REO PROPERTY UPDATE

Active Listings Distressed (% of total) REO Only (% of Distressed)

Valley Wide- 32,852 12,311 or 37% 4,564 or 37%

Scottsdale- 4,606 955 or 21% 270 or 29%

Paradise Valley- 562 61 or 11% 12 or 20%

We are seeing a dwindling of inventory, and a varying way of how the Lenders/Servicers and Banks are now distributing the property. The reality is, even if 25,000 REO homes below 250K came on the market next week, we would have that inventory absorbed in the next 90 days. We are seeing multiple offers on every decently priced REO property and we are seeing buyers become frustrated, as they are willing, have cash offers and made offers above or at asking price and still can’t get a home. What we need is transparency, this issue CANNOT be solved by Banks or Government working in isolation, but rather Banks and Government in partnership with the community and citizens to make sure we can indeed solve the issues of the increasing delinquencies.

Steve de Laveaga
SVP Sales and Marketing FNT Maricopa
Office Ph. 480-214-4500
Fax: 480-214-1743
email: steve.delaveaga@fnf.com
www.fidelityphoenix.com

Good news on the horizon!

The press has finally run out of bad news to report!

Inventory still at an all time low – multiple offers on properties which our raising values creating neighborhood stabilization.

Read in good health!

Noted Melissa Shapiro, VP of Sales with Fidelity National Title, melissa.shapiro@fnf.com

Phoenix-area Home Prices Have “Reached a Turning Point”ASU Study:

Estimates Show Third Month of Slowing Declines

TEMPE, Ariz. (June 15, 2009) — Phoenix-area homeowners can take some comfort from a new Arizona State University study that indicates the Valley housing market is finally starting to turn around.

The Arizona State University-Repeat Sales Index (ASU-RSI) measures changes in average Phoenix-area home prices from year to year. The latest report shows a record 37-percent drop in the index from March 2008 to March 2009. However, that’s stagnant from the same 37-percent fall noted from February 2008 to February 2009. It’s also followed by preliminary estimates of a lesser 35-percent drop for April 2008 to April 2009, and a 33-percent dip from May 2008 to May 2009.

“If they hold up, the April and May figures would be the first evidence that the housing market has reached a turning point,” says Karl Guntermann, the Fred E. Taylor Professor of Real Estate at the W. P. Carey School of Business at Arizona State University, who calculates the ASU-RSI with research associate Adam Nowak. “This indicates the rate of decline is slowing, and even though actual home prices continue to drop, they’re falling by much smaller amounts than they typically have during the past 18 months.”

The index has now declined for 25 months in a row, the longest drop in Valley history. From March 2008 to March 2009, Glendale experienced the worst fall of any local city at 40 percent. Tempe saw the mildest decline in the index at 18 percent.

Preliminary estimates show the median Phoenix-area home price at $115,000 in May. That would put prices back at the same level as October 1998.

“The large number of foreclosed properties being sold at distressed price levels suggests that the median price is unlikely to increase significantly in the near future,” says Guntermann, who points out the positive, that this makes homes in the area more affordable.

The ASU-RSI is based on repeat sales, the most reliable way to estimate price changes in the housing market. Repeat sales compare the prices of a single house against itself at different points in time, instead of comparing different homes with different quality factors.

The ASU-RSI is produced through the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.

The current report and archived reports are available at the Division of Real Estate – Repeat Sales Reports. Further ASU-RSI analysis is available at http://knowledge.wpcarey.asu.edu.

Source:W. P. CAREY SCHOOL OF BUSINESSThe W. P. Carey School of Business at Arizona State University is one of the top-ranked and largest business schools in the United States. The school is internationally regarded for its research productivity and its distinguished faculty members, including a Nobel Prize winner. Students come from 75 countries and include more than 60 National Merit Scholars. For more information please visit wpcarey.asu.edu andhttp://knowledge.wpcarey.asu.edu/

Distressed Properties...A Quick Note:

As you can see, we continue to have over 70% of the properties that close in Distress, the interesting thing about this months numbers is that Short Sales have seen a huge increase, in closings, which means the banks are getting closer to understanding this problem needs to be solved upstream.

I am certain you will see the short sale closings increase, as well as the Homes being sold at the Courthouse steps through Drop Bid, as again, solving this problem upstream will help keep prices, either stable or increasing slightly, as it will limit the large amount of Inventory flooding the market.

· Sold – 9,313
· Short Sale – 1,055
· REO – 5,828
· Around 70% of all properties in the MLS from May 2009 were distressed properties.

Note Provided By:

Steve de Laveaga, VP of Sales and Marketing

Fidelity National Title, Maricopa and Pinal Counties

60 E. Rio Salado Parkway, 11th Floor

Tempe, AZ 85281

480-214-4500

Banks Are Making Headway

The reality is we do have more challenge to go through, we do have more property that will be returned to our Banks here and more write offs will occur. The good news is, there are investors out there purchasing property, homes, land, our transactions are WAY up over the first quarter of 09 as compared to 08. The Banks that get in front of this, that get a strong property distribution partner, either through a qualified Realtor base or Asset Management firm, will be able to get to the bottom and through the bad news, and start to move the needle north again faster. The longer Financial institutions wait, or don’t react to the market, the longer the challenge and pain will be.

For More Information On Banks Making Headway Read Today's AZ Central Article: http://www.azcentral.com/arizonarepublic/business/articles/2009/05/28/20090528biz-AZBanking0528.html

Steve de Laveaga
SVP Sales and Marketing FNT Maricopa
www.fntarizona.com

Networking Tips!

• Avoid hard sells or pitches that come across as desperate.
• Be ready with referrals and recommendations to improve credibility.
• Try to build personal rapport and trust.
• Offer mutual benefits.
• Don't expect an immediate sale or employment opportunity from first meetings.
  
• Stay positive and upbeat.
• Recognize the venue and attendees, and determine how best to pitch yourself or your product.

Source: Phoenix Business Journal research, May 15, 2009

How Green is TransactionPoint?

Statistics:

Based on about 27,000 pages per day faxed to TransactionPoint and 255 business days per year, that's 6,885,000 pages or 13,770 reams of paper (68,850 pounds) per year saved if just one user looks at every document without printing it. In the printing world, it is estimated that one ream of paper uses about 6% of a tree. That adds up to 826 trees - a virtual TransactionPoint forest!

There are many estimates of the results of not using paper. Besides the tree itself, the manufacturing process generates greenhouse gases, as do the trucks that move the paper from factory to suppliers and to the end user.

The 'Global Cooling Campaign' estimates that planting one tree compensates for the effect of driving (or flying) 2,000 miles or using 1,000 kilowatt hours of electricity. Based on their figures, 826 trees is the equivalent of not driving 1,652,000 miles or saving 826,000 kilowatt hours of electricity - enough to power 184 homes in San Francisco for an entire year.

Fidelity will soon be launching its Transaction Connect Services utilizing the TransactionPoint system. By utilizing these services along with TransactionPoint you will be saving your time, your files and the planet.

For more information contact info-fntarizona@fnf.com

The Road To Recovery
by Jeff Lucas, Hunt Real Estate ERA

For an accurate assessment, the "health" of Phoenix residential real estate market must be analyzed in price-point "segments".

The data indicates that the residential market at FHA loan levels ($326, 250) and below is moving into balance with active inventories from 3-6 months throughout most of metropolitan Phoenix- a balanced market is 3-5 months inventory. FHA loans, which enable a buyer to buy with as little as 3.5% down payment and allow a seller contribution of up to 6% of purchase price toward buyer's loan and closing costs, are largely responsible for dramatically reducing inventory at the $350,000 price point and below from more than 20 months two years ago to the current 3-5 month levels.

The stringent underwriting requirements of commercial banks for conforming conventional loans, under $417,000., and Jumbo loans, above $417,000., have stymied inventory absorption above FHA loan limits. The result is that inventory of unsold homes increases as the price of homes increases. Economics 101 teaches us that when supply exceeds demand, prices will continue to decline.

Therefore, based on the data below, the Phoenix residential Market will recover from the bottom up. Properly priced homes at the $350,000 level and below have "bottomed out" and are approaching "bottom".

Mid-Market homes priced above $350,000 to $500,000 have substantially higher unsold inventories and likely will continue to experience price declines for the next 18-24 months, unless commercial banks relax underwriting guidelines substantially.

Homes priced from $500,000 and higher into the "luxury market" currently have unsold inventories ranging from 27 months to more than five years. Absent greater mortgage liquidity for "Jumbo" loan programs, the prices for homes priced in these ranges face further substantial declines and the inventory is not likely to move into balance for three or more years.


Price Range of Homes/ Months Inventory Supply
(active inventory divided by monthly sales)
$00-$350,000/ 3.6
$350,001-$500,000 /16.6
$500,001-$750,000/ 27.6
$750,001-$$1,000,000/ 51.4
$1,000,0001 +/ 64.7

Hunt Real Estate ERA
480-603-3310
http://www.huntrealestate.com/