Phoenix Urban Living News. Real Estate In Phoenix Arizona

A Home Shortage? Really?

Home sales have been sluggish for quite a while. Fewer sales are closing, so the state of California has extended the homebuyers tax credit in an effort to get buyers back into the market. People imagine that bringing willing buyers back to the party will do the trick, because there is a mammoth supply houses available. That really isn’t the case. These days a lot of home buyers find themselves in multiple-offer situations when they write an offer on a home. That’s because there are few houses available to a home buyer who want to put 10% or less down and qualify for a loan. The sort of buyer who can buy a home is dictated by the seller’s circumstances.

Bank Owned Houses

A significant supply of foreclosed homes is offered for sale now, and the months until all the delinquent loans have worked their way through the system will bring more.

mortgage companies want to sell homes as soon as possible once they’ve finally completed the prolonged forclosure process, obtained clear title and moved any residents out. They price it to sell and accept an offer that will close quickly, even if it’s not at the best price. This means that buyers who can pay cash, or at least have a large down payment and preapproval, get the house. These are frequently investors.

Short Sales

Many homeowners who owe more on their mortgages than their homes are worth try to sell their properties as a short sale to save their credit. This type of sale needs approval of the lender who is to forgive a portion of the loan. Lenders, however, usually aren’t eager to do this. It often takes months and months to get approval - if ever. Those who can afford to wait and don’t mind the uncertainty of not knowing whether they’ll get the house usually make low offers on short sales. Investors are much more likely to accept such a scenario than are people who need to find a home to live in.

New Homes

Home builders have slowed down production in these difficult economic times. They are able to hold off and wait to develop their land when prices appear to be on the rise. But they are building and selling some homes, and these are a great option for would be homeowners.

Normal Sales

Many people who can afford to continue making their house payments are not moving. They see that home values have plummetted since the peak of a few years ago. They expect prices to rise again after the market hits bottom and all the short sales and foreclosures have worked their way through the system. A few are figuring out that it’s an ideal time to move up to a bigger home - if they can afford to do so. They’ll come out ahead because prices of more expensive houses have decreased more than values of less expensive properties. Relocating employees may often have to sell regardless of market conditions.

Homes Available to Would-Be Homeowners

Most consumers looking for a home to live in need to come up with a minimum down payment and get a home mortgage loan. This process takes time, and some deals don’t make it to the closing table. Recent changes in appraisal guidelines have made things worse. Lenders will only loan 80%, 90% or 96.5% of the appraised value, and recently appraisals have been below the contract price. Many distressed sellers do not have the opportunity to wait for a borrower to go through this process, particularly when it’s a real possibility that they won’t be able to close in the end. Consequently, they are selling to cash buyers. Some sellers take an extended period of time to get lender consent on a proposed sale. This just isn’t an option for a family in need of a home. This leaves a few equity listings and new homes as the only logical options.

Which Areas Are Impacted

The communities that are most affected by this seller’s market are those that had exaggerated home values just before the troubles began, including houses in Las Vegas or Tampa, new homes in Chula Vista, and any homes in areas where sub-prime loans were popular. Anyone trying to buy Riverside, Los Angeles, Orange County or San Diego new homes will shortly find out that California has been one of the hardest hit markets. It also happens to be one of those that most needed a market correction.