Homie’s Greater Phoenix, AZ Housing Market Update August 2020

The real estate market fluctuates often. The local Phoenix market isn’t an exception! Many people are wondering how the market performed this summer. Spoiler alert–the summer might be over but the market is staying hot! We’ve got your monthly update!

chart showing monthly sales increased YOY

Data via ARMLS®.

According to data from the ARMLS® from August 1, 2020 to August 31, 2020 the Phoenix metro area saw a 13.8% decrease from the previous month. At 8,878 total sales, the number is still quite high. That month-over-month drop is largely driven by July’s 20-year record-breakingly high sales numbers. Comparing monthly sales to August 2019, the market has seen a 1.7% increase.

List Price

data showing new list price up to 445k over 335k yoy

Data via ARMLS®

August list prices saw a +19.4% year-over-year increase, landing at $445.4K. At $335K, a +13.6% increase from August 2019, median list prices are also high.

Sale Price

chart showing sales price at 398k vs. 325k YOY

Data via ARMLS®

Throughout the summer months, sale prices have been rising, but August saw the largest jump. At $398.8K, sale prices are up +17.7%, compared to August 2019. That’s a significant increase considering July saw only a 14.6% year-over-year increase in average sale prices, while June’s increase was just 1.4%.

At $325K, median sale prices are also rapidly jumping up with a +16.1% year-over-year increase. If you’re wondering if this will continue, forecasts predict the sale prices to rise again in September.

Days on Market (DOM)

chart showing average days on market down to 51 from 63 YOY

Data via ARMLS®

We have good news if you’re looking to sell quickly. The Average Cumulative Days on Market is dropping steadily. The average for 2020 is 51, which is a 4 day decrease from July 2020 and a 12 day decrease from August 2019.

Want to Know Your Home’s Value?

With prices rising quickly, your home’s value is likely going up as well! Find out how much your home is worth by requesting a free home value report from a Homie pro. Click here to get your free report!

Turn to a Homie

Homie has local real estate agents in all of our service areas. These agents are pros in everything they do, including understanding the local real estate market. Click to start selling or buying and to get in touch with your dedicated agent.

Learn more about Arizona real estate.

How to Find a Real Estate Agent in Arizona
The Best Months to Plan a Move in Arizona

Source: homie.com

FHA Will Insure Mortgages in Forbearance, With a Catch

Last updated on June 23rd, 2020

The Federal Housing Administration (FHA) finally announced a new policy, which is temporary, to endorse mortgages where the borrower has requested or obtained COVID-19 forbearance.

Mortgagee Letter 2020-16 temporarily reverses the FHA’s existing policy that doesn’t permit FHA insurance for mortgages in forbearance.

The agency said the policy ensures “the safeguards of the FHA program continue to work for new homeowners facing a financial hardship due to COVID-19.”

Now before mortgage lenders get too excited about this, there is a major hitch. They must sign an indemnification agreement with the FHA that leaves them on the hook for 20% of the original loan amount if it goes bad.

What Are the Requirements for Insuring FHA Loans in Forbearance?

  • Borrower must be experiencing a financial hardship due directly or indirectly to COVID-19
  • Mortgage must have been current at time of request for forbearance
  • Mortgage must satisfy all requirements for FHA insurance at time of closing
  • Mortgagee must execute a two-year partial indemnification agreement

Aside from that pretty significant piece about lenders being liable for 20% of the original loan amount, there are also some general requirements that must be met.

First off, the borrower must be experiencing a financial hardship directly or indirectly related to COVID-19 and in a forbearance plan.

Additionally, they must have been current on the mortgage at the time they requested the forbearance.

In the letter, the FHA says “forbearance provided to borrowers experiencing a financial hardship due, directly or indirectly, to COVID-19 is not considered the provision of funds by a Mortgagee to bring and/or keep the mortgage current or to provide the appearance of an acceptable payment history.”

In other words, the loan won’t be insurable if the borrower was already behind on the mortgage before asking for a break on payments.

Like any other FHA loan, it must satisfy all requirements for FHA insurance at the time of closing.

And as mentioned, the originating lender must execute a two-year partial indemnification agreement for 20% of the original loan amount.

The somewhat good news for lenders is that they’re only on the hook for that 20% if the mortgage goes into foreclosure and results in a claim to the FHA’s Mutual Mortgage Insurance (MMI) Fund.

But it could lead to lender overlays, like higher credit scores or a max number of forborne payments, to limit the likelihood of these loans going sour.

May Have Been an Alternative to Raising Mortgage Insurance Premiums

forbearance rate

HUD Deputy Secretary Brian Montgomery said, “This policy helps address current and future capital issues for all lenders, including those who are not equipped to hold mortgages on their balance sheets for extended lengths of time.”

While maybe true, it doesn’t explain how they’ll pay those claims if lots of homes go into foreclosure in the two-year indemnification period.

However, the FHA did add that it won’t require upfront payments by lenders or an adjustment to FHA mortgage insurance premiums for such loans.

And added that it would “generally result in a reduction of the claim amount FHA would need to pay to the lender for defaulted mortgages.”

Lenders might have time on their side since the housing market is on pretty good footing and mortgage rates are super cheap, meaning housing payments should be more or less affordable.

Foreclosures also take quite a bit of time these days, so depending on when that clock starts ticking, there may not be too many claims.

Of course, I don’t know how comfortable lenders are sitting around and wondering if a home loan will go bad at some point. And it’s a two-year period to sit around and wait.

Earlier this week, the MBA said 11.82% of outstanding Ginnie Mae-backed loans (FHA/USDA/VA) loans were in forbearance, while Black Knight reported today that 12.3% of FHA/VA mortgages are now in forbearance.

But the number of homeowners in forbearance plans decreased for the first time since the crisis began, with 34,000 fewer homeowners in forbearance as of June 2nd thanks to a 43,000 decline among government-backed mortgages.

Read more: Fannie and Freddie Will Buy Loans in Forbearance

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for nearly 15 years.

Source: thetruthaboutmortgage.com

Homie’s Utah Housing Market Update January 2021

The Utah real estate market continues to see new peaks and valleys. Here’s your monthly update on what’s happening.

Data from Utah MLS from January 1, 2021 to January 31, 2021.

Sale Price

In January, Utah real estate prices leveled out from their previous upward trend. Median home prices settled at $380K, down $4K or 1% from December. The annual trend, however, shows a stark contrast. Median home prices rose $55K, or 16.9% from the previous January. The 2020-21 trendline has been mirroring the 2019-20 trendline for several months, albeit at a higher level.

UT Median Sale Price Jan 21

Data from Utah MLS

Days on Market (DOM)

When it comes to days on the market, the Utah market has stayed steady. For the fourth month in a row, the average home spent nine days on the Utah market. That’s a full 30 day difference from January 2020, a 76.9% year-over-year decrease. Homebuyers may feel the heat of competition for fast-moving homes in this seller’s market.

UT DOM Jan 21

Data from Utah MLS


Inventory has fallen to new lows. Only 2,383 active listings were on the Utah market in January, compared to 2,920 available units in December. The month-over-month decrease was an on-trend 18.4%. Annually, the market saw a rather steep drop from 6,811 active listings in January 2020. That’s a year-over-year inventory decrease of 65%. With that level of scarcity, it’s no wonder that Utah homes are selling so quickly.

UT Inventory Jan 21

Data from Utah MLS

Monthly Sales

January saw a sharp decline in monthly sales from December, down by 1,528 units or 35.3%, following the seasonal trend. Monthly sales have followed the seasonal pattern, down one tenth of a percent from November 2020. A mere six fewer homes were sold in December than in the previous month. Observing the annual trend, home sales came up just slightly from the previous January. Only 90 more homes sold in January 2021 than January 2020, an increase of 3.3%. It is likely that market seasonality is largely responsible for the dip. However, the low level of inventory may be affecting the number of homes sold as well.

UT Monthly Sales Jan 21

Data from Utah MLS

Turn to a Homie

Homie has local real estate agents in all of our service areas, including Utah. These agents are pros in everything they do, including understanding the local real estate market, so they can help you regardless of market conditions. Click to start selling or buying and to get in touch with your dedicated agent.

Source: homie.com

Homie’s Greater Phoenix, AZ Housing Market Update January 2021

Phoenix January 2021 Market Report

2021 is already starting off strong for the Arizona housing market. Check out the January happenings!

Monthly Sales

According to data from the ARMLS ® from January 1, 2021 to January 31, 2021, the Phoenix metro area had 7,076 monthly sales, an +11.8% year-over-year increase, landing at 7,076. This number is a 26.8% drop from the previous month’s sales, however.

Monthly Sales

Data From ARMLS®

List Price

With a +10.8% increase from January of 2020, the average list price in Phoenix this January was $471.4K. Median prices also rose in January, landing at $347.7K, a +12.2% increase from December.

New List Prices

Data From ARMLS®

Sale Price

Sale prices continue to rise faster and faster. With an increase of +20.6% between January 2020 and January 2021, the average list price this month was $439.6K. Median sale prices also rose with +17.3% year-over-year increase. The January median sale price was $340.0K. This increase is 3% larger than the previous month’s increase in median sale price. Both median and average sale prices are expected to rise again in February.

Sales Prices

Data From ARMLS®

Days on Market (DOM)

The Average Cumulative Days on Market in January was 46. This is a three-day increase from the previous month, however, it’s an 18-day decrease from January 2020, showing the market is still quite hot, especially for this time of year.

Average Days on Market

Data From ARMLS®

A Message From Wayne Graham, Head of Real Estate

All indications point to the Phoenix market continuing to be strong in 2021. We have a strong start to the year coming off a record year in 2020. The demand for homes is high as interest rates are still low so we expect homes to continue to sell quickly. Now is the time to jump into the Phoenix market and take advantage of record sales and high demand.

Want to Know Your Home’s Value?

Are you thinking of selling soon? Are you wondering how these market trends affect your home? We can help you determine your home’s value. Click here to request your free home value report prepared by a Homie pro.

Turn to a Homie

Whether you’re buying or selling, our team of experienced professionals will help you make the most of your real estate experience. Click to start selling or buying with your dedicated Homie agent.

Source: homie.com

Buyer’s vs. Seller’s Market: What Do They Mean?

When you’re buying a house, it’s important to know what type of market you’re in: a buyers market or a sellers market. Each type of housing market offers its own set of unique opportunities and drawbacks depending on what side of the equation you’re on.

In a buyers market, the market is more favorable toward buyers due to an abundance of inventory, a low demand for housing or other factors that cause home sales to be slower than normal. This type of market works in the buyer’s favor because they can ask for extra concessions, lowball the offer or generally push the purchase to be more favorable to them. A sellers market, on the other hand, means that you’ll be competing with other buyers for the homes on the market. In this case, the seller calls the shots due to high demand for homes.

Though much of the country would be considered a sellers market right now due to extremely low interest rates on mortgage loans, that could always change in the near future. The pendulum swings constantly, and it’s not always clear where it will stop. So, if you’re considering a new home purchase in the near future, here’s what you need to know about a buyers or sellers market to make the most of the market you happen to be in.

In this article

What is a buyer’s market?

A buyers market is when there are more houses for sale than there are buyers. People aren’t buying at a fast enough rate to keep the market from flooding with inventory — which drives the market to be more friendly to the buyers that do exist.

[Read: Mortgage Rates Hit Another 50-Year Low. Should You Buy?]

In a buyers market, sellers must often lower the asking price on their homes to be competitive. If they don’t, they run the risk of their house sitting on the market for too long, which can cause financial issues or issues with getting a loan for the house they’re moving to. Therefore, not only do homebuyers get to enjoy deflated prices in a buyer’s market, but they also stand a good chance of having their lowball offers being considered.

What is a seller’s market?

A sellers market is the opposite of a buyer’s market, and occurs when there are more buyers than there are sellers. When this happens, sellers obviously have the upper hand. Any reasonably priced house is likely to get multiple offers or even instigate a bidding war in highly desirable neighborhoods or cities.

In this type of market, most homes don’t last long before being snatched up by buyers — especially if mortgage loan interest rates are as low as they are right now. Many homes are sold as is and could even get an offer that’s well above asking price. If you have a home to sell, putting it on the market during a seller’s market will likely get you more than you paid for it and help propel you to your next home.

[Read: How to Negotiate Mortgage Closing Costs]

How to determine if it’s a buyers market or a sellers market

If you want to determine whether you’re in a buyers or sellers market, there are a few tricks you can use to figure it out. These include:

  • Analyze the inventory. Use a listing website and look at the county, neighborhood or area you plan to purchase in. Pay particular attention to information like time on the market and the final sales price. If you see a large number of homes are being sold as soon as they hit the market, you are most likely in a sellers market. If sold homes are few and far between, you’re in a buyers market. It’s possible to get even more precise. You can divide the number of homes on the market by the number of homes sold the last 30 days. If the quotient is over seven, you’re in a buyer’s market. Five sold homes or below equals a sellers market.
  • Determine the amount of time homes are sitting. Homes sell quickly in a sellers market if they are priced right and are in good condition — or in some cases, they may sell even if they need a ton of work and aren’t priced as low as you’d expect. The opposite is true of a buyers market.
  • Determine market trends. Are home prices rising or falling? A downward trend suggests a buyers market while an upwards trend indicates a sellers market. The good news is that you don’t have to do the research yourself. You can easily find market reports online or ask a licensed real estate agent to pull some comps for you.
  • Figure out whether the homes are selling for asking price. If a lot of the offers in the area you’re looking at are selling for more than their asking price, that is obviously good news for sellers and bad news for buyers. If the comps indicate that the homes are selling for well below the list price, then you know you’re in a buyers market. You can also look at current listings to determine whether you’re in a buyers or sellers market. Do you notice a lot of listed homes with price cuts? This suggests that homes in this area have sat on the market for longer than expected and that buyers are in control.

Tips for a buyer’s market

A buyer’s market offers unique perks for would-be homeowners. However, if you’re a seller, you’ll have to both lower your expectations and clear a few hurdles along the way.

[Read: 5 Tips for Navigating the Mortgage Underwriting Process During Covid-19]

Tips for sellers:

  • Don’t ask for too much. If your home is priced in the right range, you could still get a buyer in a reasonable amount of time. However, don’t price your home too low to try and unload it, since buyers will still push the envelope in this type of market, no matter what you list your home at.
  • Tackle needed repairs that won’t break the bank. With so many options to choose from, buyers won’t have a reason to take on a fixer-upper unless you’re selling it at a huge discount. Any decent agent will be able to tell you what your house needs to get attention — so listen to them and make repairs or upgrades when possible.
  • Be prepared for lowball offers. Don’t take lowball offers personally and be prepared for them. Figure out what you’re willing to negotiate on before you list your home. If you aren’t willing to negotiate, your home may sit there for a while.

Tips for buyers:

  • Be aggressive: Don’t be afraid to make an offer that’s well below the asking price — especially if the home has been on the market for a while. All the buyer can do is turn you down — and if you’re in a buyers market, it’s less likely that would happen.
  • Negotiate with the seller. You have nothing to lose by negotiating. There are tons of other options on the market if this offer falls through. So, unless you’re at risk of losing the house of your dreams, you can go back and forth with the seller without worrying that you’ll kill the deal over bad feelings.
  • Ask for repairs and closing costs. The worst thing that might happen is the seller will say no. At the very least, you can expect a reasonable counter offer to come of it — and best case, you’ll end up with some contributions from the seller to make your home purchase cheaper.

Tips for a seller’s market

A seller’s market is a great time to cash in if you’re a seller. If you’re a buyer, be prepared to compete with tons of other buyers and maybe offer more than you originally intended.

Tips for sellers:

  • Don’t worry about cosmetic repairs. As long as your home is in decent condition, it’s very likely to get multiple offers. You don’t need to dump a bunch of money into painting the bathroom a neutral color or upgrading the siding. Buyers will still likely be interested in your home.
  • Test the waters on the price. Believe it or not, you can scare buyers away with an overly ambitious listing price, but that doesn’t mean you shouldn’t test the waters a little bit. Try listing your home for over what you think it’s worth. Even with a high listing price, you may get a bidding war from buyers — especially if you’re in a highly desirable area and also in a sellers market.

Tips for buyers:

  • Check listing sites every day. It’s not uncommon for homes to get offers on the first day of listing in a sellers market. Be prepared to live on sites like Realtor and Zillow — and employ the help of a real estate professional who can send you the new listings as soon as they hit the market.
  • Work with a top notch agent. In a sellers market, you’ll need an aggressive agent who is able and willing to drop to show you a house. If you don’t have an agent like this, you’re going to miss out.
  • Get preapproved. You need to be able to make an offer at any time to be competitive with other buyers. Speak with a lender before you speak with an agent to get preapproved — this will strengthen your offer and make you stand out against others.
  • Know your maximum price. Bidding wars are common in a sellers market. Your emotions can put you in financial ruin if you aren’t careful, so you need to know when to back out. Set a maximum price cap and stick to it. Also keep in mind that you can refinance later on if you need to.
  • Don’t ask for too much. You’re competing with a lot of buyers in this type of market. Asking for too much in closing costs and repairs will likely result in the seller not considering your offer.

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We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

Source: thesimpledollar.com

Record Number of Home Buyers Searching Outside Their Own City as Properties Fly Off the Shelf

Posted on June 25th, 2020

After some uncertain months while COVID-19 first emerged, home buying has become hot again. Super-hot.

In fact, homes are being scooped up at the fastest pace in more than two years, per Zillow.

Homes Are Going Pending Fast

  • Homes went pending in a median 22 days during week ending June 13
  • Down 9 days month-to-month and 3 days year-over-year
  • Listings going pending in as few as 5 days in Columbus, Ohio
  • But slowing down in metros like NYC (up to 70 days from 47 last year)

During the second week of June, the typical listing accepted an offer after just 22 days, the best reading since June 2018, when it was a 21-day average.

It was even faster in certain Midwest cities like Columbus, Cincinnati, and Kansas City, where homes went pending in less than a week, in as little as five days on average.

Of course, this could be a temporary trend related to sellers being more reticent about listing their homes, while home buyers continue to exhibit a relatively strong appetite.

We’ll know as more listings hit the market and eliminate some of the recent scarcity. Zillow said new listings were up 14% month-over-month, so that could balance the market somewhat.

Meanwhile, there are still slow housing markets, with New York properties typically spending a staggering 70 days on the market before an offer is accepted, an increase of more than three weeks from the same time last year.

Similar trends have been seen in cities like Miami (55 days) and Atlanta (38 days), also struggling with COVID-19 related closures and disruptions.

Density Has Become a Problem

home buyers moving

  • Record 27% of prospective home buyers looking outside their metro
  • Up from 26% in first quarter of 2020 and 25.2% in Q2 2019
  • Redfin says searching for out-of-town homes could be related to coronavirus
  • Searches for homes in small towns continue to surge on Redfin website

If there were a word to define 2020 at this moment, it would probably be “distance.”

Whether it’s social distancing, six feet apart, tables spaced apart, walking on different sides of the street, one-way grocery aisles, etc.

Now it appears living too close to someone else is also a problem, as evidenced by the uptrend in rural and small town home searches.

Per Redfin, pageviews of property listings in towns with fewer than 50,000 residents increased 87% year-over-year in May.

That was more than triple the 22% year-over-year increase in pageviews seen for properties in cities with more than one million residents.

So it’s pretty clear a lot of prospective home buyers have the same idea about greener and larger pastures.

Specifically, many of them want to leave once-bustling metropolises like Los Angeles, New York, and San Francisco, which had the biggest net outflows (more leaving than coming) in April and May.

As for where everyone is going, the top destinations are:

– New York residents want to move to Atlanta
– San Francisco residents want to move to Sacramento
– Los Angeles residents want to move to San Diego
– Chicago residents want to move to Phoenix
– Boston residents want to move to Portland, Maine

The trend of moving from more expensive cities to cheaper ones isn’t new, but it’s probably more practical now since a lot of people can work remotely without issue.

This is especially true for tech workers, whose companies (Facebook, Twitter and Slack) have embraced the work-from-home movement.

For many, this means moving from expensive urban centers or coastal cities to more spread out, inland metros.

The big question remains whether this is a permanent, lasting sea change, or just a short-term trend that will reverse itself in coming months or years.

If it’s short-lived, it could mean opportunity to buy a home or condo in a once-hot urban center at a discount with less competition. Same goes for properties in vacation locales that have cooled.

Will Hot Housing Market Taper Off Later This Year?

  • There are possible headwinds facing the housing market in fall
  • High and lasting unemployment has yet to be factored in
  • And the end of forbearance programs could lead to a foreclosure surge
  • A COVID-19 second wave is also a major concern

We’re only halfway through 2020 and it has been beyond painful. It’s hard to imagine what’s to come for the rest of the year.

And it won’t be without fireworks, given we’ve got a presidential election in the fall that could be more contentious than usual thanks to increased mail-in voting.

There’s also the nagging issue of unemployment, which both the stock market and housing market have seemed to shrug off so far.

At some point, we’re going to need to face the music, and the same goes for expiring mortgage forbearance programs.

While some homeowners will be able to pick up where they left off in making monthly mortgage payments, others may not be so fortunate.

This could lead to an increase in defaults, foreclosures, and higher REO inventory, which could hurt the seemingly unscathed housing market.

Of course, an ongoing inventory shortage could provide a strong buffer, assuming the pool of eligible home buyers remains.

Moody’s Analytics chief economist Mark Zandi told CNBC he thinks the housing market will “cool off a bit later this year.”

He added that he doesn’t expect a “sharp downturn,” noting that “there are some very solid underpinnings” giving the housing market strength.

I tend to agree – it’s not 2008 all over again. However, at some point in coming years it might be.

Read more: Should I rent or buy a home?

Source: thetruthaboutmortgage.com