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Arizona ‘Boomerang Buyers’ to own again after losing their homes.
Of those who lost their AZ homes in recession, over seventy percent will return to Arizona home ownership within a few years, expert says.
A few years ago, AZ home owners were in the worst financial crisis of their life. They were in foreclosure, had declared bankruptcy and were struggling to find a place to rent in Arizona because of their terrible credit. But this year they are able to buy a medium priced AZ home that’s potentially bigger than the one they lost.
They are “boomerang buyer,” one of several million who are returning to the Arizona market these next few years, real estate experts say, bringing needed muscle to a AZ housing market that seems to be finding its footing. They are people who lost Arizona homes in foreclosures and AZ short sales in the Arizona housing bust who are working to be AZ homeowners again.
Since 2007, more than five million homeowners were estimated to have lost homes to foreclosure or short sale. Seven out of ten will return to ownership within the next few years of their AZ short sale or Arizona foreclosure, estimates consulting services, feasibility analysis, due diligence, and AZ market research.
With the start of the Arizona housing bust now 6-7 years past, this will be the first big year for “Arizona Boomerangers” accounting for over ten percent of AZ home sales, up from last year. They should stay at that level until starting to subside in the next few years, about 8 years after the peak of the Arizona foreclosure crisis, experts project. These research firms estimates the crop of national “boomerang buyers” who lost homes in 2007 through 2012 will exceed 500,000 a year for the next few years.
Already, boomerang buyers are adding up to real numbers in some Arizona “boomerang buyer” markets. In Phoenix, one of the areas hardest hit by foreclosures, 40% of home purchase customers are AZ boomerang buyers, estimates mortgage lenders.
Across the Southwest, almost fourteen percent of new home sales in the last half of last year were to “boomerang buyers” – according to a consulting home builder survey of two hundred builders nationwide.
Some have already purchased Arizona homes again. One owner got his new home loan through the Department of Veterans Affairs, paid no money down and got a 3.74 percent, 30-year fixed-rate loan. Given the 60% drop in Arizona home prices from 2006, the AZ homeowner now pays fifteen hundred a month in mortgage costs versus three thousand for the smaller foreclosed house they lost. While his previous house plunged in value with the housing bust, his new house has risen in value, he says.
Arizona is booming with boomerang buyers.
How can you become an Arizona Boomerang Buyer?
If you repair your credit, you’ll generally face waits of two to seven years to become eligible for AZ home loans after a foreclosure or short sale. An Arizona short sale occurs when AZ lenders allow a home’s sale for less than what’s owed. The FHA wait is three years for either one.
For example: Jackie is an homeowners again. A house she bought in 2006 was lost in foreclosure following a job loss. She just closed on a $148,000 home in Phoenix, three years after their foreclosure. She got a Federal Housing Administration loan at a 3.55 percent interest rate. (FHA borrowers can also have less-than-stellar credit. Her average credit score stood at 717 vs. 767 for conventional-loan borrowers, according to data from mortgage tracker Lender Processing Services.)
During their wait, she rebuilt her credit score to a respectable 700-plus, from below 500, where it sank after their foreclosure. She also paid off a car loan and credit card debt. “I just really buckled down,” Jackie says. She too has seen her new home rise in value. Phoenix prices jumped 23% last year.
Even after the financial wreckage of a short sale or foreclosure, Arizona boomerang buyers say they’re driven to own for the same reasons they bought before. They want their own AZ place. They see it as a good investment.
The rent vs own equation is driving Arizona home ownership. Nationwide, buying a home is now 44% cheaper than renting in 100 leading cities:
• Helping affordability: low interest rates and home prices still off their 2006 peaks. Rents, meanwhile, have risen.
• A lot of these people are just doing the math, reports real estate consultants.
• To rent a smaller home, the Smith family in Phoenix paid $1,000 a month, and that was rising to $1,200. By owning, they pay $950 a month, which includes all costs, except utilities.
Please feel free to contact us and we can provide you with additional “Boomerang Buyer’s” information to guide you through the Home Buying process in AZ. We look forward to hearing from you and working with you soon!
Our best,
Carl Pepper, Realtor
info@MyOwnArizona.com
www.MyOwnArizona.com
Tucson: (520) 822-6575
Phoenix: (480) 382-9191
Featured MLS Listing: 14016 Dove Canyon Pass Marana, AZ 85658
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