by Dru Bloomfield on July 17, 2010
Here’s a quick update on the status of the Scottsdale real estate market, looking at it from a “distressed” point of view.
First, a reminder of where the Scottsdale market was last year at this time. A quarter of the listings were either pre-foreclosures or lender-owned properties, yet these two types of sales accounted for almost half of the sales. Depending on the type of sale, listing prices in June 2009 ranged from about $180 to $350 per square foot. Sales prices ranged from approximately $140 to $210 per square foot, with normal sales being about 50% higher than distressed sales.
Looking at today’s market, you will see that not much has changed. More pre-foreclosures are listed, but not significantly more. Sales of lender-owned properties are down a bit, pre-foreclosures are up a bit, for a wash. Listing prices ranged from about $190 to $310 per square foot. In June 2010, sales prices ranged from approximately $145 to $215 per square foot, with normal sales being about 50% higher than distressed sales. Not a lot of difference. According to the Cromford Index, the market is a bit more distressed.
All in all, more of the same, a bit of bumping across the bottom as many have predicted. Only time will tell when, we start to see some significant improvement.
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For the sake of clarity, I have included the following definitions of terms that were used in this Cromford Report chart:
- The Distress Index gauge at the center shows a value from 0 to 100 which expresses the overall level of foreclosure activity.
- REOs or lender-owned properties have already been through the foreclosure process and completed their trustee sale. These properties were sold by the trustee to the beneficiary (lender). In a few trustee sales (typically less than 5% at the moment), the property may be sold to an investor or wholesaler who is prepared to bid higher than the bank. These properties are not classified as lender-owned.
- The Pre-foreclosure category includes those properties that have started the foreclosure process, but have not yet had the trustee sale. We also include those which are being marketed in a short-sale situation, even if a notice of trustee sale has not been issued. In a full pre-foreclosure situation, the owner(s) have received a notice of trustee sale and the property is being marketed in order to try to sell the home before foreclosure completes. Many of pre-foreclosures are in a “short sale” situation, where the price asked is lower than the outstanding debt secured by the home. Such sales require the approval of the lender.
- Normal sales are those where the owner has the unencumbered right to sell the property without requiring approval from a lender, court or external corporation of any kind, and the owner is not a financial institution. In a normal market, these constitute the vast majority of all listings and sales. The degree to which these sales become a smaller proportion of all sales indicates the level of distress being felt in the market.
- Active listings include active-with-contingency and are measured at the beginning of the calendar month. All figures are for single family detached homes only. Monthly sales means sales that closed during the preceding calendar month. The date shown at the top of the dashboard is the date on which this measurement was taken.
by Dru Bloomfield on May 10, 2010
I’m working on a Broker Price Opinion (BPO) for a lender owned property tonight. I pulled up this map and just had to share. Makes me crazy. Why?
Well, this is not ordinary. This is not typical.
To clarify, the gavels are pending foreclosures, and the map does not include the properties that have already gone back to the lender. To date, I’ve not seen so many in such a small area. Most of these homes are condos. Two bedroom units sold for over $200-300K in 2005-2006. Today, they are listing and selling for about $60K.
The question in my mind is how did this many owners get approved for loans and then default so quickly in mass?
I got my real estate license in December 2003, so I was basically on the sidelines trying to figure out to build a business watching more experienced, confident, and sometimes aggressive colleagues make a ton of money during the big real price run-up. Over the years, my business has continued to grow, while many real estate agents left the business. With all the craziness of this industry and what it’s done to our economy, I feel fortunate to have a strong, diverse business that helps people and creates a solid income for me.
Part of my business does come from listing bank-owned properties, which I’ve been doing since early last year. It’s a different type of business, and I’ve learned a ton. Besides tightening up my business practices, I’ve learned how to knock on doors, asking the occupants if they know the property they are living in has been foreclosed on. And these days, the now bank-owned homes usually have someone still residing in them, waiting for me to show up. More often than not, the occupants are tenants. They’ve seen the legal papers posted on their door. They know the bank will help them move on, by helping them recoup their lost security deposits and more.
I really don’t have the answer my original question. I can tell you that many of the people that I come in contact with are not sure what is next for them, but these days I do sense a calmer demeanor, than I did last year. Maybe it’s me being more confident about what I’m doing, or maybe people are starting to see that moving out and moving on, is really the next best step for them. Seeing a bit of light at the end of the tunnel.
Maybe it’s not so crazy after all. Maybe times are changing, and I’m just a little slow to catch on.
by Dru Bloomfield on April 13, 2010
Last week, I took yet another class on Short Sales and Foreclosures. It’s a critical part of my on-going education in our ever-changing real estate market. Tonight, I received an email from the instructor, Chris Combs of the Combs Law Group, letting me know he’s now offering classes for the general public, not just Realtors.
Combs Law Group, P.C will present classes in four valley locations open to the general public on Foreclosures and Short Sales. These classes will include informational materials and will answer such questions as:
If a homeowner can’t make payments, should they do a short sale or a foreclosure?
Can a homeowner still have liability to a lender after a short sale? After a foreclosure?
What are a tenant’s rights before and after a foreclosure sale?
Upcoming classes:
- Thursday April 29th, 6:00 pm – 8:00 pm
Quality Inn and Suites, 950 N. Dysart Road, Goodyear AZ
- Tuesday, May 4th, 6:00 pm – 8:00 pm
DC Ranch Community Center, 18600 N. 98th Street, Scottsdale, AZ
- Thursday, May 6th, 6:00 pm – 8:00 pm
Rio Vista Recreation Center, 8866 -A West Thunderbird Road, Peoria, AZ
- Tuesday, May 11th, 6:00 pm – 8:00 pm
Southeast Valley Regional Association of Realtors, 1363 S. Vineyard, Mesa AZ
Cost is $50 per person; go to our website: http://www.combslawgroup.com to register for one of these classes.
My first response was that the cost of the course was high considering the audience would most likely be homeowners who were having financial challenges. In thinking about it a bit more, I realized that I have clients who spent $275 for an hour of legal counsel from another local real estate attorney, so that they could decide if they should proceed with the short sale of their house.
Chris Combs staffs the Arizona Association of REALTOR Legal Hot Line, providing legal opinion to brokers from around the state. Getting the latest up-to-date information was critical to me, and you may find it helpful too.
Recent posts from Combs Law Group blog include:
by Dru Bloomfield on February 5, 2010
Last summer, pre-foreclosures and lender-owned properties made up 25% of the active listings in the MLS. However, about 45% of the actual sales were distressed properties. Average price per square for a normal home sale was just over $200 per square foot, $150/sf for a pre-foreclosure, and closer to $140/sf for lender owned properties.
Looking at where we are today, you can see that we have a slightly larger number of pre-foreclosures on the market and about 50% of all the properties sold in January were either pre-foreclosure (and most likely short sales) or lender-owned (REO) properties. What is very interesting is that the average price per square foot has increased for all property types, to almost $240/sf for normal sales, to about $160/sf for pre-foreclosures, and to $150/sf for foreclosures.
I expected the higher numbers of distressed listings and sales. However, the increased price per square foot was totally unexpected.
I’ve been seeing an increase in prices in the lower end of the real estate market in various cities around Phoenix, but have not seen much of that pricing behavior in Scottsdale yet. By the numbers though, it is happening. Surprised me…. what do you think?
by Dru Bloomfield on October 7, 2009
by Dru Bloomfield on August 21, 2009
This is one real estate statistic that we’d all like to see improve. Pending foreclosures in Maricopa County (for all real estate property types) continues to increase, approaching 50% since the beginning of the year, January 2009.
You can see that the number of foreclosures remained relatively constant from 2002 through 2006, and then the steady increase started. Momentum pick up between February and April of this year, and has slowed since then. However, the total number of pending foreclosures continues to increase.
If you’d like to see a clearer view of the chart, just click on it.
