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Real Estate Services by Jon Griffith

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Archives for August 2008

Lewis Black and Olympic Swimming

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Lewis Black has repeatedly made a point about television networks streaming information that’s distracting to the viewer on the bottom of the television screen, which I fully agree with. As a generation X’er, I was around during the days where there were no fancy graphics on the screens and the country was riveted to only 3 TV Stations. It seems that the plethora of news that we are bombarded with IS in fact distracting us. True, the visual effects are quite fantastic, but they certainly aren’t necessary to convey the message. After all, it is the message that we’re looking for.

What does this have to do with the Olympic games?  Well, I’m a swimming fanatic, and I love watching all of the swimming events, naturally.  In swimming, like most other sports, the most important moments are the start and the finish.  I don’t recall what the 2004 Olympic Games coverage was like, so this may be an old argument, but I’m finding that the lane graphics that show the name of the competitor through the entire start is detracting from the dramatic entrance of the athlete into the water.  I really like seeing how well they start the race.

Please, NBC and other stations, STOP cluttering the screen with fancy graphics.  Next thing we know there will be product placement in just the wrong places and nobody will be able to enjoy the raw spectacle they tuned in to see.

Do you agree?  Disagree?  Leave a comment and let me know.

Weekly Market Update

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As usual, the graphs below, organized by week, outline the activity in the market since the beginning of the year.

Inventory for all of ARMLS stands at 54,114 homes with an average asking price of $411,671. The average sales price over this period was $245,206. The average asking price for properties that sold during the week is actually lower than the sales price.

Homes are selling on average in 101 days. Based on our current inventory and rate of closing, we are looking valleywide at a 9 month inventory on average.

Weekly Market Update

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All stats in the weekly update are based on all residential listings and are compiled using data from ARMLS records. I do not guarantee that these statistics are 100% accurate, but they do represent the market trends accurately.

All of the statistics are represented graphically, recorded for each week of the year starting with week one, January 1 – 7.

Buyers Beware: Time Is Running Out

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For years and years the real estate market has been up and down, up and down, a cycle that repeats itself every 7 to 14 years on average.  SEVEN TO FOURTEEN YEARS!!!  That’s long enough to start a family and have kids in elementary school AND high school.  Remember how long 4 years was when you were young?

Are you renting?  Are you living at home, just out of college?  Consider your options now because time is running out.  You don’t want to be someone who’s looking back

What is the market condition?

Today, the market is in distress.  We experienced unnatural gains in 2005 and as a result, we had our second bubble of the new millennium.  The first bubble was the outlandish condition of the stock market, a market where people invested in ideas, not in solid products.  The second bubble was the same but with homes.  People investing in ideas like.  The idea that you could purchase a home for $100,000 and sell it for $200,000.  Some people were lucky enough to buy at the right time and sell at the right time, but nobody knew it was going to go down the way it has.

What do I mean when I say that the market is in distress?  In 2003, people were buying homes on adjustable rate mortgages because the interest rates were so low.  In 2005 as people saw the prices of real estate skyrocket, they did one of two things.  They either sold their property, or they pulled money out on interest only loans with adjustable rates to buy cars, boats, other homes (bad timing,) you name it.  A remodeling and new builds went nuts.  Those who sold probably had a legitimate reason to sell and weren’t doing it because they were fearful of a market bubble bursting.  Most of us asked the same question: “If I sell now, where am I going to go?” Read more about retirement investing at https://moneypacers.com Your Guide To Financial Stability .

Here’s why there is so much distress.  Those adjustable rate mortgages were typically 5 years fixed, then adjustable after that.  If you purchased your home in 2003 on an adjustable rate mortgage, then you pulled money out of your house for who knows what, you are probably experiencing hard times now because your mortgage has expired and has adjusted by around 2 points, and now you can’t afford your payment.  To top it off, your home is worth less than you owe the bank and you can’t pay.  Foreclosure is imminent, you must sell short.

Think of Owning as a Long Term Proposition

Before you own, understand that you need to come to terms with the way the market swings.  If you play the stock market and you have been successful trading short term trades, then perhaps you’ll do well managing real estate the same way, but if you cannot handle the swings, don’t buy real estate.  Buying today means owning for a longer time.

Owning a home builds long term wealth.  As you pay your mortgage, every month a little more of that house becomes yours.  Every year, on average, the value of your investment increases.  History shows that the market always increases over time, barring natural disaster or other completely unexpected anomalies.  Scottsdale is quite solid in its growth history.

What Does the Future Hold?

Nobody knows.  Isn’t that comforting.  The only thing we see are patterns, and right now, the patterns of the past tell us that even though our circumstances are unique compared to other times the market has been in distress, we are not spiraling towards our doom.  In 2008, the number of homes sold has increased.  In 2008, the number of foreclosed properties has increased.  By the end of 2009, when we have a new president in office, and people have cooled down, and interest rates have begun to climb, consumers will be more confident about spending, and more money will be invested in long term real estate holdings.

If you find yourself watching this come true and you haven’t purchased your first home by then, it will be too late.

Start looking today.  Downpayment Assistance is going away.  Think about ownership rather than preference.  Buy something! Find a home that might not be ideal and start building ownership so you can look back in 10 years and say, “Thank you…I am so glad you helped me begin building my wealth when you did, because I would have missed out.”

What Does Escrow Mean?

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Susan Gruenling in an article entitled Open Sesame, outlined what it means to “open escrow.”  As I was reading it, I was thinking about what the word Escrow really means and where it comes from, so I did a little research.

If you ever learned Spanish, you probably remember that the verb to write is escribir.  A desk is an escritorio.  The word Escrow, according to The Online Etymology Dictionary is basically a scroll that is a deed delivered to a third person to hold until a future condition is satisfied.

In real estate transactions in Arizona, the escrow is the period during which the Title/Escrow company (the third person) holds the proceeds from the sale of a home until both the buyer and seller sign their documents at which point the funds are transferred from the buyer or buyer’s lender to the seller and/or lienholders of the property being sold.

In other businesses, escrow companies are responsible for securing the funds from the buyer and holding those funds until a future condition is satisfied.  When the conditions are met, the escrow company releases the funds to the seller.  An example would be the process of selling a vehicle or other high dollar luxury item, like a piano, over the internet.  If you have a car to sell, and someone across the country whom you do not know wants to buy it, you would most likely involve an escrow company to ensure that you get your money, and they get their car.

Another Sold Property: 1028 W. Tremaine

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Success is a byproduct of helping others.  Today, the sale of 1028 W. Tremaine closed as expected.  This listing hit the market on June 2nd, received its first offer in 17 days and found its way into escrow within 22 days.  The new homeowners are very pleased with their purchase and I am ecstatic to have a satisfied seller.

The property was listed at $239,000 and closed today at $225,000, which is 94.1% of what we were asking.  Not bad considering the market conditions.  Gilbert has seen quite a bit of action in the past months, especially in Cayman Square, but just like any other market, price is driving the sale of the homes.

Over the past 6 months, in Cayman Square, single family detached homes with the same square footage as 1028 W. Tremaine have consistently sold at an average of $136.00ft/sq.  In February, we saw 1103 W. Heather sell at a full price offer of $230,000.00 after only 14 days on market.  2 Months later, yet another identical unit sold at $213,500 or 92.9% of the original $229,900 asking price.  On the 1st of May we saw 605 N. Ocotillo go for $10.00 more than the list price at $215,000.  Although listed shortly after our property, 621 N. Ocotillo closed on the 28th of July at a full asking price of $225,000.

There are currently two active listings that have not seen any action, which is unlike the rest, which closed in an average of 17 days.  These are 1102 W. Laurel which has been on the market for 83 days, first listed at $229,000 on May 11th with a recent 5.2% price drop to $217,000 on July 17th, and 616 N. Ocotillo, first listed on July 1st at $239,900.00 which is well above the average sale price in the area.  It will not sell for $239,900.00.

All of these properties are within a stone’s throw to 1028 W. Tremaine, and all of the ones that have sold have one thing in common.  The price was right.

The evidence is before you and will help you determine what your home should be priced at should you be ready to sell.  Now is a fantastic time to buy if you’re planning on expanding or moving up.  Take a look at the following image to see the current Statistical Summary that I have put together.

All of this information has been provided free of charge as a courtesy to you and your neighbors in Cayman Square.  If you are currently considering selling your home, I would love the opportunity to help you.  Call me today!  (602)  312-3262.