by MICHAEL BODEEN | Nov 27, 2023 | Bodeen Team Blog, Mike's "Real State" of the Market, North Scottsdale News, Real Estate News, Uncategorized
We trust your Thanksgiving weekend was wonderful! Apart from the traditional, additional, and certainly not subliminal poundage gained, it was for the Bodeen family and friends.
As most of our readers are aware, our current housing shortage is due in large part to homeowners having very low mortgage rates. They are not willing to bite off a 7% or 8% mortgage rate to sell and buy.
According to a new report from Redfin, via BusinessWire.com, roughly 6 of 7 (85%) homeowners with mortgages have rates under 5%. A large percentage of the under 5 percenters have rates in the 2.5% to 3.5% range. So far, there’s not enough upside for them to sell.
Then, I came across an article a few days ago from HousingWire.com provoking further thought. The article stated that the largest share of people aged 65 or older in our country own the largest share of mortgage-free homes. As of 2022, almost 40% of U.S. homeowners owned their homes free and clear. Read the housingwire.com article here.
This is wonderful news, if you’re one of those fortunate enough to be in the 40%.
On top of ALL this, is yet another article (Forbes) about how my generation, the Baby Boomers, will bequeath almost 70 trillion (that’s illion with a Tr) dollars to our offspring, and much of it before 2030. With the greatest generation winding down and the Boomers soon to follow, the greatest wealth transfer in the history of mankind is happening – now!
How will these new generations invest/spend this absurdly huge amount of passed down wealth? In many things of course, but one investment for sure, will be real estate. As my former and deceased Realtor father-in-law used to preach to anyone who would listen, (which wasn’t many), “you can make more babies, but you can’t make more land.”
So, when we encourage, nigh, exhort our friends, or anyone who will listen, to buy real estate, it’s knowing that successive gens will be able to step in line ahead of you to do so. Beat them to it!
The final paragraph of this Forbes article reads, “Being locked out of the housing market due to high-interest rates and housing prices could soon change. With the new largess, Millennials could purchase new homes and even secondary vacation homes…” Read the Forbes article here
So renters, to sum up, at least 3 forces are pitted against the future affordability of a home for you:
- 40% of Americans who have no mortgage. Even if they might sell, these would be cash buyer competitors for the home you may want.
- 85% of homeowners with a mortgage have an existing rate under 5%, and are not too keen on selling than buying a home with a 7% or 8% new mortgage.
- Current and future competition from all cash nouveau riche home buyers.
So, when Mike or Jonathan Bodeen continue to encourage, nigh, exhort our friends, or anyone who will listen, to buy real estate, it’s knowing that successive gens will be able to step in line ahead of you to do so.
Beat them to it!
by MICHAEL BODEEN | Oct 2, 2023 | Bodeen Team Blog, Mike's "Real State" of the Market, Real Estate News, Uncategorized
Scottsdale and Phoenix Real Estate Inventory Rise
In this current Scottdale and Phoenix Metro residential real estate market, something’s gonna have to give, and we’re not sure what that will be.
Historically and economically, when mortgage interest rates rise, sales and new escrows will slow. When inventory increases, buyers can gain an upper hand in negotiations with sellers, thereby having the tendency to reduce prices. When all of these factors are happening at the same time, prices will drop – or will they?
First off, we’re currently seeing the drum beat rise of mortgage rates taking us into the mid 7% range. We’re also witnessing the rise of homes for sale (inventory), albeit, slowly, but rising nonetheless. Next, listings under contract (6,983) at this time of year (September) are at their lowest point since 2007. Sales per month (6,207) are at their lowest levels since 2008 (Aug).
Yet Prices Continue to Rise?
Finally, the release of last week’s S&P / Case-Shiller Home Price Index showed that Phoenix is again catapulting towards the top (2nd Place) of the national monthly sales price chart increasing .88% compared to the previous month. A note of caution on this index, however, is that it’s 3 months behind in reporting sales prices.
The only plausible explanation for our price increase remains the still very low level of inventory. And this is not just in Phoenix, but nationally too. Judging by the slowing market as a result of higher rates, I think we’ll start seeing price drops. The pressure for sellers to sell will grow with passing time. Affordability is suffering and right now it looks like this could continue into next year. A reversal in mortgage rate hikes, however, would spark buyers.
For buyers, time on the market for any given listing, will let them know how much negotiating room there might be. For sellers, correct pricing is critical. Adding or agreeing to incentives for buyers such as rate buy-downs may also help that property to get under contract.
by MICHAEL BODEEN | Aug 22, 2022 | Bodeen Team Blog, Real Estate News
In a perfect world, a local real estate market would be a balance of buyer and seller supply and demand, with reasonable annual appreciation. The Phoenix and Scottsdale area has had a consistent six-year run of just such a market between May 2014 and June 2020.
Then, in early 2020, we had a global pandemic and predictably, per all of us experts anyway, real estate values declined – for all of 2-3 months. I’m not just talking about Phoenix, Arizona, but nationwide as well.
At that point, the market decided to release its foot off the breaks and apply the pedal to the metal, sort of like popping a wheelie, and laying rubber simultaneously to hit new pricing records within two years. It went from a reasonably healthy and consistent market to one that’s out of control. It had also become unaffordable.
Brakes Applied Again!
Over the past few months since spring, the breaks have once again been applied. A slowing market has returned, and we have now entered a balanced market. But not everywhere. Per the Cromford Report, Surprise, Gilbert, Tempe, Maricopa, Litchfield Park, Buckeye, Queen Creek & San Tan Valley are buyer’s markets, while Fountain Hills, Paradise Valley, Scottsdale and Cave Creek are seller’s markets.
If you check out our weekly Cromford Market Index today, which takes into account our entire Phoenix Metro area, you’ll see that we have fallen just below 110. A rating of 90-110 is a balanced market.
The question now is where we’ll go from here? Can this be a sustained slower growth market, or a quick touch and go back to a rabid seller’s market as we did 30 months ago? It’s also very possible that we continue slowing into a full-fledged buyer’s market. This is a possible scenario, although there are some indications that the slowing is slowing. Either way, the rate of downward pricing will still be felt for a while, especially in the trailing sales price numbers.
by MICHAEL BODEEN | Jul 25, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market, Real Estate News
Good news continues for prospective Scottsdale and Phoenix renters who haven’t gotten much of a break over the last few years. The long-term rental supply is growing… QUICKLY! There are over 2,900 active rental listings (on our local MLS). This is an 18% increase in just one month, up from 2,463 rental listings last month.
This means that renters will have more choice with less competitive bidding. And if you’re looking for single family detached (SFD) homes to rent, those numbers are increasing the fastest. 2,088 of the 2900 total rentals listed, per the Cromford Report, are in the SFD category.
And what about rental pricing? Pricing is on the downward slide as well. The average rental asking price in the MLS is down to $1.57 per square foot (PSF), compared with $1.63 PSF last month and $1.94 one year ago.
It’s really important to get the word out to folks about the changing rental market. Many may believe that the market is what it was 6 months ago. Not so. This is a radical change occurring as we speak .
by MICHAEL BODEEN | Jul 18, 2022 | North Scottdale Zip Code Information, North Scottsdale News, Real Estate News
Terrific communities encompass the 85259 Zip Code. If we were speaking geographically abou tit we would say that it’s located in the East Central part of Scottsdale. Some folks may wonder then, why we include the 85259-zip code in North Scottsdale? The same folks rightly ask the question about 85254, 85258, and 85260 as well? After all, if you look at the long (32 miles) city of Scottsdale, you’d see it to be more central or South Central than north.
It was not too long in Scottsdale’s past (1960’s) that if you lived around Shea Blvd, that was considered “nose-bleed” country. Even McCormick Ranch (85258) was considered pretty far north from Old Town.
So the answer seems to be that for many of us who have been here for awhile, these zip code communities were a part of North Scottsdale.
85259 Zip Code contains numerous upscale communities, such as Stonegate, The Ancala Country Club, portions of Scottsdale Ranch, Scottsdale Mountain, Cactus Gates, Rancho Trinidad, Hidden Hills, and Bella Montagna.
Mountain and City light views, terrific convenience to recreation, shopping, golf, and health facilities abound. In fact, some folks refer to the Shea Blvd N/S dividing line as the “Medical Mile” with Honor hospital and the Mayo clinic plus hundreds of all types of medical offices within a few miles.
Schools are excellent in the 85259 community which includes Desert Mountain High and Middle public school. One of the highest rated schools in the country is the Basis Charter School encompassing grades 5-12. Anasazi Elementary is another excellent choice.
As of the summer of 2022, 71 homes were listed for sale at an average list price per square foot (PSF) of $480. Under Contract listings average list prices PSF are $430, while closed median sales over the past 6 months averaged $1.085M.
Our market is changing. When updated in July, we’ll see greater listings and fewer sales, reflecting a Valley and National trend.
85259 Real Estate as of June 1st 2022
Today Last Month Last Year 1 Year Change
Active Listings: 71 60 66 +08%
Listings Under Contract 49 48 60 -18%
Sales Per Month 42 55 57 -26%
Sales Per Year 541 556 598 -10%
Months of Supply 1.1 0.7 0.7 +4 Months
Annual Appreciation Median 23% 21% 19% -4%
Median Annual Sales Price $1.085M $1.050 $880K +23%
Considering Buying or Selling in North Scottsdale or the Northeast Valley. Give Mike a call at 602.689.3100 or send an email to: [email protected].
by MICHAEL BODEEN | Jul 11, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market, Real Estate News
In a rising and heated sales market, almost any agent can look like a genius sales guru. You may mess up inputting your data into the MLS, you could take house photos with a 10-year-old cell phone, you could fail to follow up with phone calls to your client, fellow agents, and the buying public, and not even get a “for sale sign” on the property for 5 days, and still, you’ll be deluged with a dozen or more offers on the property, with many of them over asking price. Agent is hero. And sadly, many of these “agents” believe their own self-imagined press releases.
It’s been a market where gimmicky sales approaches will thrive, then dive. 5 Star agent google ratings will plummet from the skyscraper to the basement – assuming they are ever shown to the public. If you thought you weren’t hearing from your agent very often before, you ain’t seen nuthin yet.
Advantage of Experience and the Longview
One advantage of having been an active and productive real estate sales professional for over 45 years is that I’ve seen it all – that is until the next thing that I’ve never seen before comes along. These days, that could be yesterday. 😉
But now the market is changing. Supply (listings) are rising quickly, (see chart below). Demand is diminishing. Pending sales, closed sales and listing prices are dropping.
“And as a sure sign of the Apocalypse, builders are cuddling up to Realtors to get us to bring our buyers back to them.”
We’re now seeing layoffs happening. Re/Max, one of the largest franchises in the country is laying off 17% of their support staff. (https://www.marketwatch.com/story/remax-to-cut-17-of-its-workforce-2022-07-07) The mortgage industry has now laid off hundreds of thousands of jobs nationwide. Title companies are shedding thousands of jobs. And as a sure sign of the Apocalypse, builders are cuddling up to Realtors to get us to bring our buyers back to them.
https://www.mansionglobal.com/articles/what-real-estate-industry-layoffs-could-mean-for-u-s-housing-markets-01657278554
