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19 Dec 2011

The Feds Don't Have a Clue


by: Frank Merlo

 

FHA Jumbo loans went from $417,000 to $287,000 and back to mid $300,000 this last year. Two questions come to mind. Firstly Why? And secondly Why?

If you own a home in the mid $100,000’s and want to move up you most likely have to find someone selling the bigger home who also wants to move up. If the bigger home buyer cannot finance the home he wants to purchase he cannot sell you his home.

 

So why did the Feds change down and up and soon down again? I think they haven’t a clue how to fix a real estate market so they are trying anything and everything. I believe in the Free Market and as soon as the Feds stop fixing it, it will get better.

Also, Real Estate prices in the South East Valley are up slightly for the year. We were the first into this mess and we appear to be the first out.

Current number of bank owned homes for sell is fewer than 100. Down from a 2200 high. Queen Creek and San Tan Valley’s market is close to 80,000 homes. In a normal market we should expect approximately ½ % homes in foreclosure. Unfortunately, people lose their jobs, or get divorced, or pass away. We should see a number closer to 400 or 500. We have only 71 bank owned homes for sale.

The number of Short Sale homes has also dropped dramatically, less than 200. These are the next year’s supply of bank owned.

I expect 2012 to be a great year for Real Estate in Arizona. California, NY, and Florida will take a little longer to get out of this mess. These three states bring the rest of the nation’s averages down.

So remember to be more than a little skeptical when you hear the national news.

 

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Frank Merlo

Frank Merlo

Hello, my name is Frank Merlo, II, and I am a resident of Queen Creek, AZ.

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