The Wall Street Journal recently reported that the number of people underwater on their mortgages (those who owe more than the property is currently worth), has increased to 23% nationally.

Arizona is second only to Nevada with 47.9% of all home owners with a mortgage having negative equity in the third quarter of 2009.

Another 4.5% are classified as “near negative” – within 5% of being in a negative equity position.

So much for the Dry-Heat. The heat this puts on homeowners is truly unbearable.

Something has to give… soon.

The latest act of civil disobedience surrounding the housing crisis involves a University of Arizona professor who is advising homeowners that they should walk away from their home if it’s underwater.

According to the LA Times, University of Arizona law school professor Brent T. White has published an academic paper titled, “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis.” In it, he says people could save “…hundreds of thousands of dollars that they “have no reasonable prospect of recouping” in the years ahead. Plus the penalties are nowhere near as painful or long-lasting as they might assume.”

His theory is that people should not throw good money at bad and due to shame and embarrassment of foreclosure, their emotions control them, where in fact, it’s probably the best thing to do in the long term financially.

I meet with distraught sellers in desperate situations… every week.  While most of them are at their wits end as to how to solve their personal financial crisis… they do not want to “walk away”.

Sorry Brent, but most of the people in my community are fighters, not quitters.

If you fee like “walking away”… please call me.  602-909-2845.  24-hours a day.

I was watching CNBC this morning when this news story broke.

If you add the number of homeowners who are behind on their mortgages to the number of homes that are in foreclosure you will get a number that is greater than than the number of homes on that are currently active on the market!

The bad news: That logic says that we are heading for a big wave of new inventory of bank owned homes.

The good news: I have a pipeline FULL of buyers that are ready, willing and able to scoop up those homes when they hit the market.

I wish we didn’t have to see the bad news happen before the good news could happen.

That’s my opinion.

The First Time Home Buyer Tax Credit has been EXTENDED to July 1, 2010 and offers current homeowners looking to move a tax credit too!

Purchase a home before May 1, 2010 and you may be eligible for a tax credit:

$6,500 for current homeowners looking to move
$8,000 for first-time homeowners

Buyers who have owned their current homes for at least five years would be eligible, subject to income limits, for tax credits of up to $6,500.

First-time homebuyers – or people who have not owned homes in the previous three years – could get up to $8,000 in tax credits.

To qualify, buyers have to SIGN a purchase agreement before May 1, 2010 and CLOSE before July 1, 2010.

Conditions regarding the homebuyer’s tax credit:

On the purchase of primary residence costing $800,000 or less
For individuals with annual incomes less than $125,000
For those who file joint tax returns with combined incomes totaling less than $225,000

For more information please feel free to call or email me and I will put you in contact with a lender who will check to see if you qualify.

HOT OFF THE PRESS….

WASHINGTON – Missed out on Cash for Clunkers? Congress has another deal for you: Buy a home before May 1 and collect up to $6,500 from the government. If you’re a first-time homebuyer, get up to $8,000.

Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers — or people who haven’t owned homes in the previous three years — could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.

This story is breaking news across all of the major news web sites. You can read the entire news release by CLICKING HERE.

While it is not officially signed, sealed and delivered… it sure appears to be heading that way.

People ask me every day how the real estate market is. My response is typically “it depends if you are a buyer or a seller” (and when you bought your home if you are a seller).

This news is yet another reason (in addition to low prices, low interest rates, great inventory selection) for buyers to celebrate!

That’s my opinion…

More great news about the national real estate market was reported on Monday. 

September had an increase of 6.1% in Pending Home Sales.  The rise from 110.1 million to 103.8 million marked the largest annual increase on record and the longest streak of gains since the measurement began in 2001.

The gains are attributed to homebuyers rushing to take advantage of the $8,000 tax credit which is set to expire at the end of this month.  Forbes reported yesterday that the Senate voted 85-2 on Monday to move to a final vote on an extension through April 2010. This is a promising step closer to seeing the bill reach the President. There is also discussion of a tax credit of $6,500 for homebuyers who have lived in their home the previous 5 years.

CLICK HERE to read the entire article.

Here are the Arizona market results for October 2009 (Information was provided by our friends at CromfordReport.com):

Sales per Month @ 8,032 were up 191 from September 2009 @ 7,841

Days on Market @ 91 was down 2 days from September 2009 @ 93

Days on Inventory @ 163 remained steady from September 2009 @ 162

Active Listings @ 38,733 were up 1,315 from September 2009 @ 37,418

Median Sales Price @ 128K remained somewhat steady from September 2009 @ 130K

Lender Owned Percentage of Monthly Sales @ 46% was down from September 2009 @ 50.6%

I get a lot of crazy things in my email.

Today I received this image of the “Recession Version” of Monopoly.

Note the “Foreclosed” and #Short Sale” real estate.

Humorous..yes.  True…yes.  Sad…yes.

Well, if you do…then the future of home prices in Phoenix, Arizona, is most certainly LOWER.

This article appeared all over the web today. It was written by By Les Christie, a CNNMoney.com staff writer. Who am I to to contradict Les? I’m just an optimistic real estate broker who believes my community (Anthem, Arizona) has found its footing. Time will tell, I suppose…

Following, in all of its glory, is Les’ article. Well, almost all of it. I have -EDITED- everything not related to Phoenix since the focus of this blog is the local Phoenix real estate market and the real estate space on this blog site has some value!

For those of you who want to read the entire, unedited article… CLICK HERE.

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Homes: About to Get Much Cheaper
National home prices are forecast to shrink another 11%.
Miami, Las Vegas and Phoenix will record steep declines,
but a few cities will actually post gains.
By Les Christie, CNNMoney.com staff writer
Last Updated: October 20, 2009: 11:07 AM ET

NEW YORK (CNNMoney.com) — If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices. Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.

Mark Zandi, chief economist with Moody’s Economy.com, agreed with Fiserv’s current assessments. “I think more price declines are coming because the foreclosure crisis is not over,” he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. -EDIT-

In Phoenix values have already collapsed by 54% and could fall another 23.4%. -EDIT-

The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.

Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however.

“I’m afraid Case-Shiller may be just a temporary reprieve,” he said.  He pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors. But the market assistance ends when the credit expires on Dec. 1.

Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.

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I know what you are asking…“What’s Your Opinion, Dennis?”

Well, I know for sure that prices will not drop forever.  Just like the stock market, we will find a “bottom”.  If not, then eventually homes will sell for a buck a piece, and I will buy the entire city of Anthem, Arizona for about $12,000.00!

Some of you will still be waiting to buy even lower…

Sometimes a little humor is appropriate.

With the current state of the Real Estate Market, it is VERY appropriate.

Check out this very creative work that is the viral hit of YouTube:

I just read an article from The Associated Press by Dawn Wotapka on the subject of home buyers, credit reports and mortgage loans. There were two points of interest that I want to share, along with my opinion of course…

* Home buyers who are under contract and hoping to close before Nov. 30 (when the first-time home buyer credit expires) should refrain from buying furniture, appliances and other large ticket items on credit.

* Most lenders are running ADDITIONAL credit checks prior to closing day and any increase in credit card or other debt can jeopardize the loan!

When you are getting ready to move in to your new home, the urge to buy a new area rug, outdoor BBQ, flat screen TV and entertainment center is natural! But when lenders see large run-ups in credit card balances they will attempt to “re-qualify” you for the loan based on the new increased debt you have incurred. If you no longer qualify, well… get ready to return the area rug and stay in your current home.

So wait until you have CLOSED on your new home (and the new loan) before buying anything on credit. You don’t want to get a phone call 4 days before you are about to move saying that your loan is being “re-considered”, which usually means it will be denied.

Remember, the best way to not spend money is to stay out of the store!