Arizona Real Estate Review
Seeds of Wealth
Arizona Real Estate Review
All of the information here should be considered as frosting on the cake. If you are not familiar with the current conditions and want to get updated with our view, please
The Arizona Real Estate Review will be updated from time to time. We can help by adding clarification to most real estate topics. If there is a need to be more specific, we will leave the frosting on the cake and dig deeper for a more substantial answer. We can even give you a personal Arizona Real Estate Review.
At this stage of inquiry; It is a beginning point for research and development, pre-due diligence and finding financial and personal comfort levels.
We of course believe that it is in your best interest to consult us first. We can save you thousands in most cases and put your process on a smooth transitional process. Helping you to avoid stress and the practice runs that are common with other real estate groups. We want you in escrow quickly. We expect to have it cafefully handled to the end of escrow. You should always start with an Arizona Real Estate Review.
When you choose to purchase we will refer you to our preferred service providers or handle your transaction personally if you are in the area we serve. An Arizona Real Estate Review for your best interests to be discovered and formated to your endeavor to find the place that is just right.
So put your wallet away. We are here to coach with information way before transacting the "deal". It's what we live for. As independent brokers and business people we have seen a lot in the last 33 years.
We are always looking for more options to consider. Investing with an Arizona Real Estate Review is relatively safe. Compared to the troubles in the economy across the country, now in 2009, Arizona is ripe for investment.
There is so much more under the frosting to know about. Each individual or corporation has separate needs and brings to a potential transaction hers, his or its own framework, creativity and dream. Lets expand the dream. Make it real. Many Arizona residents are entrepreneurs in their own right. We think that is very healthy for the long term economy in Arizona. The Arizona Real Estate Review is very important to adjust your thinking to a higher awareness of issues and time expense.
A general feel and knowledge is very important for an owner or potential owner of Arizona real estate. Review always, measure once then twice for good measure. We discovered in our Arizona Real Estate Review that our market here is usually doing very well when other markets around the country are suffering or frustrated.
Arizona still has approximately 6,000 to 8,000 people relocating here from other states and countries every month. (2008) Most are relocating to the Phoenix Metro area. While this is true, there are 2,000 to 4000 people vacating the state as well.
Prior to 2007 we would recover more quickly from an economic down turn or recession without fanfare. Recoveries are slow and steady and build to a crescendo quietly, whereas down turns are sudden seemingly out of nowhere. Those who watch our market as investors are very aware of the trends and have become well tuned in. Many have become very profitable navigating these trends under constant Arizona Real Estate Review. Yet, even those investors are treading cautiously.
Those who look to move here for a personal residence or second home experience, will find huge equity shifts upward over a 4 to 6 year period normally. We expect these shifts to be enormous in the like period from 2009.
Commercially, downturns are often non existant for several reasons. Mostly this is the result of good demographic planning. Commercial ventures almost always are filling a need in the community and the "people numbers" or "roof top" counts are there way before the projects get started. And of course, the land acquisition for the commercial projects have been purchased wisely, after an Arizona Real Estate Review, and several years prior to build out, gives reason to the project and avoids huge losses in equity in most cases.
Until recently, commercial financing has been fairly easily acquired. The commercial markets are finally feeling the pinch in the economy. This does not happen very often. In this Arizona Real Estate Review we feel the comeback will not find the commercial markets wanting for very long.
In comparison with Arizona: New Mexico has lower priced property as does Texas. Lesser regional populations equal lesser demands on price. Colorado is very expensive. Utah and Nevada have strong spurts of growth but the increases in the "move to" population are not as constant generally as they seem to be in Arizona. Prices in Utah, Nevada, California and Colorado tend to be less enticing to a huge mobile population or investment.
California is so large, in populations and land mass, that it is hard to compare. It is perceived by most that California is overpriced in areas with very large populations where employment centers are readily available. The cost of California real estate even in the down markets is pricey. It is no wonder that Arizona's investment population is filled with Californians.
Arizona is looked at by many as a safer investment environment with greater residential potential for large and improved equity shifts. This can be deceptive to an investor because they see the safety but forget that they are dealing with Arizona timing, growth and location. More focus on an Arizona Real Estate Review would help.
This is not New York City or Orange County California. However, the risk of loss is smaller in Arizona to begin with because Prices, taxes and acquisition costs are smaller. It is not too rare to see investors hold on to their properties hoping it will make a come back like properties owned in Chicago or Denver. The ultimate hold is too long.
Timing in Arizona is as important as location. We like to play it as safe as is possible. If an increase in equity is available to make a difference, sell right away. Don't wait for the equity to max out. If a property has become a liability and the cost of retaining and maintaining the property is burdensome... Sell at cost or below. You will save in the long run and live to re-invest again.
Here is an example of timing. A man bought 10 acres of property in 2004 next to a town called Maricopa. Not far from Casa Grande. The very next year 2005, another man out of California but originally from the Orient bought the same 10 acres for $500,000.00 cash. In 2006 the man from the Orient could not sell the property for much more than $200,000.00. He tried to sue the seller but there was no grounds. Now, in another five to seven years the gentleman will probably be able to break even and perhaps find some profit if the markets continue to improve as they have in the last year (starting from 2008, and ending in 2009). If the man from the Orient can wait another cycle until 2023 the forecast would be favorable. This is probably not the intention. It was originally to flip, not hold and develop. This buyer did not bother to get an Arizona Real Estate Review. He did not bother to search out recent sales over the last year or more to see the trend. Due dilligence is one thing but that type of review is usually too narrow.
In late 2004, 2005, and part of 2006 speculators started their investment with inflated appraisals, no equity and deferred interest (negative amortization) loans at occupancy.
This has put incredible stress on our economy and to property owners in both residential and commercial markets. The short sale, and the lease option processes are very popular.
The trends on a graph would indicate that overall real estate ownership always out performs stocks and other investments not tied to real estate especially, over time. But you can not trade real estate like stock and flip it when it moves up in value in short periods of time unless you buy at under, way under market. Even then it pays to know and get the Arizona Real Estate Review.
In our Arizona Real Estate Review, If you bought a residential property in 2003 or earlier, many homes that were for sale at $155,000.00 to $185,000.00 for example, rose in equity in 2004 and 2005 to just over and just under $300,000.00. A sample of those homes, if they are on the market in 2008, are selling still for near 200,000.00. So if in 2003 there was no equity upon the purchase, then the owners are still able to get out of the property and start over. Even though after the cost of sale there is little left to roll over into the next house.
Commercial projects are completely at the mercy of their lenders and lines of credit in 2008. FDIC has come in and taken control of many of the banks in Arizona. The result is usually a freeze on fundings of payroll, infrastructure and future phases. This is the reality for now. Again, when the fence sitters are tired of holding their funds, Arizona will burst with activity. Metaphorically speaking, The current economic conditions are really just a weak dam holding back the inevitable waters of quenching relief. The dam is going to release eventually. Timing is the "dam-dest" thing.
Land is very speculative and hard hit. There is virtually no institutional financing available to assist in the purchase of land. Seller financing is very popular if a buyer can not pay cash and has a tidy sum for down payment or option fund.
In our market today, here in Arizona, (August 2008) we are seeing some growth which may indicate that we have seen our market bouncing from the bottom just a little bit giving signs of hope to our prospects and speculation. We do not expect huge and improved equity swings upward. Small increases over the next 3 to 5 years.
Perhaps the hardest hit homes are those in the $800,000.00 to the $4,000,000.00 and up. We have seen these homes in some areas drop 35% to 50% and more in Arizona. Yet in areas like Scottsdale, Carefree and Ahwatukee, values tend to maintain longer and recover more quickly (if they recover at all.)
Perhaps the ownership can afford to hold on longer and have more traditonal financing which does not threaten the stability in these areas. In this upscale type of home there are huge amounts of equity available to leverage.
The best financing for first time and middle income buyers is through FHA at this time.
Incredibly however, If a home is being bought out in the "country" at the edge of suburbia there is a very good program of financing through the Farm Home Loan Administration. Any buyer can get into a home with no money down and the seller can pay up to 6% of the costs to close in behalf of the buyer. We sincerely hope that the government does not "kill" this program. Certain restrictions apply to this program but it is worth checking out.
It needs to be mentioned for the homeowner who may be losing his property. There are humanitarian programs that will assist you and refinance your property if you show signs of a willingness to fight for the property and meet the guidelines. It can be a source to try, there is nothing to lose and can be very helpful.
Those who do not watch the trends are very prone to poor timing. In Arizona, the market is usually demonstrating slow improvement in pricing and longer lengths of sale. Very rarely have we had a declining market as we have had now for about eighteen months. When the declining market hits it is always suddenly and no one knows how fast and long the decline will be. Most investors are still on this fence. They do not know where the bottom is.
Homeowners are stopped in their tracks unless they choose to lose the home to foreclosure and can find a better place, environment and prospective place to live. If they try to sell their mortgage is higher than the value of their property. If they try to buy, the lending markets have tightened up so much on the rules the large percentage of general buying public have been cut to less than half. Time fixes this, How much time?
Our crystal ball is constantly foggy but we do see improvements every day.
The most recent improvement is the fact that there are literal bidding wars going on for homes under 200,000.00. Investors and homeowners are vying for the same properties. If an offer is presented, often on a very well priced property (REO foreclosures only) there can be 10 to 20 offers. In our opinion in an Arizona Real Estate Review this is very good news and the trend will give us our floor eventually. Buy it now.
Sudden drops of equity surprise most who land bank. Some may not even realize that there is a major sudden drop. Even sophisticated developers are baffeled by the sudden change in fortunes. Many have put off plans for three and five years anticipating the market cycling upward by then or joint venture partners become more visible.
Most active real estate agents in their praticular markets are aware of the general feel of the environment they are working in.
You can always use a different opinion. We are amused at the rumor that one in four people have a real estate license yet only one in thousands are minimally active in the market place.
Favorite questions you should ask your real estate agent or broker. Have you ever been through a major downturn? How did you recover? Were you able to come to a successful resolution?. More on that later.
In an Arizona Real Estate Review, it can reveal that your timing is as important as location. Many locations seem to be ideal and would normally be, except the timing is way off. For example, a developer could by a large tract of land expecting the economy to move on. Most find a way to extend lines of credit to keep the project moving. If there are no deep pockets the banks become the land holders. Banks do not develop property very well.
They do lend money creatively at times but real estate owned by banks is a disaster for all involved until it is put back in the hands of the non-institutional, private sector ownership.
Banks are looking to lend to only those who could really fund their whole projects by themselves. This makes it so much harder for the rest of us.
If you have not been affected by the downturn in the economy and have always wanted to get into a "buy low - sell high" real estate opportunity... Now is the time, Arizona is the place. It is not positioned for a short term flip. But rents are relatively good. So holding property for 3 to 5 years can make sense. In our Arizona Real Estate Review.
If you have or are able to set up self-directed, Independent Retirement funds you have a rare oportunity to possibly create a perpetual flow of income and obtain huge equity positions while holding and transferring real estate within the confines of this vehicle. Again, an Arizona Real Estate Review is the first step.
If you have investments in stocks and bonds you may want to convert portions of those into real estate. Stocks are capable of dropping to zero equity. Most property will never do that. It seems to us the Stock Trades are always counselling us to "diversify". Our advice pecisely, real estate for now, not when the prices jump. Property may be overfinanced but the value is always worth more than zero.
There are very good opportunities out there to use options to purchase land, apartments, office buildings and residences.
Putting the pencil to the numbers can reveal excellent returns while leveraging someone elses financing. In cases of extreme distress many of these properties are acquired with very little money down and no qualifying. If you can pay cash the limits in opportunity are only as restricted as your bank, savings, mattress and vault money. Always do your Arizona Real Estate Review and then do it again with those who work in your interest.
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