by JONATHAN BODEEN | Mar 7, 2016 | Bodeen Team Blog, Real Estate News
“So how’s the market?” you ask.
“Great!” I respond, but then quickly add; “Wait which market would you like to know about?”
While the Phoenix Metro Market is incredibly nuanced from neighborhood to neighborhood, we can divide the market here into three main categories of price ranges when determining the overall health of the market.
$250,000 and Under:
Amazing! Well, if you are a seller that is. If you are a buyer in the price range… well… I am so, so, so very sorry. Supply was low in march of 2015. It was a seller’s market and buyers were fighting each other for a place at the bargaining table. Now in March 2016, it has escalated even beyond that! The supply has dropped 20% since then, and as a result prices are appreciating at 8% annually!
Now sellers love this, but truthfully, we can’t call this a healthy market. Phoenix Metro needs a fresh supply of homes in this price range to benefit the buyers in that price range, for whom buying a home is essential in building personal financial security. While builders have again become active with a relative gusto in our fair city, they seem religiously intent on building homes that start in the 300k, not helping our buyers on the lower end.
Between $250,000 and $500,000:
This price range we find to be really more a picture of overall health here in the valley. The supply of listings is going up overall, but so the demand as well. We have more listings on the market and more deals being done than this time last year. Sellers have experienced a moderate 2.6% annual appreciate rate as a result of this. Nothing to write home about… and yet still much better than your 401k has done this year 😉
$500,000 and Over:
In the words of a Michael Orr, the man who is responsible for all of this raw data, this market is “…Wallowing in too much supply…” The supply in this price range has increased a whopping 15% since this time last year. Demand is actually up a bit since last year, but unfortunately not enough to counterweight the greater increase in supply. Some of the stats in this price range have been skewed (inadvertently I’m sure) by some analysts to suggest an appreciation here, but truthfully it looks as if we have actually seen a price depreciation of 5%.
The bulk of our market is still healthy when we remember that the 500k+ price range represents only about 8% of the entire Phoenix Metro market.
by JONATHAN BODEEN | Feb 29, 2016 | Bodeen Team Blog, Buying a Home, Real Estate News
February and March seems to be the time of year when the real estate industry of our fair city of Phoenix is at its most active. This is true both for the most amount of listings coming on the market as well as the time when the most buyers are out and about scurrying to find their dream home. But who does this advantage the most, buyers or sellers? Does this mean we are in a buyers’ market or sellers’ market?
Well that can depend. Ultimately whether we find ourselves in a seller’s or buyers’ market seems to vary from year to year rather than from season to season, albeit with minor bumps up and down throughout the year. Most of 2015, for example was a seller’s market overall for much of the valley, where as 2014 leaned much more toward buyers.
Around this time, we usually see a burst of homes going under contract and higher volume of real estate transactions overall. Many would think this would bode worst for buyers with the increase of competition over homes with other buyers. However, if the increase in new listings, which also rise in the spring, outpace the buyer push, well then seller’s do not necessarily gain the advantage.
What about right now though? According to Michael Orr, a locally renowned real estate statistician whose assessments we follow diligently, the Phoenix Metro Area has already hit its peak for new listings arriving on the market in most areas. This is good news for most currently trying to sell, as competition begins to dwindle, while buyers remain out in force.
Not all sellers can say this however, with some of the more upscale areas continuing to outpace buyer demand with increasing supply. Paradise Valley and Scottsdale for example, are both very balanced markets right now, with no decided advantage for buyers or sellers either way. These areas and a few others are trending toward a buyers’ market.
Always remember that we are forced to speak in generalities in these short little updates. Markets vary from different prices ranges, types of homes, areas, and even from neighborhood to neighborhood.
by JONATHAN BODEEN | Feb 29, 2016 | Bodeen Team Blog, Real Estate News
Where Are We Now?
February and March seem to be the time of year when the real estate industry of our fair city is at its most active. This is true both for the most amount of listings coming on the market as well as the time when the most buyers are out and about scurrying to find their dream home. But who does this advantage the most, buyers or sellers?
Well that can depend. Ultimately whether we find ourselves in a buyers’ or sellers’ market seems to vary from year to year rather than from season to season, albeit with minor bumps up and down throughout the year. Most of 2015, for example was a seller’s market overall for much of the valley, where as 2014 leaned much more toward buyers.
Around this time, we usually see a burst of homes going under contract and higher volume of real estate transactions overall. Many would think this would bode worst for buyers with the increase of competition over homes with other buyers. However, if the increase in new listings, which also rise in the spring, outpace the buyer push, then seller’s do not necessarily gain the advantage.
What about right now though? According to Michael Orr, a locally renowned real estate statistician whose assessments we follow diligently, the Phoenix Metro Area has already hit its peak for new listings arriving on the market in most areas. This is good news for most currently trying to sell, as competition begins to dwindle, while buyers remain out in force.
Not all sellers can say this however, with some of the more up-scale areas continuing to outpace buyer demand with increasing supply. Paradise Valley and Scottsdale for example, are both very balanced markets right now, with no decided advantage for buyers or sellers either way. These areas and a few others are trending toward a buyer’s market.
Always remember that we are forced to speak in generalities in these short little updates. Markets vary from different prices ranges, types of homes, areas, and even from neighborhood to neighborhood.
by MICHAEL BODEEN | Feb 22, 2016 | Bodeen Team Blog, Real Estate News
FHA loans have long been an important and fundamental part of providing American home buying consumers with affordable mortgages using down payments as low as 3.5%. Other benefits with the FHA loan include more relaxed loan qualifying standards than conventional mortgages.
The Wall Street Journal (WSJ) had a front page article today about a new loan product that is just being introduced by Bank of America that looks like quite an improvement over FHA loans – if you qualify. The required down payment amount is slightly less (3%) but the big difference is there’s NO PRIVATE MORTGAGE INSURANCE (PMI) which can add $100 or more per month to the mortgage.
According to the article many big banks have pulled away from FHA insured lending over the past few years “citing the risk of being hit with penalties for minor errors…the banks retreat from the loan program has made it more difficult for low income borrowers to get home loans.”
B of A is able to avoid the PMI by partnering with a Durham, NC non-profit called Self-Help Ventures Fund (https://www.self-help.org) which will step into a loan default situation to help decrease losses to Freddie Mac (lender) before Freddie Mac has to take a loss.
To get this loan, borrowers will need a credit score of at least 660, which is higher than FHA’s requirement, and an income that is less than the area’s median. The 660 is higher than FHA’s minimum, but that is part of the overall strategy of the Self-Help organization to assist those folks who are showing responsibility in paying their bills. The article did not cite the maximum loan amount that B of A would make. FHA only loans $271,000 in Maricopa and Pinal counties.
Bottom line? If you’ve got a decent record of paying your bills and your income is less than the county median, this could be a great loan for you. If your credit however has some challenges or your income is higher, the FHA product or other low down conventional loan may be the right one for you. Either way, do it!
Either way, with the record low interest rates we currently have, or this new product, the time is (still) ideal to buy a home.
http://www.wsj.com/articles/bank-of-americas-newest-mortgage-3-down-and-no-fha-1456117203
by JONATHAN BODEEN | Feb 15, 2016 | Bodeen Team Blog, Real Estate News
We’ve told you recently, on more than a few occasions, that rents are rising across the valley. What may be frightening for those still renting, is that this trend does not seem to be going away. This is especially true for homes in the first time home buying range, where, there is actually a shortage across the valley for homes under 250k.
According to Catherine Reagor of the Arizona Republic; “Almost half of Valley renters saw their monthly payments jump by more than 9 percent in 2015.”
We’ve also been telling you for a long time that interests rates will eventually begin to rise, and to get in on the game while they remain depressed. On that count, interest rates have stayed low longer than us, or any of our real estate compatriots could have predicted. In fact, over the weekend, we have actually seen a slight lowering.
The story with interest rates, is that they generally have an inverse relationship with the overall economic health of our country overall. The more skittish investors become, the more they chase low risk investments, which keeps interest rates low. So often, what bodes ill for our economy, actually excites those of us who rejoice at low interest rates.
I do not mean to gloom and doom about our economy. Apparently, according to folks much more versed in such things, it is the geo-political economical situations that have investors more worried, not so much any particular alarms ringing from our side of the ocean.
The moral of the story remains what it has been since 2008-2009; First time home buyers, get in while the waters hot! My wife and I bought our home last May with a run-of-the-mill 3% down FHA loan, and already I know it would cost me $200 more a month to rent the home I live in than the mortgage is.
If you have you have friends or family that have been renting, encourage them to buy! And of course, give them our info while you’re at it 😉
by MICHAEL BODEEN | Dec 15, 2015 | Bodeen Team Blog, Real Estate News
Drones Fight Wars and Sells Homes – Take a Look!
We’ve all seen how the American military has been utilizing robotic drones to help fight wars, especially in the Middle East. It has eliminated many Al Qaeda and Isis terrorist enemies without having to jeopardize allied “boots on the ground” which is another issue far too big for this discussion.
Personally and commercially, the use of drones today is controversial! The invasion of privacy is a big deal – it certainly is to me. Awhile back, Karen and I had a drone examining our backyard while we were there. It was, to say the least disconcerting even troubling. I can certainly see why many of these drones have been shot down by angry homeowners.
That being said…
From a real estate marketing standpoint, however, I sure see advantages. Jonathan and I recently experimented with drone marketing on a current listing we have, hiring my friend who had recently spent $4000 purchasing the drone. We felt good about the fee we paid as a marketing investment for this particular home which was on an acre parcel in North Phoenix. The views are terrific and we added the drone shots to go along with an interior video filmed previously.
Rather than describe this, why don’t you enjoy this. We’ve linked both interior and exterior drone shots below. Oh, and by the way, if you know of someone who might like this home, please send the links to them and have them call us. Our asking price is $644,500.
by MICHAEL BODEEN | Dec 7, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
Solid and Balances Market Continues
The good news is that the Phoenix Metro real estate market will surpass the last two years in many important categories including the number of sales, average and median sales prices, numbers of homes under contract and the time it takes to sell a home. The only bad news is that the good news is good news for sellers, not for buyers who find themselves still on the sideline.
Compared to 2013 and 2014, this year is doing well. Balanced is the term we’ve used consistently this past year which benefits both buyers and sellers. Some Examples:
| |
2015 |
2014 |
2013 |
| Active Listings |
19,601 |
23,579 |
22,043 |
| Listings Under Contract |
7,951 |
6,203 |
5,519 |
| Sold Listings |
75,574 |
66,448 |
64,855 |
| Median Sales Price |
$212,900 |
$200,000 |
$190,000 |
| Average Sales Price |
$268,791 |
$259,604 |
$252,052 |
| Days on Market (Sales) |
70 |
80 |
62 |
| Month’s Supply Inventory |
4.4 |
4.9 |
5.0 |
How Much Can You Buy?
Buyers Take Note!
The Phoenix Metro communities remain some of the most affordable in the nation. A recent article by mortgage firm HSH.com indicated Phoenix home buyers who make $43,836 can afford to buy the median priced home here, currently at $213,000. The mortgage payment on that priced home, per the article is $1023 per month.
When one considers the average cost to rent which is $1200 – $1377 per month, home
ownership begins to look pretty good.
Remember, the first place to start home shopping is through an excellent and reputable lender. Buyers will need a PQF (Pre-Qual Form) for us to give to the listing agent as part of the offer. Give us a call and we’ll be happy to recommend one of these professionals.
by MICHAEL BODEEN | Nov 30, 2015 | Bodeen Team Blog, Real Estate News
The Contingency Sale Part 3
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In the two previous installments concerning the Contingency Sale, we concentrated on how and why sellers should now be considering offers on their homes contingent on the buyer first selling their own home. We saw that the contingency sale is not new, but was a common method of selling a home before the market gyrations of the mid 2000’s to just a few years ago. Basically, our local real estate market has now returned to “normal.” And in a normal market, contingency sales are a viable and necessary tool we use to buy and sell homes.
Today we look at the buy side of the contingency sale to see how a buyer can best structure their offer to obtain the best possible response from the seller. After all, it’s no given that a seller will want to accept an offer contingent on the sale of the buyer’s home. Why? Because escrow risks increase as more properties (and buyers and sellers) enter the mix. The contingency deal states that if the buyer’s home doesn’t close for whatever reason, the buyer is not obligated to close on this home. Therefore “due diligence” homework is needful to ascertain the facts (hence, risks) that may surface to derail the deal.
To be able to get the best look from the seller, the buyer should have already found a buyer for their home, they’re in escrow with a pre-approved buyer, and they’re past the due diligence (inspections) phase on their home’s escrow. In other words, they’re just waiting to close without any known roadblocks.
But what if that’s not the case? What can a buyer do if they’ve found the house of their dreams, but their house has not sold yet? To be honest, this is not a strong position for the buyer. A buyer’s agent (on behalf of their client) must be able to convince the seller/seller’s agent why they’re better off taking this deal as opposed to another. First, we need to find out how long the seller’s home has already been on the market. If it’s been on the market for a long time (over 60 days) a seller will be more apt to consider it. Also, what is the buyer offering? I would recommend a full price (or more) offer, and all other terms and conditions to be seller beneficial. Whereas a low-ball offer will most likely be an insult to the seller and cease negotiations.
Another tool a buyer (or seller) can use is the “Contingency Release Clause.” The CRC basically allows the seller to continue to market the property and accept other offers subject to a 72 hour “right to release” the buyer’s contingency to close escrow on their home. The downside of this for the buyer is they may have to forego being able to buy this home if there is no other way to close the deal apart from selling their home. The dirty little secret however is that the seller is required to now list the home as “UCB” which stands for Under Contract, Back-Up Offers only. Most agents will not show these home to their buyers.
There is more that buyers and sellers can do accomplish their buy/sell goals using a CRC. If you or someone you know would like more information about real estate, please give us a call. We’re here to help. 602-689-3100.
Mike Bodeen
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by MICHAEL BODEEN | Nov 24, 2015 | Bodeen Team Blog, Real Estate News
The “total” housing supply of homes for sale in the Phoenix Metro region is well down from last year, which on the surface would seem to be not great news for buyers and good news for sellers. All of that decline, however is in the price ranges below $225,000, as illustrated by the chart below, which is for all areas & types:
Above the $225,000 price range, we now have more supply than at this time last year. Sellers should therefore be careful not to over-estimate their bargaining power if they are priced over $225,000. This is particularly true of price ranges over $1 million where demand has become much weaker since August.
This is encouraging news for buyers looking to purchase above $225,000. There is more supply available now than at this time last year in all the other price ranges. If you’re looking under $225,000 you will find that the selection is increasingly meager the lower your price range is below $225,000.
No matter the price range buyers, make sure that you’re pre-approved for a loan if you need one. The nicest homes no matter the price range are most often contested by other buyers.
by MICHAEL BODEEN | Nov 16, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Selling a Home
2014 was one of the most balanced years in the Phoenix Metro residential real estate market according to Michael Orr’s (ASU) Cromford Index. One year ago the Cromford Index was just above “100” which Mr. Orr has determined to be a “balanced market” between supply and demand.
From that point the index steadily increased in 2015 favoring a seller’s market. The seller’s market that ensued reached an index of 148 during the first week of September just over two months ago. It has now steadily been decreasing and currently resides at 131. Remember, 100 is balanced, so this reversal only reinforces our market’s trend of maintaining balance.
For context, the Cromford index reached an incredible high of 308 back in April of 2005-which was the seller’s market of all seller’s markets. Just two years after that the index plummeted to its lowest point ever to 27 in October of 2007, a rabid buyer’s market. I can tell you that both of those markets were hell on steroids to work in.
In the near term, it looks as if balance will continue to prevail. Interest rates are remaining low, the number of buyers will remain about where it is now, and the supply of homes for sale is slightly increasing. For there to be meaningful change in any given buyer or seller direction will require an abundance of more buyers to send home prices higher, or a significant increase in the number of homes for sale to drive down values for buyers. From our vantage point we don’t see either of those events happening soon.
The major impacts however will be price based. The lowest price ranges (under $300K) will continue to be very strong for sellers. The highest price ranges, especially over $2,000,000 will not be kind to sellers. The moderate price range ($300K to $800K) should continue in, shall we say, a balanced sort of way.
If you or someone you know would benefit from our expertise, by all means have them contact us. We’ll be happy to help. It’s what we do! (602) 689 – 3100
Mike Bodeen
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