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« Ask Questions When Choosing a Mortgage Lender | Main | Scottsdale, Arizona Traffic Cameras » Saturday, February 24, 2007Apply for a Mortgage & Buy a HouseThat's right, it's time...time to buy Arizona real estate again! While many people are still waiting for the bubble to burst, the market's picking back up. Personally, my phone has been ringing off the hook since the weekend after the Super Bowl. And in a normal real estate year, that's what happens...the market slows down for the holidays and then starts getting busy again as soon as the Super Bowl is over. We've seen a weird Arizona real estate market over the last couple years, but it looks like 2007 is going to be a good real estate year. The economy is strong (locally & nationally), interest rates are still low, rental amounts are increasing and sellers are negotiating...the perfect time to buy! Some buyers are still scared because everytime they pick up the newspaper there's another story about the bubble bursting. But have you noticed there are less of those stories lately? Many buyers are still in disbelief that home prices are as high as they are, but waiting to buy is the wrong strategy, as many who were recently priced out of the market will tell you. Supply is relatively high right now (home inventories are still higher than normal). Demand has been somewhat lower than normal since the run-up of real estate prices over the past few years has priced many buyers out of the market. But sellers have started to negotiate, and prices have stopped appreciating like crazy and have even come down in some areas. That's all it takes to stimulate the Arizona real estate market and get buyers shopping for houses again! So get pre-approved for your mortgage and give me a call - I'll help you find the perfect home!
Posted by Shannon Hubbard, Arizona Real Estate Agent on February 24, 2007 | Permalink CommentsGreat Article and blog Shannon, looks like that finally our Arizona and Chandler Real Estate is picking up again. I see that you are suggesting to get pre-approved for mortgage, what would be the best strategy for someone who is looking to get their dream home and stay for a minimum of 5 years in home. What loan option would you suggest. Fixed, ARM, or maybe something else? What is your take on that? Posted by: Renato | Feb 24, 2007 6:00:24 PM Hi Renato - Thanks for your comment. I usually suggest getting your mortgage pre-approved vs. pre-qualified prior to looking for a home. Pre-qualification is usually only based on income & debt information that you provided to the mortgage company along with a basic credit report. Pre-approved usually means they've verified all the information you provided and you're approved (been through underwriting and the only thing left for full loan approval is to approve the house - usually appraisal, termite report & title work). A pre-qualified buyer still needs to go through underwriting and really needs 3-4 weeks to close a loan. A buyer who is pre-approved on the other hand, can close a loan in 7-10 days. The ability to close quickly can make a buyer more attractive to the seller. I've seen sellers pass up higher offers for a deal that can close quickly. But mostly, a pre-approved buyer means the seller doesn't have to worry about whether or not the buyer can obtain the necessary loan. As far as what type of loan I would recommend for "someone who is looking to get their dream home and stay for a minimum of 5 years in home"...there are many other factors to consider such as the current income vs future income of the buyers - are they a young couple just starting their working life or are they an older couple getting ready to retire and be on a fixed income? I'm not a mortgage broker so I really can't recommend a specific loan option. I can say that I personally am very conservative when it comes to borrowing money for my personal home. I believe in old fashioned loans - 20% down with a 30-year fixed rate mortgage. As long as you put 20% down, you don't pay mortgage insurance, you get a decent interest rate (assuming your credit is good), and you never have to worry about whether or not your house is worth what you owe on it. You also know that your mortgage payment will stay the same for 30 years - that's huge! I'm not saying I'd never use more creative financing. I believe there's a time and a place for such loans. For example, you might want to get a 10-year interest only loan on a property you buy with the intention of fixing it up and selling it. Or if you're in the military and you know you'll only be living in a home for 3 years max, you may want to look at an ARM that's guranteed not to adjust for 3+ years. It really depends on the individual situation! Posted by: Shannon Hubbard | Feb 25, 2007 3:43:30 PM Finding the Perfect Neighborhood Posted by: Justin Chimento | Feb 26, 2007 2:40:17 PM Glad to hear the the markets coming on again...I'll be doing my homework on Arizona once again...! wahoo! Posted by: James Klobasa | Feb 27, 2007 10:32:18 PM Great article! UK Home Mortgages Guy Posted by: UK Home Mortgages | Mar 27, 2007 8:56:03 AM Now is a great time to buy, you have got such a wonderful choice of places to live! 50k+++ and rising fast. But seriously... How you can suggest that anyone in their right mind should buy now is beyond me. You should be ashamed of yourself. Posted by: almost died laughing | Apr 7, 2007 2:52:20 PM Hello 'almost died laughing' - Sorry it took me a few days to get to your comment - I was busy working with many of those AZ home buyers you apparently don't think are out there. And we're not actually at 50,000 yet. The search of Arizona Regional MLS that I just now performed shows 47,042 active listings. That number includes all active listings (except timeshares, cooperatives and leaseholds) in 37 Valley cities, plus Maricopa. The data also shows something else very interesting - while the average list price is $472,292, the average cumulative Days on Market (DOM) in the Phoenix metro area is currently only 106 days! In other words, the average Valley home that's currently for sale has only been on the market a little over 3 months. And the 5,658 Valley properties that sold last month had an average days on market of only 108 days. That's certainly NOT indicative of a 'crashing' housing market. If you look at the average list price of those 5,658 homes that sold in March ($366,024) compared to the average list price of homes currently on the market ($472,292), it's easy to see where the excess inventory comes from - homes that are priced higher than the average buyer is willing to pay. I have to respectfully disagree with your opinion that nobody in their right mind would buy a home in Arizona right now. However, I'd like to think I'm somewhat open minded. So in weighing ones opinion, I first look at their credentials - are you a real estate professional/investor; or are you one of those people that hates real estate agents and anybody else who makes money in real estate? Second, do you own real estate and/or live in Arizona? Lastly, when do you suggest would be a better time to buy a home in Arizona, perhaps when inventory is lower, demand is higher, and sellers are negotiating less than in the current market? People who make money in the stock market don't do so by buying when everyone else is buying. On the contrary, they buy when everyone else is selling, and they sell when everyone else is buying. Real estate works the same way - you want to buy when everyone else is selling, hence a "buyer's market". Of course, not every situation is the same. If you're buying a house to live in...don't wait. If you're buying real estate as a long term investment, don't wait. If you're buying a house to flip and make money...BE CAREFUL! Selling in the current market, however, is a different animal. Over the past year, I've told many sellers to wait if they didn't have to sell. And no, I'm not ashamed of myself. In fact, I'm not the one hiding behind a bogus name and email address. Posted by: Shannon Hubbard | Apr 14, 2007 1:05:57 PM So you count the MLS sales figure when you discuss sales, but you pretend that there are less than 50,000 listings by eliminating areas that "don't count" in a search. Hilarious. Posted by: Russ | Apr 26, 2007 11:07:30 PM Hi Russ - The AZ real estate inventory statistics that the bubble bursters are reporting include both Maricopa and Pinal Counties, which makes the nearly 60,000 number they're reporting deceiving. But then that's what bubble bursters do, and unless you look deeper, you may fall for their 'the sky is falling on AZ real estate' theory (which they've been clinging to for what - 2-3 years now?). However, there are many cities in both Pinal and Maricopa Counties that have no relevance to the Valley's housing inventory. For example: Gila Bend, Aguila, Mammoth, and Oracle are all cities that are located in either Maricopa or Pinal County, but they have nothing to do with the Valley's housing inventory. In my many years of working in the AZ real estate market, I've never had a buyer tell me they're going to work in Phoenix, but they're not sure if they want to live in Mesa or Wickenburg. Therefore, you can see that my numbers are much more relevant since I do NOT include all of the irrelevant cities when I look at stats for the Valley. As a real estate agent, I know that most of Pinal County's real estate inventory is never considered by people who want to live/work in the Valley, and therefore has little or no effect on the Valley's real estate market. However, there are many people who live in Maricopa, for example, and commute to Phoenix for work. Therefore, I do include Maricopa and some other outlying areas in my search criteria. Although the city of Maricopa is not really part of the Valley, it's relevant to our housing market. While the tone of your comment tells me you'd be much more comfortable over at the bubble burster blogs, I appreciate your comment. Posted by: Shannon Hubbard | Apr 27, 2007 10:34:57 AM
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