by MICHAEL BODEEN | Jun 22, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
It was bound to happen and now it’s beginning. Millennial buyers are starting to move into the market in earnest. This is good news for our overall market for a number of reasons.
But first, an expert’s statement: Tom Ruff of The Information Market (owned by our MLS) said that FHA financed loans accounted for 32% of all home sales in April. This is a significant rise in the use of these loans. Ruff stated:
“The biggest change in homes financed occurred with FHA loans. In 2014 FHA loans accounted for 18.4% of home loan purchases, in April 2015 this percentage grew to 32%. The percentage of home purchases financed continues to trend higher which translates into an improving housing market.
Obviously we don’t have exact demographics about who these FHA buyers are, but it’s a pretty safe bet that they are the millennials (born from early 1980’s to early 2000’s or Gen X’ers) who need help with down payments, closing costs and qualifying ratios, which is what is attractive about FHA.
The good of this trend for Phoenix Metro is the continued solidification of our local real estate market. With more millennials buying this frees up the lower to mid-price range sellers to get their home sold and to then “move up” the home buying ladder. Move up buyers are another part of our market that we have sorely missed. If the $150K to $300K sellers can now sell, they can “move up” to the $300K to $500K price ranges. And then these sellers can move up or out, or whatever. This is all about a market getting “freed up” to do what it normally does in a healthy economy.
As we’ve mentioned before what’s good for sellers is not so good for buyers. This same lower to moderate price range is getting skimpier on inventory creating price increases, fewer buyer selections, with hyper buying activity.
More evidence? Well, on a personal level, millennial son and partner Jonathan had to offer on three homes before getting the home that he and Sarah just moved into. Jonathan then just sold a home to millennial friends Travis and Autumn who also experienced feverish activity in their home search before finally securing one last week.
All in all, we feel it’s a very healthy market for buyers and sellers and by all appearance it’s getting even stronger.
by MICHAEL BODEEN | Jun 1, 2015 | Bodeen Team Blog
Last week we reported that the current Phoenix Metro Pending sales may indicate a decrease in the average sales price in the next few months – that may still be the case. But this last month registered the highest price per square foot (PSF) since August of 2008 – $130 PSF.
Since the price PSF bottomed out in 2011 at $82 PSF, there have been 42 months of consecutive increases including this last month. The peak of the market was $184 PSF back in November of 2008, so we are still well below what the top of our market reached just under 7 years ago.
Listing Supply Continues Dropping ~ Sales Looking Strong
Supply continues to fall – we have just 20,847 active listings, down another 1,000 from this time last month. Sales are looking strong – 9,319, and this is the first time we have seen a sales number over 9,000 in almost two years – June 30th 2013. Per the MLS, the year to date for all ARMLS sales is 12.5% higher than at the same point in 2014.
Foreclosure Sales Rate Drops Down to Early 2000’s
May’s foreclosures (Deed Transfer after foreclosure sale) are in the books recording 348 during May. This is amazing, and all the more so considering that in March of 2010, we hit a monthly record of 5450 deed foreclosures!
And if you figure in our extreme Phoenix Metro population growth with hundreds of thousands of new homes that were built since the 1990’s, and over a million in population growth, this is an astonishingly low number
By
Mike Bodeen
by MICHAEL BODEEN | May 24, 2015 | Bodeen Team Blog
9.6% of Loans However Remain Underwater
Homeowners with mortgages in Arizona have increasingly been improving their delinquency level which is defined as having a late payment, but not having a Notice of Foreclosure action recorded against it. As you can see from the chart below there has been a continuous downward (positive) trend which has now ranked Arizona being better off than most other states in this category.
- March 2010 = 11.3%
- March 2011 = 8.6%
- March 2012 = 6.1%
- March 2013 = 4.9%
- March 2014 = 3.8%
- March 2015 = 3.3%
Other positive news in our local post-distressed economic climate is that Lender Owned Homes:
- make up 1.9% of current listings vs 4.8% in 2013
- make up 4.9% of Pending Listings vs 12.2% in 2013
- make up 3.6% of monthly sales vs 10.4% in 2013
And Pre-Foreclosure homes (Notice of Pending Foreclosure) versus two years ago have also improved in that:
Pre-Foreclosure homes are now 5.1% of active listings vs 14.9% in 2013
- Pre-Foreclosure homes are now 7.9% of Pending Listings vs 26.2% in 2013
- Pre-Foreclosure homes are now 3.1% of Monthly sales vs 12.4% in 2013
On the not-so-good part of all this is that 9.6% of Arizona homeowners with a mortgage owe more on their home than its value. This number has been continually improving, but is still too high.
As values increase and the economy strengthens, these numbers will continue to drop. Eleven other states are worse off than Arizona with Florida leading the pack at 15.1%.
These statistics have been provided via Michael Orr of the Cromford Report via The Black Knight Financial Services.
– Mike Bodeen
by MICHAEL BODEEN | May 18, 2015 | Bodeen Team Blog
But Do Pending Sales Indicate a Leveling Off?
Sales prices rose again in the past 30 days in our Phoenix Metro communities measuring all areas and types of housing. Many are wondering if this recent rise will be a continuous surge or a momentary blip on the proverbial radar screen. Fair question.
With access to what we believe is the best real estate analytics in the nation via Michael Orr and the ASU School of Real Estate, Arizona is in a mostly enviable position to get a glimpse of what the local real estate future holds, at least in the near term. And as always, we continue to preach that “all real estate is local,” meaning whatever may be happening in the big picture of the Phoenix Metro real estate market may not be true of your neighborhood.
For the l0ng term, the Phoenix Metro real estate area seems to be moving in a positive direction. As Arizona strengthens its core job base away from home construction, which we have in years past relied on to grow, our economy could likewise grow in the health industry, bio sciences and the emerging Silicon Desert.
But here in the short term, for the monthly period ending May 15, the Valley is currently recording a sales price Per Square Foot (PSF) of $136.34 averaged for all areas and types within our MLS. This is 2.2% above the PSF of $133.42 measured April 15 and represents the second month in a row with a significant increase in average pricing.
Distressed Property Sales Continue to Decrease
Another real estate bright spot is that REO (Bank Owned) and short sales continue to decrease their market share, while “normal” or traditional property sales increased. The market share of normal sales increased from 93.1% to 93.5% over the last 30 days. REOs lost market share from 3.8% to 3.5%, the lowest since July 2007. Short sales and pre-foreclosures also lost market share from 3.1% to 2.9%.
Pending Sales Prices Slowed Last Month
On May 15 the pending listings for all areas & types showed an average list PSF of $136.08, 1.3% below the reading for April 15. This could indicate a slowing of price increases. In reviewing the average list price numbers for Pending listings, Michael Orr of ASU / Cromford Report is forecasting another slight sales price drop when those numbers are looked at in mid-June.
As Realtor professionals, like Stock market analysts, we can tend to take a micro view of the importance of short term price increases or decreases, but in the end, the most important thing is not that, but our day to day living enjoyment in our “home” rather than our investment.
What are your thoughts? Shoot us an e-mail to let us know or ask any questions.
See you next week!
– Mike Bodeen
by MICHAEL BODEEN | May 15, 2015 | Mike's "Real State" of the Market, North Scottsdale News
The Phoenix Metro Seller’s market has returned which of course means good news and bad news. We just need to first answer the question, “Are you buying or selling?” And if neither, keep reading anyway because it will help give you a lead-in to a conversation besides “Isn’t it great weather we’re having lately?” Now you can say, “Have you heard how the residential real estate market has been heating up?
How has it been heating up Mike? Since last quarter:
- Active listings are down by 6%
- Under Contract listings are up by 29% and Pending Sales are up by 28%
- Sales have increased 40% (8255 vs 5171)
- Monthly Listing Supply Dropped from 5.5 to 3.1 (39% decrease)
- Pending Price Per Square Ft (PSF) rose from $131 PSF to $137 (5% increase)
- Monthly Sales PSF rose from $131 to $136 (4% in one quarter)
First the good news for owners/sellers:
- Prices are rising hence equity is increasing
- Inventory is shrinking, Market Times are Decreasing
- Underwater homeowners may soon be above water – Choices may emerge
- Refinance options may be back on the table – Interest rates remain low
- Caveat: All Real Estate is local — the Seller’s Market news is not for everyone — yet
Now the bad news for ‘on the fence’ and future buyers:
- With rising prices you will get less house for the money or;
- Paying more for the same type house gets you a higher payment
- With less inventory you will have less choice, with more competition
- Your rents are rising or it may be getting a little too cozy living with family
- Caveat: All Real Estate is local – In some areas it’s still a buyer’s market – for now
Is there good news still for buyers? Absolutely! There are communities that are still in a buyer’s market realm, and even if you’re looking in a hot area you can still do well with a good buyer strategy. Also, mortgage rates are still low. Unfortunately, the window in that vein is closing.
HomeSmart Opens New World Headquarters in Scottsdale
HomeSmart Realty is preparing the opening of its new 66,000 SqFt World Headquarters in Scottsdale within the 101 loop near Princess Drive and Frank Lloyd Wright (pictured below). The recent acquisition by CEO Matt Widdows will become HomeSmart’s new corporate location having just vacated the current location at 32nd St and Camelback. HomeSmart will still have a presence on Camelback, opening up a new office there as well.
The office will be split between the corporate side and the sales agents’ side. Having already been a leader of innovation and technology, we’re excited about having the latest and greatest available for the benefit of our clients. Jonathan, and I will be relocating to the new location when the office remodeling is complete – we hope shortly.
Along with the Camelback location there are 10 other offices in the Valley. One of the great perks of our business is that HomeSmart lets each professional use any office facility in the Valley as if it’s our own 24/7 utilizing a pass card.
