by MICHAEL BODEEN | Aug 10, 2015 | Bodeen Team Blog, Real Estate News
If you recently obtained a new mortgage or refinanced your existing one, there’s a pretty good chance that you got a terrific interest rate but were less than thrilled with the paperwork experience. This would be especially true if you were a self-employed individual. The good news is that you hopefully stuck it out and closed on the loan.
I had two clients in the past six months who purchased a home with the same major institutional lender who shall remain anonymous, except that for both it was a very bumpy trip akin to a wild west stage coach ride.
Both clients were well qualified. One was semi-self-employed (two jobs) and the other fully retired with superb financial credentials. The self-employed client was the hardest and this lender put the through the proverbial ringer. My client was so ticked off at this process, that at one point he was very close to throwing in the towel. Fortunately he hung in there and received the reward of an excellent interest rate. My other client was a dream borrower. He too got dragged through the weeds but again put up with it to get the process done, but he was not happy.
And if I thought that was bad, I ain’t seen nothin yet. Soon Big Brother, via the CFPB (Consumer Financial Protection Bureau) will (supposedly) provide borrowers much needed protection against lender abuses and reckless lending standards. In other words, if you’re going to get a jumbo loan, or your self-employed, be prepared to jump through hoops. And interest only loans? You probably won’t be seeing any of those around anymore as well.
by MICHAEL BODEEN | Aug 3, 2015 | Bodeen Team Blog, Real Estate News
The Market is on the Rise!
Son and business partner, Jonathan got his first live taste on the state of the buyer’s market out there making an offer on he and Sarah’s first home. He is one of those millennials that will practice what we’ve been preaching which is to get off the sidelines and start looking. You’ll have to tune in later to find the outcome, but suffice to say, the house they made an offer on within two days had two other offers on it. He’s learning first-hand about multiple offers and buying strategy. Oh yea, and home buying emotions.
…regular home buyers are leading the surge rather than investors. This may yet change, but currently it’s a stronger and safer market.
Considering what’s happening in the market-place, it’s no surprise. As we’ve been suggesting for several months and likewise advocating for buyers longer than that, buyer’s need to take action if they want in on the current bottom of the market, for it is moving forward and upward.
Consider These Market Stats:
- Active Listings: 19,835 versus 23,096 last year – down 14.1% – and down 6.0% from 21,103 last month
- Under Contract Listings: 10,039 versus 8,173 last year – up 22.8% – and up 16.4% from 8,628 last month
- Monthly Sales: 7,174 versus 5,825 last year – up 23.2% – and up 38.8% from 5,170 last month
- Monthly Average Sales Price per Sq. Ft.: $134.78 versus $135.18 last year – down 0.3% – but up 0.6% from $134.04 last month (Prospective Buyers, memorize this number)
- Monthly Median Sales Price: $207,000 versus $198,050 last year – up 4.5% – and up 2.0% from $203,000 last month (Prospective Buyers, memorize this number). (Thanks to Michael Orr of ASU and the Cromford Report for these timely numbers)
You’ll note our highlighted instruction above for buyers to memorize the Monthly Average Sales Price per square foot and Monthly Median Sales Price. I think these numbers will be a new price appreciation benchmark, as they will begin to rise considerably shortly due to increasing sales, (demand) and further supply decrease. Another Caveat Emptor (Buyer Beware).
What’s so healthy about this market versus our frenetic market in 2005, is that right now, regular home buyers are leading the surge rather than investors. This may yet change, but currently it’s a stronger and safer market. Amen to that!
Oh and by the way buyers, the standard 30 year fixed rate mortgage, has just dropped to a two year low at 3.71%.
by MICHAEL BODEEN | Jul 27, 2015 | Bodeen Team Blog, North Scottsdale News, Real Estate News
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.
By
Mike Bodeen
by MICHAEL BODEEN | Jul 13, 2015 | Bodeen Team Blog, Real Estate News
Home remodeling is making a comeback. Is it in full swing? Not yet, although companies like Home Depot and Lowes would have a better grip on that than I would.
As the economy appears to be improving (notice the word “appears”) homeowners are more willing to plunk down some serious dollars to upgrade their homes to the latest design trends for 2015. And as they do, they’re asking questions about what’s in style and what’s not. These are important questions. No one wants to waste money.
Well, my wife Karen knows that I’m not a design expert, but I know how my clients respond to what they’re seeing in homes. Today I’ll discuss design trends in flooring. In the next few weeks, we’ll look at countertops. These are two of the more expensive items in a remodel, but make a huge impact with buyers and owners.
First, the flooring. Flooring quality has taken positive steps in recent years and is pretty affordable. Whether it’s real or engineered wood, laminate, vinyl or tile, you’ll be amazed at the value and look that’s out there.
A local website of Scottsdale based Amy Wolf Interiors (http://amywolffinteriors.com/hardwood-tile/) has some great info on it and you can click on this link to get her many good insights. One of the huge design trends for 2015 and one that has resonated well with myself and clients is hardwood tile. A quality hardwood tile is almost impossible to distinguish from good hardwood. (see tiled floor photos below) but it has the durability of tile which sets itself against the recent perennial favorite of Travertine tile. Travertine is a gorgeous look, but due to its porous nature will scratch, chip and crack. Refinishing it is not cheap either. Travertine is no longer the “in” stone, but the “look” remains fabulous.
Solid and engineered woods are very popular right now as well, as in who doesn’t like real wood, right? The latest issue of Consumer Reports (CR-Aug 2015) has terrific flooring information and ratings. If you’re considering a major investment in home remodeling, do yourself a favor and pick up a copy of it.
Overall, what’s the best bang for the flooring buck according to CR? Tarkett, Congoleum, and Armstrong brand vinyls scored highest and sell for less than wood, and the look is also incredibly stone and wood-like.
Oh and by the way Mr. Realtor, do you get your money back at resale with any of these flooring investments? Great question and not an easy answer. I can tell you though that if you have an outdated looking floor that begs “get rid of me” then you’ll take a hit at the checkout counter. Regrouped costs are an important consideration for sure, but more importantly is your day to day enjoyment. If you spend higher now to be able to achieve that, you win and your ROI (return on investment) returns every day of the year.
Personally, I’d go with the tile. It’ll go the distance and keep its look.
by MICHAEL BODEEN | Jul 6, 2015 | Bodeen Team Blog, Real Estate News
The 8,721 closed listings in June were the highest since May of 2013. Overall market demand remains normal, but again, diminishing listings remain the story. Experts, including Michael Orr of ASU/Cromford report indicate that demand-wise there will be little change in the near future.
Per Orr, with the listing supply dwindling, the most interesting thing to watch is for which price ranges is supply increasing and which are reducing.
For single family active listings within Greater Phoenix:
- Under $100,000 – down to 251 from 277 last month
- $100,000 to $199,999 – up to 2,672 from 2,605 last month
- $200,000 to $299,999 – down to 3,412 from 3,542 last month
- $300,000 to $499,999 – down to 4,315 from 4,408 last month
- $500,000 to $999,999 – down to 2,525 from 2,705 last month
- $1,000,000 and over – down to 1,346 from 1,622 last month
Here are the local MLS numbers for July 1, 2015 relative to July 1, 2014 for all areas & types:
- Active Listings: 19,548 versus 24,440 last year – down 20.0% – and down 3.9% from 20,351 last month
- Pending* Listings: 7,007 versus 6,426 last year – up 9.0% – but down 10.4% from 7,819 last month
- Under Contract* Listings: 10,747 versus 9,681 last year – up 11.0% – but down 10.9% from 12,063 last month
- Monthly Sales: 8,721 versus 7,228 last year – up 20.7% – and up 5.6% from 8,261 last month
- Monthly Average Sales Price per Sq. Ft.: $135.79 versus $129.67 last year – up 4.7% – but down 0.3% from $136.16 last month
- Monthly Median Sales Price: $214,990 versus $198,000 last year – up 8.5% – and up 0.9% from $213,000 last month
- *”Pending” and “Under Contract” are two terms both expressing a sold listing that has not yet closed.
Our take away? Not much really. June was relatively calm. Sales were up, median sales prices rose slightly and there was a slight decrease in the average price per square foot.
Mortgage rates are still low. If you’re looking for a loan with a REAL LOW down payment, give us a call. There are some current programs out there that provide amazing down payment assistance through grants. 602-689-3100. Historically we’re at the mid-year peak in the amount of monthly sales and sales will continue dropping slightly each month till the end of the year. Unless of course I’m wrong.
(Thank you Michael Orr/Cromford Report/ASU for the numbers – you’re the best!)
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.
