by MICHAEL BODEEN | Feb 15, 2015 | Mike's "Real State" of the Market, Real Estate News
There’re several different ways to interpret sales numbers from January. On the one hand, there seems to be the same trend occurring that we experienced in 2014; consistent, flat balanced. Yet sellers at the low and medium price ranges have some valid reasons to feel hopeful as we head into the prime selling season. Buyers are certainly not in trouble, but they need to keep an eye on supply. If that starts falling early this year, we could see the re-emergence of multiple offer situations.
I actually believe we’ll start to see sales numbers increase this spring. Strong optimism for Phoenix and Arizona (more on that on the next page) felt by many will breed action. I’m hopeful that the Millennials and the “Penalty Box” folks will be getting back in the game. If that happens, we’ll quickly see competitive bidding and price increases, especially in the low to medium range. This is another admonition for any fence sitting buyers out there – move!
Here are the basic MLS numbers for February 1, 2015 relative to February 1, 2014 for the Phoenix Metro area and includes all home types:
- Active Listings: 23,950 versus 25,541 last year – down 6.2% – but up 6.0% from 22,604 last month
- Pending Listings: 5,631 versus 5,723 last year – down 1.6% – but up a whopping 27.7% from 4,410 last month
- Under Contract Listings: 8,776 versus 8,595 last year – up 2.1% – and up 30.5% from 6,724 last month
- Monthly Sales: 4,781 versus 4,862 last year – down 1.7% – and down 26.1% from 6,466 last month – these are closings that began in 2014.
- Monthly Average Sales Price per Sq. Ft. $130.87 versus $125.54 last year – up 4.2% – but down 0.8% from $131.87 last month
- Monthly Median Sales Price: $195,000 versus $183,000 last year – up 6.6% – but down 1.0% from $197,000 last month. (Data thanks from Michael Orr and the Cromford Report)
Also, as we’ve previously reported, mortgage rates hit a 15 month low recently and are now around 3.75% for a 30 year fixed rate. The Feds have also been decreasing their tight mortgage controls including coming up with a 3% conventional down payment loan and reducing FHA mortgage insurance making these loans more affordable.
One final mortgage tip. We know of mortgage money sources for “penalty box” prospective borrowers who may be able to qualify for a loan without waiting for the statutory 3 or 7 year wait period if they’ve had a short sale or foreclosure. Yes, the interest rate is higher but not usurious. It may make sense if you’ve found a great home and you can lock in the price now. Give us a call and we’d be happy to share that info.
by MICHAEL BODEEN | Feb 9, 2015 | Bodeen Team Blog, Real Estate News
Today’s Jeopardy Answer: February 2011.
Today’s Jeopardy question? When was the last time the Phoenix Metro real estate market was as balanced as it is today?
So, what exactly does a “Balanced Market” mean anyway and what is the Cromford Market Index? It might help for our readers to know. According to the Cromford Market Index (Michael Orr of ASU).
Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.
The Cromford Index is showing “99” (as of 2/6/15), a balanced market. But why doesn’t it feel that way? I think the answer to that question has to do with how we view the market and whether we are looking from the eyes of a buyer or a seller.
Actually, the market is probably as healthy as it’s ever been and positive for both buyers and sellers. For sellers or prospective sellers, the latest data from Michael Orr of the Cromford reports states the following for “normal” sales – not distressed, as in bank owned, pre-foreclosure, or short sale:
- Active Listings – down 5% from 22,872 to 21,750
- UCB (Under Contract) Listings – up 38% from 1,825 to 2,519
- Pending (Also Under contract) Listings – up 14% from 4,404 to 5,036
- Days of Inventory – down from 138 to 132
- Months of Supply – down from 6.1 to 5.6 months
For buyers, the market is still very good, but if you see the above numbers benefitting sellers, we know that the opposite is true also – that we’re seeing a swing away from buyer advantage. According to the Index, we’ve been in a Buyer’s market since December of 2013, but it could easily swing above the line to a Seller’s Market. I believe that trend will continue and our balanced market will head north into Seller positive territory.
At an open house this past Saturday for one of our sellers, Jonathan and I had 14 groups though plus 4 Realtor showings. This resulted in two offers that we’re currently negotiating with the possibility of receiving another offer today. The result of multiple offers usually results in a seller getting the highest price possible for that home, or even above asking price. These sales then become the new “comps” (aka comparable sales) for new listings, which in turn drives prices up.
Our market can change rapidly and judging from what we’re seeing on the street, coupled with these supply numbers, we may not remain hanging in the “balance” for long.
by MICHAEL BODEEN | Feb 2, 2015 | Bodeen Team Blog, North Scottsdale News, Real Estate News
For most of the nation, the holidays ended after New Year’s, but in Arizona, especially the Phoenix Metro communities, the party continued unabated through January, and ended yesterday with a Patriots interception in Super Bowl XL1X with 19 seconds left on the clock. Or did it end in a slugfest? Either way it ended and will go down as one of the great Super Bowls of all time. And in my opinion, it was a week (actually a month) that saw Phoenix and Arizona positively elevated by the glow of Super Bowl publicity.
It’s difficult (at best) to actually gauge all the benefits that will accrue to the Valley and State from the events of this past month. Is golf your thing? Well, not only can you play here in the dead of winter, but the Phoenix Open had some of its cooler temps and light rain Friday and Saturday but it still trumped most all other weather in the U.S. and had Tiger Woods and Phil Mickelson (for Thursday and Friday anyway), and then Sunday’s warmth and sunshine climaxed a great finish, and timed the ending perfectly to switch over to the Super Bowl.
Are cars or horses a great love for you? Well, if so, the month of January would have pleased with the Arabian Horse show and the Barrett Jackson Car auction/event in North Scottsdale. And just as the football season ends, here comes baseball and spring training that will be starting up shortly.
And if you’re living here, whether it be as a snowbird or permanent resident, there are so many incredible great eateries and resorts, arts and sports throughout the valley to enjoy. And our people, including visitors, are a proverbial smorgasbord of niceness. And of course, the beauty of the Sonoran desert is amazing.
Regarding our local housing market, this type of continuous and positive national media coverage serves to reinforce a terrific and high quality place to live. Make no mistake, companies and prospective residents will continue to be checking us out. And as my baby boomer generation continues to age, many will want to age in warmth and recreation. And judging by what I’ve been observing recently with out of town buyers, they are liking what they see – and feel.
Do we have issues? Of course. All places do – welcome to humanity. But more important, welcome to a place that seems to really be learning how to provide folks with a Super lifestyle.
by MICHAEL BODEEN | Jan 26, 2015 | Bodeen Team Blog, Real Estate News
Across Maricopa County, we in the housing industry, including lenders, title agents, builders and we Realtors, have great optimism for 2015. It is still very early in the year, but that hasn’t stopped those of us who pay attention to the market from looking for the smallest of evidences to substantiate our hopes.
One of those small evidences we have notices is an increase in the number of houses currently in escrow compared with this time last year. Theoretically this should represent an increase of demand, which is really the one thing our housing economy lacks right now. This increase is not yet great enough to warrant any amount real celebration but is still worth noting.
If we look at the amount of dollar volume sold in Maricopa County last December compared with December 2013, we see a small decrease. Now December is never a strong month for sales in Arizona, and January is usually worse, so it is possible to make too much of it, but still, it keeps us from breathing easy just yet.
You may know that here in the Valley of the Sun, the high season for Real Estate is really March through July. Already we are seeing that people are coming out of the woodwork to buy and sell. Our listing inventory is low right now, having sold most all our listings, but we have already three or four that should be coming to the market soon. We assume that other Realtors are experiencing the same.
To be fair, it probably will not be until late February or March until we will see substantial signs of 2015 being any better than 2014. Over all 2014 was a flat year, but we’re confident of a better 2015. Until then we’re thankful that we have a market more in balance – more or less.
All data referenced courtesy of CromfordReport.com, in our opinion, the very best source of accurate Real Estate and housing data for Arizona.
by MICHAEL BODEEN | Jan 19, 2015 | Bodeen Team Blog, Real Estate News, Selling a Home
Few things in modern life can be as frustrating as having a home on the sales market week after week and month after month without it selling. We are currently in a real estate market that’s neither hot nor cold, but bordering on a buyer’s market. The average market time for a Phoenix Metro area single family detached home that has not sold is 134 days.
In Part 1 of our home sales series, we discussed the importance of timing the listing to go on the market. We made mention that timing may be different based on the type and location of the neighborhood and the amount of buyers that are typically drawn to it.
Last week we learned that correct home pricing trumps all marketing and home preparation. This week we will learn the importance of condition and staging to get the best selling price in the shortest amount of time possible.
There are many good articles and HGTV programming that extol the benefits of staging a home to sell. Indeed many companies and services have sprouted in the past 10 years for just this purpose. How needful, how helpful is it to have your home staged? Much, but it may not be as difficult as you think.
In my 35 PLUS years of experience I can boil down staging advice to a half dozen “its” in the order of importance.
1) Clear it.
2) Clean it.
3) Fix it.
4) Lighten it.
5) Appeal it.
6) Stage it.
1) Clear it: We are a nation of stuffers. Ideally, this step should be taken well in advance of your listing period. One of the (albeit few) advantages of moving is the golden opportunity to get rid of stuff. E-Bay or relatives for the good stuff, Garage sales or Goodwill for the rest. If you’re selling everything, you may want to consider going the “estate sale” route. You won’t make a ton of money but you get rid of everything in one fell swoop. And there is a lot to say for that. With a few exceptions, remove all clutter including family photos and wall posters. Clean and organize closets. Pack everything you’re not using. You’ll have to pack it soon anyway.
2) Clean it: If you’re not one that knows how to or wants to thoroughly clean a home, hire a professional to clean all the nooks and crannies. Believe me, people notice, appreciate, and mention cleanliness when they see it. Make the kitchen, bathrooms, and hard surfaced floors shine. Find and eliminate all odors. Ask someone who doesn’t live in the home to give it their nose test. We’re too use to these smells but someone from the outside will notice. If there are pet or smoking odors, get rid of them, even if you have to remove and replace carpet and pad. As the old commercial puts it, “You can pay me now or pay me later. In experience, strong negative odors will prevent, or at best delay, a home sale. Some buyers will ask to leave right away. What about odor masking such as scented candles? It may help, but it’s not the best. Masking is often a red flag for people to wonder what the sellers are hiding. Some owners have loaned out their pets to friends or family members while the home is on the market. And clean the windows – yes, inside and out! The bottom line is that many buyers will judge the condition of your whole house by its cleanliness.
3) Fix it: The Arizona residential purchase contracts stipulate that all the mechanicals (moving components) be in working condition prior to close of escrow. Plumbing (including leaks), electrical, appliances, heating and AC, and pool cleaning apparatus needs to be repaired if not in working order. Replace all burnt out bulbs and make sure the doorbell is operative. Repair any fences/gates and give them a fresh coat of paint or stain if necessary. Though not a requirement in the contract, having a roof that’s in good order is a huge help come inspection time. Replace any cracked windows or broken screens. Repair caulking in tubs and showers.
4) Lighten it: Natural light is a huge feature in a home. Whatever we can do to increase it, will help our sales efforts. Often times it’s as simple as having window coverings open. Painting walls can have the dual benefit of a positive fresh scent and lightening up a dark room. And always have lights on when the home is being shown.
5) Appeal it: Curb appeal is talked about a lot by us Realtors, and for very good reason. It helps us get potential buyers into your home and you can’t sell your home unless buyers take the time to go see it! Many buyers do “drive-byes” and if a house looks great from the outside, there’s a good chance they will want to go see it – and vice versa. All buyers typically view online photos and the quality of those photos is perhaps the most important reason why a buyer may or may not see a home. So a fresh coat of exterior paint, always trimmed and mowed lawns, and a clean yard will help bring those buyers into your home. Make sure all debris, toys and lawn equipment are removed. Trim shrubs and eliminate dead trees and branches.
6) Stage it: The tough part is already done including, clearing, cleaning, painting, fixing. Now the question, should we stage it? Maybe yes, maybe no. This is where a Realtor professional’s experience can be a big time help. Once all the above has occurred, you may not need to stage, but in most cases some staging advice is important. We provide the services of a professional interior designer who literally goes room to room suggesting what can be done to enhance the show-appeal. She may recommend painting (and which colors to use), item removal, cleaning if necessary, and item addition (if important). (In this staging section, it may be possible that your home could benefit by doing some updating, which falls under remodeling. This is an entirely separate issue and article that we’ll address soon)
Bottom line? Prepare well and your home will sell well!
by MICHAEL BODEEN | Jan 12, 2015 | Bodeen Team Blog, Real Estate News, Selling a Home
In last week’s blog, we discussed the importance of timing the listing to go on the market. We made mention that timing may be different based on the type and location of the neighborhood and the amount of buyers that are typically drawn to it.
This week we want to look at the MOST IMPORTANT part of the property listing. Pricing.
Without argument, the most important part of the home sale process is the home’s pricing. As important as timing, staging, and property conditioning are, they will not trump bad pricing. One of the most important responsibilities of the Realtor professional is to provide an accurate market analysis of the property’s value. The other part of this equation is the seller being on board with the right price. Trust in your Realtor professional’s price opinion will go a long way toward a successful and timely transaction.
In determining the right listing price, the Realtor professional needs to show the homeowner not only the neighborhood comparable sales during the past six months, but also the current “Pendings” and “Actives.” If the market is feverish (either rising or falling) then sales should only go back 3 months. If it’s a slow, plodding market, with little price change, we can look at sales longer than 6 months, but lenders may not.
Why do we look at Pendings and Actives? Well, for one, Appraisers look at them, because lenders want to know what’s going on in the overall market. Pending sales can be the MOST accurate gauge of CURRENT sales activity and values, but since they may not close and we may not know the closing price yet, best practices would dictate using only closed sales.
Active listings are used to help determine the competition. If for example a similar floorplan has been for sale for 6 months and has not sold, we will want to compare that listing with our listing to ask why hasn’t this listing sold? Usually, nothing less than a phone call to this other Realtor is in order. This is where Realtor experience and savvy could be the difference in getting top dollars.
So now comes the time for structuring the listed price. If the recent comparable sales dictate a $375,000 sales price, should you price it at $375K? This is where knowing the current market trends is key. In a normal market we would probably advise a price slightly about 3% above the sold pricing. In a slumping market, we would probably want to price it no higher than comps. And vice versa in a strong appreciating market, pricing slightly more than that may be in order. Either way, if we have priced the property correctly, we’re pretty much assured that a sale won’t get “kicked out” of escrow down the line by the buyer’s lender but will close as scheduled.
And in the end, closing is the goal right?
Next week, we will look at what should take place in property preparing the home for sale.
