ANOTHER SHORT SALE FALLS THROUGH

I can't tell you how disappointed I am to see how banks are responding to Short Sales. A Short Sale is the sale of a home where the seller owes more than the home is worth. We present the offer, comps and financial distress of the seller to the bank and hope to get it approved. This is an opportunity for the banks to sell them home without taking it back in foreclosure. Many times the bank would be able to sell the home at a higher price than after foreclosure due to condition and timing.
This short sale fall through was for one of my buyers. This is the second home that this buyer tried to purchase, that was a short sale and did not go through. The first and second mortgage companies were not apposed to the deal. It was the mortgage insurance company for the 2nd mortgage that killed it. It does not make sense. This would have been better for all involved, but the mortgage insurance company wanted the seller to sign a note in order to approve the deal. The note, had no amounts nor interest rate stated. They were going to fill those numbers in later. Who in their right mind would sign a note like that???
This also happened to one of my sellers mid summer. These are not the type of actions that will help us get through this period.

Just my Opinion...Jeff Cameron

SEPTEMBER EXISTING HOME SALES SURGE

Yes, existing homes sales are up 5.5% from September compared to August, but what is more important is September 2008 existing home sales here in Metro Phoenix are up over 100% compared to September 2007 sales. WHY IS THIS NOT BEING REPORTED IN THE NEWS????

September existing home sales up 5.5 percent By MARTIN CRUTSINGER, AP

A real estate trade group says sales of existing homes rose by the largest amount in more than five years in September. The data is a possible glimmer of hope that the housing slump could be starting to bottom out.
The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.
Even with the gain in sales, prices kept falling. The median sales price has dropped to $191,600, down by 9 percent from a year ago.

METRO PHOENIX HOMES SALES

Home sales in the Metro Phoenix area have been picking up all year. They seemed to peak in June at 1,207 sales per week. Then by the end of July home sales dropped to an average of 1.61 per week. However, August is usually the slower month and sales have picked up. By the first week of August the 4 week moving average of home sales had increased to 1,101 and by the first of September the average had climbed back to 1,188. Great news on the sales front.

I see all kinds of numbers on the news for home sales. I don't know where they get these numbers, because 2 years ago I was seeing worse numbers than they were reporting and today I am seeing much better numbers.

In July of 2007 the metro Phoenix area averaged 867 home closings per week, in July of 2008 ther were 1,190 closings per week. This is a 37% increase in sales year over year. In August of 2007, the metro Phoenix area recorded an average of 802 home closings per week and for August of 2008 the closings averaged 1,177 closings per week. This is a 47% increase in year over year sales for the month of August. GOOD NEWS!



Just my opinion!



Jeff Cameron

TAKE ACTION FOR DOWN PAYMENT ASSISTANCE TODAY

Here is a link to send a letter to your representatives about down payment assistance. Click the link below and put together an email in your own words. Act now before the special interest groups win this fight.

http://takeaction.supporthomeownership.com/ahaa/issues/alert/?alertid=11521436&PROCESS=Take+Action

My letter is below:

Thank you for using Association for Homeowners Across America (AHAA) Mail SystemMessage sent to the following recipients:
Governor Napolitano
Representative Mitchell
Senator Kyl
Senator McCain
Representative Kavanagh
Representative Reagan
Senator Allen

August 26, 2008
[recipient address was inserted here]Dear [recipient name was inserted here],
You must understand there were very few FHA loans from 2004 to 2006 due to high home values and low FHA loan limits. They did not fuel this boom bust event, GREED did! Today, 82% of home sales in metro Phoenix are FHA loans and 50% of those are down payment assistance, DPA. The first time home buyer was locked out of the market due to the boom. They are now saving the market as they buy homes at pre-boom pricing. What will happen when 41% (82% X 50%) of the home buyers are removed from our weak market????? This is the best time to let these kind of buyers into the market. Home values are below the cost to build a home, not counting the land. They will have equity as the market strengthens. REINSTATE DPA program for the good of ALL the AMERICAN citizens!
Sincerely,
Jeff Cameron
480-502-7699

DPA, DOWN PAYMENT ASSISTANCE, SHOULD NOT GO AWAY

The DPA was eliminated effective October 1, 2008, in the comprehensive housing bill (H.R. 3221) due to political negotiations. It seems every time the government steps in to help during a crisis, political pressure creates a law that does more damage than good. They had to do something about Fannie Mae and Freddie Mac, but at the cost of down payment assistance program; was that wise?
I have copied part of a document that gives statistics on the DPA program. The truth is currently in Phoenix, 82% of homes sold are now FHA. Let me just tell you FHA disappeared during the boom run up of 2004 to 2006 due to low loan limits and high real estate prices, so they weren't the culprit of this BUST. Back to the facts, of those FHA loans 50% are DPA loans. What will happen when you remove 41% (82% X 50% = 41%) of the buyers from our market? It can't be pretty, that is our government helping out again.
Many in congress pointed to DPA as the reason for this bust. NO, the reason for the bust was GREED by people with money running up property values, bank fraud, unlicensed loan officers and the rest of the industry going along. Yes, I mean us Realtors too.
DPA does have a higher failure rate than regular FHA loans. But when 94% of the borrowers pay on time, is that a bad program. It creates home ownership and pride in the community. Home ownership is the only way for many people to build wealth and a nest egg for retirement. This again shows how the narrow minded LAWYERS we hire, through our votes, as representatives twist the truth for their own agenda. It is always about ME, ME, ME(or should I say, my special interest, my special interest...). That is why I switched to Independent. I see votes as GREED and MEED, not what is best for our country. That is why no one is doing anything about: Energy problem, Trade imbalance, Budget deficit, Medicare, Social Security and Education. Because we are still 15 to 20 years away from those becoming the next BUST for our country! Is the only answer hyper inflation to make these financial issues go away? Our political representatives seem to think so, because that is the only answer right now.

Don't get me going, Just my opinion.

Jeff Cameron



IMPACT OF THE CHARITABLE DPA PROGRAM ON FHA
The Mutual Mortgage Insurance Fund (MMIF) WILL NOT Require an Appropriation – The MMIF is the fund that supports FHA’s home mortgage program. A 2007 Congressionally mandated independent actuarial review of the fund shows that from 2007 to 2014 the MMIF will realize over $1 billion per year and be at three times the statutorily required 2% capital ratio even with a significant number of charitable DPA gift assisted loans. H.R.6694 will further enhance the fund by requiring higher FICO scores and increased premiums based on homebuyer qualification.
FHA Loans Using Charitable DPA Gifts Enjoy 94% Success Rate; Comparable To Other FHA Loans – 94% of charitable DPA-assisted homebuyers pay their mortgage without undue difficulty, according to a 2005 study by the General Accounting Office. Specifically, FHA homeowners using gifts from seller-based and other DPA assistance with 3-year old loans have a 6% and 5% default rate respectively while FHA owners using no DPA assistance have a 3-4% default rate. H.R.6694 will further enhance the success rate requiring higher FICO scores for homebuyers who need DPA assistance.
Loans Using Charitable DPA Gifts are 50% of FHA’s Current Annual Volume – The advent of the private sector’s subprime, zero downpayment mortgage market caused FHA’s overall mortgage market share (in dollar volume) to decline from 7.87% in 2001 to just 1.99% in 2007 (HUD Actuarial Review). Even though the number of DPA gift-assisted loans stayed about the same, the drastic decline in the overall number of FHA’s non-DPA loans means that DPA gift-assisted loans (from any source) now account for almost 50% of FHA’s total loan volume. Seller-assisted DPA’s portion of FHA’s current loan volume is 30%. The private sector sub-prime, zero downpayment market also siphoned off the less risky pool of FHA borrowers – leaving FHA with a larger than usual proportion of higher risk loans -- contributing to an increase in all of FHA’s claim rates. H.R.6694 will continue advancing FHA’s mission to serve low-to moderate-income homebuyers by reauthorizing and reforming DPA.
HOW THE CHARITABLE DPA PROGRAM WORKS WITH FHA DPA Program Is Specifically Designed to Meet FHA Borrower Needs – Charitable DPA programs aid borrowers who meet all the rigorous underwriting requirements with verified documentation to qualify for a FHA-insured loan but have insufficient capital to meet the three percent downpayment requirement for an FHA loan. Charitable DPAs bridge the gap by providing this downpayment as a gift to the buyer, helping those who otherwise could not become homeowners. The DPA
program was developed and designed to work with FHA’s specific mortgage requirements to expand homeownership opportunities to those who can qualify and sustain homeownership while also serving the population of homebuyers that is FHA’s mission to serve - minority, low-income, and working families with limited access to capital of whom 80% are first-time homebuyers.
read more on Ameridream: http://www.ameridream.org/Documents/Congress/Support-HR6694-TalkingPoints-8-21-2008.pdf

NATIONAL ASSOCIATION OF REALTORS REPORTS HOME SALES UP 3.1%

Nationally home sales may be up 3.1%, but here in metro Phoenix home sales jumped 4.9% over June. However, the real news is the year over year jump in sales. Home sales are up over 39% this July when compared to July of 2007 in the metro Phoenix area. That my friends is what you expect to see when a market is rebounding. One thing I have learned over the years is that the market is so huge, it does not turn over night.
When we look at 2005, the market started turning towards a buyer's market in August of 2005 in the metro Phoenix area, yet prices continued to climb to a peak nearly a year later in August of 2006. This market turns slowly. It will be interesting to see when we hit a bottom in our market. Many parts of the valley are at a bottom. We listed a home last week in Anthem, my partner, Buffi, said great what good is that. Well it was the most active listing over the weekend and it yielded a contract!!!!!

Existing-Home Sales Up 3.1 Percent
AP
WASHINGTON (Aug. 25) - A trade group for real estate agents says sales of existing homes rose 3.1 percent in July as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.

The National Association of Realtors reported sales rose to a seasonally adjusted annual rate of 5 million units. Sales had been expected to rise by only 1.6 percent, according to economists surveyed by Thomson/IFR.
Still, home sales were 13.2 percent lower than a year ago.
The median price for a home sold in July dropped to $212,000, down by 7.1 percent from a year ago.

METRO PHOENIX HOME SALES AUGUST 2008

Inventory levels of single family homes,SFH, in metro Phoenix and Scottsdale continue to stay level. After jumping up the first couple of months this year, inventory declined through the peak selling season of April to June. Since June the inventory levels have remained fairly constant.

When looking at July 2008 sales for SFH, I have recorded 5,353 homes sales from ARMLS, Arizona Multiple Listing Service. This compares to July 2007 sales of 3,839 SFH for the Metro Phoenix area and we see a huge jump from last year. I believe home sales hit there bottom here in Phoenix from July of 2007 through March of 2008. That doesn't mean prices or average values have bottomed out, price declines lag sales activity. But what that does mean is that demand is back in the market and right now we are working towards a bottom and another shift in the market. The biggest thing I have learned is that this market is so big, it takes a while to shift. With the level of REO, standing for real estate owned or foreclosure homes, properties coming to the market that is another factor that will stand in the way of the shift. Demand is back, we need the REO's to peak and begin to fall. We did see fewer foreclosures last month than the previous month, but one month does not make a trend.

THE SECRET IS OUT, PROPERTY VALUES ARE DOWN

It is what it is! I don't like it, but I am seeing it everyday. Property values have dropped and those that don't get it need to take their home off the market. They are doing more damage to their own value than they will ever comprehend. Many areas of the valley are beginning to see a bottom. The unfortunate fact is the sooner we get prices down, the sooner we get to recovery. Lower prices bring the buyers out. I have 3 clients who have been out bid on Full price offers over the last week!

Home Prices Fall by Record Amount
By J.W. ELPHINSTONE,

NEW YORK (July 29) - Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened in the U.S.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.Nine metropolitan cities - Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Detroit, Minneapolis, and Tampa, Fla. - posted record lows in May. And the value of housing in Detroit is now lower than it was in 2000.But a possible bright spot in an otherwise dismal report, seven metros - Tampa (Florida), Boston, Detroit, Minneapolis, New York, Dallas and Atlanta - showed smaller annual declines.Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.
http://www.walletpop.com/article/_a/home-prices-fall-by-record-amount/20080729092909990002

NEW HOUSING RECUE PLAN

Boy, I have been absent from the blog. I have been working day and night. The buyers are coming out like crazy. On the other hand, I have written many offers for several buyers, as we continue to get out bid for homes. What a crazy market. It just depends on where you are in the market.
The new housing rescue plan is out. I don't know how it will affect us here in Arizona. I do know about 82% of the homes selling are FHA. Most of those loans have seller assistance, whether for down payment or for closing costs. The new law outlaws seller assistance towards the down payment after October 1, 2008. This should cause a little spike in sales, but afterward who knows.
If you don't know what a Loan Modification or Loan Workout is, call us, we can help.
480-502-7699
We are also partnered up with an attorney who is offering a FREE consultation to our clients regarding short sales, foreclosure and housing.
Here is what USA today has to say about the new plan.

Who Benefits From Housing Rescue Plan?
By Anna Bahney,
USA Today

Is it a remedy for the worst housing slump the nation has suffered in decades? Or merely a taxpayer-funded bailout that will fail to reverse the plunge in home prices, the surge in foreclosures and the grave threat that overhangs the economy?
The housing act, which won final approval in Congress on Saturday and which President Bush has said he will sign, is historic in its sweep and ambition. It aims to provide relief to homeowners, incentives to buyers, guidance to lenders and oversight to vital government-sponsored entities, such as Fannie Mae and Freddie Mac.
Who, really, will benefit? And for how long? Will the legislation make a real difference for those who most desperately need help?
It depends on whom you ask. The act has plenty of fans. But skepticism abounds, too.
"The bill is not a silver bullet," says Mark Zandi, chief economist of Moody's Economy.com. "We have to string together several platinum bullets."
Yet Zandi endorses the legislation as among the most important steps that can be done now to prop up the housing market.
On paper, the act holds out help for thousands in need:
--Up to 400,000 homeowners at risk of losing their homes to foreclosure.
--First-time buyers who can't afford full down payments.
--States and cities that will receive money to redevelop abandoned and foreclosed homes.
--People in need of mortgage counseling.
--Fannie Mae and Freddie Mac, which own or guarantee nearly half of the nation's mortgages and which now have a rescue plan.
But is it enough? Even if 400,000 homeowners can avoid foreclosure - a figure that a few critics dispute - some estimates put the number of potential foreclosures from 2007 through 2012 at up to 6 million.
"We're not getting enough for our money," says John Vogel, an adjunct professor at Tuck School of Business at Dartmouth. "Sure, some number of families - 100,000 or 200,000 - will be helped, and that's not insignificant. But it will not address the problem as fully as we would have liked."
Vogel notes that those in danger of foreclosure won't benefit unless their lenders agree to reduce the balances on their mortgages; for the lenders, it's purely voluntary.
Not since the National Housing Act of 1934 has legislation addressed a class as large as homeowners, without restricting the benefits to veterans, urban dwellers or low-income people. The 1934 law created the Federal Housing Administration and authorized the creation of Fannie Mae.
The question now is whether the current measure, sprawling as it is, will do what it's designed to do and serve those it aims to help. Here's a look at six groups that are intended to benefit.
HOMEOWNERS: $300 billion in FHA loans for refinancing
http://money.aol.com/news/articles/_a/bbdp/who-benefits-from-housing-rescue-plan/103559

NEEDED FHA MODERNIZATION AND LIMIT INCREASES

Below is a letter from National Association of Realtors thanking me for emailing the Senate regarding modernization of FHA and increasing loan limits. I suggest you all contact congress. This is what congress can do to help us. Create more demand for housing by creating more liquidity in the mortgage market.

Just my opinion...Jeff


Dear Jeff,
I want to personally thank you each of you for taking action on these latest Calls for Action in support of FHA Modernization. More than 90,000 REALTORS contacted the Senate urging passage of the Housing bill. On July 11th, the Senate voted 63 to 5 to approve the legislation. As a result of your efforts, HR 3221 creates affordable housing opportunities by setting loan limits up to $625,500 for Fannie Mae, Freddie Mac and FHA, and will stimulate housing demand with a temporary $8,000 home ownership tax credit. The bill also includes broad reform for Fannie Mae, Freddie Mac, and FHA, and creates a new FHA program to help homeowners at-risk for foreclosure.
This bill is critical to restoring confidence in the mortgage and housing markets and the nation’s entire economy. But it isn’t complete yet. Now, the bill goes to a conference committee before Congress can send it to the President. Negotiations begin over the next few days and weeks, and both House and Senate leaders hope to get the bill on the President’s desk before the August recess.
Of course, none of this would have been possible without members mobilizing in support of this crucial legislation. Our strong involvement included face to face meetings between members and their Senators and Representatives in their home states as well as in Washington, DC. NAR generated more than 250,000 e-mail messages and phone calls urging Congress to take action on the vitally important Housing bill.
By working “All Together” we have shown that when REALTORS stand united the American dream of homeownership is open to all. Thank you for your successful efforts!
Dick GaylordPresident NAR

BANK FORECLOSURE SOLD BY THE CAMERON TEAM

We have been working with Indymac bank to sell some of their Foreclosure homes. Last week we had our first closing. The home was located in Knoell Scottsdale, a subdivision in Scottsdale that was built in 1985. It was an interesting experience. With the real estate market in Scottsdale shifting, buyers are acting strangely. Within a few weeks of listing the Foreclosure home for sale we had 2 offers. Both were bottom fishing. But one stepped up and paid $270K for the home. One week before closing, he cancelled and lost his $2500 earnest money. He cancelled fearing the Scottsdale real estate market was declining and this Foreclosure was not a good enough deal. He just did not get that this was an adjusted price. The home sat for 2 weeks. I was shocked, then we got 4 offers over a weekend. We had an offer at full price, $275K, but the bank took the lower offer that was cash. An investor was bidding with others for this Foreclosure home in Scottsdale. This to me shows that in Scottsdale for this product in the real estate market THIS IS A BOTTOM!

Just my opinion,

Jeff Cameron

METRO PHOENIX HOME INVENTORY LEVELS DROP AGAIN

Inventory of single family homes for sale in the Metro Phoenix area dropped by over 700 last night. Our inventory levels are at the lowest point in over a year. Today there are 42,800 single family homes listed for sale in the Arizona Multiple Listing Service. That is the lowest level I have recorded since April 16, 2007. Along with sales at a 2 year high and Pending home sales at a 2 year high, this is just another sign we are approaching a bottom. Where is the bottom? We will only know when we see it in the rear view mirror. However, we can use this statistics in order to know the market is turning. A market of this size does not turn quickly and will not turn over night.

I read this new article sounding off about a recovery, I hope you enjoy it.

Just my opinion,

Jeff Cameron

Over the horizon, a housing recovery: Harvard report finds immigration, other demographic trends will fuel housing demand over the next decade.
By Beth Braverman, CNNMoney.com contributing writer

NEW YORK (CNNMoney.com) -- The current housing market is bleak: home prices and sales are plummeting, foreclosure proceedings are skyrocketing and mortgage rates are on the rise. When will things be better?
A new study from the Joint Center for Housing Studies of Harvard University, "The State of the Nation's Housing 2008," finds the country poised to see an increase in housing demand over the next decade.
"The good news is that we still have a growing population," said Nicolas Retsinas, director of the Joint Center for Housing Studies and one of the study's authors. "As long as you have more households, more people are going to need places to live."
Social trends - people getting married later and divorced more often - are making single-person households the fastest growing household type, the study finds. In addition, a long-term net increase in potential home buyers will be driven by demographic factors: the aging of "echo boomers" into adulthood, an increased life expectancy for baby boomers and projected annual immigration of 1.2 million. http://realestate.aol.com/article/_a/over-the-horizon-a-housing-recovery/20080626120409990001?ncid=AOLCOMMre00DYNLprim0001&icid=200100397x1204780037x1200229763

ARIZONA LOOSES 6,700 JOBS IN MAY, 4.4% UNEMPLOYMENT RATE

We continue to shed jobs here in the valley of the sun. Job losses are spreading from the construction industry to the rest of the economy. However some areas show strength. The housing industry is primed for recovery as we slowly go through the excess inventory. Home construction should hit a bottom this year and begin to move up next year. The question is how bad does the recession get before housing turns fully?


Arizona Department of Commerce, Research Administration
Nonfarm Employment Down by 6,700
in May; Unemployment Rate at 4.4%
Arizona’s seasonally adjusted unemployment rate rose to 4.4 percent in May, a one-half of one percentage point increase from 3.9 percent in April. The national rate increased from 5 percent to 5.5 percent during the same time period. The civilian labor force in the state increased and employment fell, according to local area unemployment statistics. Arizona’s economy lost 6,700 nonfarm jobs in May for an over-themonth percentage change of -0.3 percent. Based on the 10-year average, a small gain was expected during May (+0.1%). http://www.workforce.az.gov/admin/uploadedPublications/2711_PrJune08.pdf

NOT WHAT THE REAL ESTATE DOCTOR ORDERED, HIGHER INTEREST RATES

As high oil prices are sending inflation into every aspect of our economy, interest rates tick up. The entry level buyer is driving the recovery efforts in our real estate market and higher rates take away their purchasing power. The reality is that until our market is fully recovered we are going to be dependent on lower rates to bring in first time home buyers and investors. Rates are then tied to inflation which is all about oil.
It is time for the US government to do something about oil prices. These high prices are driven by speculators with no place to make a profit today, so they buy oil. Let's hit on both the supply and demand side. Increase drilling, open markets, but drill smart and keep the environment in mind. Increase incentives for research to lower our dependence on oil. I would love to see a candidate for the President of the United States come out with a 10 year plan to cure our addiction!

Just my opinion,

Jeff Cameron

article on interest rates:
Mortgage Applications Plunge on Soaring Rates
By Reuters 18 Jun 2008 07:04 AM ET
Applications for U.S. home mortgages dropped for the fourth week in the last five as soaring rates on standard, fixed-rate mortgages choked off refinancing opportunities, an industry group said on Wednesday. CNBC.com
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 8.7 percent to 508.4 in the week ended June 13.
The MBA's seasonally adjusted index of refinancing applications tumbled last week by 15 percent to 1,378.6 -- its lowest since July 2006.
The gauge of loan requests for home purchases declined 4.3 percent to 360.2.
Fixed 30-year mortgage rates averaged 6.57 percent in the week, up 33 basis points from the prior week and the highest since July 2007.http://www.cnbc.com/id/25237087

METRO PHOENIX HOME SALES AND TRACKING

Another week and another good week of sales. Last week I recorded 1,242 homes sales. Not the best week of the year, but another in the mid 1,200's. The 4 week moving average came back above 1,200 to 1,204. It had dropped due to the Memorial Day holiday week, where sales slacked off. Again, the weekly sales are at the highest point in over 2 years. This is great news as our market moves out of the mess it is in. We are starting to see multiple offers on homes again, only those priced right. The problem is still TOO MANY SELLERS don't understand they are over priced. The BEST thing they can do for their value is take the home off the market. The quicker we get to a supply and demand balance, the sooner prices stop sliding. It is worst in Scottsdale. I have been looking for a buyer looking in the $800,000 to $1,250,000 range. I see nice homes that are not selling, then I see similar homes priced $100,000 to $200,000 more. I think, "boy if they would just get out and see what I see." If they did, then they would know their choice is to lower, take their home off the market OR sit there and hurt us all by increasing the glut of "homes that will not sell!"
Pending home sales are in the 8,000 range today. I have only recorded 5 weeks where Pending home sales has been in the 8,000's since October of 2005. Another great stat showing the market is turning to the positive.
What is selling? When I look at the market, 45% of homes are vacant. That is really the only way to track REO and SHORT SALE properties, because agents don't fill out listings properly. I know not all vacant homes are REO and SHORT SALES, but not all SHORT SALES are vacant. So, it is the best barometer. With 45% of the Active listings being vacant, 65% of the Pending and Solds are vacant properties. What does that tell us. It tells us buyers are choosing those vacant homes over owner occupied homes at a ratio close to 2 : 1. Usually the owner occupied homes are in better shape and show better than do vacant homes. Buyers must be selected the vacant homes due to value. VALUE = PRICE! We can look and study all day, we still come back to what we all know, PRICE IT RIGHT AND IT SELLS!

Just my opinion,

Jeff Cameron

This weeks Numbers:
Single Family Inventory 43,255
Months of Inventory based on Pending 5.5
Pending Home Sales 7,934
Last 7 days Sales 1,242
4 week moving average Pending Home Sales 7,815
4 week moving average Last 7 days Sales 1,204
4 week moving average Home Closings 1,147

PENDING HOME SALES JUMP

I have been reporting this for a while. Why do they report April numbers in June? May numbers are even better. It was helpful when the market was slowing, but that things are picking up, it is slowing the recovery.
Here in the Metro Phoenix area, our MLS is showing 7,863 single family homes in the Pending status. That is the highest number in over 2 years. If more buyers were aware of this, I believe more buyers would get off the fence. Sales are also at their highest level in 2 years. Our next goal is to get closings to that level. Closings are dragging due to the short sales, they take 4 to 6 months to close.


NAR: US pending home sales move higher in April
AP
Posted: 2008-06-09 15:24:31
NEW YORK (AP) - Pending home sales unexpectedly increased in April to the highest reading since October, an industry group said Monday, but they remain more than 13 percent below a year ago. The National Association of Realtors' seasonally adjusted index of pending sales for existing homes rose to 88.2 from a March reading of 83.0, the lowest since the index was started in 2001. The index stood at 101.5 in April 2007. Wall Street economists polled by Thomson/IFR had predicted the index would remain steady at 83. A reading of 100 is equal to the average level of sales activity in 2001. The April index in the West climbed 8.3 percent from March and is 4 percent higher than a year ago. In the Midwest, the index jumped 13 percent, but is still lower than in 2007. The South posted a 4.6 percent gain, while the Northeast index declined 1.9 percent. Read the full article: http://money.aol.com/news/articles/_a/nar-us-pending-home-sales-move-higher-in/n20080609152409990024

CONSUMER REMAINS STRONG, RETAIL SALES UP IN MAY

The consumer is looking strong for May. Preliminary results from retailers are looking good. You can read the stats below.
I have had a theory about this whole situation. It goes something like this: The amount of people delinquent on their mortgage as a percentage is at its highest point in 30 years. I believe today we have the highest actual level of foreclosures, due to more homes today. Many of the home owners, who have given up on their home and selling in a short sale or going into foreclosure, simply are not making their monthly payment. I home owner with a $2,000 (for example) payment, where the new adjustment is now $2,800(for those with mortgages adjusting) stops making the mortgage payment. For 4 to 10 months they save $2,000(what they were paying). That in turn gives them $2,000 more to spend on groceries and gas and whatever. This is why our economy is only slowing and not dropping off a cliff, in my mind.
I was just in California, on the strip at Seal Beach I got my hair cut. My stylist had just sold his home in a short sale. His old payment was $3,000, he is renting in the same complex for $1,500. His rental unit is nicer than the one he owned. He is now saving $1,500 per month and since he is American, it will be spent!


Consumers Return to Malls in May
AP
Posted: 2008-06-05 11:02:53
NEW YORK (June 6) - U.S. consumers stepped up their shopping in May after tax rebate checks hit mailboxes, giving many of the nation's retailers stronger than expected sales for the month. Still, there were signs that many people are still focusing on necessities such as food and gas.

Discount and lower-priced stores such as Costco Wholesale Corp. and Wal-Mart Stores Inc. were again among the strongest performers. Analysts had predicted a gloomy May, with consumers contending with a rising cost of living, declining home values and tightening credit. However, according to a preliminary report from Thomson Financial, of 27 retailers reporting, 13 beat expectations, 3 met expectations and 7 missed. Read the full article here: http://money.aol.com/news/articles/shopping/_a/consumers-return-to-malls-in-may/20080605073909990001

METRO PHOENIX HOME SALES FOR THE WEEK ENDED JUNE 2, 2008

The numbers are looking better and better after last weeks pull back. We have to expect a holiday week to be light on the sales, especially one that has a holiday on Monday.

This last week included an end of the month, so we experienced a large reduction in inventory levels. The total inventory of SFH (single family homes) dropped by 1,112 to a total of 43,282. The only time I have registered this large of a drop over the last 3+ years of tracking is during the last week of the year, many agents write their listing agreements to expire at the end of the year. The inventory levels are at their lowest level since the first week of the year, and then after that the lowest since April 2007. Supply is still an issue, but instead of getting worse it is slowly improving. With all the foreclosure homes coming on the market, the logical answer for this is that homeowners are taking their home off the market. I would suggest that those homeowners who understand an overpriced home hurts the market right now, are taking them off the market. THANK YOU!

THE GOOD NEWS IS ABOUT DEMAND! Yes, demand continues to improve. I registered 1,279 home sales last week. That is the highest level in over 2 years! Yes, since the week of May 15, 2006, last week was the highest recording of home sales.
Not only do the weekly numbers show this strength, but the 4 week moving average is at nearly 1,200 and we have been experiencing the highest 4 week moving average since May of 2006. Why a moving average? The moving average takes the last 4 weeks sales and divides it by 4. This evens out any dramatic ups and downs, for example the week before last was a holiday week and thus lower. This is a better number.
After meeting with some investors last month, I added a new stat. That is the closed homes. This one varies more dramatically week to week. Many home buyers like to close at the end of the month. I was surprised to see how many close each week, since I thought most everyone closed at the end of the month. The home closings last week reached 1,570, the highest level since July of 2007. More importantly, the 4 week moving average was at 1,146, the highest number since September of 2006. The closings will lag behind the sales for a couple of reasons. First, since we have come out of a period of such low sales, it takes a while to catch up. Second, since many of these short sales take 3+ months to close, that will also delay the catch up period. However, the number is growing nicely and again the best since September 2006!

These are great numbers, but what do they mean? The market is improving. Great can we raise the price of our home? No, on the contrary, prices will continue to slide. But this tells us the slide is nearing a bottom. Most of the sales are happening away from the city centers, like Scottsdale for instance. Most home sellers in Scottsdale have not lowered their price to where the market is. I believe, as Scottsdale was last to loose value, it will be last to bottom. Most of the new financing is available for the entry level buyers. We are seeing multiple offers for some properties priced under $300,000.

Where is the bottom? We will only know when the bottom has hit when we see it in the rear view mirror. In some areas, I believe we will be in an "over sold" capacity. What I mean by "over sold," is just the opposite of what happened in 2005-2006. Then homes were "over bought." Prices were driven to unrealistic values. Now, I believe homes will be driven unrealistically low. We can already find places where you could not build a home for what they are selling for today. That is "over sold."

This weeks Numbers:

Single Family Inventory 43,282
Months of Inventory based on Pending 5.8
Pending Home Sales 7,500
Last 7 days Sales 1,279
4 week moving average Pending Home Sales 7,698
4 week moving average Last 7 days Sales 1,198
4 week moving average Home Closings 1,146

Below are some graphs I created to demonstrate those numbers. You can click on the graph, it will get bigger and easier to see.

The First Graph is SFH sales, comparing the last 6 years. Look how the line this year is straight Up! I believe we will not see such a soft off season this year as buyers sense the bottom and jump into the market.
The Second Graph shows inventory levels over the past 2 years. See how we uncharacteristically are headed down since March, unlike other years.














Graphs 3 and 4 are below. Graph 3 shows how many months of supply their are based on Pending home sales. Numbers below 6 months would lead into a seller's market. But we need to know our numbers. When I say that, I mean understand there are many Pending home sales that are short sales. They take much longer to close and thus show a larger number of Pending home sales.
Graph 4 is 3 lines. One is weekly home sales, you see how jagged that is. The next is the 4 week moving average of weekly home sale, a more evened out line. The big drop 2 weeks ago in home sales was due to the holiday. The last line is the 4 week moving average of home closings. That is rising nicely as we are only about 3 months into the recovery in Demand.

If you have any questions about these numbers, the graphs, the market or about buying/selling a home; please contact me or a member of our team.

Thanks,

Jeff Cameron

The Cameron Team

480-502-7699

jeff@thecameronteam.com

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METRO PHOENIX HOME SALES GRAPH

Above is a graph that reflects the Metro Phoenix home sales. There are 3 different lines plotted. One is the weekly home sales, another is the 4 week moving average of weekly home sales and the last is the 4 week moving average of home closings. All this information was derived from the Arizona Multiple Listing Service. We use the 4 week moving averages due to the fluctuations in the exact reading time.
You can see the home sales and closing are continuing to rise. Demand has been returning to the market. Buyers are taking advantage of the lower prices and buying up a storm. We have a ways to go, but things are getting better. One confusion by the public is that even though things are getting better prices continue to drop. That is just the way it works! Until we transition from a buyer's market to a seller's market, prices will continue to drop.