About a week ago, I was driving in Central Phoenix and I saw a Times Square-sized billboard of a happy, smiling Realtor who’s a well known name in the Valley. Next to his portrait, in which he’s fielding an obviously mission-critical phone call with a clipboard tucked under his arm, and yet still managing to give a thumbs-up and toothy-grin for the camera, was a simple phrase:
“What’s your home worth? Call Ted (not his real name) NOW to find out!”
I dismissed the ad and continued my commute.
About 4 blocks later, while stopped at a red light, a bus drove by with a smaller version of the same advertisement plastered on the back.
A few blocks later and there he is, grinning at me from a bus stop poster. Wow. Deja vu.
At this point, I found myself wondering if maybe I was missing the boat on the commuter market and drivers’ apparent fascination with property values. I mean, maybe ramping up my social media visibility was not the right strategy at this time after all.
“Hmmm…,” I thought, “perhaps I should enlist the Ron Paul Revolutionaries to engage in a poster-hanging, sign-pounding, sticker-stickering grassroots campaign to blanket the public streets and sign posts with my brand.”
Commuters would be pummeled on every corner with my messaging, stickers plastered over signs –
“STOP (wondering what your home is worth and call Justin!)” and
“YIELD (to the best comps methodology in the business and call Justin!)” and
“NO U-TURNS (Justin will tell you what you’re home is worth so you can make all the right turns! So call Justin!)”
“ONE WAY (To know what your home is worth — CALL JUSTIN!)”
After a few bizarre Willy-Wonka-esque moments, I realized that, despite commuters’ apparent uncontainable excitement about property values, my blitzkrieg campaign was unlikely to yield sufficient ROI to cover the fines that would be levied against me for defacing public property. I had hit a dead end, so to speak.
Having ruled out vandalism as a marketing strategy, my thoughts shifted away from how to reach an audience of perspective home sellers to the concept of VALUE. Specifically, what do Arizona home sellers want from their Realtor?
Marketing 101 teaches us that one’s marketing message should convey some notion of value to the target audience. Since the majority of Realtor marketing to sellers promotes helping them put a price on their home, one might conclude that home sellers look to their agents primarily for this purpose.
Now, I’m the first to admit that running comps the right way takes experience and a sound methodology. However, I’d argue that ranking it as the number one service of value from your Realtor is like choosing a doctor because they have an accurate scale at their office. (Not that we can choose our doctors anymore.) Yes, knowing and tracking our weight is one factor in understanding our health, but we usually have a rough idea of our weight so a scale that’s a couple of pounds off isn’t going to have much of a difference on our overall experience.
When you visit your doctor, issues like timeliness, education, experience, “bedside manner”, office resources, staff support, and other issues have a much greater impact on the overall quality of care.
The same holds true with Realtors. Are comps important? Of course! But I’ve never met a seller yet who didn’t have at least a “Zillow-rough” idea of what their property was worth. If an agent suggests a value that differs grossly from their own opinion, they’ll know something is wrong. They look to me to help them zero in on the right number that maximizes their sales price because every dollar counts.
However, there are several other facets of the client-agent relationship that can have a greater impact on the overall success or failure of the experience. This is where not all agents are created equally!
Consider a short list of factors that directly affect what I’ll refer to as the “sales experience.” That is to say, the bundle of qualities that include sales price, transaction-related hassle, and potential liability.
Ways Realtors can add value beyond comps analysis:
- Home staging (proactive recommendations to help your property show as well as it can)
- Marketing strategy (how to position the property to target the right buyer)
- Advertising (outlets and reach)
- Quality and completeness of photos, descriptions, measurements
- Ongoing adjustments (based on showing feedback, sales activity updates)
- Accessibility of your agent (Are they there when you need them? Do they return your calls?)
- Negotiating skills of your agent (contract terms, repairs)
- Knowledge of contracts, including when and how to modify to best protect your interests
- Risk management to minimize your present and future liability (disclosures, repairs, insurance, etc)
- Communication “flow” with your agent (current steps, next steps – do you know them?)
- Post-sales support (does your agent disappear after the sale?)
The way these issues are handled can have a much greater impact on the sales experience, including the sales price, than a set of comps that’s a few thousand dollars off target.
Unfortunately, it’s very difficult to gauge in advance how an agent will address these issues.
To find the right agent, whether you’re looking to purchase or sell a property, I recommend the following steps:
- Ask your family, friends, co-workers for recommendations. Gather a short list of 3 – 5 names.
- Visit their websites and search around the Internet to get a feel for their online presence and candid Internet reviews.
- Schedule in-person interviews with those who “make the cut.” Your goal is to learn about the agents’ services and philosophy.
- Ask for references from each agent and call them! Have questions prepared that will give you insight on issues that are important to you.
- Once you find the agent who you feel offers the best mix of services and personality fit, get a commitment in writing of what they promised during your interview(s) so you can hold them accountable.
- You should also insist that the Listing Agreement contain verbiage that allows you to sever the Agreement if the Realtor fails to deliver on what they promised to you.
The concept of “value” in a real estate agent is much easier to appreciate after you’ve had a positive or negative experience. With some due diligence up front, you’ll increase your chances of finding a Realtor that brings maximum value to the table, far beyond a good Comparative Market Analysis.
To own or rent, that is the question that continues to weigh on the minds of potential homebuyers everywhere. While the gap may have narrowed over the past year due to rising mortgage rates and home values, buying is still a better bargain than renting in most communities across the country – including Phoenix and Tucson — according to an online real estate company.
Trulia recently reported that even with the rate for a 30-year mortgage fixed at 4.5 percent, buying is 38 percent cheaper than renting nationally and in all of the 100 largest metro areas. The number shrank slightly compared to last year, when homeownership was 44 percent cheaper than renting.
In Phoenix and Tucson, the buying vs. renting margin experienced a similar squeeze. Trulia’s Rent vs. Buy analysis indicates it presently is 33 percent cheaper to buy than rent in metro Phoenix, and 42 percent less expensive in Tucson, compared to 46 percent and 48 percent, respectively, last year.
Trulia’s research assumes three main conditions: that you will stay in the home seven years; that you itemize federal tax deductions in the 25 percent bracket; and that your 30-year, fixed-rate mortgage rate is 4.5 percent, with a 20 percent down payment. The company’s calculations take into account the cost of buying and renting for identical sets of properties, including maintenance, insurance, taxes, closing costs, down payment, sales proceeds and monthly mortgage and rent payments.
In general, today’s rent vs. buy discussion is driven by simple supply and demand and the market correction that occurred in residential real estate following the Great Recession, when home prices fell by 56 percent. Homeownership became more affordable for some, but at the same time, displaced homeowners flooded the rental market, causing significant rent increases. “Rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison,” writes Trulia chief economist Jed Kolko on the Trulia Trends blog.
So, when will we reach the tipping point where renting becomes cheaper than buying? Kolko says in all but the most extreme markets, homeownership will be less expensive than renting until mortgage rates hit 10.6 percent – and rates haven’t been that high since 1989.
The top 10 markets for first-time home buyers this year include seven metropolitan areas in Sun Belt states, plus the areas around Pittsburgh and Philadelphia, according to a new report by realtor.com®.
Pittsburgh topped the study’s ranking, which examined five key factors that make particular markets ideal for first-time buyers: market popularity, prices, inventory, time on market and unemployment rates.
Florida had the most market of any state, with the metropolitan areas of Tampa-St.Petersburg-Clearwater, Orlando and Jacksonville all making the list.
“As we head into home-buying season, these markets show favorable conditions for first-time buyers, which is encouraging because these buyers are crucial to the housing market,” said Steve Berkowitz, CEO of Move Inc., operator of realtor.com.® “First-time buyers have a widespread impact on the local housing markets. In transitioning from renters to owners, new buyers pay property taxes and other fees and taxes associated with homeownership that benefit local schools and services.”
Here are the criteria realtor.com® used to rank the top 10 markets:
- Location, location, location: Market popularity is an important consideration for first-time buyers. It is common for owners to become “move up” buyers and purchase a larger home a few years after a first-home purchase. Buying a home in popular markets increases the likelihood of making money on a first home.
- Affordable list prices: One of the biggest barriers to homeownership is affordability. Homeowners not only have to be able to afford a monthly mortgage payment, but must have enough saved for a down payment.
- Ample inventory: Inventory shortages can often spark bidding wars in which investors or buyers with higher incomes can price out first-time buyers. Markets with an ample inventory of homes for sale are less likely to experience bidding wars.
- Reasonable time on market: Median age of inventory is a clear indicator of demand in a market. High demand is another factor that prompts bidding wars and makes it difficult for first-timers to get the home of their dreams. Additionally, first-time homebuyers should consider how long a home has been on the market. They may have an opportunity for a better deal if a seller is required to price a home more competitively in order to close.
- Steady employment: Unemployment rates affect all aspects of the economy, including first-time buyers. In order to pay for their mortgages, new buyers need to work and hold steady jobs in markets that support their job.
Methodology: Realtor.com® examined key housing indicators including: search rank, median list price, year-over-year change in inventory, median age of inventory and unemployment rates across 146 markets and evaluated the metrics against the needs and desires of the typical first-time homebuyer. All metrics considered were pulled directly from realtor.com®’s February 2014 data and the U.S. Bureau of Labor Statistics.
by Justin Lombard
“I SEE THE LIGHT!”
When selling a home, there are a number of variables that you cannot control, such as location, lot-specific features, community dynamics, and (to an extent) floor plan.
Home sellers and their real estate agents should embrace these variables – the good, bad, and ugly – and emphasize the positives as best they can.
So while you can’t move that school across the street and replace it with a community park, you CAN remind prospective buyers that the days of driving their kids to school or the bus stop would be over! “Easy walking distance to Madison Elementary!”
Just as there are important factors that a homeowner can’t change, I’m a big believer in taking charge of those things that are within a seller’s control. Why not stack the deck as much in your favor as you can to present the most positive image of your home?
Today’s staging tip is a very simple 2-step process that will immediately brighten up your home to give the feeling of a larger, cleaner living space:
Step 1: Change light bulbs to the highest wattage incandescent (gasp! How not green!) or LED (gasp! How expensive!) bulbs that the fixture will safely accommodate.
Step 2: As long as you’re on the step-stool, take a moment to clean the existing bulbs AND the light fixture itself.
Lisa Kaplan Gordan, a luxury home builder and Homes editor for Gannett News Service, offers advice and cleaning tips for different types of light fixtures to help your home “shine” in the most literal sense.
“Dirty light fixtures not only look bad, they reduce brightness and waste energy. Here’s how to clean your fixtures and brighten the room to boot.
Granted, cleaning light fixtures is a hassle that requires a stepladder and a steady hand. But it’s a necessary spring-cleaning chore that freshens your home and gives you the light you’re paying for.
Dirty bulbs shed 30% less light than clean ones, says the U.S. Department of Energy. Add a dusty, dead-bug riddled cover, and you’ve got an automatic dimmer, whether you want one or not.
Got a dirty light fixture? We’ve got your cleaning tips.
Yes, you should dust your crystal chandeliers weekly, especially during pollen season. But once or twice a year, you should make those crystals sparkle with a thorough wash.
1. If the chandelier isn’t too big, take it down and lay it on top of a towel spread on a table. If it’s huge, hire a handyman to bring it down, or grab a stepladder and clean it while it hangs.
2. Take a picture of the chandelier before you start cleaning. That way you’ll remember where each crystal belongs if you take them off during cleaning, says Meg Roberts, president of Molly Maid cleaning service.
3. Mix a solution of 1 ounce mild dish soap with ¼ cup white vinegar and 3 cups water.
4. Add to a spray bottle.
5. Spritz each crystal.
6. Let dry and polish with a microfiber cloth.
These days, bulbs have long lives thanks to new LED and CFL technology. They’re bound to get dirty and should be cleaned.
Mary Beth Gotti, manager of the GE Lighting Institute, says a thorough wipe with a dry cloth is the best way to get rid of dust and dirt.
“If you use a damp cloth, you can get water into crevices in the lamp that can damage electronics,” Gotti says. Also, don’t spray cleaning solutions directly onto the light bulb, which could damage the bulb.
Most important: Turn off the electricity to the fixture before messing with the bulbs. To be extra cautious, turn off the circuit breaker, or put a piece of tape over the switch so no one else turns it on while your working.
Ceiling fixtures can be a dusty, grimy, buggy mess. Carefully take down the fixture cover and slide it into a sink full of soapy water. Dry and shine with a microfiber cloth.
Avoid the temptation to put glass fixtures into the dishwasher. The glass can shatter, ruining your fixture and your dishwasher.
These usually are easier to reach than ceiling fixtures, so you can clean in place.
Turn off the light, let bulbs cool, then spray and wipe the outside of globes with a microfiber cloth and cleaning spray.
Wipe bulbs and extension rods and cables with a dry cloth.
Dust weekly with a long-handle duster, such as a Swiffer, that traps dust and cobwebs. For a more thorough cleaning, wipe the insides of canisters and the bulbs with a microfiber cloth or a slightly damp rag.
Caution: Before cleaning, make sure the electricity is off and the bulb is cool.
Dust the lights on ceiling fans weekly when you clean the fan blades. When a bulb goes out and you have to climb a ladder anyway, clean globes and bulbs with a microfiber cloth. If the globes are really dirty, take them down and clean with soapy water or a cleaning solution.
When removing or returning globes or bulbs, be sure not to steady yourself by grabbing fan blades, which will turn if touched.
Tricks of the Trade
1. Dryer sheets are low-cost alternatives to microfiber clothes. They’re great for dusting bulbs.
2. Wear goggles when dusting or spritzing overhead fixtures to prevent dust or cleaning solution from hurting your eyes.
3. If you’re having trouble removing the bulb in a recessed light, cut a 12-inch strip of duct tape, and fold it over the bulb so that the ends act like handles that are easier to grip than the glass.”
by Justin Lombard
My husband and I learned the hard way that it’s often best to buy closer to the bottom of a real estate market. Here are five markets worth a second look.
When my husband and I bought our home, prices were near their peak in our area.
At the time, we had no idea that home prices in our market were near the peak. We thought we were buying in an area that had potential. We bought in a new subdivision. The town was expanding. Things were starting to blow up.
Unfortunately, at the time, we didn’t exactly have our fingers on the pulse of what was happening. We didn’t realize that housing permits were dropping in number, or even that employment was stagnating in our area.
A year later, the financial crisis changed everything for everyone, and now, several years later, our home’s market value is $13,000 less than we paid.
We learned a valuable investing lesson from this experience. We learned that it’s important to pay attention to more than just (possibly) bubble-inflated prices — and to carefully consider where we are buying to ensure that the housing market in the area really is on the way up.
Perhaps most important, we learned that it’s often best to buy closer to the bottom of a market. That’s when you can find the best deals. In fact, my colleague Nathan Slaughter — editor of Street Authority’s High-Yield Investing newsletter, says if there was ever a time to invest in real estate, it is now. To put it bluntly, if you wait too long, you could miss out on a ton of potential profits from an opportunity that only comes along once every couple of decades.
With that in mind, here’s a list of markets that are booming right now. Next time we decide to buy — or rather, if we decide to buy again — we will research the situation more, and we will look for markets that recently saw bottoms but are truly heading higher.
According to the NAHB/First American Improving Markets Index (IMI) issued on August 6, 2013, Phoenix is one of the 247 metro areas in the United States showing improvement in housing. Prices have improved 34.8% from their trough in 2011. This improvement is solid, but it also means that there are plenty of undervalued homes available in Phoenix.
On top of that, the IMI notes that permits have increased 3.4% and employment has improved 6.6% from their troughs of recent years.
There is solid, but undramatic improvement, and it’s possible to get some good deals in this popular area.
Texas has been on a lot of lists lately, with its cities showing signs of solid economic growth and housing market recovery. One of these towns is Odessa.
According to the IMI, Odessa has seen a 27% improvement in prices since its trough in late 2010. Permits are also on the rise, gaining 29.9% since 2009. This means that you might have a choice of newer homes to choose from, as opposed to Phoenix, where there is still something of a glut of existing home inventory.
Employment is growing as well. Odessa has experienced 29.1% employment growth since its 2009 bottom.
Bismarck, North Dakota
This town might be considered by some to be located in the middle of nowhere, but it has made its mark in the aftermath of the financial crisis.
North Dakota is one of the states that didn’t see a huge drop in employment, and that was sheltered, to some degree, from the worst of the recession. But the housing market is still blowing up in Bismarck. Indeed, home prices are up 29.4% from their trough in early 2010, and permits are up 41.8%. The IMI also says that employment is also still improving — up 13.9% from its trough in 2007.
I’m from Idaho (but not Boise), so I found it interesting that Boise was represented on the IMI’s list of improving markets. When I considered the hit my uncle took when he sold his house during the recession, though, my surprise evaporated. After all, a market that ended up being smashed can make a great opportunity later, when you catch it on the upswing.
Boise has seen a 26.4% improvement in prices since the trough it reached in 2011. Permits are up 3.8%, and employment has improved 8% since their 2009 troughs. As with Phoenix, one way to look at these stats is to realize that there are plenty of good deals to be had on existing homes.
Yes. Detroit. Really.
In spite of concerns over the city declaring bankruptcy, the housing market in Detroit is starting to heat up, probably due to the fact that there are people like Donald Trump who think that Detroit is worth investing in right now. It might not be a poor choice.
Home prices have rebounded 24.5% from their 2011 trough, and permits are up 10%. Even employment is improving, gaining 6.6%, according to the IMI, from the 2009 trough. If Detroit really is on the verge of a renaissance, now might be the time to get in on it.
The Investing Answer: Now is the time to start thinking about investing in real estate — or even buying a primary residence. Prices, although up from their troughs in many markets, are still far from their pre-crash peaks. That means that, with the right research, you could get in now, while the markets are starting to blow up. You can get a good deal and even possibly see decent appreciation in the future.
The Obama administration wants to create a mortgage market that is more forgiving to borrowers who lost their homes due to the recession, an effort that could widen the pool of potential homeowners.
A recent rule change lets certain borrowers who have gone through a foreclosure, bankruptcy or other adverse event—but who have repaired their credit—become eligible to receive a new mortgage backed by the Federal Housing Administration after waiting as little as one year. Previously, they had to wait at least three years before they could qualify for a new government-backed loan.
To be eligible for the new FHA loans, borrowers must show that their foreclosure or bankruptcy was caused by a job loss or reduction in income that was beyond their control. Borrowers also must prove their incomes have had a “full recovery” and complete housing counseling before getting a new mortgage.
The Obama administration wants to create a mortgage market that is more forgiving to borrowers who lost their homes due to the recession — an effort that could widen the pool of potential homeowners.
Real-estate companies in bubble hot spots like Las Vegas and Phoenix already have stepped up marketing campaigns to attract these so-called “boomerang” buyers whose finances have improved after a foreclosure.
But it isn’t clear if banks will be eager to offer loans with the new terms at a time when they are facing a wave of lawsuits and investigations related to other government-backed loans. The FHA already offers among the most flexible lending standards today, requiring down payments of just 3.5%.
“It’s difficult to see how lenders would even consider doing mortgages with higher risk” in the current environment, said David Stevens, the chief executive of the Mortgage Bankers Association, who served as the FHA’s commissioner from 2009 to 2011. Lenders aren’t going to expand credit “while you’re suing them and threatening them over minor errors.”
The policy change reflects broader concerns among administration officials and federal regulators that the mortgage-credit pendulum has swung too far to the restrictive side from the days of lax lending rules that fueled the bubble. Some economists say too-strict credit standards are shutting out some creditworthy borrowers and holding back economic growth. Low participation in the recovery by young buyers “absolutely is a problem, and I’m not exactly an ‘easy credit’ guy,” said Thomas Lawler, a housing economist in Leesburg, Va.
The new rules, which expire in three years, also apply to former homeowners who completed a short sale, where a bank approves the sale for less than the amount owed.
That could help potential buyers like Candy Alvarado, who sold a condominium in Norwalk, Calif., for $108,000 three years ago, leaving her bank with a $168,000 loss. The 31-year-old schoolteacher, who used a no-money-down mortgage, said it didn’t make sense to keep the condo after home values dropped and her work hours were cut during the recession.
Ms. Alvarado and her husband began looking for a home for around $400,000 in April and they are preapproved for an FHA-backed loan. “We’ve been saving, and we want to make sure we have a home where we can build equity,” she said.
Shaun Donovan, the secretary for the Department of Housing and Urban Development, which runs the FHA, played down potential criticism that the agency might invite a return to risky lending practices. “What we are talking about is getting back to responsible, plain-vanilla lending,” he said in an interview. “We believe these are low-risk loans that can be made safely.”
In the four years ended last September, some 3.9 million homes had been lost to foreclosure. About 1 million borrowers who went through foreclosure during the crisis have already waited the required three years to be eligible for an FHA-backed mortgage, and by early next year that number could rise to 1.5 million, according to estimates from Moody’s Analytics.
While the new rules could help some buyers, many former homeowners will need more time to repair their credit, said Aviva Lomeli, a real-estate agent with Redfin who represents Ms. Alvarado. “You don’t necessarily start recovering one day after you finish a short sale,” she said.
The administration’s broader push to ease lending is running up against other hurdles. The government—through mortgage-finance firms Fannie Mae, Freddie Mac or federal agencies—has guaranteed as many as nine in 10 new loans in recent years. But over the past four years, banks have had to buy back tens of billions of defaulted loans as Fannie, Freddie and the FHA faced mounting losses. Because of uncertainties about these “put-backs,” lenders have imposed more-conservative standards than what the federal entities require.
The FHA says it has a separate effort under way to provide greater clarity about when banks could face put-backs, following on the work of the regulator for Fannie and Freddie last year. Lenders say those changes haven’t been specific enough to change their lending posture.
In speeches this year, officials at the Federal Reserve have raised concerns that tight lending standards could make it harder for younger borrowers, who tend to have lower credit scores, to obtain mortgages. The Fed’s quarterly surveys of senior loan officers have found that while banks have indicated a growing willingness to extend credit to borrowers with high credit scores, about 30% of lenders in April reported that they were less likely than a year earlier to extend FHA-backed loans to borrowers with lower credit scores.
Still, not all lenders believe tight credit is the problem. Logan Mohtashami, a mortgage broker in Irvine, Calif., argues that weak income growth is a bigger problem. “Getting a loan done is a lot more work, but if you have the financial goods, you get the loan,” he said.
But Mr. Mohtashami said he isn’t concerned that the FHA rule changes invites a return to bubble-era excesses. “This can’t be compared to subprime. The problem back then was that nobody was verifying anything,” he said. “This still requires people to qualify for the loan, verify the job, verify the assets.”
The nation’s foreclosure landscape is changing rapidly.
While it looks like foreclosure activity continued to boil over in a select group of markets in July, Arizona slid out of its top 10 highest foreclosure rate slot for the first time since the zenith of the housing boom.
The amount of foreclosure filings in Arizona fell 15.8% in July and is also down nearly 50% from year ago levels. The state is now in the ranks with California’s foreclosure rate, which was out of the top 10 for the sixth consecutive month in July, according to RealtyTrac’s latest report.
“The foreclosure boil-over markets are becoming fewer and farther between as lenders have caught up with the backlog of delayed foreclosures in some of the states with the more lengthy judicial foreclosure process,” said Daren Blomquist, vice president of RealtyTrac. Arizona is both a non-judicial and judicial foreclosure state and states with this quasi-judicial status are trending slower and slower foreclosures.
Nationwide, foreclosure filings were up 2%, or 130,888 filings, in July, an increase from the 78-month low in June, but still down 32% from a year earlier.
The monthly increase in foreclosure activity was driven by an increase in foreclosure starts, up 6%, and an increase in bank repossessions, which rose 4%.
Foreclosures starts increased in 26 states from the previous month, and were also up in 15 states from a year ago, including Maryland (275%), Oregon (137%), New Jersey (40%) and Ohio (20%).
Bank repossessions also increased in 29 states from the previous month, and also rose in 18 states from a year earlier, including Arkansas (266%), Oklahoma (126%), Maryland (101%), New York (100%), Connecticut (67%), New Jersey (40%) and Ohio (20%).
“U.S. foreclosure activity in July is 64% below the peak of more than 367,000 properties with foreclosure filings in March 2010, but is still 54% above the historical average of 85,000 properties with foreclosure filings per month before the housing bubble burst in late 2006,” Blomquist explained.
Meanwhile, nine of the nation’s 10 highest metropolitan foreclosure rates were Florida cities.
Florida posted the nation’s highest state foreclosure rate for the third consecutive month in July – one in every 328 units had a foreclosure filing in July, more than three times the national average, RealtyTrac noted.
Jacksonville, Fla., posted the nation’s highest foreclosure rate among metropolitan statistical areas, increasing 19% from the previous month and rising 24% from a year ago.
Nonetheless, there were a dozen states where foreclosure activity levels in July were at or below average monthly levels.
Those states included Colorado, Indiana, Michigan, Oklahoma and Texas.
“More and more homes are now coming on the market from non-distressed homeowners thanks to the snap back in pricing that homeowners have experienced over the past 12 months or so,” said Rich Cosner, CEO of Prudential California Realty.
He concluded, “Because these prices moved up in favor of the homeowners, more and more people are now putting their home on the market and over time this will relieve the dire inventory shortage.”
Over the years, I’ve seen some pretty remarkable things in the Phoenix real estate market, both at properties and in the MLS. A few years ago, I finally started collecting images of the more interesting topics. I also have an outstanding collection of Realtor business cards that’ll leave you rolling, but that’s another blog post for a different day.
As you look through these photos, keep in mind that some are pulled directly from the MLS. You know, the main source for marketing properties to buyers around the world? Yeah, that MLS. Seems that some sellers (and their Realtors!) have forgotten that the goal of posting photos is to generate INTEREST in a property, not scare people away.
The main take-away here, besides a few memorable laughs, is that when you list a home for sale, be sure to review your agent’s marketing materials! It’s no wonder that properties marketed like the ones below can sit on the market a loooonnnngggg time.
Without further ado, here’s a sampling of my collection…
The MLS “Public Remarks” for this one included, “Can’t even tell it’s been lived in!”
Hate to burst your bubble, but, uh, I can tell.
Excuse me, but you have weeds growing in your pool.
Hey, look, a toilet koozie!
This was the MAIN photo in the MLS, traditionally considered a property’s most compelling “side.”
This photo was posted in the MLS and says, “Good day! Welcome to (Address). Please allow me to show you around…”
Thanks, but I think I can handle it myself.
“Power to the TOWEL BAR!”
This dining set really opens up the room!
“Root damage?! What root damage?”
This property was a cosmetic fix and flip. All the big work had been done throughout, which is why I laughed when I saw this bathroom sink and vanity. Notice the granite accent trim over it, which tied nicely into the kitchen countertops.
Speaking of kitchens… Have you ever wished you could invite the gang over for a big screening party without having to worry about missing the movie while you did the dishes?
If so, this could be the home for you!
The family room has been converted to a high tech movie theater, complete with tiered stadium-style seating, projector, and wall-sized screen with retractable curtain. And yes, it’s directly connected to the one and only kitchen in the house.
As an added bonus, the walls and windows have been paneled over for a completely dark movie theater experience.
Is it noon or is it midnight? For you, my friend, it just doesn’t matter.
This one’s a little tough to read. The “Realtor Remarks” in the MLS say, “Property mistakenly listed as ‘vacant.’ Call Listing Agent for showing.” The funny thing is, most agents wouldn’t bother with the verbiage. Instead, they’d change the “Showing Instructions” field to say “Occupied” because that’s where agents look.
Not only did this agent take the time to spell out the error, but he left the showing instructions field (DIRECTLY BELOW IT) labeled as “Vacant.”
Perhaps you won’t notice the cluttered kitchen if you put on these beer goggles…
Yes, that is a light switch mounted directly to the inside middle of a garage door. Needless to say, with no idea on earth what would happen, I didn’t touch it.
And here’s my favorite. You know it’s a seller’s market when the birds get into the game…
It’s hard to believe that only a couple of years ago, foreclosed and bank owned signs lined the streets of neighborhoods across the Valley, because today the housing market is seeing the complete opposite.
Charles Cowden and his wife started house hunting in Ahwatukee a couple of weeks ago and are finding the process a challenge.
“It’s pretty competitive out there. There are a number of offers in the houses we’re interested in already. Some are on the market for 5 or 6 days and they already have 6 or 7 offers on them,” Cowden said.
Mike Metz of Sun State Home Loans said the competitiveness is a growing problem for Valley buyers. He foresees the trend continuing for another couple of years.
“It is definitely a seller’s market. We have a lot of clients that are pre-approved right now. They can’t find a house or they’ll go out and put an offer on a house and boom, it sells for over asking price,” Metz said.
Back in 2009, the housing market in Arizona was a much different situation.
President Barack Obama paid a visit to the Valley during that time and introduced the Home Affordable Refinance Program (HARP) to help underwater or near-underwater homeowners refinance their mortgages.
Metz said the program has helped homeowners tremendously in the Valley.
“Most of the people refinanced into the high three’s or low four’s. So they saved a full 2 percent on their interest rate. Well on a $3,000 or $4,000 mortgage that can be $400 to $600 a month in savings for people. It really was a hit,” Metz said.
President Obama will be heading back to the Valley on Tuesday, to talk about plans to help homeowners and prospective buyers. He will be speaking at Desert Vista High School at an event that is closed to the public.
In 2007, the Valley’s housing market began a long spiral collapse, followed by years of high supply and low demand, leading to a multi-year, very slow, very steady period of recovery.
About 19 months ago, people realized that the Phoenix real estate inventory, once as high as 60,000 available properties, had dwindled to well below 10,000 units. Indeed, we had shifted from a strong buyer’s market, to a rabid seller’s market, which is where we remain today.
One of the easiest statistics for people to relate to is price. Both “Average Sale Price” and “Median Sale Price” are helpful measures of a market’s affordability. When tracked over time, they can also show the relationship trend between supply and demand.
With increasing demand and historically low supply, the Greater Phoenix housing market has about recovered to where it was in June 2008, when the median price of all single family homes was $195,000. As of June 2013, the median sales price is $192,000, up from $185,000 the month prior.
Here’s a chart that illustrates Median home values from mid-2008 to mid-2013:
Not surprising, the Average Sale Price of a single family home has mirrored the graph above:
In July 2008, the Average Sale Price was $254,863. In June 2013, it was $250,965.
Though we experienced a small $2000 dip in the average sales price between May 2013 and June 2013, I expect appreciation to continue for as long as the inventory supply remains tight. Investment opportunities are still out there!