Signs of the residential housing recovery are popping up daily.  The most rapid recoveries are the housing markets that were hardest hit, such as Metro Phoenix.

Nationally we are seeing positive signs of recovery and a turning real estate market across all price points with the exception of a few weak housing markets.

USA Today reported that the number of existing homes for sale (inventory) dropped to 22% from a year ago.

The National Association of Realtorsreported a rise in home prices in 74 of the 146 housing markets they track in the first quarter of 2012 vs. declines in 72 areas.

Let’s look at some encouraging statistics for first quarter 2012:

• In Phoenix the March Inventory was down 64% from a year ago.
• The National Association of Realtors reported that there are a shortage of inventory of homes for sale in Phoenix, Orange County, California, Naples, Florida, Seattle, Suburban Washington, DC and North Dakota.
• According to TransUnion mortgage delinquency rates dropped from 6.19% in the last quarter of 2011 to 5.78% in the first quarter of 2012.
• Investors accounted for 22% of buyers.
• Condo prices rose 3.4%.
• All cash transactions made up 31% of all sales.
• Existing home prices were up 5.3% and are the highest level since 2007.
• The hardest hit markets are now among the top recovering markets.

Here’s a quick snapshot of the housing activity for last month.

The supply of homes for sale is shrinking and there is not enough inventory to keep up with the Buyer’s demands…. this is known as a Seller’s market which we have not seen since before the housing bust.

Home prices rise in a Seller’s market and it is a sure sign of a housing market recovery.

Below are some highlights of the market housing activity from April issued by The Tucson Multiple Listing Service.

Statistics:

• Average Sales Price saw an increase of 4.53% from March to April.

• Average List Price is up 5.62% over March.

• Total Under Contract rose significantly from March to April by 19.52%, and 27.16% from April 2011.

• Total Unit Sales decreased 8% from March, while up 10.76% from April 2011.

• The Median Sales Price increased again in April to $134,000, a .83% increase from March, and a 1.52% increase over April 2011.

• Total Sales Volume decreased slightly in April by 3.84%, but increased 11.90% from April 2011.

• The number of New Listings decreased 24.05% from March and increased 7.23% over April 2011.

• Average Days on Market decreased again, from 77 in March to 74 in April.

• 37.8% of April closed sales are attributed to cash, while conventional loans made up 31% and government loans accounted for 27.7%, leaving 3.5% as other financing.

The above statistics were provided by The Tucson Multiple Listing Service, Inc. is a wholly owned subsidiary of the Tucson Association of REALTORS®, dedicated to providing a reliable real estate database for members and the public. 

Making the decision to buy rental property and becoming a landlord is very appealing in this market. With record low home prices and record low interest rates the purchase of rental property seems very appealing.

However, If this is the first time you will be purchasing a rental property you must get over the hurdle of obtaining mortgage financing in a tight credit environment.

This can be difficult for the first time investor who does not have decent credit and sufficient income to qualify for rental property financing, or better known as non-owner occupant (NOO) financing. Even if you will have no difficulty with credit or income issues….non-owner occupant financing does not come cheaply.

If you plan on buying an investment property, be prepared to put some serious money down. Lenders have the typical tendency of expecting down payments’ of around 20-25% or more, depending on your credit profile and the value of the property. The interest rate for NOO property will be higher than what you would pay for owner-occupied property.

A good way to get into the rental income business and avoid paying extra for a NOO loan is to buy a home in which you will live in for a year or more. In this way you need only to qualify for an owner-occupied loan (traditional financing for a home you will live in).

As an owner occupant, you can take advantage of the affordable financing terms and interest rates available in today’s market, and you may be able to put down as little as 3.5% with FHA financing. The loan stays in place with the original terms when you move out and make it a rental. It makes sense to get into the rental business this way, if you are willing to sell your current home (if you own one), and be willing to live in the rental property home for at least 12 months.

While living in the rental property you have purchased you can upgrade and/or renovate the home and therefore increase the value of the property and be able to ask for a higher rent.

However, do your due diligence before you purchase and spend money to fix up the rental property.

Here’s what to look for in a rental property;

• What are the average home prices and the rental rates for the area?
• Is the home located in a good zip code that commands higher rents?
• Is the home located in a good school district?
• What is the proximity to stores, public transportation and freeways?
• What amenities do the neighborhood offers?

All of the above can help or hinder your chances of renting a home out.

Once you have lived in your rental home for a year or more, buy your next owner-occupant property and rent out the original one. Then repeat once every one to three years. You will be able to obtain financing in this way generally for up to 4 loans, after that, the underwriting criteria may get much tougher, and the loan costs, interest rates, and terms will be less appealing.

In summary, if you are willing to make a move every couple of years and deal with the headaches that often times come with owning rental property, you can set yourself up for a nice second stream of income. This can be so very important in your retirement.

Everyone has heard about the housing crisis. However, it may not affect you personally until you try to sell your home or refinance. The lender will insist that you get an appraisal on your home. The low appraisal value that comes in for your home may be an eye-opener for many homeowners.

Almost every housing market in the Nation has been affected by unprecedented numbers of foreclosures which drove down home prices and values across the board. Your home was no exception.

How is the appraisal value of your home obtained?

Banks, homeowners and home buyers all depend upon a licensed home appraiser to supply them with an unbiased report of the value of a particular piece of property.

When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features measure up against those of similar homes recently sold nearby.

Factors appraisers consider in determining the homes value are:

• The quality of structure
• Level of maintenance
• Overall appeal of the property

Appraisers are trained professionals. First, they derive a base for your home’s value based on the recent sales prices of homes that are comparable to yours in terms of bedrooms, bathrooms, style, and square footage.

Then, accounting for features and amenities that make your home different, the appraiser applies “adjustments” to that base value.

This methodology is called the “Sales Comparison” approach and the result is your home’s appraised value.

It’s the most common appraisal method used by lenders.

What to do if the appraisal comes in too low?

Appraisers have the last word, but they will consider input from homeowners who are refinancing or from real estate agents when a home is being sold.

As a homeowner you can’t affect the sales prices of your home’s comparable properties, but you can help your appraiser understand how your home stands apart from these homes. This, in turn, can affect your home’s adjustments, resulting in a higher appraised value.

With home appraisals, every valuation dollar can matter. With that in mind, here are a few tips for maximizing your home’s appraised value:

• Be home for your appraisal so you can answer the appraiser’s question, if there are any.
• Mention any new roofing, flooring, HVAC, plumbing, or windows you’ve installed since purchase.
• Don’t mention projects or repairs you’re “about to undertake”. Appraisers don’t credit for unfinished projects.
• Make minor household fixes prior to the appraisal (e.g.; leaky sink, running toilet, peeling paint).
• Present a tidy home. This can contribute to a higher “overall condition” adjustment.

Lastly, schedule the appraisal for a time that is convenient for your entire household. An appraiser needs to see, measure, and take photos of every room in your home. For example, if a room’s door is closed because of a resting family member, the appraiser may need to schedule a second appointment to complete the appraisal, and that can raise your appraisal costs.

Remember appraisers will not consider adjusting home values based on your personal issues. Even if your reason for selling is due to a job loss, or job transfer, or your inability to keep up the mortgage payments’ an appraiser will not consider any personal factors.

You can ask for a second opinion.

If your home appraisal comes back at a value you believe is too low, you can request that a second appraisal be performed by a different appraiser. You will have to pay for the second appraisal. Keep in mind that the appraisal you received may be accurate, and it may be an indication that you need to adjust your pricing or the size of the loan you’re refinancing.

Call us today at: (520) 219-1024 to get Your Personalized Market Analysis

It’s Spring and It’s The Best Time to Sell Your Home. The spring selling season is here and the market has finally turned in favor of sellers. Buyers are gearing up to find the perfect home.

It’s well known in the real estate industry that, if you plan to sell a home, the spring season is the best time to do it. Buyers come out in droves and the market bares more rewards for those sellers who are ready. Here are some quick ways you can get your home in top shape for maximum return.

First Impressions….

First impressions are key to a quick sell, and nothing gives a better first impression than curb appeal.  Buyers want to walk up to a home and feel this is the one. Taking advantage of a buyer’s first impression is as simple as cleaning up the front yard and getting rid of the clutter.

Add some fresh potted plants in the entrance way, or plant some new flowering plants in the front yard, and if needed, touch up chipped or faded paint.

Now, walk across the street and take a good hard look at your entire front yard. Does your home say welcome when you look at it? Does your front yard need some touch up, shrubs or trees need to be trimmed, flowerbeds and gardens need some gardeners love? Are your windows in need of cleaning? Make sure your home sparkles from the outside before you move to the inside.

How to Impress the Buyer From Inside Your Home…

When a buyer sees a home for the first time it has to be perfect. They want to envision themselves living there and it’s up to you to make that happen. Give every room in the house a thorough cleaning, remove all personal items including family photos, clean out closets and pantries, and touch up paint where necessary.

If you have carpets get them cleaned by a professional, especially if you have pets. During showings, if you do have pets, ask the neighbors or a family member if they will take care of them while you’re showing the home. The whole idea here is to appeal to as many potential buyers as possible. Pets will eliminate half of your buyer pool due to allergens and pet dander.

Enhance Your Homes Main Selling Features….

Kitchens and bathrooms are your main selling features in a home so they have to look their best. In the kitchen, keep the counter tops spotless and remove unnecessary appliances and cookware. You can spruce up your kitchen by replacing old cabinet knobs, adding new blinds or draperies, and giving it a fresh coat of neutral paint.

Bathrooms should have fresh-clean towels, new shower curtains, and replace worn or defective faucets. Bathrooms can easily be transformed with a new mirror and new light fixtures. Buyers are looking for updated kitchens and bathrooms, so if yours is in need of some updating, get it done now.

Selling a home for top dollar is all about enhancing your best selling features and creating an inviting atmosphere. These are quick, easy and low-cost ways to prepare your home for the spring selling season. Check with a Realtor if you have any questions and good luck!

The market in Tucson has turned! We have been waiting over 6 years to say this, but the data and trends point to a recent shift in the market.

Inventory is down, sales are up – resulting in only 4.1 months of inventory.

Even pricing is showing some early positive signs, with median price increasing to $133,500 in March.

We are watching closely for any emerging trends across other local markets in southern Arizona, including the Green Valley and Sierra Vista areas. Just as Tucson tends to follow Phoenix, some of these other markets may follow Tucson’s uptick.

As of March 2012 active inventory was 5,486, an 18% decrease from March 2011.

There were 1,347 closings in March 2012, 15% above March 2011.

Months of Inventory was 4.1, down from 5.7 in March 2011. Months of Inventory (MOI) is a good indicator of market health, taking into account both current inventory and sales rates. As a rule of thumb, a market is considered “balanced” when Months of Inventory is around 6.

Median price of sold homes was $133,500 for the month of March 2012, up 7% from March 2011.

The Tucson Market had 1,928 new properties under contract in March 2012, up 24% from March 2011.

Good News at last for Sellers.

Find Out What Your Home is Worth in Today’s Market, Call Us Today: (520) 219-1024.

Home prices in the 53 largest cities increased 5.8% in March from the same month last year, according to a report from real estate association RE/MAX.

The homes sold in March had a median sales price of $184,525. It was the second-straight month prices rose higher than the year-ago period. Before February, home prices landed below year-ago levels for 18 consecutive months. But home sales steadily picked up over the last nine months.

In March, home sales climbed 1.5% from last year and jumped more than 25% from February, according to the report.
“With buyers starting to jump into this market, this year’s selling season is shaping up to be the strongest we’ve seen in years,” said Margaret Kelly, CEO of RE/MAX. “Although we don’t expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold.”

Detroit showed the largest increase in prices from last year, increasing 22.8%, followed by Miami (21.8%), St. Louis (18.5%) and Phoenix (18.2%).

The homes sold in March spent an average 101 days on the market, down from 104 last year.

Inventory also dropped to a 5.3-month supply, a roughly 2% dip from February and the 21st consecutive monthly decline. The shadow inventory of foreclosed homes or those on the verge of repossession spans into the millions, and is anticipated to begin growing again as the robo-signing freeze thaws.

But RE/MAX anticipates housing to rebound through the selling season.

“Following these trends, the spring and summer months should experience increased activity. With falling inventory and many markets witnessing multiple offers with bidding competitions, prices are likely to continue to rise in many areas,” according to the report.

Source: john Prior, Housingwire

Regular Home Maintenance is Key to Preserving the Value of Your House

If you think home maintenance is an unavoidable series of weekend-eating chores, remember the age-old advice of Benjamin Franklin: “An ounce of prevention is worth a pound of cure.” The fact is, proactive maintenance is essential to preserving the value of your home—without it, your home could lose 10% of its value. Regular home maintenance enhances curb appeal, ensures safety, and prevents neglected upkeep from turning into costly major repairs.

“It’s the little things that tend to trip up people,” says Frank Lesh, former president of the American Society of Home Inspectors and owner of Home Sweet Home Inspection Co. in Chicago. “Some cracked caulk around the windows, or maybe a furnace filter that hasn’t been changed in awhile. It may not seem like much, but behind that caulk, water could get into your sheathing, causing mold and rot. Before you know it, you’re looking at a $5,000 repair that could have been prevented by a $4 tube of caulk and a half hour of your time.

Maintenance affects property value

Outright damage to your house is just one of the consequences of neglected maintenance. Without regular upkeep, overall property values are affected.

“If a house is in worn condition and shows a lack of preventative maintenance, the property could easily lose 10% of its appraised value,” says Mack Strickland, a professional appraiser and real estate agent in Chester, Va. “That could translate into a $15,000 or $20,000 adjustment.”

In addition, a house with chipped, fading paint, sagging gutters, and worn carpeting faces an uphill battle when it comes time to sell. Not only is it at a disadvantage in comparison with other similar homes that might be for sale in the neighborhood, but a shaggy appearance is bound to turn off prospective buyers and depress the selling price.

“It’s simple marketing principles,” says Strickland. “First impressions mean a lot to price support.”

Prolonging economic age

To a professional appraiser, diligent maintenance doesn’t translate into higher property valuations the way that improvements, upgrades, and appreciation all increase a home’s worth. But good regular home maintenance does affect an appraiser’s estimate of a property’s economic age—the number of years that a house is expected to survive.

Economic age is a key factor in helping appraisers determine depreciation—the rate at which a house is losing value. A well-maintained house with a long, healthy economic age depreciates at a much slower rate than a poorly maintained house, helping to preserve value.

Estimating the value of maintenance

Although professional appraisers don’t assign a positive value to regular home maintenance, there are indications that maintenance is not just about preventing little problems from becoming larger. A study by researchers at the University of Connecticut and Syracuse University suggests that maintenance actually increases the value of a house by about 1% each year, meaning that getting off the couch and heading outside with a caulking gun is more than simply a chore—it actually makes money.

“It’s like going to the gym,” says Dr. John P. Harding, Professor of Finance & Real Estate at UConn’s School of Business and an author of the study. “You have to put in the effort to see the results. In that respect, people and houses are somewhat similar—the older (they are), the more work is needed.”

Harding notes that the 1% gain in valuation usually is offset by the ongoing cost of maintenance. “Simply put,” he says, “maintenance costs money, so it’s probably best to say that the net effect of regular home maintenance is to slow the rate of depreciation.”

How much does maintenance cost?

How much money is required for annual maintenance varies. Some years, routine tasks, such as cleaning gutters and changing furnace filters, are all that’s needed, and your total expenditures may be a few hundred dollars. Other years may include major replacements, such as a new roof, at a cost of $10,000 or more.

Over time, annual maintenance costs average more than $3,300, according to data from the U.S. Census. Various lending institutions, such as Directors Credit Union and LendingTree.com, agree, placing maintenance costs at 1% to 3% of initial house price. That means owners of a $200,000 house should plan to budget $2,000 to $6,000 per year for ongoing upkeep and replacements.

Proactive maintenance strategies

Knowing these average costs can help homeowners be prepared, says Melanie McLane, a professional appraiser and real estate agent in Williamsport, Pa. “It’s called reserve for replacements,” says McLane. “Commercial real estate investors use it to make sure they have enough cash on hand for replacing systems and materials.”

McLane suggests a similar strategy for homeowners, setting aside a cash reserve that’s used strictly for home repair and maintenance. That way, routine upkeep is a snap and any significant replacements won’t blindside the family budget. McLane’s other strategies include:

Play offense, not defense.

Proactive regular home maintenance is key to preventing small problems from becoming big issues. Take the initiative with regular inspections. Create and faithfully follow a maintenance schedule. If you’re unsure of what needs to be done, a $200 to $300 visit from a professional inspector can be invaluable in pointing out quick fixes and potential problems.

Plan a room-per-year redo.

“Pick a different room every year and go through it, fixing and improving as you go,” says McLane. “That helps keep maintenance fun and interesting.”

Keep track.

“Having a notebook of all your maintenance and upgrades, along with receipts, is a powerful tool when it comes to sell your home,” advises McLane. “It gets rid of any doubts for the buyer, and it says you are a meticulous, caring homeowner.” A maintenance record also proves repairs and replacements for systems, such as wiring and plumbing, which might not be readily apparent.

Source: Houselogic

You may be one of the typical U.S. taxpayer who will receive roughly $3,000 in federal income tax refunds this year.  This averages out to $250/month. So, what how do you plan to spend an extra $250 monthly? Or maybe you won’t be spending your refund.

Watch this video from NBC for some solid advice on what to do with you refund.
Whether you’ve already filed your annual taxes for 2011, filed an extension, or will squeak by on the deadline, you could probably be doing more with your taxes. The above video shares some tips. It’s four minutes of solid insight on tax refunds, tax withholdings, and reducing your household’s overall “bad debt”. There’s something for everyone.

Among the points covered in the tax refund piece:

• Consider changing your personal payroll exemptions so your 2012 refund is $0
• Remember that refunds are not “free money” — it’s your money. Spend wisely.
• Use your tax refund to fund retirement accounts

Advice is also shared about how to use your tax refund to fund a reserve account, or emergency fund. As a homeowner or home buyer, applying tax refunds to a savings accounts in this manner can go a long way. When you’re a homeowner, maintenance costs can be sudden and unexpected. A furnace can explode, for example; or, a roof could spring a leak. Having money set aside for crisis is essential.

Having a savings account will also improve your household’s long-term financial stability.

As a reminder, in most years, federal income tax is due April 15. However, with Tax Day falling on a Sunday and with the federal government closed for a holiday the following Monday, U.S. taxpayers in Arizona and nationwide get a reprieve until Tuesday, April 17, 2012.

Beginning Saturday, April 14 Bank of America will be ready to approve short sales in 20 days.

Bank of America announced it’s making changes to its short-sale procedures that will shorten decision times on short sale offers to 20 days, down from 45 days or longer.

The move could spare delinquent homeowners from months of limbo while the bank considers offers from buyers. No longer will the buyer have to wait up to 6 months for the Bank to approve the deal.

The new task flow in Bank of America’s short-sale management platform, Equator, will enable short-sale specialists to conduct tasks like document collection, valuations and underwriting simultaneously.
Bank of America has been working with Equator, a real estate software company, to develop a program that allows short-sale negotiators to approve the process faster.

When the changes to Equator take effect Saturday, five documents will be required to process short-sales initiated with an offer:

• A purchase contract including buyer’s acknowledgment and disclosure.
• HUD-1.
• IRS Form 4506-T.
• Bank of America short-sale addendum.
• Bank of America third-party authorization form.

Offer documents and supporting documents for all short-sales submitted with an offer must be uploaded before Friday, April 13, or files may be declined.

Major lenders are looking to save millions on court costs, lawyer fees and property taxes by avoiding foreclosure. Short-Sales also speed the process of getting bad loans off bank books and gets the properties back on the market faster.

To further sweeten the deals, many lenders are waiving the deficiency on the mortgages, which would allow homeowners to sell the house for less than they owe without having to make up the difference to the bank.

Need Advice? Call the Short Sales Experts at the Vallee Gold Team: (520) 219-1024