Market News and Opinion

Buying a Short Sale in Downtown Phoenix Can Be Daunting

When people contact us to buy a home or condo in the downtown Phoenix area we always have “the short sale” talk. Short sales are nothing like any other real estate transaction and demand special attention, knowledge and cautions.

I just read an article from another downtown newspaper in California that pretty much sums up what a person needs to know if the home they want to buy is a short sale. Here is what they have to say:

Bill Joyce starts every short-sale journey with “The Speech.”

In a what’s-ahead warning to homebuyers, the Roseville real estate broker promises something resembling burning deserts, howling winds and crops destroyed by hail. Buyers will be tested and tortured, he tells them. They will endure privations beyond all expectations.

And then they might fail. All the things you normally expect are suspended. There’s a new set of rules that apply here.

Read more: http://www.sacbee.com/2010/09/05/3006215/short-sales-can-be-great-deals.html#ixzz0yrWVgIGu

That said, buying a home or condo offered by short sale is possible and actually doable. It takes special education and knowledge on our part. We have to know what to ask the listing agent to make sure they have the skills it takes execute a successful short sale purchase. With good pre-purchase and great follow-through work we have become very successful helping people buy a good home at below market prices in the downtown Phoenix area.

Short sales are not for everyone, yet they are a huge part of the market these days. In some areas, short sales comprise up to 40% of the available listings so the home or condo you want may well be a short sale.

If you have questions about buying a home that is being sold as a short sale, let us know. We are short sale specialists a lot of experience buying and selling homes via the short sale process. You can also check out our short sale information site, www.short-sale-phoenix.com for more information.

Hope you have a great week.

Gene Urban
The Urban Connection
602-234-5777

Downtown Phoenix Real Estate Update

As we move into September we thought it would be a good time to write a real estate update for downtown and mid-town Phoenix.

In general, the downtown region is fairing better than most other parts of the valley, especially zip code 85006.  On the good side of the equation, 39 properties sold in the downtown region in August and we have 75 properties in escrow waiting to close soon. The big winners in the condo market are One Lexington, Landmark Towers and The Pierre.

Speaking of One Lexington, they have 34 people who now call One Lexington home. This means they have sold 40% of the units as they move into Fall, a stronger selling period compared to Summer. In addition to One Lexington, Landmark Towers and The Pierre on 5th Avenue showed good sales. We have new posts on these two developments if you want to know more.

The link below will take you to our full market analysis for the downtown and central/north Phoenix market. The report is the work of famed Phoenix market analyst Mike Orr of the Cromford Report. We consider his work to be the finest and most accurate available and are happy we can share it with our readers.

Just to prepare you, Mike’s report is not very favorable; To quote him… “almost all indicators point to a severe deterioration in the residential resale market in the city of Phoenix.”

However, a few downtown and N. Central zip codes are on his good list. Please note too that Mike only evaluates the single family home market. Thus, the downtown condo/loft market in not included.

The Phoenix Real Estate Market Update for August 2010 and Fall Forecast

Best to you and let us know if we can answer any of your specific questions, help you sell your place, explain short sales or other other real estate oriented concerns.

Gene Urban and Ron Urban
The Urban Connection Real Estate Team
602-234-5777

Short Sales and Bankruptcies Can Affect Each Other

Seems like we’ve been writing a lot of articles about short sales in downtown Phoenix these days. The fact is, a lot of the homes for sale in downtown, midtown and north Phoenix. Also, many who want to sell their home have to do a short sale since they owe more than the place is worth.

As part of our short sale education program we found an interesting and scary article on the subject of short sales and bankruptcy. Even if you are not in this situation, the information is worth reading. Knowledge is a good thing.

The article comes from our fiends at Thomson Law Group. They provide a lot of good short sale info these days and helps us, as real estate guys, informed. We send special thanks to Doug Farnham for his valuable knowledge and willingness to share it with us and the readers of Urban Connection Realty. Below is Doug’s latest article:

How Bankruptcy Affects Short Sales & Vice Versa

By now, most Realtors are aware of many of the risks associated with short sales.  Either they know someone that has faced litigation or have read about problems that can arise from homeowners that either faced an unexpected foreclosure or who did not understand their deficiency or tax liability.

Recently we have seen a new issue arise for some homeowners that completed a short sale before filing for bankruptcy.  The issue of concern is that a homeowner may no longer qualify for bankruptcy because the sale of their home lowered their debt ratio and, thus they became ineligible under the means test 11 U.S. C. 707. The means test compares the income against the expenses or debts of a homeowner and determines whether a homeowner is eligible to seek relief to discharge debt obligations under a Chapter 7 bankruptcy proceeding.

Residential mortgage debts are an expense which can be included in the means test. By including the residential mortgage debt in the analysis, the probability that a homeowner can qualify for bankruptcy is increased. By excluding or eliminating that debt, the probability of the homeowner to qualify for bankruptcy is decreased or, in some instances, eliminated altogether. So, if a homeowner intends to file for bankruptcy, a review of the homeowners eligibility under the means test should be completed by a qualified bankruptcy attorney before a homeowner is encouraged to complete a short sale.

Another concern arises when a homeowner completes a short sale and then files for bankruptcy some years later.  Since the lender has up to six years after the close of escrow to file a deficiency lawsuit, it is possible that the lawsuit could come after the homeowner has been discharged from bankruptcy.  A bankruptcy attorney may not include the mortgage loan(s) that was involved with a completed short sale if a 1099 has been filed by the lender or if the homeowner fails to tell the attorney of the loans.  However, since the legal effect of a 1099 filing upon a homeowner’s deficiency liability is still in dispute under Arizona law, it is recommended that all loans from previously completed short sale transactions be included when filing bankruptcy, even if the short sale was completed several years prior (at least until the 1099 issue has been clearly settled by the courts).

Short sales are on the increase which means that it is a market segment that Realtors cannot ignore.  We hope this information helps you to avoid the pitfalls and makes you better prepared to handle these issues.

For questions and answers on this subject and many other related topics please visit our blog at: http://blog.MortgageMediationGroup.com

For more info on short sales in Arizona, we have a site dedicated to the subject. Short Sale Phoenix.com

Gene Urban and Ron Urban
The Urban Connection Realty Team
602-234-5777

connecting you to the perfect space

Buying Downtown Phoenix Homes in As Is Condition

Several of our Urban Connection readers have asked us what AS IS means when buying a home or condo in the downtown Phoenix area. This comes up often when people are buying bank owned homes or short sales.

Lender owned homes seldom offer the option of having repairs made to the home and the majority of people selling their home as a “short sale” simply don’t have the money to make repairs. Therefore, as a home buyer, you will be asked to sign an addendum to the contract that explains what is expected of you and the seller when selling a home in “AS IS” condition.

Your Urban Connection Team has created a little YouTube video that gives offers an overview of the AS IS addendum created by the Arizona Association of Realtors. Below is the video:

Obviously, this is simply an overview of the Short Sale Addendum and does not go into all the nuances and implications of the document.  However, we hope it gives you a broader understanding of what as is means when buying a home or condo in downtown Phoenix, AZ.

Gene Urban & Ron Urban
The Urban Connection Realty Team
602-234-5777

Information About HAFA and Short Sales in Phoenix

Short sales are big news in the real estate industry these days. With a large number of people owning more on their home/condo than its worth, folks are pondering a short sale as one of their options. This is evident in the downtown region with about 1/4th of all active listings being short sales.

The US Government, for better or worse, has adopted a program called HAFA (Home Affordable Foreclosure Alternative) to help streamline the short sale process. Some of our readers have emailed asking: What is the HAFA program?  We are here today to answer that question.

In case you don’t know. the Urban Connection team launched a site dedicated to information about short sales last Fall. We have well over 100 pages of short sale articles, short sale news, an FAQ section and much more. We just added a page describing the HAFA program and its guidelines. Below is a link to that piece so you can be an expert on the HAFA program and impress your friends and coworkers with your in depth knowledge on the subject.

What is the HAFA Program for short sales in AZ?

If you know someone who needs more information about short sales, please know we are there for them. Short sales are not for everyone and there are legal and tax issues that need to be explored before moving forward with this option. We would be delighted to help navigate the short sale waters.

Gene Urban & Ron Urban
The Urban Connection Team
602-234-5777
Gene@UrbanTeamAZ.com

connecting people to the perfect space

Lenders Use Deception to Get Promissory Note Signed

Many of our readers know we are very involved with people trying to sell their home by short sale. We have a dedicated short sale site, Short-Sale-Phoenix.com and have written dozens of articles on the subject including our newest about how some lenders and PMI companies use lies, mistruths and threats to intimidate homeowners into signing promissory notes. I know you are shocked a bank would do such a thing… Not.

Anyway, we just posted a real world example of the email one of our clients received from their lender. Our clients are ideal short sale candidates… they both lost their jobs, the husband’s new job pay 40% less and is 30 miles from their house, they can no longer afford their house payments, they had just one loan and they did not refinance and take money out.

We listed their home last January and  a well qualified buyer was brought in by an agent. The short sale package was professionally put together by a law firm who handled the conversations between the lender and the homeowner. Five months later we finally get conditional short sale approval from the lender.

Check out what the bank had to offer after 5 months of lender red tape on our sister site, UrbanLIfe Blog.com.

Lenders and PMI Companies Use Mistruths and Intimidation

44 Monroe Future Still Unknown

44 Monroe, the exclusive condo tower in downtown Phoenix did go to trustee sale and the documents were recorded on June 1, 2010. Many wonder when 44 Monroe condo units will be available for purchase and at what price.

To be honest, no one currently knows. 186 of the 201 units were purchased by Corus Construction Venture, LLC for twenty million dollars. The remaining 15 units are privately owned. If you do the math, CCV picked up the available condos for about $107,500 each plus acquisition costs.

Many speculate Corus Construction Ventures, a subsidiary of Starwood Capital Group, will release the units soon. Personally, we believe it will be some time off. This isn’t a pessimistic belief, rather a realistic look at the facts.

• The new owner will have to file the Disclosure Report application with the Arizona Department of Real Estate prior to offering the units for sale.
• A sales brokerage will need to be selected and staffed for the project. Starwood may elect to form their own real estate brokerage or hire an existing one.
• Starwood will conduct a full market analysis to determine the potential of their investment.
• Starwood/Corus will need to find a mortgage lender willing to finance potential condo sales. As it stands, the units do not qualify for FHA or conventional financing and a partner willing to take a risk has to be found. Perhaps MetLife Home Loans will step up to the plate like they have at One Lexington.
• Perhaps the biggest question lies with Starwood’s head honcho, Barry Stenlicht. Stenlicht, in a recent New York Times interview made an interesting statement that could indicate his intentions for 44 Monroe.

Mr. Sternlicht hopes to foreclose on many of Corus’s errant borrowers, restyle their buildings and sell units for a significant profit once the real estate market recovers. He says he and his investors can afford to wait until then because the F.D.I.C. has provided them with $1.4 billion in zero-coupon financing and an additional $1 billion in low-cost loans that can be used to complete unfinished projects.

The Urban Connection team is in a wait and see on when units will be released for sale. No doubt there will be a lot of press as we expect them to hire a top advertising agency to put together a strong marketing campaign. In addition, we don’t expect super low prices; Barry Stenlicht likes to make big profits and he has deep enough assets to wait until the time is right.

Gene Urban & Ron Urban
The Urban Connection Team at Realty Executives
602-234-5777

Vanishing Phoenix and Downtown’s Fox Theater

Robert Melikian, owner of the San Carlos Hotel, offered a presentation yesterday of his new book Vanishing Phoenix. The talk, hosted by the City of Phoenix, gathered a standing room only crowd as Melikian took us on a tour of great buildings and homes lost over the years.

Rob’s talk was an amazing history lesson and it was very sad. Many epic places are gone forever and some of what replaced them is anomic.

For me, the most awful loss is the Fox Theater once located on the SE corner of Washington and 2nd Street in downtown Phoenix. The Fox Theater was built in the early 1930’s and featured an Art Deco design by famed theater architect S. Charles Lee.

Most experts suggest the Fox Theater Phoenix was Lee’s most outstanding work… no small statement when you look at the breadth of his achievements. Below is an excerpt from Cinema Treasures that describes some of the interior:

A special feature in its lobby was the row of streetlights alongside the staircase, topped with glass disks and spun in silver globes on the end of 15-foot uprights, outlined by the delicate filigree of the metal railing.
In the auditorium, a metallic sunburst spread across the ceiling from the radiating acoustic frames of the proscenium arch. The organ grills were silver leafed with gold highlights. 0n the side wall an archer takes aim at a gazelle, while birds fly overhead.

If you talk to some long-term-Phoenix native you’ll hear many stories about an evening out at the Fox Theater. It was the first building to have air-conditioning and they would let people put their groceries in the refrigerators while they watched a film.

Alas, the economic downturn of the downtown Phoenix region and competition from new theaters like the Cine Capri cast a large shadow on the Fox Theater economically. In its later years it was home to a variety of retail shops and home to Dr. Please, a well known dentist.

The Fox Theater met its demise in 1975 when the City purchased the building and land to make room for a city bus terminal. Is that sad or what? To add insult to injury, the bus terminal didn’t survive as the property that once housed one of America’s great theaters is now a parking lot.

We are working on obtaining rights to show more pictures of the Fox Theater and will post these when and if that comes about.

In the meantime, we highly recommend you pick up a copy of Vanishing Phoenix. You can buy an autographed copy at the San Carlos Hotel or at booksellers around the valley and online. You find lots more information about the Fox Theater as well as numerous other grand buildings and homes that have vanished from downtown Phoenix.

Gene Urban and Ron Urban
The Urban Connection Team
602-234-5777
connecting people to the perfect space

Phoenix Real Estate Market News May 2010

Good day Urban Connection readers. Michael Orr’s real estate market report for May 2010 just arrived in our mail box and we wanted to share the info with you. The full report and Michael’s numbers and analysis of the Phoenix residential real estate market is below. Just click on a page to have it open in a larger view for easier reading.

THE URBAN CONNETION TEAM’S THOUGHTS:

The report covers all of Phoenix and excludes other cities in Maricopa County. Since many of our readers are downtown types, please understand this is a big Phoenix picture and does not necessarily reflect the downtown market. Also, Michael’s data is for single family homes only so does not include info on the downtown condo/loft sector.

Much of the news is what we expected to see. The tax credit pushed a lot of home sales last month so the pending sales figures jumped a bit. This helped the days on market numbers to fall as more homes sold quickly.

On the goods news front, we continue to see some strength in home prices with lower priced homes actually seeing gains… good news for a lot of homeowners.

Good news item #2 is the number of notices of trustee sale (the date a home is scheduled to go back to the investor) has fallen. We feel this is due to more lenders trying to work out loan modifications or short sales. We feel homeowners will find greater success as banks are better equipped to handle the volume of requests than in 2009 and early 2010.

To get a clue of the problem banks face look at this statistic.  Bank of America/Countrywide had 65,000 short sale applications filed in April 2010 compared to just 12 filed in all of 2007.

As we’ve mentioned in other articles, we do not expect improvement in the condo/loft market in 2010. Lenders simply are not giving mortgages on condos except in rare cases like One Lexington. The single family home market should continue to see modest strength, however, until the jobs market gets better don’t expect too much.

If you have any question or would like more information about the report, toss us an email and we’ll get back to you ASAP.

THE PHOENIX REAL ESTATE MARKET REPORT FOR MAY 2010:

The data used to create this report is obtained from public records and extracted under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS).
Although certain corrections and checks have been applied to this data, Cromford Associates LLC, Fidelity National Title Insurance Company, Realty Executives and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability
or fitness for any particular purpose. This report is copyrighted in 2010 by Cromford Associates LLC and used with permission on UrbanConnectionRealty.com

Real Estate and Home Values 85014

Today, May 18 2010,  we’ll be taking a look at the real estate and home/condo market in Phoenix zip code 85014. The map to the right shows you the boundaries to this narrow region of mid-town and central Phoenix, AZ. As you can see, Camelback sits midway and 7th Street and the 51 bound it on the sides.

Zip code 85014 offers a diverse selection of real estate opportunities from condos, townhomes, single family homes, multi-family housing and some historics. It is this eclectic blend that gives the area its personality and diversity.

The 85014 zip code is one of the most popular in Phoenix. Relative to the general region, home prices are generally lower. At the same time, there are a lot of benefits with great access to downtown Phoenix, Sky Harbor airport, proximity to the Biltmore area and it is fairly close to Metro Light Rail and the ASU downtown Phoenix campus for ASU. The job market is strong with ASU, many law firms, numerous hospitals, hotels and other businesses.

Recent real estate data shows some strength in the single family home market. As of this post, only 72 homes are for sale and home inventory is in the 3-4 month range. The graph to the left comes from Mike Orr of the Cromford Report and shows pretty good sales from traditional homeowners and a growing inventory of short sales. As you can see, buying a short sale or bank owned home offers some strong price advantages. With short sales getting a bit easier, it may be wise to explore these opportunities. (If you would like more information about short sales please visit our short sale information site.)

The condo market is a completely different story. As we’ve discussed in the past, financing for condos is a nightmare. Lenders are afraid of condos these days due to financial problems with homeowners associations. Thus, most lenders are staying as far away from condos as possible and its easier to find a fiscally responsible politician than obtaining an FHA loan.

The loan issues surround condos has made values pretty soft. A few projects like Brick Commons and One Lexington qualify for financing but the majority do not. If you are a cash buyer there are some great deals out there. I’d advise caution though and make sure to have a CPA take a look at the HOA’s financials and don’t expect much, if any, appreciation until the mortgage issues are resolved and a larger buyer pool becomes available.

If you would like to take a look at what’s for sale in 85014, we’ve included a nifty home search tool below. If you click on any home it will open a window with lots of information and an opportunity to modify the search for your particular needs. If you have a question, need more information or what to take a look at a place, we’d be happy to help.

Best to you,

Gene Urban & Ron Urban
The Urban Connection Team
602-234-5777

SEARCH FOR HOMES % CONDOS IN 85014

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