November 2014

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What’s the Buzz?

The latest Existing-Home Sales Report from NAR revealed that sales decreased 1.8% in August. Although some might start to panic, let’s see what the report really shows.

Lawrence Yun (NAR chief economist) explains, “there was a marked decline in all cash sales from investors. On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”

There is still A LOT of good news—for example:

  • The average existing-home price for all housing types for Phoenix in October was $249,128, which is 8 percent above October 2013. This marks the 30th consecutive month of year-over-year price gains.
  • Nearly half of all Phoenix area homes sold in October were on the market for less than 30 days!
  • Distressed home sales remain at single digits, as they have for nearly all of 2014.
  • More buyers qualified for mortgages to purchase a home in October, as evidenced by the continued decline in the number of all cash buyers (investors).
  • 30-year-fixed Mortgage rates remain at or below 4%.

In other news… recently released data point to a rise in new construction in 2015. In the West region, which includes Arizona, the index in September was 54.2 – the fourth month of a rebound from declining trends from April and May. Any number over 50 means a rising trend, while under 50 is a drop from the previous month.

And in a related report, Fannie Mae says they expect that overall home sales in 2015 will post their best performance since 2007.

Bottom Line: Now is still a great time to buy a home. Whether as a first time homebuyer or moving up to the home of your dreams, don’t let the headlines scare you from making the best decision for your family. And if you’re thinking of selling, take advantage of the lower inventory levels (and competition) during this “off season”. Come next Spring, there will be a flood of homes hitting the market.

Please keep us in mind with all your Real Estate needs. Referrals are the lifeblood of our business and we are always looking for new buyers and sellers, so if you know of anyone planning to buy or sell a home, we would appreciate you pointing them our way!


In this edition:

  • Investment Opportunity!
  • 30-Year Fixed Mortgage Rates Stay Below 4 Percent
  • Fannie Mae Expects Housing Growth in 2015
  • Non-Mortgage Debt Dragging Homeownership
  • Your House Usually Isn’t Worth As Much As You Think
  • Debunking 4 Myths about Buying a Home
  • Mortgage Rates

Investment Opportunity!

One of our clients has two condos he wishes to sell privately (i.e., not on the MLS), and, as The Kennedy Group, we have agreed to help. These units will not be marketed publicly in order to keep the price as low as possible.

The condos are in a well-maintained development named La Tierra in Tempe, located at 1402 E. Guadalupe Road, between Rural and McClintock. Some of the key features include:

  • 2 bedroom, 2 bath
  • Approximately 1,000 s/f
  • All appliances included
  • Storage closet off Master BR
  • Community pool & Fitness center

The units are being offered at $105,000 each, and can be purchased together or separately. Recent sales of comparable units have been for $115,000 to $120,000, with currently active units listed for between $114,000 and $124,900. We have inspected these two units, and can tell you that both are in good condition.

Most of these units rent for around $850-$875 per month—generating some $10,500 rental income per year (minus HOA fees = $8,388 net). Depending on whether the units are purchased for cash or financed, occupancy rate, and maintenance expenses, your annual ROI should range between 7% and 10% – not including appreciation.

Financing is available for 35% down (condos require a higher down payment).


30-Year Fixed Mortgage Rates Stay Below 4 Percent

The 30-year fixed mortgage rate hovered around 3.85 percent for most of the week, dropping to 3.70 percent Wednesday before rising to the current rate. Additionally, the 15-year fixed mortgage rate was 2.97 percent, and for 5/1 ARMs, the rate was 2.80 percent. Click here for complete article.


Fannie Mae Expects Housing Growth in 2015

Where the U.S. housing market is concerned, Fannie Mae chief economist Doug Duncan said he expects that overall home sales in 2015 will post their best performance since 2007 despite seeing only moderate growth for the year. Click here for complete article.


Non-Mortgage Debt Dragging Homeownership

A report released by RealtyTrac Tuesday revealed that a monthly mortgage payment is affordable to those with additional non-mortgage debt in less than half of the counties in the U.S. Click here for complete article.


Your House Usually Isn’t Worth As Much As You Think

Your house is easily the nicest home on the block. Great updates and a corner lot. You’re going to make a fortune when you sell. You might even set a new record for the neighborhood. Click here for complete article.


Debunking 4 Myths about Buying a Home

Well over 50% of renters consider affordability as a financial barrier to homeownership. However, study after study has shown us that there are major misunderstandings about what is required to purchase a home. The biggest misconception is the amount of a down payment required. Click here for complete article.


Mortgage Rates

U.S. averages as of November 1, 2014:

30 yr. fixed: 3.99%

15 yr. fixed: 3.14%

5/1 ARM: 3.27%

30 yr. jumbo: 4.26%

View current rates