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Fair Housing Rules and Racist Deed Restrictions

September 30, 2009

I was asked a question the other day:

Are real estate restrictions on race legal?

That’s a big NO.

Fair Housing Laws in Tucson

Fair Housing Laws are intended to prohibit discrimination against those looking for housing, and list several protected classes.  In Tucson, that means you can’t discriminate based on someone’s race, color, religion, national origin, sex, familial status, or sexual orientation.  There are exceptions to the rule, but that’s a whole different post.

Legacy – and Racist – Deed Restrictions in Tucson Neighborhoods

Fair Housing laws started in the 1960s.  And unfortunately, when some subdivisions here in Tucson were created prior to that, the creator sometimes included restrictions against people of specific races owning or occupying property in those neighborhoods.  They often say something like:

No part of said property shall be used or occupied in whole or in part by any person of African or Asiatic descent, or by any person not of the White or Caucasian race, except such persons as may be employed thereon as domestic servants by the owners or tenants.

Which is rather ugly.  The person who asked me that question has a Chinese-American husband.  So when they read through the deed restrictions for a house they liked in a nice Central neighborhood, they were horrified.

Couple things – restrictions like that can’t be enforced, given the Fair Housing laws.  Most people don’t even read their deed restrictions, quite honestly.  And I wouldn’t assume that current residents of that neighborhood are in support of that restriction – or are even aware of it.

If you do find something like that in your deed restrictions, you can always try to get them changed.  Usually, restrictions apply to an entire community, so you’ll have to go to all of them and get agreement to change them.  If your neighborhood has an active HOA, that might be the best place to start.

FHA 90 Day Rule and First Time Buyers

September 28, 2009

I found a lovely house for some of my Buyer clients the other day.  It had been listed previously as a short sale and was under contract, but was suddenly withdrawn from the market.  Turns out, the property was foreclosed upon and bought at auction by an investor.

The investor put in new carpet, painted it, cleaned up the yard, installed new appliances, and put it back on the market within about 2 weeks, for only $5k more than it was listed last time.

So now, it’s a great house, in really good condition with some nice fresh upgrades at a really good price.

Except my clients can’t buy it.

Like many first time buyers, they’re using FHA financing to purchase their first home.  FHA financing lets them come in with a smaller down payment, and the credit score requirements are a bit more lenient than conventional financing.  It’s fabulous financing for first-timers who have steady jobs and a little bit of savings, looking to get into that first home.

But FHA says that the owner of the property has to have held it 90 days before any Buyer with FHA financing can buy it.  In fact, the offer itself must be dated on the 91st day or later.  Which takes this house completely out of the running because it sold on the first day it was listed, and I’m pretty sure they got more than the list price for it.

Of course, not every ‘flip’ is a great deal for home buyers, and certainly many are not well renovated, but it’s frustrating to watch a good one go by and not be able to compete.

Giving Away A Bedroom and a Whole Lot of Money

September 23, 2009

I was touring a house a couple months ago, getting a feel for the condition in order to price the house more accurately.  I’d done my research online ahead of time and had a decent range of price in mind, depending on the condition that I found.

Except when I got there, the owner had torn down the wall between the two front bedrooms, making one long bedroom with a closet at one end.

That’s a problem, for several reasons.

First, now I can’t market it as a 3 bedroom home.  More people look for 3 bedroom homes in this area than will even peek at the 2 bedroom homes.  So instantly, we just made a huge cut in the number of potential buyers that would even know the home was for sale.

Second, most buyers are going to want to turn that back into 3 bedrooms.  And from experience, I know that buyers nearly always overestimate the amount of money it will take to complete a repair.  So while it might take $1000 to turn that back into two separate bedrooms, I know that in a buyer’s head, that number usually sits at 2-3x that estimate.  And even fewer buyers want to take on that work anyway.

Both of those things mean that we’ll get less than top dollar for the house.  And in a market where home sellers are already dealing with declining values, it is silly to just give away more money because that separating wall doesn’t exist.

Greek Festival 2009

September 23, 2009

It’s saganaki time!  OPA!

Every September brings the Greek Festival at the St. Demetrios Hellenic Center, over at 1145 E Ft. Lowell.  This year, from September 24th to the 27th, you can enjoy all that is Greek – the food, the beverages, the pastries, the music, the dancing.

As you may have guessed, my favorite is the food. 

Admission is $3, kids under 12 get in free, and active duty military get in free as well.  On Thursday and Sunday, if you bring a can of food for the Community Food Bank, you’ll get a $1 food line coupon – a bargain, to be sure.  Friday and Saturday, there is parking and shuttle service from the Salpointe High School stadium (off of Glenn and Mountain) – I recommend the shuttle, as parking can get crowded closer to the event.

Hours vary by day: Thursday is 5 – 10pm, Friday is 5 – 11 pm, Saturday is 4 – 11pm, and Sunday is noon to 6:30pm.

There’s more information over at www.stdemetriostucson.org.

Go check it out, have some tasty eats, and enjoy the cooler Tucson evenings.  Ought to be a lovely festival this year.

Open Housing

September 21, 2009

I have a buyer client who absolutely LOVES going to open houses.  I can’t blame ‘em.  Open houses are fun to visit.  When else does the general public have an opportunity to randomly wander through other people’s houses, see what they look like inside, how it’s been decorated, what they did with the back yard. 

As a buying strategy though, there are more effective methods.  Trying to find the perfect home by driving around and visiting open houses is like firing randomly into the woods and hoping to hit a chicken. Or other woodland creature. 

Odds are not in your favor. 

Especially when we can search the Tucson MLS and know there are exactly 45 homes that meet your criteria and can go visit all of them together, on our own time, at our leisure, without anyone chasing us around the home.

They’re fabulous for getting to know a neighborhood though, to see examples of homes in the region.

Tucson Distressed Housing Market – Sales by Type and Area

September 17, 2009

I was curious today to know exactly how much of our market was distress sales. So I bring you the extra lovely chart, below:

By area of Tucson, this shows you what percent of sales in that area are short sales, REO properties (foreclosed homes sold on the resale market), and what percent were regular sales. This includes all sales from 8/1/09 to today.

Clearly, the REO market is larger than the short sale market – at least in terms of sales that are actually closing. Regular non-distress sales still are a large portion of the market in some areas – but check out the South. Well over half of the sales in South Tucson are distressed properties of some kind.

Citywide, by the way, that makes our market 10% short sales, 28% foreclosed properties, and 62% regular properties. Now that the Tucson MLS has added a short sale and REO property flag to listings, these numbers ought to be quite a bit easier to track.

Arizona Restaurant Week in Tucson – Sept 19th – 26th

September 14, 2009

Arizona Restaurant Week starts in Tucson this Saturday!

This is the second year for this event, and the first that it has come to Tucson I believe.  There’s about 30 local high-end restaurants who will offer a three course prix-fixe dinner for $29/person (or $58 for two) during the week of September 19th to the 26th. 

The goal of Arizona Restaurant week is to position Arizona as one of the top culinary destinations in the nation, but for those of us that aren’t ‘foodies,’ it seems like a week of very lovely meals at really nice places at a fabulous price.

The list of participating restaurants in Tucson is here, and includes such places as:

• Blanco
• Flemings
• Gold at Westward Look
• Lodge on the Desert
• Kingfisher
• Sullivans
• The Grill at Hacienda del Sol
• Zinburger

and lots more.  Hungry yet?  I am.

At the Tucson Foreclosure Auction

September 11, 2009

I went with a friend to the foreclosure auction the other day.  I’d never been to one before, sort of an odd experience.

The foreclosure auctions in Tucson are held every business day on the court house steps – though they have nothing to do with the courts.  The auctions are actually run by a company out of California.

And I do mean on the steps.  As in outside. Bring water.

So the auctioneer shows up with a bunch of clipboards and contacts all the trustees to get instructions about each property – she has to check with them first to see if the sale should be delayed or if the sale should proceed.  In my estimation, about 95% of the sales that day were either postponed or canceled, for no stated reason.

I wonder how many of those postponed sales are homeowners trying to work out loan modifications and short sales.  A lender can postpone a sale for as long as they want to – if a homeowner is trying to work out their problems, I suspect that’d be a decent reason to postpone the auction.

Each property on the schedule for that day is read off, and the sale either declared postponed or canceled – or that property gets auctioned off right there.  To bid, you have to register for the sale, which you can do the day of the auction.  You need a $10,000 cashier’s check as well, in case you win the auction.  If you win, that check is turned over immediately to the auctioneer and the remainder of the funds are due within 24 hours to the trustee.  Which means you need to overnight another cashier’s check to where ever that trustee is located.  Wiring funds, to my knowledge, is not allowed.

Every so often, people wanting to buy Tucson foreclosures at auction contact me.  What most of those folks don’t realize is that you have to have cash.  Cold hard money.  Not a loan lined up.  And there’s no inspections.  Sure, you can drive by the house, maybe peek in the windows if you’re feeling brave (and like trespassing…).  But buying a home at the foreclosure auction is an as-is, all cash deal.  If you’re interested in that sort of thing, you can hang out at a couple auctions and see it first-hand.

Tucson Market Statistics and Report – August 2009

September 8, 2009

The Quick Numbers:

• Single Family Home Average Sales Price: $220,065
• Single Family Home Median Sales Price: $172,500
• Single Family Home Units Sold: 736
• Single Family Home Months of Inventory: 7.3 months

• Townhouse Average Sales Price: $154,058
• Townhouse Median Sales Price: $130,000
• Townhouse Units Sold: 61
• Townhouse Months of Inventory: 8.8 months

• Condo Average Sales Price: $109,085
• Condo Median Sales Price: $100,000
• Condo Units Sold: 53
• Condo Months of Inventory: 9.0 months

• Citywide Average Sales Price: $208,408
• Citywide Median Sales Price: $165,750
• Citywide Units Sold: 851
• Citywide Months of Inventory: 7.5 months

Some interesting moves in August in the Tucson housing market. 

Generally, real estate activity is down every August in Tucson, and this one was no exception.  Sales were down to 851 units.  Last month, we had 1053 homes sold, so it seems like a huge drop until you realize that was a peak market figure, and 851 houses sold is much more in line with typical sales levels this year in Tucson.

Active listings continue to drop slowly, though with the fewer sales, our months of inventory figure, or absorption rate, was at 7.5 months, citywide, an increase from our summer peak.

Average and median sales prices continue to drop as well, down 4% and 3% from last month, respectively.  Typically, with faster sales over summer, the average and median sales prices in Tucson tend to hold steady just a bit, and then start a decline as sales drop off in the winter months.  This is the pattern over the last few years, and this year we’re starting to see that happen again.  The only thing to counter the trend would be large decrease in inventory, but I don’t see that happening.  Most likely, we’ll slowly drop in sales and prices for the next few months.

The East side of Tucson had an excellent August – the only region in Tucson to record more single family home sales than last month, ending the month with 4.3 months of inventory (for single family homes).  That’s roughly one in 4 homes on the East side selling every month – not too shabby.  The East side also had an increase in average and median sales price from last month, at $194,665 on average and $168,450 median.

And in the interest of full disclosure, the MLS listed one $65 million dollar sale on the West side.  I removed this data point from my calculations here.  That’s either a data entry error or a very unusual sale…

As always, there are extensive charts and statistics and whatnot, broken down by area and type of housing, over at my Tucson market statistics site. The market in this city varies widely from one end to the other, so you can check out what’s going on in your area over at that section of my site.

Data gathered from the Tucson MLS and is deemed reliable but not guaranteed. Figures quoted here include only single family homes, townhomes, and condos in the 9 areas that make up the Greater Tucson Area: NW, N, NE, W, C, E, SW, S, and SE.

Cash for Crappers?

September 4, 2009

I discovered a program for Tucson Water customers the other day that offers rebates for replacing old 3.5 gallon/flush toilets with new high efficiency toilets, in an effort to reduce water usage.  You can get a rebate of half the cost of the new toilet fixture, up to $120/toilet, with a maximum rebate per house of $200.

There’s a list of approved high efficiency replacement toilets here.

Oh, and if you’re doing a big house remodel and swapping out toilets as part of that, then that doesn’t qualify for the rebate either.  And the rebate doesn’t cover installation costs or any "accessories" like a new wax ring.  You can check out answers to frequently asked questions here.

Rules to Qualify:

• The house must be serviced by Tucson Water.
• The toilets being removed must use 3.5 gallons/flush or more, and be manufactured prior to 1991
• The new toilet must be a high efficiency toilet, using 1.3 gallons per flush or less. 

Photo via flickr by janewaterbury.

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