August 2009

Logical Advice for Buying a Home

Rushing into a house purchase is all too common. As with romantic relationships, it’s easy to get swept away by emotion. Once you realize you’ve fallen in love with the wrong house, it may be too late! The consequences of a bad decision range from buyer’s remorse to foreclosure. When buying a home, avoid costly mistakes by using logic.

Before looking at a single house, know whether you’re buying a house or a home. Will this be a place in which to raise a family? Is the purpose of buying a house primarily as an investment?

Know what you can comfortably afford. Please note – this is not the same as how much you can borrow! Factor in a reasonable cushion for unforeseen maintenance and other expenses.

Assess your actual needs versus optional wants. Knowing the difference is a key step toward buying a home based on logic. In addition, also determine your deal-breakers. Know ahead of time where you are able and willing to compromise.

Think about amenities in advance. For instance, do you have the extra time and money required for pool or hot-tub maintenance? Don’t even look at houses with amenities that are impractical based on your lifestyle or economic circumstances.

Consider your skills and interest in home maintenance and repair. Unless you can easily afford to pay to have the work done, or are confident in your ability to do the work yourself, do not consider a home in need of even minor renovation.

Based on your needs, wants, and deal-breakers, create a rating sheet with which to compare houses. This helps you when viewing homes and also gives direction to the real estate agent so as not to waste valuable time. Refuse to see homes that do not meet your criteria. If the agent is not respectful of your budget or specifications, find a different agent.

When viewing homes, do not take the agent’s or seller’s word on questions of permits or zoning. For instance, if you intend to do renovations or operate a home-based business, contact the proper local authorities regarding applicable regulations or permit requirements.

Hire an independent home inspector to assess any house under serious consideration. Talk to the inspector about both current and potential problems.

Finally, have patience with the process. If you’ve done your homework and you’re proceeding logically, the right home is out there just waiting to be found.

Interesting Elements to buying Arizona Homes

I’ve been giving a lot of thought to the subtleties and landscapes (no pun intended) of real estate in Arizona, and have come up with a handful of tidbits which I find really different and interesting. I wanted to share them, so here goes.

1. Like just about everything else in the country right now, property prices in Arizona have plummeted over the last year. Zillow.com offer some great city-by-city statistics on this, if you’re interested in checking them out. While the prices have been cut in half (and by more than that in some places), now that the economy is supposedly on an up-swing, this means people with money to spend on real estate in Arizona have a great position. You can buy cheap and wait to cash in as property values and prices rise.

2. Arizona has low, competitive property taxes which, although they vary from one city, town or village to the next, holding relatively low at an average of 1.3% on market value. States like New York have property taxes that are nearly 40% higher than the national average, so Arizona residents get a pretty sweet deal on their taxes!

3. In 2006, the DaimlerChrysler (remember back when Chrysler wasn’t part of Fiat?) Proving Grounds, located to the northwest of Phoenix, were sold for a record-breaking $312 million dollars to a group of developers who paid a premium price for this huge tract of land. (Okay, that one doesn’t have a lot of bearing on the points about owning property in Arizona, but it’s an interesting fact about how much money has exchanged hands for massive – we’re talking 5,500 acres here – tracts of land in this state in the past).

4. The owner of the Grand Ole Opry has been planning a huge hotel located in Mesa, Arizona, since September 2008. This hotel would be the biggest one in Arizona, featuring a huge golf course and other amenities for guests.

There are plenty of other interesting elements to Arizona’s real estate scene. If you look for yourself, you’ll be surprised at what you find!

Arizona Foreclosures Still Some of the Highest in the U.S.

If economic growth statistics are any indication, Arizona foreclosure percentages continue to decline. Overall, in June and July of 2009 research by Metrostudy.com showed major growth in new home starts and existing home sales. In the second quarter of 2009 Phoenix-area contractors and builders started 1,654 homes, which was 58 percent more than in the first quarter of 2009. This information comes on the tail of news that shows in June of 2009 home sales rose and Phoenix foreclosures fell. According to a study by the Arizona State University Realty Studies department foreclosure activity in May represented 30 percent of all transactions. In February that percentage hit a high of 51 percent. Overall this is good news for a state that has struggled in the current real estate market.

The news for Arizona and more specifically Phoenix isn’t all positive, though. In early April, Arizona was ranked number two for foreclosures by RealtyTrac.com. They further placed Phoenix foreclosures at ninth in the United States. Only Nevada was ranked higher over the duration of this time period. During the first half of the year, Arizona real estate suffered and Phoenix foreclosures were 52 percent higher than during the same time in 2008. This placed the Phoenix foreclosure rate at 4.4 percent, which was 3.2 percent higher than the national average. This news for the Arizona real estate market followed an encouraging June report by the S&P/Case-Shiller Home Price index that found a slowing in the recent slide of Phoenix home values.

R.L. Brown Reports, an Arizona-based research firm showed in The Phoenix Housing Market Letter that the Arizona real estate market was showing promising signs of growth in a comparison between February and March. Home sales between those two months rose by nearly 200. While these numbers are still down from 2008 it’s an encouraging sign for a market that has sought to stabilize itself in a struggling economy. In another sign of stabilization R.L. Brown reported that home resales were up. The downside of this information is that 67 percent of the resales in the Arizona real estate market were from bank-owned properties. This mixed news shows that while the Arizona foreclosure rate may be high, that the Arizona real estate market is slowly becoming more stable.

Fortunately for buyers, while mortgage interest rates have risen slightly, they are still relatively low making the idea of new home ownership an enticing notion. Also in the Arizona real estate market’s favor is that in the past, summer has continuously proven to be the strongest part of the year for home purchases.

Overall it appears that Arizona foreclosures and Phoenix foreclosures may very well be dropping and that the Arizona real estate market is stabilizing and that the demand for new and resale homes is up. Under the current circumstances of an economy that is only now beginning to show signs of recovery this news is excellent and bodes well for a market that has struggled significantly over the last 12 months.