Arizona Real Estate Specialist

The Blogger Buzz Begins- Fannie and Freddie Find Father Figure

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Sat, 06 Sep 2008 01:04:14 -0500

It looks like Uncle Sam will be taking a more active role in the life and duties of Freddie Mac and Fannie Mae.

And I expect the bloggers, as well as the traditional media of the world to speculate on this for the near future.

This New York Times article gives a few of the details. "Questions, and Hope, on Plans for Mortgage Giants" ... here's my favorite paragraph:

"The hope is that by stabilizing Fannie Mae and Freddie Mac, which together own or guarantee nearly half of all mortgages outstanding, the government will forestall a more severe decline in economic activity and restore some order to the financial system."

Let's stick with the Hope and Questions part.

I hope that the government can intervene in a way that does not hinder the market in a way that prolongs the agony. Free market forces are curbed when one entity has too much influence.

Now for the questions:

Will this be a short term fix?
How will the market react?
Will non-US investment be bolstered?

So far the market appears to be reacting positively and there does appear to be some initial reaction in that direction from outside investors. Time will tell if this is a good or bad thing.

I'd love to hear your opinions on the matter.

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Photo: "Uncle Sam Needs Some Cash" by Jeff Sandquist

September Arizona Real Estate Investment Club Meeting - September 17

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Fri, 05 Sep 2008 18:34:27 -0500

Gentry Real Estate & Investments (and friends) will be discussing recent changes facing today’s real estate investor.

Freddie Mac is capping investors to 4 properties on their credit report. This is pushing the investors and homeowners in the direction of creative/seller financing.

Join us as our guest speakers explain options that will allow you to profit by taking over mortgage payments or by flipping the financing.

Plan to join us in Scottsdale, Arizona for an exciting evening of real estate education, networking and opportunities.

Tell a friend!

Where: 9237 E. Via de Ventura Suite 100 Scottsdale, AZ 85258

It’s at the State Mortgage Building (Directly behind the Cold Stone Creamery Building.)

The class will be held on the second floor in the training room.

There will be signs on the door directing you where to go.

When: September 17, 2008: 6:30 Networking ; 7 - 8:30 pm Meeting

Cost: FREE

What the Investors Want - Phoenix Metro Update

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Fri, 05 Sep 2008 14:27:12 -0500

The Latest Trends in Arizona Real Estate Investing (September 2008)

Real Estate has seasons. Most agents will be able to tell you when the buyers tend to show up and when they tend to slow down.

The market has fluctuations. Sometimes we're in a buyer's market- other times sellers are in the driver's seat.

Then there are the trends that come and go. These trends can vary by market and in many cases by neighborhoods.

Let me use this opportunity to share with you the investor trends I'm seeing in the Phoenix metro area market. First let me qualify this post. This is what I'm experiencing. Other agents may be focusing on other sectors.

1. The fix and flip is back. With the increase in foreclosures prices are starting to fall as banks are more willing to accept lower offers than they were in the previous months. Speculators are beginning to purchase distressed properties from short sales, via auction or through bank-owned listings. For a while many properties would go through auction without any bids. Now the bidding is picking up as the potential margins look very good. This is the way to pick up properties well below market... sufficient to profit from the fix and flip.

2. New home builders are having trouble competing against bank owned properties. For much of the previous year new home communities were priced well below the existing home market. There were also too few bank owned properties in nice enough condition to be considered a viable option for the home buyer. Now there are quite a few distressed properties that require little fix-up. Though purchasing short-sales and bank owned properties is very much a needle-in-the-haystack pursuit the "pickings" aren't as thin as they used to be.

3. The rental market is great or terrible. Some areas have so much competition for rentals that the investor will have trouble finding a nice cash-flow property. Other areas have less competition. As credit tightens, and with financing options going away there are more people who have sufficient credit to make for a good renter but insufficient credit or down payment to purchase a home. Investors who purchase new homes tend to compete well against existing homes... people want to live in a nicer home. Of course, the buyer has to purchase at a price below the existing rental rate... which is still possible.

4. The commercial market is feeling the pinch. It's becoming easier to fine commercial properties. Commercial real estate troubles tend to lag residential. We're seeing more pricing pressure on commercial properties... rental prices are going down as vacancies increase. Also- commercial buildings are starting to hit the short sale and foreclosure phase in increasing numbers.

5. Buyers are avoiding short sales unless the properties are close to foreclosure. Banks have been slow in accepting offers. They are much more motivated when the foreclosure date approaches. Cash buyers are snapping up properties around 2-3 weeks before foreclosure date. By this time the bank may have already found their price. By purchasing before foreclosure the investor can take the property off the market.

6. The carrot and the stick still exist. The people who wanted to buy at sixty cents on the dollar soon wanted fifty... then forty. It appears that no matter what the price, the investor always wants a better deal. This is to be expected. We'll see less of this when prices begin to go up. Judging by our investor activity as of late I can only say this: we're seeing many more investors jump back into the fray in the past couple weeks. That's one of the signs we look for in the pricing equation.

That's my report from the Phoenix metro area- what are you seeing?

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Chuck Willman is a real estate agent based who helps investors, first time home buyers and persons wishing to relocate find properties in the Phoenix metro area. He's available at 480.292.0600 or email: chuck@AZvest.com.

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Photo "Investing 1" by the very talented Thomas Picard

"We'll Print Your New Home by Tomorrow"

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Wed, 03 Sep 2008 17:30:44 -0500

There's a company that has its hopes set on "printing" homes on-site. Let me present a scenario.

A natural disaster takes place- displacing thousands. The government moves in to either a) provide a trailer or b) enable quick construction.

Trailers for Katrina cost as little as $19k or as much as $75k. Constuction could take months. Solution? Bring a machine to print a house on site... a two story, 2,000 square foot home could be built in as little as 24 hours.

This is the claim of Contour Crafting. Caterpiller sees enough merit that they are sponsoring the research behind it. See, "Caterpillar Inc. Funds Viterbi"

Subtitle: 'Print-a-House' Construction Technology System can already build six-foot walls; further work will address design, robotics and other issues"

One of the advantages explained on the company website, "Contour Crafting technology has great potential for automating the construction of whole structures as well as sub-components. Using this process, a single house or a colony of houses, each with possibly a different design, may be automatically constructed in a single run, embedded in each house all the conduits for electrical, plumbing and air-conditioning. The potential applications of this technology are far reaching including but not limited to applications in emergency, low-income, and commercial housing."

Here is an additional aritcles that explores the what-if's of a disaster scenario:

USC Information Science Institute - Katrina Text

I see this as an ecouraging solution for disaster scenarios or in places where housing is substandard. Maybe it could be used as an alternative to low-income housing. Who knows... is this the construction method of the future... Homes stamped out George Jetson style?

Arizona Extreme Makeover House For Sale

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Tue, 02 Sep 2008 16:12:13 -0500

The Okvath family was facing difficulty. With their daughter fighting cancer, the Exteme Makeover team, with the help of Disney animators showed up at the hospital to give it a good fix-up. It was the selfless request of a simple eight year old... a wish to benefit her fellow patients.

The family didn't know, while they were assisting in the hospital makeover, their own home was also undergoing a change. It was another feel good great moment from a show that has made quite a few dreams come true.

Now the home is for sale.

Asking Price $1.8m. Here are the Details:

• 5,346 sq ft

• Six bedrooms / Six bathrooms

• Granite Counters / Huge Pantry

• Two fridges under Island

• 28 x 23 Living room

• Home Theater 26 x 14

• Every room prewired

• Fireplace Great Rm & Master

• Master w/Sitting Area

• Courtyard w/Fireplace

• Covered Children's Play Area

I'm not the listing agent. If you'd like details, email me at chuck@AZvest.com and I'll send you the full listing information.

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Episode Synopsis: http://www.locatetv.com/tv/extreme-makeover--home-edition/season-2/1988013

Freeze Your Own Credit?

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Fri, 29 Aug 2008 14:27:40 -0500

Would you intentionally freeze your credit?

Much in the same way one would want to stop a check or put a temporary block on a personal credit card- consumers may find a need to freeze all personal credit. In most states this is possible. In Arizona, it will be.

On September 1, Arizona citizens will join 44 states in being able to take the most extreme ID Theft protection measure out there. It will become possible to prevent access to credit files at all three credit bureaus. By so doing, the consumer will be able to prevent others from adding lines of credit or open accounts without authorization.

The consumer can unfreeze the accounts temporarily and then lock them again once new lines have been successfully established.

Consumer's Union, the people who publish Consumer's Report, have a full report.

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For those who want more information about ID theft and how to contact credit bureaus, visit one of my older posts here: "My Brief Unintended Marriage- A Tale of ID Theft Prevention and Recovery"

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Chuck Willman - Gentry Realty - 480.292.0600

-----ActiveRain Real Estate Network

Photo Credit montage includes a) "card payment" by Steve Woods b) "ice cube" by Dominik Gwarek

Credit Freezers Told to Chill

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Tue, 26 Aug 2008 22:17:28 -0500

This Just In...

The Office of Thrift Supervision publishes their purpose on their website:

"The OTS supervises savings associations

and their holding companies to meet

America's financial services needs."

Today, in response to a large number of consumer complaints, they issued a six page press release that deals with the way financial services have been handling lines of credit. The meat of the release is this:

“Declining home prices in parts of the country are prompting some institutions to curtail, suspend, or terminate customers’ home equity line of credit. Today’s guidance emphasizes that institutions taking such actions must comply with federal laws and rules designed to protect customers, including regulations implementing the Truth in Lending Act, Equal Credit Opportunity Act, Fair Housing Act and the OTS nondiscrimination rule.”

“A home equity line of credit is an attractive product for many homeowners and lenders,” the guidance said. “While sound underwriting and effective risk management systems are essential, associations must employ these strategies in a manner that complies with applicable consumer protection laws and regulations.”

In other words, they are warning lenders not to skirt the rules of the contracts behind home equity lines. In an interview with Kevin Hall of McClatchy Newspapers, a spokesman for the OTS said this, “There's an uptick in complaints, written and by telephone,” [further] “We just wanted to give our institutions a heads-up that our examiners are going to be focusing on this area.”

It's understandable that lenders are concerned with home equity loans. These contracts were granted based, in large part, on the value of personal property or create concern for the lending institution that borrowers may put such paper in an unbalanced position. Now that prices have declined in many areas such lines of credit hold a value greater than the property that secured it. However, the OTS is warning lenders that they still need to honor contract terms in a way that does not violate federal guidelines.

It remains to be seen how this warning will be interpreted by lending institutions.

Bank Owned Homes in Phoenix and the East Valley

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Mon, 25 Aug 2008 18:09:33 -0500

Home Sales in the Phoenix area are increasing... and so is the inventory. Investors are cashing in on these buying opportunities as there are many homes priced well below the median. Among the most aggressively priced homes are those owned by banks.

I've created a link that allows the more sophisticated user to be able to search through the bank owned inventory. The reason I say sophisticated user is because this link has a few features that are database-specific. This, in essence, is the same database that a real estate agent uses to find you properties. Some of the fields that we see are not a part of this search but many of them are.

It's not the most user-friendly interface, but it's what the MLS system offers and I'm simply taking what they give me. Also... this system is new to the Phoenix area. Sometimes it runs slower than I'd like AND it may take a while to load. The systems operators are working out the bugs and tinkering with the functionality quite a bit. I keep telling myself, "Patience is a Virtue." :-)

Here's the link: Bank Owned Property in and around Phoenix Arizona

I created the link as a general search of bank-owned properties ($50k and above) that are single family homes with at least two bedrooms. They're sorted from most expensive to least expensive. You can click on the blue underlined column header titles to sort by each click-able characteristic. I sorted the list below by price (lowest to highest). Feel free to do the same for any of the categories.

Bank Owned in Phoenix- The List View

Bank Owned in Phoenix- The Map View

You may find it helpful to look at the map tab to zero in on certain areas (specific neighborhoods for instance). The little tools below the map allow you to zoom in, take measurements, center the map, etc. With a little experimentation you'll find these tools to be invaluable.

This link does not include pre-foreclosed short sales... I'll be creating that link later. Short sales tend to have a longer bid offer/response time. The bank owned homes tend to move more quickly- in part because there are no second mortgages that require further negotiation. I will be creating a similar "portal" for short sales in the not-so-distant future.

Are You a Power Searcher?

If you want to be really adventurous, click on the edit search tab. You can change quite a bit of the criteria to make this work more specifically... such as narrowing pricing or changing cities, bed and bath qty, square footage and more. The cool thing about this link is that it will always produce new information no matter which day you click on it. The list updates every 24 hours so the information tends to stay pretty fresh.

Other Features:

Some of the other options are pretty self-explanatory. As you select a property you're able to look at the details by using the detail tab. Photos are found by selecting the photos tab. Send me a message about a property (or a general message) by using the message tab. I'll receive an email regarding your request.

Feel free to pass this on to anyone who is in the market for a bank owned property or ask me to create a more narrowly focused search link. Include what type of home you're looking for and include characteristics that are important to you. The customization process is not difficult.

I hope you find this useful, Chuck Willman - Gentry Realty - 480.292.0600

Warren Calls "Game Over" in Freddie/Fannie

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Fri, 22 Aug 2008 20:00:37 -0500

As Fannie Mae and Freddie Mac continue thier free fall one very rich man has decided to pass on investing.

In an interview on CNBC Warrent Buffet says the "game is over" for the two. He sites a lack of net worth as a major factor. This increases the speculation that the government will need to get involved in a bail-out.

In other news, here's what Warren Buffet (investor/richest man in the world) had to say about the current defit situation and the varied economic factors facing today's market.

Why You Find Fewer New Homes in the Bigger Cities

Chuck Willman, Arizona Realtor®, ABR, TRC (Gentry Realty) — Fri, 22 Aug 2008 19:05:39 -0500

The Ship Builder: A friend of a friend built a ship. It was like a larger-than-average houseboat. People admired his one-of-a-kind creation and asked where he bought it. Discovering this was a custom creation, someone wanted him to build another.

Life Change: He turned his back pasture into a makeshift shipyard. Then another request came in. Soon he was a yacht builder. It was an accidental job change that was turning into a lucrative endeavor. He couldn't be happier with the new direction his life had taken. He had become an artist and master-craftsman and loved every minute of it. He had achieved bliss.

The Project: He decided to build a super-yacht. This one had everything anyone could hope for. This yacht took quite a while to finish. His buyer could hardly wait to launch it.

Big problem: The ship was too large for the highway. It was too heavy to be airlifted. It couldn't be economically broken down and reassembled. The ship was landlocked. Now it's a fancy "second home" that is ship-shaped.

Land and Sea: A country that does not have access to the open waters is said to be landlocked. In real estate we use the term landlocked also... but it has a different meaning. When we tell you the city is landlocked, what we agents are saying is that there's very little vacant land upon which to build new homes. Let's discuss what this means in market terms.

Density in the City: Pick a thriving downtown in an established metropolitan area. The price of land will be very high compared to land on the outskirts. This is scarcity at the most extreme. Land will be marketed at a premium. In Japan, it's not uncommon to buy property by the square inch.

Infill: In the Phoenix metro area there are a few cities that are considered to be landlocked. In these cities you won't find massive subdivisions with low-priced homes. At best you'll find very small subdivisions with a few homes that are being built on land that previously had some other form of construction that had to be demolished before the new buildings went up. This is called infill... and there is a cost to this. The new homes in an infill community will tend to be as expensive (or more expensive) than the existing older homes in the immediate vicinity.

The changing Landscape: When a city becomes landlocked the real estate features change. Rather than growing horizontally, builders will "go vertical". They'll build two and three story homes, condos, town-homes, high-rises and other such properties that make the most use out of the smaller geographical footprint. Such dwellings tend to have a higher cost per square foot than dwellings on the outskirts of town or neighboring cities.

The Future?: Though prices are falling in the outskirts of Phoenix and the immediate neighboring cities, the scarcity factor is still at work. It stands to reason that an increase in population will cause these homes to increase in value. We can't build more land... we can only use up more sky.

For a report on how this phenomena works, check out this article in the article on AZCentral "Chandler plans for job growth, high-density housing". It deals with how the City of Chandler is gearing up for the demands of their future residents. That's right, Chandler is no longer a sleepy farm town. It's landlocked.

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Chuck Willman is a real estate agent based in the Phoenix metro area. He helps people find and sell residences in Mesa, Tempe, Chandler, Gilbert, Phoenix, Scottsdale and Queen Creek.

Gentry Realty - www.AZvest.com - 480.292.0600

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photo credit: "Fort McMurray" by the very talented, Richard Faulder