by JONATHAN BODEEN | Jun 15, 2016 | Bodeen Team Blog, North Scottsdale News, Real Estate News
A recent article from Realtor.com, our national trade organization, revealed that Americans love their pets, and especially their dogs, and even more so their dogs in Scottsdale, Arizona. Scottsdale was named one of the top ten (4th place) cities in the country for dog ownership.http://www.realtor.com/news/trends/top-10-cities-for-dog-lovers/
More and more clients these days are asking where the nearest dog park is in the community they’re considering buying into. The neighborhood where I live seems to annually request the HOA to provide a dog park even though there are miles upon miles of already existing grass and walking paths.
According to www.HumaneSociety.org, a 2015-2016 survey reported:
- There are 78,000,000 dogs in the U.S.
- 44% of all homes have at least one dog
- 50% of all pet owners own small dogs
- 66.7% of dog owners consider their dogs to be family members
- $1436 is the average amount spent on veterinary care per year
- 69% of Scottsdale homes have at least one dog
Referring to Scottsdale, the article shared this about the city as it relates to dogs:
- This wealthy suburb of Phoenix has no shortage of retirees who can spend all day with Fido alfresco. The city boasts a long list of restaurants and cafes with extensive outdoor dining for you and your furball, along with 20 bars where dogs can sit alongside your bar stool. (Don’t knock it if you haven’t tried it.)
- There’s also an abundance of pet shops that cater to petite dogs. Check out miniature frilly dresses and collars at Mackie’s Parlour, or Louis Vuitton knockoff dog toys, plush sports car-shaped dog beds, and rhinestone collars at
Oh My Dog. But please don’t go overboard-dogs embarrass easily.
Buyer beware about this! Some communities limit the number and/or size of dogs. That information is found in the CC&R’s (neighborhood rules) and is an important read even if you don’t own pets. Some clients of ours who have three dogs recently sold their home in McCormick Ranch, and purchased a home a little further north in a community that limited the number of pets to two. Our clients spoke in person with the President of the HOA about their three, and they were given approval. That’s good, because that rule could have been the proverbial deal killer.
by MICHAEL BODEEN | Jun 6, 2016 | Bodeen Team Blog, Real Estate News
The current statewide real estate agent numbers are in. And based on the swelling ranks of folks getting into our industry, business must be good! We now total just over 30,000 compared with 28,000+ one year ago. If you or someone you know is considering a real estate career in Arizona, you might have them look at the chart below. But first we need to make some clarifications to the chart.
(Chart Removed for proprietary purposes, original article written for clients only)
At the far right is the average commission based on a 6% commission per agent. It’s actually closer to half that as a 6% commission is split 50/50 with both the buyer’s and seller’s agent’s. So the average commission per agent is more like $23,000. Gross. Now a portion of that fee goes to the company, usually anywhere from 10% to 50%. Let’s assume an average of 25% fees go to the company. This will leave the agent’s share (75%) at $17,250. Gross.
Expenses. Ah yes, remember as a real estate agent no one will pay you a salary. You’re an independent contractor working solely on commissions and are responsible for all your own expenses. The good news is that you’re your own boss. The bad news is that you’re your own boss!
Expenses are, in a word, “expensive.” First there are National, State, and local Realtor association dues (assuming one belongs to a Realtor board), and many of us do. Then there are the MLS dues, which we pay for the privilege of having access to the database of all homes, lots, rentals, etc for sale. These easily total a grand per year, so now the agent’s share is down to just over $16,000.
Then we have marketing expenses including but not limited to listing expenses, photography expenses, printing expenses, errors and omissions insurance (E&O), internet/website expenses, utility (cell phone) expenses, and oh yea, auto expenses, entertainment expenses, ad nauseam.
Taxes. As an independent contractor you pay the full Self Employment tax, which is another 8+% compared to your employee brethren. And you’ll need to pay your taxes quarterly. Long story short you can figure expenses to be about half of your gross income after paying your broker/company. In our example here, let’s err on the generous side so you’ll figure your annual take home pay before taxes to be $8,500.
The number of real estate agents has increased 7% this past year which means that with sales increasing about 4%, this will leave agents with a smaller piece of the income pie.
Anyone want an application?
by MICHAEL BODEEN | May 30, 2016 | Bodeen Team Blog, Real Estate News, Realtors
Is this Good or Bad for the Consumer?
When I arrived on the real estate scene in 1976 in Truckee, California, I was a mere 22 years old. I knew nothing about real estate. While it was technically accurate to call myself a real estate practitioner, I shudder to think of all the folks I “practiced” on in those days.
So when I read these newer studies that show how Realtors are increasing in number and decreasing in age, my gut reaction is to be frightened for an unsuspecting populace. Of course back when I started, it was much harder to find quality training, education and mentorship that encouraged best practices than it is today.
According to the National Association of Realtors (NAR), the median age of a Realtor, as of 2015, is now 53. This is reduced from 57 in 2014 and is the lowest since 1952. This means a lot of younger people are joining the real estate industry.
Our local market is no exception to these statistics. We have been observing large increases in the number of ARMLS members over the past two months. This is the listing service that almost all local agents register with that enables them to hunt for homes and list them publicly as well. Today we topped 36,000 entries in this database. As recently as March 24, we saw fewer than 35,000, which is an increase of 500 agents a month! All of the largest 20 real estate brokerages except (except for one) saw increases in the number of agents as well.
So is this a good thing for Joe Q. Public? Is my gut twisting in knots needlessly? From a base economic standpoint, more laborers within a single industry creates more competition, more choice and, theoretically, lower average costs for the public to employ those agents. So from that perspective alone that can be seen as a gain to the public.
On the other hand, new agents mean inexperience, and in our industry, the knowledge we gain from experience is half our worth. A successful listing agent must also understand marketing, negotiating, and how to price a home correctly to get their clients the highest value for their property. If an agent is representing a buyer they need to know how to read a local market, and to understand the basics of lending so they can guide their client to an honest and fair lender. The 90 hours of classes you must take to become a licensed Realtor in Arizona will not give a person these skills.
My son actually began his career working for a very successful agent in Idaho as a licensed assistant in 2009. He was involved with 50 transactions from start to finish before he ever represented his first client, and I wish more agents would begin their careers this way.
It’s not that you should never work with a newer agent, because many of them are motivated, high energy, and desperate for a payday, which means they will break their back for you. The questions you need to ask are; 1. Does this agent know where to find the right answers when they are unsure of something? 2. Does the agent have a mentor/business partner they can lean on for experience? 3. Is this agent taking steps to educate themselves regularly? 4. Is this agent full time?
Fortunately, with larger companies such as our firm, HomeSmart, excellent training is made available to all agents and that’s a plus. We also have tremendous Broker Support, all of which I wished I had when I started in the biz back in 1976.
My greatest plea to a consumer searching for an agent, is not to just go with the first one you meet, which is what most do. Instead attempt to evaluate their level of experience, industry knowledge, and integrity.
by JONATHAN BODEEN | May 16, 2016 | Bodeen Team Blog, Mike's "Real State" of the Market, Real Estate News
The health of a residential real estate market can be written about in many ways, often depicting(or spinning) the author’s own viewpoint or opinion. Certainly as real estate professionals we’re prone to do this as much as anyone, so it’s best just to let the facts speak for themselves.
Home Prices Running Steady
In 2004, our local Phoenix Metro area began an upward rise in the median sales price that reached a frenetic peak in July of 2006. In January of 2001, the median sales price in the Phoenix Metro area was $128,000. Three years later it had risen to $151,000, a robust increase of 18%, or 6% per year. Then it went up 14% the next year (2005). Then it soared to its peak in July of 2006 at $260,000. I think we all agree that this price rise was NOT HEALTHY. Just as dramatically unhealthy was the market collapse that saw the median sales price drop to $110,000 in October of 2011, a frightening 58% in 5 years with most of that decrease happening in just 18 months during 2008-2009.
Since 2011, prices have been steadily rising. I realize that “steadily” is not very sexy but in fact, it beats the heck out of two up and down market flings that ruined millions across the country and hundreds of thousands in Arizona. Perhaps steadily should be the new sexy. Prices are again rising, as are rental rates, Arizona’s population is increasing again, jobs are being created, and new home construction is heading up. This is evidence (see below) of our states residential real estate health.
Foreclosures Have Virtually Disappeared.
Foreclosures, which saw hundreds of families lose their homes weekly, have swung to an amazing,almost nation leading, basement rate of .05%. Arizona ranks 43 out 51 states (including DC) for non-current loans and 49 out of 51 for homes in foreclosure. Considering that just a few years ago we were leading the nation in foreclosures, this is an amazing turnaround.
Michael Orr (Cromford Report/ASU) details how the Black Knight Financial Service Mortgage Monitor report for March shows a dramatic fall in mortgage loan delinquency over the past 2 months. There is something of a seasonal pattern in these numbers and January to March is the time of year when the delinquency rate tumbles almost every year. However, it is significant that the total delinquency rate for the USA is now at pre-housing crisis levels and the 30-day delinquency rate is the lowest in well over 15 years.
To provide some perspective, these states have the highest rate of foreclosures compared to AZ’s .05%:
- New Jersey 4.3%
- New York 3.7%
- Hawaii 3.5%
- Maine 2.7%
- Florida 2.6%
- New Mexico 2.4%
- Delaware 2.3%
- District of Columbia 2.2%
- Rhode Island 2.2%
- Connecticut 2.1%
New Construction Permits Highest in 9 Years
For the first quarter of 2016 there were 4,436 single family permits in total, up 33% from 3,333 last year and the highest number since 2007, when there were 8,710. Mesa and Chandler are the two cities with the fastest growth in new home construction while Goodyear and Gilbert are decelerating.
The top locations so far in 2016 are:
- Phoenix 656 – up 47% from 445 in Q1 2015
- Mesa 478 – up 76% from 271
- Gilbert 468 – down 1% from 475
- Peoria 374 – up 22% from 307
- Unincorporated Pinal County 358 – up 37% from 261
- Chandler 340 – up 73% from 196
- Buckeye 314 – up 64% from 191
- Queen Creek 239 up 24% from 192
- Scottsdale 212 – up 13% from 187
- Goodyear 200 – down 17% from 242
- Maricopa 200 – up 36% from 147
So without exaggerating, based on these stories anyway, we’d have to say this checkup went pretty well.
by JONATHAN BODEEN | Apr 25, 2016 | Bodeen Team Blog, Real Estate News
Well, now that I’ve turned 62, more senior financial options are presenting themselves to me even besides being able to take Social Security payments, though I won’t just presently. Since this is a real estate column, I’ll discuss one of these options as it relates to your home sweet home; the “Reverse Mortgage.”
Many seniors today own their homes free and clear or very nearly free and clear. Quite a few of them are also living on Social Security alone, or close to it. By leveraging some of their home equity to receive monthly payments, their quality of life could substantially improve. Using their equity in that way however, is also one of the downsides as there could be less inheritance for family members down the line.
Reverse Mortgages have been around since the 80’s and originally they did not have such a great reputation. Nowadays most folk don’t even know they exist. If they knew more about them, they might want to consider checking into the program. It has its advantages. But first,what is a Reverse Mortgage?
A reverse mortgage is a type of home equity loan for homeowners who are 62 or over. It does not require monthly mortgage payments. The loan is repaid after the borrower moves out or dies. It is also known as a home equity conversion mortgage, or HECM. People who can benefit from a reverse mortgage include people that:
- Don’t plan to move.
- Can afford the cost of maintaining their home.
- Want to access the equity in their home to supplement their income or have money available for a rainy day.
To qualify, borrowers have to be at least 62, own their home outright or carry a mortgage small enough to be paid off by the proceeds. There are no income or credit qualifications, although homeowners are responsible for paying the annual taxes, property insurance and maintenance. No loans have to be repaid until the owners move or die, in which case the bank takes its share and anything left goes to the heirs. However, if the owner fails to pay insurance and property taxes, the reverse mortgage is deemed in default and the owner is in danger of foreclosure.
Disclosures and protections are much better than they were back in the 80’s. Like any financial product, it’s a good idea to get wise counsel from an attorney, family member or trusted friend. As always, the best advice often comes from someone who isn’t financially remunerated from their advice.
To learn more about Reverse Mortgages and their benefits and risks, check these links:
http://www.bankrate.com/finance/retirement/basics-of-reverse-mortgages-1.aspx#ixzz46sLog12J
http://portal.hud.gov/hudportal/HUDsrc=/program_offices/housing/sfh/hecm/rmtopten
http://www.aarp.org/money/credit-loans-debt/info-04-2013/are-reverse-mortgages-helpful.html
http://www.consumerfinance.gov/about-us/blog/consumer-advisory-dont-be-misled-by-reverse-mortgage-advertising/
by JONATHAN BODEEN | Apr 18, 2016 | Bodeen Team Blog, Buying a Home, Real Estate News
When my family relocated to the Valley in 1994, it was a hot new-home sales market. North Scottsdale in particular was building incredible communities such as Grayhawk, McDowell Mountain Ranch, Scottsdale Mountain, Scottsdale Ranch ad infinitum. These brand new communities also provided top notch amenities, and certainly qualified as move-in ready at the time.
Fast forward 20 years. The communities are still a huge draw, but the new home newness has worn off. These upscale homeowners have discovered that roofs leak, heating and A/C units fail and need replacement, hot water heaters were probably replaced 2-3 times, and exteriors need attention/painting, again. In short, they are no longer “move-in ready.”
And that’s just the outside.
Inside, that wonderful Corian hard surface countertop is still in great shape, just not what HGTV is serving up in 2016. Slab Granite is still popular, but 10 year old granite counters look like, well, 10 year old granite counters. Quartz (engineered stone) and newer designed slab granite are the new popularity winner. Even the wonderful Travertine tile that was so “in” ten years ago is now showing its age susceptibility. Hardwood (always in), and wood-design tiled floors are the new (old) kids on the block. Here’s a good website to check out: http://homerenovations.about.com/
It’s no accident that flippers are again starting to experience a lot of success in the Phoenix Metro real estate market. They are providing a finished product much in demand, especially with the rise and success of HGTV cable TV programs, such as “Love it or List It,” “Fixer Upper” and “Property Brothers” among others.
“Local sellers are taking quite the hit on price if they’re not updated, and if the updating was ten years ago, that’s ancient, design-wise. Buyers want new and now…”
Local sellers are taking quite the hit on price if they’re not move-in ready, and if the updating was ten years ago, that’s ancient, design-wise. Buyers want new and now, which is a big reason why new home sales are taking off again in the valley. Though many buyers would love to remodel new, very few buyers have the additional cash required to accomplish that expensive feat. In the financing heydays of not that long ago, but before the crash, banks were so happy when you closed on your home they gave you a $50,000 line of credit at closing which you didn’t even have to spend on your home. Hey, new car, vacations, you name it. Spend it. Well, no more.
For someone who has the financial resources, there are very good buying opportunities availing themselves right now, because these outdated but well located homes are not getting decent offers, if any at all. They’re lagging on the market if not priced aggressively. Prices for homes over $500,000 are slipping.
It’s now apparent that we are in a difficult market for homes that are not “move-in ready.” What’s an owner to do if they’re thinking of selling? Here are some options:
1) Price it aggressively
2) Rent it out if you’re relocating
3) Stay, fix it up and enjoy it
4) Stay, don’t fix it up and enjoy it
On the positive flip side, if your home is “move in ready” or fairly close to it, you will do well. Best neighborhood price, shorter market time.
