Market Price Changes 7-24-14Housing Begins to Stagnate. . .Again!

Hello Folks!

I hope you are well, and your families are well. I wanted to drop you a line on a little bit of information regarding housing stats. As of this month, July 2014, housing starts are down, and prices in the valley are starting to “slip” again.

We had a really phenomenal growth period over the last few years, as foreclosure inventory has slowed, and all but disappeared. There are still some distressed short sales out there, but not nearly as many as there were in 2012 and 2013. As a result, general inventories went down, and so prices went up. The valley, in some places, has seen as much as 24% price increases over the last two years, as we fight to make ground again after the collapse(s)? of 2008, 2010, and 2011.

So, what’s the upshot? If you’re at all contemplating selling your home, now is the time to do so, before prices deteriorate even further. The market is currently in a balancing act, where there is increased inventory, but buyers are still buying. This is going to change pretty rapidly however, as more and more people place their home on the market to try to realize these price gains.

Also, we’ve seen more and more investors realize that the homes they have purchased over the years and have rented out, reach their likely maximum price potential for the near future, and they’re offloading inventory. This will likely bring prices down more rapidly, as supply and demand balances out.

If you’d like to check the current value of your home, or talk to us about your next move, just let us know! We’d be happy to help out, and provide you the same great service and professionalism we’ve become known for at The Realty Butler.

Talk again soon!

Allen

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Choosing a Listing Agent for Your Arizona Home

When choosing a listing agent for your Arizona home, there are a few simple criteria you’ll want to keep in mind. In this new video promotion, Allen shares top tips for choosing a Realtor to sell your Arizona home, and shows you why you should choose The Realty Butler for all your real estate needs.

More Trouble In The Real Estate Market?

Housing Collapse. . .Again!?

For about the last 2 years now, most media and their housing experts have been reporting good news on the housing front. The number of distressed properties was decreasing, the number of foreclosures was decreasing, prices were (and are) increasing. This seems like good news all around, right? Well, it certainly would be IF IT WERE ACTUALLY TRUE!

I’m sure it comes as no surprise to most of my readers that things are NOT always what they are reported to be:

1.) “If you like your health plan, you can keep it!”

2.) “Al Qaeda is on the run!”

3.) “The Benghazi embassy attack was in response to a youtube video. . .”

4.) “The average family’s health plan will be reduced by approximately $2500 per year. . .”

5.) “There were a few rogue agents in our Cincinnati IRS office who were targeting their political enemies. . .”

Etc, etc, ad infinitum.

Well, now comes the news that “Housing Bubble Fears May Not Be Unfounded” and that “Low Inventories Conceal Hidden Vacancies, Threat Looms. . .”

These two news stories from DS News show what I have been telling my clients for the last few years. Yes, things LOOK like they’re turning around, when

Squatting Homeowners

you read the news. By when you actually work in the default industry, you know that things are NOT what they seem to be. Here’s the bottom line, and it makes all the difference in the world:

Many millions of mortgage holders who have not payed their mortgages for some time, are simply not being foreclosed on. You heard me correctly. There are millions of people living in homes that they haven’t payed for, in some cases up to 3 to 4 years!

Why is this happening? Because it is now politically incorrect to foreclose on people who haven’t payed their mortgages. Mortgage lenders were directed in no uncertain terms to simply “STOP FORECLOSING ON PEOPLE! You’re making things worse!”

I have been saying for years that politicians will continue to kick this housing can down the road as long as they can, and hide the data from the American people, to try to create more consumer confidence. Well, the plan hasn’t worked out too well. The news reports that consumers are more confident, but do you know anyone who has confidence in the housing market? the economy? our military prowess? our health care system? I certainly don’t.

Sooner or later, all these people who are not paying their mortgages are going to be removed from their homes. Those homes will hit the market. Then there are all the homes that homeowners have simply abandoned, but have not been placed on the market for sale, but are held “off the books” by lenders. Those will have to come to the market eventually as well. That’s a double whammy. It HAS to happen. It’s just a matter of WHEN.

So, now you know why your house price has increase by 20% over the last 24 months. There are very few homes for sale, and this contributed to creating a strong demand.

If only you could see below the surface, you’d see all those other thousands of homes just sitting vacant, WAITING to go up for sale.

Hello 2006!

Allen

Has Allen “Gone All Duck Dynasty” on Us?

Lately I have been asked a lot by people why I look so. . .different. . .rugged, etc. People are often a little surprised when they see me for the first time, or haven’t seen me in a while. It’s been almost 9 years now that I’ve been running The Realty Butler LLC, and over that time, my appearance has changed quite a bit. I’ve gone from a very thin, very primped, short-haired, corporate type, to my current look of. . .some would say Charles Manson!

Well, I AM getting older (just had my 42nd in Oct.), and more importantly, I’ve never had a beard before! I wanted to try it out. My wife had never let me have a beard, as she said I look “evil” with a beard! That may or may not be true (it probably is. . .), but with the advent of Duck Dynasty, a large beard has become slightly more socially acceptable. Kinda.

Furthermore, I’ve had longer hair most of my life. When I first joined West USA Realty, my first boss, Steve Kersey, insisted that I could not be a successful sales agent with long hair and demanded that I cut it. I did. My wife was sad, as she’d always enjoyed my long hair. She thought I looked like a “dork” with short hair.

Well, these days, I want to cut my hair, but she won’t let me, and I want the beard, but she wants it gone. Oh well. . .you just can’t win.

Group Crop II

Allen 2009 Compressed.jpg  Allen Butler

Between A Rock and a Hard Place: American Anxiety

I’ve not been one to wax political in public (though I am a rabid idealogue in private) as politics doesn’t always relate to the business of real estate.  And in a sense, my comments here will not be so much politcal as they are societal, and a connection absolutely can be made in this case to real estate and such, and I will do so.

I believe that a case can be made that Americans are feeling a great deal of anxiety right now over both their own circumstances, those of their neighbors and friends, and those of the entire country (and economy) at large.  I think that Americans are caught beween a rock and a hard place.  Or perhaps a better metaphor would be that Americans are at a “fork in the road,” and both roads seem to lead to hell.  Let me explain:

When gasoline was $4 per/gallon it really hit Americans where it hurt: in the pocket.  There was a national uproar. Now consider the problem in the housing market. It’s been bad for 4 years already, and it only seems to be getting worse.  And unlike an expensive tank of gasoline, the foreclosure of a  family’s home is much more personal, emotional, and powerfully troubling. And here is where we come to the fork in the road.

The first road is the public road. This road is run and maintained by the federal government.  The road is wide, and branches off in seemingly endless directions.  There are tolls to pay at every fork in this road, and taking any given fork will theoretically take you to your destination. The problem with this road is that like all government roads it is semi-maintained, the signs are confusing, and once you do get to your destination, you’ve paid dearly for the trip, and you have the nagging sensation that your destination looks a lot like your starting-point. 

The American people have lost faith in the ability of government to actually solve problems.  They have come to understand that government will simply take their money,  throw it at some aspect of the problem, and report success with charts, graphs, and cryptograms that show the problem has been solved, or will be solved “shortly.”

When President Obama came to office in 2009, the people seemed persuaded to give the government one more chance to fix things. It seemed that Obama maybe could make positive changes to the way things were done in Washington. He called for transparency, openness, coming together to solve problems, and offering real solutions.  Instead, what we got was less transparency, more seeming corruption, and a whole lot of the people’s money spend on stimulous that didn’t seem to stimulate anything or anybody except the bureaucrats in Washington and their corporate lobbyists on Wall Street.

Once again, government has failed to fix anything. Just like we secretly knew in our hearts that it would.  But what is our alternative? What is the “other road,” or the “hard place”?  The private sector.

The people’s only other choice is to get the government out of the way, and allow the private sector to fix its own economic problems. Capitalist free markets are harsh in the glare of reality.  If the people allow the market to correct itself, the pain could be intense.  Many people do not trust capitalism because they have been lead to believe that capitalism equals greed and corrution. They believe that if capitalism is given free reign, the rich will simply take all the money, and everybody who’s poor and disenfrachised will become moreso. 

I believe this stems from a misconception people have about the road of capitalism.  The capitalist road is almost always straight. It has to be, because the goal is always to get from point “A” to point “B” as quickly, efficiently, and cheaply as possible.  On the capitalist road, if the people decide that a particular branch of the road is no longer useful or desireable, they will abandon it, or use it for something else.

In regard to the housing crisis, I woud like to make the following proposition: “The Government’s Meddling in the Private Sector caused the housing crisis.” You see, the road in the private sector that represents housing was a large road, and many people were on it. It was a well maintained road, the speed limits were set correctly to provide safety to the people on the road, and there were very few “accidents” on this road.

But then, along comes mister government. He has an observation to make, and just like any government observation, it always comes with consequences. The government suddenly mandated that the road be widened, the speed limit be increased to a reckless 150 miles per hour, those who couldn’t pay the toll for this road were subsidized. Union government contractors took over road maintenance, and the rules of the road were expanded, duplicated, and codified into a 12,000 page document that normal Americans couldn’t even understand. 

And just like government always does when its bungling causes misery for the poeple who used to enjoy the road, it blames the former owners of the road. The government’s good intentions are never to be questioned. The outcomes of the government’s bungling always goes bad, and it’s almost always the private sector’s fault when things crumble. It is a strange and wonderful thing that our government feels the need to confound, confuse, and destroy the very system that props it up and gives it its power.

Thus, there are indeed only two roads we can take, and both are scary, but for different reasons. The laws of nature are manipulated and not allowed to function correctly on the private road. The government is determined to make the private road look and feel and function like other government roads. But allow me to ask this:

“Which road will you travel on?”

Unfortunately, the government road is freshly paved, and decorated beautifully. In spite of its confusion, corruption, cost, and unknown destination, people may choose to use this road rather than the people’s road.  The people’s road has a 3 million car pile-up, the roads are in disrepair, the signs and speed limits need to be redone, and it is certainly not safe.  But can we realize that we need to take the road back from the bumbling bureaucrats and fix it ourselves, so it goes where we need it to, and the rules make sense?

Until we determine to fix our own road, and get the government OUT OF THE HOUSING BUSINESS, our choices will look pretty bleak. I for one will be shouting loudly and clearly on the side of the private road:

“Give me my damn road back!”

Arizona Short Sale “Experts” Abound in 2010

Homeowners searching for help with a short sale might be unnerved to find that almost all of the real estate agents advertising in their city are promoting themselves as “Short Sale Specialists” or “Short Sale Experts,” or some other exemplifying adjectives. With so many experts out there, how can a homeowner be sure they actually have an “expert” to help them? Let’s start out by stating unequivocally, there simply is not any licensing or certification from any governing body anywhere that places restrictions on who can process a short sale, nor are there universal standards on how they can or should be done. Finding a good short sale agent to help you involves the search for knowledge and experience. They’re gonna need both.

It might be helpful to define the word “expert” itself. I suppose common sense dictates that anyone claiming to be an expert at anything would have to exhibit the following qualities:

1.) A deep and current knowledge of the subject

2.) Plenty of current experience with the subject

How much knowledge is enough? Consider this: if you had to hire an attorney, a CPA, a doctor, or a mechanic, how much would you expect them to be “up-to-date” on current trends, law, or practice in their subject? My guess is, most folks would like it if their representative was as current and cutting edge as possible. Until 2009, there was virtually no formal educational training for agents in short sale negotiations. Now, there are many training/coaching/certifying entities. Some agents have been certified by the Distressed Property Institute (CDPEs) to handle short sales, others get trained and certified as “Master Short Sale Consultants,” while other agents may have no certifications because they don’t really need any; these might be agents who are either research hounds, or are very experienced and engaged in the practice.

In regards to the subject of experience, consider the same example. How many cases like yours would you like for the attorney you hire to have tried? How comfortable would you be if your mechanic reassured you that he had dealt with exactly this same problem on numerous occasions? Experience also has a shelf life. If I was a short sale expert back in the late 80s, I might have a foundational knowledge of the subject, but might be well behind in the current methods being used to perform short sales. So, how is the homeowner to select a true expert? By getting the answers to just a few questions, when interviewing short sale experts:

1.) Ask them to tell you about the latest laws and programs that are in place to help you in your situation.

*Here, you’ll want to carefully gauge to the agent’s overall knowledge on the subject. Does he or she speak with authority and confidence on the subject, or can you hear lots of paper shuffling in the background? How much detail is he or she able to go into? When there’s an expert on the other end of the line, you can definitely tell.

2.) Ask them for records of actual success.

*Here, you’ll want actual records of success. Not stories, not letters of reference from beaming clients, actual records. The specific document you want is called a “Closed MLS Plano.” Ask them to show you at least a few recently closed short sale transactions. On an Arizona Regional MLS Plano, you’ll see the following data strip (click image for larger view) near the bottom of the page:

 

The highlighted portions show that it was a short sale (Short Sale Apprvl Req), it took 144 days to complete, and it closed escrow on 12/14/09. Ask for the agent to show you at least 3 of these that are fairly current.

If you can get a good feel for the knowledge level of the agent, and be assured that they actually have experience, you’ll be well on your way to selecting a good representative. That’s not to say the experience is guaranteed to be good, but at least you can be confident that the person is really at least experienced. Beyond this, it all comes down to customer service. At the bare minimum, I think decent service dictates that your representative be able to educate you, answer your questions, communicate with you on progress, and guide you along the way.

Here’s to hoping you never need a short sale expert!

Free Loan Counsel Available Now!

By Phone: (602) 499-4798

or by Email: therealtybutler@gmail.com

*Disclaimer: We DO provide loan counseling services and process short sales for our clients. Please also remember: I am NOT an attorney, and neither do I play one on TV or the Internet. None of these pontifications should be construed as specific legal advice. If you need specific legal advice regarding your personal situation, give us a call. We can help you ourselves, or provide a list of housing counselors that are free!

Why Loan Modifications Fail

According to the latest report by the Dept of Treasury, loan modifications are failing at an alarming rate. Consider: of the 728,000+ attempted loan modifications done so far through the government’s HAMP program, only slightly over 31,000 have been successful.  Stated differently, if you attempt a loan modification, you have a 23% chance of success. Why can’t people get loan modifications completed?  Let’s take a look.

According to reports from banks, homeowners are to blame because they don’t turn in the paperwork required, nor do they make trial payments.  Homeowners, on the other hand, say mods are failing because lenders are losing paperwork, foreclosing on “accident,” changing terms mid-stream, simply ignoring them, or denying them loan mods based on some mysterious formula.

 There are in fact many homeowners who can qualify for a modification who have decided they don’t want one.  These people who “failed to complete the process,” probably came to the conclusion (after months of emotional hell) that it’s best to ditch the home and start over.  Once these families have been through 6 months of fighting with their lenders about a modification, they start to realize a few things:

 a.)    their credit is already ruined

b.)    the “fix” is somewhat iffy, and temporary

c.)    there is a real chance they’ll be going through this again in 5 years

 These facts add up fast, and signing on the dotted line to temporarily modify an already shaky loan is the last thing these people want. 

 Homeowner accusations of lost paperwork, accidental foreclosures, and unfair dealing are all absolutely true, when viewed in a certain light.  The reasons that banks appear to be unfair in their dealings is probably for a different reason than many think, though. What many fail to realize is that getting three huge bureaucracies to agree, in writing, to give away free money, and coordinate this free money give away on a specified date is no small feat. It can actually feel a lot like trying to trick a gang of bullies into poking each other in the eye while you make a quiet escape.  That’s not to say it can’t be done, just that it’s . . . tricky.  It really helps to understand the bureaucracy part of the equation to understand why you can’t get help from your bank.

 The servicing lender you send your bill to every month? They don’t actually own the mortgage to your house. They’re just “servicing” that mortgage for an investor. So already, you’ve got one road-block. Your servicer can’t actually make a decision regarding modifying or short selling your loan.  Oh, and that lovely and gracious representative on the other end of the line you call for help? She’s about 20 people down the chain of command in this organization that can’t make a decision anyway.  Not only that, she’s likely a low paid “temp” with little incentive to be helpful or friendly. And to make matters worse, she knows absolutely nothing about the process, your file, your problem, or the bank she works for! She’s just reading from a screen that contains very little information. She couldn’t help you even if she did have the best customer service skills in the world. I could actually write an entire book on the process, and the steps that have to be followed, and the executives who need to sign off, and this book would leave a lot of questions unanswered. Imagine, if you will, that you would like the federal government to send you a detailed report of every dollar you’ve paid them in taxes and what they spent it on.  Yeah. It’s kind of like that.

 The housing crisis is an absolute mess. The processes in place for helping troubled homeowners are very confusing, very time intensive, and anything but guaranteed.  Lenders will continue to blame homeowners, and homeowners will blame lenders for lack of progress on the issue.  There is one certain fact that everyone knows, but we’re hiding from and delaying at all costs: there will be millions of families moving out of their homes and renting in the coming years.  The millions of the homes sold between 2000 and 2008 are the crumbling, decaying, “foundation” of all of our household wealth. It is and has been crumbling. Those who abandon ship now will suffer for a time, then thrive and grow again. Those who continue to “re-arrange the deck chairs” on this sinking ship will be floating on a life-raft for quite some time.

Next time, I’ll detail for you the governments new program to “streamline” this process. . .

Free Loan Counsel Available Now!

By Phone: (602) 499-4798

or by Email: therealtybutler@gmail.com

*Disclaimer: We DO provide loan counseling services to our clients, but we NEVER charge the homeowner money. Please also remember: I am NOT an attorney, and neither do I play one on TV or the Internet. None of these pontifications should be construed as specific legal advice. If you need specific legal advice regarding your personal situation, give us a call. We can help you ourselves, or provide a list of housing counselors that are free!