December 2013 Market Report

Report overview

This report includes MLS data for the past 36 months in Maricopa County only as provided by the FlexMLS system.  Please note that searches fluctuate daily when running these reports; these figures were obtained on 12/3/2013.

A reminder that you need to meet with a real estate professional to see how statistics impact the area where you are considering selling or buying – blended statistics will not be as accurate as a more detailed report that your real estate professional can provide to help you with your decision making.
 

(click any graph for larger view)

Total # of Closed Sales (36 Month Overview)

Closed Sales Report Analysis:

Sellers:
The month of November showed another decrease in the number of closed sales when compared to the prior month. The statistics show that we had 4,669 residential homes sell in November in Maricopa County compared to 5,411 in the month of October, a 14% decrease. This is the sixth month in a row that we have seen this number decrease. Sellers should pay attention to this, as it means fewer sellers are having success selling AND it is the lowest number of closings in the 36-month reporting period.  This trend is showing we are moving out of a strong sellers’ market, which could mean that pricing and terms will need to be adjusted to attract the most number of buyers.

Buyers:
For buyers, this means that fewer homes successfully closed last month than in prior months. As prices and interest rates continue to rise, it is very important for buyers to monitor the impact of rising interest rates and changes that will be coming in 2014 related to loan qualification requirements.

 

Average Sales Price (36 month overview)

Average Sales Price Analysis:

Sellers:
Last month saw the average sales price decrease 3%, from $251,328 to $243,754.  Because this is NOT a normal trend in the month of November, to see a decrease in the average sales price, sellers need to pay careful attention.  We continue to see inventory increase and homes remain on the market longer which could eventually mean that prices will need to adjust for buyers to maintain their interest.  Sellers need to remain diligent about pricing homes according to the current market and to understand how this increase impacts individual homes.  Sellers are encouraged to spend time with their real estate professional to determine what is happening in their local market.

Buyers:
This statistic is an indicator that buyers still continue to pay more for homes than they have in the past 36 months. Educated and savvy buyers understand that a competitive market gives them fewer options for home choices, negotiating on price and looking for concessions from a seller.  Although this may vary from area to area and from price range to price range, buyers need to make sure they are fully informed regarding the individual market in which they have an interest.  This will give them the best chance of being competitive in the search for a home.
 

Total # Pending Sales (36 Month Overview)


 

Pending Sales Report Analysis

Sellers:
The month of November saw a decrease in the number of homes that moved to pending status – a total of 3,885 homes.  Although this is typical for this time of year to see a decrease in pending sales, this is the lowest number of homes moving to pending status in the 36-month reporting period.  It is very important for sellers to continue to monitor this statistic, as it means the number of buyers and sellers that were able to come to agreement on the terms of a contract on a home remains low when compared to other months in the 36-month reporting period.

Buyers:
Educated and savvy buyers understand that a competitive market gives them fewer options for home choices, negotiating price and looking for concessions from a seller.  Although this may vary from area to area and from price range to price range, buyers need to make sure they are fully informed regarding the individual market in which they have an interest.  This will give them the best chance of being competitive in the search for a home.  With the recent increase in interest rates, it will be important to monitor its impact on future sales. 
 

Months of Inventory (36 Month Overview)

Months of Inventory Analysis

Sellers:
This is another reason for sellers to pay attention.  For the first time since February of 2011, the average Months Of Inventory was over 4 months.  We increased our Months Of Inventory to 4.24 months in November, up from 3.6 months the prior month.  This will be important to monitor, as more months of inventory is an indicator that there are more homes competing for buyers and more homes staying on the market.

Buyers:
Buyers will want to monitor this as well, as it indicates that inventory has increased.  We still remain in a sellers’ market.  A sellers’ market traditionally gives less control to buyers and can create significant competition for the current inventory.  The current inventory is still resulting in the very best homes selling more quickly, at a higher price, and with fewer concessions for buyers.  However, the type of market will vary from price range to price range and even area to area.  Work with your real estate professional to make sure you understand the type of market you are in.

STOP!

I would be very happy to get your information.
Just Call or send me an Email and let me know that your in.

I will tell you where to drop off boxes so I will give them to CCV .

"Opening The Door To Opportunity and Your Future Home..."

Thank you

Joseph D'Ambrosio

Joseph D'Ambrosio Cell: 623-204-2138

Real Estate Consultant / REALTOR 

West USA Realty

 

Email: ArizonaHomeBuying@gmail.com

What to do if you want to buy a home next year...

3 things you need to do now to buy a home next year

 

By Christine DiGangi December 10, 2013 7:21 PM  

With big changes coming to the mortgage industry at the beginning of next year, many consumers will want to evaluate their home-buying plans.

With big changes coming to the mortgage industry at the beginning of next year, many consumers will want to evaluate their home-buying plans. Regulations drafted by the Consumer Financial Protection Bureau will change the definition of a qualified mortgage for any loan applications received on and after Jan. 10, and many consumers may find themselves unable to meet the new requirements.

Qualified mortgages are loans that meet certain standards designed to ensure that borrowers are highly likely to be able to pay back the amount in question.
Facing this challenge, it’s up to the hopeful homeowner to improve their chances of mortgage approval by doing the necessary research, improving their credit profiles and meeting the qualified mortgage standards well in advance of filling out loan applications.
[Thinking about getting a mortgage? Click to compare interest rates from multiple lenders now.]
It’s important to meet qualified mortgage standards because government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac have said they won’t buy non-qualified mortgages starting next year, said Joshua Weinberg, senior vice president of compliance with First Choice Lending/Bank. Fannie and Freddie don’t lend to homeowners directly, rather they purchase mortgages from banks and then bundle them into securities and sell those securities to investors.
For lenders that originate mortgages with the intention of selling them to the GSEs, as many do, originating non-qualified mortgages won’t be feasible. Other lenders own the mortgages they originate, meaning they don’t have to worry about selling them to GSEs, and such larger portfolios could probably take on non-qualified mortgages.
What’s Changing?
Mortgages must pass tests of sorts to meet the standards of a qualified mortgage: The APR must be within 150 basis points (1.5 percentage points) of the annual prime offer rate, the loan term cannot exceed 30 years, points and fees cannot exceed 3% of the loan balance and there can be no negative amortization or interest-only payments.
Under these conditions, the mortgage qualifies for safe harbor, meaning the lender is not at risk of being sued by a borrower who is unable to repay the loan. There’s a class of loans called higher-priced qualified mortgages, in which the APR exceeds the 150 basis-point limit, and in those cases, the loan falls under rebuttable presumption, meaning the lender is assumed to have complied with ability-to-pay requirements, unless a borrower or attorney argues otherwise. Loans with rebuttable presumption will likely come at an additional premium, said Cameron Findlay, chief economist at Discover Home Loans, though the price of that premium is unclear at this point.
The ability to repay comprises a series of requirements that must be met by the borrower and verified by the lender, including income and debt levels. All of these CFPB regulations are aimed at protecting consumers from mortgages they can’t reasonably expect to repay, because such faulty loans triggered the recent financial crisis.
Given these limitations, and some new restrictions on lenders that also go into effect in January, some have suggested that consumers may find themselves struggling to acquire a mortgage. Weinberg described it this way: Originating a mortgage has been a process that blends science and art. The science includes the regulations that give clear guidelines for what does and does not meet qualified mortgage standards. The art comes in when an originator decides to approve or deny a mortgage application, even if a borrower doesn’t meet every requirement in the book, because his or her experiences can give important context to a case that numbers and rules cannot.
“With this QM rule we’re seeing an elimination of the art and a focus on the science,” Weinberg said. “The way the points and fees will be calculated is now a pretty defined standard. My gut says because of the shrinking art component and the emphasis on the science, fewer people are going to qualify for loans.”
While the new regulations are beyond consumer control, there are several things potential homeowners can do to prepare for buying residential property in 2014.
[Click to see what type of interest rate you would qualify for now.]
1. Ask Questions
If this all sounds a bit confusing, don’t worry. You’re not alone. Both Findlay and Weinberg acknowledged the complexity of the new rules and said there’s confusion among lenders. For potential homeowners who don’t understand what these changes mean for them, there’s no shame in asking someone to explain them.

There are a lot of components to mortgages that first-time homebuyers may not be familiar with. Say a lender instructs you to reduce your debt-to-income ratio — that means how much of your income is tied up in student loan payments, collections accounts, judgments and other existing loan obligations. You’ve just learned that points and fees can’t exceed 3% of the loan balance, but what’s a point? A point, for the record, is prepaid interest on the loan, with one point equal to 1% of the loan. If a borrower would rather have a lower interest rate than the one they’re offered then they can pay points to lower that rate.

There’s bound to be something that confuses the borrower, and no one should enter into such a large financial decision with uncertainty. Ask a lender to explain it to you, but understand that the lenders are nailing down the new processes, as well.
“It doesn’t bode well for the consumer when there’s this confusion,” Findlay said.
It’s important to shop around for mortgages, and consumers should know that they can concentrate their mortgage search into a few weeks in order to minimize the impact on their credit scores. Inquiries are a major factor in your credit scores, and too many inquiries can hurt your credit. Mortgage inquiries made within that short period (which varies by credit scoring model) will count as a single inquiry on their credit reports, and because multiple inquiries would normally ding credit scores, this allows consumers to find the best offer without harming their credit profiles. If you want to see how inquiries are affecting your credit, you can look at your free Credit Report Card, which grades you on important credit score factors and gives you free credit scores.
2. Tackle Debt
If you have debt, you should try to reduce it, and this is true for all consumers, not just those looking to buy a house. Potential homeowners, however, should be extra motivated to conquer their debt: Under new ability-to-repay requirements necessary to attain a qualified mortgage, a borrower’s debt-to-income ratio must be 43% or less, including the potential mortgage payment.
[Have you raised your credit score recently? Click to compare interest rates from a variety of lenders now.]
“Not only do we consider the debts that show up on your credit report, but we have to look at debts you may expect to pay in the future,” Weinberg said, giving the examples of child support and student loans in deferment. “They are also going to need to be comfortable and aware of managing that debt. They are going to be asked questions about that.”
Whether you’re looking to buy a home next year or in two years, make a plan to manage debts now. It can only help.
3. Start the Paperwork
Though these new requirements impact consumers, they also affect lenders, and no one wants to be the first to screw up. The ability-to-repay measures require a lot of documentation, which will need to come from you, the applicant.
“We’re really needing to get a very holistic perspective on the borrower in order to complete the analysis necessary to meet compliance,” Weinberg said. Borrowers should ask a lender exactly what they’ll need to provide, and in order to answer lenders’ questions, they should also take stock of their credit profile.
Consumers are entitled to a free annual copy of their credit report from each of the three major credit bureaus — Experian, Equifax and TransUnion. That’s three credit reports, so it’s smart to review at least one before starting the homebuying process.
No one is sugar-coating these changes — they’re a lot to handle. Changes are common in this post-crisis climate, so the best consumers can do is ask questions and do their part to prepare and educate themselves.
“If we’re making better loans, and the consumers are protected better, that’s better at the end of the day,” Weinberg said.

STOP!

I would be very happy to get your information.
Just Call or send me an Email and let me know that your in.

I will tell you where to drop off boxes so I will give them to CCV .

"Opening The Door To Opportunity and Your Future Home..."

Thank you

Joseph D'Ambrosio

Joseph D'Ambrosio Cell: 623-204-2138

Real Estate Consultant / REALTOR 

West USA Realty

 

Email: ArizonaHomeBuying@gmail.com