- Are We at the Bottom Yet? Why Timing Doesn’t Work
It happened again today…and yesterday for that matter. I inevibility get the question, ”What is the Phoenix market going to do?” and that is usually coupled by “Are prices going to continue to go down?” What they REALLY mean is, “I want you to tell me the exact moment that the prices are at their lowest and then I want to buy my dream home.” This way of thinking is flawed for a couple of different reasons:
- You know the saying “Hindsight is 20/20?” It is a common saying for a reason and it pertains to real estate markets, too. It takes three months of “different” activity to create a trend. The problems is that we won’t know that we’ve hit bottom until we are already three months past the bottom. Look at this diagram:
- Different areas and communities bottom out and trend a little differently. Did you know that houses are flying, FLYING off the market in Queen Creek? They are cheap but it’ll take some doing to get one that you want. Multiple offers, over asking price, cash buyers. Sound familiar? My experience recently with a couple of clients out there…20 houses, 4 offers, 1 house (as a back-up offer when the first buyer couldn’t get it done).
- Interest rates play a role, too. Would you rather have a payment on a house that: a). you got for $10,000 less or b). the interest rate was 1% less? HMMM??? Not sure? Food for thought…
- Will you be emotionally invested in your home or is it an investment that you have no real ties to? Even with the quantity of homes on the market right now finding that perfect one is still challenging for some. And what if you lose it by waiting for the price to come down an extra couple of thousand dollars? It’s never fun for anyone (least of all your Realtor) when we have to live with “the one that got away”.
Here’s another diagram for you that depicts the cyclical nature of markets.
My wish for my clients and all the rest of you out there is that we would focus on the safe zones. Is it a safe time to buy? YES!!! Might the market decline a little still? Sure.
Might we be in the Lucky Zone?
Short Sale, what?
If you’ve been paying attention to the real estate industry at all in the past year or so one of the buzz terms that you’ve heard frequently is SHORT SALE. In short, (pun intended) a short sale is occurs when the owner of a home (or more commonly their REALTOR) negotiates with the bank(s) to accept less than what is owed on the note(s) as payment in full. This in turn allows the owner to sell the property to a waiting buyer.
The most common times we see the need for a short sale include when a homeowner is upside-down in their home and finds themselves unable to make the payments (loss of job, ARM increase, health issues), when the owner needs to relocate out of state, or in the unfortunate case of divorce and a forced sale. A short sale is very often a pre-foreclosure process and a better alternative to foreclosure.
In a form of sick irony and contrary to their name, there is nothing short about a short sale. The time frame is getting better but it usually takes a minimum of 3-4 months and we had one that took nearly a year.
The faxes aren’t short.
The phone lines aren’t short.
The conditions aren’t short.
The commission cuts aren’t short.
The only other short thing we find occasionally is that the tempers are short (usually not ours, you get more flies with honey…but that is a different post).
The process isn’t easy and it surely isn’t fun for any of the involved parties. You’ll find that many REALTORS turn up their noses at short sales and won’t do them. They are too hard, too time consuming, too low in commission…the excuses go on. While we concur that they aren’t the easiest thing to do, when did we ever commit to you (our customers, clients, friends, family) that we would only work hard for you if it was the easy thing to do?
We’ve sat across the table from people during the difficult times.
We’ve cried with clients and friends and clients who’ve become friends.
We’ve talked to agents who did this the last time around and were profusely thanked years later for “saving our marriage”.
If you know of anyone who is in a difficult situation we’d love to speak with them. They DO have options and we can help. Please just call us at 480.444.2231 with their contact information and we’ll take good care of them.
Well, it appears to be “Whoo Hoo” for JPMorgan Chase & Co. at any rate…
As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.
The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.
Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country’s history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.
Read the rest of the story here.
Did someone say BAILOUT? If the million dollar question is, “What do we do with the bad mortgages?” It appears that there is a trillion dollar proposal on the horizon.
Over the weekend The US Department of the Treasury released this Statement buy Secretary Paulson
Released yesterday was this Fact Sheet
What does all this mean? I’m not sure yet. I don’t think anyone knows how all of this will really shake out. It is safe to say that we are living through interesting times.
I’m curious to know what your thoughts and opinions are…
