Real Estate News & The Tucson Housing Market

I have written a lot on foreclosure homes here in Tucson. I wanted to write a little more on what to actually expect as far as the condition of the homes and what you as a buyer should consider doing to protect your interests. When buying a foreclosure home (bank owned) in Tucson buyers may or may not be surprised with what they see, here is what to expect:

- #1 The homes are 99% of the time going to be missing appliances. The reason why? The previous owners can take them (not exactly legally but most do.) and sell them and at least re-coup some money out of the home.

Interesting idea to get homes sold in New York City national builder Toll Brothers is employing. Toll Brothers is using a “Try and Buy” also known as a “Rent To Own”, (Not in the traditional sense that, that name “rent to own” is used here in Tucson but a different program with the same name.) what’s happening is to help sell some of their units in NYC, Toll has decided to allow several units to be “rented” for potential buyers to “try out” for several months to see if the units fit as something the buyer would want to complete the purchase on. So here are essentially the ground rules:

I started the SellingTucsonRealEstate forum a couple months ago and to be honest haven’t done a lot to get things going over there. However I would like to get the readers that regularly read this blog to start checking out the forum, and help ask questions and get some good conversations going back and forth about real estate, Tucson, Arizona you name it we have a lot of different subtitles in which people can ask and receive answers. If your not used to forums it can seem a little intimidating that “people are going to read my responses…etc” I have contributed on many forums over the years and the forum format is (in my opinion) the absolute most engaging and best way for those with questions to post them and have them answered by others who have knowledge about that subject. Once you get used to how the forum works I think most will agree that it is a preferred way to be engaged about a subject in this case mostly Tucson Real Estate matters online.

Beazer Homes while not having a presence in the Tucson market does have a large presence in the Phoenix market reported earnings today. Beazer reported losses of $473.9 million for the quarter ending September 30th, 2008. Last year for the same quarter Beazer lost $155.2 million, this shows as other home builders have reported that this year was a much harder year for all the builders Beazer as no exception. Beazer based in Atlanta showed a decline in revenue of 35% to $712.6 million, on those revenue numbers home sales for Beazer fell 38%. Beazer stated:

So yesterday and today (I’m sure) has been pretty wild in the bond markets. The bond markets dictate the mortgage markets and ultimately mortgage interest rates. While I am not an expert in bond price forecasting or mortgage rate forecasting for that matter, this chart tells a lot of what has happened over the past 5 days. As a note mortgage rates DID HIT 5.25% ON A 30 YR FIXED MORTGAGE YESTERDAY! As predicted here yesterday. However towards the end of the day bond rates (as well as mortgage rates) started to rise quickly closing to a little over 5.5% (on a 30 year mortgage basis). Anyway above is the chart showing what has happened with the 10 year bond note in the open market. The 10 year bond more then any other bond note dictates mortgage rates. By following the 10 year bond you as a consumer can see how rates are moving. This is very important if you happen to work with a loan officer who isn’t the most “ethical” as they can lock you into a mortgage rate at a higher rate then you otherwise could get. Seriously a lot of times people get charged a higher rate by 1/8%-1/2% then what they should be getting because they just don’t understand much about mortgage and bond rates. I got this chart from yahoo.com click on finance and then in the “symbol” search put “10 year bond” the prices on the bond will come up and you can follow what the bond market is doing. The actual ticker that the 10 year bond trades under is ^TNX you can also type that in on the stock search function. In any event if you would like honest, straightforward advice about mortgages and real estate questions send us an email and we’ll do our best to help you out.

This maybe going out on a limb HOWEVER watching the bond markets and talking with a couple lenders who are very familiar with the interest rate marketplace I think in Tucson we will be seeing 5.25% 30 year mortgage rates this week! I did a post last week about how good 5.5% is and to see 5.25% is incredible, and honestly that is as cheap as I can envision things getting. Now the official word is not out but I would expect that mortgage lenders will be re-pricing their rates this afternoon and tomorrow to show a 30 year fixed loan with no points at 5.25%. If you wanted to get this rate even cheaper you could pay points however with rates already being so low the amount you would need to spend to reduce the interest rate to make a difference I don’t think makes economic sense.

Right now in Rancho Sahuarita there is a HUD home on the market awaiting bids, the bids close at 12/2/08. Basically the home is a 1624sf 2 story Pulte home priced at a pretty ridiculous (low) price of $139,500! This home was built in 2002 and offers 3 beds and 2 baths. Like I have been talking about on this blog right now there are lots of “deals” being throw around and in my opinion this is a pretty good one. A Rancho Sahuarita 6 year old, 1624sf home currently at the bid stage of a HUD sale with an asking price of $139,500. HUD homes work much differently then a regular foreclosure home sale. If you need more info about the HUD process go over to our regular website www.SellingTucsonRealEstate.com and then click on the “HUD Homes” section you can learn all about how they are bought and what you as a buyer would need to do to obtain one.

If you’re a first (1st) time home buyer (homebuyer) in Tucson you most likely would like to know about what programs or incentives are out there to help you buy a home. Buying your first (1st) home in Tucson Arizona is not as hard as a lot of people make it out to be, and there are a lot of programs designed to help first (1st) time homebuyers (home buyer) be able to purchase a home here in Tucson. What are some of the first time home buyer programs for home ownership here in the Tucson Arizona area?

Talking with several buyer clients of mine and others in the industry it looks like the word has spread that interest rates took a big drop last week and most buyers are aware of this. Now I don’t want to over blow this BUT our local real estate market here in Tucson has been looking for something to “incentivize” buyers to take action. This so called “demand side incentive” has been lacking for some time, but low interest rates which everyone can agree 5.5% for a 30 year fixed is very low should get a lot of buyers off the fence and into a home sooner rather then later. Demand is the basis of any product or market without it (or a significant lack there-of) the marketplace will falter and as we have seen here in Tucson AZ prices will soon be headed south. During the real estate boom the demand side incentive was that “Hey next month prices will be higher so buy now!” and this for a long time was true. For about 3 years we saw prices escalate every month pretty steady. Now for the past 3 years we have seen prices decline and also interest rates hold between 6.5% and 7% for the majority of this downturn. This left many buyers thinking “Why buy this month when next month I can buy MORE home for the money or the same home for much less?” unless you had a need to purchase a home more then likely waiting has saved you a lot.

A lot of people think to own a second home/ winter home in Tucson you must spend a lot of money. Here in Tucson you can get nice second homes/ winter homes all day long for under $150k. Many people don’t realize the selection is available because for the past 5 years any home under 150k was purchased very quickly during the boom years that Tucson went through. What kind of second home can you get in Tucson for 150k or less? Well the options vary. Many snowbirds purchase a condo on the east side, central, northwest, or north/ northeast side of town complete with community swimming pools, fitness areas, and other amenities that condo/ townhome living offers for well under $150k.