Tucson Short Sales myth or truth?

Many Buyers are currently attracted to the Short Sales that are currently listed in the Tucson MLS. There are a few areas of Tucson that currently appear to have more Short Sales than others.

Some of this may be due to investor bail outs, and also adjusting ARM’s.

However Short Sales are not always what they seem. Unlike a foreclosure, they have a much more extended process. One has to deal first with the Seller that has to Accept the Contract, and then the Contract is sent to the bank.

Many of them are placed in MLS with pricing that will not work, and most have not had any type of bank approval that the price will even remotely work. Many of the banks will only accept paperwork when an offer is in place.

It has been our experience that the process can take at least 4 to 5 months.

So if you are wiling to wait for an extended amount of time, and then find out that the bank may be unwilling to accept or counter your offer, then I would suggest that you negotiate on an existing home that is well priced, or one that the Seller is willing and able to negotiate on their price.

I totally understand that there are Sellers that are involved in Short Sales in Tucson through no fault of their own adn have had depreciating values. I also believe   that Short Sale process should be available to Sellers.

However, the banking process is currently lacking in its efficiency to perform with the large amount of Contracts that they are receiving.

Reform should be made  so that the process is easier not only the Sellers, but also to the Real Estate agent that has to call and leave multiple  messages that do not get returned. Many times the bank tired to negotiate away the commission that the agent definitely deserves. Short Sales require a myriad of phone calls, time and multiple Contracts.

One would also  think that when one assigns a negotiator that the Contract would be close to getting settled?

However, the reality is that  an agent may go through three to four bank negotiators before a Contract gets accepted or countered.

If you are a Seller, realize that your home even when it gets an offer, may take many months to come  to fruition. Also remember that when you have more than one note the process becomes more difficult.

Look for a Tucson home for sale with an experienced Real Estate Agent that can help you understand the area, the location of the home, and can present an offer that will work in our current Tucson market. If you decide that you would like to put an offer on a Short Sale, then realize how the process works, and how long the home may take to come to fruition.

Tucson and National Real Estate home-price data has its flaws.

Good reading  is to be had by reading  the latest real estate articles published by Market Watch in the San Francisco Bay area about  the National Real Estate market.

Top officials with the National Association of Realtors, and also Standard and Poors, which issue the S and P/Case Schiller Price Index, agreed that their monthly reports are giving imprecise information about  national and local market reports across the country and Arizona at all levels.  There are rare market conditional that are distorting the information and the results.

The NAR reported that medium market sales reduced 7. 7 % in March from a year ago, but the decline is largely an anomaly with a steep decline in costlier homes on the market and also increasing jumbo mortgage rates.This is also coupled with a foreclosure driven spike in cheaper homes.  

The producers of two of the most widely tracked indexes, acknowledged this fact publicly this week.

If sales are more common  in the lower end of the market, and there are fewer home sold in the higher end homes,  then the medium is bound to drop in a dramatic fashion as proposed by NAR Chief Economist Lawrence Yun.
In Tucson  and nationally, the jumbo market is frozen, and the buying activity is more focused on the lower value homes. Coupled with the fact that the FHA limit in Pima County was raised, then there is an incentive for those that did not have a down payment to make their home purchase now.

Conversely the S and P/ Case- Schiller Index had posted a 12.7% decline in February as it only tracks 20 major markets and many of those are among the hardest hit. Plus it only pulls in individual homes both bought and sold in the last few years.

Many of those as we know are distressed owners who bought and sold in the last few years, who are now facing adjustable ARMS and also bought at the peak of the market.
This may explain the misleading home value statistics that have been widely divergent of the US Economy as a whole.
The media has capitalized on the housing market as there are such discrepancies reported nationally that it makes one wonder who are you to believe.

To Quote " A University of Michigan survey incorporated in the U.S. Index of Leading Economic Indicators last week rang in at its lowest level since November 1982 –when the country was suffering through 10.8% unemployment and the worst recession since the Great Depression. "

"The Conference Board’s closely tracked index Tuesday showed confidence falling in April to its lowest since the eve of the U.S. invasion of Iraq in March 2003."

Apparently, not one journalist that contacted Director Frank Tortorici’s office  at Conference Board Communications on Tuesday, had inquired about the  astounding discrepancy.

I tend to agree with the NAR’s Yun  that said that the financial media has seized on gloomy numbers and  is providing very  little analysis or historical perspective. Yun also  admitted that the  NAR’s readings are not totally accurate in reflecting home values for the overwhelming majority of the American people. 
 
Media Sensationalism about  the National and the Tucson Real estate market

On Tuesday, the S&P/Case-Shiller Home Price Index reported a 12.7% decline for February  and that it was the largest drop since its creation in 2001. However the index has a limited seven-year history, and the Associated Press reported that home prices "plunged by a record" percentage and also "at their fastest rate ever."
The obvious  discrepancy however, is that  only 17 of the 20 metro areas posted record annual declines,  but  78% of the other  330 metropolitan regions that NAR tracks reported price increases in the latest period .

However the S&P Index Committee Chairman David Blitzer  has acknowledged their readings  have been painting an incomplete picture of the national real estate market.  To help clarify this they are now reporting price changes in 17 of the markets at three specific levels – low-, mid- and high-priced homes. This should provide a much clearer assessment of things in different price brackets.

If  a Tucson homeowners want to determine their property’s value, it has never been more critical to have a professional compile a CMA of their home by recent sales in their neighborhood.  In Tucson pricing is definitely area sensitive. 
Read your local market conditions by consulting with a professional in your area to include a Licensed Realtor and also an Appraiser to help you determine the value of your home.