Market Update: Is There A 90 Day Window That May Slam Shut?

The Arizona real estate market is on an upswing. All the economic news and stats are pointing toward a long sustained recovery. The Reeves Team’s last 8 listings have had multiple offers from aggressive buyers competing for their homes. So what info do we have that leads us to believe this white hot market will cool off in a few short months? Check out our Market Update below.

Article Summary

1.) Arizona housing inventory is the lowest it has been in over 5 years. (see chart below)
2.) The 5 largest banks just settled a major suit with the government, bringing nearly 2 Billion to the AZ economy.
3.) Home prices in AZ have risen for four consecutive months, first time since the housing collapse. (see chart below)
4.)The Reeves Team and other big agents handling a large portion of the foreclosure business in Arizona have seen foreclosures dry up in recent months.

The Good News

Arizona real estate has been in the news quite a bit over the last month. First, there was the report released that confirmed Arizona was the only state in the U.S. that experienced an increase in home values. The speculation is that because Arizona was one of the hardest hit states when the housing bubble burst that it is also going to be one of the first to rebound.
Next came the news that the 5 biggest mortgage companies in the United States agreed to a 26 Billion dollar settlement with the government. This 26 Billion is to go back into the pockets of homeowners that had been harmed by fraudulent foreclosure processes put in place by the banks. This is also seen as great economic news for the state of Arizona. Arizona residents are expected to receive nearly 2 Billion dollars from the banks settlement, that money will go directly into the Arizona economy.

So with all this good news, what is this 90 day window we are talking about? Before we explain why all this good news might not last, let me give you one more piece of good news. Take a look at the three charts below, for the first time since the market collapsed all of the major market trends are pointing in the right direction.

Average Sales Price In Arizona.

We have now seen the average sales price rise for 4 consecutive months. The metric jumped nearly $15,000 in 4 short months. So what are the reasons for the turn around?

Why is Arizona the only state that is seeing this kind of improvement? The economy is partially to thank, but the real secret is the shortage in houses for sale.

Arizona Housing Inventory

The housing inventory in Arizona has been steadily declining now for the past year, this has more to do with the lack of foreclosures being processed by the banks than anything else, but we will get to that in a moment. At the height of the housing crisis, there were over 57,000 homes on the market in Arizona, as of the writing of this article there are just above 16,000. We have not seen inventories this low since the height of the market back in 2005 and 2006.

Days on market

The average days on market has been nearly cut in half over the past year, this is truly incredible when you consider this is not the amount of days that it takes to receive an offer, but instead it reflects the amount of days necessary to complete the entire transaction. Still not stunned? Consider this, the days on market metric also includes short sale listings, which can take upwards of 6 months to get closed. Yet the DOM is still under 90 for the first time in years.

The Clouds In The Distance

Yet Troy Reeves is quoted as saying “There is a 90 day window to get your home sold before the market conditions change.” What is it that Troy and his team are seeing that most of the media must be missing?

Fallout from the bank settlement

The truth is all of these current factors, the low inventory, the rising home values, and in some part the economic turnaround are due to one forgotten truth. While the banks were in negotiations with the federal government they basically quit foreclosing on properties. They did this because they knew they were going to have to pay out a sum of money for every house they foreclosed on between 2009 and when the agreement was reached.

So the banks made a strategic decision to halt foreclosures and save themselves the penalty they would eventually be paying. So many homeowners that were late on payments never received a foreclosure date, and many of those that had already been issued a foreclosure date saw that date pushed back until after a settlement could be reached.

Short Term Gain

This dramatic decrease in foreclosures eventually helped dry up the houses for sale in Arizona, which in turn increased competition for the current homes on the market and drove up prices. There is however a flip side of the coin. Even though these huge banks were not processing as many foreclosures, it does not mean that homeowners were not still falling behind on their payments.

Long Term Pain

So as the banks begin to ramp back up their foreclosure process, they will not only be dealing with the foreclosures to come, but they will also be cleaning up all the foreclosures they let slip through the cracks during the bank negotiations. Its possible, because of these circumstances prices might not only fall, but fall back even further than they were just 4 or 5 months ago.

What got the banks into trouble in the first place was moving to quickly, and not paying enough attention. Lets hope that the banks have learned their lesson and will take their time getting these foreclosure homes back on the market. While we can’t predict the banks, one thing is clear, with the banks ramping up their foreclosure process again the inventory levels can’t stay this low. More homes on the market means less competition, and less competition typically means lower prices.

Now that we know the banks have come to an agreement and will resume the foreclosure process, we expect it will take nearly 90 days before the market will see a major impact. Let us know in the comments below how long you think it will take, and if you disagree with us completely please let us know, we value your opinion.

The foreclosure nightmare that has plagued the U.S. and Arizona in particular over the last few years will eventually come to an end, but what we are seeing now is not that end, but it paints a good picture of what the end will look like. We here at the Reeves Team like what we see!

3 Great Tips To Improve Your Chances When Writing An Offer

Few things can be as nerve-racking as submitting an offer on a home you have fallen in love with. Coming up with that magic number that is low enough to satisfy you, but not so low that you are rejected can make you want to pull your hair out, especially when you really want the home. There are a number of reasons why a seller rejects an offer, but keeping these three in mind before you submit an offer will go a long way toward making sure your offer is accepted.

1. Presenting a seller with an offer that is way below the asking price may seem like a good negotiating strategy if you want a good deal, but this is one of the top reasons offers are rejected. Too low of a price may be taken as an insult to a seller causing them to reject your offer instantly. Sometimes it is perceived that the buyer could not be serious when the offer comes in too low, and that can cost a buyer their credibility and get their offer rejected. In some states, a seller does not even have to respond to an offer below the listing price, and if a home has just recently been put on the market, many sellers will not even consider it. Do your research and offer a fair price for the home if you want a seller to entertain a below list price offer.

2. Not contacting the listing agent before you present your offer is another big reason for rejection. Sellers may have specific needs or contingencies that must be met for them to sell. Perhaps they will require a long escrow period or even a cash settlement. Whatever their needs are, make sure that your real estate agent contacts the listing agent to see if there are any specifics that you could address in your offer. If they require a long escrow, present the offer with a longer closing date. Keep in mind that a seller is more likely to consider an offer from a buyer who is ready to go; earnest money deposits and a prequalification letter from a lender are a good way to separate yourself from other offers on the table. Making sure you meet the seller’s unique needs is a good way to make sure your offer is accepted.

3. If you think that your real estate agent is unprofessional, then chances are others do too. Believe it or not, a lousy buyer’s agent is a big reason why many offers are rejected. If you find yourself dreading having to deal with a real estate agent who is loud, or obnoxious, or otherwise unpleasant, then you should remember that this is the individual that will be representing you to the seller. If a listing agent has two identical offers, and one of them is from a real estate agent who is easy to work with and your real estate agent is not, chances are the one that will be presented to the seller with more enthusiasm will not be yours. Make sure that you have the right representation when submitting an offer will help make sure your offer is accepted.

Making an offer on a home is an exciting experience. By taking the time to strongly consider your offer, present a fair price, meet seller’s needs, and acquire good representation, you can increase the chances of having your offer accepted.

100 Facts For Arizona’s 100th Birthday

The Grand Canyon State turned 100 years old on February 14, 2012. Below are 100 fun facts for Arizona’s 100th Birthday.

1. Arizona has 3,928 mountain peaks and summits—more mountains than any one of the other Mountain States (Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming).

2. All New England, plus the state of Pennsylvania would fit inside Arizona.

3. Arizona became the 48th state and last of the contiguous states on February 14, 1912.

4. Arizona’s disparate climate can yield both the highest temperature across the nation and the lowest temperature across the nation in the same day.

5. There are more wilderness areas in Arizona than in the entire Midwest. Arizona alone has 90 wilderness areas, while the Midwest has 50.

6. Arizona has 26 peaks that are more than 10,000 feet in elevation.

7. Arizona has the largest contiguous stand of ponderosa pines in the world stretching from near Flagstaff along the Mogollon Rim to the White Mountains region.

8. Yuma, Arizona is the country’s highest producer of winter vegetables, especially lettuce.

9. Arizona is the 6th largest state in the nation, covering 113,909 square miles.

10. Out of all the states in the U.S., Arizona has the largest percentage of its land designated as Indian lands.

11. The “Five C’s” of Arizona’s economy are: Cattle, Copper, Citrus, Cotton, and Climate.

12. More copper is mined in Arizona than all the other states combined, and the Morenci Mine is the largest copper producer in all of North America.

13. Clark Gable and Carole Lombard, two of the most prominent movie stars of Hollywood’s Golden Age, were married on March 18, 1939, in Kingman, Arizona.

14. Covering 18,608 sq. miles, Coconino County is the second largest county by land area in the 48 contiguous United States.

15. The world’s largest solar telescope is located at Kitt Peak National Observatory in Sells, Arizona.

16. Bisbee, Arizona is known as the Queen of the Copper Mines because during its mining heyday it produced nearly 25 percent of the world’s copper and was the largest city in the Southwest between Saint Louis and San Francisco.

17. Billy the Kid killed his first man, Windy Cahill, in Bonita, Arizona.

18. Pioneer filmmaker, Cecil B. DeMille originally traveled to Flagstaff to make his first film but he arrived there in the middle of a storm and decided to move operations further west, to Hollywood. His film, The Squaw Man (1914), went on to be wildly successful, launching the fledgling movie industry and establishing Hollywood as the movie capital of the world.

19. Arizona grows enough cotton each year to make more than one pair of jeans for every person in the United States.

20. Famous labor leader and activist Cesar Chavez was born in Yuma.

21. In 1912, President William Howard Taft was ready to make Arizona a state on February 12, but it was Lincoln’s birthday. The next day, the 13th, was considered bad luck so they waited until the following day. That’s how Arizona became known as the “Valentine State.”

22. When England’s famous London Bridge was replaced in the 1960s, the original was purchased, dismantled, shipped stone by stone and reconstructed in Lake Havasu City, Arizona, where it still stands today.

23. Mount Lemmon, in the Santa Catalina Mountains, is the southernmost ski resort in the United States.

24. Rooster Cogburn Ostrich Ranch in Picacho, Arizona is the largest privately-owned ostrich ranch in the world outside South Africa.

25. If you cut down a protected species of cactus in Arizona, you could spend more than a year in prison.

26. The world’s largest to-scale collection of miniature airplane models is housed at the library at Embry-Riddle Aeronautical University in Prescott, Arizona.

27. The only place in the country where mail is delivered by mule is the village of Supai, located at the bottom of the Grand Canyon.

28. Located on Arizona’s western border, Parker Dam is the deepest dam in the world at 320 feet.

29. South Mountain Park/Preserve in Phoenix is the largest municipal park in the country.

30. Palo Verde Nuclear Generating Station, located about 55 miles west of Phoenix, generates more electricity than any other U.S. power plant.

31. Montezuma never visited Montezuma National Monument—he was born 100 years after the prehistoric dwelling was abandoned. The monument was misnamed for the Aztec emperor when it was rediscovered in the 1860’s.

32. Oraibi, a Hopi village located in Navajo County, Arizona, dates back to before A.D. 1200 and is reputed to be the oldest continuously inhabited community in America.

33. Built in by Del Webb in 1960, Sun City, Arizona was the first 55-plus active adult retirement community in the country.

34. Petrified wood is the official state fossil. The Petrified Forest in northeastern Arizona contains America’s largest deposits of petrified wood.

35. Many of the founders of San Francisco in 1776 were Spanish colonists from Tubac, Arizona.

36. Phoenix originated in 1866 as a hay camp to supply military post Camp McDowell.

37. Chino Valley’s Fort Whipple was a U.S. Army post that served as Arizona Territory’s first capital prior to the founding of Prescott. The post was founded in January 1864, but was moved in May 1864 to Granite Creek near present-day Prescott.

38. Prior to President Abraham Lincoln signing the Arizona Organic Act on February 24, 1863 to create Arizona Territory, Arizona was part of the territory of New Mexico.

39. Rainfall averages for Arizona range from less than three inches in the deserts to more than 30 inches per year in the mountains.

40. Rising to a height of 12,643 feet, Mount Humphreys north of Flagstaff is the state’s highest mountain.

41. Roadrunners are not just in cartoons! In Arizona, you’ll see them running up to 17-mph away from their enemies.

42. The Saguaro cactus is the largest cactus found in the U.S. It can grow as high as a five-story building and is native to the Sonoran Desert, which stretches across southern Arizona.

43. Sandra Day O’Connor, the first woman appointed to the U.S. Supreme Court, grew up on a large family ranch near Duncan, Arizona.

44. The city of Phoenix was named for the mythical Egyptian phoenix bird—which burst into flame and was reborn from its ashes—because the town sprouted from the ruins of a former civilization.

45. Santa Cruz County (1,237 sq. miles) is the smallest of Arizona’s 15 counties, but is larger than more than 72 countries.

46. Spanish Franciscan friar Marcos de Niza was the first European to explore Arizona. He entered the area in 1539 in search of the mythical Seven Cities of Gold.

47. The best-preserved meteor crater in the world is located near Winslow, Arizona.

48. Camels were imported in the 1850s to survey the future Route 66 across northern Arizona.

49. The Arizona Cardinals are the oldest continuous franchise in the National Football League, dating back to 1898.

50. The worst range war and family feud in the West, which claimed the lives of dozens of ranchers, ironically occurred in a place called Pleasant Valley, Arizona.

51. The average state elevation is 4,000 feet.

52. The cactus wren is the official state bird. It gets its name from the fact that it likes to build nests in the protection of thorny desert plants, like the saguaro cactus.

53. The Navajo Nation spans 27,000 square miles across the states of Utah, Arizona and New Mexico, but its capital is seated in Window Rock, Arizona.

54. The amount of copper utilized to make the copper dome atop Arizona’s Capitol building is equivalent to the amount used in 4.8 million pennies.

55. Between the years 1692 and 1711 Spanish missionary Father Eusebio Kino did more than just found missions in Arizona; he also taught many tribes the basics of agriculture and supplied them with cattle and seed grain.

56. The Castilian and Burgundian flags of Spain, the Mexican flag, the Confederate flag, and the flag of the United States have all flown over the land we now know as Arizona.

57. Near Yuma, the Colorado River’s elevation dips to 70 feet above sea level, making it the lowest point in the state.

58. The geographic center of Arizona is 55 miles southeast of Prescott near the community of Mayer.

59. You could pile four 1,300-foot skyscrapers on top of each other and they still would not reach the rim of the Grand Canyon.

60. Nearly 5 million people visit Arizona’s Grand Canyon National Park each year.

61. The hottest temperature recorded in Arizona was 128 degrees at Lake Havasu City on June 29, 1994.

62. The coldest temperature recorded in Arizona was 40 degrees below zero at Hawley Lake on January 7, 1971.

63. The Lost Dutchman, Jacob Waltz—who is alleged to be the owner of the yet-undiscovered Lost Dutchman Gold Mine in Arizona’s Superstition Mountains—was actually a German.

64. Arizona’s official state colors are blue and gold.

65. The Palo Verde is the official state tree. Its name means “green stick” and it blooms a brilliant yellow-gold in April or May.

66. The saguaro cactus blossom is the official state flower. The white flower blooms in May and June, opening in the middle of the night and closing the next day—surviving only about 18 hours for pollination.

67. A saguaro cactus can store up to nine tons of water.

68. The Arizona towns of Adair and Alamo Crossing are now underwater, having been swallowed up by the formation of dams that created Fool Hollow Lake and Alamo Lake (respectively).

69. The State Motto is Ditat Deus, which means “God Enriches” in Latin.

70. From 1973 to 2007, Arizona was the only state with official state neckwear, the bola tie. In 2007, New Mexico also adopted the bola tie as the official State Tie.

71. The state of Massachusetts could fit inside Maricopa County (9,922 sq. miles).

72. The westernmost battle of the Civil War was fought at Picacho Pass on April 15, 1862 near Picacho Peak in Pinal County.

73. There are 11.2 million acres of National Forest in Arizona, and one-fourth of the state forested.

74. Tubac was the first European Settlement in Arizona (1752).

75. Turquoise is the official state gemstone. The blue-green stone has a somewhat waxy surface and can be found throughout the state.

76. World War II brought many military personnel to train at Luke and Thunderbird airbases in Glendale.

77. Jerome, Arizona was named for Eugene Jerome of New York City, who never visited the town.

78. Two Arizonans have won their party’s nomination for President: Barry Goldwater and John McCain.

79. Wyatt Earp was neither the town marshal nor the sheriff in Tombstone at the time of the shoot-out at the O.K. Corral. His brother Virgil was the town marshal.

80. The Navajo Nation Zoological and Botanical Park is the only tribally-owned zoo in the U.S.

81. The ringtail is the official state mammal. It is a fox-like, nocturnal animal that measures about two-and-a-half feet long.

82. The Center for Creative Photography at the University of Arizona holds more archives and individual works by 20th-century North American photographers than any other museum in the nation. Its archives contain an estimated 3.8 million items.

83. On June 6, 1936, the first barrel of tequila produced in the United States rolled off the production line in Nogales, Arizona.

84. The world’s tallest Kachina doll, measuring 39 feet tall and fashioned of concrete, is located in Carefree, Arizona.

85. Once a rowdy copper mining town, Jerome’s population dwindled to as few as 50 people after the mines closed in 1953.

86. The Sonoran Desert is the most biologically diverse desert in North America.

87. The Arizona tree frog is the state’s official amphibian.

88. Bisbee is the Nation’s southernmost mile-high city.

89. The two largest manmade lakes in the U.S. are Lake Mead and Lake Powell—both located in Arizona.

90. Arizona is the only state in the nation that elects a Mine Inspector.

91. The longest remaining intact section of Route 66 can be found in Arizona and runs from Seligman to Topock, a total of 157 unbroken miles.

92. The 13 stripes on the Arizona flag represent the 13 original colonies of the United States.

93. Thirteen species of rattlesnakes live in Arizona, more species than in any other state.

94. The University of Phoenix Stadium, home to the NFL Cardinals, retractable roof and rollout field combination is a first in North America.

95. The negotiations for Geronimo’s final surrender took place in Skeleton Canyon, near present day Douglas, Arizona, in 1886.

96. Prescott, Arizona is home to the world’s oldest rodeo, and Payson, Arizona is home to the world’s oldest continuous rodeo—both of which date back to the 1880s.

97. Downtown Yuma, Arizona is one of only two designated National Heritage Areas west of the Mississippi.

98. Kartchner Caverns, near Benson, Arizona, is a massive limestone cave with 13,000 feet of passages, two rooms as long as football fields, and one of the world’s longest soda straw stalactites: measuring 21 feet 3 inches.

99. The Litchfield Naval Air Facility (now called the Phoenix-Goodyear Airport) was the training base for the Navy Blue Angels aerial demonstration team until 1968.

100. At 221 miles long, Apache County is the longest county in the U.S., stretching from the Utah border to just south of Alpine, Arizona.

Arizona Celebrates 100th Birthday

On February 14th Arizona celebrated its 100th birthday. On this day in 1912 Arizona became the nations 48th State. So we here are thought it would be fun to take a look back at what Arizona looked like 100 years ago. A few statistics follow:

In 1912 less than 15 percent of homes had a bathtub.

Over half of the population lived in homes with 6 or more people.

The average price for an Arizona home was around $3,000.

The average life expectancy was 47 years of age.

The population of Arizona was 294,353 in 1912. It is nearly 7 million today.

Just imagine what Arizona might look like in the next 100 years!

Arizona Will Receive Nearly 2 Billion From Nationwide Mortgage Settlement

Arizona will receive $1.6 billion of the $26 billion settlement over bad foreclosure practices that government officials reached with the nation’s biggest lenders today.

Separately, the state will receive $10 million from Bank of America to settle its lawsuit over alleged mortgage fraud the Arizona Attorney General filed against the lender in December 2010. The settlement of that lawsuit, reached late last night, had to happen for Arizona to participate in the national settlement. BofA is also part of the nationwide settlement.

The $26 billion deal is the largest industry settlement since the multistate tobacco deal reached in 1998.

The money will go toward reducing the principal amount on borrower’s mortgages and compensating people who wrongly lost their home to foreclosure.

Besides BofA, Ally Financial, J.P. Mortgage Chase, Citigroup and Wells Fargo are part of the settlement. Those lenders hold more than half of all outstanding loans across the nation.

More details on Arizona’s separate settlement with BofA will be announced later today by Attorney General Tom Horne.

Negotiations on the national $26 billion settlement have been going on for the past year.

Arizona has ranked among the top five states for foreclosures during the housing crash.

Are You Eligible For Obama’s New Mortgage Refinance Program?

President Obama recently announced new measures to help borrowers refinance their existing mortgages to new loans with lower interest rates and cheaper monthly payments.

The plan is an expansion of an existing program to help borrowers who are not behind on their payments but cannot refinance because they do not enough equity in their home. Or they might be underwater–which means they owe more than their home is worth.

“Right now, some underwater homeowners have no choice but to refinance with their original lender – which some lenders refuse to do,” Obama said in prepared remarks.

“These changes will encourage other lenders to compete for their business by offering better terms and rates, and eligible homeowners to shop around for the best ones,” he added.

But how many homeowners will it really help? And will it be enough to jumpstart the still struggling housing market?

This program could be a big help to those borrowers, but probably not enough to make much of a difference in the overall economy, he added.

Despite the relatively modest effect, Mr. Obama and his team recognize the president needs to be seen on television everyday as someone trying to solve problems.

If Obama can’t get a resolution passed through Congress, he has to move ahead with incremental measures that help pockets of Americans.

The plan will mostly help borrowers who owe less than their mortgage, despite the repeated talked from White House officials that it is aimed at so-called “underwater” borrowers.

Close to a million borrowers have gotten a HARP refinance loan since it was introduced two years ago, but only about 100,000 of them were borrowers who owed more than their house is worth. Without the HARP program, borrowers would have to owe less than 80 percent of the loan’s value to refinance, so the majority of borrowers who got new HARP loans were in that 80 to 100 percent range.

Time will tell how many homeowners will actually be able to take advantage of this new program. Contact Us if you would like to review your options.