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.
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 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 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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by MICHAEL BODEEN | Oct 12, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
Barb (one of my team members) called me yesterday as she was going to write an offer for some young clients who found that proverbial “perfect home.” Our football Cardinals had already demolished Detroit earlier in the day, so I was good to go. For my real estate team, I help our agents prepare the contract paperwork. I would prefer it wasn’t on a Sunday, but hey, it’s our job!
The home they wanted to buy had been originally listed at $315,000, and was then reduced in $5000 increments until it hit $299,500. And that’s where Ben and Benita (not their real names) saw the home as the listing info had been automatically e-mailed to them. Now the price had fallen within their buying parameters which was under $300,000.
Barb showed Ben and Benita the home immediately, and they both loved it, and wanted to buy – NOW! In their words, this was the only house they found that they both agreed on the location and home.
There was, as we so often say in our business, some issues. First, we needed to get the PQF (Pre-Qual Form). Very fortunately our lender Sandy who they had been working with answered her phone. She agreed to prepare the PQF and e-mail it to me. Secondly, they were only pre-approved up to $285,000 and this home seemed like a deal at $285K. On top of that, they needed to get an FHA loan as they were just coming out of their three year wait penalty due to a previous foreclosure. To complicate matters, another buyer had submitted an offer earlier that day as well. There would be a competing offer. This deal was no slam dunk!
After discussing with Barb and the buyers, we decided to meet at our office to write the contract. Barb called the seller’s agent to see if an FHA offer of $285k would even fly. She was informed that the other offer had not been accepted and would not be addressed until Monday morning. Further she told Barb the other offer was for $285,000 AND was FHA also. So get this! This house was on the market for 66 days, had three price reductions, and two offers come in on the same day for the same price and both FHA. Wow, we had a fighting chance.
Obviously, multiple buyers/offers benefit the seller. We prepared the buyer that the “normal” thing would have the seller countering the offer on a “multiple counter offer” form and that if the other buyer raises their price, they will probably get the home. And typically, the seller says to the competing buyers, “give me your highest and best deal.” Usually this is how a seller will get their best price. And considering that Barb and the buyers felt this was a strong value at $299,500, it would seem logical that the seller could easily get more than $285K. In other words, we needed to temper our client’s expectations.
But here’s the thing. We usually never really know what’s really going on in the personal life of the seller. I’ve seen unbelievable things in over 35 years in this biz!
We were however limited by their $285K PQF. Well, all we could do was to make some small adjustments within the contract to try and rise above the other offer. So Barb found out that the seller would prefer to close in 60 days which is long by today’s standards, but in this case, this worked out great for the buyer as well. Then, we agreed to use the title company of the listing agents choice, which was also a national reputable company. The buyer also agreed to pay for a home warranty themselves, rather than having the seller pay for it which is customary. And finally we reduced by two days the “Due Diligence” (inspection) period. Ben and Benita signed the contract.
Oh and lastly, we had Benita write a letter directly to the seller letting the seller know how much they loved their home – and their dogs! Hello, personal!
I wasn’t really prepared for Barb’s phone call this am to say that the sellers accepted Ben and Benita’s offer! No multiple counter offer. No raised price. Acceptance. Incredible.
Why did the seller accept their offer? According to the seller’s agent, there were a few things in the offer that worked better for them! According to Benita, she had asked everyone she knew to pray they could get this home. Hmm.
by MICHAEL BODEEN | Jun 22, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News
It was bound to happen and now it’s beginning. Millennial buyers are starting to move into the market in earnest. This is good news for our overall market for a number of reasons.
But first, an expert’s statement: Tom Ruff of The Information Market (owned by our MLS) said that FHA financed loans accounted for 32% of all home sales in April. This is a significant rise in the use of these loans. Ruff stated:
“The biggest change in homes financed occurred with FHA loans. In 2014 FHA loans accounted for 18.4% of home loan purchases, in April 2015 this percentage grew to 32%. The percentage of home purchases financed continues to trend higher which translates into an improving housing market.
Obviously we don’t have exact demographics about who these FHA buyers are, but it’s a pretty safe bet that they are the millennials (born from early 1980’s to early 2000’s or Gen X’ers) who need help with down payments, closing costs and qualifying ratios, which is what is attractive about FHA.
The good of this trend for Phoenix Metro is the continued solidification of our local real estate market. With more millennials buying this frees up the lower to mid-price range sellers to get their home sold and to then “move up” the home buying ladder. Move up buyers are another part of our market that we have sorely missed. If the $150K to $300K sellers can now sell, they can “move up” to the $300K to $500K price ranges. And then these sellers can move up or out, or whatever. This is all about a market getting “freed up” to do what it normally does in a healthy economy.
As we’ve mentioned before what’s good for sellers is not so good for buyers. This same lower to moderate price range is getting skimpier on inventory creating price increases, fewer buyer selections, with hyper buying activity.
More evidence? Well, on a personal level, millennial son and partner Jonathan had to offer on three homes before getting the home that he and Sarah just moved into. Jonathan then just sold a home to millennial friends Travis and Autumn who also experienced feverish activity in their home search before finally securing one last week.
All in all, we feel it’s a very healthy market for buyers and sellers and by all appearance it’s getting even stronger.
