Scottsdale Arizona Real Estate Blog

by Cathryn Creno – Sept. 4, 2009 11:55 AM
The Arizona Republic

It should be the best time to purchase a home in decades.

Prices are at record lows. Many, if not most, of the houses on the market in areas like the Ahwatukee Foothills are owned by banks – not emotional and capricious homeowners.

Instead, even seasoned real estate agents say it’s the most difficult market they have worked in decades. for sale in Ahwatukee right now. In a normal market there are 600. There also is a huge shortage of owner-owned well-maintained homes.”homesfamily single

And buyers say they are frustrated with the condition of houses they find on the market – plus they are getting caught up in unpleasant bidding wars with cash-rich real estate investors.

“I have six buyers who want homes in Ahwatukee, but we can’t find a thing.” said Pam Eagan, a long-time Ahwatukee real estate saleswoman who specializes in selling custom homes.

“There are 487

Eagan said the selection of attractive move-in ready homes is low because owners who are not having financial problems intend to hang on to their properties until prices rise again.

So instead of walking through their dream houses, buyers are looking at repos gutted by evicted former owners.

“You would not believe the condition some of these places are in,” said Nancy Nighswonger, an Ahwatukee resident who is helping her mother, Diane Moss, search for a comfortable home for her retirement years.

“We’ve researched 100 houses and looked at 20 since June. In one place all the appliances had been left out in the driveway,” Nighswonger said.

Buyers who want houses to live in must also compete with real estate investors who have deep enough pockets to pay cash for discounted properties. Banks are creating bidding wars on such properties by calling potential buyers and asking them to up their offers, real estate professionals say.

While that might sound similar to bidding wars for Valley houses at the peak of the real estate market, experts say there is a difference: In 2005 and 2006, home prices were set at market value and buyers could offer higher amounts, depending on the competition.

“Now sellers are pricing their homes 25 to 30 percent below the market because they want to take 8 or 10 offers to the bank (that foreclosed on the property),” said Pete Meier, who has sold real estate in Ahwatukee for 30 years.

“This is not the normal way things are done. “I have made five or six bids for some buyers and they have not been successful in buying a house yet.”

Mike Mendoza, another long-time Ahwatukee real estate salesman, said the upside to the situation is that “the market is starting to move again.”

Also, he said, buyers with the patience and fortitude to endure the bidding wars can wind up with great deals.

In some cases, houses in neighborhoods where houses recently sold for $600,000 are now at “FHA levels” — the $300,000 range, he said.

At the other end of the spectrum, houses that formerly sold for a million or more can be purchased for $500,000 now, he said.

Mendoza said he recently represented a house in Chandler that was offered as a “short sale” – the owners owed more on the house than what it was worth.

“I had nine offers on it,” he said. “It was a very nice house. A million-dollar property originally.”

The house sold for $449,000, he said.

Eagan was so thrilled by a similar success story that she posted a message about it on Twitter.com the day the deal was signed.

The family she was representing — Honeywell engineer Rudy Dudebout, his wife Tina Hynes and their three sons Eric, 6, Adam, 4, and Alex, 2 – had just paid $556,000 for a home that appraised for $1.2 million at the peak of the housing boom, she said.

The 1982 five-bedroom, 3,500-square-foot custom home backs to the South Mountain Preserve and has a pool, basketball court and a balcony overlooking a circular driveway.

“We had had our eyes on this neighborhood for a long time,” Dudebout said. “It does not have the uniformity of looks that you find in other parts of Ahwatukee. We also wanted a funner back yard for the kids.”

The Dudebouts wound up in two bidding wars for the house, one in December and another in April, when they signed the contract.

Right after they lost the house in the first bidding war, vandals broke into the house, stopped up the sinks and created a flood that destroyed a bathroom and the kitchen. Afterward the buyer pulled out of the deal.

“We were nervous about having to go through the remodeling but now I look at it as a blessing in disguise,” Dudebout. “If the house had not been vandalized (after the first sale) it might not have come back on the market.”

by Cathryn Creno – Sept. 8, 2009 12:00 AM
The Arizona Republic

With a $165,000 price tag, the two-story, four-bedroom house for sale in Avondale was a steal.

Three years ago, when the house was new, a family paid $416,000 for it.

But its soaring living-room ceiling, whirlpool bath, three-car garage and pool with a slide and waterfall weren’t enough to make it much more than a handyman’s special. Thieves made off with the home’s $30,000 custom-kitchen and other fixtures after it went into foreclosure.

Custom cabinets, appliances, granite countertops and other fixtures just disappeared one day.

“These are fixtures that are supposed to be part of the house. They basically took $30,000 out of the kitchen and left,” said John Lincoln, the real-estate agent who recently sold the house to buyers who don’t mind fixing it.

Julie Halferty, a special agent who oversees the Phoenix FBI Mortgage Fraud Task Force, said no one knows exactly how many foreclosed houses in the Valley have been stripped by former owners, neighbors or strangers.

Those who work in real estate believe the number is in the thousands.

“Without question, probably 85 to 90 percent of houses on the market under $200,000 have been stripped,” said Tempe real-estate agent Kim Baker.

“Appliances are the most commonly poached item, but plumbing fixtures and faucets, ceiling fans, light fixtures, water heaters and air-conditioning units are fair game” in the eyes of the strippers, she said.

Halferty said she and her fellow FBI agents “haven’t been able to quantify it, but we know it is rampant.”

She said that since metropolitan Phoenix foreclosures are up 600 percent since 2005 – half of the homes sold here this summer were bank-owned – she believes stripping is more common here than anywhere else in the nation.

“These crimes are happening with enough frequency that it has caught the attention of law enforcement, Realtors and lenders across our state,” said Tom Farley, executive director of the Arizona Association of Realtors.

“Many Realtors are taking photos of the interior of the home as soon as they take a lender-owned listing to document the condition of the property in case of vandalism,” Farley said.

Last week, the Maricopa County Attorney’s Office announced five recent prosecutions of accused foreclosure strippers, including one involving a real-estate salesman.

Halferty said the task force hopes the information will educate owners of homes in foreclosure, neighbors and others that it is illegal to help themselves to fixtures and appliances in a vacant home.

“Take a look at Craigslist,” Lincoln said. “It’s full of things that have been stripped out of houses.”

Halferty said Craigslist.org tipped the fraud task force to the extent of the problem.

“It is so blatant,” Halferty said. “People would advertise that they were selling cabinets in a foreclosure sale.”

Halferty said legally there should be no such thing as a foreclosure sale. The law states that anything attached to a home – stoves, cabinets, lights and ceiling fans – belongs to the property and stays there when it is sold.

Lincoln, who is based in Ahwatukee Foothills but represents properties all over town, said the problem is most widespread in Valley neighborhoods that were built during the housing boom a few years ago.

“Mature neighborhoods aren’t seeing this as much as the newer neighborhoods in places like Avondale and Tolleson,” he said.

While some homes are stripped by cash-strapped former owners, others are targeted by strangers.

Lincoln said one of his clients purchased a bank-owned house in Tolleson. Before it closed, thieves posing as pest-control workers broke in and removed $4,000 in appliances. The matter was reported to police, Lincoln said, but there has not been an arrest.

“Neighbors said two guys drove up in a white truck and said they were there to spray for bugs,” Lincoln said. “What they really did was go in the backyard and bust a window to get into the house.”

He said the deal still went through, but the family paid $6,000 less.

Talk to anyone searching for a deal on a house these days and you will hear similar stories.

“People are having to look at 20 or more houses before they find one that is suitable,” said Jay Butler, director of realty studies in the Morrison School of Management and Agribusiness at Arizona State University at the Polytechnic campus.

“One of my students looked at 35. Doors are missing. Plumbing is gone. There is a huge secondary market for these things. People buy them and put them in their own homes.”

In extreme cases, thieves rip copper pipes and wiring out of the walls, Baker said.

Nancy Nighswonger of Ahwatukee Foothills just wants to help her mother find a deal on a house for retirement. That might have taken a few weeks a couple of years ago.

“You would not believe the condition some of these places are in.” Nighswonger said. “We’ve researched 100 houses and looked at 20 since June. All of them needed extensive repairs.”

Getting financing to fix up damaged properties is not easy, Baker said.

“The FHA will not loan on a property that isn’t fully intact,” Baker said

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