version. Sales figures were not reported correctly during the first few days, and the sales figures were not complete until a week (or so) into the month. Could publishing this information so quickly be a cause for future revision? Possibly, so I'll check again in a few days for consistency.

The number and percentage of foreclosure sales continued to increase in August 2008. August's 2,754 sales were 197 higher than July's sales. The percentage of "sold homes" that were foreclosures jumped from 42.8% in July to 47.2% in August. That percentage has steadily increased for 15+ months.

The 3 columns on the right side show sales by county. The ARMLS selling region is comprised of Maricopa and Pinal counties. However, MLS allows Realtors to list property from all Arizona counties and even areas across the U.S.

It is getting increasingly more difficult for "normal sellers" to complete against "foreclosure-type" sales.