Sales of foreclosed homes in the Tucson region hit a five-year low in February, driven by a mix of revisions to federal guidelines for short sales and tighter inventory. Last month, 279 distressed houses were sold in Pima County, the lowest monthly total since March 2008 when there were 275 sales.
Trustee’s sales notices also declined, in step with a downward trend that began in May 2012 when there was a peak of 984 foreclosure notices. Last month, the number of foreclosure notices was down to 534, according to the Pima County Recorder’s Office (see chart).
“Obviously, it’s a good sign that trustee’s notices are down. We’re seeing some positive changes in the marketplace that revised the short-sale process. It’s all about supply and demand,” said Cathy Erchull, president for 2013 of the Tucson Association of Realtors.
In February, Fannie Mae revised its procedures to streamline the documentation and processing of short sales. Additionally, the government-sponsored agency assigned more personnel to focus solely on short sales. The process had been so complex, inconsistent, slow and cumbersome that frustrated under water home owners, potential buyers and lenders stayed away.
A short sale requires the mutual consent of the lender and borrower. The proceeds from selling the property are “short” of the amount owed. Considered an alternative to foreclosure, both parties can benefit because the negative financial impacts are somewhat moderated.
Erchull said that Fannie Mae “heard the complaints” and cut both the bureaucracy and the paperwork to accelerate the process.
“Now after documents are submitted, lenders must answer in 30 to 60 days,” she said. Going forward, that should decrease foreclosure notices and distressed sales. Home owners and lenders got a viable option to circumvent foreclosure “by not using a trustee’s deed.”
In 2012, an average of 485 foreclosed homes were sold each month. After the housing market collapse in 2008, the average of foreclosed home sales peaked at 580 sales per month in 2011. So far, the 2013 pace is 348 units per month.
Currently, there are 333 short-sale and 516 bank-owned house listings. In addition, there are 4,237 traditional listings, bringing the total to 5,086 units for sale in the Tucson region.
“The majority of homes now are normal listings,” Erchull said.
General information about the short-sale revisions is at www.homepathforshortsales.com. For real estate agents who have problems with a specific short sale, they can go to www.homepathforshortsales.com/hpshortsaleinquiry.html for direct assistance from Fannie Mae.
Home prices going up
Average home prices increased 8.2 percent in the Tucson metropolitan area over the past year. Projections are that by early October, prices will rise another 2.2 percent.
And from there, the forecast gets even better. The region’s housing market is expected to gain more value momentum.
Average home prices are projected to grow 7.2 percent annually from the third quarter of 2012 through the third quarter of 2017, according to data out this week from the Fiserv Case-Shiller Indexes.
Fiserv Case-Shiller tracks home trends in 380 markets. In most areas, the data trends are toward a “return to normal” housing market. Overall, gains in values have been solid and broad-based.
By 2014, home prices will be rising in nearly every market of the U.S., according to Fiserv chief economist David Stiff.
“In all the bubble-crash markets, foreclosures will have a persistent but diminishing drag on price appreciation. Since the timing of the disposition of foreclosed properties can be uncertain, we will witness choppy price movements as individual metro markets stabilize,” he said.
In general, most bank-owned properties have been absorbed. As a result, “foreclosures are no longer pulling home prices down,” he added.
In the Tucson region, home prices peaked in the first quarter of 2006 and had fallen by 40.4 percent as of the third quarter of 2012. The biggest one-year decline was 19.8 percent from the first quarter 2008 to the same quarter in 2009, according to Fiserv Case-Shiller data dating back to 1980.
Dean joins CBRE
Veteran property manager Mona Deane has joined CBRE in the firm’s Asset Services Group. Deane moves to CBRE, 3719 N. Campbell Ave., from Picor Commercial Real Estate Services, where she was for 4½ years.
Deane has more than 25 years of commercial real estate experience including the direct management of office, industrial and retail product for private and institutional investors. Contact her at email@example.com or (520) 323-5116.
July 31 is the deadline for non-profit organizations to apply for a property “makeover” from the Tucson Utility Contractors Association (TUCA). Called Volunteer Day, each year TUCA members donate materials and labor to a community organization for site improvements.
Non-profits can apply by submitting a brief letter describing the organization and the type of work needed. Send it to TUCA, 1842 W. Grant Road, Suite 103, Tucson 85745.
Sales and leases
• Ayaaz Ismail and Romeo Esquivel purchased Unit 11 of Building 4 at the Magee Corporate Center, 2205 W. Magee Road, for $257,805 from Landmark Title Trust No. 18183-Tf, represented by Tom Nieman and Richard Kleiner, Picor Commercial Real Estate Services. The buyers were represented by Andrew Sternberg, Oxford Realty Advisors.
• ParMerica leased 10,686 square feet at 3700 E. Columbia St., Suite 100, from Holualoa Columbia Industrial LLC, represented by Rob Glaser, Picor Commercial Real Estate Services. The tenant was represented by Michael England, Cresa Dallas.
• San Plumbing Supply leased 4,800 square feet at 1121 W. Grant Road, Suite 401, from Sloat Family Partnership, represented by Stephen Cohen and Russell Hall, Picor Commercial Real Estate Services. The tenant was represented by Patrick Welchert, also with Picor.
• El Rio Community Health Centers leased 4,600 square feet at 210 W. Fifth St., Suites 4 and 6, from Rich Rodgers Investment, represented by Brandon Rodgers, Picor Commercial Real Estate Services. The tenant was represented by James Hardman, Desco Southwest.
Email sales and leases and other real estate news items to firstname.lastname@example.org. Inside Real Estate & Construction appears weekly.