Delay in Getting New Homes Wearing on Buyers!

Delay in getting new homes wearing on buyers

Laborers in short supply

Glen Creno and Catherine ReagorThe Arizona RepublicSept. 29, 2005 12:00 AM

New-home shoppers' patience is being tested in metropolitan Phoenix. It's taking twice as long to build a home as it did five years ago, and buyers have fewer lots from which to choose.The number of permits for new homes issued in August fell 3.73 percent, to 5,548, compared with August 2004 after a more than 23 percent decline in July. Analyst RL Brown attributed the drop to builders having only a small inventory of lots ready for construction. He also said processing delays contributed to the slowdown, particularly in smaller cities in Maricopa and Pinal counties that are swamped by rapid growth.
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Home shoppers who win lotteries for the scarce number of lots find themselves caught in equity traps. Although the average wait is 210 days, they easily may have to wait a year or more for their houses to be built. Despite the aggravation, it is difficult to walk away from an asset that may gain thousands of dollars in value in that time.Builders and the subcontractors who construct the houses face labor shortages and higher costs of basic materials such as lumber, steel and concrete. The situation makes it more difficult to predict when a house will be finished.Doug Fulton, president of Fulton Homes, said the company tells buyers exactly how long construction is expected to take. Some are not willing to wait because of priorities like getting children in school. But demand for new homes is so strong that many buyers will tolerate the wait."In this weird environment that we are living in, people are happy to be picked and give us their money," he said. "It's no different when the concrete guy talks to me: 'What do you mean, negotiate price? You are lucky to get it.' It just works its way up the chain."Brown said it takes an average of 210 days to build a house in metro Phoenix. The industry, he said, prefers something like a 90-day building cycle. He said that 25 years ago, builders were knocking out houses in the Valley in an average of 75 days.Eric Brown, president of Artisan Homes, a division of Engle Homes, said it's a struggle to find enough labor to build homes. He also said builders are worried about what Hurricanes Katrina and Rita are going to do to construction material costs. "Construction time for new homes isn't going to shrink anytime soon," he said.Whatever the cause, the wait is wearing on buyers.Holly Hunter and her husband, Stephane Chartier, signed a contract for a $428,000 house in north Phoenix in February 2004. They were told they probably could move into the house in about seven months. They still are waiting, although the house is almost done.Subcontractors' problems with the slab, framing and plumbing delayed construction, Hunter said. But the couple also figures the house is worth $650,000 now. "This was our dream house," she said. "What they have slapped up is really disappointing. But you're at their mercy. You're not going to walk away from a gain in equity of $200,000."RL Brown, publisher of the Phoenix Housing Market Letter, said, "Once a consumer signs a contract, he has lost control. He is at the mercy of the builder who is at the mercy of the subcontractor who is at the mercy of suppliers. There isn't a builder out there that wants to take 30 minutes longer to build a house than he has to. . . . He doesn't get his money until it is done. It's the same with the subcontractors."The delays pushed some home shoppers into the resale market, which already was superheated due to investors who were blocked out of new subdivisions by builders. But there is evidence that the resale market is slowing to a more sedate pace as the number of listings increases along with the time it takes to sell. Brown said he viewed the slowing in the new-home market as a positive. He expects price increases to moderate, a good sign, he said, in a market that has made its reputation on affordability.

Did you know that Lenders & Title Companies answer to.......... State Banking & State Insurance?

It is up to the actual buyer and or sellers of real property to contact their local State Banking and State Insurance Departments to file complaints against Lenders and Title companies they feel have acted inappropriately during the process of purchasing a home or a refinance.

Only you can change to face of the industry; do not accept predatory practices by anyone involved in the process of buying or selling your next home. If you feel you have not been treated appropriately please, I urge you, contact your local office of State Banking & Insurance .........



Arizona Department of Insurance
Consumer Affairs Division
2910 N. 44th Street, Suite 210
Phoenix, AZ 85018

http://www.id.state.az.us/

Phone: 602-912-8446
Fax: 602-954-7008

Arizona Department of State Banking
Consumer Affairs Division
2910 North 44th Street, Suite 310
Phoenix, Arizona 85018

http://azbanking.gov/

Phone: 602-255-4421
Fax: 602-381-1225

Disclosure, Disclosure, Disclosure...............

Case in Point: Two Inspections.......... Two different out comes..... Should the Seller & the Sellers Listing Agent Disclose the presence of both inspections? ABSOLUTELY...........
If a Buyer had the opportunity to speak with the first inspector, or hear his report of the inspection, it may well have influenced the Buyer's decision to buy the home. For those reasons, the Courts held that a reasonable person, in determining whether to purchase the home, may well have attached importance to the more extensive description of the damage and the much higher repair estimate contained in the report and, therefore, the agent & Seller was required to disclose the information.
ARIZONA: A real Estate Agent MUST disclose all adverse material facts that they know. If two inspections are conducted, and they contradict or are inconsistent and an agent is aware of both of them, an agent should disclose both reports or risk being held liable for failing to disclose.

Arizona Homes & Land For Sale - We like it HOT!

Valley home sales continue on record pace

LATEST NEWS
July 24, 2005
Valley home sales continue on record paceMike Padgett
The Business Journal
Residential construction in metro Phoenix and south into Pinal County remains strong and likely will set another record by year's end, according to R.L. Brown, publisher of The Phoenix Housing Market Letter.
Permits issued in June for new homes totaled 6,531, up nearly 10.9 percent over the 5,890 recorded in June 2004, while the year-to-date 2005 total of 33,200 permits was nearly 15.6 percent over the 28,731 issued during the same period last year, Brown wrote in his newest monthly report.
If the trend continues through the rest of 2005, Brown believes "this market is headed for another all-time record year."
Brown also said:
The median closing price for a new home in metro Phoenix was $224,605, up 24 percent from a year ago.
Resales totaled 13,570 in June, up 19 percent from 11,410 recorded in June 2004.
Year-to-date resales through June totaled 68,719, up 30 percent from 52,861 sold during the same time in 2004.
"Builder after builder that we have talked to say there is no letup in the parade of consumers to sign up for the lottery to purchase a new home," Brown said.
Brown has been a vocal critic of other analysts in the real estate industry commenting that central Arizona could be headed for a housing bubble. He said the 6,531 permits for new houses issued in June, as well as increases in prices sparked by strong demand, are clear signs "that the mythical bubble about to burst that some babble about is not yet on the horizon."
For more: www.rlbrownreports.com

Presenting & Negotiating Multiple Offers

a White Paper from the NATIONAL ASSOCIATION OF REALTORS (R)

"When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS (R) pledge themselves to protect and promote the interests of their clients. This obligation to the client's interests is primary, but it does not relieve REALTORS (R) of their obligation to treat all parties honestly." (from Article 1 of the 2002 REALTORS (R) Code of Ethics).

"REALTORS (R) shall submit offers and counter-offers objectively and as quickly as possible."
(Standard of Practice 1-6)

Perhaps no situation routinely faced by REALTORS (R) can be more frustrating, fraught with potential for misunderstanding and missed opportunity, and elusive of a formulaic solution than presenting and negotiating multiple purchase or lease offers and/or counter-offers on the same property. Consider the competing dynamics. Listing brokers are charged with helping sellers get the highest price and the most favorable terms for their property. Buyer's brokers help their clients purchase property at the lowest price and on favorable terms. Balanced against the codes mandate of honesty is the imperative to refrain from making disclosures that may not, in the final analysis, be in a client's interests. (Revised 11/01)

Will disclosing the existence of one offer make a second potential purchaser more likely to sign a full price purchase offer - or to pursue a different opportunity? Will telling several potential purchasers that each will be given a final opportunity to make their best offer result in spirited competition for the sellers property - or in a table devoid of offers?

What is fair? What is honest? What is to be done? Who decides? And why is there not a simple way to deal with these situations?

1. As REALTORS (R) know, there are almost never simple answers to complex situations. And multiple offer presentations and negotiations are nothing if not complex. But, although there is not a single, standard approach to dealing with multiple offers, there are fundamental principles to guide REALTORS (R). While these guidelines focus on negotiation of purchase offers, the following general principles are equally applicable to negotiation of lease agreements. (Revised 11/01)
   Be aware of your duties to your client -seller or buyer - both as established in the Code of Ethics and in state law and regulations. (Revised 5/01) The Code requires you to protect and promote your client's interests. State law or regulations will likely also spell out duties you owe to your client.
2. The Code requires that you be honest with all parties. State law or regulations will likely spell out duties you owe to other parties and to other real estate professionals. Those duties may vary from the general guidance offered here. REALTORS (R) need to be familiar with applicable laws and regulations. Be aware of your duties to other parties, both as established in the Code of Ethics and in state law and regulation.
   
3. Remember that the decisions about how offers will be presented, how offers will be negotiated, whether counter-offers will be made and ultimately, which offer, if any, will be accepted, are made by the seller, not by the listing broker. (Revised 05/01)
   
4. Remember that decisions about how counter-offers will be presented, how counter-offers will be negotiated, and whether a counter-offer will be accepted, are made by the buyer, not by the buyer's broker. (Adopted 05/01)
   
5. When taking listings, explain to sellers that receiving multiple, competing offers is a possibility. Explain the various ways they may be dealt with (e.g., acceptance of the "best" offer; informing all potential purchasers that other offers are on the table and inviting them to make their best offer; countering one offer while putting the others to the side; countering one offer while rejecting the other offers, etc.). Explain the pluses and minuses of each approach (patience may result in an even better offer; inviting each offeror to make their "best" offer may produce a better offer(s) than what is currently on the table - or may discourage offerors and result in their pursuing other properties). Explain that your advice is just that and that your past experience cannot guarantee what a particular buyer may do. Remember - and remind the seller - that the decisions are theirs to make, not yours, and that you are bound by their lawful and ethical instructions.
   
6. When entering into buyer representation agreements, explain to buyers that you or your firm may represent more than one buyer - client, that more than one of your clients or your firm's clients may be interested in purchasing the same property, and how offers and counter-offers will be negotiated if that happens. (Adopted 05/01) Explain the pluses and minuses of various negotiating strategies (that a "low" initial offer may result in the buyer purchasing the desired property at less than the listed price, or in another, higher offer from another buyer being accepted; that a full price offer may result in the buyer purchasing the desired property while paying more than the seller might have taken for the property, etc.). (Adopted 05/01) Remember - and remind the buyer - that the decisions are theirs to make; not yours, and that you are bound by their lawful and ethical instructions. (Adopted 05/01)
   
7. If the possibility of multiple offers and the various ways they might be dealt with were not discussed with the seller when their property was listed and it becomes apparent that multiple offers may be (or have been) made, immediately explain the options and alternatives available to the sellers - and get direction from them.
   
8. When representing sellers or buyers, be mindful of Standard of Practice 1-6's charge to "...submit offers and counter-offers objectively and as quickly as possible." (Revised 5/01)
   
9. With the sellers approval "...Divulge the existence of offers on the property" consistent with Standard of Practice 1-15. (Adopted 11/02)
   
10. While the Code of Ethics does not expressly mandate "fairness" (given its inherent subjectivity), remember that the Preamble has long noted that "...REALTOR (R) has come to connote competency, fairness, and high integrity..." If a seller directs you to advise offerors about the existence of other purchase offers, fairness dictates that all offerors or their representatives be so informed.
    
11. Article 3 calls on REALTORS (R) to "...Cooperate with other brokers except when cooperation is not in the client's best interest." Implicit in cooperation is forthright sharing of information related to cooperative transactions and potential cooperative transactions. Much of the frustration that occurs in multiple offers situations results from cooperating brokers being unaware of the status of offers they have procured. Listing brokers should make reasonable efforts to keep cooperating brokers informed. Similarly, buyer brokers should make reasonable efforts to keep listing brokers informed about the status of counter-offers their seller-clients have made. (Revised 5/01)
    

Realize that in multiple offer situations only one offer will result in a sale and one (or more) potential purchasers will be disappointed that their offer was not accepted. While little can be done to assuage their disappointment, fair and honest treatment throughout the process, coupled with prompt, ongoing and open communications, will enhance the likelihood they will feel they were treated fairly and honestly. In this regard, "...REALTORS (R) can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, "Whatsoever ye would that others should do to you, do ye even so to them." (from the Preamble to the Code of Ethics). (Revised 11/01)

Real Estate Market Begins 2005 With Hot Month

The Valley housing market kicked off the New Year with a bang.

January home sales set a new record at 9,360 recorded sales. That's a gain of nearly 4,300 sales year - over - year, according to the Arizona Real Estate Center at Arizona State University.

Home prices continue to rise, up 24 percent year-over-year to a median home price of $194,000.00.

And for the first time ever, the median home price in Paradise Valley hit the $1 million mark. This is the first time that a median resale home price in any Valley community exceeded $1 million, according to Jay Butler, director of the Arizona Real Estate Center.

Arizona Real Estate researchers said that with mortgage rates higher now than a year ago, the average mortgage payment rose nearly $200 on the typical 30-year mortgage.

Checking sales figures and median sales prices Valleywide from January 2004 to 2005:

* Recorded sales in Phoenix increased from 1,460 sales to 2,685 sales, while the median sales price increased to $154,000.00 from $127,000.00

* The Scottsdale resale home market improved from 515 to 785 recorded sales. The median sales price continued its upward movement by increasing from $350,000 to $458,690.00

* Mesa resales grew from 665 to 1,060 sales, while the median price increased from $144,000.00 to $172,900.00.

* Glendale improved from 390 to 640 sales and the median sales price increased from $148,950.00 to $171,450.00.

* The Sun City resale market increased from 125 to 160 sales, with the median sales price increasing to $159,000.00 from $124,000.00. Resale activity in Sun City West increased from 65 to 95 recorded sales and the median sales price increased from $154,900.00 to $179,900.00.

* Gilbert's resale activity moved from 280 to 565 sales and the median sales price increased from $190,000.00 to $244,000.00.

* Chandler's resale market expanded from 325 to 625 recorded sales, while the median sales price increased from $165,000.00 to $219,000.00.

* The resale market in Tempe improved from 115 to 195 sales, with the median sales price increasing from $166,950.00 to $219,000.00.

*Avondale's resale market grew from 105 to 220 sales with the median price moving from $146,250.00 to $188,140.00.

* El Mirage improved from 50 sales to 155 sales, with the median sales price rising from $123,500.00 to $150,410.00.

* Goodyear moved from 75 to 195 sales, while the median price increased from $149,900 to $204,000.00.

* Surprise increased from 170 sales to 370 sales, median sales rose from $145,115.00 to $195,000.00.

As seen in: The Business Journal Phoenix, The Arizona Real Estate CEnter is associated with East College at Arizona State University's East campus. For more: www.east.asu.edu Latest News 5:31 pm MST Wednesday 2/16/2005.

Home prices showed steady climb in 2004

LATEST NEWS
11:56 AM MST Tuesday
Home prices showed steady climb in 2004
Valley home prices, both new and resales, and interest rates were on the rise in 2004, according to research released Tuesday by the Arizona Real Estate Center.

Even though the average interest rate on a 30-year mortgage neared 6 percent during the summer months of 2004, the annual average interest rate remained unchanged from the 2003 average of 5.5 percent.

"While interest rates were expected to increase during 2004, they remained fairly stable due to low inflation," said Jay Butler, director of the Arizona Real Estate Center located at Arizona State University's East campus.

In the resale home market, the median home price increased 12.8 percent from $155,000 in 2003 to $174,815 in 2004. The median home price for resales opened 2004 at $156,000 in January and increased to $190,000 by December.

For new homes, the median home price increased 12.6 percent from $173,240 in 2003 to $195,000 in 2004. During 2004, the median home price increased from $178,110 in January to $211,640 in December, a 19 percent increase.

Butler added that based on 85 percent loan-to-value, the average monthly mortgage payment would have increased from $735 in January to $920 in December in Arizona.

Research indicates that if the median home price remains at $190,000 as found in December 2004, affordability can only be maintained with a mortgage rate at 6.125 percent.

Valleywide, housing resales and new homes were most affordable in Chandler, Gilbert, and in the West Valley communities of Avondale, Goodyear, and Surprise.

North Scottsdale's housing affordability index for both resales and new home sales continued to decline.

For more: www.east.asu.edu.

When It's Hot, It's Hot............

This is truly a Sellers market.

Houses are on the market for less than a day and with multiple offers being received on them. Most are selling above market value, and with Sellers calling most of the shots.

If your agent is having trouble finding and getting you into a home; it's not just you trust me. I run 24/7 for my clients; checking the MLS 10 or more times a day and running the minute I see a new listing, only to get to the house and several other Agents have already been there before me. You rush to try and get your clients in to view the home and sometimes have to do it by photos alone. The the mad rush to do the comps and get an offer (full price or more) to the listing agent, only to find they have accepted an offer already; all within 24 hours of it coming onto the market.

This is truly a tuff time to be a buyer. But don't let the Sellers or their agents convince you to for go your appraisal and inspection contingencies, you still need to protect yourself.

The number of houses falling out of escrow are amazing right now and most are either because the house did not appraise at the asking price or the Buyers could not qualify for the increased cost of these homes.

Sit back, and strap yourself in this is going to be a bumpy road for sure.

Be sure to visit: http://www.GotRealEstateQuestions.com for more information about buying or selling your next home. Search the MLS 24/7/365 from the privacy of your own home.

Arizona Real Estate Questions

http://www.GotArizonaHomes.com

• Are you ready to play the real estate game; but need more information? Visit my web site and find homes available 24/7/365 from the privacy of your own home. No calls, No long winded agents trying to sell you on why you should use them.
• Interest rates are feared to be going up if your even thinking about buying or selling a home you should talk to a lender who can help you be prepared to move FAST; houses are limited after the length of time interests rates have continued to remain low. You want to be in the best possible state when ready to buy; i.e. no contingencies, no waiting to be approved for a loan, and know that the days of sellers paying all your closing costs may be be hind us for awhile. Let me help you hook up with a great lender who may be able to help you.
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  LATEST NEWS (From the Arizona Business Journal)
  1:06 PM MST Tuesday
  Resale housing market up 38 percent over last year
  The Valley's resale home market jumped 38 percent in 2004, rising from 73,785 homes changing hands in 2003 to 102,115
  recorded sales last year.
  Since 2000, the local resale housing market has consistently set new records, officials of the Arizona Real Estate Center at
  the East College at Arizona State University said Tuesday.
  For the year, the median home price increased 22 percent, going from $156,000 in January to $190,000 in December.
  The median square footage for a single-family home sold in 2004 was 1,685 square feet, while it was reported as 1,670
  square feet in 2003.
  "There are four basic motivations that drive home buyers: the need for housing, especially for new residents; the desire to
  own, not rent; the dream to improve current housing; and/or to invest in housing as a rental or seasonal home," said Dr. Jay
  Q. Butler, Arizona Real Estate Center director.
  Looking across the Valley:
  • Recorded sales in Phoenix improved from 20,100 to 27,075 sales, while the median sales price increased from
  $126,000 to $139,500.
  • Scottsdale's resale market increased by nearly 2,100 sales to 9,485 sales in 2004. The median sales price also
  continued its strong upward movement from $322,000 to $385,000.
  • The resale market in Mesa also expanded from last year's 9,205 sales to 12,310 sales. The median price increased
  from $141,000 to $158,000.
  • Glendale sales activity increased from 6,345 sales to 7,695 sales, while the median sales price increased from
  $142,000 to $158,900.
  • The Sun City West resale market increased from 1,035 sales to 1,065 sales, and the median sales price also
  increased from $144,500 to $165,000. In Sun City, sales activity improved from 1,770 sales to 2,065 sales while
  the median sales price increased from $118,000 to $136,925.
  • The Gilbert resale market jumped from 1,755 resales to 6,310 sales in 2004 while the median sales price improved
  from $174,500 to $205,000.
  • Chandler's resale market improved from 5,610 to 7,280 sales, while the median sales price increased from
  $162,000 to $186,000.
  • The resale market in Tempe expanded from 2,205 sales to 2,530, while the median sales price moved from
  $166,925 to $182,000.
  • Avondale's resales jumped from 1,080 to 2,145, with the median sales price jumping from $148,800 to $163,000.
  • El Mirage's resale market more than doubled to 1,340 sales and the median sales jumped nearly $17,000 over the
  year to $134,900.
  • In Goodyear, the resale market increased from 920 in 2003 to 1,900 sales in 2004, with the median sales price
  posting an increase from $163,500 to $183,000.
  • And the Surprise housing resales jumped from 1,865 to 3,685 sales and the median sales price jumped from
  $140,000 to $164,900.
  The highest median sales price was in Paradise Valley at $925,000 with a median square footage of 3,525 square feet.
  Butler noted that low interest rates continue to support the strong housing market.
  With that in mind, Butler said in order to sustain home buyer motivation, the economic recovery must continue, home
  prices must not rise so quickly as to result in affordability issues and future traumatic events must be limited.
  For more: www.east.asu.edu.