by MICHAEL BODEEN | May 10, 2015 | Bodeen Team Blog, North Scottsdale News
Seller Patience or Radical Price Surgery – Your Choice
All real estate is local. When observing the trends and data for the Phoenix Metro real estate market, we often use all parts of the metro area (macro) and all types of housing, including single family detached (SFD), condos, mobile homes etc, though SFD is the great majority of all types.
When determining the value of a specific property, we use the “micro” approach where we pull comparable sales from the immediate neighborhood and usually up to a mile away – the same parameters most often used by appraisers.
When determining trends, we are usually safe to use the “macro” approach, because quite often the vast majority of homes fall into the similar trend of the greater. When we start to analyze the more narrow parts of the market however, we throw just about everything out the window.
We can therefore say that overall the Phoenix sales market is improving for sellers. Sales are increasing, market time is decreasing, pending sales have been increasing, and the sales price per SqFt is increasing again.
But all real estate is local. The Northeast Valley sales market in the luxury division (Over $1 Million) is far different than the under $500K market in the rest of the valley. In the NE Valley luxury market (16 zip codes) which includes Scottsdale, Paradise Valley, Carefree, Cave Creek, Fountain Hills and a few Phoenix zips, the market time required to sell a home, with one exception, are all over 300 days, and many of these zip codes require between 680 and 1100 days to sell. The market temperature description that comes to mind is ‘frigid.’
On the other hand, at the lower part of the pricing market, such as under $200,000, the market time for a number of communities is less than one month. These communities are ‘smokin’ hot. Here, sellers need to be careful not to list their homes too cheaply – they could leave money on the table.
But what if you have a pricey luxury home that needs to get sold now, (within 30-60 days) what can you do to sell that home? That’s a great question and unfortunately, there’s no guarantee it can be sold quicker unless you perform radical surgery dealing with the listing price.
In truth, a “radically” reduced price may “appear” like you’re giving away the home when in fact it may end up to be the “Fair Market Value” of the home because the great majority of the other homes for sale are significantly overpriced.
Remember, the market tells us our values. You MUST lead the market to show that your home is one of the neighborhood’s best values. To do that you must talk to your Realtor straight out and say, “Mike, you’re telling me the market time in my community is 600+ days? I don’t want to be listed in 600+ days. What is the price I need to set the house at to sell it within 30 – 60 days???
If you’ve never seen a Realtor GULP before, you will now after asking that question. Then get two other professional opinions asking the same question.
– Mike Bodeen
by MICHAEL BODEEN | Apr 27, 2015 | Bodeen Team Blog
Good News Continues for Landlords – For Renters, not so Good
More reports coming in are further demonstrating a local real estate market that continues to strengthen in a number of facets.
First off, the rental market continues to see strong demand in single family detached (SFD) listings on the market, with the number of active listings dropping further in the past month with but a 27 day supply of available rentals. The average lease listing price is $2077 per month.
The market for condo rentals has loosened somewhat with 57 days of supply, up from last month’s number of 54. The average asking list price for these rentals is now $1654 per month. Landlords are continuing to enjoy this rental market for sure.
As demand continues for rentals, this will undoubtedly push renters into the home buying market which will then continue to put upward pressure on sales prices – an interesting scenario that could have both rental and home prices increase. If this happens, it will also help the building industry, as our need for housing supply in the Valley. (See next story)
Substantial Building Permit Increase
Building permit numbers just released by the census bureau for March show that Central Arizona’s building permits recorded their highest level since 2007 with 1438 permits issued in Maricopa and Pinal counties.. This is an increase of 43% over last month!
Northeast and Southeast Valley Improves Slightly For Home Buyers… West Side Not so Much
New listings have started to arrive faster than they did last year and are up 2.1% for the quarter to date. They are up 5.4% quarter to date compared with 2013. Because we are at the height of the buying season, the additional supply is not increasing the total number of active listings. However they are not declining as they were in February and March and this will moderate the market in some areas. Unfortunately for both sellers and buyers the new supply tends to be arriving fastest in the areas that need it least. The West Valley remains very short of supply while the Northeast and many parts of the Southeast are starting to look a little better from a buyer’s perspective.
Thank you Michael Orr and ASU (Cromford Report) for the statistical data on all of the above reports
by MICHAEL BODEEN | Apr 20, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Selling a Home
Although not great news for Phoenician buyers, sellers and prospective sellers of single family homes across the Valley can start their happy dance. For the monthly period ending April 15th, the Valley’s prices have moved up 2.1(% since March 15th. The new average sales price per SqFt is 133.49 averaged for all areas and types of housing across the MLS database, which is what we refer to as “the Valley.” Last month it measured $130.70. This is on top of a 1% increase from mid-February to mid-March.
Other indicators are also falling into line to bolster the continued strengthening of what might soon be a very active Seller’s market:
Current Listings: 22,574 One Month Ago: 22,934 (1% Drop)
Pending Listings: 8375 “ 8,048 (4% Increase)
Sales Per Month: 8368 “ 6655 (26% Increase)
Avg Market Time: 88 Days “ 95 Days (7% Drop)
Pending Sales PSF: $138* “ $134 (3% Increase)
Months of Supply: 3.3 “ 4.2 (21% Drop)
*PSF = Price Per SqFt
Based on a number of stats, including the Pending Sales price per SqFt, we can, with relative certainty see that the May report will have another bounce in values. Aside from the obvious negative buyer ramifications of rising values, further property increases will continue to release more homeowners to be able to sell who have still been underwater (home value less than mortgage debt).
by MICHAEL BODEEN | Apr 13, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Relocation, Selling a Home
Besides some recent evidence that Millennial buyers are moving off the buying sidelines onto the real estate playing field, another block of mostly idled buyers, known as MUBs, (Move-Up-Buyers) may now be suiting up to play as well. If so, our market will continue to heat up – even more.
MUBs will be a large number of new buyers that will fill in the buying blanks of higher price ranges above those of the millennials who would typically be buying in the more affordable lower price ranges.
MUBs have been mostly inactive due to a foreclosure or short sale or not having enough equity in their home to close the sale without having to write a check. A rising market and improved credit are enabling this new freedom. As mentioned in past blogs these previous homeowners get released from the “penalty box” starting this year and will continue for an additional 2-3 years following 2015.
Importantly also is the current willingness of sellers to accept offers from buyers “contingent” on the sale of their existing home. You can thank a healthy and normalized market for that.
How do we know this is happening? Take a look at Michael Orr’s (ASU) recent Cromford Report chart comparing normal non-distressed sales under contract today (April 13th) compared with the same date last year in 2014. We can see where demand is highest:
| Price Range |
Under Contract |
Annual Growth |
| Under $100K |
587 |
-6% |
| $100K-$150K |
1771 |
+5% |
| $150K-$200K |
2440 |
+33% |
| $200K-$300K |
2940 |
+29% |
| $300K-$400K |
1389 |
+41% |
| $400K-$500K |
660 |
+35% |
| $500K-$600K |
329 |
+44% |
| $500K-$800K |
287 |
+14% |
| $800K-$1M |
118 |
+10% |
| $1M-$1.5M |
122 |
+7% |
| $1.5M-$2M |
60 |
+7% |
| $2M-$3M |
33 |
-23% |
| Over $3M |
32 |
+115% |
|
Interesting enough the lower ranges are down, but this is due to lack of inventory. Under contract homes from $150,000 to $600,000 pricing have enormously increased. The $300,000 to $600,000 (move up range) and even the $600,000 to $1,000,000 range all are experiencing double digit increases. And the market with the largest increase? Amazingly it’s over $3 Million.
For sellers, the good news continues. For buyers, the prices you see today, will be soon changing upwards. And if that happens, you’ll have the MUB’s to thank – or curse.
by MICHAEL BODEEN | Apr 6, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Selling a Home
Son and business partner, Jonathan got his first live taste on the state of the buyer’s market out there making an offer on he and Sarah’s first home. He is one of those millennials that will practice what we’ve been preaching which is to get off the sidelines and start looking. You’ll have to tune in later to find the outcome, but suffice to say, the house they made an offer on within two days had two other offers on it. He’s learning first-hand about multiple offers and buying strategy. Oh yea, and home buying emotions.
…regular home buyers are leading the surge rather than investors. This may yet change, but currently it’s a stronger and safer market.
Considering what’s happening in the market-place, it’s no surprise. As we’ve been suggesting for several months and likewise advocating for buyers longer than that, buyer’s need to take action if they want in on the current bottom of the market, for it is moving forward and upward.
Consider These Market Stats:
- Active Listings: 19,835 versus 23,096 last year – down 14.1% – and down 6.0% from 21,103 last month
- Under Contract Listings: 10,039 versus 8,173 last year – up 22.8% – and up 16.4% from 8,628 last month
- Monthly Sales: 7,174 versus 5,825 last year – up 23.2% – and up 38.8% from 5,170 last month
- Monthly Average Sales Price per Sq. Ft.: $134.78 versus $135.18 last year – down 0.3% – but up 0.6% from $134.04 last month (Prospective Buyers, memorize this number)
- Monthly Median Sales Price: $207,000 versus $198,050 last year – up 4.5% – and up 2.0% from $203,000 last month (Prospective Buyers, memorize this number). (Thanks to Michael Orr of ASU and the Cromford Report for these timely numbers)
You’ll note our highlighted instruction above for buyers to memorize the Monthly Average Sales Price per square foot and Monthly Median Sales Price. I think these numbers will be a new price appreciation benchmark, as they will begin to rise considerably shortly due to increasing sales, (demand) and further supply decrease. Another Caveat Emptor (Buyer Beware).
What’s so healthy about this market versus our frenetic market in 2005, is that right now, regular home buyers are leading the surge rather than investors. This may yet change, but currently it’s a stronger and safer market. Amen to that!
Oh and by the way buyers, the standard 30 year fixed rate mortgage, has just dropped to a two year low at 3.71%.
