What's changing in Tucson and national real estate?

Change ... is it time for you to move on your choices?

Interest rates, mortgage payments and affordability … these are the reasons most people decide to buy or sell. Interest rates are starting to creep up, according to most industry gurus. Why is this important?

As long as interest rates remain stable, potential buyers and sellers can remain indecisive if now is the time. As interest rates start to rise, motivation kicks in; you are costing yourself money!

On the local scene ...

Home prices in Tucson edged up 2% from January to February, according to Tucson Association of Realtors Multiple Listing Service. The median price of $137,000, down from February 2010’s $150,000, still demonstrates that activity is starting to percolate in the Tucson marketplace. We are not suggesting the downturn is over, but there is beneficial actions.

Inventory and selection are good … but, with the bump in activity, homes that people have been undecided about are starting to move. Unemployment in Pima County is steady at 9.1%, lower than Arizona’s 9.6%. This is good news for people who have been forced into foreclosures and short sales, but the economic reality is that sellers are motivated to work with buyers at this time.

Changing Rules and Regulations; confusion may result!

The changes in rules and regulations regarding financing your purchase means more complicated loan requirements, more time spent on the paperwork … thereby making it more costly for the transaction. Experts say expect higher fees, higher mortgage insurance payments and bigger down payments. Expect more 10% down payments, as well as fewer 0-5% down-payments.

The Obama administration has stated it wants to put more of the mortgage guarantees to be placed in the private sector, as opposed to the 9 out of 10 guarantees now being handled by the fed. Fannie Mae and Freddie Mac are projected to reduce the number of loans they guarantee.

While some regulations have taken effect, new regs like the Dodd-Frank Wall Street Reform and the Consumer Protection Act (CPA) are getting ready to take effect. The quicker you make your buying or selling decisions, the more of these regulations you won’t have to deal with. Experts are going to have to sort out the confusion these changes will bring, so buyers and sellers are the ones that will be footing the bill.

We’ll have more information on these changes soon; keep your eyes out for more WhyRice.com blogs!

Real Estate News: Update on February stats ...

Below are some highlights from the February Statistics:

Total Sales Volume increased significantly from $130,258,440 in January to $160,319,228 in February, an increase of 23.08%!

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Average Sales Price is up 9.22% from January.

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Average List Price of $191,957 showed an 8.43% increase over January.

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Total Under Contract had a 12.87% increase from January.

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Total Unit Sales rose by 12.69%, from 780 in January to 879 in February, and by 18.62% compared to January 2010.

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The Median Sales Price went from $134,250 in January to $137,000 in February with a total increase of 2.05%.

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March insights ...

Welcome to our March 7th addition. We will also be discussing in a future blog the changes in pre-quals and lending that are due to change very shortly. Have a great St. Patrick's Day, and stay safe!!!

March 2011 Market Update

Gradual progress in the housing market continues at a steady pace without government support. The market has shown remarkable improvement from the initial drop after the expiration of the home buyer tax credit this past July. Although higher-than-normal distressed sales skew the overall picture of home prices downward, inventory continues to shrink and sales continue to rise. The rock-bottom interest rates of 2010 are likely to trend upward. As economists anticipate rates at or above 6% by the end of 2012, buyers are moving off the sidelines and into the market.

A good sign for long-term market stability is that the median down payment on conventional mortgages has risen to 22%, up from 4% in 2006 and slightly above the 20% standard in the 1990s. This may keep buyers looking in slightly lower price ranges, but it is a good sign of future sustainability for homeowners and banks alike. There are still ample opportunities for those who would like down payments below 20%, including some conventional mortgages and those backed by the Federal Housing Administration, Veterans Affairs, and the Department of Agriculture’s Rural Development loans.

As the economy improves, stimulus efforts by the government and the Federal Reserve Board will gradually wind down, which typically means rising interest rates. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers are encouraged by increased market stability.

Home Sales

in millions

The increasing trend in existing home sales activity continued through January, and for the first time rose above year-ago levels when the home buyer tax credit was in effect. This marks the sixth monthly increase since July when the tax credit expired, and indicates a recovery that’s gaining a firmer footing without government support.

Home Price

in thousands

Home prices softened in January with median home prices decreasing slightly to $158,800 - 3.7% below the year-ago level. Contributing to this is a larger share of distressed homes sales, which accounted for 37% of sales in January compared to 30%-35% throughout much of 2010. Prices and mortgage rates remain favorable for buyers.

Inventory- Month's Supply

in months

The uptick in home sales and a shrinking inventory pared down the month’s supply to 7.6 months, a decrease of 7.3% from December and 1% from year-ago levels. This is the lowest level in more than a year and marks the first time since July that the month’s supply is below where it was the previous year. Months of inventory has declined steadily (64%) from its peak of 12.5 months in July and is now back to pre-tax credit expiration levels. The supply of inventory is not far from a seller’s market, which is less than 6 month’s supply.

Source: National Association of Realtors - housing data released Feb 23.

Interest Rates

Mortgage rates jumped above 5% for the first time since April 2009 in January. While rates dipped back to just below 5%, they are expected to continue an upward trend throughout the year. As overall economic recovery remains on track, rates will likely rise to keep inflation in check. Buyers wanting to capture the savings in monthly payments that a historically low interest rate affords are expected to take advantage of excellent buying conditions.

Source: Freddie Mac, Rates as of Mar 3.

Topics For Home Owners, Buyers & Sellers

Preparing your home for sale in a buyer’s market can seem daunting, but these five tips will help you get the best price in the least amount of time.

• Organizing and cleaning is crucial when prepping a home for sale. Potential home buyers have a more positive reaction to homes that are clutter-free and give them the feeling that the home is “move-in ready.”
• Presale home inspection can inform you of any trouble areas within your home that can stand out to potential buyers. An inspection can also help you make any repairs necessary before future open houses.
• Determine replacement estimates before listing your home, even if you are not planning on making the replacements yourself. This information can help buyers to make informed decisions.
• Have your warranties ready – especially for all those home appliances that will stay within the home after the sale.
• Curb appeal is a crucial factor because it determines first impressions. A negative first impression can cloud their entire opinion about the home.

Real Estate News

This blog will provide you with life changing information. The real estate industry has phenomenal opportunities ... you have to understand the opportunities, and have dedicated professionals to assist you in finding the right home, investment properties or land/ranches.

We will be sharing information that will impact your life, so welcome and we look forward to sharing our expertise with you!

February 2011 Market Update

Gradual improvement in the housing market continues at a steady pace without government support. Six months after two consecutive years of tax incentives for buyers; starting in July 2008 with a $7,500 repayable first-time buyer tax credit, extending to a $8,000 nonrepayable first-time buyer tax credit in January 2009, and ending in June 2010 with the expanded credit to repeat buyers; the market has shown remarkable improvement from the initial drop this past July. With mortgage rates remaining near historic lows and home prices having generally stabilized, economists are expecting further strength in 2011.

Consumers are showing some signs that they’re feeling better: a significant boost in the food and services industry implies they are eating out more, vacations are back on the rise as spending on travel and tourism increased 8% in the third quarter, and household net worth has risen notably thanks to a strong stock market even as they continue to shrink their debt.

As the economy improves, current stimulus efforts by the government and the Federal Reserve Board are expected to gradually wind down, which typically means rising interest rates. Meanwhile, buyers continue to benefit from historically favorable buying conditions and sellers enjoy increased stability in the market.

Home Sales

in millions

The uptrend in existing home sales activity continued through December, increasing by a substantial 12.3% from a month ago. This marks the fifth monthly increase in the past six months and indicates a recovery that’s gaining a firmer footing. While home sales remained 2.9% below the level seen last year, the market’s upward momentum, despite the absence of the tax credit, is a welcoming sign.

Home Price

in thousands

Home prices softened in December: median home prices edged down slightly to $168,800, 1% below the year-ago level. Contributing to this is a larger share of distressed homes sales which accounted for 36% of sales in December. This is compared to 33% in November 2010 and 32% in December 2009. Prices continue to hold steady and mortgage rates remain historically low, offering favorable buying opportunities.

Inventory- Month's Supply

in months

The surge in home sales and a shrinking inventory pared down the month’s supply to 8.1 months. This is down 1.4 months from November but remains 0.9 months above last year at this time. While still at a relatively high level historically, months of inventory has declined steadily from its peak of 12.5 months in July and is now back to pre-tax credit expiration levels.

Source: National Association of Realtors - December housing data released Janurary 20.

Interest Rates

Mortgage rates are inching up but remain historically low. This trend continues to support home buying, as it translates to significant savings for buyers. As overall economic recovery remains on track, rates are expected to rise to keep inflation in check.

Type	Rate
30 year fixed	4.81%
15 year fixed	4.08%
5/1-year ARM	3.69%
30 year average for a 30 year fixed rate mortgage	8.9%

Source: Freddie Mac, Rates as of Feb 7 .