Urban Life

Residential Home Sales Stats...again

We apologize for yesterday's post... don't know what happened but we'll try it again today.

The sales stats for residential housing in the area show a steady decline. Since we run the numbers on a weekly basis, it is not too surprising to us, yet much of the media is clamoring on this information as a "surprise".

The graph shows the sales stats for the past few months in the Phoenix, Scottsdale and Paradise Valley markets. Click on the graph to see a larger view.

Last winter we looked into the crystal ball and predicted a continued slow market with a probable summer sales fall off. How did we know? It's actually pretty simple... the number of qualified buyers was reduced during the thunder market of 2004 through mid 2006. Inventory levels were on the rise creating more concern and a feeling from many buyers that they should wait. Add the doomsdayers who seemed to write endless articles about the state of the market and it's clear why demand is down

A few other factors figured into our report, yet the fear that unbalanced media reporting initiated was the biggest factor... for those of you who are fans of "The Secret" it should be clear.

We do believe the greater Phoenix market will see some light in 2008 and that good news will come in another post. 

The Urban Brothers... Ron & Gene

Some Real Estate Stats for the Phx Area

Parrot Grande... what a weekend

Well, our first Parrot Grande was quite a bit of fun. Buffet fans from around the country converge, listened to music, raced their pirate boats (that's a subject in itself) and raised close to $10,000 for the West Valley Crisis Center.

                                                                                                 
                              

                                                                            Pirates come in all sizes

The music was fantastic and we especially enjoyed time with our friend Mark Mulligan whose music can be heard on Radio Margaritaville or downloaded from ITUNES.

In addition to the funds raised to support the kids, Parrotheads gathered well over a thousand pairs of flip flops to send to our troops as part of operation flip flop.

Best wishes Ron & Ruth + Gene & Amy 

Parrot Grande… Oh boy.

Ron and Gene are getting ready for a Parrot Head weekend get-a-way. Most of you know the Urban Boyz are Jimmy fans and like to get spread our wings and listen to a little island/beach music, sip on something that has rum or tequila in it and relax.

This weekend they’ll be joining a bit over a hundred other “Beak Heads” to enjoy food drink, music, golf and more at the Francisco Grande resort.

 The weekend isn’t all party though. As an organization, the Arizona Parrot Heads raise money for the West Valley Crisis Care Center and clothing for our injured solders.

So, we’re going to have fun and do good deeds all at the same time…Life is good.

Mortgage Rates Drop to Three-Month Lows

Freddie Mac reported that 30-year fixed home loans moved down this week to 6.52 percent, from 6.62 percent a week ago. That's the lowest level in three months. Meanwhile, interest rates on 15-year fixed mortgages dropped to 6.18 percent from last week's average of 6.3 percent.

Source: San Diego Union-Tribune (08/24/07)

Mortgage and the Fed Update

The scale of the mortgage industry crisis is BIG and will be felt throughout the economy.  As a result, the Fed is monitoring the situation carefully and has already taken steps to manage the impact. 

Here is a quick lesson on how the Fed does its job:  The Federal Reserve Bank (the Fed) coordinates the borrowing and lending activities of federally chartered banks. The principal reason the Federal Reserve was created was to reduce severe financial crises. One way to accomplish this goal is to control the amount of money that flows through the economy.  By manipulating the

US

money supply, the Fed influences inflation, unemployment, and the level of

US

economic activity. The Fed has an assortment of tools that it uses to control the money supply, but its primary scheme is the management of short-term interest rates.

The Federal Reserve can modify two distinct short-term interest rates. The discount rate is the interest rate which banks pay the Fed for primarily overnight loans. Despite its name, the Fed Funds rate is the rate banks pay to borrow from other banks. While the Federal Reserve has direct control over the level of short-term interest rates, the Feds influence over longer-term interest rates is less certain.  Mortgage interest rates fall into the latter group.

The Fed recently purchased $38 billion of mortgage bonds to advance liquidity in the mortgage industry, and they lowered the discount rate from 6.25% to 5.75%. Despite these steps, liquidity problems remain, and it is unknown how long it will take for the financial markets to recover.

During this time we advise you do not take equity out of your home through refinancing or add/use a Home Equity Line of Credit. Let the market shake out and when there is a clearer picture make conservative changes.

Short Sales... the beginning

Ron and I just got out of another short sale CE class and will be going to a half day intensive on the subject next week. Ron has seen this type of market before (he's the older wiser part of the Team).

Short sales are a pretty complex process for both the buyer and seller. As a buyer, we can't express enough how important it is to hire a highly qualified and trained agent or attorney to help you. Even we, with some 20 years in the business, find the process exasperating and multifarious.

If you have questions about short sales please feel free to contact Ron. He can help make sense of the concept and process and he loves to educate.

Gene

Tips & Tricks to get a good home loan Part 2

If you read our last post you know we like Mortgage Bankers verses Brokers.... no offense to all you brokers out there... it's simply what some 20 years of experience has taught us at the Urban Team.

Let's talk about credit scores (also called FICO scores) for a moment. FICO scores are at the root of all home loans... and the higher the number the better. In this market we are told that a score of 680 or more is strongly advised.

So what is your current FICO score? Several companies offer access to your credit report... Experian, MyFico.com, and many more. Each service has some kind of plan to trade your dollars for their information so choose carefully.

We'll talk again about tips on how to get your numbers higher.

Gene & Ron Urban

Tips & Tricks to get a good home loan Part 1

We said we'd talk about what to do during this mortgate industry shift... especially if you are going to be applying for a loan in the near future.

First, we recommend our clients use a Mortgage Bank ranther than a Mortgage Broker.  Why?  During these interesting times banks are changing the rules they use to qulaify a potential buyer, you, at lightspeed intervals. Brokers have a very hard time keeping up with the changes and can put you in a precarious position by promising a loan that can't be done under the newest lender guildlines. Simply put, you may think yoiu are in great shape to get your loan and find out only days or hours before you are supposed to close escrow that you no longer qualify. This really is happening. 

By the way our favorite bank is First Horizon Home Loans and we especially love the service and knowledge of one of their lenders Judy Giel in their Phoenix, AZ office.

Mortgages, Mayhem and Margaritas

No doubt you’ve been hearing about the problems in the mortgage industry. Countrywide is the latest to make it to the front pages but the real industry problems have been brewing for months and it’s not going away for some time.

We expect the lenders to further tighten their requirements, especially as the 2-3 years ARM's written in 2004-2005 come due and result in even more foreclosures.

Our advice… gets a frosty margarita. Relax. Take a nice log sip of the nectar of life. Understand this is a real estate cycle in play. It won’t last forever. Markets like ours in the greater Phoenix/Scottsdale area will rebound. Take another sip of the margarita. Look for future posts about short sales, best practices in a down market and The Official Urban Life Killer Margarita Recipe.

 Enjoy… Ron & Gene