The video is my appearance on Channel 12 News story on September 24, 2009 about the infamous “Buy and Bail.” Surpisingly enough, they cut the most important pieces of what I said. . . .Or, not surprisingly.

What they didn’t show of our 45 minutes of talking were these controversial and critical points:

The “Buy and Bail” is not the problem; it’s a symptom of the problem. A problem that occurred years ago when the market was at its height when the legislators, realtors, lenders and builders didn’t act ethically in their own rights; A negative equity problem that is currently not being addressed by our government.

They’re focused on the monthly payment issue when it’s much more widespread than that. The tiny percentage of people who actually qualify for a loan modification, don’t make up the masses. The primary problem is being overlooked: Negative Equity. This problem is going to perpetuate and ail the housing market for years to come.

Why are people bailing?
3-5 years ago, builders sold new homes to investors while having buyers sign off on documents promising they weren’t an investor. Some of these communities ended up having 50% or more investor population. What does that mean? They did zero upgrades, never lived in the home, and didn’t landscape the back and/or front yard. That sure doesn’t help the value of a property, especially when the investors were the first phase of bailing on properties because they couldn’t find renters and couldn’t afford to keep them.

3-5 years ago, what were the lending guidelines? Face it, there were none. If you could sign your name, you got a loan.

The current system has a gaping hole in it. The government is handing out money right and left to the crooks in corporate America, the unfortunate population that has become victim to the economy, and to the people who over-bought on homes and abused their credit.

But, WAIT! What about the huge percentage of the population that did all the right things? The people who are making good incomes, have high credit scores, saved and put 20% or more cash down on a home, got into a conventional mortgage, spent wisely and did not abuse their credit cards and rack up debt throughout the years, and yet are down hundreds of thousands of dollars in equity? I’ll tell you what. They’re left holding the bill for all the neighbors who have abandoned their homes for whatever reason, and the new people who are buying the same house for hundreds of thousands of dollars under what these people paid. They’re the people being scoffed at and called unethical.

This population of homeowners who put tens of thousands or hundreds of thousands cash down and in upgrades has been accused of being immoral for walking away as if they’re not losing anything. When you look at the history of the housing market over decades, you see that the value increases that we saw a few years ago will never happen again in our lifetime. That’s right, NEVER again will we see a home increase 100% or more in one year. With that factoid in mind, then how will these homeowners recoup $300,000 or more in equity? They won’t. Therefore, it can be a good financial decision to cut your losses short and start over. Are they supposed to feel good that they’re paying on jumbo mortgages when all of their neighbors are paying teensy weensy mortgages for the same house? Just because they can pay, doesn’t mean they should have to.

Everyday, I hear things like, “We didn’t plan on spending this much for a home. The lender told us we could” …… “I knew we couldn’t spend this much, but they gave us the loan!”………. “We had no idea how we would make these payments, we just thought we’d figure it out as we go”……… “I have $20,000 in credit card debt and am leasing a brand new BMW. I can’t afford this house payment!” Many of these people were given a free ride and walked away and looked upon as someone with financial “hardship”. Hey, I have all the sympathy in the world for the people who had true financial devastation hit from something bad like losing a job or divorce, but not because they were spend thrifts.

You know as well as I do that there are masses of people who created their own financial hardship, and they’re being rewarded for it. How is that right?

I’ve said it for the past 2 years and I’ll say it again. The people who are 200% or more down in equity and purchased their homes with good credit, money down and have not abused credit cards NEED a SOLUTION or the Buy and Bail will continue because it just plain makes good financial sense. Do the math. “You’ll ruin your credit” they all cry out. What did good credit get them? A swift kick in the a–.

Why don’t they come up with a solution modeled after the Mortgage Forgiveness Debt Relief Act of 2007 – which was extended to 2012 for a reason! If you bought a primary residence between 2003-2007, you put cash down, you can show income, you have good credit and you’re more than 40% down in equity from the mortgaged amount —- you qualify for a principle reduction of xyz…. Now that makes more sense then letting all these properties foreclose, doesn’t it? Reward the people that DID THE RIGHT THINGS.

** You should always consult your realtor, CPA and a real estate attorney to decide what options you have to make a financial decision about your property. There are tax ramifications to consider. This is in no way intended to give advice or suggest people should walk away from their homes and mortgages. If you make a decision, whatever it is, you’re the one responsible. Don’t try to blame me and this article!

Recently, realtors and industry experts gathered to showcase neighborhoods in central and east Phoenix. It appears that home buying and selling is strong in specific neighborhoods, such as the area between 35th and 40th streets, from Oak St. to McDowell. Homes have consistently been selling for about 97 percent of value.

With gas prices soaring to an all-time high, people are focused on living closer to work.

The foreclosure and mortgage crisis dominate the news. Andrew Waite, author of ‘Where to live in Phoenix’, confirms that 94.6 percent of all mortgages are current. And, with certain neighborhoods still doing well, it’s really not accurate to blanket the entire valley with the same negative stats.

Phoenix, the ‘Valley of the Sun’, has always been very neighborhood-centric. The recent housing market highlights how individual communities within one city have their own lifestyle and characteristics.

In the last Neighborhood Advisory Council meeting in Sonoran Foothills, the Community Manager pointed out how we can be proactive in taking control of our neighborhood. Developers and home builders market new communities using enormous marketing budgets. Once the community is turned over to the homeowners, we can still make an impact.

I guarantee each neighborhood has several resident realtors and mortgage brokers. I, for one, am looking forward to marketing my neighborhood as an attractive place to live with all of our surrounding beauty and amenities! I don’t think it’ll happen right away due to simple geography, but as more businesses are built nearby –the better it will get.

For accurate neighborhood housing stats, contact your neighborhood Realtor, Kelli Grant.

2 Bdrm/2 Bath Condo for Sale at 52nd St/Thomas
810 Sq Ft
$115,000 - PRICED TO SELL!
Centrally located to all areas of the valley.

First Time Home Buyers or Great Investment Property. 2 bedroom -2 bath condo has tenants in place until 6/30/2008. The carpet was replaced in 2006 along with a fresh coat of paint. This unit has updated appliances. The two bedrooms are very large and spacious. Conveniently located next to Scottsdale on 52nd Street between McDowell and Thomas….easy access to entire valley!

Call Kelli Grant to see this excellent property for sale! 602-799-5420

4 Bdrm/3 Bath House for Sale in Rio Verde
2,883 Sq Ft * Built in 2004
$579,000 - PRICED TO SELL!
Rio Verde Dr. (Dynamite)/144th
Visit Property Web Site
Gorgeous mountain views and preserve. Swimming Pool/Spa is a ‘Spool’. Outdoor firepit. Granite counters, travertine, view deck. This beautiful home is surrounded by the stunning natural landscape of the desert that Arizona is known for.

Call Kelli Grant to see this excellent property for sale! 602-799-5420

2 Bdrm/2 Bath Condo for Sale in Salida Del Sol!
1298 Sq Ft * 2002
$239,000 - UNDER MARKET and PRICED TO SELL!
16801 N 94th St. #2044 — 101/Bell Rd

Spectacular mountain views from living room, bedroom and balcony! Desirable Scottsdale Area convenient to shopping, dining, entertainment, night life. Within 5 minutes of the 101 freeway. 2 bedroom split floorplan is perrfect for office or roommate.

Call Kelli Grant to see this excellent property for sale! 602-799-5420

$258,000
4 Bdrm/2 Bath
1676 sq ft
MLS #2932288

Needs TLC. New pool pump. Excellent neighborhood and desirable area. Big lot with swimming pool and big backyard with grapefruit tree. NO longer a diving pool, only 5 ft deep. Good home for an investment, fix up, first time home buyer. NO HOA! Close to all amenities…shopping, dining, golf. Scottsdale Fashion Square within minutes. Freeway within 5 minutes with easy access to Phoenix. Family estate sale.

Gorgeous brick fireplace in living room/great room open to the kitchen

View of Wilshire St from front yard

What is the infamous “Housing Market?”

We keep hearing people talk about the “housing market” as if it’s all the same from Rhode Island to Montana. The term “housing market” is thrown around as if it’s one entity, no matter where “it” is. I don’t think the “housing market” and all of its characteristics are the same from Nantucket to Newport (Nantucket??)

The “market” has all the same differences, complexities and intricacies that humans do. Why? Well, because the housing market consists of an inanimate object that we, as people, control. So, to talk about it from state to state and city to city as if it were all the same, would be like talking about “people” as if we were all the same. How absurd!

Each city and state have their own economies with individual distinctions. Why do I bring this up? We live in a growing city that has had its setbacks in the “market”, however, it’s just not that bad. It’s like if we were to compare the real estate statistics of Queen Creek and North Scottsdale. It would make no sense. Meaningless facts are being spewed all over us like a bad salesman on a car lot would do.

For Example
Arizona was just named BEST GOLF DESTINATION by the International Association of Golf Tour Operators for the North American category. That’s unique to our state! Maricopa County is also one of the fastest growing counties in the nation. At one point, we had surpassed Nevada, so THAT’S unique! I got a phone call from a Canadian investment company asking me to help them find properties to buy. They have a $10M budget and they are buying in 4 markets and Scottsdale-Phoenix is one of the four. I have also heard from several Canadian buyers who want to buy vacation homes in our sunny city because their dollar is so strong, our weather is fantastic and our market has a lot to choose from! I bet they’re not buying in New Jersey (NOT that there’s anything wrong with New Jersey)!

Here’s a local stat for you to consider: if house prices are down by 8% in the past 12 months according to the Case-Shiller index, but up by a net 80.2% between 2002 and 2007, it left homeowners with most of their paper gains intact.

The most forgotten aspect of this beast called the “housing market” is that these houses are our homes. They are shelter for our families, a refuge to come HOME to at the end of a day. A shelter that comes with tax benefits and leveraged appreciation. The home where memories are made with family and friends. Let us not forget that owning a home in this country is quite a privilege.

Remember Norman Rockwell. Hundreds of his paintings centered around the American dream of family and the essence of home ownership. The home wasn’t just an asset to be flipped and bartered. Don’t forget the American dream.

So, the market is that bad, eh! Well, here’s some great news that ensures we keep them visiting here…and moving here!

Arizona has been honored as the best golf destination in all of North America! The International Association of Golf Tour Operators honored Arizona as the Golf Destination of the Year in the North America category.

“The global trade organization for the golf tourism industry comprises more than 1,000 companies in 73 countries, including more than 320 golf tour operators in 45 countries. Arizona averages more than 330 sunny days each year, and the state has more than 300 golf courses, according to the group.”

Let’s face it . . .we are the place to be! We have excellent weather at least 7 mths out of the year (shhhhh), no natural disasters to worry about, no snow to shovel….so it’s really not that bad. We have so many economic indicators that are in our favor for the local housing market to be “aweswome” by 2009. Now, if only we all jumped on that mental bandwagon instead of staying in the doomsday mindset.

Clearly, folks, things could be a heck of a lot worse for us. Turn to one of the good cities in the US of A, New Orleans, and count your blessings and quit complaining. The more you stay in analysis paralysis waiting for some imaginary floor to drop -the more stagnant our market will stay. It’s like trying to time the stock market just right - it’s totally unrealistic.

For those of you who keep waiting, you just might miss the perfect home for your family. This is a great time to invest in a home!

November 20, 2007
By Bernice Ross
Inman News

I am sick and tired of the negative media constantly ranting about how horrible everything is in our business. It’s time for our industry to fight back against these psychic vampires who seek to suck every bit of hope and optimism out of us just to build their circulation.

Newspaper headlines and buzzwords abound, such as: “Two million people will lose their homes in foreclosure in the next two years!” “Subprime Fiasco!” and “Mortgage Meltdown.”

These are the headlines we hear every day, yet where is the positive news about the real estate market? The answer is, buried in statistics on page 15 of section 3 of your newspaper, provided you can find them at all.

Here’s a typical example from USA Today, Oct. 26, 2007, page 1B:

New Home Sales Unexpectedly Rise

New homes sales posted an unexpected increase in September. But analysts were highly skeptical given the credit crunch and predicted further sales declines. The Commerce Department said sales of new homes rose 4.8 percent last month…”

By the way, here’s what they didn’t report. Sales in the West were up 36.6 percent. The media totally discounted these statistics. What about a different headline: “Great News! Real Estate Sales Surge Despite Biggest Credit Crunch in Decades”?

Here’s another example. In Sept. 6, 2007, article entitled, “New Mortgage Foreclosures Set Record,” Martin Crutsinger provided the following summary of a speech given by Doug Duncan, the chief economist for the National Mortgage Bankers Association. Here’s how it was reported:

“The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages. The Mortgage Bankers Association reported Thursday that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent, marking the third consecutive quarter that this figure has set an all-time high.

“The delinquency rate has risen to 5.12 percent … The worsening performance was driven by two factors — heavy losses in the Midwest states of Ohio, Michigan and Indiana, and the collapse of previously booming housing markets in California, Florida, Nevada and Arizona … Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected in part speculators walking away from mortgages they can no longer afford.”

This article ends with the negative media’s favorite theme for scaring their readers and/or listeners: “Two million people will face foreclosure in the next two years.”

Here are the numbers that the negative media did NOT report from Duncan’s speech:

1. Thirty-five percent of the homes in the U.S. do NOT have a mortgage.

2. Some 94.88 percent of the loans ARE performing.

3. The foreclosure problem in this country is really a story about seven states.

4. The biggest foreclosure problems are in Michigan, Ohio and Indiana. These are manufacturing states that had horrible job losses. Since 2001, Michigan has lost 300,000 jobs. These states would probably have had problems no matter what the market was doing.

5. The other four states — California, Florida, Nevada and Arizona — experienced significant overbuilding. Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating.

6. Only 25 percent of all mortgages are subprime, and of these, 75 percent are performing.

7. In the other 43 states, foreclosures have fallen in 2007 from 2006 (data from Michael Clawson, vice president, Central Texas Mortgage).

Furthermore, buyers who are waiting to purchase when the so-called bubble pops in California’s major metropolitan areas are going to be sitting on the sidelines, according to the latest data from a state Realtor group.

According to Leslie Appleton Young, chief economist for the California Association of Realtors, the areas being hardest hit in California are the outlying areas where there has been overbuilding. The resale market in California’s major markets continues to be strong. In fact, the closer you are to a metropolitan area, the better the sales are. In the million-dollar-plus price range, there has been essentially no change from 2006 to 2007.

There’s no question about the fact that there is bad news in some markets. What irks me is that there is also a lot of good news that is either being buried or is not being reported at all.