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EXIT Arizona Marks the Spot!

Fernando Campos — Mon, 23 Jun 2008 18:16:34 +0000

EXIT Marks the Spot!

Pat Kelly, Franchisee

480.812.1900

www.exitrealtyev.com

EXIT Realty East Valley
Gilbert, AZ

EXIT Realty Arizona leaves its mark in Gilbert, AZ with the help of Franchisee, Pat Kelly, who’s office is now 50 agents strong!

It didn’t take long for local real estate professionals to see the appeal of EXIT’s revolutionary Formula after EXIT Realty East Valley opened for business in August of 2006. With amazement and pride, Pat watched his office grow from only 11 sales associates to a total of 50 agents by May, 2008!

“EXIT Realty is really catching on in Gilbert and the surrounding areas,” Pat said.

“Once agents hear about all that the company has to offer, it’s really a pretty easy decision for them to make, both for new and experienced agents alike.”

EXIT Realty East Valley is growing and profitable! Congratulations to Pat Kelly and his entire staff for a fantastic year!

Is the Phoenix Metro Market Insulated?

Fernando Campos — Wed, 22 Aug 2007 14:52:46 +0000

Obtaining a home loan is going to get even more difficult.Lending guidelines are tightening almost daily for borrowers as the subprime-loan crisis spreads. Those higher-risk loans have just about disappeared as their default rates soar.Now, financing is getting tougher for all homebuyers.On Thursday, megalender Countrywide Financial Corp. had to take out an emergency loan to keep operating, and Tucson-based First Magnus Financial Corp. stopped taking loan applications. Magnus is one of the nation’s top private lender.Earlier this year, New Century Financial Corp. and American Home Mortgage Investment Corp. filed for bankruptcy. So far, at least 70 mortgage firms have closed or put themselves up for sale since last year.Because of the meltdown in the mortgage market, lenders have begun requiring higher credit scores and bigger down payments from all borrowers. They also are charging higher interest rates to people who want to buy a home for $417,000 or more because fewer lenders want to fund them.The tighter mortgage market will work to slow metro Phoenix’s housing market. Real-estate analysts say the new lending restrictions could knock 10 to 15 percent of home buyers out the market because they can’t get funding. That could significantly affect the local market, where a record number of homes are for sale and where sales are already down about 25 percent from 2006’s pace. “The mortgage market has changed drastically in just the past few weeks,” said Tom Miner of the Scottsdale-based mortgage firm Miner Kennedy Chmura Associates. “We are getting calls from buyers who can’t close anymore because lenders want more documentation or money down.”Cheryl Serbic wanted to buy a condominium in central Scottsdale. Earlier this summer, the restaurant manager qualified for an adjustable-rate mortgage that required little down.

But a week before she was to close, her lender said she needed a bigger down payment. Serbic called other lenders and got the same bad news.

“I didn’t think I needed a down payment. My friend bought last year without one,” she said. “But if the housing market is going to keep going down. I’ll save and maybe I’ll find a better deal then.”

Not all the 100 percent financing and no-documentation loans have gone away. But now, lenders are requiring borrowers’ FICO scores to be 20 to 40 points higher than last year. A 10 percent down payment, once considered standard, is now required on many more loans.

“There was a lot of dumb lending done in the past few years,” said Jay Luber of First Horizon Home Loans. “Loan guidelines now are tougher but much closer to normal.”

How we got here

In 2003, lenders started offering a slew of new easier-to-get mortgages that enabled the nation’s housing boom.Borrowers with bad credit and lower incomes could buy homes by getting subprime loans with higher interest rates.Other borrowers could get in with nothing down and without paying private mortgage insurance by using 80/20 or piggyback loans.The 20 percent was typically a home-equity loan that covered the down payment. Lenders also cut back on the income documentation they required on loans. These “no doc” loans opened the door for people to qualify.The housing market was booming. People thought they could refinance into better loans as home prices climbed. Lenders were making money.Then last year, home prices and sales started to slip. The subprime market started to implode as foreclosures on those loans jumped.

Now, the foreclosure epidemic has spread to the Alt-A mortgage market, the segment between subprime and prime loans that includes many 80/20s and no-documentation loans.

Changing guidelines

Lending guidelines are changing quickly.Not only borrowers but sellers looking to move up should make sure they qualify first.The “jumbo” loan market for mortgages of $417,000 has tightened up because mortgage institutions Fannie Mae and Freddie Mac don’t guarantee loans above that amount. The investors who would have backed the bigger loans have pulled back, which is part of the mortgage market’s liquidity problem.Tighter lending practices are also affecting homeowners looking to refinance.In a slowing housing market, some homeowners who got subprime or adjustable-rate and interest-only loans a few years ago are finding they can’t refinance because they don’t have a high enough credit score or their house is worth less than they owe.“Now, their rates are adjusting up, and they can’t refinance because don’t qualify under the new guidelines,” said Andy Griffin of Scottsdale-based Core Mortgage Group.

“It’s a really tough time for a lot of homeowners now, but if people can hold on and make their payments, it will be much better for them than a foreclosure.”

In its newest report, the Mortgage Bankers Association said mortgage markets are “facing a liquidity crisis of a force and magnitude not seen in decades.”

It went on to say the ripple effect will be felt throughout the housing market.

Those effects are already being felt here in the Valley.

Is Phoenix Arizona’s Growth Sustainable?

Fernando Campos — Thu, 02 Aug 2007 03:38:33 +0000

It is truly hard to believe what has happened in Greater Phoenix over the past 5 years. While many Phoenicians were caught “flat footed” with the wave of out of state investors in 2004 and 2005 it appears that the real estate market has gone through a tremendous absorption of a huge investor sell-off. While many predicted the collapse of the residential real estate market it is quite obvious that the predicted collapse was actually a minor correction.

Every significant real estate collapse has been historically tied to jobs and negative migration. It is clear that when communities lose jobs negative migration soon follows then the residential real estate market collapses. Phoenix Arizona is quite the opposite. With over 190,000 people migrating a year to the Phoenix metropolitan area it is obvious that there is still tremendous demand. Especially considering a new housing unit is needed for every 2.7 people. That is over 70,000 new units per year needed to maintain the population growth.

With the job estimates continually being revised upward since 2002, Phoenix is becoming more and more a popular relocation destination. In 2006, Greater Phoenix created a record 106,900 new jobs!!! To put those numbers into perspective, Greater Phoenix was responsible for 1 out of every 25 new jobs created in the entire country for 2006. It is not just jobs it is the type of jobs. In 2006 the largest sector of growth in Greater Phoenix at 21.3% was “Professional and Business Services”. So, not only is Phoenix growing new jobs it is the high paying type of jobs that are being created. By comparison, Los Angeles County created only approximately 85,000 new jobs. Considering the disparity of the population the ratio is significant.

Mesa, Arizona a suburb of Phoenix now posts a greater population than Cleveland, OH and Kansas City, MO. Mesa, Arizona is now in the Top 40 most populated cities in America. Other Phoenix-area suburbs continue to rank in the Top 5 for growth when compared to the cities of equivalent size.

So the answer is yes!!! Phoenix can and will sustain the growth for decades to come.

Phoenix Metropolitan is No. 3 in Home Building

Fernando Campos — Tue, 24 Jul 2007 05:30:24 +0000

The housing market continues to slow in metropolitan Phoenix, but the area still ranks third in the nation for home building.According to the National Association of Home Builders, Phoenix ranks behind only Atlanta and Houston for the number of single-family home permits issued this year.The Valley’s high spot in the home-building ranks comes even as housing permits fell 22 percent this year from 2006’s pace, according to RL Brown’s most recent issue of the Phoenix Housing Market Letter.

All of the big markets are feeling the downturn, some more than others. Single-family home construction has fallen 10 percent in Houston, 20 percent in Atlanta and 35 percent in Dallas, according to the association’s report.Last year, Phoenix ranked No. 4 for home building after Atlanta, Houston and Dallas, according to the National Association of Home Builders.Metro Phoenix beat out Atlanta to be the top home-building market in 2004 and ‘05, but, in retrospect, that wasn’t necessarily a good thing. At least 30 percent of the homes built during the market’s high point a couple of years ago were bought by investors who either didn’t move into them or found renters.

Those empty homes are now hurting some neighborhoods and their home values as investors can’t sell and their houses fall into foreclosure.

As the housing boom faded in metro Phoenix, building slowed, and the area slipped in the national rankings. Here again, the slowdown could be seen as a good thing since there are plenty of already built new homes sitting unsold.

Housing analysts estimate anywhere from 10,000 to 20,000 speculatively built houses are sitting empty in the Valley.

Some investors signed deals putting very little down, and when the market slowed, they walked away from that earnest money, leaving builders with the house.

Other new homes haven’t sold because buyers can’t sell their existing homes and close on the new ones.

Brown is currently revising his forecast for home building in metro Phoenix downward.

In January, he had estimated 41,000 single-family permits would be issued in metro Phoenix this year. In 2006, there were 42,460 new home permits issued. In 2005, there were 63,570 - but how many of those went to investors who artificially inflated demand?

“Even with 35,000 or 36,000 single-family permits in a year, Phoenix still has a heckuva housing market,” Brown said.

Catherine Reagor
The Arizona Republic

Introduction | Exit Realty is the RISMedia Local News Author for Phoenix Arizona

Fernando Campos — Thu, 12 Jul 2007 23:24:24 +0000

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