An end to the steep slide, but with an expected bumpy ride at the bottom.

"The ASU-RSI is very similar to the national S&P/Case-Shiller Index, although the method used to cleanse the data is slightly different. Like the S&P/Case-Shiller index, the data used in the ASU–RSI also begins with January 1989 data, and beginning in January 1990 the percent change from the same month in the previous year is reported." (ASU-RSI)

See Also

• Phoenix Real Estate Housing Market Trends Overview, Graphs, Statistics And Reports
  Current and Historic graphs, statistics, tables and commentary of the real estate market in Greater Phoenix
• Phoenix Home Search | MLS Properties For Sale | MLS Wizard | Real Estate By Map
  Search Phoenix Real Estate by Region, Map, Address, School, MLS# or Zip Code | Lender Owned, REO homes | SearchValleyHomes

Many renters are making the choice to buy a home in the Phoenix market.

See Also

• Home Buying In Greater Phoenix Starts Here.
  Support, not sales pressure: we give you the perfect combination of online search and research tools and personal service to buy a home.
• Phoenix Home Search | MLS Properties For Sale | MLS Wizard | Real Estate By Map
  Search Phoenix Real Estate by Region, Map, Address, School, MLS# or Zip Code | Lender Owned, REO homes | SearchValleyHomes

Thousands at risk of rate hikes as AIB bars mortgage switchers…

THOUSANDS of homeowners are effectively trapped with their existing lenders after the biggest bank in the country, AIB, admitted yesterday that it no longer accepts mortgage switchers.

Just two lenders will now accept switchers, leaving thousands of homeowners trapped and vulnerable to being hit with higher mortgage rates.

The AIB move is a huge blow to mortgage holders who are with Permanent TSB as it has increased its mortgage rates twice in the past six months, and those with Halifax, which is closing its retail operations here.

AIB has the lowest home-loan rates in the market, with a standard variable rate of as low as 2.25pc and a three-year fixed rate of 3.19pc.

In comparison, Bank of Scotland (Ireland)/Halifax has a three-year fixed rate of 7.25pc.

Permanent TSB shocked homeowners this month when it pushed up its standard variable rate for existing customers by 0.5pc.

Other lenders are now expected to follow the move by Permanent TSB.

Up to 350,000 mortgage holders have standard variable rates, which lenders are free to increase when they want. Some mortgage experts expect standard variable rates to rise by up to 1pc this year.

Frank Conway, director with the Irish Mortgage Corporation, said the switcher market was now effectively closed off to borrowers at the very time they needed it.

AIB admitted in a statement to the Irish Independent yesterday that it was no longer interested in switchers.

“We’re very keen to talk to anyone — especially first-time buyers — who want to purchase a property.

“However, when we can use our resources to provide mortgages to customers who want to purchase property, rather than exchange loans, we’re less inclined to use those resources to facilitate the replacement of a mortgage contract at one institution with a cheaper one at AIB.”

Priority

The bank, which has so far received €3.5bn in funding from the State, said its priority was funding new buyers who borrow less than 92pc of the value of the house, and who show “a capacity to repay”.

It is understood that AIB has promised the Government to fund first-time buyers, but the bank has not given any commitments to fund other types of mortgages. Because banks are chronically short of funds, the bank has decided not to finance switcher mortgages.

Just KBC Homeloans and EBS Building Society will now transact switcher mortgages, Mr Conway said. But these lenders have strict lending criteria making their switcher mortgages difficult to quality for. KBC will only accept switchers who are borrowing less than 80pc of the value of the home.

Bank of Ireland said it would accept a mortgage switch from people who were not customers only if they were borrowing less than half the value of the home.

However, managing director of Bank of Ireland Mortgages Brendan Nevin said the lender would loan up to 90pc of the value of the home to existing customers.

Three years ago at the height of the property boom, mortgage switchers were responsible for 40pc of the value of mortgage drawdowns. But switcher mortgages now represent 12pc of the market.

Banking sources said yesterday that switcher business was regarded as risky as people switching had not always being upfront about their financial position in the past and they often wanted to extend the term of the loan or consolidate other loans into the mortgage.

Report by Charlie Weston – Irish Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

It’s time to shout ‘stop’ — NAMA is grand larceny…

The land has reverted to the price you’d get from a farmer for putting a donkey out to graze on it

For the past year, this column has been warning of a “triple lock” in the Irish banking system, which would financially incarcerate the Irish people for a generation.

The triple lock would solder the people to the banking system in a suffocating embrace forcing us to borrow from tomorrow to pay for yesterday and, in the process, destroy the opportunities of today.

Now with the Government upping its stake in Bank of Ireland, this prediction — regretfully — is coming to pass. The worst thing is that it doesn’t have to be like this. The latest news that some development land in Athlone valued in the boom at €31m is now worth only €600,000 has truly terrifying implications for all of us, because it means NAMA will bankrupt us, and the triple lock implies that we can’t sever the fortunes of the people from the fortunes of the bank.

Let’s just recap what I mean by the triple lock. The first lock was the bank guarantee, the second lock was NAMA and the third lock was the “forced” nationalisation of the banks. It is important to remember one overriding fact: we do not need Bank of Ireland or AIB. This truism needs to sink in. There is nothing sacrosanct about either, nor is there anything sacrosanct about the debts these banks have run up. These debts have nothing to do with us.

Yes, we need a banking system or a couple of functioning banks, but they don’t have to be AIB or Bank of Ireland as constituted at present.

At this stage, the Government should be trying to give the banks away for free to a large European bank. This is what you would do if a sweetshop were in trouble and banks are no different. Any new owner, taking the opportunity of having cash, not debt, in a downturn, will do a deal with the creditors. This is how normal bankruptcies work.

What big bank wouldn’t want to take on the Irish deposit base of €175bn, the branch network and the banking possibilities of a European country? The new owners would do a deal with the old creditors. The way this is done in the real world is that the creditors are told the game is up, there is no cash left in the kitty, but if they are prepared to take stock of the new parent bank, they can get something out of their Irish misadventure. Obviously the new owners of Bank of Ireland would roast the old creditors, but, hey, that’s capitalism!

The only way new credit will emerge in Ireland is if there is a new banking balance sheet. And the only way a new banking balance sheet will emerge is if the big banks are given away to a healthy bank for free and the old creditors told where to go — to the back of the queue.

The problem for us in Ireland is that the people who are drafting our laws locking us to the banks do not understand this, because they are not capitalists; they are legalistic functionaries, civil servants and bankers trying to hold on to their jobs. In short, they are consummate insiders with their interests vested in the old status quo who can’t see that the old status quo is the problem.

As a result, these insiders are all too happy to give the outsiders (the people) the bill without any thought of how we are going to raise this money. This is why the Finance Minister can come on radio and talk blithely of billions here and there without appearing to consider just how much money this is and how much we have to produce to earn these sums he is tossing about.

Listening to politicians and bankers/brokers using these figures is like witnessing demented generals in the last stages of a war moving imaginary armies on a map — battalions that have long been vanquished.

About 18 months ago, the ‘guarantee’ was constructed to avoid this endgame. The logic of the guarantee was to buy time to get the banks to sort out their own mess. Implicit was the notion that the banks were to look to the market — not the State — for capital and, if there were to be a ‘bad bank’, the banks (not the taxpayer) would have to fund it from their own resources.

On the night the guarantee was first mooted, the ‘bad bank’ was touched on too. The bad bank would be a skip into which we threw our withered land portfolio. The State would raise the money, but the banks would pay for this out of their profits and the taxpayer was not to be touched.

Unfortunately, and not surprisingly given the way our country runs, the banking ‘insiders’ hijacked these ideas last year and have left us with the pathetic situation we are in where they get away with it and give us the bill.

To see how pathetic the reality is, let’s go back to the site in Athlone and extrapolate. The value of this land has fallen by 98pc from €31m to €600,000. So, after all the hype about Ireland and its new wealth, the price of the land has reverted to the price you’d get from a farmer for putting a donkey out to graze on it.

In the Commercial Court, Mr Justice Peter Kelly — who is emerging as a hero in all this — said that his original presumption (from his experience in the Commercial Court in the past year) that land prices had fallen by 70-80pc was now put “in a cocked hat”. So he thinks 70-80pc falls in land prices are too optimistic.

So if we look at the breakdown of NAMA’s ‘assets’ and see what this new reality means for the banks and us, we see that there will be €51.5bn of land and development assets and “associated loans” transferred. If we apply Mr Justice Kelly’s discount based on what he has seen so far, we are looking at a hole of possibly €40bn, where we will borrow €51.5bn from the ECB, for assets worth a little over €10bn.

Obviously there will be some assets that will be worth more. In addition, some of the assets that are in the UK or the US will recover reasonably quickly, but given that the lion’s share are in Ireland, a massive discount should be expected.

Whatever the gap, someone has to plug it and, although the NAMA plan is over 10 years, no one in their right mind believes that development land in Athlone will ever again be worth €31m — nor should it be.

In fact, permanently cheap land should be the aim in order to give us a comparative advantage. But permanently cheap land would impoverish the landlords and their financial backers — the very people who have got us into this mess and the very people NAMA is devised to rescue. So someone has to pay for the bailout.

According to the triple lock system devised by the Government, we the people — the outsiders — will plug this gap. This is grand larceny overseen by the insiders. Someone has to shout “stop”!

Report by David McWilliams – Irish Independent.

Ireland Property – Daft Property – http://daftproperty.blogspot.com

A road map for the future developement of the Central City.

See Also

• Articles Related to Downtown Phoenix
  Get to know downtown
• Downtown Central City Phoenix Homes For Sale
  Search by neighbohrood and region: full MLS search.

An exhibition of silkscreen monoprints.

This is an exhibition of silkscreen monoprints – a celebration of original artwork created in the monoscreen print workshop at the Mesa Arts Center.

When:  Saturday March 6th, 2010 from 14:30 to 17:30

Where: Inside the Bungalow at 48 North Robson in Downtown Mesa.

There will be music by jazz pianist Jimmy Boyd

And meet our own Joanna Zajusz, one of the artists along with: Vanya Allison, Julius Forzanzo, Kaori Fujitani, Michael Healy, Nieves Manje, Tomas Martinez, Jackie McKenzie, Ann Otis, Florence Siekman, Amanda Shine Yocum, Jeremy Yocum.

Not a single new home registered by Premier in January…

THE private housing market could be in danger of grinding to a complete halt with one of the two home-registration firms in the country not registering a single house in January.

The Irish Independent has learned that Premier Guarantee did not register a single housing unit in January, with its larger rival Homebond only registering 149 houses, including just 24 in Dublin.

At the peak of the property market in 2006, Homebond was registering 6,122 houses a month or about 72,000 in a full year. Premier, the smaller of the two registration services, was registering about 2,117 houses per month, or almost 25,000 per annum.

Of the 149 houses registered with Homebond in January, 62 were in Cork, 16 in Kildare and 24 in Dublin. In most of the other counties there were less than three houses registered, with many counties only registering a single house.

One of the few things propping up the housing market now is one-off housing which often doesn’t depend on insurance from either Homebond or Premier. Local authority housing, which is also continuing, normally has some form of state insurance behind it.

The warranties provided by the companies also protect a homeowner’s deposit in the event that their builder goes bust. Homebond has been operating since the late 1970s and has only faced competition from Premier since 2002. Willis Risk Services offers the Premier product in Ireland.

Economists regard the house registration figures as the best indication of housing starts. Once a house is registered with either of the two companies the builder and then the owner has cover for any serious structural problems that arise in the first 10 years after construction.

The collapse in prices, rising unemployment and a lack of mortgage finance has seriously hurt the housing market, with first-time buyers also finding it hard to come up with deposits to make purchases. In some parts of the country the overhang of existing stock will not be cleared for many years.

Banks have changed their loan-to-value rules forcing purchasers to come up with more of their own finance. Credit standards have also been tightened in other areas, for example long-term mortgage loans over 40 years have been restricted along with 100pc mortgages.

Average national house prices in Ireland fell by 18.5pc in 2009, according to the Permanent tsb/ESRI House Price Index, with prices declining by 3.6pc in December alone. The full-year decline of 18.5pc compared to a reduction of 9.1pc in 2008.

Report by Emmet Oliver – Irish Independent.

Ireland Property – Daft Property – http://daftproperty.blogspot.com

A superb opportunity for savvy buyers and investors with no defined constraints.

Pursuing a short sale purchase is in a lot of ways very attractive low risk way to obtain properties.  A way to look at a short sale purchase is like an option to buy.  

In years past some people would pay an owner for an option to purchase a property at a later date, a first right of refusal to proceed if and when it was the right time: this did cost some money, but often the cost of the option was a much smaller and less risk then actually having to contract to buy the property and finding out it was not such a good idea.  

Well, with a short sale you get to put in a similar play without the small, but additional loss of the option money if at the end of the process the situation has changed.

Short sale are, sometimes, good for home buyers who plan to live there, but I’d recommend reading the following articles before you make that decision:10 Tips For Buying A Short Sale In Phoenix, because it’s better suited to those not with any specific time frames.

For investors they are a superb option.  Investors don’t have the need home buyers do:  they can pursue short sales simply as in investment and if it works it’s good and if not, there are other choices.

Let me give you some examples.  One investor pursued a very unique condo in a very prestigious complex.  The initial contract was very attractive: a good price, good terms, good property and it required the buyer to put ,000 into escrow for at least 90 days.  Needless to say, and not surprisingly, it took nearly 9 months to get the final approval letter from the lender.

By that time there were a few major changes in the condo market: prices went down, a few competing complexes were on the verge of foreclosure and one was about to exit foreclosure and enter the market at reduced prices.  While the condo was still a good purchase other options were better so the investor decided to invest elsewhere.  He had the option to buy or move on.

In another example, that of a fourplex the reason for possible withdrawal was a change in the condition of a property.  It is inevitable that some properties in the course of a year can deteriorate from lack of care and maintenance. 

When the initial contact was placed there were 3 units leased, the property was in decent condition.  We know this could change and expected it to.  Owners in distress usually don’t have the money to make repairs.  But in this case, it took almost a year to get an approval letter from the lender and by that time the building was empty, the roof caved in from water damage, the tenants who left did so with little care to what they left behind etc.

The investor had the option to buy or cancel, but there was another option: re-negotiate.  That is what we did, several months ago and, guess what, were still waiting for the bank to approve the new price based on the updated condition while the property is still vacant and deteriorating and when the approval letter comes again the investor will have the option to buy or not.

I don’t mean to propose that you shoot of a lot of offers and only once they are approved you pick and choose, although that is an option.  If you put in an offer and there are no significant changes when the approval letter comes then you should probably buy it.  The seller took a risk buy taking your offer and with the withdrawal they may go into foreclosure, so please be mindful of the consequences, but there are times when that option comes in handy.

See Also

• Other Titles Related To Buying and Selling Short Sales
  20+ articles
• Short Sales for Sale
  Search all short sale homes for sale in Greater Phoenix.

Devastating ‘pyrite epidemic’ hits 20,000 newly built houses…

UP to 20,000 homeowners are facing the devastating “pyrite problem” which is destroying recently built houses.

The Irish Independent has learned that this many claims for pyrite-related damage, such as cracked floors and walls, have been made to the builders’ insurance company HomeBond — which may not have enough funds to cover the cost of all the claims.

Its cash reserves have dropped from €50m in 2007 to €26m, according to its latest accounts, due to declining stock market returns.

This means it would only be able to pay around €1,250 per household. The average cost of removing the pyrite from a house and repairing the damage is between €50,000 and €70,000.

HomeBond only covers a portion of the cost if the builder is liquidated or unable to pay for all the repairs — so families are facing potentially huge bills to repair their homes.

The claims against HomeBond are separate to a landmark case presently before the High Court.

Quarries

According to an Irish Independent investigation, there are 20 building firms which have used material containing pyrite from at least four suspect quarries — which are located in Dublin and Meath. These quarries are still functioning.

The affected houses are located in parts of Dublin, Meath, Kildare and Offaly where pyrite — a mineral that expands in the presence of moisture and oxygen — has been discovered in the infill material put in below their floors.

In Kildare, one family bought a €560,000 home which has been damaged by the presence of pyrite. Yet they are being offered only a €38,000 settlement by HomeBond when the total repair bill could be up to €220,000.

Fine Gael Meath East TD Shane McEntee said there was a “pyrite epidemic” waiting to be uncovered.

“Over the past 12 months I have been contacted by numerous householders who are experiencing defects within their homes. This is a problem which is affecting estates extending all the way from south Meath to north Dublin and into parts of Kildare,” he said.

HomeBond was established by the construction industry in 1978 to provide a warranty to homeowners to ensure builders would fix defects that arose in their home over a certain period. And it would then step in to cover some of the costs if the builder was unable to pay.

HomeBond has provided cover for 680,000 homes since 1978 and now has 300,000 homes under warrantee.

Mr McEntee called on householders who were experiencing pyrite-related defects within their homes to contact HomeBond immediately.

HomeBond confirmed it was currently processing a number of claims for problems associated with excess pyrite under floors. It said it did not offer to cover the full costs of every household against structural damage because there were limits specified in every agreement.

Meanwhile, in the High Court, the Menolly Homes building firm and three associated companies are claiming damages of more than €18m against Irish Asphalt and the Lagan Group. The claims follow the discovery of pyrite in the infill material used under concrete floors in three new housing estates in north Dublin. The repair bill for the 400 houses affected is estimated at €20m.

The High Court is also due to give judgment tomorrow on an application by 175 of the affected homeowners to take separate legal action against Menolly Homes.

Report by Michael Brennan – Irish Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Mortgage lending at lowest level since records began…

MORTGAGE lending plunged last year to the lowest level since records began in 2005, as borrowing by investors and those seeking to trade up plummeted.

Just €8.08bn of mortgage loans were issued in 2009, a 65pc drop on the previous year, the Irish Banking Federation said yesterday. The number of loans made fell 58.5pc to 45,818.

“The data illustrate how difficult 2009 was for the mortgage market,” Irish Banking Federation boss Pat Farrell said.

“The general economic situation, consumer confidence, the unsold housing stock and house-price movements will be among the factors to influence market activity in 2010.”

Despite the plunge, first-time buyers and people moving house still only accounted for two-thirds of mortgage lending in the final quarter of 2009. Investors and those seeking socalled top-ups or remortgages accounted for the remainder.

The market remains so moribund that there are more people borrowing money to “top up” their mortgages than there are people borrowing to move house.

Just 2,116 people took out a mortgage to move house in the final quarter of last year, the figures show. The amount borrowed by home buyers has fallen as property prices continue their downward spiral.

First-time buyers borrowed an average of €206,865 in the final quarter of 2009, compared with €243,232 in the last quarter of 2007, when the property market was beginning to crumble.

Peak

Those trading houses borrowed an average of €242,793, compared to an average of €271,751 two years earlier. House prices have fallen in every month since March 2007 and are now around 40pc below their peak in the early part of that year, according to the Irish Homebuilders Association.

Rating agency Moody’s said last month that the percentage of Irish home mortgages at least 90 days in arrears had hit 3.3pc – the highest since it began monitoring the area in 2004.

The EBS building society claimed yesterday to have increased its share of the retail mortgage market by seven percentage points to 21.3pc last year.

The lender also said it was lending 43.8pc of all loans made to first-time buyers in the retail market last year.

The EBS cited market data given to lenders by the Irish Banking Federation but not released to the public. Other lenders have not disclosed their share of the market.

“The level of applications, specifically for first-time buyers, remains strong. This suggests that some potential buyers have decided that now may be the time to get into the market,” the EBS said.

“Affordability levels continue to improve for first-time buyers. The quarterly index shows that the average proportion of net income required to fund a mortgage has fallen by more than 50pc in the past three years,” said membership business director, Dara Deering.

“These kinds of figures, in addition to the well-publicised fall in house prices, are prompting people to consider their options and we would expect to see increased levels of activity in 2010.”

Report by Thomas Molloy – Irish Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com