Buyers are snapping up cheaper homes
Wednesday, February 13, 2008
February 13, 2008
Buyers are snapping up cheaper homes
Misty Williams, Tribune
A rising number of Valley homebuyers are snapping up less expensive houses as prices keep tumbling and squeamish lenders avoid financing higher-end properties.
Read Misty Williams' real estate blog
Last month, 34 percent of buyers purchased existing homes costing under $200,000, compared with 16 percent in January 2007, a report released Tuesday by Arizona State University's Realty Studies department shows.
"You've got a lot of variables going on in this situation," Realty Studies director Jay Butler said.
Stricter lending guidelines have made it more difficult to get financing for expensive homes, especially those above the traditional loan limit of $417,000, Butler said.
At the same time, the use of mortgage products tailored for first-time buyers has ramped up, he said. Valley lenders have reported increases in the number of Federal Housing Administration loans.
The government-insured loans require less of a down payment and have more flexible credit score standards. Drops in home prices are also having an impact
"Some properties that were over $200,000 are now under $200,000," said Malcolm MacEwen, chairman of Coldwell Banker Residential Brokerage in Arizona.
Buyers are grabbing heavily discounted bank-owned properties and short sales - deals in which the lender agrees to let a borrower sell the house for less than what is owed.
But the start of the new year didn't bring a miraculous turnaround for Valley housing.
In all, 3,350 existing homes were sold in January, down 26 percent from the same month a year ago, according to the ASU report. es were comparable to the 3,345 reported in January 2002.
Also last month, the median home sale price was $230,000, compared with $260,000 a year ago. That marks the lowest monthly median since April 2005's $221,000.
MacEwen said he's seen sales and open house traffic pick up in recent weeks.
Coldwell recently opened escrow on the highest number of homes done over a two-day period in the past six months.
"The market's not suddenly going to change its stripes overnight, but there definitely is an uptrend at the moment," he said.
Tempe-based real estate agent Dee Kepp said she's also seen more buyer interest in the past week. She recently listed two new houses, has one in escrow and has had more property showings."I don't know what the surge is all about, but it's exciting," she said.
Whether that uptick will last is unclear with the market still plagued by many of last year's problems, including an oversupply of nearly 57,000 homes for sale.
Buyers are worried prices will drop more and the threat of layoffs as the country faces a possible recession, ASU's Butler said.
"The real issue is going to be the economy," he said. "How does it hold together?"
Read Misty Williams' real estate blog
Last month, 34 percent of buyers purchased existing homes costing under $200,000, compared with 16 percent in January 2007, a report released Tuesday by Arizona State University's Realty Studies department shows.
"You've got a lot of variables going on in this situation," Realty Studies director Jay Butler said.
Stricter lending guidelines have made it more difficult to get financing for expensive homes, especially those above the traditional loan limit of $417,000, Butler said.
At the same time, the use of mortgage products tailored for first-time buyers has ramped up, he said. Valley lenders have reported increases in the number of Federal Housing Administration loans.
The government-insured loans require less of a down payment and have more flexible credit score standards. Drops in home prices are also having an impact
"Some properties that were over $200,000 are now under $200,000," said Malcolm MacEwen, chairman of Coldwell Banker Residential Brokerage in Arizona.
Buyers are grabbing heavily discounted bank-owned properties and short sales - deals in which the lender agrees to let a borrower sell the house for less than what is owed.
But the start of the new year didn't bring a miraculous turnaround for Valley housing.
In all, 3,350 existing homes were sold in January, down 26 percent from the same month a year ago, according to the ASU report. es were comparable to the 3,345 reported in January 2002.
Also last month, the median home sale price was $230,000, compared with $260,000 a year ago. That marks the lowest monthly median since April 2005's $221,000.
MacEwen said he's seen sales and open house traffic pick up in recent weeks.
Coldwell recently opened escrow on the highest number of homes done over a two-day period in the past six months.
"The market's not suddenly going to change its stripes overnight, but there definitely is an uptrend at the moment," he said.
Tempe-based real estate agent Dee Kepp said she's also seen more buyer interest in the past week. She recently listed two new houses, has one in escrow and has had more property showings."I don't know what the surge is all about, but it's exciting," she said.
Whether that uptick will last is unclear with the market still plagued by many of last year's problems, including an oversupply of nearly 57,000 homes for sale.
Buyers are worried prices will drop more and the threat of layoffs as the country faces a possible recession, ASU's Butler said.
"The real issue is going to be the economy," he said. "How does it hold together?"
