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Archives for 2016

For My Home Owner Friends, A Quick Thought

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The Phoenix real estate market can be summed up in general statements, just like anything else, but it’s also very clear that the diversity in the valley between subdivisions and communities that sit right next to each other often paints a strange story.  So, when we refer to the market moving in a certain direction, sometimes we have to get more specific in order to offer a more representative opinion relative to your home.

According to the data for the entire valley, the number of days that it takes to sell a home in the $150K – $300K range is hovering around the following numbers:

1-Year Average:  67 days.
Long Term Average (years and years): 80 days.

When the 1-Year average is below the long term average, the seller has an advantage.  One key point however is to note that the direction that the 1 year average is traveling is the more important measure of whether or not the rate of appreciation is increasing (more seller control and scarcity) or decreasing (seller losing control.)

Small fluctuations, even while in a seller’s market, can sway the advantage back and forth depending on the circumstances of your particular situation.

Wanting YOU to Know How It Works

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One evening, while expressing my thoughts in a small group, it was brought to my attention that I take a relatively evangelical approach to life, and I don’t necessarily mean in the religious sense.  This was contrary to my own self-perception.  I had expressed, perhaps hoping to not be branded an “evangelist” due to the negative connotations, that I didn’t believe I was evangelical.  I was corrected.

I think I am, and the evidence is here and in many other places to prove it, else why would I take the time to write, in hopes of influencing people I care about, like you.

Real estate is a constantly shifting landscape that has many variables and can be quite complicated.  It is my goal to help you understand how to make the right decisions at the right times based upon the mountain of information that comes your way every day, and to make sure the information you receive is relevant and up to date.

The following link will take you to one of the best resources that I have at my disposal to measure the market.  It’s an exclusive tool that I pay for that provides you with a chart that will help you make better real estate decisions.  Take a look, play around, and if you need some guidance, let me know and I can help you interpret the information you see.

Days of Inventory

 

I hope you’re having an awesome day!

 

 

 

The Importance of Choosing the Right Lender

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In October, new lending rules were put into place.  As a result, most lenders who aren’t always on top of their game were exposed without the education and systems in place to handle what was coming.

The evidence of the inability for many lenders to handle the new rules came in the form of extra long closing times.  Industry experts warned everyone to prepare for closings of up to 45 days or even more.  Gone were the 30 day closings, or so it seemed it would be.

However, some lenders simply got it right, and continue to get it right, providing much better service to the buyer, closing in the more familiar 30-day time-line.

There are two questions you should start with when you’re looking for a lender, aside from “do you like the loan officer.”

  1. Are you a mortgage banker, or a mortgage broker?Mortgage brokers hunt for banks for you, and then pass off the work to those lenders.  You have very little connection to the lender, and very little influence over whether or not they’ll make it difficult for you to meet critical contract deadlines
  2. What is your average closing time-frame now that TRID is in place?Loans can still close in 30 days.  Find a lender who can fund their own deals and who has complete control over the decision making process.  Make sure they’re local, and that you can actually meet them face to face to develop a real relationship with them.

One company that I have worked with in the past that I would recommend all day long is VIP Mortgage.  So far, I have developed a relationship with two of their loan officers, and both of them stand tall in their industry as reliable, hard-working characters that have your best interests in mind, and who know their stuff.

If you’re looking for someone to help you get started with the home-buying process, give one of them a call today!

Ryan Halldorson

Individual Licenses National: 216632 | AZ: 0911658 | CA: DBO216632

8388 E Hartford Dr, Ste 100
Scottsdale, AZ 85255

Office: 602-793-7204Fax: 602-288-9415

The Price of your Home

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There are many factors that determine what someone is willing to pay for your house, today.  And let’s be real.  The value of your home isn’t what Zillow says it is, it isn’t what your neighbor’s house sold for recently, and it isn’t necessarily what you feel it’s worth.

The value of your home is what a buyer is willing to pay for it, today.

It is a completely subjective matter controlled by the forces of Supply and Demand, a simple concept that many people don’t quite understand.

The variables that operate inside of Supply and Demand are seemingly endless, but for the purposes of pricing a home, one of the most important factors is its location.  Where a home is will often be the most influential factor in evaluating a home’s potential sales price.  I say potential because some homes, while they may be located in prime locations, may not be ready to exploit the full value of that location.  They may be in disrepair, etc.

Remember, your home is only worth what someone will pay today.  This makes marketing the property a challenge, because unless someone comes to the table today (which happens from time to time) the price you ask needs to be in line with what it will sell for in the future, and none of us have information that allows us to predict the future.

What we do have is a long history of trends and behaviors.  Those past behavior patterns allow us to accurately predict gradual future changes, whether positive or negative.  There’s no prediction tool for anomalies (such as the market meltdown of 2008) and sometimes they surprise us, but we are able to develop a fairly accurate assessment of a gradual change in the market over time, thereby being able to anticipate the market and price a home correctly the first time.

The goal when selling a house is to get it sold.  If that’s not the goal, then it shouldn’t be on the market.  In order to get the house sold, the price needs to anticipate where the market is headed and be priced according to that trend.  If we do this successfully, then we’ll be able to price the home ahead of the market.

So how do we determine the direction of the market such that we ensure we are pricing the home ahead of the market?

Math.

In almost every metropolitan market, anticipating the gradual direction of the market can be calculated with simple math, and that simple math will show us more about the Market Condition and Market Supply.

Market Condition

There are three market conditions that you may hear from time to time.  The first is a “Buyer’s Market.”  That’s where the number of homes on the market favors the buyer and puts them in a stronger position, i.e.: plenty of homes from which to choose.  The second is a “Seller’s Market,” which is the opposite, giving the seller more control over the outcome because there are less options for the buyer.  The third is a “Balanced Market” where everything is balanced with very little fluctuation in price.

To determine what the condition of the market is, one must first narrow their market to the area that they’re working with, such as your sub-division.  With just the right information, we can figure out what the condition of the market is in your area.

Market Supply

Market supply, in it’s simplest form, represents the time it would take for all of the homes on the market to sell, assuming no other homes were listed for sale.  For instance, if you had 10 homes on the market, and 2 homes per month were selling, then there’s a 5 month supply. (10 / 2 = 5)  Simple math.

In Phoenix, over time, we can show that a balanced market (that being a market where price does not fluctuate) occurs when there are approximately 6 months worth of homes on the market.  Anything below means we’re in a Seller’s Market, and anything above means we’re in a Buyer’s market.  The degree to which the prices will be influenced is directly related to how far away the Market Supply is from that 6 month mark.

In your neighborhood, if we find that there’s a 5 months supply, then it would be safe to assume that there is slight upward momentum in pricing.  If there is a 1 month supply, then prices may be increasing at a much faster pace.

The same goes for an over-supply of homes.  If there’s a 10 month supply of homes in your market area, it would be safe to assume that there will be down-ward pressure on pricing.

Once we determine the market supply in your area, we can accurately predict the direction of pricing, and price your home accordingly, which ultimately is a target price that will get your home sold.

That is, after all, the goal.