by JONATHAN BODEEN | Mar 14, 2016 | Bodeen Team Blog, Real Estate News
Zillow has become probably the most widely used home searching tool in the United States. If you, like many of our clients have browsed Zillow, you may have seen, or even used their “Zestimate” tool. With a click of a button Zillow will give you a quick price analysis of your home. So many of our buyers or sellers come to us with preconceived notions about what their home is worth, or what a home they might want to buy is worth based on this fancy tool from Zillow.
The real question is, can you trust this tool for accuracy, and if so to what degree.
The simple and easy answer is no, you should not trust this tool. That is not to say it doesn’t have any benefits or uses, but the bottom line, it just doesn’t have enough information to make any sort of accurate assessment of a property. Zillow actually admits this in small print on another page somewhere on their website, saying “Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.”
And that really is a good way to say it. Some clients of ours recently sold their home for over 75,000 more than what the Zestimate stated it should be. We have another set of clients, where the Zestimate is 68,000 more than what they were able to get for the property. The Zestimate is not always this far off, but it is very rarely spot on.
Zestimate is an attempt at being a Kelley Blue Book for Houses. The problem is that, unlike cars, homes generally have very little uniformity. Even homes in the same neighborhood with the same floorplan can have whole different levels of upgrades that Zillow can’t see which can mean the difference between tens of thousands of dollars.
In related news, The Arizona Republic is actually setting up a locally charged website called Street Scout that aims to give consumers a better idea of value. Unlike Zillow or other online valuation tools, Streetscout.com will use local real estate experts and data. The site is yet in its infancy, but I already feel better about this tool than the Zestimate.
The best answer though, is to have a real estate professional to do a market analysis on your home. We do these free of charge for all of our clients, and not just if your planning to buy or sell. Often you’re simply curious to see the state of your assets and the current value of your home is a big part of that. We are happy to help.
by JONATHAN BODEEN | Mar 7, 2016 | Bodeen Team Blog, Real Estate News
“So how’s the market?” you ask.
“Great!” I respond, but then quickly add; “Wait which market would you like to know about?”
While the Phoenix Metro Market is incredibly nuanced from neighborhood to neighborhood, we can divide the market here into three main categories of price ranges when determining the overall health of the market.
$250,000 and Under:
Amazing! Well, if you are a seller that is. If you are a buyer in the price range… well… I am so, so, so very sorry. Supply was low in march of 2015. It was a seller’s market and buyers were fighting each other for a place at the bargaining table. Now in March 2016, it has escalated even beyond that! The supply has dropped 20% since then, and as a result prices are appreciating at 8% annually!
Now sellers love this, but truthfully, we can’t call this a healthy market. Phoenix Metro needs a fresh supply of homes in this price range to benefit the buyers in that price range, for whom buying a home is essential in building personal financial security. While builders have again become active with a relative gusto in our fair city, they seem religiously intent on building homes that start in the 300k, not helping our buyers on the lower end.
Between $250,000 and $500,000:
This price range we find to be really more a picture of overall health here in the valley. The supply of listings is going up overall, but so the demand as well. We have more listings on the market and more deals being done than this time last year. Sellers have experienced a moderate 2.6% annual appreciate rate as a result of this. Nothing to write home about… and yet still much better than your 401k has done this year 😉
$500,000 and Over:
In the words of a Michael Orr, the man who is responsible for all of this raw data, this market is “…Wallowing in too much supply…” The supply in this price range has increased a whopping 15% since this time last year. Demand is actually up a bit since last year, but unfortunately not enough to counterweight the greater increase in supply. Some of the stats in this price range have been skewed (inadvertently I’m sure) by some analysts to suggest an appreciation here, but truthfully it looks as if we have actually seen a price depreciation of 5%.
The bulk of our market is still healthy when we remember that the 500k+ price range represents only about 8% of the entire Phoenix Metro market.
by JONATHAN BODEEN | Feb 29, 2016 | Bodeen Team Blog, Buying a Home, Real Estate News
February and March seems to be the time of year when the real estate industry of our fair city of Phoenix is at its most active. This is true both for the most amount of listings coming on the market as well as the time when the most buyers are out and about scurrying to find their dream home. But who does this advantage the most, buyers or sellers? Does this mean we are in a buyers’ market or sellers’ market?
Well that can depend. Ultimately whether we find ourselves in a seller’s or buyers’ market seems to vary from year to year rather than from season to season, albeit with minor bumps up and down throughout the year. Most of 2015, for example was a seller’s market overall for much of the valley, where as 2014 leaned much more toward buyers.
Around this time, we usually see a burst of homes going under contract and higher volume of real estate transactions overall. Many would think this would bode worst for buyers with the increase of competition over homes with other buyers. However, if the increase in new listings, which also rise in the spring, outpace the buyer push, well then seller’s do not necessarily gain the advantage.
What about right now though? According to Michael Orr, a locally renowned real estate statistician whose assessments we follow diligently, the Phoenix Metro Area has already hit its peak for new listings arriving on the market in most areas. This is good news for most currently trying to sell, as competition begins to dwindle, while buyers remain out in force.
Not all sellers can say this however, with some of the more upscale areas continuing to outpace buyer demand with increasing supply. Paradise Valley and Scottsdale for example, are both very balanced markets right now, with no decided advantage for buyers or sellers either way. These areas and a few others are trending toward a buyers’ market.
Always remember that we are forced to speak in generalities in these short little updates. Markets vary from different prices ranges, types of homes, areas, and even from neighborhood to neighborhood.
by JONATHAN BODEEN | Feb 29, 2016 | Bodeen Team Blog, Real Estate News
Where Are We Now?
February and March seem to be the time of year when the real estate industry of our fair city is at its most active. This is true both for the most amount of listings coming on the market as well as the time when the most buyers are out and about scurrying to find their dream home. But who does this advantage the most, buyers or sellers?
Well that can depend. Ultimately whether we find ourselves in a buyers’ or sellers’ market seems to vary from year to year rather than from season to season, albeit with minor bumps up and down throughout the year. Most of 2015, for example was a seller’s market overall for much of the valley, where as 2014 leaned much more toward buyers.
Around this time, we usually see a burst of homes going under contract and higher volume of real estate transactions overall. Many would think this would bode worst for buyers with the increase of competition over homes with other buyers. However, if the increase in new listings, which also rise in the spring, outpace the buyer push, then seller’s do not necessarily gain the advantage.
What about right now though? According to Michael Orr, a locally renowned real estate statistician whose assessments we follow diligently, the Phoenix Metro Area has already hit its peak for new listings arriving on the market in most areas. This is good news for most currently trying to sell, as competition begins to dwindle, while buyers remain out in force.
Not all sellers can say this however, with some of the more up-scale areas continuing to outpace buyer demand with increasing supply. Paradise Valley and Scottsdale for example, are both very balanced markets right now, with no decided advantage for buyers or sellers either way. These areas and a few others are trending toward a buyer’s market.
Always remember that we are forced to speak in generalities in these short little updates. Markets vary from different prices ranges, types of homes, areas, and even from neighborhood to neighborhood.
by MICHAEL BODEEN | Feb 22, 2016 | Bodeen Team Blog, Real Estate News
FHA loans have long been an important and fundamental part of providing American home buying consumers with affordable mortgages using down payments as low as 3.5%. Other benefits with the FHA loan include more relaxed loan qualifying standards than conventional mortgages.
The Wall Street Journal (WSJ) had a front page article today about a new loan product that is just being introduced by Bank of America that looks like quite an improvement over FHA loans – if you qualify. The required down payment amount is slightly less (3%) but the big difference is there’s NO PRIVATE MORTGAGE INSURANCE (PMI) which can add $100 or more per month to the mortgage.
According to the article many big banks have pulled away from FHA insured lending over the past few years “citing the risk of being hit with penalties for minor errors…the banks retreat from the loan program has made it more difficult for low income borrowers to get home loans.”
B of A is able to avoid the PMI by partnering with a Durham, NC non-profit called Self-Help Ventures Fund (https://www.self-help.org) which will step into a loan default situation to help decrease losses to Freddie Mac (lender) before Freddie Mac has to take a loss.
To get this loan, borrowers will need a credit score of at least 660, which is higher than FHA’s requirement, and an income that is less than the area’s median. The 660 is higher than FHA’s minimum, but that is part of the overall strategy of the Self-Help organization to assist those folks who are showing responsibility in paying their bills. The article did not cite the maximum loan amount that B of A would make. FHA only loans $271,000 in Maricopa and Pinal counties.
Bottom line? If you’ve got a decent record of paying your bills and your income is less than the county median, this could be a great loan for you. If your credit however has some challenges or your income is higher, the FHA product or other low down conventional loan may be the right one for you. Either way, do it!
Either way, with the record low interest rates we currently have, or this new product, the time is (still) ideal to buy a home.
http://www.wsj.com/articles/bank-of-americas-newest-mortgage-3-down-and-no-fha-1456117203
by JONATHAN BODEEN | Feb 15, 2016 | Bodeen Team Blog, Real Estate News
We’ve told you recently, on more than a few occasions, that rents are rising across the valley. What may be frightening for those still renting, is that this trend does not seem to be going away. This is especially true for homes in the first time home buying range, where, there is actually a shortage across the valley for homes under 250k.
According to Catherine Reagor of the Arizona Republic; “Almost half of Valley renters saw their monthly payments jump by more than 9 percent in 2015.”
We’ve also been telling you for a long time that interests rates will eventually begin to rise, and to get in on the game while they remain depressed. On that count, interest rates have stayed low longer than us, or any of our real estate compatriots could have predicted. In fact, over the weekend, we have actually seen a slight lowering.
The story with interest rates, is that they generally have an inverse relationship with the overall economic health of our country overall. The more skittish investors become, the more they chase low risk investments, which keeps interest rates low. So often, what bodes ill for our economy, actually excites those of us who rejoice at low interest rates.
I do not mean to gloom and doom about our economy. Apparently, according to folks much more versed in such things, it is the geo-political economical situations that have investors more worried, not so much any particular alarms ringing from our side of the ocean.
The moral of the story remains what it has been since 2008-2009; First time home buyers, get in while the waters hot! My wife and I bought our home last May with a run-of-the-mill 3% down FHA loan, and already I know it would cost me $200 more a month to rent the home I live in than the mortgage is.
If you have you have friends or family that have been renting, encourage them to buy! And of course, give them our info while you’re at it 😉
