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 9, 2015 | Bodeen Team Blog, Real Estate News
Today’s Jeopardy Answer: February 2011.
Today’s Jeopardy question? When was the last time the Phoenix Metro real estate market was as balanced as it is today?
So, what exactly does a “Balanced Market” mean anyway and what is the Cromford Market Index? It might help for our readers to know. According to the Cromford Market Index (Michael Orr of ASU).
Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.
The Cromford Index is showing “99” (as of 2/6/15), a balanced market. But why doesn’t it feel that way? I think the answer to that question has to do with how we view the market and whether we are looking from the eyes of a buyer or a seller.
Actually, the market is probably as healthy as it’s ever been and positive for both buyers and sellers. For sellers or prospective sellers, the latest data from Michael Orr of the Cromford reports states the following for “normal” sales – not distressed, as in bank owned, pre-foreclosure, or short sale:
- Active Listings – down 5% from 22,872 to 21,750
- UCB (Under Contract) Listings – up 38% from 1,825 to 2,519
- Pending (Also Under contract) Listings – up 14% from 4,404 to 5,036
- Days of Inventory – down from 138 to 132
- Months of Supply – down from 6.1 to 5.6 months
For buyers, the market is still very good, but if you see the above numbers benefitting sellers, we know that the opposite is true also – that we’re seeing a swing away from buyer advantage. According to the Index, we’ve been in a Buyer’s market since December of 2013, but it could easily swing above the line to a Seller’s Market. I believe that trend will continue and our balanced market will head north into Seller positive territory.
At an open house this past Saturday for one of our sellers, Jonathan and I had 14 groups though plus 4 Realtor showings. This resulted in two offers that we’re currently negotiating with the possibility of receiving another offer today. The result of multiple offers usually results in a seller getting the highest price possible for that home, or even above asking price. These sales then become the new “comps” (aka comparable sales) for new listings, which in turn drives prices up.
Our market can change rapidly and judging from what we’re seeing on the street, coupled with these supply numbers, we may not remain hanging in the “balance” for long.
by MICHAEL BODEEN | Feb 2, 2015 | Bodeen Team Blog, North Scottsdale News, Real Estate News
For most of the nation, the holidays ended after New Year’s, but in Arizona, especially the Phoenix Metro communities, the party continued unabated through January, and ended yesterday with a Patriots interception in Super Bowl XL1X with 19 seconds left on the clock. Or did it end in a slugfest? Either way it ended and will go down as one of the great Super Bowls of all time. And in my opinion, it was a week (actually a month) that saw Phoenix and Arizona positively elevated by the glow of Super Bowl publicity.
It’s difficult (at best) to actually gauge all the benefits that will accrue to the Valley and State from the events of this past month. Is golf your thing? Well, not only can you play here in the dead of winter, but the Phoenix Open had some of its cooler temps and light rain Friday and Saturday but it still trumped most all other weather in the U.S. and had Tiger Woods and Phil Mickelson (for Thursday and Friday anyway), and then Sunday’s warmth and sunshine climaxed a great finish, and timed the ending perfectly to switch over to the Super Bowl.
Are cars or horses a great love for you? Well, if so, the month of January would have pleased with the Arabian Horse show and the Barrett Jackson Car auction/event in North Scottsdale. And just as the football season ends, here comes baseball and spring training that will be starting up shortly.
And if you’re living here, whether it be as a snowbird or permanent resident, there are so many incredible great eateries and resorts, arts and sports throughout the valley to enjoy. And our people, including visitors, are a proverbial smorgasbord of niceness. And of course, the beauty of the Sonoran desert is amazing.
Regarding our local housing market, this type of continuous and positive national media coverage serves to reinforce a terrific and high quality place to live. Make no mistake, companies and prospective residents will continue to be checking us out. And as my baby boomer generation continues to age, many will want to age in warmth and recreation. And judging by what I’ve been observing recently with out of town buyers, they are liking what they see – and feel.
Do we have issues? Of course. All places do – welcome to humanity. But more important, welcome to a place that seems to really be learning how to provide folks with a Super lifestyle.
by MICHAEL BODEEN | Jan 26, 2015 | Bodeen Team Blog, Real Estate News
Across Maricopa County, we in the housing industry, including lenders, title agents, builders and we Realtors, have great optimism for 2015. It is still very early in the year, but that hasn’t stopped those of us who pay attention to the market from looking for the smallest of evidences to substantiate our hopes.
One of those small evidences we have notices is an increase in the number of houses currently in escrow compared with this time last year. Theoretically this should represent an increase of demand, which is really the one thing our housing economy lacks right now. This increase is not yet great enough to warrant any amount real celebration but is still worth noting.
If we look at the amount of dollar volume sold in Maricopa County last December compared with December 2013, we see a small decrease. Now December is never a strong month for sales in Arizona, and January is usually worse, so it is possible to make too much of it, but still, it keeps us from breathing easy just yet.
You may know that here in the Valley of the Sun, the high season for Real Estate is really March through July. Already we are seeing that people are coming out of the woodwork to buy and sell. Our listing inventory is low right now, having sold most all our listings, but we have already three or four that should be coming to the market soon. We assume that other Realtors are experiencing the same.
To be fair, it probably will not be until late February or March until we will see substantial signs of 2015 being any better than 2014. Over all 2014 was a flat year, but we’re confident of a better 2015. Until then we’re thankful that we have a market more in balance – more or less.
All data referenced courtesy of CromfordReport.com, in our opinion, the very best source of accurate Real Estate and housing data for Arizona.
