Phoenix Area Sales “Continued To Slip” In January
The January sales numbers are out for Arizona. “As the new year began, the local resale housing market continued to slip with 4,520 sales recorded in January. This is down from the 4,620 sales of December 2006 and the 5,260 recordings of a year ago. This is the lowest monthly level for January since 4,220 sales were reported in 2003, which was the year that the hyper-market began in the local area.”
“For January 2007, 15 percent of all recorded sales were for homes priced from $125,000 to $199,999, 43 percent for $200,000 to $299,999 and 39 percent for homes priced more than $300,000.”
“Last year, the distribution was 20 percent of all recorded sales were for homes priced from $125,000 to $199,999, 40 percent for $200,000 to $299,999 and 36 percent for homes priced more than $300,000. The increase in the higher price levels demonstrates how the move-up market tends to become more obvious in a slowing market. Several areas are continuing to show declining price activity.”
The Arizona Republic. “Many of the people in Arizona who help home buyers finance what is often the biggest purchase of their lives are not licensed. It’s estimated that there are as many as 18,000 unlicensed people taking mortgage applications, negotiating rates and getting loan commissions statewide.”
“But things could change. If House Bill 2320 is passed, it will require the licensing of most of Arizona’s mortgage loan officers and originators and bring more accountability to the industry.”
“Kelly Lewan recently bought a home in north Phoenix’s Tatum Ranch. She secured a loan with a 9 percent interest rate and a promise that she could refinance in a few months and cut her payment. She even paid off a prepayment penalty on the loan when she closed.”
“Now, Lewan is struggling to make her monthly payment, and her mortgage agent isn’t returning her calls.”
“‘There are loan officers in Arizona who aren’t educated on the business. They make mistakes and put consumers in the wrong loans. And some are committing fraud,’ said Stan Lund, president-elect of the Arizona Association of Mortgage Brokers.”
“‘We want to regulate anyone who is soliciting loans and getting commissions,’ said Felecia Rotellini, superintendent of the state Department of Financial Institutions. She recently led efforts to start a statewide mortgage fraud task force to tackle a cash-back scam that involves obtaining a mortgage for more than a home is worth and pocketing the extra money.”
“‘The bad mortgage brokers who can’t pass tests in other states have gone to Arizona, and some of them couldn’t get licenses because they have criminal records,’ said Richard Hagar, a Washington appraiser who helped that state crack down on fraud.”
“‘I know of mortgage people working out of their bedrooms and selling stereos on the side. They got into the business six months ago and don’t know a lot about it,’ said Rick Allen, a branch manager with (a) Valley mortgage firm. ‘But the big lenders who are exempt from the legislation are also hiring people without any experience, and those people can also do bad loans.’”
“Lewan said she thought everything was on the up and up when her Valley mortgage officer said she could get a $310,000 loan for a $299,000 home. She said he told her the extra $11,000 could be applied to her debt and she could quickly refinance to get a better loan with a lower rate because her credit record would improve.”
“But she said most of the $11,000 went to the mortgage broker, and he won’t return her calls about the money or help her refinance to reduce her $2,400 monthly payment. ‘I called his boss and got nowhere, and neither my broker or his boss are licensed,’ said Lewan. ‘I trusted him, and now I can’t make my house payment and had no idea getting money back was part of a scam.’”
The Review Journal from Nevada. “The inventory of luxury condominium units for sale and under construction in Las Vegas far exceeds demand, local research firm Applied Analysis concluded in its fourth-quarter condo market report.”
“There is insufficient market demand to absorb all of the units in the development pipeline, Applied Analysis principal Brian Gordon said. Potential inventory of 98,432 units includes 57,999 planned or proposed units, 3,889 existing units and 11,124 units under construction.”
“‘Obviously the supply side of the equation continues to increase as far as the number of potential units,’ Gordon said.”
“Gordon estimates that 18,500 units will finish construction by the end of 2010. It’s not likely that the feverish sales volume reported by early developers will be sustained in the near term, he said.”
“‘From the demand side, we look at sales activity and pricing,’ Gordon said. ‘The number of units is off the feverish pace of 2004 and the first half of ‘05 as the investment component of buyers has dropped off dramatically.”
“The number of units available in the existing resale inventory was 557 at the end of the year, with an average asking price of $861,000, or $639 a square foot, Applied Analysis reported.”
“Jeremy Aguero, principal of Applied Analysis, cautioned that up to 60 percent of luxury condo units that close escrow could enter the market during the next 36 months in the form of resales.”
From the ASU report:
‘The Scottsdale resale home market declined from 400 to 360 recorded sales, with the median sales price decreasing from last year’s $600,000 to $550,000. The Mesa resale housing market declined from 615 to 475 sales, and the median price fell from $240,000 to $235,000 ($241,000 in December).’
‘The Sun City resale market fell from 100 to 80 sales, with the median sales price decreasing to $190,000 from $212,000. As resale activity in Sun City West stayed at 40 sales, the median sales price decreased from $243,500 to $238,725. The townhouse/condominium market in Sun City declined from 60 to 45 recorded sales, while the median home price decreased from $140,000 to $133,500. In Sun City West, activity remained at 15 sales and the median sales price decreased from $203,450 to $151,000.’
‘The resale market in Gilbert decreased from 310 to 280 sales, and the median sales price decreased from $337,250 to $319,000 ($328,000 in December). The townhouse/condominium market fell from 15 to 10 sales as the median sales price decreased from $212,500 to $195,750.’
‘Avondale fell from 150 to 90 sales with the median price moving from $258,000 to $243,950 ($245,000 in December). El Mirage decreased from 70 to 65 sales, while the median home price went from $224,000 to $202,000 ($209,750 in December 2006). Goodyear declined from 100 to 70 sales, while the median price decreased from $275,000 to $260,000.’
Keep in mind this market was already under pressure in January 2006. And the distribution of sales moving up the price brackets means price decreases are actually greater than the stats show, IMO. Of course, just about everyone in Arizona knows this already.
I don’t know weather to laugh or cry:
http://news.yahoo.com/s/kgtv/20070213/lo_kgtv/11000657
Credit tightening my ass.
At least now we know there is no law that says you have to provide your SS# to banks.
Then why does MY bank still require it? Along with my mother’s maiden name, my city of birth, and my blood type?
Dang. I need to become an illegal immigrant.
Says right on your card that the SS# is for tax purposes only. Used to be a statute / code # on the back saying so. Everything is negotiable.
“Dang. I need to become an illegal immigrant.”
Why? If you just faked it who would know?
You’ll wish you were an illegal if you ever try to leave the U.S.
New “You can check in but you can’t check out” law by the asshats that have decided the constitution is just a piece of paper. Best to move assets offshore immediately if you are even considering a move abroad.
“Congress is on the verge of passing an outrageous law that would impose the first-ever “exit tax” on expatriates (former U.S. citizens or long-term residents).
Like many outrageous laws, this ridiculous bill is cleverly hidden within another Act. In this case, it’s buried in the “Small Business and Work Opportunity Act.” Sounds innocent enough right?
The Small Business and Work Opportunity Act includes an increase in the minimum wage along with tax breaks for small businesses. That means once this bill emerges from the conference committee, and both houses of Congress approve the bill, it would be political hari-kari for President Bush not to sign it.
Right now, this bill is stuck in a conference committee in Congress. If it passes, it could include a little-known provision, which demands that expatriates pay a tax on all unrealized gains of their worldwide estate. The gains will be assessed based on the fair market value of the expatriate’s assets and the tax due within 90 days of expatriation.
Legislative Overkill!
This exit tax applies to assets held in retirement plans and trusts, both domestic and foreign. The only thing it doesn’t apply to is U.S. real estate investments, which remain subject to U.S. tax under existing law.
Presumably, the phantom gain would be taxed as ordinary income (at rates as high as 35%) or capital gains (at either a 15% or 25% rate), as provided under current law. When the assets are actually sold, no further U.S. tax will be due (although the gain might be taxed again by the country in which the expatriate resides, leading to double taxation on the same income).
The section of the bill that applies to retirement plans is particularly unfair. First, these gains are generally taxed at the expatriate’s top marginal tax rate - up to 35% - and usually aren’t eligible for the more favorable 15% long-term capital gains rate. Also, expatriates who must withdraw assets from retirement plan to pay this tax, and are under 59-1/2 years old, will be hit with a 10% penalty tax on top of the exit tax. And finally, when distributions are actually made, the country where the expat resides could tax those distributions a second time. Talk about legislative overkill!”
This is from an article by Mark Nestmann of the Sovereign Society.
I think most countries have this law. I know when I left Canada for the US, I had to do this.
My neighbor showed me her 1099 from the bank for interest earned last year.
The SSN is first 9 digits of her phone number.
I called bofa on this, anyone can get this, you just have to tell them to call corporate if the local bank emps don’t know about it. Legal or illegal it does not matter, you just need two pieces of ID, one must be gov’t issued. Though they don’t say what gov’t that is….
You in fact do not need a social security number to have a bank account. That in fact is the way a lot of money from 3rd world nations that should not exist, is deposited here. I have friends who are foreign nationals with both a checking account, and large (6 digit) credit cards, and NO SS#. It has been this way for a long, long time!
My CC is larger - it has 16 digits. Not including the security code.
Seriously though - 6 digits?! You must have some serious banker friends. From third-world countries too you say. Hmmm.
Or maybe those six digits are in pesos?
Nope, just people that I grew up with, that have done well for themselves… Much better than I…
I wonder how much longer the average American will play by the rules when everyday we see illegals doing anything they want? I seriously fear a revolution/civil war in this country soon….why should we continue to obey the laws and pay taxes when the gov’t lets a certain group do whatever they want ..i.e. stay in this country ILLEGALLY?
It’s not that hard to figure out - these are Bush’s ideal citizens. They work hard for whatever you pay them, they don’t complain, they don’t vote. You can lock them up and even administer beatings if you want, they hardly ever call pesky lawyers.
If anybody who is not filthy rich expects to be treated any better than this in the future, all I can say is you are on the way out brothers and sisters.
My 18 year daughter recently opened a bank account and was required to provide 2 picture IDs to open a bank account and her SS #. We were told it was required because of the Homeland Security Act.
Homeland security doesn’t exist when it comes to borders and illegal immigrants. I think I’ll just apply for a credit card as an illegal immigrant. I just won’t repay when I max the card out. The same goes for medical care. Just go to a hospital and pretend to be an illegal immigrant with no ID. They can’t turn you away
So let me get this straight, I can walk into Bank of America and tell them I’m from Russia give them a telephone # for my SS# open an account and they will give me a credit card worth thousands of dollars. Am I reading that correctly or have I had way too much coffee this morning.
According to a new law, starting next year (May 2008), all state issued i.d. cards must have forge deterrent measures (i.e. RFID) in order for you to:
1. open bank acct
2. keep open the bank acct you have
3. show to your employer
There are other requirements, but these are the ones that struck me as most unconstitutional in nature. For any that haven’t already seen this movie, watch “America, From Freedom to Fascism” on Google Video. It may have been mentioned here previously. Good info on some of the laws that have recently passed, including some stuff on taxes.
Saw that documentary… interesting to say the least and if what you say is true either B of A is working on a money grab or we will be one nation sooner than later. Those gold bugs may be on to something.
You need to have a checking account for 3 months with no overdraws too. They sure are cracking down on fraud at BoA.
Get the credit card, close the checking account. Spend thousands of dollars courtesy of BoA.
OT… from Marketwatch…
Fremont General stops providing “piggyback” loans: WSJ
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FMT13.00, +1.14, +9.6%) no longer provides “piggyback” second mortgages, according to a media report Tuesday citing emails received this week by mortgage brokers. The emails said the company has stopped offering the mortgages, which are frequently used by borrowers seeking to finance 100% of a home’s price, because investors have no interest in them, the Wall Street Journal reported on its Web site. Officials of Fremont, based in Santa Monica, Calif., could not immediately be reached for comment, the Journal said. Fremont shares were up 10% at $12.99 in afternoon trading Tuesday.
I am going to take this as a good indicator. If more companies stop offering piggy backs, then it can only help speed up the implosion.
Is there any stock price pressure on the companies that offer PMI?
“She said he told her the extra $11,000 could be applied to her debt and she could quickly refinance to get a better loan with a lower rate because her credit record would improve.”
I guess the warning bells didn’t go off in head when he told her she could use money she borrowed to pay down the same loan ?
LOL - my thoughts exactly! She was counting her profits - no sympathy here.
Yea… you wonder about that.
This was an idiot test. She just found out her score.
Got popcorn?
Neil
Sorry for the long post…can’t get my tinyurl to work
Blue Shield sued by Realtors
A California association acts to stop its health insurer from canceling coverage for thousands.
By Lisa Girion, Times Staff Writer
February 13, 2007
The California Assn. of Realtors said Monday it had sued Blue Shield of California to stop the health plan from canceling its contract and dropping coverage for as many as 8,000 Realtors and family members.
The flap is the latest example of how high health costs and changes in the marketplace are eroding the availability of group coverage.
“We were abruptly notified — by mail — that our insurance coverage was being canceled,” said association President Colleen Badagliacco. “Families are scrambling unsuccessfully to find replacement coverage.”
The healthcare of some members may be interrupted if they are unable to line up replacement coverage by May 31, the termination date set by Blue Shield, Badagliacco said.
“Blue Shield has shown a callous disregard for the more than 8,000 people who will be stranded without medical coverage and has refused to engage in any meaningful discussions,” she said.
Blue Shield contends that the association failed to live up to a provision in the contract requiring 75% of its members who obtain health insurance through the group to purchase the Blue Shield plan, said David Seldin, a spokesman for the company. Once the participation dropped below that threshold, he said, it triggered the cancellation.
Seldin said Blue Shield notified the association in December of its decision to cancel the contract but was giving its members several months to line up new coverage.
Seldin said the 75% participation requirement was “important because in any contract you need to ensure that you are insuring the full range of individuals so that risk is shared broadly and risk be kept at a reasonable level.”
But a lawyer for the Realtors association said it had far more than 75% of its eligible members in the Blue Shield plan.
“We think we are actually at 99% participation,” said Debra Ferrier, the association’s assistant general counsel.
Blue Shield covers more than 3 million people in California on a variety of plans. The Realtor group is Blue Shield’s only guarantee issue association plan in the state. Such plans were created to allow access to guaranteed coverage for contract workers and other free agents, such as Realtors, who must purchase insurance on their own.
In contrast to individual coverage, a guaranteed issue plan will cover every member of the group in question, regardless of the person’s medical condition.
By law, a guarantee issue association plan requires a certain level of participation to ensure a broad mix of members, which helps spread the risk. The reason is that such plans are susceptible to so-called adverse selection — a concentration of less-healthy members — when individual medical insurance available on the open market lures away healthier and younger members with low premiums.
As the concentration of sicker, higher-cost members increases, premiums rise, pushing out more members who can find cheaper coverage elsewhere. This is known in the insurance industry as a death spiral, and can kill a plan.
A hearing on the Realtor association’s request for a court order temporarily stopping the cancellation is set for March 14 in Los Angeles County Superior Court.
This, in a nutshell, is why association health plans are doomed to failure. One member’s heart transplant can drive every other member’s premiums through the roof.
And in this day in age - when an insurance salesman doesn’t have to travel the countryside signing up and servicing his accounts - what actual savings can a groupactually wring out of an insurance company. With the internet az slim and east coast waaahoo are just as much a group as two guys in the same cubicle.
The end result of an association is that you saddle yourself to the health of the sickest member.
I feel so sorry for these real estate agents.
sarcasm off
“Lewan said she thought everything was on the up and up when her Valley mortgage officer said she could get a $310,000 loan for a $299,000 home. She said he told her the extra $11,000 could be applied to her debt and she could quickly refinance to get a better loan with a lower rate because her credit record would improve.”
. . … “‘I know of mortgage people working out of their bedrooms and selling stereos on the side. They got into the business six months ago and don’t know a lot about it,’ said Rick Allen, a branch manager with (a) Valley mortgage firm.
You know, the absolute laziness & stupidity of people really becomes apparent as this housing disaster plays out.
I would pretty much NOT buy anything over $10 from someone advertising on a cardboard sign stuck to a light pole, or a small generic ad in the PennySaver, etc.
Call me paranoid but yeah I kinda want a REAL brick n mortar place that actually exists, dedicated to the business at hand, preferably been around for a few years !!
If you want Amway atmosphere, then by all means frequent the bedroom offices & flea markets.
I have little sympathy for those who will not take some personal initiative on a major purchase, then whine later.
Aw, Karl, does that mean you’re not even going to pick up the phone and dial the long distance number when you see one of those “Real Estate Investor Seeks Apprentice” signs on a telephone pole?
Has anyone here ever tried calling that number just for kicks?
Not me. I’m too cheap to call the long distance numbers that are usually on those signs.
What’s amazing to me is that the authorities aren’t making the calls. How much easier does it get than a criminal activity where the bad guys actually advertise? Start taking these people off the streets.
That is why you use real estate agents. They know who is a trustworthy broker vs. some fly-by-night broker.
Shhhhhh a lot of them haven’t figured that out yet.
the markets up today because citi transfered their umbrella to travelers
the RE meldown doesn’t matter ,silly !
of course she’ll get a raise for being so ahead of her time an all
Felecia Rotellini, superintendent of the state Department of Financial Institutions.
OT anybody have a comment on how the LBO , whoops prvate equity craze will end?
reselling these debt balls as ipo stocks will be tough imo
Mortgage Meltdowns, front page Column One feature, today’s LA Times. I’m sure Ben will have it in his Cali section this afternoon:
http://www.latimes.com/business/la-fi-foreclose13feb13,0,5503897.story?coll=la-home-headlines
If he does that article will break records here.
It must feel real good to hear that Freemont doesn’t want to be the sloppy seconds on any more loans.
Specially if you hold a bunch of MBS paper on loans they sent out there
OT ? Has anyone any experience in Maricopa County (Phoenix AZ) filing a “Petition for Review of Valuation”?
I just got my valuation for 2008 and they’re going too high considering everything I’ve learned in this blog. My concern is their forms say that,
“Evidence contained in this appeal could be the basis for either increasing or decreasing the valuation.*** ”
Thanks for any comments,
WSF
Did it a few years back when I owned a home in Carefree before I dumped it for a substatial profit in 2005. Was succesful in reducing valuation and thus property taxes, based on meeting with assessor at formal review. Redid 3 years later as home was still over-assesed as the virtually the next door comparables. Denied,so took to the next appeal level, (more structured at county court setting), and lost in a kangaroo-court type environment. Judge, though did order assesssors office to revist neighborhood and address discrepancies of why bigger and newer parcels were substantially undervalued in comparison to mine. Result was that after about 18 months, neighboring parcels (6), were all paying significantly higher real estate taxes after being re-assessed based on my appeal. Neighbors got upset and went around asking each other what happened… as I privately smiled and planned to sell in a inflated market , which I did.
Moral of the story:
When asked “what is the fair amount of taxes one should pay?”, Warren Buffet replied: ” No more than your neighbors”.
So, yes, challenge your appeal if you can provide the hard documentation that you are SIGNIFICANTLY over-assessed based on neighboring and comparable parcels.(at least 50k, to have a chance).
On the subject of real estate taxes in Arizona and particularly Phoenix metro, the long term trend is definitely a more rapid escalation,IMO.
Old enough to remember when Florida in the 70s and early 80s was always mentioned as a place with very low property taxes compared to the Northeast..was looking at properties in the Boca Raton area last year and taxes now rival Long Island, NY in some cases ! (then add flood ins.)
Once Phoenix matures, the infrastructure issues multiply, and the economy flattens, in a decade or two, propety taxes here will no longer be deemed as much cheaper than other metro areas.
557 listed out of 3889 existing inventory? That’s what… 14%?? Yep, sounds way too tight; definitely need another 94,543 condos. NOT!!!