by MICHAEL BODEEN | Jul 28, 2014 | Bodeen Team Blog, Real Estate News
The Cromford Report provides us with very interesting and timely reports regarding the local sales and rental market – as always. It’s our goal to pass on this information to our clients. Whether you’re a landlord, tenant, prospective buyer, or seller, this news today should be of interest.
One of Michael Orr’s (founder of Cromford) most recent reports deals with the effect that the low supply and high demand for rental housing is currently forcing rent prices up. Overall rates for closed leases, he reports, are currently averaging 74.7 cents per SqFt over the past month. In 2013 for the exact same time of the year, the rental rates were 69.6 cents. This is an annual increase of 7.3%.
Active lease listings, which Orr says are skewed towards expensive homes because they stay active longer than cheaper ones is 86.4 cents. Last year it was 81.2 cents – an annual increase of 6.4%.
We knew that rent price increases were going to start happening considering that many prospective home buyers who are currently renters and who would normally be in the buying mode, are choosing to remain renters. Also, many who are renting are still doing so because they cannot qualify for a home loan due to poor credit from foreclosure, short sales or bankruptcies.
As long as rental supply remains low and demand high, consistent rent increases will continue. So not only will renters pay more, but will have less choice in the amount of inventory. With 30 year mortgage rates in the low 4% range, it makes a lot of sense for some to look at the buying market.
And remember, Jon and I are NACA certified to help you get that amazing low rate (high 3% range), with no down payment, no closing costs, and no mortgage insurance too. Just give us a call at 602-689-3100 to get started.
by MICHAEL BODEEN | Jul 14, 2014 | North Scottsdale News
With few exceptions, the slowdown in the Phoenix Metro residential real estate market is impacting virtually all Valley communities. Today, we’re going to look at the North Scottsdale market to see how it’s fairing.
Currently, Valley sales are down 11% compared to one year ago. North Scottsdale sales are down by 19% while all of Scottsdale is down 14% for the same time period, but the percentages for each North Scottsdale zip code are across the board.
Values are holding their own and no North Scottsdale zip code has decreased in value, though two have registered no gain. The most expensive North Scottsdale neighborhood is 85255 ($280 PSF) followed by 85262 ($253 PSF)
The average sales price change from one year ago ranges from no gain (85259 and 85262) to double digit gains for 85255 and 85258 (11% and 13% respectively). The 85258 zip code community includes McCormick Ranch, Scottsdale Ranch, Gainey Ranch down to Indian Bend. (Basically, Shea Blvd south to Indian Bend and Scottsdale Road east to the 101 and continuing along Shea to 106th St).
by MICHAEL BODEEN | Jul 7, 2014 | Bodeen Team Blog, Real Estate News
You may recall that a recent blog discussed a home we have in escrow in the Desert Hills area of North Phoenix and that the VA (buyer’s lender) wanted a passing water quality test because it’s a private well. Well, (pun intended) we didn’t get the passing grade as this home had elevated arsenic levels. Come to find out that this was not uncommon in the North Phoenix areas serviced by private wells.
We then proceeded to find a company who could install a water purification system (Reverse Osmosis) that would reduce the arsenic to acceptable EPA levels. The problem was compounded when the buyer wanted to have the whole house treated, which could have cost tens of thousands of dollars, effectively killing the deal.
Further frustration ensued for us because no one from the buyer’s end was helping him to be reasonable. We couldn’t talk to the selling agents as this company’s system only allows for other Realtors (that would be me) to talk to the Transaction Manager, not the Realtors. This was a so called “Realtor Efficiency.”
So what did we do? I suggested that I and the Transaction Manager talk to the buyer directly on a conference call. This we did. I recommended that the buyer speak directly with the water company rep that I had spoken with so that the buyer would have confidence that by having one unit under his kitchen sink would provide him with excellent drinking water protection. He took our advice and contacted the rep and the rep was able to convince him that this was indeed the case. There were several companies that had R.O. systems that could likewise solve the problem, but in the end the buyer’s comfort level was with Kinetico’s brand.
So, did the deal finally get done? Well, the short answer is that the deal is ALMOST done, as we close on the 7th of July (sometime today), but the arsenic in the well water issue has been solved to the satisfaction of all parties.
by MICHAEL BODEEN | Jun 30, 2014 | Bodeen Team Blog, Real Estate News
With the sluggish Single Family (SF) market currently in place in the Phoenix Metro area, builders have slowed on SF construction and instead have been focusing on the Multi-Family market.
Michael Orr’s Cromford Report quotes the following:
“Multi-family permits were strong again in May 2014 with a total of 757 units for Maricopa and Pinal Counties. The permit numbers were confined to the 3 cities of Phoenix, Scottsdale and Tempe. The count of 757 is lower than the previous 3 months but the annual average has increased to 6,992 units. This is well up from the 4,792 we saw in May 2013. The “Blue Chip” consensus forecast for multi-family permits is currently 6,172, up from 5,906 three months ago. This is still looking too low and a 2014 total over 7,000 appears increasingly likely.
Phoenix (2,648), Scottsdale (1,933) and Tempe (1,698) are responsible for 6,279 (90%) of the total of 6,992 multi-family units permitted over the last 12 months. Chandler (446) is the only other city with a significant number of permits. All the other cities and county areas contributed less than 4% of the total.
Permits are reflecting a strong swing towards rental units and away from homes to purchase. This is also happening in the rest of the market so is unsurprising. The unknown question is how long this trend will continue.”
We’re seeing another market correction that attempts to fill the vacuum caused by the consequences of our hot rental/slow resale market. Rents will continue to increase, which landlords are thrilled about and renters not so much. This often gets the resale market in gear when people can actually see that home ownership is more cost effective than renting.
On that note, due to the continued sluggish economy, mortgage rates have been dropping again, now down in the low 4% range for the typical 30 year fixed rate product.
by MICHAEL BODEEN | Jun 23, 2014 | Bodeen Team Blog
A large local real estate team brought a buyer to one of my listings recently. The negotiations went well, the parties were very amicable, a deal was struck and escrow opened. The 10 day “Due Diligence” period began. Because the buyer was obtaining a VA loan, and since the property had a private well, the lender (VA) required a water quality test.
No problem, right? Wrong. Big problem! It turns out that the property’s water quality after lab testing had an unacceptably high amount of arsenic, per EPA guidelines.
Now, the good news is that a quality Reverse Osmosis (RO) system will reduce the arsenic levels in the water to more than acceptable limits. So recognizing that the seller had a problem, we needed to determine which company can best provide the solution affordably and quickly. The “we” in this case is “me.” The seller had just gone out to the east coast for two weeks to find and close on a house out there.
Now this is where it gets a little frustrating. The Bodeen Team was instructed by the buyer’s agent’s Transaction Manager (TM) to no longer contact the agent who wrote the contract, that we would need to deal directly with the TM. The other oddity is that we were told to change the MLS reporting for which agent actually sold the house. We put the gal who wrote the contract and negotiated the deal. “Wrong!” said the TM, the agent who gets the credit for selling the property is actually So and So, who’s name you may recognize as they use extensive radio and TV advertising getting their name out there.
Okay, no problem there. That is not uncommon for large Realtor teams.
Now, back to the story. The logical solution to this arsenic issue is to negotiate who fixes the problem. In this case, it’s pretty clear that my seller is on the hook, though not legally, just practically. And he agrees to correct it, within reason. We begin to research the issue which will be saved for a future blog. The short story is that we will need to install an RO system at the kitchen sink to handle the sink area and refrigerator water line and then re-test the water for the lender. Voila, problem solved, right? Wrong again! The buyer, like most people, does not like the word, “arsenic.” (And can you blame him?) And he’s heard all the bad stuff and more about arsenic, including that you can get skin cancer by coming into physical contact with the arsenic laden water. WRONG! Only ingested arsenic can cause a problem, not bodily contact.
And because of all the bad he’s heard, the buyer wants EVERY water outlet covered, or in other words, a whole house system. Under sink RO units that can take out arsenic can be installed for less than $500 up to almost $2000 for the best product on the market, supposedly. Whole house systems can run in the tens of thousands. We were quoted $30,000 for a top of the line unit.
Now, the buyer still wants to buy and the seller still wants to sell, so we need to determine if there is a reasonable middle ground solution.
Here’s the rub. Come to find out that it is the TM who is now negotiating. Whoa, what about the buyer’s agent who showed them the property and wrote the contract? “No, they are officially out of the loop,” said the TM. So the gal who has never met them and did not write the contract is now negotiating. But no one is talking sense to the buyer, trying to help the buyer see what is reasonable.
Did we get the deal done? As of this writing, not yet! Stay tuned!!
