I attended a seminar hosted by 3 lawyers and the
chief of a title company yesterday to better
understand the impact of the Dodd Frank Act, and
the new Consumer Financial Protection Bureau.
After 3 hours I can safely say this: in 2005 the US
financial sector was under-regulated, and now
Washington DC in its infinite wisdom has decided
that the cure is over-regulation.
If you think I'm oversimplifying, then consider this:
in a panel of 3 lawyers I heard more "we just don't
know this yet" than anything else. Why don't
lawyers who specialize in these areas understand
the impact? Because the laws are so complicated,
because the associated regulations are so far
behind schedule, and most importantly... because
many of the laws contradict other laws, and it's
unclear which one takes precedence.
Here is why this is so critically important for real
estate: credit drives all economic activity, and most
especially real estate. These regulations make
it extremely perilous and expensive for lenders to
extend credit. As it stands, the new laws are a
bonanza for plaintiff's lawyers. So, let's hope that
Washington pumps the breaks before January 1st,
but right now that's not looking good.
So, we may have a hiccup (or worse) in mortgage
lending at the start of next year. If you're looking
to buy a home using bank financing, please
recognize that you may no longer get that loan
come January 1st. You'll likely be offered a loan
that's less desirable, or perhaps no loan at all.
The good news for buyers is they've got over
6 months until the invasion of red tape comes full
force to the mortgage lending market, which is
plenty of time. After that, who knows how long it's
going to take for Washington to unscramble the
omelet.
The good news for sellers is that seller financing
will still be possible even after these laws take
effect. I've always advised anyone contemplating
seller financing to consult an attorney, and this
will become absolutely critical in light of the new
laws. Specifically, Dodd Frank treats different
parties differently -- i.e. there is no one law for all
lenders, there are different standards for someone
who just loans on one property vs 3 properties vs
more than 3. I won't get too detailed here, but
suffice it to say that I still plan to utilize seller
financing when it's appropriate, and if this is of
interest to you I'd be happy to discuss it in greater
detail.
One final ironic note: these regulations come at
a time when the mortgage market has already
imposed enormous self-discipline. The aggregate
statistics on loan-to-value and credit scores are
the strongest they've been in decades. Indeed,
these existing high standards are the very
reason why the single family home rental market
is so strong across the United States -- people
with sufficient income to afford a mortgage
payment don't qualify for a mortgage. So, they
pay an investor a monthly rent that covers the
investor's mortgage payment.
Closings
For the second week in a row, closings outnumber
new listings in Paradise Valley, further shrinking
inventory.
The average sale price last week was a whopping
$2.65 million, with a total sales volume just under
$24 million. These are very impressive numbers.
Here's the really eye-popping number: the average
price per square foot was $380 for homes with
an average year of construction of 1988. This is
very strong indeed.
A postscript the statistical geeks out there, I've
updated the methodology for computing the average
year of construction. Specifically, it's now a weighted
average based on square feet, vs the simple average
that was used previously. This will help keep the data
meaningful even when there are dramatic differences
in the mix of properties -- i.e. when some homes are
brand new and large, and others are small and old.
New Listings
Only 8 new listings this week, same as last week and
sadly not enough. Also, it's slim pickings again with
the strong market encouraging sellers to put anything
and everything on market. 2 of the homes are at
asking prices north of $600 per square foot.
Asking prices range from $775k to $6 million this week.
Owing to the slim pickings I'm making a special effort
to highlight noteworthy properties in areas adjacent
to Paradise Valley, and fortunately there's one real gem.
Here are my current picks for quality and value:
Arcadia Masterpiece
Extreme privacy behind 20 foot Oleanders right in
the heart of Arcadia on Exeter Boulevard. Absolutely
exquisite interior finishes throughout the almost
13,000 square feet. There's a koi pond and
Japanese tea house in the yard. I don't even want
to write any more about this home, because you
should just click on the links and see it. It's really
special. Offered at $4 million.
Hillside Contemporary with Views for Miles
This 6,000 square foot home in guard gated La Place
du Sommet offers sweeping views. Exceptional
media room, open floor plan, and this has something
so few hillside homes in this price range offer: ample
parking with a 4 car garage. A noteworthy home
offered at $2.7 million.
Bargain of the Month
Remodels under $1 million are rare, and they tend
to be located close to Shea. Not this one. It's on
Mockingbird just south of Lincoln, and is a great
turn-key property of 3,000 square feet. Granted its
a busy intersection, but this is buffered from Lincoln
by another property. Offered at $799k its unlikely
we'll see anything better at this price range for quite
some time.
To see all of this week's listings, please click here.
To see everything on the MLS in Paradise Valley
please click here.
That's all for this week, I'll be back next week with all
the latest in Paradise Valley real estate.
Regards,
Alex
SearchParadiseValleyProperties.com
(480) 442-7325
p.s. Would you like immediate notification of homes
that meet your needs, including those that never
hit the MLS? It's easy please click here.
PLUS Here are Ways I Can Help You Today:
Daily Tour of Homes
MarketWatch Daily Updates of Any Area You Choose
Find Out How Much Your Home Is Worth
Powered by:GetResponse
Realty One Group, 7975 N Hayden Road #101, Scottsdale, AZ 85258, United States
You may unsubscribe or change your contact details at any time.
