Welcome to the area information section for the Greater Phoenix area in Maricopa County. When considering what home to buy, the community can be as important a consideration as the real estate itself. This section should help you learn more about our beautiful community, the current market and all it has to offer.
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Tribune - August 2007
The mortgage industry's tailspin from lofty heights has left potential Valley homebuyers scrambling to pick up the pieces of shattered deals, as lending standards tighten on a near-daily basis. During the housing boom, it was easy to get a loan, said Elaine Paddy, senior vice president at Alliance Home Mortgage in
"If you lived and breathed, the underwriting guidelines would pretty much allow for you to get a loan," she said.
Today, it's harder than ever for borrowers to qualify for financing.
The days are gone when anybody could get 100 percent financing or use loans that didn't require proof of income. That's forced some borrowers who were already preapproved to start the process again from scratch.
Buyers now need higher credit scores and often a down payment of at least 5 percent.
Subprime and Alt-A borrowers are taking the biggest hits because they are at greatest risk for default, said Jeff Underwood, a loan officer with Mesa-based AmeriFirst Financial.
Subprime loans cater to borrowers with less than perfect credit, while Alt-A are geared toward people with decent credit scores but who can't or won't document their income or assets.
Many Alt-A borrowers are self-employed and have depended on these loans, Underwood said. That includes local investors, a number of them real estate agents, who hope to refinance loans on multiple properties in the coming months, he said.
"I really feel like we're going to see a lot of Realtors, who are going to be in trouble this year," he said.
LUXURY BUYERS TAKE HIT, TOO
While stricter guidelines have pinched struggling first-time buyers, luxury homebuyers are also feeling the heat.
Earlier this month, interest rates spiked on jumbo loans, which are larger than the traditional loan limit of $417,000. Jumbo rates jumped from 6.75 percent to 8.25 percent practically overnight, Underwood said.
The federal government is considering raising conforming loan limits, but for now, some luxury buyers are sitting on the sidelines.
Borrowers have also watched deals evaporate as mortgage companies have shut their doors.
Lenders throughout the country have lost hundreds of millions of dollars, as surging default and foreclosure rates scared away Wall Street investors from buying up mortgages on the secondary market. More than 38,000 workers at mortgage firms have lost their jobs so far this year.
Tucson-based First Magnus Financial Corp., which filed for bankruptcy protection last week, and
LIFE IN UPHEAVAL
Now, instead of moving into their new Queen Creek home, Andersen, her husband and two daughters are living at her mother's house in Gilbert, where they've been staying since selling their home in Utah in June.
"At this point, you can imagine I'm a little stressed," she said. "We're definitely anxious to get our own home again."
Andersen now has a friend who is a loan officer at Ameri-First working to push the deal through as soon as possible. Meanwhile, she is trucking her daughter to daycare in Queen Creek during the week.
"Our whole life is just kind of in upheaval until we can get this figured out," she said.
While lenders across the nation struggle to remain financially viable, industry experts worry that the mortgage crisis could have a drag on the larger housing market and economy.
The stricter guidelines could effectively shut out as many as 30 percent of potential homebuyers from the market, AmeriFirst's Underwood said.
Local real estate agents are watching deals fall through as buyers' loan options shrink, said Yalda Alawi, an agent with West USA Realty Revelation in
"Any buyers you have right now, don't tell them to be waiting, sitting on the fence," Alawi said. "Otherwise, it's going to continue to get tighter, tighter and tighter."
New homebuilders are facing the same challenges.
At Arizona-based Meritage Homes, some buyers have lost their loan approvals in the middle of the building process, said Ron Morgan, the company's senior vice president of sales and marketing.
Meritage, which has its own mortgage company, has been laboring to fit borrowers into different loans and counseling them on how to repair their credit, Morgan said.
"Everything in the world is dependent on these FICO (credit) scores," he said.
TRADITIONAL RETURNS
Still, local experts say there are plenty of loan products that remain available and some tried-and-true options are making comebacks.
The 30-year-fixed-rate loan is one of them. With rates as good as they are, it doesn't make sense to get an adjustable-rate mortgage, said Jeff Brock, a loan officer with The Mortgage Advantage in
The gap between fixed and adjustable rates has steadily closed in recent months.
It's also still possible to do a zero-down loan if a borrower has good credit, Brock said.
"You have to stay on top of all the new guidelines and changes," he said. "There's still good ways to get all the stuff done that you need to get done."
Paddy at Alliance Home Mortgage said she's also seen a large increase in the use of 30-year fixed-rate products over the past six to nine months.
Today's market is beginning to look similar to the days when Paddy first got into the business a decade ago.
There were no interest-only loans or other "crazy types of financing," she said.
Loan officers are having to work harder to close deals and are forced to be at the top of their game, Paddy said.
"Consumers are leaning toward the foundation - what built the mortgage industry in the first place," she said.
Paddy said she's also seen a slight increase in the use of Federal Housing Administration, or FHA, loans, which require 3 percent down but don't have specific credit score criteria.
To qualify for other loans, a borrower has an uphill battle if he can't put down at least 5 percent, Meritage's Morgan said. "For a buyer who has 10 percent or more down and has a good credit score, there is no crisis," Morgan said.
People planning to buy a house need to save some money and work on improving their credit, he added.
It takes four to six months to build a starter home, and a lot can be accomplished in that time, Morgan said.
"You really have to have the self-discipline and commitment," he said. "Lenders just don't reward bad behavior with low rates."
Positive Commerce Department Reports Suggest Economy Was Stable Before Credit Crunch Worsened
AP - August 2007
New-home sales turned up and factory orders soared in July, suggesting the economy was on stable footing before a credit crunch took a turn for the worse.The Commerce Department reported Friday that sales of new homes rose 2.8 percent to a seasonally adjusted annual rate of 870,000 units. The increase came after a 4 percent drop in June.
Another report from the department showed that orders placed with factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months.
The latest batch of economic news was better than analysts had expected. They were forecasting home sales to fall and calling for a much smaller, 1 percent gain in factory orders.
On Wall Street, the reports cheered investors who have been consumed by worry in recent weeks about the country's financial health amid spreading credit troubles. The Dow Jones industrials were up around 70 points in afternoon trading.
The housing report showing the July sales boost comes as credit standards have been tightening on home mortgages. Credit problems took a turn for the worse in August, making it even harder for some buyers to get financing. That means home sales in the coming months will likely show renewed weakness, economists said.
"Sales in August will face significant headwinds from further tightening in credit conditions, reduced availability of mortgage credit as many lenders shuttered their doors and upward pressure on mortgage rates, especially for non-conforming jumbo loans" of more than $417,000, predicted Brian Bethune, economist at Global Insight.
By region, sales in the West shot up 22.4 percent in July and increased 0.6 percent in the South. Sales, however, tumbled 24.3 percent in the Northeast and were down 0.9 percent in the
The improvement in overall sales didn't change the big picture of the housing market, which has been suffering through a deep slump for more than a year. Sales are down 10.2 percent from last year, and the weakness is expected drag on into next year.
To lure buyers, some builders are offering incentives including help with closing costs or lining up financing, and working with lenders to lower interest rates on loans, said Bernard Markstein, senior economist at the National Association of Home Builders. Some builders also are throwing in free upgrades to sweeten deals for buyers.
Home prices were mixed. The median price of a new home was $239,500 in July, up 0.6 percent from last year. The median price is the point where half sold for more and half sold for less. The average home price, however, dropped to $300,800 in July, down 3.4 percent from same month last year.
In the manufacturing report, gains were widespread, indicating that capital spending -- a key ingredient of a healthy economy -- had gained momentum. Orders increased for machinery, automobiles, metal products, airplanes and communications equipment. That blunted a drop in demand for computers, as well as electrical equipment and appliances.
A proxy for future business investment also was encouraging: Orders for non-defense capital spending excluding airplanes rose 2.2 percent in July, compared with a dip of 0.1 percent in June.
"The recent squeeze on business credit could damp investment plans in the months ahead. That said, the data will help allay fears that business spending was slowing even before credit got tighter," said Sal Guatieri, economist at BMO Capital Markets Economics. Fears that the painful housing slump and credit crunch could hurt the economy have gripped Wall Street investors in recent weeks, causing stocks to swing wildly.
Credit is the economy's life blood. If it becomes too hard to get, spending and investment by people and businesses can stall, short-circuiting the economy.
"The downside risks to growth have increased appreciably," Fed Chairman Ben Bernanke and his colleagues concluded on Aug. 17. It was a much more sober assessment than they had offered just 10 days earlier when they met to examine economic conditions and interest rates. Against this backdrop, the central bank sliced the rate it charges banks for loans, a narrowly tailored move aimed at propping up sagging financial markets.
If problems persist, the Fed could opt for more aggressive action: reducing an important interest rate, called the federal funds rate, on or before Sept. 18, the Fed's next regularly scheduled meeting. The Fed hasn't cut this rate in four years. It is the Fed's main tool for influencing overall economic activity.
The funds rate, the interest banks charge each other on overnight loans, has stayed at 5.25 percent for more than a year. A rate cut would bring lower interest rates for millions of people and businesses.
Parade - August 2007
Experts fear that a million homes will face foreclosure this year—30% more than in 2006—and scams are making the crisis worse. Some tips:
1. Contact your lender as soon as you have a problem paying. Most want to help you keep your house.
2. Respond to all mail from your lender. Early letters often include options that let you avoid foreclosure; later ones are legal notices. “I didn’t open my mail” isn’t a valid excuse in foreclosure court.
3. Know your rights. Read your loan papers and find out about foreclosure laws in your state.
4. Prioritize your spending. After health care, keeping your home should be your top priority—even before paying off other debt.
5. Avoid foreclosure-prevention companies and scams. You don’t have to pay fees for foreclosure help. Don’t sign a document from someone claiming to stop a foreclosure. In a scam called “equity skimming,” a “buyer” offers to repay the mortgage if you sign over your deed and move out. You’re left with the debt and no house.
6. Get help from HUD. The Department of Housing and Urban Development offers free or low-cost counselors (call 1-800-569-4287 to find one) and information on avoiding foreclosure at www.fha.gov.
Home buyers need better credit, more cash
Obtaining a home loan is going to get even more difficult.
Lending guidelines are tightening almost daily for borrowers as the subprime-loan crisis spreads. Those higher-risk loans have just about disappeared as their default rates soar.
Now, financing is getting tougher for all homebuyers.
On Thursday, megalender Countrywide Financial Corp. had to take out an emergency loan to keep operating, and Tucson-based First Magnus Financial Corp. stopped taking loan applications. Magnus is one of the nation's top private lender.
Earlier this year, New Century Financial Corp. and American Home Mortgage Investment Corp. filed for bankruptcy. So far, at least 70 mortgage firms have closed or put themselves up for sale since last year.
Because of the meltdown in the mortgage market, lenders have begun requiring higher credit scores and bigger down payments from all borrowers. They also are charging higher interest rates to people who want to buy a home for $417,000 or more because fewer lenders want to fund them.
The tighter mortgage market will work to slow metro
"The mortgage market has changed drastically in just the past few weeks," said Tom Miner of the Scottsdale-based mortgage firm Miner Kennedy Chmura Associates. "We are getting calls from buyers who can't close anymore because lenders want more documentation or money down."
Cheryl Serbic wanted to buy a condominium in central
But a week before she was to close, her lender said she needed a bigger down payment. Serbic called other lenders and got the same bad news.
"I didn't think I needed a down payment. My friend bought last year without one," she said. "But if the housing market is going to keep going down. I'll save and maybe I'll find a better deal then."
Not all the 100 percent financing and no-documentation loans have gone away. But now, lenders are requiring borrowers' FICO scores to be 20 to 40 points higher than last year. A 10 percent down payment, once considered standard, is now required on many more loans.
"There was a lot of dumb lending done in the past few years," said Jay Luber of First Horizon Home Loans. "Loan guidelines now are tougher but much closer to normal."
How we got here
In 2003, lenders started offering a slew of new easier-to-get mortgages that enabled the nation's housing boom.
Borrowers with bad credit and lower incomes could buy homes by getting subprime loans with higher interest rates.
Other borrowers could get in with nothing down and without paying private mortgage insurance by using 80/20 or piggyback loans.
The 20 percent was typically a home-equity loan that covered the down payment. Lenders also cut back on the income documentation they required on loans. These "no doc" loans opened the door for people to qualify.
The housing market was booming. People thought they could refinance into better loans as home prices climbed. Lenders were making money.
Then last year, home prices and sales started to slip. The subprime market started to implode as foreclosures on those loans jumped.
Now, the foreclosure epidemic has spread to the Alt-A mortgage market, the segment between subprime and prime loans that includes many 80/20s and no-documentation loans.
Changing guidelines
Lending guidelines are changing quickly.
Not only borrowers but sellers looking to move up should make sure they qualify first.
The "jumbo" loan market for mortgages of $417,000 has tightened up because mortgage institutions Fannie Mae and Freddie Mac don't guarantee loans above that amount. The investors who would have backed the bigger loans have pulled back, which is part of the mortgage market's liquidity problem.
Tighter lending practices are also affecting homeowners looking to refinance.
In a slowing housing market, some homeowners who got subprime or adjustable-rate and interest-only loans a few years ago are finding they can't refinance because they don't have a high enough credit score or their house is worth less than they owe.
"Now, their rates are adjusting up, and they can't refinance because don't qualify under the new guidelines," said Andy Griffin of Scottsdale-based Core Mortgage Group.
"It's a really tough time for a lot of homeowners now, but if people can hold on and make their payments, it will be much better for them than a foreclosure."
In its newest report, the Mortgage Bankers Association said mortgage markets are "facing a liquidity crisis of a force and magnitude not seen in decades."
It went on to say the ripple effect will be felt throughout the housing market.
Those effects are already being felt here in the Valley.
"Things are bad and are going to get worse," said Brett Barry, a north Valley real-estate agent.
AP - August 2007
More banks have tightened lending standards on subprime mortgages, the Federal Reserve said Monday in a survey that provided further evidence of spreading problems.
The Fed said it found that over half of banks responding to a survey reported they had tightened their lending standards for subprime mortgages, loans offered to borrowers with weak credit histories.
The Fed survey found that of 16 banks that said they were still in the subprime market, nine of those banks had tightened lending standards in the past three months. The 16 banks are among the nation's largest and accounted for 57 percent of all residential loans at the end of March, the Fed said.
The survey found that nearly half of the banks responding said they had tightened loan standards for so-called non-traditional mortgages. The Fed defines this category as adjustable-rate loans with multiple payment options, interest-only mortgages and products referred to as "Alt-A" loans that offer such features as limited verification of incomes.
The Fed survey found that even on prime loans, which offer traditional payment options such as 30-year mortgages to borrowers with strong credit histories, slightly more than 10 percent said they had tightened lending standards in the past three months while none reported easing standards.
The Fed survey on prime-mortgage lending was based on the responses of 49 of the country's biggest banks, accounting for 71 percent of all residential loans on the books of commercial banks.
Analysts said the survey, which they follow closely for trends in the banking industry, showed banks were responding to growing troubles in mortgage lending, reflected by a rising number of mortgage defaults.
"Lending standards are being tightened as aggressively as in the credit crunch of 1990-91," said Mark Zandi, chief economist at Moody's Economy.com.
David Wyss, chief economist at Standard & Poor's in New York, said it was troubling that credit standards are being tightened for business loans given that non-residential construction activity had been helping to soften the impact of the steep slump in housing construction.
The Mortgage Bankers Association reported recently that the percentage of subprime loans that were 30 or more days past due climbed to 15.75 percent in the first three months of this year, a record high and up from 14.44 percent in the final three months of last year.
The crisis in subprime lending has sent shock waves through other parts of the financial system and caused big drops in the stock market in trading last week as investors worried about whether an expanding credit crunch could seriously harm the overall economy.
Tribune - August 2007
The latest phase of a plan to bring thousands of homes, shops and offices to Gilbert is taking shape with two new housing subdivisions in the works.
Longtime farmer Jeff Cooley plans to put 900 homes near the southeast corner of Williams Field and Recker roads, as part of the massive Cooley Station development.
Cooley's family set plans in motion nearly a decade ago to transform 950 acres of farmland into some 4,000 homes and more than 2,000 apartments and condominiums.
Those will surround Cooley Station's
It's the family's legacy in a way, Cooley said.
"It's a place we hope people will be proud of," he said. "This is kind of now our last hurrah."
The homes in Cooley's project, called Eldon Point, will be built by Gilbert-based Thornton Homes in multiple phases.
Houses will range in size from 1,100 to 2,400 square feet and likely cost in the low-to mid-$200,000s, said Quentin Thornton. Construction could begin as early as next summer with sales starting the following fall.
Access to Loop 202's Santan Freeway and proximity to
It's in the heart of the southeast Valley, where the growth is, Cooley said.
Still, how long Eldon Point and the larger Cooley Station development take to build will depend on the state of the real estate market, Cooley said.
"We hope, maybe, within the latter part of 2008 things will start picking up again and stabilizing," he said. "The problem now is where's the bottom?"
Cooley Station is going to be a major player in Gilbert's commercial development, said John Zupon, a town business development specialist. It will help serve the future Big League Dreams sports complex, he said.
North of the Eldon Point project, another Cooley subdivision is being planned, which will have 100 houses and 270 town homes.
The multifamily market is much stronger than the single-family market right now, so the town homes will likely be built first, said Greg Davis, president of Iplan Consulting.
Construction could start on the Fincher Fields project in the third quarter of 2008, though a builder hasn't signed on yet,
Tribune - August 2007
It's especially bothersome since the previous landowner, the Apache Junction Fire District, is now looking to buy property in the same general area for a new station.
"They really should've just kept that station," a
Fire Marshall Dave Montgomery, a fire district spokesman, said many residents have criticized the April 2006 fire station sale, which netted about $800,000 for the district. The buyers placed the former station back on the market in late July for $1.6 million.
Meanwhile, the fire district's failed efforts to find a site for a new station in northwest
The district most recently hoped to buy land at
The problem,
"Could we dig in our heels and let the attorneys that represent the fire district go to work and push that type of agenda through?"
Others also question the old fire station's sale because the buyers, area residents Lonnie and Julie Pace, are now asking twice what they paid for the property. Lonnie Pace is a friend of fire district Battalion Chief Doug Taylor, top official at the former Gold Canyon Fire Station.
"It's just fishy," a
Proceeds were used to offset the cost of a new, larger fire station at U.S. 60 and King's Ranch, Montgomery said, which opened just prior to the sale and has led to a 20-percent improvement in emergency response times.
The former fire station would be ideal for medical offices, although it could have a number of commercial uses.
The sellers are not in any hurry to sell the property.
"It's a commercial piece, and you can ask whatever you want," said the owners real estate agent.
Voters in the fire district approved a $9.5 million general purpose bond in September 2006, $1.75 million of which is earmarked for a second
Still, if district officials cannot convince homeowners to abide a residential location, the district board will either have to go against their wishes or choose a more distant commercial location, which would defeat the purpose of selling the old property.
Finding a spot just a mile or two closer to homes could improve response times by 30 to 45 seconds,
"If your house is on fire and you're not breathing, or your heart is not beating, now you're talking about a significant period of time," he said.
Tribune - August 2007
As Gilbert's Agritopia community nears buildout on its first phase, even the niche subdivision is feeling the recent housing-market downturn.
The development, known for its features that promote neighborhood interaction, has reduced home prices to compete in the sluggish market. And specialty housing such as Agritopia can be especially vulnerable to a market slowdown, experts say.
The developer has about 17 existing homes and available lots remaining in Agritopia's approximately 160-unit first phase. They expect to have those sold by the end of the year, said Christa Marten, a sales associate with Scott Communities, which is selling the Agritopia home sites.
"I certainly think the pluses are in the buyer's favor," she said.
Since construction began in February 2002, the project has been sold on its amenities that include large front porches, small front lawns and short fences - all aimed at encouraging community interaction.
When completed, Agritopia will feature various-sized homes along with parks, athletic fields, gardens and a community center.
It was that closer, homey feel that enticed Ronna Meredith to move from north
"This is a great community, great closeness," she said. "People here just bring over a plate of cookies."
She's not concerned about the real estate slump since she's not planning to move anytime soon. But she said she has noticed for sale signs in her neighbors' yards are staying up longer than they used to during the past few months.
But now, Scott Communities is offering $40,000 discounts on new homes as a buyer incentive.
And it was knocking off $45,000 off a handful of existing homes available when their original deals were canceled.
The price cuts at Agritopia have dropped the development's cottage models to the $210,000-$250,000 range. The cottages range from 1,321 square feet to 1,991 square feet.
"Those types of incentives are not unusual" said Ben Sage,
The lowest base price in Agritopia, about $210,000, is considerably lower then the median base price for a new home in Gilbert at $289,000, according to figures provided by Sage.
More distant communities such as
"I can state that Gilbert is hanging on better," he said. "It's not doing great, but it's not suffering as badly." And a slowdown in the overall housing market can mean extra trouble for specialized projects, such as Agritopia, since there are probably even fewer buyers looking for niche products.
"Generally speaking, niche product is more at risk when the market goes down," Sage said.
But to resident Meredith, Agritopia won't lose its appeal with buyers who were looking for the close-knit community she has found. "I think people who want the front porches and smaller yards will still want to buy here," she said.
Agritopia developers have been planning two more phases of roughly the same size and makeup as phase one.
Associated Press - August 2007
Pending sales of existing homes rose by 5 percent in June compared with the previous month, a surprisingly positive sign for the beleaguered housing market, a real-estate trade group said Wednesday.
The National Association of Realtors said it was the largest monthly gain in more than three years and that increases in pending sales were reported across the country. However, Lawrence Yun, the trade group's senior economist, wasn't overly optimistic, and the pending sales index remained 8.6 percent below year-ago levels.
"It is too early to say if home sales have already passed bottom," Yun said in a statement.
Since there typically is a period of one to two months between when buyers and sellers sign a sales contract and when the property changes hands, pending home sales in June are likely to be completed between July and August.
The trade group's index of pending home sales rose to 102.4 in June, up from a downwardly revised figure of 97.5 in May. Wall Street had been anticipating a slight decrease, as analysts surveyed by Briefing.com forecast a decline of 0.6 percent from the original May number of 97.7.
The index, calculated since 2001, is based on a national sample that represents about 20 percent of existing home sales.
It is considered an indicator of how sales will perform in the coming weeks because it measures home purchases in which a sales contract has been signed, but the deal has not yet been closed.
The report is comes amid a flood of negative news about the housing market and the troubled mortgage industry. A housing index released Tuesday by Standard & Poor's said U.S. home prices fell for a fifth consecutive month in May, the index's steepest drop in about 16 years. The S&P/Case-Shiller index that covers 10
Demand for new and existing homes has been hurt as lenders tightened borrowing criteria after defaults started to rise in the market for mortgages offered to borrowers with spotty credit histories. Numerous mortgage companies are facing troubles.
New York-based American Home Mortgage Investment Corp. lost 90 percent of its market value on Tuesday after saying it may have to sell off its assets, and analysts were skeptical about its ability to survive.
Last month, the realtors' trade group projected that home prices and sales would bounce back next year after a dreary 2007.
Tribune - July 2007
Roger Ball, spokesman for the Transportation Department, said the crack is small for now, and county workers placed steel plates over it to allow road travel to continue in the area.
Several fissures - subsidence cracks caused by groundwater harvesting and exposed during heavy rains - appeared over the past week in the Queen Creek area, prompting attention to how they are affecting roads, Ball said.
Fissures damaging roads is uncharted territory for Maricopa County, but engineers did minor work in the area Tuesday and plan to do more comprehensive study next week, he said.
Out of the 2,600 miles of roadway the county maintains, this is the first issue of fissures interfering with the roads, Ball said.
"The big concern for all of us is that we don't exactly know where each and every fissure is," he said. "This is one of those things where as you dig, you may find more. The magnitude of the fissures in this area makes it unusual for us."
Ball urges area residents to report fissures.
Mapping recently completed by the Arizona Geological Survey is the first step in preparing more highly detailed fissure maps of specific areas. Those maps will be completed over the next five years.
Geological Survey officials said the first detailed fissure map due out in the next year will focus on the area where the fissure damaged San Tan Boulevard: the Chandler Heights area, an unincorporated area of Maricopa County south of Queen Creek.
That area was selected for the first map because of its growth and the need to show developers and residents where fissures could pose a hazard, Geological
Tribune - July 2007
Valley builders and homeowners alike are continuing to struggle in an over-saturated real estate market, as buyers wait to see if prices will keep falling.
Two studies released this week show continued weakness in sales of newly built homes in the Valley and existing
Some 2,988 new Valley homes were sold in June, compared with 4,348 during the same month last year, the latest Phoenix Housing Market Letter by analyst RL Brown shows.
Large inventories of both new and existing homes are still hurting the market, Brown said. More than 50,000 existing homes are currently for sale in the Valley.
"There's a lot of people who would buy if they could get rid of their present house," he said.
Stricter lending guidelines created in response to a spate of foreclosures nationwide are also an immense problem, Brown said.
"It cuts deeply into the pool of potential home buyers and especially first-time home buyers," he said.
Building permit activity is also sagging.
In the first six months of 2007, 20,662 single-family home permits were issued, a 24 percent drop from the same period last year.
Brown recently adjusted his five-year forecast downward, anticipating that new home building permits will not reach pre-boom levels of about 44,000 annually until 2011.
Despite the slump in sales, builders began ramping up production on speculative homes earlier this year, likely anticipating buyers returning to the market, said Ben Sage with research firm Metrostudy.
That hasn't happened. "It means they're going to continue to have inventory they need to get rid of," he said. "It'll keep downward pressure on prices."
Still, roughly a dozen new builders have jumped into the market in the past year, said Sage, who heads up the Houston-based company's
"That's the good news for
Some 970 existing
Sellers are competing with investors and builders, who are trying to off load homes, said real estate agent in the east valley. Builders are getting cancellations, which adds to the housing inventory. They can afford to cut prices by tens of thousands of dollars, while homeowners can't, he said. "They're the ones with the deep pockets," he said.
For now, sellers need to keep lowering their prices, and if they can't, they shouldn't sell. "Pay the bill and keep making the drive."
Associated Press - July 2007
The September/October issue profiling the cities will be distributed this week.
While each city is obviously different - from hot to freezing, from expensive and historic to inexpensive and fitness-oriented - they all have taken the lead in becoming friendlier places to live in for people over 50, Slon said.
Chandler was cited for its programs like cab coupons that also help seniors who might not be able to drive, in addition to sunny weather and a much cheaper cost of living than the East Coast cities selected.
In
Forbes - July 2007
Instead, Angelinos are packing their bags and heading 60 miles east to
It's easy to understand why. Home prices in the Riverside-San Bernardino metropolitan area are 30% less expensive than in L.A. Add comparable household incomes to the mix, and the move from the basin to the valley makes sense.
So much sense that
Our list was compiled using U.S. Census growth data from 2000 to 2006 and provided by Demographia, a St. Louis-based research firm. Since a city's metropolitan statistical area is defined by the counties it encompasses, Demographia excluded those outlying towns which were in suburban counties but didn't have significant economic and social ties to the big city. Suburbs included cities, townships and villages that had more than 10,000 people in 2000.
Behind The Numbers
The fastest-growing suburb in the country is
While not cheap by national standards, the growth in
But with sprawl comes both pros and cons.
In
As a result, these areas have some of the most affordable homes in the nation, since there is plenty of supply to meet demand. But transportation expenses are often high. In
Cities that engage in restrictive growth policies find themselves with different trade offs. In
This becomes particularly problematic in northeastern and Rust-Belt cities that are losing population. Places like
Last year, just over 16,000 more people left the
Rounding out the top 10 fastest-growing suburbs after
Having your home inspected by a licensed professional is expensive. But Janis Emery of
"You have to think about the money you're spending. ... Even if it's a newly built property, if you're not in the building trade, you don't even begin to know what to look for," Emery says. "I look at it as insurance. It's just money well spent."
Paul and Janis Emery were interested in a rustic Western red cedar home nestled in the woods just outside
"We knew the foundation was cracked," Janis Emery says. "We didn't realize the extent of the damage. Mr. Goad also pointed out some other structural problems in the house we didn't pick up on."
The Emerys decided against buying the house.
Goad is a third-generation homebuilder who began inspecting homes in 2006. He says most people think about having a professional home inspection when they're about to buy a house. Few think about it when they're looking to sell a house, and even fewer think about having an inspection done on a house they've been happily living in for years.
Goad says the seller's inspection is a useful tool. Your home may get a clean bill of health, a useful selling tool. Some inspectors offer password-protected links to your full report online, so sellers can direct potential buyers to the report even before they see the home.
On the other hand, if the home has problems, sellers have the option of fixing them before a buyer or buyer's inspector ever sees them.
"By having the house inspected before they put it on the market, then they're not caught by surprise," Goad says.
Sellers could avoid the heartbreak of having a great sale disappear once the buyer's home inspector files his report.
Maintenance inspections can provide peace of mind that all systems and structures are in good shape, or can give homeowners advance warning of problems.
"Most homeowners never see the far corner of the crawl space, the far corner of the attic," Goad says. "It's good to know what you may need to have done that may be being neglected. If you find something that needs repair in the near future, you can budget for that repair. You have time to get several estimates before it becomes absolutely necessary to have it done."
Goad says the most common problem he finds in any home inspection is moisture. Water in a crawl space or an attic is a problem that can usually be fixed pretty easily, but if the water sits for months or years, mold and rot become bigger issues.
"Some things you may be able to catch before it gets out of hand and becomes a much more costly repair," Goad says. "Especially water-related damage. They only end up getting worse."
If you've never had a home inspection, you would probably be surprised by how thorough it is. A home inspection should take at least two hours and may stretch to four hours or longer depending on the size and condition of the house. The inspector will look at every area of the house, from the basement to the roof.
According to the American Society of Home Inspectors, the standard home inspector's report will cover the condition of the home's heating system; central air-conditioning system; interior plumbing and electrical systems; the roof, attic and insulation; walls, ceilings, floors, windows and doors; and the foundation, basement and structure. The price of the inspection varies according to geography, the size of the home, and whether optional services, such as a test for radon, are necessary. The average cost of an inspection is between $250 and $350, according to Christiana Brenner, a spokeswoman for ASHI.
"My husband said it was the best money we ever spent," Janis Emery says. "It saved us untold thousands."
Tribune - July 2007
Home sellers in
Home prices also are dropping - an indication that some sellers are willing to make a deal in the troubled market.
Vern Zeman, of
He is competing with other homes for sale in his neighborhood, but Zeman is optimistic.
"I think we've got a bigger and better house than most of the homes in the area," he said.
He might want to consider joining the trend, though.
In
Valleywide, the slumping market has shown signs of stabilizing in recent months. However, a massive oversupply of houses for sale and more stringent lending standards are threatening to send it tumbling.
Some 14,990 existing Valley homes were sold from April through June, up from the 14,185 sales recorded in the first three months of the year, according to ASU's report. Second-quarter sales were still significantly below the same period in 2006, which had 18,310 sales.
The recent sales totals are comparable to the historical trends that occurred before the hyper market of the past couple years, Realty Studies director Jay Butler said.
Builders have more room to maneuver than regular homeowners because they have their own mortgage companies and can offer larger incentives,
Some communities are also being hit by a growing number of foreclosures,
It's not just low-income individuals who are losing their homes but owners of all financial levels,
"It's people really stretching beyond their economic means," he said.
Also in June, 17 percent of homes sold were priced from $125,000 to $199,999, while 41 percent sold for $200,000 to $299,999; and 40 percent cost more than $300,000.
The median existing home price was $263,145, compared with $267,000 in the same month last year.
Associated Press - July 2007
The National Association of Realtors also said it expects existing-home sales to rise to nearly 6.4 million in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, the association said.
As for new homes, sales are projected at 865,000 in 2007 and 878,000 next year, but the 2008 projection would still be down more than 20 percent compared with the nearly 1.1 million new homes sold in 2006.
More than 1.4 million housing starts, including multifamily units, are forecast this year and in 2008, but that is down from 1.8 million last year.
Existing-home prices are expected to gain 1.8 percent to a median of $222,700 in 2008 after a 1.4 percent decline this year to $218,800, the according said. The median new-home price should rise 2.2 percent to $222,700 next year after a 2.6 percent drop to $240,100 in 2007.
"Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Lawrence Yun, NAR senior economist, said in a release. "Buyers now have an overwhelming advantage given the wide selection of homes available in many markets. But with profit margins coming under pressure, homebuilders will limit new construction well into 2008."
The
It's going to cost more to build a house in Gilbert starting July 16 when new town fees take effect.
It'll cost $15,968 in fees to build a single-family home in Gilbert, up from $14,633.
Gilbert has charged system-development fees, also known as impact fees in other municipalities, since 1997.
"The council has a policy that they want all new growth to pay for itself," Assistant Town Manager Marc Skocypec said.
Once a development fee is collected, it is then divided into categories to pay for new parks, police, fire and other town infrastructure.
This most recent system-development fee increase will particularly benefit fire protection, parks and recreation, and water and sewer systems, officials said.
Tribune - July 2007
With foreclosure rates hurtling upward, Valley lenders are being forced to take back a growing number of homes from cash-strapped borrowers - costing them tens of thousands of dollars. That's because investors aren't biting at foreclosure auctions since many properties for sale have no equity left, said Tom Ruff, a partner at Glendale-based data research firm Information Market.
"They're looking to buy it at a discount at the sale, and they just don't see that those properties are profitable," he said.
Valleywide, 18 percent of the 676 properties foreclosed on last month were purchased by third-party buyers - typically investors - while lenders took back 82 percent, statistics compiled by Information Market show.
That's a sharp reversal from June 2005, when investors snapped up 75 percent of 105 foreclosed properties.
"That's when the market was just sizzling hot," Ruff said. "Investors were more willing to take a chance."
But with home price appreciation now stagnant, many investors are steering clear of buying up foreclosure properties - leaving lenders to carry hefty financial burdens.
Taking back a home back can cost a bank tens of thousands of dollars in attorney fees, repairs, maintenance, utilities and marketing by a real estate firm.
Many are also being forced to buy back bad loans they sold to national mortgage servicing companies or Wall Street investors, said Eric Bowlby, president of AmeriFirst Financial in
And it's causing a climbing number of firms to shut their doors, Bowlby said.
"It's unfortunate," he said. "A lot of people, they've made their bed. Now they have to sleep in it."
It's a problem throughout the country and across income levels, said Patti Crawford, who manages Intero Real Estate Services' foreclosure division in
A two-bedroom home off of
Another lender-owned home with four bedrooms was on the market for $1.6 million in
"Properties are coming back in droves," Crawford said.
Borrowers need to be more careful before they get into loans and make sure they know what they're signing, she said. Many loan officers jumped into the business in recent years to capitalize on the boom - pressuring some homebuyers into loans they couldn't afford.
The
The nation's home builders continue to fall on hard times.
Scottsdale-based Meritage Homes is the latest hit by the slowing housing market.
Arizona's only publicly traded home builder must write off $100 million on land and operations after a second quarter in which home orders fell 28 percent and new-home cancellations climbed to 37 percent, according to preliminary numbers released Friday.
Early this year, many home builders, including Meritage, expected to see the market stabilize during the spring selling season. But by May, it was clear the housing market hadn't yet hit bottom. Now, builders are reporting losses for the first time in several years and writing off money-losing land and other assets such as speculatively built homes.
A few weeks ago, Los Angeles-based KB Home reported a second-quarter loss of $148 million and a $308 million write-off on land and inventory. Florida-based Lennar Corp., another housing giant, also reported a loss and write-offs last month. Both companies build in
Housing is
Analysts and builders are now looking to 2008 for any kind of market upswing."One hundred million dollars is a lot of money, but I am not surprised by Meritage's write-down," said national housing analyst Tim Sullivan of the San-Diego based Sullivan Group. "Every builder is doing it now. The housing market has some more pain ahead of it."
RL Brown, publisher of the Phoenix Housing Market Letter, is downgrading his earlier forecast for home building. In January, he predicted 41,000 new homes could go up Valley-wide. That compares with 42,460 new-home permits issued in 2006 and a record 63,570 in 2005.
In June, Meritage warned that April and May homes sales were weaker than expected. About the same time, overall home-builder confidence in the industry dropped to a 16-year low, renewing concern that the housing slump was not over.
New-home cancellations have left the Valley's housing market with at least 20,000 homes built but unsold. Builders have offered hefty incentives of $50,000 and more to sell the houses, but many potential buyers can't sell their existing homes.
The result is a glut of homes for sale that is putting pressure on prices and dragging down the market.
"Weak demand and high inventory levels have increased competition among home builders, pressuring margins, despite reductions in new-home starts, lot supplies and operating costs,"
Meritage Chief Executive Steve Hilton said. Meritage's write-off translates to about a $60 million hit to its second-quarter income. During this year's first quarter, the company reported a net income of $15 million, compared with $79.7 million the year before. Analysts expect to see more of the same problems among other big
In 2005, investors inflated demand for new homes. Builders rushed to buy land, often paying top dollar, and construct homes fast enough to keep up with demand. But prices peaked in many speculator-driven markets like Southern California,
The value of some land bought during the market frenzy has fallen since then, which accounts for a lot of the recent home builder write-offs.
For example, if a builder purchased a lot for $100,000 but it's now valued at $75,000, accounting rules require the builder's balance sheets to show the drop.
Meritage is taking a $25 million write-off from an acquisition it made in
"It's the market correcting," Sullivan said.
The
Coming down from two years of dizzying growth that poured 100,000 new people into the county's borders, Pinal now finds itself trying to get a grip on development before the next tidal wave of growth strikes.
County leaders, planners and officials in cities and towns throughout Pinal are capitalizing on a cooling housing market to ask themselves some important questions: Where are we? How did we get here? And most importantly, where are we going?
Many say taking a step back to try and guide growth is a luxury that this up-and-coming county sandwiched between
"We're going with a clean slate, but that clean slate is quickly filling up," said Jess Knudson, a management assistant with
Part of the county's move to take a step back and think about what that full slate could look like appears in a report titled "The Future at Pinal."
The county paid the Morrison Institute for Public Policy $272,000 to develop the report as Pinal prepares to map out future land use, open space, transportation corridors and employment hubs.
The idea is to take an in-depth inventory of the region going from rural roots to an urban outlook.
The goal is to develop a vision to steer development so Pinal doesn't disappear into the suburban shadows of Maricopa and Pima counties.
Starting around 2004, growth blindsided
People entered lotteries fighting for homes in the newest master-planned communities. The county issued a record-breaking 18,700 permits for new single-family houses in 2005. And cities and towns started seeing their first chain grocery stores and Starbucks.
It's a different picture today.
From a peak of 1,785 sales in the second quarter of 2005, Pinal's resale market dipped to 840 transactions in the first quarter of this year.
"We're at a trot now instead of a full-fledged run," said Sandie Smith, one of three
"While we haven't stopped," Smith said, "we can take a deep breath and address some of the issues we have going forward that we couldn't think about when we were growing so rapidly."
Hopes and fears
"We want to talk about what we want to look like when we grow up," Smith said.
It seems to be more a matter of what
• "We don't want to be a bedroom community for
• "I don't want us to be like
• "We have to be forward looking while still respecting the past," said C. Alton Bruce, the director of growth management in Coolidge.
But across the board, the consensus is the same: Pinal wants to be different.
It doesn't want clogged roads, a pattern of strip malls and bedroom communities - things already set in motion from the first wave of growth.
"We're really good at growth in
"It's really fortuitous for Pinal that things have slowed down. If the county keeps going on the default growth scenario, Maricopa will come down to two-thirds of the county, Pima will take the other third and Pinal will end up this big McMega drive-through."
Because most of
About half of the county's population marches out of Pinal's borders every morning for work. And sales-tax-hungry cities and towns are aggressively annexing land, priming for the next auto mall or power center.
The county will have to tackle water, transportation and open-space issues.
Time for game plan
Many believe now is the time to develop the game plan that will lead Pinal into what could be a surprisingly bright future.
Cities and towns are revamping general plans, updating impact fees and preparing for larger wastewater treatment plants. Mayors are meeting for breakfast to talk about regional cooperation, and planners are crossing borders to talk traffic.
"People in Pinal want to have a real distinction from Maricopa and Pima counties," said Rob Melnick, director of the Morrison Institute. "They don't want to be lost in the in-between. But just because they have a vision doesn't mean they're going to rise out of the occasion. They really have a shot at this, but they have a huge amount of work to do."
Pinal sits right in the path of the
The challenge will be to break from
"As we are all facing the prospect of this tsunami of change, I think we've come to the determination that we need to get a grip on this growth," Pinal County Supervisor David Snider said. "We are being challenged by our residents and our stakeholders to do business in a way that is not 'as usual.' "
Tribune - June 2007
With the record home sales of 2005 long past, Valley builders aren't sitting back, hoping for a return to the glory days. May permits and sales
They're repricing homes, changing up what's included in option packages, ramping up marketing and cutting staff.
Some 3,135 new homes were sold across the Valley in May, a slight uptick from the month before, the latest Phoenix Housing Market Letter by analyst RL Brown shows.
But that's still a 26 percent dip from May of last year.
Year-over-year sales also are down.
The first five months of 2007 had 16,449 new home sales, compared with 20,522 in the same period last year.
Developers are battling the same basic problem they have been for months now: a huge oversupply of homes on the market, Brown said. Many potential new home buyers need to sell their old ones first and can't, he said.
"We have too many homes on the market, and too many houses are overpriced for the market conditions," he said.
Valleywide, there are currently more than 50,000 existing homes for sale.
Sellers haven't gotten realistic and are asking for too much, Brown said. Creeping interest rates and tightening lending standards are affecting affordability.
Rising foreclosure rates also are a danger. Still, the Valley's housing market is healthy by historical standards, he said.
Tribune - June 2007
A 25-year veteran of the development business, Gilbert homeowner Anthony Amendola knows how to spot quality construction. That's why he hired Toll Brothers - a national builder he respected - to build his more than $500,000 luxury home in the southeast Valley's Power Ranch development. But on his first walk-through shortly before the deal was set to close, Amendola realized his dream home was a nightmare. Sinks, cabinets and faucets were missing. Gaping holes surrounded outlets. The electricity wasn't turned on.
"My reaction was complete disgust," he said.
Nearly two years later, he still has unresolved issues with the workmanship, and he isn't alone. Other neighbors in the Toll subdivision have similar complaints. They say Toll is a good company. But some believe the frenzied pace of construction during the housing boom led to shoddy workmanship as builders struggled to find enough qualified laborers to meet demand - a theory industry observers say is likely true in some cases.
"We do strive to resolve everything as best we can," she said. "We want to maintain our name and reputation."
Every Toll home has a nine-page inspection list, and each owner is given two walk-throughs before closing.
"We want people to be able to entertain the night they move into their house,"
Before Amendola signed the contract for his roughly 5,700-square-foot home, he spent eight hours inspecting it and counted more than 200 defects. Nearly two years and 14 letters later, he still has a list of 15 problems. In that time, he's dealt with an upstairs shower that leaked water into the basement, windows that don't shut properly, a back yard wall with loose concrete blocks and more.
A vice president at Lauth Development in
Toll has made repairs, but if you stop calling they disappear again, Amendola said.
Toll's average time for initial response to complaints is 24 hours,
"Sometimes, you have to respond on multiple occasions to a problem, and, sometimes, that can be spaced out more than the customer might want," she said.
GROWING FRUSTRATIONS
Since April 2004, Gilbert inspection company Tony Hecht Enterprises has inspected at least 57 Toll homes Valleywide, including 11 in Power Ranch.
Toll isn't a bad builder, but its homes seem to have more defects than those of other builders, said Hecht, whose company inspected 1,600 to 1,800 homes last year.
At an average size of 4,130 square feet, the Toll homes Hecht has inspected have averaged 61.5 defects. Other similar-sized homes have closer to 49 problems, he said. The number of defects in the Power Ranch homes ranged from 52 to 144.
Hecht recently added a 20 percent surcharge for checking Toll homes because inspections take so much longer than what's typical.
"It appears that Toll Brothers just does not have their arms wrapped around quality control," said Hecht, who inspected Amendola's house.
That is Hecht's opinion, said Alan Euvrard, vice president of Toll's
"He makes his living that way," he said. "I think you need to take everything with a grain of salt."
Euvrard added that, to his knowledge, all of the Power Ranch complaints, including Amendola's, have been addressed and taken care of. Amendola, though, says he still has outstanding issues.
For homeowner Brian Eastley, the problem comes down to quality control.
Eastley walked by the construction site of his home daily, finding new issues, such as cracking in the foundation slab and stucco. He addressed those problems with Toll but still faced more when the home was done, including bubbles and trowel marks on walls.
"They're only as good as the labor they've hired," he said.
CONSTRUCTION FRENZY
During the height of the housing boom, builders were so busy that they couldn't find enough skilled labor, said John Fioramonti with research firm Hanley Wood Market Intelligence. Job superintendents were spread too thin and many didn't have experience in mass production, he said.
"It was a real aberrational time in terms of the volume that was going on," Fioramonti said. "Nobody had a good handle on how to deal with it."
Supervisors were under horrendous pressure, and most builders weren't restricting sales, Hecht said. City building inspectors were also overwhelmed, he said.
Gilbert has 18 inspectors who visit home sites a dozen or more times each during construction, spokesman Greg Svelund said. They look at underground work, framing, drywall and other elements.
"It's a big job for sure," Svelund said.
Gilbert issues from 300 to 500 new-home permits each month. That translates to about 5,000 annually for the past five years to 10 years, he said.
Inspectors focus on spotting functionality and safety issues versus aesthetics. Cracking in the stucco is common and isn't necessarily something that's a code violation, Svelund said.
The boom may have exacerbated the problem, but overall construction quality has been declining for years, said Dean Kashiwagi, a professor at
REGULATING QUALITY
Despite the surge in building in recent years, the Arizona Registrar of Contractors hasn't seen a corresponding huge increase in homeowner complaints about poor workmanship, said Brian Livingston, legislative and intergovernmental affairs director at the state regulatory agency.
The registrar receives between 11,000 and 13,000 complaints annually.
Builders average three homeowner callbacks for every new home, National Association of Home Builders spokesman David Jaffe said.
Labor shortages during the boom may have resulted in some quality issues but not as a general trend, Jaffe said. Builders who have problems are quick to fix them, he said.
MAKING PROGRESS
Toll homeowner John Kenneally has been glad to see some progress being made in recent weeks on longstanding problems.
He's battled sink holes in his yard created by water runoff from the roof. Window wells in the basement have also filled with mud when it rained, and water has seeped in through the walls, Kenneally said.
Workers have come out repeatedly to try to fix the problems, though not without the pressure of repeated calls, he said. Kenneally worries that his home's value may be hurt.
"We've had mold, and now I'll have to fill out a mold disclosure if I go to sell or rent the house," he said.
Despite his frustrations, Kenneally said he loves the house and believes Toll is a great company. But, for a company like Toll, it shouldn't have to come to this, he said. "They're a luxury home builder they should be correcting this up front," he said.
Toll was originally using an outside warranty firm that wasn't working, so the builder took over, Euvrard said. Now, it takes workers probably less than a week to get out to homes, he said. "We go back as often as we have to to get it correct," Euvrard said.
Amendola said the latest supervisor to oversee his home is more responsive. Still, he said he would do things differently if given the chance. "This is supposed to be top of the line," he said. "For the price that you pay, I would have gone to a custom builder."
The
If you blinked, you might have missed the jump in mortgage rates.
Responding to action in the bond market, lenders have pushed up interest rates on many types of loans, including the 30-year fixed variety that's favored by so many borrowers.
"Fixed mortgage rates have risen by more than half a percentage point in the last month," said Greg McBride, senior financial analyst at rate-tracker Bankrate.com.
For a person seeking a $300,000 fixed mortgage, a half-point hike adds about $100 to the monthly payment.
Julie Alsayed, a vice president at Bank of Arizona, said she hasn't noticed any drop in mortgage business yet. "But some of my clients wished they had locked in rates weeks ago," she said.
Rates have risen as bond-market investors came to realize the Federal Reserve isn't likely to cut interest rates near term with inflation pressures still visible and the economy growing. Bond-market action influences mortgage rates.
Rates on 30-year fixed mortgages have jumped from a March average low of 6.16 percent to 6.84 percent, McBride said. Mortgages with adjustable rates also are climbing. Even with the upticks, people with adjustable-rate loans should try to refinance into fixed loans, McBride advises, as ARM rates are still rising.
"For people facing adjustable-rate resets," he said, "fixed loans are still the place to be."
"If we're right, liquidity will continue drying up and this will produce somewhat higher interest rates," they wrote last week.
Associated Press - June 2007
For years, the wealthy have bought second homes to use as vacation retreats and benefit from the appreciation of the property. Increasingly, middle class families are looking more seriously at the second home market - especially baby boomers who want to line up a home now for retirement later.
"The demand for second homes is big and growing," said Joseph H. Badal, president and chief executive of Thornburg Mortgage in
But buying a second home requires a major financial commitment, so consumers need to think carefully before taking the plunge.
"Many people discover too late that the cost of a second home outweighs the benefits," Badal said. "There's the mortgage, insurance, taxes ... and maybe they don't use it as much as they thought. It really requires planning."
Although rising interest rates have been slowing home-buying in general, the market for second homes has remained strong, according to figures from the National Association of Realtors.
As sales of primary residences and investment homes dropped last year, sales of vacation homes rose nearly 5 percent to a record 1.07 million from 1.02 million in 2005, the Washington, D.C.-based trade group said.
The Realtors said the typical vacation home buyer was 44 years old, came from a household with a median annual income of $102,000 and purchased a property that was about 215 miles from his or her primary residence.
The
The number of
Mortgage delinquencies across the state dropped to 3 percent at the end of March from 3.51 percent at the end of 2006, according to the Mortgage Bankers Association of America.
Nationally, the delinquency rate fell only to 4.84 percent, from 4.95 percent.
Delinquencies are a leading indicator of foreclosures. The drop could mean fewer people in
"It's one less black cloud over
The falling rates could be attributed to mortgage bankers working with borrowers instead of taking back homes they can't sell for a profit. Another reason could be that more borrowers are lowering their payments by refinancing out of adjustable-rate or subprime mortgages.
Although
The same states that led the nation for price run-ups, subprime loans and speculator buying sprees a few year ago -
Doug Duncan, chief economist for the Mortgage Bankers, said foreclosures nationally would have dropped if these states hadn't posted such big increases.
