Just when I thought Tom Ruff ended his excellent email series, yesterday afternoon the next chapter of brilliance came across.  I don’t know anyone that puts the current Phoenix housing market in easier to understand terms than Tom.   Anyone who is interested in or works in real estate should read this email in entirety.  Thanks Tom! (we’re glad your still in business

Maricopa County Foreclosure Numbers

Subject: March’s Housing Opinion

“I expect January foreclosure numbers to increase, and I think this increase will have more to do with November and particularly December than January itself. A period of grace took place over the holidays leaving December numbers lower than expected, with actual foreclosures coming in well below our quarterly projections. I would not be alarmed by an increase in January numbers anymore than being encouraged by December numbers.”

Tom Ruff, The Information Market

Often times I start my monthly newsletter with a quote from someone rich or famous, this month I elected to quote someone who is neither. I wanted to direct your attention to our December newsletter as to what we saw coming in the first two months of 2009. The one thing that continues to amaze me is how quickly the foreclosure numbers are impacted by the actions of a few key lenders and government entities. Reading Azcentral today there was an article headlined Valley home resales, foreclosures jump, this is exactly what we said you would be reading when February numbers were reported. Now, let me give you next month’s headlines, March resales higher than expected, foreclosures drop. I can’t tell you how March’s numbers will be explained; I can only tell you the headline. Let me give you my explanation on both February and March’s numbers.  February foreclosure numbers were higher because of the moratorium in late December and early January pushing properties that normally would have been foreclosed during this period into mid January and early February. Add in the fact that recorded Trustee’s Deeds lag behind the court house auction by 10 to 14 days and you have heavy numbers reported in February. By the same formula a temporary hold on repossessions in February will result in much lower numbers in March. That being said, the other side of the coin tells us that the drop in March will mean an increase in recorded Trustee’s Deeds in April and/or May, with further government intervention our standard disclaimer. The pattern can best be described as a bumpy road. A note to the analysts in our listening audience, keep your shocks in good working order and don’t jump to any dramatic conclusions based on any one month of foreclosure data, or you’ll probably be embarrassed. Excuse me while I write a personal note to myself, “Self, only draw dramatic attention to singular monthly data when in need of instant media attention.” Noted.

Recession vs Recession

I was reading an article comparing our current recession to where we were in the early 1980′s, the similarities and differences. No one has mentioned one big difference between now and then, the internet. It is alarming the velocity and volume with which we are bombarded with negative news. In 1980 we had TV news, the local newspaper and our car radio to let us know how bad things were, and our radio was probably tuned to KUPD. Today, everywhere we turn, the news is miserable. I think we can agree the news hasn’t been good, but we should also know, it ain’t all bad.  In the next few months, we will make a concerted effort to point out the silver lining within our local housing market, someone has to.

The goose and the gander

As you are aware from time to time I challenge the numbers of others, I was going to say other experts, but they’re the experts and I’m the other. Speaking of which, in my next commentary I will be giving my opinion of Realty Trac and First American’s Core Logic and their local and national press releases.  I can feel my keyboard heating up just mentioning the thought.

Anyway, what’s good for the goose is good for the gander, if you think I’m wrong, challenge me, I’ll make you my opening quote next month. You too can join the ranks of Warren Buffet, David R Kotoc, Franklin D Roosevelt and Tom Ruff.  The only way you learn anything new is to be attached to nothing and open to everything, I welcome any and all responses.

My Sister

I remember my sister once saying, “Isn’t it amazing that whenever you start a conversation about someone you know and like with God bless in front of their name you can say just about say anything and it doesn’t sound mean.” The previously mentioned Azcentral article contained this statement, “The median foreclosed home value of $164,470 was higher than the median resale price, which ASU Realty Director Jay Butler said was due to higher-end homes going into foreclosure while the resale market focused mainly on less expensive homes.”  God bless Jay Butler, but that statement is absurd. There are no rules for determining what the opening bid will be at auction; it is completely the discretion of the lender. With approximately 95% of all properties at auction returning to the beneficiary, they can only truly be described for what they are, a failed cash auction. You could say a Trustee’s Sale is tied to market value only when purchased by a third party and, it should be duly noted only cash buyers need apply. Let me give you an example, a bungalow I tried to purchase downtown. The property sold for $232,000 in March of 2005. A notice of trustee’s sale was filed in September of 2008 with the Trustee stating the unpaid balance to be $188,000, which traditionally would have been the opening bid amount set by the lender. On February 3^rd 2009 the property was auctioned on the court house steps with an opening bid of $124,000, which in turn became the sales price listed on the Trustee’s Deed.  The property returned to the beneficiary and the bank listed the property for $45,900.

Putting our money where our mouth is

We are currently trying to buy a second home, we think the deals are too good to say no.  I live in downtown Phoenix and have seen two houses within the past two weeks I have wanted to purchase.  Both properties were sold within minutes of being listed, both had multiple offers, both were about $65,000 below what I believed the real value to be, both were bank owned, both we’re below $100,000, I never even had a chance to get ink on the offer sheet, they were already gone.   Anyone who is waiting for the bottom to purchase a home, what are you waiting for? If you don’t get out there now you’ll be kicking yourself later. I don’t ask you to believe what I write; I simply suggest you look at homes for sale in your desired neighborhood.  Some areas have not hit bottom, some are just hitting bottom, and others are already on their way up.  Listen to me now, believe me later.

Further incentive

If the Federal Stimulus housing package didn’t offer enough incentive, here’s what will soon be available from the city of Phoenix.

You Could be Eligible for $15,000 in Down Payment Assistance

through the City of Phoenix Neighborhood Stabilization Program (NSP)!

You are invited to meet with City of Phoenix Housing and Neighborhood Services staff and housing counseling partners to learn about a new down payment assistance program that helps homebuyers purchase foreclosed single family homes and condominiums (no condo conversions) in the City of Phoenix.

You … or someone you know … may qualify for $15,000 in down payment and closing cost assistance to help buy an affordable foreclosed home anywhere in the City of Phoenix.  Plan to attend one of the Homeownership Assistance Information Sessions listed below to see if you and your family can participate.

Parking is available at the 305 West Washington Street Garage.  Please enter the garage on 4^th Avenue between Washington and Jefferson streets or ride the new light rail to the 1^st Avenue and Washington Street stop or the Central Avenue and Adams Street stop.

Date: Monday, March 16, 2009

Time: Choose from one of two scheduled information sessions:

2:00 p.m. or 5:30 p.m.

Place: Phoenix City Council Chambers

200 West Jefferson Street

Phoenix, Arizona 85003

For more information on the NSP Homeownership Assistance program:

• contact a real estate professional,
• call the City of Phoenix Housing Department hotline- (602) 262-6602,
• visit the City of Phoenix Neighborhood Housing Services web site

www.phoenix.gov/NSD/nspa

For more information on upcoming NSP Homeownership Assistance Information Sessions:

• visit the City of Phoenix Neighborhood Services Department web site: www.phoenix.gov/nsd/fevent
• call the City of Phoenix Housing Department hotline- (602) 262-6602

Where you been

I’d like to thank our many readers who took the time to contact us asking about our monthly commentary over the past two months when nothing arrived in their mailbox. One reader even stated she was afraid we were no longer in business; imagine that type of thinking in this economy.  Special thanks to the Federal Reserve Board member, you know who you are, who’s colorful language was more inspiring than any muse I’ve encountered, your extraordinary words brought me to the keyboard this evening. The reports normally attached to this email as well as my editorial comment can be found at www.cromfordreport.com If there is a monthly report you have been tracking and you do not see it within The Cromford Report let me know and I will see that it is added. As always, please feel free to share this with whom you wish. If anyone reading this would like to be added to our mailing list I would be happy to do so, by the same token, if you would like to be removed, just say so. I expect to hear from many of you, and I expect your correspondence to begin, God bless you Tom Ruff ………

http://www.azcentral.com/business/articles/2009/03/13/20090313biz-resales0316.html

Thanks,

Tom