Gilbert, Arizona

The orange trees are beginning to blossom, bicyclists are out in full force, and Arizonans are settling into our favorite season of the year.  Spring is here!  And what are you going to do to about it?

Help celebrate the Town of Gilbert's 90th birthday on Wednesday, March 24th while getting in some exercise at the same time!  In honor of the town's big 90th, all Gilbert residents will be eligible for 90 minutes of free workout time at its participating recreation centers.  Take your buddy, take your kids, or take yourself, but don't miss your free chance to see what Gilbert's recreation centers have to offer.  And, if you like what you see, registration is now open for the spring session of recreational classes like dance, martial arts, etc.

What: Free access to Gilbert's recreation centers, Where: The Freestone Recreation Center, The McQueen Park Activity Center, The Gilbert Community Center, When: March 24, 2010, How: Visit www.ci.gilbert.az.us

So you're eligible for one of the two 2009 - 2010 home buyer tax credits, now what?  The Internal Revenue Service (IRS) issued new guidance last week on the two tax credit programs - the $6,500 credit for repeat buyers, and the $8,000 first-time home buyer credit.  Filing for the tax credits isn't as simple as telling your accountant that you bought a house recently, but it's also not as hard as you might think the government could have made it.  The Washington Post filed this report about the new guidelines, and did an excellent job outlining them for you.  As the article says, the large number of repeat buyers and first-time buyers expected to file for these tax credits coupled with the IRS's increased monitoring and need for documentation will slow down the processing time.  Don't expect your $6,500 or $8,000 overnight; it should, instead, come to you approximately four to eight weeks after filing.  Still, not bad for a sizable stack of free money in the mail!

If this is the first time you're hearing about the tax credits available to home buyers this year, or if you need help getting under contract on a home before the tax credits expire on April 30, 2010, give us a call or visit The Hill Group's website here.

Here in the Gilbert, Arizona and surrounding areas, "foreclosures" has been the buzz word for at least the last two years.  So much so that most home buying clients that come to us, now ask for them by name.  "More Ovaltine, please" is now "Show me foreclosures, please."  The problem is that the once very large, seemingly unending supply of foreclosed homes (also known as REO's) has shrunk very dramatically in just the last 12 months.  According to The Cromford Report, a well-respected local resource which provides daily real estate market updates, the inventory of lender owned properties in Gilbert was at approximately 360 on March 19, 2009.  Now, it's at approximately just 190.  Granted, that is still higher than the historical average for our fair city, but it's also not the very large, seemingly unending supply to which everyone had become so accustomed.  Now, when new clients come to us asking to see all those foreclosures they've been hearing so much about, they need to expect the competition from other buyers to be fierce, and therefore, to pay at or very close to the list price.

So....where have all the foreclosures gone?  It would seem, at least temporarily, that they've been bought up!  Taking a look back at 2009, lender owned properties only ever accounted for 25% - 30% of the available homes for sale, yet they often accounted for 65% - 70% of the monthly sales!  At that rate, at some point, our inventory of foreclosures was bound to run out.  I'm not suggesting that it is going to run out this year, though.  There are still too many unknowns in the market for me to predict that.

One very pressing unknown is this thing called our shadow inventory - the inventory of foreclosed homes, or homes to be foreclosed upon, that has not reached the active market yet, but must eventually.  One might say that short sales belong to or will belong to that shadow inventory.  Afterall, with a success ratio of just 41.6%, the average short sale in Maricopa or Pinal County is not getting approved, and ending up in foreclosure.  Standard & Poor's published an article on February 16, 2010 asserting that the current shadow inventory of homes could take 33 months, nearly three years, to sell, once it hits the market.  It is their opinion that the only reason these homes have not reached the market already is due to "court delays, servicing backlogs, and political pressure to keep borrowers in their homes."  I cannot prove this notion either, but my own experiences lead to me to believe it is true.  I know of one homeowner in Scottsdale who has not paid his mortgage payment in 11 months, and still has not received a notice of foreclosure on his home.  Eventually, he will, though, and eventually that home will come out of the shadows.