Phoenix Real Estate: signs and numbers point to a hot spring housing market in Phoenix

February 2015 Results

Signs and numbers point to a heated housing market in Phoenix this spring

Purchases with a mortgage are increasing – decreasing are new monthly listings

February 2015 purchases with a mortgage were the highest for a month of February since February 2006

5,945 less new monthly listings for the last nine months year-to-year

  Changes coming to residential real estate closing process starting on August 1, 2015.  See page seven.

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Sales in which a buyer purchased with a mortgage in February 2015 were 15% higher than February 2014. February 2015 purchases with a mortgage were the highest for a month of February since 2006, which was before the great real estate recession. Is the February 2015 increase in mortgage purchases a sign that demand to own is growing? Maybe. There are some other recent signs. Mike Orr Director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University said that “During February it became clear that from watching contract rates that the market was starting to take off.” Philip Haldiman from the Rose Law Group Reporter wrote that people are camping out to buy homes at a Mesa subdivision. The subdivision is the new Mulberry Community, by builder Blandford Homes. Purchase prices start in the low $200,000 and range from 1,700 to 4,300-square feet.  Watch this video from Catherine Reagor Arizona Republic reporter on once again camping out for new homes.

More signs and numbers pointing to an increase in purchases with a mortgage Increasing are job growth, and population growth, and boomerang buyers. While job growth and population growth are lower than their historic norm, and could be better, both are growing. At the same time job and population numbers grow, growing is the number of possible boomerang buyers. These three factors should contribute to an increase in mortgage purchases.

Increasing job growth. You have to have a job to get a loan. Greater Phoenix lost 302,100 non-farm jobs from December 2007 to July 2010 (December 2007 is the record month for most non-farm jobs, while July 2010 was the month with the least non-farm jobs since the start of the great real estate recession). Greater Phoenix has gained back 266,500 jobs from July 2010 to December 2014. From December 2014 to December 2015, jobs should grow by another 50,000.

Increasing population growth. The population grew by approximately 46,000 in 2014 over 2013. 2015 population growth is projected to increase by 57,000 over 2014. And from 2015 through 2020 projections are 327,800 more people. More people means more housing.

Increasing Boomerang Buyers: A boomerang buyer is defined as someone who buys after going through a foreclosure or short sale. As time goes on, more and more people will have reached the minimum wait periods or penalty boxes for being able to buy again with an FHA, Fannie Mae or Freddie Mac loan. I estimate that from 2009 through 2014, 220,536 homeowners that were owner occupants, not investors, either went through a foreclosure or short sale. The minimum wait period to buy again after a foreclosure or short sale is three years with an FHA insured loan; four years after a short sale with a Fannie Mae or Freddie Mac loan; and seven years after a foreclosure to purchase with a Fannie Mae or Freddie Mac loan. As time goes on, more and more people will meet the required wait periods, and if they have the necessary credit score, down payment, and closing costs they will be able to purchase with a mortgage. Let’s hope there will be enough inventory for them.

New Monthly Inventory of Single Family Homes June of 2014 was the first month last year, to have less new monthly listings when compared to the same month of the previous year. February 2015 was the ninth consecutive month year-to-year, that there were less new monthly listings, resulting in 5,945 less listings.

Sales by sold price range, median sale price, total volume The sold price range with the largest increase in sales year-to-year was between $200,000 and $249,999 with 185 more sales. The sold price range with highest year-to-year increase in percentage was between $300,000 and $349,999 with a 34% increase. There were thirteen more sales over $1,000,000 for an 18% increase. The February 2015 median sale price was $220,000 or $10,000 higher than February 2014. Total sales volume was $101,569,653 higher.

On August 1, 2015 new rules apply to most closed-end consumer mortgages. The rules effect existing and new home purchases, refinances, loans secured by vacant land, construction only loans, and timeshare loans. Excluded are reverse mortgages, home equity lines of credit, mortgages secured by a mobile home or a dwelling that is not attached to real property. The Consumer Financial Protection Bureau or the CFPB a creation of the Dodd-Frank Act, has integrated mortgage disclosures and created new forms. For loans originated on August 1, 2015 or later, the Good Faith Estimate and the Truth in Lending will be replaced with a new document called the Loan Estimate. And the final Truth in Lending and Settlement Statement are replaced with a new document called the Closing Disclosure. The new Loan Estimate and Closing Disclosure will make it easier for a buyer to compare their initial loan costs to their final loan costs. The timing of workflow and closings will be impacted by the new rules. The Closing Disclosure has new time tables associated with it. There is a Delivery Period and a Waiting Period before the borrower is allowed to sign loan documents. Ken Trepeta of Government Affairs for the National Association of REALTORS suggests adding fifteen more days to the normal closing process time in this video. http://www.realtor.org/videos/hud-1-going-away-understand-new-closing-forms-procedures There is much more to the upcoming changes, for more detailed information contact me, Fletcher Wilcox, at FWilcox@gcta.com or 602.648.1230. I will be representing Grand Canyon Title Agency in meeting with real estate designated brokers and their agents, and builders, and banks and lenders and their loan officers. Don’t wait to learn about the changes, but find out what you need to know, what you need to do.      

Disclaimer While deemed accurate this report does not guarantee the accuracy of the data. Some numbers will change. Report may not reflect all real estate activity. Information should be verified. This article is of a general nature, and is not intended as investment advice, real estate advice, lending advice or legal advice. Please consult your broker, your lender, your own independent legal counsel, your certified public accountant. The information in this report may not be the opinion of Grand Canyon Title Agency. Note: Included in some of the charts of this report may be a small number of new home sales and listings.  Below is the full report.

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Phoenix Real Estate: Find out how the new mortgage rules August 1, change residential real estate closings

Don’t miss this event. I want to invite you to an event on the effect new rules will have on how real estate transactions will close. The new rules which begin on August 1, 2015 apply to most residential real estate transactions in which the buyer is buying with a loan. Don’t wait to learn.

Find out about the new upcoming rules from our panel:

Jim Sexton President of the Arizona Association of REALTORs and designated broker at Realty ONE Group

Chris Mozilo V.P. Quality Control & Compliance for Homeowners Financial Group

Leslie Banes Certified Senior Escrow Officer, First American Title

Moderator:  Eric Wright Senior Loan Officer with AmeriFirst Financial

Moderator: Fletcher Wilcox  V.P. Grand Canyon Title Agency of FNTA, FNTA is a subsidiary of the Fortune 500 company FNF.

Wednesday, March 18 Be the first to know and prepared on how the rules change for residential real estate

• Five things every real estate agent, every loan officer and every escrow officer must know that happen August 1, 2015!

• Did you know the Good Faith Estimate and the HUD-1 Settlement Statement go away?

• What changes for buyers and sellers • What type of residential transactions are covered under the new rules

* What the National Association of REALTORs says about adding fifteen days to your normal close of escrow time

• We will review the upcoming TILA-RESPA Integrated Disclosure Changes

• We will define the new TILA-RESPA terms • Documents

– We will review the new loan estimate and the new closing disclosure • Timelines – you must understand the new timelines for closing residential real estate

Register today at the Arizona Mortgage Lenders Association Wednesday, March 18

  • Orange Tree Golf Resort 10601 N 56th St, Scottsdale 85254 8:30am – Hot Breakfast 9:00 – 11:00am – Panel Discussion

Thanks to our Sponsor Cost — AMLA Member $35.00 AMLA Loan Officer and REALTOR guest  — $55.00 REALTORS pay the member price of $35

Phoenix Real Estate: 2014 Single Family Real Estate Trends

February 25, 2015

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Existing Single Family Sales Go Up at End of Year. Mortgage Purchases Increasing.

  • December 2014 existing single family sales ten percent higher than December 2013
  •  Overall sales were less in 2014 than 2013, but trending upward
  • Watch listings: 2014 new monthly listings less than 2013  
  •  Median sale price in December highest month in 2014
  •  Sale Volume $160,000,000 higher in December 2014 than December 2013
  • 2014 Distressed Property Index lowest since 2006
  •  2014 cash purchases lowest since 2008
  • More purchases with a mortgage in 2014 than 2013
  • Grand Canyon Title acquired by Fortune 500 Company. See page two.
  • Big changes coming to residential real estate closing process starting on August 1, 2015. See page seven.

This report covers existing single family property sales in Greater Phoenix. Greater Phoenix is defined as Maricopa County. The data in this report, unless otherwise mentioned, is from the Arizona Regional Multiple Listing Services, Inc., also known as ARMLS.

In this report we compare performance for sales, sales volume, cash purchases, mortgage purchases, and new monthly listings. The report includes the Distressed Property Index covering foreclosure starts, auctioned properties, lender owned sales and short sales for the last twelve years. Most of the comparisons are year-over-year, comparing a time period in 2014 to the same time period in 2013.  Year-over-year comparisons are an effective way to measure performance, highlight differences, and negates the effect of seasonality.

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On January 1, 2015 Grand Canyon Title Agency was acquired by a Fortune 500 company. Grand Canyon Title became a division of Fidelity National Title Agency (FNTA). FNTA is a subsidiary of Fidelity National Financial (FNF). FNF is ranked 316 on the Fortune 500.

http://fortune.com/fortune500/fidelity-national-financial-inc-316/

FNF has more claim reserves than any other company in the industry.  With more than a billion dollars in claim reserves to protect you, contact me to open your next commercial real estate transaction.  

http://fidelitydfw.com/page/Financial-Strength.aspx

Existing Single Family Sales and Sale Volume

 Sales were dismal for much of 2014. There were 6,563 less existing single family sales in the first three quarters of 2014 compared to 2013. Then the course reversed. In December 2014, there were 420 or ten percent more sales and $160,000,000 more in sale volume than in December 2013. These numbers made December 2014, on a year-to-year basis, the best month of 2014. Sale volume in the first eight months of 2014 was less than for the same months in 2013.

Not only were December 2014 existing sales higher than December 2013, but so were purchases with conventional, FHA and VA loans!

Distressed Property Index

Disappearing cheap distressed property for sale was a reason for less sales in 2014. According to the Arizona Regional Multiple Listing Services, Inc. (ARMLS), there were 2,149 less lender owned sales and 4,934 less short sales in 2014 compared to 2013. The Distressed Property Index in 2009 was 186,643 compared to 18,932 in 2014 for a decrease of 90%. However, the disappearance of cheap sales diminished cash sales. Cash sales were less every month in 2014 compared to 2013, resulting in 7,370 less cash purchases in 2014. Cash sales in 2014 were the lowest since 2008.

Sales under $50,000

Gone are the days when there were thousands of sales under $50,000. In 2014, there were 207 existing single family sales under $50,000 compared to 625 in 2014. From 2009 through 2013 there were 22,513 sales under $50,000. So the good news is that the glut of cheap distressed properties for sale that previously drove down home values are gone.

6,154 more sales in 2013 than 2014

7,368 more cash sales in 2013 than 2014

1,214 more sales with a mortgage in 2014 than 2013

On August 1, 2015 new rules apply to residential real estate closings.

Do you know what they are?

On August 1, 2015 new rules apply to most closed-end consumer mortgages. The rules effect existing and new home purchases, refinances, loans secured by vacant land, construction only loans, and timeshare loans. Excluded are reverse mortgages, home equity lines of credit, mortgages secured by a mobile home or a dwelling that is not attached to real property.

The Consumer Financial Protection Bureau or the CFPB a creation of the Dodd-Frank Act, has integrated mortgage disclosures and created new forms. For loans originated on August 1, 2015 or later, the Good Faith Estimate and the Truth in Lending will be replaced with a new document called the Loan Estimate. And the final Truth in Lending and Settlement Statement are replaced with a new document called the Closing Disclosure.

How will this affect the closing of real estate transactions? The timing of workflow and closings will be impacted by the new rules. The Closing Disclosure has new time tables associated with it. There is a Delivery Period and a Waiting Period before the borrower is allowed to sign loan documents.

Ken Trepeta, Government Affairs for the National Association of REALTORS suggests adding fifteen more days to the normal closing process time in this video.

http://www.realtor.org/videos/hud-1-going-away-understand-new-closing-forms-procedures

There is much more to the upcoming changes, for more detailed information contact me, Fletcher Wilcox, at FWilcox@gcta.com or 602.648.1230. I will be representing Grand Canyon Title Agency in meeting with real estate designated brokers and their agents, and builders, and banks and lenders and their loan officers. Don’t wait to learn about the changes, but find out what you need to know, what you need to do, and how the changes impact your clients.      

Number of Buyers Purchasing with a Loan Improves. Fourth Quarter 2014 Best Quarter Year-To-Year

Purchases with a mortgage were 4.7% less in the first quarter of 2014 compared to the first quarter of 2013. As the year went on mortgage purchases gained momentum. In 2014, mortgage purchases up 1.3% in the second quarter, up 5.8% in the third quarter, and up 9.5% in the fourth quarter compared to the same quarters in 2013. However, the increase in mortgage purchases in the second and third quarters of 2014 was not enough to overcome the decrease in cash purchases resulting in less sales.

Segmenting Mortgages into Three Categories: Conventional, FHA and VA Loans

When segmenting mortgage purchases by conventional loans, FHA loans, and VA loans, we find the following results: Year-to-year conventional loan purchases were down the first three quarters in 2014 compared to 2013. A likely, partial reason for the decrease in conventional loans was the implementation of the new Dodd-Frank mortgage rules effective on January 10, 2014.

FHA loans were less only in the first quarter of 2014 compared to 2013, and VA loans were a hero all year long in 2014, up ever quarter of 2014 over 2013.

Keep Your Eye on Listing Inventory

The chart below is for new monthly listings of existing single properties in Greater Phoenix. The chart does not represent the total number of existing single family listings, but only new monthly listings. New monthly listings in 2014 were less from June through December compared to 2013.

Fletcher R. Wilcox

Fwilcox@GCTA.com  602.648.1230

Author of  TheWilcoxReport.com(TM)

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