Friday, October 31, 2008

Happy Halloween...



From the fine folks at the RE/MAX Preferred Professionals office. It was kind of like a disco/hippie theme this year. Broker David Cooley (on the right) said he was disguised as 'Higgins' from Magnum PI. I did wear a flowered shirt today, but nobody confuses me with the Ferrari driving Magnum.

(no... I did not come to work today in a costume... I forgot this morning was Halloween... even though I did take some candy to work with me from the stash I'll be handing out in a couple of hours. 2 and 2 doesn't always compute to the correct answer for me on occasion)

Wow... early voting is hot in Mohave County

I decided yesterday to vote early down at the county building. Went there around 4:00pm. I often early vote to avoid lines on election day, but there was no avoiding a line at the early voting station. Place was packed. Took about 40 minutes to wait in line, cast my vote, and leave the premises.

I reasoned that perhaps the others waiting in line were just getting off work for the day as well and maybe didn't have the time next Tuesday.

Today I decided to do the patriotic thing, as VP candidate Joe Biden says, and pay my now higher property taxes at the same county building (deadline was fast approaching).

The line for early voting was even longer today than it was yesterday. And I was there around 2:00pm today. So yeah, wow. Of course this is only my anecdotal observation, the lines might be normal... but I suspect not for whatever reason. If the numbers are greater this time around from the local participation, I'll assume it is the same in most places. The results next week should be interesting.

I won't share all my choices I made on the ballot, but I thought I'd share at least a couple.

First one... easy... voted YES on Prop 100.

The other share... I voted for Doris Goodale for State Representative District 3.

It doesn't matter if you agree with my choices or not... my only real hope is that you get out and cast your vote in this important election.

Good luck to all the candidates and the many folks that campaign not only for people running for public office, but also to the many that campaign for propositions. Lots of people have been working really hard for their candidate or issue and it is not always two ton's of fun doing the work.

Thursday, October 30, 2008

Something old is new again... perhaps

I just ran across an article from this media outlet, talking about the old local theater on Stockton Hill Road opening again in December. I haven't heard of this before, and apologize if this is old news.

Here's the article from TSNN...

Kingman's Movie Drought Ending Before Christmas

KINGMAN - Kingman will be getting an early Christmas gift from Tom Daugherty and the company that operates a theater at the Avi Resort Casino. The theater industry veteran is partnering with John Brenden and Brenden Theaters to show movies again in Kingman.

Daugherty said they've secured a ten year lease of the building on Stockton Hill Road to open a theater in what used to be known as The Movies. The Movies closed last December with Cinemark promising to open a new state-of-the-art theater in Kingman by this December. Cinemark later revised that film forecast, projecting a spring 2009 opening on a parcel at Hualapai Mountain Road and Eastern Avenue. Building plans for that project have still not been submitted.

Daugherty said he didn't have sufficient capital to enter the Kingman market on his own and that Brendan enthusiastically agreed to a partnership to help fill the void left by Cinemark's departure. Crews are working six days a week to turn the old theater back into a movie house.

"We’re cleaning the place up," Daugherty said. "We're putting in new carpet, new tile, new concessions, new digital sound, new drapes in the auditorium and real good equipment."
Daugherty said the goal is to open by December 12, in time for release of the "When the Earth Stood Still" blockbuster.

"That's one of the big movies for the Christmas season and that's what I'm trying to get to, is get this place back together by then," Daugherty said. "I'm looking to show mainstream films and I want this to be a community theater."

Daugherty said he must set a price structure that is reasonable for the consumer, while generating sufficient revenue to show first-run films.

"I'm at $5.50 matinees for adults," Daugherty said. "It'll be $4.50 for children and seniors at all times and $7.50 in the evening for adults."

Kingman Crossing in the news...

On Tuesday night there was a town hall meeting on the subject of Kingman Crossing.

Here's a couple of media links for your reading pleasure...

From the Miner.

From the new MohaveBusiness.com site.

I've also asked another person who was in attendance to share her thoughts on the meeting. Hopefully I'll be able to put that up in the next few days.

I hope there will be at least a steady drip of information on this very important issue moving forward. The more the city and the developers can share the better it will be for the community. Long way to go, but I still think it is worth the effort to see if there is a solution that benefits not only the developer, but more importantly the community.

I'm sure I'll have more on this in the weeks ahead.

A new online media source...

I'm happy to say that there is a new media source available online that covers business news for the Mohave County area.

MohaveBusiness.com is now up and running. Please check it out. I'm adding a link.

The publisher is Ric Swats, a person I've always found to be well informed and professional any time that I have had the pleasure of speaking with him on the occasions where he has interviewed me on various topics. I wish him and everyone else involved the best of success with the new endeavor.

I am excited about this because I have a strong feeling that I will be able to offer many links to important articles about what is happening in our area. These folks are pro's.

Here is a bit from their launch article...

Business communication in Mohave County and the Tri-state region officially entered the 21st Century Tuesday, Oct. 28, when MohaveBusiness.com went online.

The digital magazine offers readers the latest in business information on Kingman, Lake Havasu City, Bullhead City, Needles, Laughlin and the Tri-state area.

The site offers links to regional news sources, RSS feeds from the Wall Street Journal, Forbes, CNN and local publications. It will feature columns by local business leaders, classified ads as well as the latest news on residential and commercial real estate .

“This publication offers residents and investors in the county nearly instant access to the latest happenings in business in the region no matter where they happen to be at the time,” Ric Swats, publisher of MohaveBusiness.com, said. “It provides a central portal to people who want to know what is happening throughout the region.

“It will also provide links to everything a person in business in the region may need. It has been time consuming for someone in Los Angeles or Europe to find solid information and to make the necessary contacts to conduct business in the region. They have had to spend many hours searching the Web and would often not get complete information. This site offers a one-stop source to connect them to the news, people and organizations critical to success.”


Cheers Mr. Swats.

Phillies!! (one last time)

Done deal!! As a fan, I really am thrilled. Today though, I actually find myself more pleased for the players than for me. This team is filled with great guys who were playing together on the same page throughout the playoffs. It was great to see, and even better because it was my team.

The Rays, Dodgers, and Brewers were all very good teams as well and it just makes the accomplishments of the Phillies team that much better in my opinion. No team was a pushover.

So I enjoy this as long as I can... and wish that it won't take another twenty some odd years before any of my teams win a title again.

Thanks for the life long memories Phillies!!





Monday, October 27, 2008

Phillies!! (again)


Come on... one more dudes!! (hey, it worked last time).

Foreclosures and pricing...

This information shouldn't be shocking to anyone...

From this article...

A government report Monday showed that new-home sales posted a modest rebound in September, but some Wall Street analysts are bracing for more price deterioration in the housing market as a result of escalating foreclosures.

Fox-Pitt Kelton housing analyst Robert Stevenson on Monday increased his forecast for home-price declines, saying foreclosures are driving down pricing faster than he had expected.

"Our original expectation that home prices had another 15% to fall appears far too conservative," Stevenson wrote in a report to clients.

His base-case assumption is now an additional decline in the range of 20% to 25%.


The formula is rather simple... more inventory (supply) equals more concession (in the form of a lower and more affordable price for the buyer). The banks that own the foreclosed properties understand this formula quite well and that is why we see as many sales for REO properties as we do sales made by actual owners. The banks have the ability to put more downward pressure on the prices in the current market.

Month after month, the banks have rolled out more units to the market and have been very successful in moving their inventory as compared to the more conventional sellers have. The only reason for this is price. Banks are at least speaking the language that buyers understand.

There is another wave of foreclosures due to hit the market next calendar year, so this isn't quite over yet.

Sellers, if you want to attract buyers then you are going to have to make your asking price attractive... it is that simple.

Buyers, you have all the negotiating power you need... plus you still have many great opportunities to rent for a lower monthly cost than to purchase (for the time being as long as you are putting most of that savings away for a down payment later).

Now if I can comment about how local politics has played a role in all this here in Kingman for a second... remember that not all local markets are the same. Kingman was a hot spot for new investment activity just a couple of short years ago. Then the stories started coming out about how hard and costly it was to develop opportunities in Kingman as compared to other areas (including outside the city limits). Couple that with a rebellion of sorts against new development led by the main media presence in the area that featured a group of NIMBY citizens telling us all that Kingman is big enough for their liking. Obviously people that didn't need more opportunity because they were either already retired or simply wanted to keep other interests out of the community so they could reserve all of the opportunity for themselves (with the expectation that the citizens of Kingman would help them along the way).

Now our market is soft and with the layoffs and other folks with businesses suffering... the market will only get softer. There is no doubt that the community listened to the wrong people who didn't have the communities best interest at heart. Instead of being business and investment friendly, the community flipped the bird to those kinds of interests... and those interests have moved on to other places.

The hole only gets deeper, especially if the only effort to do something different is coming from the federal government (yuck). This is way more than 'impact fees'. An attitude adjustment is called for more than anything. The city needs to commit to a better business environment starting with developers with the resources to spend here locally (the type that will hire, invest, and create opportunity throughout the community).

Okay... political rant off.

Besides... one more win and my team earns a title. Go Phillies!!

Saturday, October 25, 2008

Recent emails received from lenders...

Lenders lend... at least that is how I think I've heard the expression more than a few times in recent months. I've decided to copy and paste a couple of recent email ads I received from a couple of different lenders.

I know that when we settle in for the evening to watch media reports on the national economy, we often hear that there is no money to lend. I guess the media has it wrong again (and I really had hoped that for this subject they'd finally break their slump... alas).

If you are out there and YOU think it is a good time to buy a home or other property, just note that the possibilities to get a good quality loan is out there. Of course you'll have to meet certain criteria to qualify for the loan of your choice... you'll have to prove that you can do more than just maintain a heart beat.

Of course if you are out there and YOU do think it is a good time to buy and need a quality agent to help with your real estate related needs... please consider choosing me. While the lenders are readjusting requirements to qualify for a loan... my only requirements of my clients is that they are ready, willing, and able to purchase... and my clients can only decide that for themselves.

Here are a couple of ads...

Purchase a Home with an FHA Mortgage
Hello Todd Tarson, did you know an FHA mortgage makes buying a home easier and less expensive than other types of home loan programs. Even people who are self-employed or who have less than perfect credit may find that they qualify under the FHA's loan program. In fact, the FHA guidelines include:
  • Down payments as low as 3% of purchase price up to $729,750.
  • Easier credit and income guidelines.
  • Funds may be 100% gift for Down Payment.
  • Up to 6% Seller/Builder Credit.
  • Easier job requirement guidelines.
  • No minimum credit score requirements.
  • Home purchase allowed just two years after a bankruptcy.
  • Home purchase allowed just three years after a foreclosure.


Zero Down Payment and NO MORTGAGE INSURANCE
That's right we have 100% financing with no mortgage insurance available right now in Mohave County. This is an awesome program designed for the moderate-income to low-income buyer in rural areas purchasing primary residences. Here are some cool points about the program:
  • 100% financing so no down payment required
  • 30 year FIXED interest rate
  • No Prepayment Penalty
  • Assumable
  • No reserves required
  • No Mortgage Insurance, no MI payments means lower monthly payments so your buyer can afford more house
  • Seller can contribute up to 6% toward closing costs
  • Closing costs can be financed up to the appraised value
  • Finance basic necessities such as roof, insulation, siding, broken windows, toilets, etc.
  • FICO score as low as 585
  • Competitive Interest Rates
So many times the biggest obstacles in buying a home are the down payment, FICO score, and qualifying with the mortgage insurance added to the monthly payment. This program helps to overcome these obstacles and lets you focus on the buyer and the property. We look at the buyers ability to repay the debt, and we look at the property. Isn't that what it really should be anyway?

Wednesday, October 22, 2008

World Series prediction...

Look... first of all I still cannot believe that my beloved Phillies are still playing meaningful baseball so late in October, yet here they are.

Of course my prediction is that my favorite team will win. But don't take that to the sports book window or anything... I've seen many a Philly team make it fairly close to a league title and come away empty handed. To give you some scope... last time (and only time) the Phillies won it all was when I was toiling away in the third grade. The last time any of my former home town teams won a league title was in '83 when Moses Malone, Dr. J, and my favorite all time hoopster Andrew Toney won it all.

Seen plenty of choke jobs since then. All four of my favorite teams have come up short in the finals since. The Flyers played like Stanley Cup champs a couple of times in the 80's but ran into probably the greatest NHL hockey team ever (and lost once again in the finals in '97 to the current dynasty of that league). The Sixers were overwhelmed by the Shaq and Kobe Laker team 7 or 8 years ago. The NFL football Eagles ran into the Patriots dynasty a few years back (what is it with dynasties and Philly teams anyway??). And of course the Phillies watched a Series clinching home run off the bat of Joe Carter in 1993 (Phillies also lost the Series in 83).

No doubt it has been great for this fan watching the Phillies on their current run. They've over-performed in my opinion, met all the expectations I had at the beginning of the season to get to this point. But as a fan, I've been to this point many times before. So I ask the gods of sporting event fans to go easy on me this time around... and to help find a way to get these great dudes a way to win four of the next seven games. It is NOT too much to ask for.

Good luck to both teams, but may fortune find the Phillies this time around.

Play ball!!



Arizona Association of Realtors--Leadership

I was in Phoenix for the AAR Leadership Conference one day last week. Todd has been to several, however, this was my first.

I was very impressed by the relevance of each and every lecture. I expected the lectures to be more 'canned'. I expected the topics to be more traditional. Instead, what I found was an association that truly has it's 'finger on the pulse'--of what is happening nationwide an how it affects our industry.

Some of the topics discussed included....of course, the economy, the election, state propositions, innovations in technology and the law (as it relates to real estate).

When the economic 'crisis' was discussed, I felt that the information was delivered without any spin what so ever. The numbers came across without unnecessary commentary or excuses. "The economy is what it is and we have a duty to those looking to buy or sell. " That was the message.

So, while the day went by very quickly; I am very happy to have been invited to attend.

Vote YES on proposition 100

Friday, October 17, 2008

From the 'can it be worse' file...

Of course it can.

Talking today again about foreclosure homes. Here's an article about a 'creative' (using that term loosely) entrepreneurial sort looking to make a buck or two using Craigslist, a list of foreclosed home listings, a digital camera, and access to foreclosed home listings.

Article here...

Chandler Police are searching for victims of a fraud scheme reportedly conducted by a former Fannie Mae employee.

Police say the suspect took advantage of his position to sell appliances from several Chandler foreclosed houses.


Gee... FannieMae can't get a break these days. Be sure to read the short article for the scheme.

Tuesday, October 14, 2008

Be creative, be original...

Home Depot has a little contest going on...

The Home Depot wants to know how people are saving energy in their home in its “Save Money. Save Energy. Win Big.” video contest. Just shoot a short video to show how you're saving money and helping the environment by making your home more energy efficient.

Anyone can log on to www.homedepot.com/youtube to enter their video between now and Nov. 9, 2008. The contest winner will receive a $5,000 Home Depot gift card and up to $2,000 for installed insulation or radiant barrier products from The Home Depot.


So with increasing utility rates happening at will... how do you save on energy??

Monday, October 13, 2008

Phillies!!




One more, dudes!!

Foreclosure photos...

Last week I made mention that I would be following up on the post about the foreclosure sales data and would have done this a bit sooner but I was distracted by other things like silly baseball games and such. Also the cooler weather over the weekend allowed me to get some things around the house done that I had been putting off. Filled up the trash can nicely.

I've also struggled with the presentation of the information and photos. I have no intention of belittling the listings of the properties that are currently for sale. Same goes with the listing brokers/agents. I won't be sharing details of the three listings I visited last week. No MLS numbers, no addresses, no prices, or that sort of thing. I basically only want to offer the reader an opportunity to see conditions for themselves. I also want to show more traditional sellers what they might be up against. I did that with the data last week and I think the photos will offer the same sort of thing.

I picked three foreclosure listings at random, but believe that the following photos are a good cross section of what buyers can expect to see when they look into listed property that has been foreclosed on. I venture to say that all of the listings have positives and negatives... much like any home on the market right now.

Backing up for just a minute I want to share some of my experience with you.

From 2002 through 2004 I used to list foreclosure property (I'll call it REO property from here on out in this post) for a company affiliated with FreddieMac. Back then REO properties were not as prevalent in the sale market as they are today. Banks used to try and compete with the traditional sellers and often would have me, the agent, see to it that the property was cleaned up and as functional as possible. The REO property may have defaulted with the borrower owing say $75,000 to the bank (for example only), but the REO property fixed up and pleasant would fetch as much as any other competing for sale listing... often meaning that the bank would see huge proceeds upon completion from the sale. It wasn't uncommon for the banks to sell for $20,000 or even much more than what the former owner owed against the property. The banks were motivated to do the spending because they knew they'd get it back and then some.

Today though... not so much.

I am not actively trying to get a bank, flush with non performing assets, as a client in this market. So I can't say for certain, but I'm willing to bet that things have changed for brokers/agents that do go after the REO property listing business. One thing I did notice was that no utilities were turned on at any of the listings I visited. Back when I listed REO property, utilities were on, toilets were operational, light bulbs were replaced, batteries in smoke detectors were also replaced. Simple things really, but each visit I made to a REO property last week came complete with non functioning toilets and chirping smoke alarms.

I'm only pointing that out to say that things are different now than just a few years ago... not better... not even worse... just different.

One other major difference I see is in attitude. It seems that all REO properties listed for sale come with the disclaimer that the buyer will be purchasing the property 'as is'... meaning no buyer requested repairs of the seller. If you are a traditional seller... please keep that in mind because it is one of the benefits that you can offer a buyer that the banks don't seem to have any interest in.

Now... lets take a look at some photos...


This is a photo from the oldest listing I looked at of the three. The kitchen is clean, but it is cramped... especially when the new owner decides to place a refrigerator in there... somewhere. Times have changed and the latest wave of new homes have better kitchen areas than older homes do.


Interior door knobs... the listing needs them for all the doors in the house.

Pride of ownership is put to the test at most REO properties. The photo does not come out as well as I would like, but this carpet had the appearance of being 'cleaned' but it is deeply stained and likely would have to be replaced unless a well placed throw rug (or two) is of the new buyers liking.

This listing could easily have been a rental at one time and I'm not disparaging the last person or person's that dwelled here. Also... not coming through in the photo is the smell that this home comes with. A typical odor that emits from many homes that have been vacant for some time and/or was a place where smoking was allowed indoors.


Is that mold?? I'd ask the owner, but the owner is a bank, and the bank is telling me that I'm buying 'as is'.


Look honey... the 'as is' home comes with an interior door that we'd have to replace.


Throw rug goes here, part two.


Only have one photo of this particular REO listing. The home was built in 2006. I didn't notice any obvious defects (other than one small deep stain in the carpet). REO properties in good condition do exist and this home might be an excellent starter home or even a good rental. For as nice as the home seems to be in, I do expect to see price reductions before it is sold. There may have been some pride of ownership in this house, but it is not as evident on the street it is located on. There seems to be at least one 'catch' with REO property.

Again, the point of these posts about REO properties was not about the folks that used to live at these places, or the brokers/agents that represent the bank owners, or the banks themselves that own these places. Just wanted to point out that properties like this are seeing the most action on the sales market. These listings are the competition for more traditional sellers.

The last couple of months have seen more sales of foreclosures than more traditional listings (owned by people with a heart-beat). Typically traditional sellers have well maintained and kept homes and offer them on the market to buyers who would appreciate the effort.

Clearly, though, more than half the buyers have settled on something much less than well maintained and kept. They've settled on price... warts and all.

Shameless plug time...

If you are interested in looking at REO properties for purchase, please consider using me as your agent. My listing experience of these sorts of properties will help you get the best possible price in today's market. We'll negotiate hard on price since it is the only concession that the banks appear ready to deal on. We'll even renegotiate when it is appropriate. I know the process and the tactics and we can use them to great advantage. Email me or call... let's make a deal!!

Thursday, October 09, 2008

NIMBY Town


Convenience store?? Not in my backyard!! New retail center?? Not in my backyard!! New access routes to reduce traffic?? Not in my backyard!! Personal use windmills to conserve energy and improve property?? Not in my neighbors backyard!!

The list continues to grow... as well as the reputation, unfortunately.

Wednesday, October 08, 2008

Data drill down... Bank owned vs. Traditional Seller

Earlier I had mentioned that I would be following up with some data separating all the single family units sold as either 'Bank Owned' or 'Traditional Seller' for the month of September 2008.

The following is the data comparison.

First, I wanted to compare the average basics of the sold homes between the 'Traditional Sellers' and 'Bank Owned'. I didn't find any substantial differences between the fundamental aspects of the average sales between 'Bank Owned' vs. 'Traditional Sellers' listings.


As you can see, basically the same number of units were sold last month in both categories (Bank Owned vs. Traditional Seller). Slight differences appear after that in terms of livable square footage, garage space, and age... but overall both categories align pretty closely.

Now we'll continue with the breakdown concerning price...

Let those comparisons sink in for a few.

Okay... I know you must be thinking about such things as 'condition' of the property as a reason for the disparity in the differences shown above... and absolutely... condition of average 'Traditional Seller' property is superior and therefore purchased at a premium as compared to 'Bank Owned' properties.

But I think this chart clearly says that buyers are being attracted to price, on average, more than condition. Over half the buyers last month chose to purchase a 'Bank Owned' property. The buyers that make up that half most likely include real estate investors, but I bet a fair number of buyers of 'Bank Owned' did so on affordability.

I'll share some photos from the few 'Bank Owned' listings I visited recently in an upcoming post. Yes there are challenges that face the buyers who choose to purchase a 'Bank Owned', but homeownership fundamentally should be based on affordability for buyers and these 'Bank Owned' properties are providing it... and obviously the buyers have spoken.

Here is one last comparison that points to price as a motivating factor for buyers...
The numbers say everything. 'Traditional Sellers' need almost three more months to attract a ready, willing, AND able buyer. Three more months of mortgage payments, utility bills, insurance, waiting for just the right buyer, and delaying getting on with your life after your house sells. Once either seller (Bank Owned or Traditional) enters a contract, closing the transaction basically takes the same amount of time.

I do want to reiterate that condition of the property is still important and the better the condition the higher premium should be expected. I'll have more on matters that deal with condition in another post, but for now these comparisons are striking.

There was a 30 point spread between what 'Traditional Sellers' received in dollars to part with the property as compared to 'Bank Owned' properties. The data is telling me that is too high of a spread and impeding opportunities for 'Traditional Sellers'. Keep in mind that in my Listing Report from the beginning of the month showed a total of 585 active listings... and only 76 of them were 'Bank Owned'. Yet 'Bank Owned' properties are producing more sales for the last two months than 'Traditional Sellers' are.

'Traditional Sellers' MUST get ahead of the market at this time. Until banks rid themselves of non-performing assets, they will only drive the prices further down. Folks, price adjustments are happening very quickly... the charts posted earlier are clearly showing that.

If you fall into the category of a traditional seller (or plan to soon), please keep in mind that you will be competing with 'Bank Owned' properties, as well as other traditional sellers. Expect prices to continue to decline until the banks decide to compete with you.

More information coming on this subject... tomorrow at the earliest.

September Sales Report (2008)

Once again the numbers this month will show that the banks (non humans) have figured out how to sell in this market. For the second month in a row, foreclosed on single family units out-sold traditional sellers (humans) in total.

The sales report was put together as normal including both foreclosed homes and traditional sales on single family units... but I will be doing a couple of follow up posts breaking down numbers a bit further. I even took some time to snap a few photos of a few foreclosed offerings on the market to share in the hope to give the readers further insight on conditions and other factors comparing a bank owned listing vs. a traditional sellers listing.

So here is the sales report for last month... preceded by... of course... the disclaimer...

Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.

Listings and sales in units chart:

The bright side here on this chart is that the spread between new listings and sold listings in a month is much closer than it was this time last year. Closing this gap from either direction would be a good sign for this local market. I hope we see that actually happen sometime next year*.

*[/political rant on] with the way both major party candidates running for president are talking about buying bad loans and having a government official rewriting those loans in the hopes of keeping non performing borrowers in their homes (a position I strongly disagree with), it may actually happen. I'd much rather let it happen on its own though. [/political rant off]

Average listings and sales averages chart:

Another spread that can use some closing and no doubt that potential sellers will have to account for as sales prices continue to diminish.

2005 through 2008 unit sales chart:

Even though production numbers for 2008 have barely outperformed 2007 in five of the months so far this year, overall production will be down making 2008 the worst year for home sales in the time I've been tracking data in this market (2004). The only hope to out perform last years production is pinned on the foreclosure sales. So even if that actually happens... there is no way that anyone can feel any sense of victory. It's a down year no matter how it is sliced.

2005 through 2008 average price chart:

The average price is down nearly 35% from last year. I commented last month that the September figure was lonely... not any longer. Might be get more cozy at those levels (and lower most likely).

2005 through 2008 median price chart:

Median price for September 2008 fell 30% compared to the median for the previous September.

The price range for units sold in September was from $50,000 through $350,000.

Average SFR statistics:

The average home sold in September had 3 bedrooms, 2 bathrooms, a 1.86 car garage, included 1,474 square feet of living space, and was built in 1996. The average hold sold for an average of $99 per square foot of living space.

It took an average of 108 days of marketing to attract a buyer to come to an agreement and a total of 145 days from the first day of marketing to the close of escrow.

Sellers reduced price $12,314 to attract a buyer on average from the first day of marketing, and conceded another $7,924 to the buyer in the transaction. The total average price concession for the homes sold in September was $20,238 (12.15% total reduction).

Bonus Charts:



Foreclosure Impact:

In terms of units sold, of the 43 sales reported for September -- 22 were listed as foreclosed on (51.1% of units sold).

The price range of foreclosed units sold for September was from $50,00 up to $273,100.

The average price of foreclosed units sold for September was $123,572 (15.5% lower than the overall September figure).

The median price of foreclosed units sold for September was $105,000.

The average foreclosure home sold in September had 3 bedrooms, 2 bathrooms, a 1.7 car garage, included 1,448 square feet of living space, and was built in 1994. The average hold sold for an average of $85 per square foot of living space. Owners of foreclosed on homes conceded 13% off the initial offering price.

Conclusions:

I said earlier that I would be following up this report with a couple of posts that draw even more stark comparisons to show just how hard the foreclosure sales are dragging down the prices in the market. I'll also be sharing a few photos of some bank owned units that are currently for sale.

The only conclusion that I can draw at this time is that affordability and perceived value are the key for buyers currently in this market. Buyers will get squeezed a bit more I believe as time passes and loans are more difficult to obtain and/or as interest rates rise (banks will have to increase profit margin to help offset some of the losses they have taken).

See you with the follow up posts soon.

Monday, October 06, 2008

Weird movie quote of the day...

For whatever reason... this just appealed to me today...

It's easy to grin
When your ship comes in
And you've got the stock market beat.

But the man worthwhile
Is the man who can smile
When his shorts are too tight in the seat.

Section 110 of the 'bail out' bill...

Here I'm copying part of Section 110 of this horse-crap given to us by Congress and the rest of the government last week. If you want to read all 451 pages of the thing it is linked right here.

(1) IN GENERAL.—To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multi-family housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.

(2) MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under paragraph (1) may include—

(A) reduction in interest rates;
(B) reduction of loan principal; and
(C) other similar modifications.


I'm not happy with (A), (B), and (C). Not happy especially since there are no 'limits' included here.

I found the following point made on a discussion forum but I have no way to credit the person who shared it.

No clause defining the mortgages that the law covers (mortgages obtained during the “boom” that were in “bubble” markets).

No clause defining the amount principal can be reduced (20% of original purchase price would have been good).

No clause defining the amount interest can be set (2% over prime would have been good).

No clause defining the term of years one’s mortgage could be extended (5 years, perhaps).

The result is that banks will not know “how far” the initial terms can be modified. Would you loan someone $200,000 at 6%, knowing a judge can modify the terms to $50,000 at 3%?

The result? A dry-up of the mortgage industry as banks can not estimate potential losses. Without mortgages, people will not be able to buy. No buyers means lower house values. Lower house values will mean more people will be “upside down” in their house payment, wanting to take advantage of Section 110. A vicious cycle of the “race to the bottom”

The way I'm reading this... this appears to be the end of the 'free as it can be' market from determining price for housing and even lending for housing. Looks as if these Federal property managers will make the final determination.

If I'm interpreting this wrong... please feel free to correct me or point to more context that eases my view that we just accepted socialism as the course for home ownership. This wreaks of opening Pandora's Box... and it makes me wonder why the National Association of Realtors encouraged me to ask my elected leaders to support this horse-crap bill.

But hey... the Phillies won and will play in the National League Championship Series starting on Thursday... so I got that goin' for me.

Wednesday, October 01, 2008

September Listing Report (2008)

The Phillies begin their quest today for the World Series title. So pardon me ahead of time if my brain isn't totally focused on the Kingman real estate market in this report. The data mining is easy, it is just the writing today.

A couple of highlights (or lowlights, your mileage may vary) before we begin... foreclosure sales continue to lead the way attracting nearly half the new agreements last month, and compared in year over year, advertised average prices at the point of contract have fallen again 25%.

So lets get this disclaimer thing over with and begin before they throw out the first pitch...

Disclaimer... all data compiled for this report comes from the WARDEX Data Exchange and does not include any sales activity from outside that resource. All research is done only on single family homes and there is no inclusion of modular homes, commercial properties, or vacant land. The geographical area researched includes; all areas within the boundaries of the city of Kingman, north Kingman, the Hualapai Mountain area, and the Valle Vista subdivisions. Click here to see maps of the included area's.

Listings:

As of October 1, total listings available for single family residence equals 585 (down from 631 on September1). The total number of units that are listed as 'foreclosure' listings is 76. The rate of new listings taken per day in September was 2.96. Compared to last years total listings available on the market are down by 20%.

There were 89 new listings taken in September (surprisingly down as compared to 127 in August). The total number of units listed as 'foreclosure' listings for September was 22. The average asking price for the new listings is $193,360 (up from last months $176,895). The median asking price is $149,450 (down from $160,000 previously). Newly listed units are down 35 units from last year and the average initial offering price dropped 11.3% as compared to September of 2007.

The average newly listed home in September has 3.11 bedrooms, 2.17 baths, a 1.9 car garage, with 1,656 square feet of living space and was built in 1994. The average asking price per square foot of living space is $116. Lastly, 16 of the new listings were actually re-listed either by the same or different broker. 10 units listed last month are already under contract and of those one had closed in September.

The original price of new listings last month was from $55,000 through $825,000.

Units under contract:

As of October 1 there are 86 total units under contract (up compared to the number of 74 last month). Of these, 41 were listed as 'foreclosure' sales.

54 units entered into contracts in the month of September (up a bit from the 48 the previous month). Of these, 25 units were listed as 'foreclosure' sales. The average asking price for homes that received contracts was $151,928 (up from $149,238 last month) and the median asking price for September was $125,000 (down some from the previous months $138,900 figure). Units entering contract are actually up from September of 2007 by 15 units and the average marketing price is down 25.2%.

The average home that went under contract in September has 3.11 bedrooms, 2.15 baths, a 1.8 car garage, with 1,541 square feet of living space, and was built in 1989. The average asking price per square foot of living space for listings that entered contract in September was $98. It was also priced $17,081 higher when it first was listed as compared to its current asking price (the average price reduction was $7,865 last month). The average marketing time to reach a contract was 104 days (from 79 last month).

The advertised price of units that entered contract was from $43,900 through $655,000.

Conclusions:

Foreclosure sales putting huge price pressure on the market. Something had to lead the way. Finally.

Buyers do exist, but they have their own value proposition that doesn't meet with a ton of interference at the moment. The banks are supplying more offerings within the buyers value proposition. Let's hope something happens that forces banks to compete with more conventional sellers (you know human sellers) again soon.

Now... PLAY BALL!!

The National Association of Realtors asks me to support...

... the bail out.

Read it here.

Decide for yourself. In total... this issue is too much for my tiny little brain. Fundamentally though... I don't agree with this plan to 'rescue' a bunch of politicians and fat cats. NAR did not move me, but please decide for yourself.