by MICHAEL BODEEN | Sep 21, 2015 | Bodeen Team Blog, Real Estate News
What $350,000 Gets You in San Francisco!
765 Square Feet in Need of Work – $458 Per Square Foot
This tiny one-story abode is being showcased as a single family home. The listing describes the property as a“distinguished home in need of work.” Built in 1906, it looks minute and outdated compared with the other homes in the neighborhood.
In many cities across the country, $350,000 is enough to buy a nice sized home with all the trimmings. Check out below what 350K buys in three local cities, Phoenix, Scottsdale, and Surprise. But in America’s most expensive city, San Francisco, that amount of money is only enough to land a person in a wooden shack.
The home is located in the Outer Mission neighborhood of the city. The two bedroom one bath California dwelling sits on a 1,633-square-foot lot on 16 De Long Street in the city.
What $350,000 Gets You in Scottsdale, AZ!
1763 Sq Ft Move-In Ready – $198 Per Square Foot
This $350,000 home is in the Phoenix (Ahwatuckee area)
2851 Sq Ft – $123 Per Square Foot!
Finally, Surprise has this 7 Bedroom gem, also priced at $350,000
3684 Sq Ft – $95 Per Square Foot
by MICHAEL BODEEN | Sep 15, 2015 | Bodeen Team Blog, Real Estate News
Last week we quoted our local real estate number crunching guru, Michael Orr,(ASU/Cromford Report) who stated that, “Appreciation of around 5% (Phoenix Metro area) seems to be the order of the day. This may not appear to be a big number but in a deflationary climate a 5% climb should be interpreted as rather impressive…indications are that sales prices will move moderately higher over the next 4 months. We expect rents to move higher more quickly.”
Then yesterday, the Arizona Republic wrote a short story about Housing prices having slipped during the summer. Their source was the Arizona Regional Multiple Listing Service (ARMLS). This article showed that the median price in Metro Phoenix was $214,900 in June, slipped to $212,000 in July and fell again to $208,000 in August. Finally, the article stated that the median price this August was 5.7% higher than the same month last year. This number does in fact agree with Orr’s 5% annual appreciation numbers.
As we’ve mentioned numerous times in the past, all real estate is local. The same is true for price appreciation. What happens statistically in one community will not usually do the same in the next community or town or county. Seeing the big picture of 5.7% is certainly helpful in terms of trends, but we need to be careful about how broad of a brush stroke we make for any given community.
This week we’ve included two charts for your review to see just what we mean about “all price appreciation is local.”
The first chart shows zip codes in the Northeast Valley. As you can see they range in appreciation rates of +12.7% to -2.8% measured from this date last year.
|
Rank
|
ZIP Code
|
% Change in 1 Year
|
Median
|
| 1 |
85263 |
+12.7% |
$450,000 |
| 2 |
85253 |
+5.9% |
$1,425,000 |
| 3 |
85257 |
+5.2% |
$255,000 |
| 4 |
85268 |
+5.1% |
$415,000 |
| 5 |
85258 |
+5.0% |
$525,000 |
| 6 |
85251 |
+4.4% |
$321,500 |
| 7 |
85255 |
+4.0% |
$810,000 |
| 8 |
85254 |
+3.4% |
$529,900 |
| 9 |
85250 |
+2.5% |
$346,500 |
| 10 |
85266 |
+1.2% |
$893,000 |
| 11 |
85377 |
+0.8% |
$750,000 |
| 12 |
85259 |
-0.3% |
$595,000 |
| 13 |
85331 |
-0.6% |
$400,000 |
| 14 |
85262 |
-2.4% |
$760,000 |
| 15 |
85260 |
-2.8% |
$427,500 |
The second chart then shows 43 Phoenix zip code neighborhoods. These neighborhoods had annual price adjustments from +100% (Sky Harbor Airport area) down to -5% in the Ahwatukee neighborhood of 85045.
|
Rank
|
ZIP Code
|
% Change in 1 Year
|
Median
|
| 1 |
85034 |
+100.0% |
$90,000 |
| 2 |
85009 |
+31.7% |
$84,950 |
| 3 |
85006 |
+29.3% |
$179.950 |
| 4 |
85021 |
+22.0% |
$275,000 |
| 5 |
85016 |
+21.3% |
$295,705 |
| 6 |
85018 |
+20.6% |
$524,800 |
| 7 |
85019 |
+20.2% |
$124,450 |
| 8 |
85020 |
+20.0% |
$108,000 |
| 9 |
85035 |
+19.8% |
$115,000 |
| 10 |
85004 |
+18.1% |
$319,000 |
| 11 |
85051 |
+16.7% |
$147,000 |
| 12 |
85031 |
+15.8% |
$110,000 |
| 13 |
85008 |
+15.4% |
$165,000 |
| 14 |
85007 |
+14.6% |
$214,900 |
| 15 |
85033 |
+12.9% |
$118,556 |
| 16 |
85015 |
+12.0% |
$168,000 |
| 17 |
85043 |
+10.6% |
$146,000 |
| 18 |
85012 |
+10.3% |
$505,000 |
| 19 |
85014 |
+10.3% |
$255,000 |
| 20 |
85042 |
+10.3% |
$182,000 |
| 21 |
85037 |
+10.0% |
$140,000 |
| 22 |
85087 |
+9.9% |
$310,000 |
| 23 |
85040 |
+9.1% |
$120,000 |
| 24 |
85027 |
+8.9% |
$172,000 |
| 25 |
85003 |
+8.8% |
$369,500 |
| 26 |
85029 |
+8.4% |
$155,000 |
| 27 |
85022 |
+7.5% |
$245,000 |
| 28 |
85032 |
+7.3% |
$220,000 |
| 29 |
85013 |
+7.0% |
$262,250 |
| 30 |
85023 |
+7.0% |
$207,250 |
| 31 |
85053 |
+6.5% |
$165,000 |
| 32 |
85024 |
+6.4% |
$250,000 |
| 33 |
85041 |
+6.3% |
$153,000 |
| 34 |
85086 |
+6.0% |
$293,000 |
| 35 |
85054 |
+5.9% |
$458,000 |
| 36 |
85044 |
+5.0% |
$255,000 |
| 37 |
85028 |
+4.0% |
$315,000 |
| 38 |
85083 |
+3.4% |
$302,000 |
| 39 |
85048 |
+0.8% |
$312,000 |
| 40 |
85050 |
-1.0% |
$292,000 |
| 41 |
85085 |
-2.6% |
$314,990 |
| 42 |
85020 |
-5.0% |
$270,000 |
| 43 |
85045 |
-5.0% |
$325,000 |
As you can see from the two charts, there are huge disparities in annual price movement. Out of about 60 communities, only a small handful of communities actually showed 5%+- appreciation. So the next time you see an article about whether or not values are rising or falling (even our articles) consider that it may be a trend for the broader market, but take it with a grain of salt, because locally, that may be all it’s worth.
by MICHAEL BODEEN | Sep 8, 2015 | Bodeen Team Blog, Real Estate News
September Sales Report
“Appreciation of around 5% seems to be the order of the day. This may not appear to be a big number but in a deflationary climate a 5% climb should be interpreted as rather impressive. It is mostly down to supply shortages at the low end, with a sprinkling of strong demand in a few luxury markets. We did see the usual seasonal price weakness from the end of June through the beginning of September, but that short term trend is gradually giving way to a resumption of the longer term upward trend. Indications are that sales prices will move moderately higher over the next 4 months. We expect rents to move higher more quickly.” -Michael Orr of the Cromford Report
“…Indications are that sales prices will move moderately higher over the next 4 months. We expect rents to move higher more quickly.”
What I appreciate about Michael Orr’s statistical reporting is his passion for thoroughness and accuracy. Make no mistake, Michael is bullish on the Phoenix-Scottsdale metro residential real estate market, but he is also the first one to report possible downside risks. He has a very solid grip on our market. This is why we invest (pay) to be able to reproduce his stats. We want our clients to have the very best numbers available to help them in their real estate decision making.
If sales prices and rents continue to increase, that’s the double whammy for sidelined buyers who are getting hit with the rent increases. One benefit of Orr’s mentioned deflationary climate is that interest rates have remained low when most all experts had been predicting them to increase.
Here are the MLS stats for Sept 1, 2015 compared with to Sept 1, 2014 for all areas & types:
- Active Listings: 19,101 versus 23,296 last year – down 18.0% – and down 1.8% from 19,459 last month
- Under Contract Listings (including Pending & UCB): 9,571 versus 8,797 last year – up 8.8% – but down 1.4% from 9,705 last month
- Monthly Sales: 7,056 versus 6,492 last year – up 8.7% – but down 11.6% from 7,978 last month
- Monthly Average Sales Price per Sq. Ft.: $132.54 versus $126.14 last year – up 5.1% – but down 0.3% from $132.88 last month
- Monthly Median Sales Price: $208,000 versus $198,000 last year – up 5.1% – but down 1.8% from $211,750 last month
Orr’s comment about 5% appreciation in a deflationary climate makes that 5% seem fairly healthy, which incidentally is on par with or greater than pre-boom/bust appreciation numbers in the early 2000’s. Make no mistake,if someone is looking for a stable investment in very unstable times, Phoenix real estate seems to make a lot of sense
by MICHAEL BODEEN | Aug 31, 2015 | Bodeen Team Blog, Real Estate News
Price range is important when determining values and trends. If I were to tell you that the Northeast Valley (NE Valley) showed a drop of 6% in listing inventory compared with one year ago, you might say, “Oh, sure, whatever.”
Or, I can say that the NE Valley listing inventory increased by 1% for homes listed above $500,000. Well, that’s kind of a yawner. And finally what is also true is that NE listings priced under $500,000 (the majority) are down by 20% compared to last year. Now that number’s significant! It helps to explain why Scottsdale, which had been seemingly plodding along, has now caught some wind in its sail.
According to a recent review of the Cromford Market Index (100 being a balanced market) for Scottsdale, the city has been moving up from a low of 95 back in May (slight buyer’s market) to 130 presently (solid Seller’s Market). It has risen 11% in one month.
And what about sales in the NE Valley over the past three months? They are up 13%! For sales under $500K, sales were up 11% and for closed sales between $500K and $1Mil, sales increased by 19%. Even home sales priced over $1Mil, sales increased 4%. Things are rebounding well in the NE Valley.
(data above courtesy of the Cromford Report)
Phoenix Ranked 8th Nationally for Future Job Growth
Forbes looked at the 200 largest metros by population for its annual feature on the
Best Places for Business. While the fastest employment growth areas are concentrated in Florida, the slowest growth places are spread out across states. Metros from eight states rank among the top 10 areas with the largest projected job growth over the next three years. Phoenix came in 8th for the largest projected job growth in the nation.
This continues a good news trend for Arizona, and specifically for the Phoenix Metro area.
Mortgage Firm Reduces Foreclosure, Short Sale, Chapters 7, 11 Bankruptcy Waiting Periods to 2-3 Years
Mark Taylor, a Mortgage Broker with Ameriprise Financial just sent out a news bulletin stating that Ameriprise will now be taking loan applications for folks who have been out of the sales market waiting for their 3-7 year penalty period to expire. Ameriprise will now loan if you’ve been foreclosed on (within the past 3 years) or had a short sale, deed in lieu, or Chapter 7 or 11 Bankruptcy within 2 years. We’ve anticipated this happening, and I’m certain other lenders will be doing the same as well. There was no announcement, however on what their rates and fees would be.
By
Mike Bodeen
by JONATHAN BODEEN | Aug 24, 2015 | Bodeen Team Blog, Mike's "Real State" of the Market, North Scottsdale News, Real Estate News
Stocks Versus Real Estate?
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.
What usually occurs when this happens is people begin to consider where they should put their investment monies if they were to sell off their stock. Is there a safe harbor out there? What’s interesting to me is that this global stock selloff is confirming what gold and silver investors have known for the past month, that world instability is good for them as the shaky markets drive up the price of precious metals. These commodities have risen 7% in the past 30 days. There are some however who are not as bullish on these metals as they used to be.
An industry expert told me today that Phoenix real estate should perform relatively well with the sort of deflation that many fear we will be driven into based on China’s current economic trend. This, he said, was because of our chronic short supply in relation to our growing population, which if you have been following us for a while, you probably have heard us talk about more than a few times!
I wonder if many will see Phoenix real estate investments as that safe harbor. Why? We have rapidly rising rent prices, low mortgage rates, and even though it’s a seller’s market for most investor price ranges, prices are still competitive compared to other metropolitan areas in the country. It’s a market that many see stability and future growth in.
Though my near 40 year career has been in real estate, and I’ve always been an advocate for Real Estate investment, my intention is not to bash stocks. In fact, my father’s success in investing utilized a balance of both real estate AND stocks. He was a common butcher with uncommon trust in his advisors who helped him select singular stocks based on their individual merit. He kept them for the long haul and never seemed to worry about the day to day gyrations of his stock because he was secure with the inherent strength of these selected companies. In the end he was financially well cared for and more importantly he lived life well, relatively free of worry, excepting of course for some of his wayward children – present company included. The point being, I’m not going to sit here and tell you that Real Estate is always better than stocks.
While real estate and the stock market are entirely different animals, they do both share that quality where the little guy is most successful when he plays the long term buy and hold strategy, like my father did.
“In the end…my father was financially well cared for and more importantly he lived life well, relatively free of worry…”
These are fascinating times we live in – in every corner of the globe.
Let us know if we can help you. If you or someone you know is considering a rental investment, or a first time home purchase, have them call me at 602-689-3100. We can help.
By
Mike Bodeen
by MICHAEL BODEEN | Aug 17, 2015 | Bodeen Team Blog, Real Estate News
I’m considering our Arizona extremes which is easy to do when there’s an excessive heat warning today (Friday the 14th). Are these the dog days of August yet? I do believe so. And what are “dog days” anyway? According to the old Farmer’s Almanac dog days “conjures up the hottest, most sultry days of summer, coinciding with the rising, at sunrise of Sirius, the dog star, (siriusly?) in the constellation Canis Major.”
Back to real estate extremes. Not that long ago (2008-2012) Arizona was deluged, actually drowning in foreclosures, short sales and mass relocations (mostly forced) as Arizona was among the hardest hit in the national real estate meltdown. At the peak of this horror, In December 2009, 51,022 foreclosures were pending in Maricopa County. (Pending foreclosures are those which are scheduled for sale by the trustee at some point in the future)
“At the peak of this horror, In December 2009, 51,022 foreclosures were pending in Maricopa County.”
Fast forward to the present, less than six year later, there are just 3499 foreclosures pending. Viewing the accompanied chart, one sees that we have less foreclosures pending now then back in 2002, like 3500 less! This is an amazing and dramatic drop. In fact, Arizona is currently in the top 10 states for the fewest foreclosures pending.
And by the way, how many homes were actually foreclosed on last month? 423. This is compared with 5450 in March of 2010. All this good news is to say that Maricopa County (Arizona) has turned itself around amazingly in less than 6 years.
And how did this happen? Primarily because of investors who swarmed from within and from outside our county scooping up homes at fire sale prices. Many of these investors rehabbed the property and flipped them, usually to permanent homebuyers which lead to the strengthening of neighborhoods. Large Institutional investors bought and still own thousands of these units in which they turned around and leased providing for the increased demand that came from folks who had to leave home ownership.
There has been discussion about what would happen if these institutional investors were to dump all these homes on the market at one time? My question is why would intelligent investors decide to so something that could drive down the price of their assets? They were smart enough to buy at the bottom of our market, my guess is they will be smart enough to liquidate them a few here and a few there, if they decide to liquidate them at all.
