I’m currently tracking 684 Foreclosures on the East Valley alone. No, that doesn’t include Scottsdale, Queen Creek, or Maricopa. These are foreclosures that are also listed on MLS in Gilbert, Mesa, Tempe, Chandler. I haven’t added up all the non-MLS foreclosures, but I assure you, there’s a ton of them. Do you think there’s any deals out there?
MSNBC had an article a few days ago about the effect of foreclosures on housing prices. There’s not too much new information here, other than reiterating why it’s an excellent time to buy investment property. Check it if you’d like, or here’s a clip.
While foreclosure sales are bad news for homeowners in neighborhoods with high foreclosure rates, they are a boon for well-financed buyers looking for properties at bargain prices. And in broad terms, economists view them as part of getting back to more realistic prices after years of excess.
Alejandro Diaz-Bazan, who sells foreclosed properties in Miami, said banks seeking to unload foreclosed properties are looking for buyers that can close deals quickly, and therefore need to have a hefty down payment. This month, Diaz-Bazan said a European client bought two foreclosed condominiums as an investment.
“The bank really is out to move them, to liquidate them,” Diaz-Bazan said. Despite the downward pressure on prices, he said, “property prices in Miami have not dropped enough” for the market to rebound.
Yup- the smart ones are buying right now. I think it’s been obvious for a while, I’ve certainly been preaching it for a while. It’ll be interesting to see the mass media spreading the message now tho- and how many investors will finally dive back into the market once their news anchors start talking about it. 
Too bad the REALLY good deals will have been snagged up by then… or will they?
The Phoenix Business Journal took a dig at us Realtors in this article posted Thursday. What cracks me up is that the article has somewhat of a negative tone towards the National Association of Realtors and Realtors in general, as if they’re hypocrites or something. To me, when I read this article, I’m thinking ‘WOW’! ONLY a 1.2% Decline for 2008? MAN- How are we NOT going to see the bottom of the market this year??? Considering we’ve seen a 12% decline in the past 1.5 years or so, a 1.2% for the entire year is AWESOME! Now, let’s get some perspective here- if your home is worth $300,000, and we see a 1.2% decline- we’re only talking about $3,600 total decline in the price of your home! Considering the hits we’ve seen, this is nothing.
Let’s get some more perspective… if you’re buying investment property right now and are worried about the market dropping after you purchase, this should ease all your worries. Assuming you’re using me to find your deals for you (HINT HINT), I’d be putting you in deals 20-30% BELOW MARKET VALUE. Who cares IF the value drops 1.2%? You just walked into 20-30% in equity! The market could drop another 10% or more, and you’d STILL have an awesome deal! Additionally, I only put my clients in deals that are good, solid, long term investments and areas. So you can be assured that the values in those neighborhoods are more secure than others out there.
Whenever I’m reading or watching the media hype on all the foreclosures, I see the other side. My perspective doesn’t sell subscriptions or higher priced air time, but it brings me great comfort that there are incredible opportunities out there for everyone. If you are interested in picking up some investment property (REO’s, Short Sales, Foreclosures, etc), please give me a call and let’s find you a great deal or three. I’m finding them all day long, in every price range, every neighborhood. Let’s build your wealth and retirement portfolio together.
MLS Active Listings |
Looks like we’ve hit the peak for listings coming onto the market. There may be some seasonality related to this, but I think overall the total number of listings are going to be dropping somewhat. Notice the momentum lines have crossed each other, and are slowing their downward trend, almost to a flat line. This could indicate an overall drop in listings for the upcoming year. |
MLS Solds |
Looks like we’re in a downward trend here. There’s definitely some seasonal factors playing in to this chart, as we’re at the slowest time of the year to sell a house. Feb charts should give us some good indications for the upcoming year. |
Avg Sale Price
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Still seeing a decline in the Avg Sales price- remember, this is for Dec 2007, folks. |
Median Sale Price |
Median Sales price doesn’t seem to be dropping as drastically as it was previously. It’s still coming to a slowdown, sitting at an 8.1% drop from last year. I’m anxious to see Jan/Feb of 2008’s charts to give us a better idea of the upcoming year. |
Average Days on Market |
This is to be expected this time of year. Sitting at just above 100 days on market isn’t all that bad for the year end. However, notice the severe drop in the trend lines- this indicates a change is on the horizon. Since the trend is upward in direction, we can expect it to reverse and start giving us a lower Days on Market for the County. |
Absorption |
As predicted earlier, absorption rates are declining now, which is surprising for the 4th Quarter of a year. Momentum lines are fairly flat, so predicting future direction is difficult. |
Building Permits
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Very odd results going on here. Obviously there’s a decline in the number of permits. However, check out the momentum readings. They’re in opposite directions (remember, one reads ‘faster’ than the other). Taking into consideration the overall directional trend of the data, I would think Building Permits will flat line over the next few months (meaning, remain steady) until the Summer. |
Mortgage Defaults |
Still climbing! There’s a ton more ARM’s adjusting now, and the difficulty in the mortgage market is helping defaults hit record highs. Less mortgage programs means less options for homeowners to refi out, or, buyer’s to purchase homes in foreclosure. We won’t see a slowdown or change in this until the Mortgage Industry turns things around. |
Trustee’s Deeds |
Still sky rocketing here. I’m not surprised, as the Lender’s still haven’t figured out how to deal with all these foreclosures. You’ll notice, the momentum lines are slowing slightly- which, I expect a change in direction sometime in Summer 2008. I am guessing it’ll take the lenders that long to figure out how to work out Short Sales effectively. |
Investor Activity |
We’re heading back to the baseline of Investor Activity. The average for our market, in other words. All the wannabe investors have run back to their IRAs and stocks- as they’re losing their homes to foreclosure now. All the guys who know what they’re doing (the smart ones!) are coming back into the market now, snagging all these great deals we have available to us. Momentum is coming to a plateau, which means it’ll remain steady for investor activity. No flood of new investors, and no loss of seasoned investors. |
Interest Rates |
Still not the most exciting of charts- however, the faster Momentum line (the pink one) is just barely crossing over the zero line. With the politics going on right now, I believe we’ll continue to see interest rates drop until we get the mortgage markets back on track. |
"I want to buy a foreclosure, I hear they grow on trees!" "Where can I get a list of foreclosures?" I hear these questions a number of times a month from various people. They hear all the hype in the media, then watch one too many infomercials, and think it’s as easy as 1-2-flip to make their $100k this year. Next thing you know, they’re fantasizing about quitting their job, working 2 hours a week from home, and raking in the profits. Believe me, if it were that easy, there wouldn’t be infomercials about it! Those ‘gurus’ you see on tv would be giving trump a run for his money, never spilling a word about how they’re doing it, not even to their closest family members. They certainly wouldn’t be selling some 100 page ‘manual’ on late night tv for $20 each!
Yes, I can give you a list of foreclosures. In fact, I can give you a list of about 150 new foreclosures every day. The question is what are you going to do with them? Most people I encounter believe that if it’s in foreclosure, it’s for sale. They think that the owners must WANT to sell their homes long before the bank starts the foreclosure process, and are begging for someone to come take it off their hands for a rock bottom price. Let me sum it up in one word- WRONG. In my 7+ years in the pre-foreclosure business, I’d say that less than 1% of the people I’ve encountered have ever WANTED to sell their homes. All the rest want to stay and keep their home. They haven’t come to terms with the reality of the situation yet, and are still scrambling to get a loan or win the lottery.
If you don’t believe me, I invite you to go to the County Recorder’s site, look up a Notice of Trustee’s Sale, and go knock on the door of one of those houses in foreclosure. You’ll figure it out in about 10 seconds how these people feel about selling their home. You’ll be one of about 20 who have knocked on their door THAT DAY. It’s MUCH tougher than you would think. If you enjoy being threatened, chased off a property, law suits thrown at you, then you found your calling. Not to mention all the ways the deal can go bad and backfire on you later. I see it happen all the time. Believe me, it’s a tough and risky way to find deals.
Yes, there’s ways to do it, but it takes a TON of knowledge, practice, and guts to make it happen. Why not leave that to the professionals who do this day in and day out? Oh, because you want to get it for cheaper than what they’re selling it to you for. I understand. So, let me ask you this- the next time you buy a home, why use a loan officer to get your mortgage for you? You could go directly to 1,000+ banks, shop their loans, negotiate the best rate/price/terms and cut the mortgage broker right out of the equation. It’d save you a few thousand dollars in costs! Or instead of going to a car dealership for your next vehicle purchase, why not go directly to the auto auctions and purchase it directly yourself? Again, it would save you about $5-7k on the cost of the car. All you have to do is find the auctions, research them every day, go there, research the vehicle to make sure it’s in top condition, and play the bidding war until you win. Sound like fun? Or, is it worth the few extra thousand to save the hassle, and buy direct from a professional? I agree.
A professional knows the ins and outs, the pitfalls and winning strategies. They know what’s legal and what’s not. They know which are good deals, and which are not. Most importantly, they have deals coming at them continuously, so they can pick out the best one for your investing portfolio. And for a few thousand dollars more, it’s worth their time and effort. I am currently tracking thousands of foreclosure deals in Maricopa County. All of these are ready to be sold, and just need a buyer. If you’re ready to pick up a deal, contact me and we’ll go to work for you. Leave the dirty work to the professionals.
If you’re looking for Pre-foreclosures, Foreclosures, REOs or deals of any kind, sign up for my Deal Alerts and you’ll be notified of any new deals that come through the REI Pipeline. These are perfect for keeping as long term rentals or fixer-uppers that you want to rehab and flip. I am currently tracking every foreclosure and REO in Maricopa County- You won’t find deals this good anywhere else! Or, if you’re rearing to go and looking for a deal NOW, I can go ’shopping’ for you and find the exact deal that fits your criteria. Just contact me and we’ll get going on finding the perfect investment property for you!
Let’s work together to make 2008 the best portfolio building year yet!
Now’s the time to Invest in Arizona Real Estate. I know, I know- the media hype and the masses are claiming it’s Black Friday all over again. A good friend told me once that ‘you always 
want to do what everyone else isn’t doing’. During the Gold Rush years I had Grandmothers (literally!) asking me how to flip houses, and where they could ‘pick up a foreclosure’. I knew it was time to get out of the game and let the amateurs get shaken out. Remember the same symptoms in 2000 when everyone had a ‘hot stock tip’ on a new dot-com? Yeah, kinda like that. And look what happened in both scenarios- inexperienced investors lost their butts, while the true investors sat on the sidelines waiting for the right moment. The ‘Fly-by-Night’ investors are now running back to the stock market, while the educated ones are swooping in and picking up the greatest deals. Many of which are foreclosures left over from the newbie investors who bought at the peak of the market, hoping it would last forever! If I learned anything from my Economics Professor, it was to buy low, sell high. It’s no different in Real Estate folks!
So how do I know this is the perfect time and place to invest? Well, for a number of reasons…
Here’s the deal- foreclosures in Maricopa County are double the normal rate. The sellers are desperate to sell, and buyers are in the driver’s seat with decision making. It’s no secret that there’s a ton of inventory out there. However, prices are holding steady and are barely dropping, if at all. Even if they drop another 2% in the next year- that’s only $5,000 on a $250,000 house. Boo Hoo. If you’re a client of mine, there’s no way I’ll let you buy a property at or close to full market value. You’ll most definitely have plenty of equity to cover a 2% drop- shoot, I’ll even give you a 10% drop and you’re STILL sitting in equity!
Shailesh Ghimire of Arizona Mortgage Guru states:
“Don’t believe the doom and gloom. Loans are still available, and with the shake up in the industry, you’ll most likely be dealing with better mortgage loan officers. ” I agree, and the same goes for REALTORS®, Title Companies, Appraisers, etc etc.
Finance rates are holding fairly low, with Rental Rates rising. I honestly don’t know a better time to start picking up property than now. Everyone wants to wait for ‘the bottom’ of the market. Keep in mind that we never know when we’re at the bottom until it’s too late and changed to an upswing. Personally, I’d rather buy now then wait for everyone else to give me permission to dip my toe in the shallow end. I’ll post more statistics and facts in the near future.
