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%.
by MICHAEL BODEEN | Mar 30, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Realtors
You’ve done your home selling research. You’ve got a fairly good idea about what your home is worth. You’ve even found a neighborhood you’d love to live in, and the numbers work. But, how do you get from here to there? Your Realtor has told you that not all sellers are willing to take a sales contingency – and by the way, your Realtor is right! So where does that leave you? Homeless? Quickly buying a home that you might not be happy with? Renting between your sale and purchase and having to move twice? Or finding the perfect home and closing within your allotted escrow period, needing only one move.
Here are some tips to help put this puzzle together, as you begin down the Sell/Buy road. Our assumption is that you can’t buy the next home until you sell the current one. And remember the goal should be finding the home you want.
Tip #1: Determine your worst case sell/buy scenario and decide if you can live with that. That worst case scenario may be that you close escrow on your home but you haven’t found the right home to buy so you will need to live in rental/apartment/family for a few months, or longer. That’s a double move, but believe it or not it has strong advantages. If you can swallow the worst case, then list your home and get ready for the ride.
Tip #2: When you’re negotiating your current home sale, try for a longer close. If the buyer wants 30-45 days to close, ask for 60. This can provide you a solid month or thereabouts to find the right home. And get yourself pre-approved with a good lender. This will go a long way in your new home negotiations.
Real World: The chances are way stacked against you that you will find a willing seller who will allow a contingency sale without you having your home in escrow. Even then, they will want to know how well seasoned the escrow is, like have the buyer and seller already negotiated inspection repair requests? Has the home been appraised? Other contingencies? (By the way, the caveat to the willing home seller is family, friends, or some new home builders)
Tip #3: Once your current home is in escrow, and you’re through the inspection process, now you can make an offer contingent on the close of escrow of your home. Most sellers will consider this type of contingency. Your Realtor and lender must be ready to make a strong documented case of your ability to close the next home. In other words, they need to “sell” the seller and seller’s agent.
Tip #4: Be willing to rent or move in with family. Renting, although a pain to have to move twice can put you in a strong negotiation position of not having a contingency. If you can find a month to month or short term lease, or a family member to temporarily live with after you close your current home, this will greatly enhance your chances of getting the right house at the right price. If possible avoid a long term lease.
Real World Example: We just closed on this very situation. A family of four had outgrown their home and were looking for a new one in 85254. When we sat down to go over their options, they mentioned that they were prepared to live with relatives nearby if need be. Well we quickly got their home under contract and through the inspection period. Then, an unbelievable home came on the market for a smoking price and they jumped for it. Because they were ready and gave a strong offer to the seller, the deal went together. They did need to move twice, but because the new home needed carpet and paint they had the luxury of being able to wait a few weeks to move in while it is being done. They couldn’t be happier.
And at the end of the day, getting the right home is the final piece of the puzzle.
by MICHAEL BODEEN | Mar 23, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
If you’re reading current local real estate news reports regarding home sales and price increases of those sales, you’ll see it being lackluster at best. As we’ve been reporting recently however, sales are trending upwards based on Pending Sales, which are the most accurate current sales evaluation we can work with. Appraisers only use closed sales for their evaluations. Some Realtors who are using Cromford Report-like data such as we’re using, have the flexibility of real time analysis.
If we compare pending homes in the Greater Phoenix Metro area, (excluding distressed properties) we’re finding significant sales increases compared to the same period of time last year.
With just a few exceptions, most price ranges are showing strong year to date sales increases with the largest percentage increase being in the Luxury Market $3,000,000 plus category.
When homes are trending well for sellers, they’re trending downward for buyers. Sales prices are starting to rise again. Buyers will be getting less house for the money and that seems to be across the price spectrum.
Interestingly enough, two of the lowest sales price ranges are under $125,000. The reason for that is that these price ranges have much fewer homes for sale this year versus last. (See the Cromford generated chart below)
The highest priced sale this year in the Phoenix Metro area is $8,000,000. There are currently 31 homes listed for sale above this amount, the highest being priced at $32,000,000.
So what’s our takeaway? Same-ole that we’ve been saying for quite a while now. When homes are trending well for sellers, they’re trending downward for buyers. Sales prices are starting to rise again. Buyers will be getting less house for the money and that seems to be across the price spectrum. It looks like buyers are catching on and that’s a good thing!
Check out the Chart below to get a good idea as to our changing market:
| Rank |
Price Range |
Under Contract 3/18/14 |
Under Contract 3/18/15 |
% Change |
| 1 |
$3M and over |
11 |
25 |
127% |
| 2 |
$350K to $400K |
392 |
593 |
51% |
| 3 |
$225K to $250K |
594 |
869 |
46% |
| 4 |
$250K to $275K |
441 |
613 |
39% |
| 5 |
$175K to $200K |
822 |
1,137 |
38% |
| 6 |
$300K to $350K |
537 |
717 |
34% |
| 7 |
$200K to $225K |
594 |
793 |
34% |
| 8 |
$150K to $175K |
890 |
1,184 |
33% |
| 9 |
$275K to $300K |
450 |
589 |
31% |
| 10 |
$600K to $800K |
220 |
285 |
30% |
| 11 |
$400K to $500K |
465 |
601 |
29% |
| 12 |
$500K to $600K |
225 |
283 |
26% |
| 13 |
$125K to $150K |
927 |
1.148 |
24% |
| 14 |
$1M to $1.5M |
109 |
125 |
15% |
| 15 |
Up to $100K |
602 |
620 |
3% |
| 16 |
$100K to $125K |
559 |
567 |
1% |
| 17 |
$2M to $3M |
38 |
38 |
0% |
| 18 |
$1.5M to $2M |
54 |
53 |
-2% |
| 19 |
$800K to $1M |
124 |
115 |
-7% |
Thanks again to Michael Orr (Cromford Report) of the ASU School of Business and Real Estate for permission to provide you, our clients, with this excellent information found nowhere else in such clarity and detail.
by MICHAEL BODEEN | Mar 20, 2015 | Buying a Home, Mike's "Real State" of the Market, Real Estate News, Selling a Home
First things first, we welcome a new team member, Barbara Anderson, to the Bodeen Team and the HomeSmart Elite group. Though new to our group, Barb is not a novice to real estate. She is however getting back into the game after a prolonged absence in the education field. Barb and hubby Bruce just celebrated their 44th wedding anniversary.
Barb joined us yesterday for her first HomeSmart Elite monthly meeting. It was indeed timely as our keynote speaker, Director Michael Orr of ASU’s W.P. Carey School of Business presented the Elite Group with encouraging homeowner data and trends indicating that change is already afoot in our local real estate market. You will be hearing about this starting now in the local news.
The Bodeen Team subscribes to Mr. Orr’s market data which we view in real-time each day. Our subscription grants us permission to reproduce his information to you. I would say that there are few, if any entities in the country that have the amazing statistical data that Orr does. He starts each meeting with the caveat that his background is mathematics, and his passion is real estate trends and numbers.
And I should clarify that the news was positive for homeowners but not so much for buyers who are still on the sidelines, unless they decide to become a homeowner sooner rather than later. That to me was the important take-away from this meeting yesterday.
Michael provided us with a whimsical chart (see below) showing us his “Market Cycles.” As you can see, he believes we are re-entering a period of “Optimism” which last occurred 12 years ago in 2003. This period historically preceded the Three E’s: Enthusiasm, Exhilaration, Euphoria. This is when sales and appreciation happened at dizzying intensity. It was an exciting time, but it wasn’t fun.
Another very interesting chart shows the annual rate for U.S. Household Formation. According to this chart, the number of newly formed households radically spiked in the last quarter of 2014. This, among other issues (see Summary below) could create huge demand.
There are a number of reasons why Orr is so Seller Bullish
- Supply is well below normal (83% of normal)
- Demand is low but growing (95% of normal)
- AZ loan delinquency below normal at 4.5%
- Foreclosures below long term average
- Lending rules starting to loosen
- Entry market heating up
- High end market cooling down
- Economy and jobs continue to improve
- Time to change from relief to optimism
He also didn’t see any slowdown for single family detached rental demand as he points out that we have only a 25 day amount of rental inventory available. And, he adds, is in the higher priced end. The supply for home rentals priced between $900 and $1200 per month is down 50% from a year ago.
So there we have it. In the words first memorialized in song by Bob Dylan, ‘The times they are a changin.’ Hang on.
by MICHAEL BODEEN | Mar 16, 2015 | Bodeen Team Blog, Real Estate News
“Buyers are certainly not in trouble, but they need to keep an eye on supply. If that starts falling early this year, we could see the re-emergence of multiple offer situations.” This is Michael Orr’s and the Cromford Report quote in last month’s Bodeen-Team Newsletter. And adding to that the market appears to be strengthening in favor of sellers on a number of different fronts. Just a few weeks ago, we were reporting that our market had achieved balance. Well, the balance didn’t last long. Consider:
The Cromford Market Index is now at 117.1. This may not mean too much to you, only to say that a balanced market, deemed to be 100, is where we were just weeks ago but is now rising into the sellers’ market realm. For those of you who have not been market followers this past year, that’s okay because the market was asleep right along with you. It could very well be that the alarm has again gone off, but buyers are no longer pressing the snooze button.
The Cromford Supply Index is rising, meaning that the supply of available homes to purchase is decreasing. The Cromford Demand Index which has been at best lackluster this past year is now growing again and headed towards a Seller’s Market as well. This looks like buyers are beginning to re-enter the race.
Good news for Sellers – not so much for Buyers! But hey, we’ve been warning buyers all this past year to get in the game.
In other market evidence, Pending sales back in December totaled an awful 5516 – a low point such as we’ve not seen since January of 2008 – 7 years! However, March’s pending’s are now at 7228, an increase of 31% since December and a 20% rise in just this last month.
The “Months of Supply” index dropped a full month from 5.5 months to 4.5 currently. This is a large drop in a very short time amount of time. Sales increased by 19% this month (6038) compared to last month (5060) and by 9% over this time last year.
by JONATHAN BODEEN | Mar 9, 2015 | Bodeen Team Blog, Buying a Home, North Scottsdale News, Real Estate News
Last week my dad talked about the upward trends in the rental market. Well since then the numbers have been getting even crazier, almost to the point of jaw-dropping! What is especially interesting is the huge demand for traditional single family homes. Now be forewarned, we only can track rentals that are advertised through the MLS, which here in Maricopa County is probably less than half of all the rentals available. The rest are marketed through places like craigslist or rentals.com. Still, we can get a pretty good idea of what’s going on in the rental market by watching the MLS numbers.
This time last year there were 2,760 listings available. Today there are only 1,988. That’s almost a 30% drop in the available supply. On top of that, Rental prices are surging. The average rental price on MLS this time last year was $1,598. Today it is a whopping $1,971! That’s about a 20% increase in value!
Summary: Landlords be feeling good! Tenants… not so much.
What does this mean for homeowners and potential buyers? A lot. With only a 25 day supply of available rentals in the valley, increasing demand for single family homes to rent, and rental prices surging, it’s not difficult to imagine a whole host of would-be-renters drawn toward becoming a buyer. We have already seen an improvement in the residential for sale market in the last month, but we feel even better times may be ahead.
Sellers: The buyer drought seems to be over for now and it may be time for you to get back in the game.
Buyers. Increase in demand and decrease in supply makes for rising prices. Don’t forget that with an improving economy interest rates rise as well. It seems as though the best days of the buyer’s market may be nearing its’ end. You may want to think about making your move before the sellers’ market is in full swing and you have to start competing with other buyers again.
Thank you to Michael Orr and the Cromford Report for all the statistics used here in.
by MICHAEL BODEEN | Mar 2, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
Well, quite honestly it comes as no surprise that the continued strong demand for rentals in our Phoenix Metro area market has been diminishing rental supply and driving up lease prices.
In a recent blurb from Michael Orr and the Cromford Report, he reports that the single family rental supply has dropped to just under 2200 active listings, where we typically see 4000 to 5000 at this time of year.
On top of that, the average rent is now $1922 per month, up from $1773 last month and $1598 one year ago. If my math is correct, that amounts to an 8% rental increase in one month and just over 20% from one year ago. Sure is a good thing we got some cheap gas prices recently.
The condo market is not much better, he reports, as there are currently 974 condo units for rent compared with 1331 last year – a 27% drop in supply. And, the average rental price has risen from $1429 last year to $1575 at this time. This is a 10% increase.
These numbers validate our strong opinion that either one of two things are going to happen with “millennial” housing. Either they will realize that buying a home at 4% mortgage rates, gaining a tax advantage, and not having to worry about the landlord raising the rents, will trump renting. Or, it will drive them back to the folks’ house for permanent living.
Reminds me of a 70’s sitcom series that sounded like, “Welcome Back Squatter!”
by MICHAEL BODEEN | Feb 23, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
Let’s be honest, buying a home for most of us is fun, and enjoyable – most often a terrific experience. But make no mistake, don’t be deceived, buying a home is emotional and buyers need to recognize this or it can have serious repercussions.
Now you noticed that I said that buying a “home’” is emotional, not buying a house or duplex as an investment. These are two totally different animals and we approach them very differently. In an investment scenario, we should be considering everything having to do with the cost and ROI (return on investment). After all, it is a business.
Buying your “home” however is so very different. Yes, we are concerned about price, condition, and location, but a gorgeous remodeled kitchen, or a brand new model home dressed to the nine’s can quickly throw out reason and sensibility. When we’re shopping for OUR home, our personal and happy emoticons are envisioning us playing ball with the kids in the huge and grassy backyard, or entertaining friends in your open concept great room, showing off your HGTV cooking skills with a fine red cabbie happily in hand.
To avoid a buying bummer, I recommend a few things.
- First, and as we’ve preached in this blog before, get pre-approved from a reputable lender and know not just what the bank says you’ll qualify for, but just as important, if not more so, decide if their number is a comfortable fit for you? Sometimes, it’s not, whereas something less is. Then have your Realtor professional plug in those parameters before you start home shopping.
- Secondly, guard your emotions in front of the seller. Preferably the seller is not there when you’re viewing the home, but unfortunately, that’s not always the case. Over-the-top happy emotions may hinder your future negotiations with that seller.
- If at all possible, I recommend not bringing children to see the homes you’re viewing until after you’ve negotiated your deal. Too often, our kids can become a distraction for the parents. I remember to this very hour, the Realtor who showed my folks homes with myself and my younger brother Jim. His name was Dusty Pomquist. I was bored out of my gourd and I’m certain I was not a happy camper for my mom or Mr. Pomquist.
- Don’t take the negotiations personally, and again, check those emotions at the door. Ask your Realtor to prepare a market analysis to verify value. Agree on a negotiation strategy and go for it.
Finally, after all this advice about keeping emotions in check, I must now reverse my counsel for this last part: This is a home. You and perhaps other family members will be living in it for who knows how many years. Your day to day happiness is huge. In the end you do want the home you will enjoy so don’t allow a small percentage of the price or nominal terms to defeat you from getting that home. There may not be another one like it.
by MICHAEL BODEEN | Feb 16, 2015 | Bodeen Team Blog, Real Estate News
Pending Listings and the average sales Price per SqFt (psf) have moved upwards this past week when compared to one year and one month ago. At the street level, we’ve also noticed increased activity including multiple offers and quicker sales. Granted, this is the time of year when sales start to take off which is why we want to look beyond this last month’s increase and look at the same period of time compared to one year ago.
Pending Listings (those listings under contract) currently stand at 6,689 compared to 5,047 one month ago. This is a 33% increase. It is also an increase of 5% from this time last year.
The annual average sales price of $130 psf is now at the highest level since December of 2008 – almost 7 years ago. What was the peak? The peak was $190 psf set back in June 2006 which was $190 psf, almost a third higher than we’re at now. Active listings have increased over last month (24,084 vs 23,620) but are lower than the supply of one year ago (26,555).
Keep in mind that ALL REAL ESTATE IS LOCAL. What we’re showing you today are numbers based on the entire Phoenix Metro area and include all residential housing types, including single family detached, condominiums, and mobile homes. The market where you live or are looking to buy in can be and probably is different; hotter, or slower, richer, or poorer – well you get the point. The value of viewing the overall larger market provides a look at trends and on a large basis is pretty accurate.
When we provide a market analysis for a client for a home they’re buying or selling, we’re essentially performing an appraisal such as a professional appraiser would do, and therefore look at the micro rather than the macro. Ideally, we’re pulling sales in the same community as the subject property, but sometimes have to go outside a community up to a mile away. It depends on the number of good comparable sales we can come up with.
Once again we urge those millennial buyers to consider getting pre-qualified/approved with a reputable local lender and strongly consider getting off the fence. With the possibility of continued home price increases, rent increases, and still way low mortgage rates, it might just make a lot of sense for you to move forward now on finding that home. And if you need professionals with a combined experience level of over 40 years, give Jon or I a call today!
by MICHAEL BODEEN | Feb 15, 2015 | Mike's "Real State" of the Market, Real Estate News
There’re several different ways to interpret sales numbers from January. On the one hand, there seems to be the same trend occurring that we experienced in 2014; consistent, flat balanced. Yet sellers at the low and medium price ranges have some valid reasons to feel hopeful as we head into the prime selling season. Buyers are certainly not in trouble, but they need to keep an eye on supply. If that starts falling early this year, we could see the re-emergence of multiple offer situations.
I actually believe we’ll start to see sales numbers increase this spring. Strong optimism for Phoenix and Arizona (more on that on the next page) felt by many will breed action. I’m hopeful that the Millennials and the “Penalty Box” folks will be getting back in the game. If that happens, we’ll quickly see competitive bidding and price increases, especially in the low to medium range. This is another admonition for any fence sitting buyers out there – move!
Here are the basic MLS numbers for February 1, 2015 relative to February 1, 2014 for the Phoenix Metro area and includes all home types:
- Active Listings: 23,950 versus 25,541 last year – down 6.2% – but up 6.0% from 22,604 last month
- Pending Listings: 5,631 versus 5,723 last year – down 1.6% – but up a whopping 27.7% from 4,410 last month
- Under Contract Listings: 8,776 versus 8,595 last year – up 2.1% – and up 30.5% from 6,724 last month
- Monthly Sales: 4,781 versus 4,862 last year – down 1.7% – and down 26.1% from 6,466 last month – these are closings that began in 2014.
- Monthly Average Sales Price per Sq. Ft. $130.87 versus $125.54 last year – up 4.2% – but down 0.8% from $131.87 last month
- Monthly Median Sales Price: $195,000 versus $183,000 last year – up 6.6% – but down 1.0% from $197,000 last month. (Data thanks from Michael Orr and the Cromford Report)
Also, as we’ve previously reported, mortgage rates hit a 15 month low recently and are now around 3.75% for a 30 year fixed rate. The Feds have also been decreasing their tight mortgage controls including coming up with a 3% conventional down payment loan and reducing FHA mortgage insurance making these loans more affordable.
One final mortgage tip. We know of mortgage money sources for “penalty box” prospective borrowers who may be able to qualify for a loan without waiting for the statutory 3 or 7 year wait period if they’ve had a short sale or foreclosure. Yes, the interest rate is higher but not usurious. It may make sense if you’ve found a great home and you can lock in the price now. Give us a call and we’d be happy to share that info.
