At last glance this Monday morning, the stock market’s DJIA was off 200 points. That’s really good news considering it started the day being negative by 1000 points — something about China’s slowing economy affecting our market. Hmm.
I met Pam (an alias) at a home listing I was holding open about three years ago in North Scottsdale. Pam liked the home but it wasn’t the one for her. She lived in SoCal and for the next few years she made an annual trek to look at patio homes. Each time she came out there would usually be one home that rose to the top of her interest list, but really she wasn’t quite ready to make the move – until now.
On this recent visit, she found the home! It was very close to a community she loved, it was a great floor plan, was a larger lot than others, and it was within her price range. The house had been on the market for almost 5 months, though they had a deal on it before but a poor home inspection sank the escrow. We came in with a lower priced offer, and through a series of counter offers, which took extra time, we agreed verbally on a price.
There are a number of risks in negotiating a home sales transaction that we explain to the buyer as we start to go down this road. With a willing buyer and seller most everything can be negotiated, and most of the time emotions are held in check, but the one thing we can’t control is what sank our deal – and that was another offer. Just before the seller was going to sign our deal another offer came in for more money. The seller accepted the other offer. We lost.
To say that Pam was bummed out was an understatement! After three years, she had finally found the right home and was thrilled she was going to be making this move soon. I explained to Pam that in my almost 40 years’ experience, there were countless times that when something like this happened, that there was a better home right around the corner. Pam, however, wasn’t really too interested in hearing my sermon right then.
To say that Pam was bummed out was an understatement! … She wasn’t really too interested in hearing my sermonette right then.
Over the next ten days, communication had pretty much stopped from her end. Calls and e-mails were not being responded to, and I was suspecting the worse – a lost business/friend relationship due to huge disappointment. Well, it wouldn’t be the first time for sure, but my own disappointment was gnawing on me as well.
I’ll be honest, sometimes I don’t think God’s too interested in my lost business deals, or more importantly, I remind myself, my clients loss. But this time, I asked. “Lord, could you actually make this work out for Pam? Either bring this other house back into the picture or bring her another one?” Yes, my faith wasn’t big enough to ask for a better one.
But guess what? A better one came. I got an e-mail from her last Thursday which simply said, “This is it!!!!!!” with a link to a new MLS listing we had automatically set up for her. It was in her favorite gated community, was located on a private golf course viewing huge pine trees and a pond, had a vaulted floorplan, terrific large patio with sunken spa and built in BBQ. She saw the photos online, saw that it was her first choice neighborhood, saw the mapped location and wanted it. But she was now back in California.
How do I get it she asked? This is where adrenaline takes over. I went over to see the house to make sure that it’s everything it seemed to be online. (Actually it was better). While I was there another agent was previewing. I knew this was going to go fast. The home was very well priced even under-valued. I called the listing agent who told me that she was having lots of action on the home and that a cash buyer was contemplating an offer, but she had nothing at that point. I reported to Pam my findings and she gave me a thumbs up on my recommendations.
Long story short we crafted an offer as best we could considering Pam was not a cash buyer. We came in over full price by $2500. We reduced the term of the inspection period to 7 days. We eliminated the appraisal as a condition of the purchase and we tripled the earnest money deposit. Another came in, also for more than asking price, but it wasn’t cash. Pam’s offer was accepted. The other buyer was bummed.
To say that Pam was ecstatic was an understatement. The same goes for me.
85254 – Zip Line Report
North Scottsdale zip code 85254, known as “The Magical Zip Code,” is showing that listings have increased compared to last summer but modestly. Pending Sales are up 33% over 2014 and likewise over 2013. Home sales have increased 17% and the median sales price increased 9% compared to 2014.
2015 2014 2013
Active Listings: 308 281 186
Pending Listings: 60 45 44
Sales Per Month: 77 66 104
Sales Per Year: 752 719 966
Median Price: $413k $378k $391k
85255 – Zip Line Report
One of the strongest and most popular North Scottsdale zip codes is 85255 and the recent numbers for these communities suggest it’s remaining so. For example North Scottsdale 85255 currently has 72 pending sales compared to 57 last year, an increase of 26%. Sales have likewise increased. The 2015 median sales price increase over last year is among the strongest in Scottsdale at 26%.
2015 2014 2013
Active Listings: 629 509 371
Pending Listings: 72 57 73
Sales Per Month: 86 74 91
Sales Per Year: 901 896 1045
Median Price: $765k $633k $685k
85258 – Zip Line Report
The Ranches and Lakes of Scottsdale which include McCormick Ranch, Scottsdale and Gainey Ranches, Lake Serena, Mountainviewlake, and the Bay Club is one of Scottsdale’s most attractive communities, especially if you like the colors of green and blue. Like North Scottsdale’s 85255 zip communities 2015 is having a strong sales year as well. With Pending home sales up 25% over last year and a sales increase of close to 10%, these special communities have soared in their median price – now at $601,000 compared with $520,000 in 2014 – an increase of 16%.
2015 2014 2013
Active Listings: 175 146 111
Pending Listings: 24 18 23
Sales Per Month: 42 38 36
Sales Per Year: 367 379 413
Median Price: $601K $520k $480k
85259 – Zip Line Report
Though you won’t hear it called this, the 85259 zip code is really “East” Scottsdale as it
2015 2014 2013
Active Listings: 258 230 157
Pending Listings: 36 33 39
Sales Per Month: 53 38 43
Sales Per Year: 426 425 501
Median Price: 663k $595k $530k
85260 – Zip Line Report
Perhaps North Scottsdale’s most central and (next to 85254) it’s most affordable zip code. The median price is pretty much mirroring August of last year, while sales were exactly the same from last year at 48 for the month.
2015 2014 2013
Active Listings: 222 215 145
Pending Listings: 32 33 37
Sales Per Month: 52 48 48
Sales Per Year: 524 481 579
Median Price: $447k $423k $430k
85262 – Zip Line Report
North Scottsdale’s most expensive and one of its nicest community’s, the median price is up slightly from last year. Pending listings are down slightly.
2015 2014 2013
Active Listings: 522 352 308
Pending Listings: 42 35 40
Sales Per Month: 40 32 42
Sales Per Year: 398 420 467
Median Price: $697k $740k $735k
85266 – Zip Line Report
These very popular and upscale communities which are the North of North Scottsdale, and which is home to the newest zip code being added to Scottsdale, has seen appreciation of almost 20% from one year ago. Pending sales and August sales are down slightly from one year ago.
2015 2014 2013
Active Listings: 274 150 121
Pending Listings: 32 18 20
Sales Per Month: 40 21 25
Sales Per Year: 279 268 374
Median Price: $650k $735k $620k
85253 (Paradise Valley) – Zip Line Report
The Valley’s most upscale, prestigious, and expensive town currently has 274 homes for sales compared to 150 one year ago. That’s interesting because usually when you get that much of an inventory increase, prices tend to go down. Not so in this case. Pending sales are way up (32 vs 18).
The median sales price is currently $1,450,000 – up a whopping 17% from one year ago.
2015 2014 2013
Active Listings: 423 301 258
Pending Listings: 38 19 24
Sales Per Month: 37 22 30
Sales Per Year: 338 352 386
Median Price: $1,450k $1.235k $1.270k
85268 (Fountain Hills) – Zip Line Report
Scottsdale’s most immediate eastern neighbor is accurately named for its mountain slopes and town fountain. For those wanting a small town feel, it doesn’t get much better than here.
2015 2014 2013
Active Listings: 175 236 193
Pending Listings: 24 21 27
Sales Per Month: 42 32 43
Sales Per Year: 367 450 531
Median Price: $601k $369k $375k
85331 (Town of Cave Creek) – Zip Line Report
Cave Creek has done a great job of standing strong in value. The median sales price of $424,000 for August is up 13% from 2013 and pending sales are about the same as last year too.
2015 2014 2013
Active Listings: 366 292 243
Pending Listings: 55 58 59
Sales Per Month: 75 56 61
Sales Per Year: 664 609 697
Median Price: $420k $424k $375k
85377 (Carefree) – Zip Line Report
The delightful and small town of Carefree is almost too small to accurately compare year to year stats. Having stated that, sales are slightly up from August 2014 at 60 – this compared to 115 one year ago. The median sales price brings one word to mind: BARGAIN!
2015 2014 2013
Active Listings: 122 114 92
Pending Listings: 18 6 12
Sales Per Month: 12 6 14
Sales Per Year: 77 87 104
Median Price: $689k $642k $773k
85086 (Anthem – North Phoenix) – Zip Line Report
Welcome to newer homes with beautiful mountain views in an unspoiled north Phoenix environment. These communities are the bargains of the north valley. Prices are affordable and only a 30 minute drive time to Sky Harbor Airport. Inventory is down from last year, pending sales are up dramatically (61%) from one year ago and the median sales price has increased by 8%.
2015 2014 2013
Active Listings: 307 376 281
Pending Listings: 106 66 101
Sales Per Month: 98 96 122
Sales Per Year: 948 936 1273
Median Price: $297k $275k $275k
*With thanks to Michael Orr and the Cromford Report for the Statistics used.
The Phoenix Metro Seller’s market has returned which of course means good news and bad news. We just need to first answer the question, “Are you buying or selling?” And if neither, keep reading anyway because it will help give you a lead-in to a conversation besides “Isn’t it great weather we’re having lately?” Now you can say, “Have you heard how the residential real estate market has been heating up?
How has it been heating up Mike? Since last quarter:
- Active listings are down by 6%
- Under Contract listings are up by 29% and Pending Sales are up by 28%
- Sales have increased 40% (8255 vs 5171)
- Monthly Listing Supply Dropped from 5.5 to 3.1 (39% decrease)
- Pending Price Per Square Ft (PSF) rose from $131 PSF to $137 (5% increase)
- Monthly Sales PSF rose from $131 to $136 (4% in one quarter)
First the good news for owners/sellers:
- Prices are rising hence equity is increasing
- Inventory is shrinking, Market Times are Decreasing
- Underwater homeowners may soon be above water – Choices may emerge
- Refinance options may be back on the table – Interest rates remain low
- Caveat: All Real Estate is local — the Seller’s Market news is not for everyone — yet
Now the bad news for ‘on the fence’ and future buyers:
- With rising prices you will get less house for the money or;
- Paying more for the same type house gets you a higher payment
- With less inventory you will have less choice, with more competition
- Your rents are rising or it may be getting a little too cozy living with family
- Caveat: All Real Estate is local – In some areas it’s still a buyer’s market – for now
Is there good news still for buyers? Absolutely! There are communities that are still in a buyer’s market realm, and even if you’re looking in a hot area you can still do well with a good buyer strategy. Also, mortgage rates are still low. Unfortunately, the window in that vein is closing.
HomeSmart Opens New World Headquarters in Scottsdale
HomeSmart Realty is preparing the opening of its new 66,000 SqFt World Headquarters in Scottsdale within the 101 loop near Princess Drive and Frank Lloyd Wright (pictured below). The recent acquisition by CEO Matt Widdows will become HomeSmart’s new corporate location having just vacated the current location at 32nd St and Camelback. HomeSmart will still have a presence on Camelback, opening up a new office there as well.
The office will be split between the corporate side and the sales agents’ side. Having already been a leader of innovation and technology, we’re excited about having the latest and greatest available for the benefit of our clients. Jonathan, and I will be relocating to the new location when the office remodeling is complete – we hope shortly.
Along with the Camelback location there are 10 other offices in the Valley. One of the great perks of our business is that HomeSmart lets each professional use any office facility in the Valley as if it’s our own 24/7 utilizing a pass card.
Seller Patience or Radical Price Surgery – Your Choice
All real estate is local. When observing the trends and data for the Phoenix Metro real estate market, we often use all parts of the metro area (macro) and all types of housing, including single family detached (SFD), condos, mobile homes etc, though SFD is the great majority of all types.
When determining the value of a specific property, we use the “micro” approach where we pull comparable sales from the immediate neighborhood and usually up to a mile away – the same parameters most often used by appraisers.
When determining trends, we are usually safe to use the “macro” approach, because quite often the vast majority of homes fall into the similar trend of the greater. When we start to analyze the more narrow parts of the market however, we throw just about everything out the window.
We can therefore say that overall the Phoenix sales market is improving for sellers. Sales are increasing, market time is decreasing, pending sales have been increasing, and the sales price per SqFt is increasing again.
But all real estate is local. The Northeast Valley sales market in the luxury division (Over $1 Million) is far different than the under $500K market in the rest of the valley. In the NE Valley luxury market (16 zip codes) which includes Scottsdale, Paradise Valley, Carefree, Cave Creek, Fountain Hills and a few Phoenix zips, the market time required to sell a home, with one exception, are all over 300 days, and many of these zip codes require between 680 and 1100 days to sell. The market temperature description that comes to mind is ‘frigid.’
On the other hand, at the lower part of the pricing market, such as under $200,000, the market time for a number of communities is less than one month. These communities are ‘smokin’ hot. Here, sellers need to be careful not to list their homes too cheaply – they could leave money on the table.
But what if you have a pricey luxury home that needs to get sold now, (within 30-60 days) what can you do to sell that home? That’s a great question and unfortunately, there’s no guarantee it can be sold quicker unless you perform radical surgery dealing with the listing price.
In truth, a “radically” reduced price may “appear” like you’re giving away the home when in fact it may end up to be the “Fair Market Value” of the home because the great majority of the other homes for sale are significantly overpriced.
Remember, the market tells us our values. You MUST lead the market to show that your home is one of the neighborhood’s best values. To do that you must talk to your Realtor straight out and say, “Mike, you’re telling me the market time in my community is 600+ days? I don’t want to be listed in 600+ days. What is the price I need to set the house at to sell it within 30 – 60 days???
If you’ve never seen a Realtor GULP before, you will now after asking that question. Then get two other professional opinions asking the same question.
– Mike Bodeen
First off, apologies for the late market update! As our faithful readers know by now, the market is heating up, as is our business! Yesterday saw both my father and I running around like the proverbial headless chickens.
To evidence the rising market, and to show you the extent to which our optimism soars, take a look at some of the below facts.
APRIL SALES MARKET SUMMARY
Here are the basic ARMLS (local Multiple Listing Service) numbers for May 1, 2015 relative to May 1, 2014 for all areas & types:
- Active Listings: 21,512 versus 26,205 last year – supply down 17.9% – and down 3.5% from 22,303 last month
- Pending Listings: 7,951 versus 7,199 last year – up 10.4%– and up 1.2% from 7,853 last month
- Under Contract/Pending Listings:12,276 versus 10,584 last year – up 15.8% – and up 2.4% from 11,988 last month
- Monthly Sales: 8,363 versus 7,572 last year – up 10.4%– and up 6.0% from 7,887 last month
- Monthly Average Sales Price per Sq. Ft.: $135.88 versus $130.27 last year – up 4.3%– andup 2.9% from $131.99 last month
- Monthly Median Sales Price: $202,000 versus $190,000 last year – up 6.3% – and up 1.0% from $200,000 last month
The Take away?! Prices are definitely rising. That statistic about the average sales price per square foot is in itself a huge deal. A 2.9% increase in one month is a very good sign. Obviously that probably won’t happen every month, but it is great none the less (for sellers anyway).
We won’t break out the champagne yet though. We are heading into the peak of the buying season and there is still more than half of the year left.
Thank you (again) Michael Orr and the Cromford Report for the statistical data provided here