I know it's an odd title, but that is how the market is behaving; there's been a bid of gluttony and now it's still digesting the home buyer tax credit and all its ramifications. Not that the tax credit was a bad thing, it might be a good one to bring  back in some form, but that it had a distinct affect on the market as did the credit's demise.

Now let's get into the numbers.

Graphs and Data via The Cromford Report 

In August 7,525 residential properties sold, that's not too much lower then August 2009 when 7,874 properties sold.  I'd say that's about the same.  Sales are even up over July's 7,021 sales, but much lower then the 8,983 in May for instance.  So the 8+ thousand was an annomoly, and the 7+k is resting period number, but one that's not so bad.  Nothing to be too worried about.  In fact, I'd say that it's a good thing considering that how much we stuffed ourselves on real estate: flat is good, in this case.  

What kind of worried me is the lack of jobs.  Arizona has amongst the highest unemployment rates in the U.S. and it's really closer to 20% if we take into account underemployment and all the people who have been looking for longer then the statistics allow.  How can we make any improvement in any sector of the economy if people don't have jobs.  An economy is all about the movement of money and we don't have much of that these days.

Total supply has increased to 6 months, putting the favor in the buyer's court. 43,480 active homes vs, 42,489 last month and 37,068 in 2009.  Bank owned homes have increased in share of the active properties to just over 18%, an upwards trend over the last few few quarters, but lender owners sales are still down to 44.3% vs 46.2% last year, though, I expect that to go up over the next few months.

Short sales have also been increasing in active market share, now at about 39% and also sales, now at just over 32%.  The short sale are really becoming a major part of the market with 32% of active properties and solds, vs only 25% sold share in July, 20% in May and 17% in August of 2009.  That's definitely something to keep an eye on: a major change in strategies for everyone from sellers, buyer, and lenders to government incentives.  You truly can't avoid short sale now and you should not.  There is not reason to say no to purchasing a short sale unless  you truly have a defined date by which you need a home. 

It's difficult to predict in any accurate way what will happen in 6 months plus, but the market for the forthcoming months will be flat with only some noise up and down: nothing to be concerned about.  What may change are interest rates and that does have some affect on how much home you can buy or should by.  

The FHA mortgage insurance guidelines are also changing early October.  They will require less upfront cost, but more monthly cost.  In other words the cost of mortgage insurance has been transfered from the from to the periodic payment. 

Come back because we'll have more detailed reports coming up as the month progresses.

image: artur ciesielski

I long for the first days after the summer when the morning air will be nippy.  Summer is nice, but it's time for it to pass and fall to come - alas there's at least a month and a half of heat left, but maybe a nippy morning somewhere in there.  This Saturday sure was cooler after the previous days monsoon storms.

It was a nice morning for a bike ride to show a home in Windsor Square to someone interested in moving into the Central Phoenix from the suburbs.  It's not the first such showing where 2,200-3,000 square feet worth of stuff needs to fit into a home of 1,200 square feet and where the large couch not flitting into the living room is the final decider.

It's not unusual for us to show homes on bikes: not common though, but this Saturday was a nice day to do it. 

I combined the showing with taking photos of the metro light rail station for a series we're doing at inPhoenix.com

The miles of cycling induce the inevitable pangs of hunger which were quelled by the breakfast offerings at Giant Coffee. 

What I liked is the fact that the breakfast burrito, though already prepared, was not warmed in the nutrition killing microwave, but the slower, yet much better, oven.  Together with a latte the cool interior provided a nice place to take some notes, watch the few people hunched over laptops and muse about the day, trying to fight of thinking about real estate yet again.

While the whole gamut of people in a short sale are important: the Realtor, Legal Counsel, Buyer, Investor, Servicing Co., the Seller is the key person.  

Without the full cooperation of the seller the prospects of completing a short sale are zero.  That means being prompt with providing information, providing all the necessary documents, communicating constantly, taking care of the property and simply being part of the process.

This is not like a foreclosure where you think you can simply walk away and others will clean up after you.  You have many responsibilities and they are not completed until the home has transferred ownership.  

There are sellers that start the process and don’t provide documents on time, don’t make the effort to return vital calls and requests and neglect the property: these are the failed short sales that eventually end up as foreclosures when that is truly unnecessary.

There is a lot of hurt when one has to do this: the short sale.  It’s easier to simply let go to put the painful event behind us.  Truly, the extra time you put into this process will be worth the effort.  Some sellers who don’t neglect paying the mortgage and do a short sale are able to purchase again quickly if they choose so there are benefits to a short sale over a foreclosure, even beyond how it benefits you individually.

It’s understandable that some sellers lack funds to give the property it’s fullest attention, but at a minimum the utilities need to be turned on and the cleanliness and safety maintained.   These don’t take much money.  

If you were advised by legal counsel and your CPA that a short sale is the best course of action then it is to the seller’s benefit to do it properly.

In other words, if you don’t want to do anything, but wash your hands of the property, don’t even bother starting the short sale.