Real Estate Conditions 3 - Mortgage & First Time Home Buyer Dec08 Hot Buyers Real Estate Market
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 3 (Excerpt)
Now is a great time for first time home buyers to get into the real estate market
Back in studio of course Brett Fallon are favorite and one of America's best financial advisors, and a very good friend of mine for a long time also Dan Havey. Dan, what is the name of the book?
The name of the book that I am in the middle of writing is called, Real Estates Future. What it is, is a model that I created with a friend of mine. I didnt believe this was possible when it was first brought to me, but after working on it for six months and doing a lot of research I found that we were actually able to predict, in advance, through a whole series of equations and data, we were actually able to predict in advance the top of the last real estate market here in Phoenix by six months.
So were doing a lot more research to see if we can take that to a broader national level and see if we can come close to actually giving people an idea in advance of the top and bottom of the real estate market.
And this is not the doom and gloom type stuff, this is reality, this is not media spin or anything, correct? No, this is just numbers. That's all this comes down to, numbers, a lot of different equations. I am not going to bore people with all the complicated stuff. When I was in college I started out with a degree in computers and mathematics and eventually ended up getting a degree in finance, so Ive got a lot of numbers spinning around in my head.
The amount of content you have put together to talk about these first time home buyers, we just talked about what you should do when buying a home right now, you need to make sure that you get the seller to pay as much as they can, obviously you want to pay as little for the house as you possibly can. You want to get the seller to contribute as much as they can. But Dan why dont you talk about what it means to be a first time home buyer or for someone who could be in the market?
Well again with the numbers we were looking at, how this came about like I said last year we were working on this model and after the real estate market kind of took a crash we put it to the side for a little bit and the other day I said, its about time to resurrect it because we have to start looking at when is it going to be the bottom of this next market and people are going to want to know that.
So I started looking at some numbers here just in Phoenix and a couple things actually surprised me, it was very heartening for me when I saw that one of the metrics that we look at is whether or not the median income household can afford to buy the median priced home. And right now in Maricopa County the median income family makes $64,000 and the median priced home is $160,000 and $160,000 home is well within the means of the $64,000 income family. In fact just running numbers at 5 1/2 to 6% you could probably buy as much as a $250,000 house.
So then I took a look at where are houses selling right now, and I found that 78% of all of the houses that were sold in Maricopa County last month were under $250,000. So 78% were under $250,000, and I do believe that between $100,000 and $250,000 its like 53% of all the houses, and obviously there is some of the cheap stuff that is being sold at the repo sales and that kind of stuff right now too.
Like I told you before, my brother picked up a couple of REOs over the weekend and I think he paid $30,000 each for them. And there is one other thing I would like to say before we move on, where I think its a great time for first time home buyers to kind of jump back into the market is another metric we look at is year over year home sales, and for obviously the last two years the home sales were declining year over year, and what we have seen is in the last 6 months there were at least a thousand to two thousand more sales per month than there were in 2007. And percentage wise that is pretty high, its not just a thousand or two thousand the percentage is significant. Sometimes the numbers dont mean a lot, but when youre talking about an increase of 20 plus percent in a few of these months, thats huge...