Blog Posts

If you are considering purchasing a home in the near future and would like to take advantage of the popular 3.5% down payment FHA* loan, you may want to act sooner rather than later. FHA-insured loans will soon be more expensive to obtain.

On November 16, 2012, FHA announced they will be increasing their Annual Mortgage Insurance Premiums by 0.10% in early 2013. Additionally, annual insurance premiums, which are paid out of monthly mortgage payments, will no longer terminate once the loan term hits 5 years, or the loan amount reaches 78% loan to value. That means mortgage insurance will be required for the “life of the loan.” The only way to remove the premium would be to refinance the loan or sell the home. An exact date has not been set for the premium increase, so it would be safe to assume these changes will be implemented on January 1, 2013.

The new FHA premium increase and mortgage insurance policy are expected to add an average of $13/month and tens of thousands in costs over the term loan for the borrower.

Below is a chart illustrating the change in FHA mortgage insurance fees for a $200,000 house:

So how do you avoid these new costs? By obtaining a new loan prior to the date the
regulations change. That means you need to have an offer accepted on a home and
the contract submitted to your lender before the new policy is implemented. This
is all assuming, of course, that they Mayans are wrong and the world isn’t going
to end on December 21^st!

Please let us know if we can help you find your dream home while protecting you from
any additional costs!

*FHA stands for the Federal Housing Administration. The Federal Housing Administration does not originate loans, it provides mortgage insurance on loans made by FHA-approved lenders. FHA mortgage insurance provides lenders with protection against losses due to homeowners defaulting on their mortgage loans. The FHA became a part of the Department of Housing and Urban Development’s (HUD) Office of Housing in 1965.

I found this chart while doing research on the cost of owning a home versus renting. It shows the ratio of the the average mortgage payment to the average rent payment for each year listed adjusted to reflect 2011 dollars. As you can see, because of record low fixed interest rates and an over correction in home prices, the ratio is half what it was in 1990 and 2006. We have seen examples of this with our buyers recently. Some clients are saving hundreds of dollars a month from what they were paying in rent before factoring in the tax benefits. Also important to note is the ratio of the average payment to the average income over the years. If you or someone you know is currently renting and has considered owning a home, you owe it to them to share this chart. Ell Real Estate Team has extensive experience in helping clients transition from renting to homeownership and we look forward to assisting you and those close to you.

Notes from the report: Prices and mortgage payments are based on the median existing single-family home price, averaged from quarterly data to obtain annual prices. Mortgage payments are calculated using the interest-rate average for that year and assume a 20% downpayment and fixed 30-year term. Rent is the median gross monthly rent from the 2010 American Community Survey, indexed using the CPI for rent of primary residence. Income is median household income.

Sources from the report: JCHS tabulations of National Association of Realtors®, Composite Affordability Index (NSA) and Existing Single-Family Home Sales via Moody’s, KCM Blog. Analytics; Freddie Mac, Primary Mortgage Market Survey; US Census Bureau, American Community Survey; Moody’s Analytics, median household income estimates.

I woke up this morning and enjoyed the Opportunity to watch a bicycle race taking
place half way around the world, in a country that American soldiers helped
save from destruction roughly 70 years ago. I then had the Freedom to go out
for a bike ride of my own, around our beautiful city on paved roads with bike
lanes. As I rode, I reflected on what this day means to me. I have Freedom, Opportunity,
and Privilege, not because I earned these rights, but because I had the good
fortune of being born an American citizen. I owe that good fortune to the men
and women who created the foundation for this great nation and those who have,
and continue to, protect the rights we enjoy. I am very grateful to those who
have given me a Privileged life and the Freedom to pursue my dreams and enjoy
my favorite hobbies. I didn’t earn these rights, but I vow to live my life to
the fullest, give to others, and show my appreciation every day for the benefits
of being a citizen of the United States of America. Thank you for those who do
the same and make this such a wonderful place to live. Happy Independence Day!

I just got back from teaching our “High School to Homeownership” program at Pueblo High School. There is nothing more rewarding than to see the lightbulbs coming on as the students grasp new concepts.

As a member of the Tucson Association of Realtors® Housing Education Committee, I volunteer with several other real estate industry professionals to teach this 4 module program to high school students across Tucson and Pima County.  Today I was teaching Module 1: Budgeting and Savings. This module covers the basics of having a spending plan and how to ensure you have a net gain at the end of each month instead of a net loss. One of the core principals in the spending plan is the 70-20-10 rule. This is also referred to as the “pay yourself first” rule, because you put 20% away for savings and 10% for investing first and then the remaining 70% is available for fixed and flexible expenses. We also teach the students the difference between needs and wants. It is amazing how many of them consider a cell phone a need and more amazing how many of us adults consider a flat screen tv in to be in the same category

Mission accomplished today, next week the kids will tackle the concept of credit and how it can be helpful or harmful depending on how they use it.

Ell Real Estate Team and Tierra Antigua Realty are very involved in the community, especially with education and our community’s youth. If you have students in high school, or know a high school teacher who would like to participate in the Tucson Association of Realtors® – High School to Homeownership program, please email us at: Success@EllTeam.com.

Have a wonderful day!

The 2011 real estate market in Tucson continues to dominate 2010 in terms of the total number of units sold. As a matter of fact, 2011 has been better than 2008, 2009, and 2010 in every month except Apr and May 2010 and Jul and Oct 2009. The median price for the Tucson market as a whole was up a few thousand over September, but down from October 2010. This trend will likely continue until we move the distressed properties through the market. The average sales price was $151,812.

Speaking of distressed properties, of the 1008 properties sold in Pima Count through the Tucson Association of Realtors® MLS in October, 485 properties were REO’s (foreclosures) and 125 were short sales (sold at a price below the loan balance with lender approval).

Okay, enough of my talking, take a look at the pretty pictures:

(click on the graphs for a larger view)

Tucson MLS Number of Sales by Price_Oct 2011

Tucson MLS Total Unit Sales and Sales by Type_Oct 2011

Tucson MLS Median Sales Price_Oct 2011

Ell Real Estate Team provides its clients with information
that really connects them to their community and provides them with
neighborhood awareness. One of our areas of focus is the Catalina Foothills
community. Our clients are drawn to this area of Tucson because of its natural
beauty, exceptional shopping, the finest restaurants and a nationally
recognized school system.

Catalina Foothills is located north of Tucson in Pima
County, situated in the foothills of the Santa Catalina Mountains. Commonly
referred to as the “Foothills”, this is the most affluent community in Tucson
and in the top 20 most affluent communities in America. Some of Tucson’s most
expensive luxury homes and land lots are located in the Foothills and it
maintains the highest median property value.

The modern development of the Catalina Foothills began in
1920. Developer John Murphey began purchasing open range, cattle grazing land
north of of River Road. The largest purchase came in 1928 when he bought a
7,000 acre tract of land from Oracle to Sabino Canyon in a federal land
auction.  His vision for the Catalina
Foothills community was low-density residential development on large lots
designed for maximum privacy. This concept also allowed for preserving existing
desert vegetation, the natural terrain and mountain views. Murphey originally
planned to develop 10 housing subdivisions. He retained a Swiss architect named
Josias Joesler to implement his vision. Joesler designed a number of homes in the
Catalina Foothills neighborhoods and they are now some of the most desired
homes in Tucson. Murphey and Joesler would later go on to design and build St.
Philips in the Hills Episcopal Church at the corner of River Road and Campbell
Ave as well as the first school building in the Catalina Foothills School
District just east of the church.

The Catalina Foothills community continued to expand north
along Oracle Road and east along the Ina Road/Skyline corridor. Catalina
Foothills now stretches from Oracle Road east to Sabino Canyon and River Road
North to the Santa Catalina Mountains. Some of the subdivisions include
Catalina Foothills Estates 1-10, Pima Canyon Estates, Coronado Foothills
Estates, La Paloma, Alta Vista, The Canyons, Canyon View Estates, Catalina
Ridge Estates, Cimarron, Cobblestone, Coronado Foothills, Fairfield,
Finisterra, Flecha Caida, The Foothills, Foothills Clusters, Hacienda Del Sol,
Haciendas Catalina, Las Alturas, Sabino Mountain, Shadow Hills,  Sin Vacas, Skyline Bel Air, Skyline Country
Club, The Summit, Sunrise Territory, and Ventana Canyon CC.

The first resorts, Westward Look and Hacienda Del Sol were converted from existing
residences and schools when tourism increased in the area in the 1930’s and
40’s. Skyline County Club was established in
1963 and around the 1980’s the Canyon Ranch, Westin La Paloma and Loews Ventana Canyon resorts were
completed. Luxury retail space was added in 2004 with the completion of the
upscale outdoor shopping center, La Encantada. Major retailers include Anthropology, Brooks Brothers, Apple Store, Coach, Louis Vuitton, Tiffany and Co., Crate and Barrel, Pottery Barn and AJ’s Fine Foods.

After a full day of shopping, you will undoubtedly work up
an appetite. The Catalina Foothills community has many wonderful restaurants
that range from casual to fine dining. Foothills restaurants include Blanco and North from Fox Restaurant Concepts, Ra Sushi, Acacia, Firebirds, Anthony’s in the Catalinas, Schlomo and Vitos, Tavolino, Vivace, Sullivan’s, PF Changs, Armitage, Janos, J Bar, Ginza Sushi, Gavi, and The Abby.

As the area has grown, most of the neighborhoods
have maintained a low-density, suburban feel, focusing on views of the majestic
Santa Catalina Mountains and spectacular sunrises and sunsets over the Sonoran
Desert. For a current list of available homes, please visit our web site: www.EllTeam.com and
click on the “Foothills Homes” link.

Although September is typically a slower month for total transactions closed, the Tucson Association of Realtors®/MLS statistics have shown an increase of more than 100 total closings over September 2010. Prices will continue to slowly decline until we eliminate the number of short sales and foreclosures on the market. The average sales price dipped by 3% last month, down to a two year low of $148,811. The median price is down $5,000 to a two year low of $115,000.

Two keys to a healthier market are affordability and decreased inventory. Statistics show a
drop of 548 units in just one month, a 7% decrease. That is a 23% reduction
from the previous 24 months’ average.

Tierra Antigua Realty once again experienced a large increase (46%) over last
year’s number of total closed residential transactions.

Jeff Ell
Associate Broker
Tierra Antigua Realty