Investors and Vacation Home Buyers adding a boost to the Phoenix Market

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The National Association of Realtors recently released their 2016 Investment and Vacation Home Buyers Survey. The survey revealed many characteristics of both vacation home purchasers and investors. Two weeks ago, we posted on the vacation home market. Today, we want to concentrate on the investor real estate market.

The survey revealed that investment-home sales in 2015 jumped 7.0 percent to an estimated 1.09 million from 1.02 million in 2014.

Investors: More Sales and Higher Prices | Simplifying The Market

Lawrence Yun, NAR’s chief economist discussed the increase in the number of sales:

“Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years. Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home.”  

Phoenix home Prices Are Also Up

The price paid by investors also increased in 2015 by 15.3%.

Investors: More Sales and Higher Prices | Simplifying The Market

Tomorrow, we will be providing an infographic that will highlight the other findings about investors from the survey.

Do you have a single story home you might want to sell?

PARKSIDE

We have client looking for a single story home. They will consider Mesa or Gilbert.  Their criteria:

Built 2006 or newer
Around 2000sf
Single Story
Swimming Pool
Upgraded flooring, kitchen, etc..
Location: Mesa/Gilbert

If you think you have a home that meets this criteria please get in touch with us.

Agritopia Down Payment Assistance

Agritopia Down Payment Assistance

Down Payment & Closing Cost Assistance – Homesmart’s The Phoenix Metro Group is a Home Program 101 Specialist

Down Payment Assistance & Low Down Programs available.
Closing Cost Assistance – Closing costs with the Home in 5 program with FHA
Teachers, Military, Police, Fire & Health Care & More

Find out which programs you qualify for:

ONE MORE TIME… YOU DO NOT NEED 20% DOWN TO BUY NOW IN PHOENIX

Teachers-Pet

 

ONE MORE TIME… YOU DO NOT NEED 20% DOWN TO BUY NOW IN PHOENIX

A survey by Ipsos found that people in Phoenix  are still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today. 

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less.

Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO Scores

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The graph below shows how the average FICO Score required has come down over the last 12 months and has stayed around 722 for the last six months.

FICO Score Distribution | Simplifying The Market

Bottom Line

If you are a prospective Phoenix Metro buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, sit down with a professional who can help you understand your true options.

Get started with our signature ‘Home Program 101’ to see which Down Payment Assistance programs are right for you.

Phoenix Home Prices are up! But there is a challenge.

Phoenix Home Prices Are Up…but there is a Challenge
By Amy Gerrish
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Phoenix home prices continues to climb and are projected to increase by about 5% over the next twelve months. That is great news for anyone who owns a home. However, it could present a challenge for a family trying to sell their house.

If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the sales price when performing the appraisal for the bank.

The National Association of Realtors (NAR) recently released information revealing just how prominent the challenge is in today’s market.

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal).

Home Prices Are Up…but there is a Challenge | Simplifying The Market

And the challenge is deepening…

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

Home Prices Are Up…but there is a Challenge | Simplifying The Market

As we can see the difference has increased each of the last two months.

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, let’s meet up so I can guide you through this, and any other obstacle that may arise.

Get Your Phoenix Home Value

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Amy Gerrish
Direct/Text: 480-294-8680
amy@phoenixmetrogroup.com