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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!

 

 

 

Real Estate Update as of March 2015

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Inventory is down, and as long as demand driven by re-bound buyers (people who sold their homes during the mortgage crisis who can now qualify) are taking advantage of low interest rates remains the same, that only means prices increase.

March showed us more closings than any other single month in the entire year 2014 and pending sales are also up.

As always, the media is behind the 8-ball on reporting and only now will be telling us that the real estate market is hot. If a home is priced right, it goes rather quickly, and this is coming from first-hand experience in the trenches with buyers who are having a hard time negotiating contracts with sellers. Sellers control the market right now.

If you want it, you need to be able to jump to action quickly, which means you need your financing in place before you even think about buying.

Will We Hit 2003 Pricing?

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Sampling of a North Phoenix neighborhood sales history.
Sampling of a North Phoenix neighborhood sales history.

It’s hard to say whether or not our market is continuing to correct. I have updated my Market Statistics page this evening and as you can see from the graph below, we are at 2004 pricing. Draw a line from 2001 to our current average sales price today and you’ll see that we’re where we should be. The unrealistic gains are still falling off in certain market areas and people who sell now are still profiting, albeit not nearly as much as they could have.

If you’ll recall, everyone kept saying, “where would you go,” when asked if they should sell back in 2005. Not many people saw that we’d fall back to where we were in 2004. My question for the masses is whether or not we’re going to see an over correction, pushing prices into the 2003 range.

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.”

FlexMLS Conversion This Weekend

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We’ve been waiting, and now is the time. Over the next 3 days, data input functions will not work on the new ARMLS FlexMLS platform which every ARMLS user will be converted to over the weekend. I have been excited about this system since I first heard about it, and since I’ve used it, I’ve been touting it to everyone I come in contact with. It’s very quick and very easy to use, and finally, it’s an application that’s been designed and optimized for use within Firefox, not Internet Exploder. For the industry as a whole, it is a major upgrade to the ARMLS users.

With all of the training that has been offered over the past six to ten weeks, it’s still surprising to me how many real estate professionals haven’t even touched the new system. Personally, I think this is a detriment to their own business, as they will be faced with learning how to utilize the new system on the fly as you, the client, demand from them.

Since the first day of July, I have been working within the new FlexMLS system and have found it to be vastly superior to the predecessor and cannot wait to show you how nice the system is.

If you’re in the market to buy, which all of you should be considering, then let me help you find your home by creating a custom portal for you to enjoy! Simply contact me today and I’ll set your sights on your dream home!