The Real Story - Nov 2008

Between the drama of the elections, the stock market volatility and the doom and gloom surrounding the economy in general, the increase in homes sales for the past few month seems to be flying under the radar of the news media.

My company issued a press release to its agents last week, quoting information from the National Association of Realtors about strong sales gains in Arizona, California, Nevada and Florida. To be honest, I didn’t pay much attention to it either, because I assumed the big increases were due in large part to buyers trying to get zero down home loans closed before the new FHA laws kicked in on October 1^st.that eliminated the Down Payment Assistance Programs for FHA buyers.

I did a double take though, when I ran the numbers for closed sales of single family homes in the Arizona Regional MLS System. This system covers Maricopa County (Greater Phoenix) and a good section of Pinal County (Southern Queen Creek to Casa Grande).

When comparing sales for Sep and Oct 2007 to Sep and Oct 2008, the increased closed sales of resale single family homes surprised me!

Resales of Single Family Homes, Closed Through the MLS System:

2007 Sep closed sales: 2,735

2008 Sep closed sales: 5,573 – up 104%

2007 Oct closed sales: 2,814

2008 Oct closed sales: 4,814 – up 71%

Pending Sales

According to Lawrence Yun, chief economist for the National Association of REALTORS (NAR), pending home-sales activity surged in August as buyers took advantage of low home prices and affordable interest rates. Yun noted that pending sales were up strongly in Arizona, Nevada, California and Florida.

The Pending Homes Sales Index (PHSI) is a forward-looking indicator based on contracts signed in August. The PHSI for the Western United States surged 18.4 percent and remains 37.8 percent above the August 2007 level. Nationwide, the PHSI jumped 7.4 percent, the highest increase since June 2007.

California Sales

The California real estate market is a bellwether for the Arizona market. In September, homes sales in Southern California soared 65 percent compared to the same period last year, according to MDA DataQuick, an information provider to the financial industry. September sales were also six percent higher than those in August 2008.

Other Bright Spots

Housing and Urban Development Secretary Steve Preston said this week that, despite reports of credit markets being “frozen,” FHA, Freddie Mac and Fannie are “open for business.” In fact, FHA’s loan volume has tripled recently, and the agency is now insuring well over 100,000 new loans a month.

The price of oil hit a 16-month low last month, a 54 percent drop in price from the all-time high of $143 a barrel set July 11. Lower energy prices benefit real estate by lowering utility and transportation costs and by stimulating economic growth and investment.

The Bad News: Still No Upward Movement in Prices

Although the good news about increased home sales is certainly a positive step in the right direction, it’s important to note, that even with the significant jump in the numbers of sales, neither the median price nor the average price of homes has gone up, and has actually continued to decline.

BBB Alert: Senior Citizens Nationwide Report Losing Thousands to “Grandchildren” Scam

Better Business Bureau is warning senior citizens to be aware of an emerging telephone scam that is preying on grandparents nationwide. BB has recently received reports about grandparents from California to New Hampshire who thought they were aiding their grandchildren by providing money for an emergency situation but were in fact giving thousands of dollars to Canadian con artists.

Generally, the scam works like this: the grandparent receives a distressed phone call from who they believe is their grandchild. The supposed grandchild typically explains that they are traveling in Canada and have been arrested or involved in an auto accident and need the grandparent to wire money to post bail or pay for damages, usually amounting to a few thousand dollars. While many seniors have reported the scam without falling prey to it, unfortunately, many others have been victimized. One well-meaning grandmother sent $15,000 to scammers, thinking she was helping a grandchild who had been in an auto accident.

“This scam is just despicable because it preys on the emotions of seniors who want nothing more than to ensure the safety of their grandchildren,” said Steve Cox, BBB spokesperson. The key to avoiding this scam is to remain calm despite the “emergency” nature of the call and to verify the identity of the caller. Too often people are allowing themselves to get caught up in the false sense of urgency and they end up making emotional, instead of logical, decisions.

Given the sudden pervasiveness of the scam, several state Attorneys General have issued warnings. In addition, the Canadian Anti-Fraud Call Centre is reporting a significant increase in complaints for this scam. In 2007, the Centre received 128 complaints about this type of scam; since the beginning of this year, nearly 350 complaints have been filed, and about half were filed in July and August alone.

Law enforcement officials are not certain how perpetrators are obtaining phone numbers for so many senior citizens across the U.S. However, it is believed that scammers are most likely calling random numbers until they happen to reach a senior citizen. The scammer’s basic tactic is to pose as a grandchild and let the unsuspecting grandparent fill in the blanks. For example, the scam caller might say, “it’s me, your favorite grandchild” to which the grandparent will guess the name of the grandchild it sounds the most like, and then the call proceeds from there.

To protect themselves from this scam, and other scams that may use a distressed loved-one tactic, BBB is advising seniors to confirm the status of the individual by calling them directly or verifying the story with other family members before taking any further action.

BBB also advises that any request to wire money through Western Union or MoneyGram should be seen as a red flag and an immediate tip-off that the call may be part of a scam. Funds sent via wire transfer are hard to track once received by scammers and are usually not recoverable by law enforcement or banking officials.

For anyone victimized by this type of distressed loved-one call, BBB recommends reporting the incident immediately to local police departments and state Attorneys General offices. If there is a request to wire money to Canada, the Canadian Anti-Fraud Call Centre has established the PhoneBusters hotline and Web site to report such fraud. Reports can be filed easily online through the PhoneBusters site at: www.phonebusters.com, or by phone, toll free at, 1-888-495-8501.

By the Numbers

Mortgage Rates

30YR Fixed: 6.170

15YR Fixed: 5.960

Supply of Homes

Oct Homes Closed:
5,360

# Homes on MLS:
54,190

# Months Supply:
10

Market Trends by Area

Anthem

Apache Junction

Avondale