Just a quick post on last night's Arizona residential real estate investor panel discussion. First, let us thank all those who came to the gathering. It wasn't a huge crowd, just the right number to have valuable discourse.
Gene Urban led things off with an update on the Greater Phoenix residential real estate market. The focus was on REOs and short sales. The fundamental market shift has been diminishing bank-owned listings with a rise in short sale listings and actual closed transactions.
If you've read our blogs for a while, you know we have not been big fans of short sales. The odds of closing escrow have been pretty miserable and there are a lot of variables. That said, we are looking at them a bit more favorably. Many of the banks have finally gotten their act together on short sale transactions and more are closing escrow. There are still a lot of loose ends and concerns, but the odds of closing escrow are much better and may be worth the hassle.
The stats on closed short sale transactions for the Greater Phoenix market are very interesting. During the first three months of 2009 only 1527 short sales made it through the bumpy process to completion. However, this past month, July 2009, 1304 short sales were reported "Sold" on ARMLS... that's a big performance shift.
Next up on the panel was Jennifer Ridenour, a ten year veteran of property management. She talked about the current state of the rental market. Her main topics were tenant acquisition and retention.
One area of concern is amateur landlords who are taking tenants without background checks and waiving part or all deposits. This puts a lot of pressure on the pros who have learned better. Oh well... the times are a changing. She recommends continuing tenant screening and perhaps be more open to tenants whose credit issues are primarily foreclosure related.
Tenant retention was another topic. Landlords are having to be more accommodating than in times past. A little honey helps keep happy tenants. We wrote a blog post on this topic a few weeks back you may want to take a look at...how to reduce vacancy rates on rental properties.
Judy Giel with MetLife Home Loans was next up and talked about changes in lending practices. The focus of her talk was on condo loans. Last March Fannie Mae changed the loan guild lines on condos and FHA has fallen in with the tougher standards. The most problematic area has to do with HOA's. Fannie Mae won't buy loans on condos where over 15% of the homeowners in a complex are behind on HOA dues. As you can imagine, a lot of properties have more than 15% of the home owners behind on their dues.
Judy's take on the condo market is that loan aquisition will continue to be difficult, resulting in a softening of condo sector. Cash investors may be able to pick up some incredible deals in Q4 2009 and into 2010. She advises very strong due-dilligence on HOAs.
The evening ended with a general Q & A session. A lot of good questions and answers where shared.
Best to you our loyal readers... we appreciate the time you spend with us.
Ron Urban & Gene Urban
The Urban Team at Realty Executives
602-234-5777
