One Important Detail on the 22% FHA Loan Program

avatarthumbnail.jpgGetting my head back out of the stars …

Last Thursday I detailed the Arizona Department of Housing’s zero interest loan program available to those purchasing a foreclosed homes. One detail that I didn’t include … you need to apply for the program before you make an offer on a home. (h/t to Justin McHood for that one.)

You also can purchase with as little as 1% down if you get the remainder from an approved source (read: family – not exclusively, but other assistance programs are very limited in number these days.)

Also, for those locally, our ABC affiliate Channel 15 is planning a story on the so-called “shadow market” – foreclosed homes that are sitting vacant and haven’t been offered for sale. Such things do exist – I’ve seen them myself – but I’m not sure anyone can pin down the extent of the issue. Estimates have varied widely from source to source.

What I’m struggling to get my arms around was one line from the tease running during the British Open – that these homes, and the larger effort of banks not to flood the market, are hurting home values.

Now I may not be the brightest person but I do understand basic supply and demand … high supply and low demand = lower prices; low supply and high demand = higher prices. Right now, supply is comparatively low and demand remains as strong as it has been in a couple of years.

The only way I see values being damaged by this strategy (assuming the banks are doing this on purpose and it’s not coincidence) is if the lenders let go of their collective end of the rope and send the market sprawling.

Then again … I only majored in print journalism, not broadcast. Maybe the economics courses on the other side of the building were different than mine.

[tags]Phoenix real estate[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at