Trilogy at Vistancia remains my favorite active adult community in the Valley. When I do a walk-through of a new home in Trilogy, I’m consistently impressed with the quality of construction. With many builders, I leave a walk-through looking like a blue-tape blizzard has blown through, due to so many quality control issues. I’ve done walk-throughs with Shea Homes where we haven’t even torn one strip from the blue tape roll. Just amazing!
Equally impressive are Trilogy customer support and onsite staff. They’re helpful to my buyers and responsive to needs after close of escrow. Every time I accompany them on a tour of Trilogy’s amenities, I learn something new.
As an obvious fan of Trilogy at Vistancia, I was pleased to receive the following email from one of the Sales Staff notifying me of a new parcel release:
I hope this email finds you well. I wanted to give you a quick update on our Trilogy at Vistancia community in Peoria Arizona. I am very excited to share we are days away from opening our next neighborhood Desert Bloom aka Parcel C-12. This quaint neighborhood will have approximately 99 home sites and will be released in phases. The first phase we will release home sites 1582 through 1622. Please let me know if you have a client who you think may have an interest – if so, highlight the specific lot of interest and I will be more than happy to provide more information!
Sales will commence on Saturday, November 17, 2012. While I am not anticipating needing a drawing, you just never know. So, should we have more than one individual interested in the same lot we will have a drawing for that specific lot to determine who has the first opportunity to purchase the home site. If a drawing is necessary it will be held on Saturday morning, November 17th, 2012. The party drawn who has the first opportunity to purchase that specific lot will have 4 hours to execute a purchase contract. Should they fail to execute a purchase contract in the 4 hour window then the 2nd interested party will have the same 4 hours to execute and so on until the lot is sold.
I have included a copy of the new neighborhood map for Desert Bloom at Trilogy (Parcel C-12) below for your reference. I also included a copy of the overall Trilogy community map so that you can see where this new neighborhood is located within Trilogy. The location is spectacular – in the heart of the community and extremely close to the Kiva Club. We saved the best for last – this will be your clients last opportunity to enjoy a new home in a premier location!!
Here’s an updated price list (remember — BASE PRICES ONLY — no lot premiums or personal upgrades):
A couple of important points to remember when you consider purchasing a new home. Most importantly, don’t EVER contact a new home builder directly until your Realtor has registered you. Otherwise, the builder will not allow you to work with your Buyer’s Agent. Furthermore, the builder will require you to sign a disclosure that says you understand and agree that the builder’s agent ONLY represents the BUILDER, not you!
Read more in one of my previous posts about new home representation in Phoenix here.
For many considering Phoenix real estate, new homes are an attractive option. Call or email if you have any questions at all! I can help you evaluate new home subdivisions across the Valley and compare prices with resale homes in the same communities, which are often available.
Buying sprees by billion-dollar hedge funds and real-estate investment firms have investors owning nearly 20 percent, or one out of every five, of the region’s single-family houses and condominiums, according to an Arizona Republic analysis of recent sales data.
That’s double the number of rentals considered normal in metro Phoenix in 2000, according to housing-market analysts.
Although it is too soon to gauge the impact of such a large increase in rental properties, the jump in investor-owned properties has the potential to change the character of neighborhoods, influence the options available to other homebuyers and ultimately alter the trajectory of the region’s housing recovery.
Since 2009, deep-pocketed buyers have snapped up tens of thousands of houses in all-cash deals, helping to stanch the bleeding in metro Phoenix’s real-estate market. Their purchases have driven up the region’s median home price 40 percent in the past year and significantly cut the supply of houses for sale.
While real-estate analysts laud investors for buying when others wouldn’t, analysts also express concern about the potential impact of so many buying in such a short time.
In Avondale’s 85323 ZIP code in the West Valley, with many relatively new, affordable homes, 32 percent of the houses are investor-owned rentals. That’s one of the highest rates for single-family homes in metro Phoenix.
In several other West Valley neighborhoods, more than 30 percent of all homes are rentals. About 32 percent of houses and condos in north Glendale ZIP code 85301 are rentals.
But the trend isn’t limited to the West Valley. In the East Valley, 30 percent of all homes in central Mesa’s 85210 ZIP code are owned by investors. And large swaths of the Valley’s core include ZIP codes where 25 percent or more of all residential properties are investor-owned.
Market analysts worry about investors’ impact on traditional buyers, who are finding it extraordinarily difficult this year to close a deal. Sellers, especially those of distressed properties and of homes priced below $150,000, often take the simpler route, accepting bids from investors paying cash instead of from traditional buyers who need to get a mortgage. Bidding wars on the moderately priced houses are the norm, and investors usually win.
What investors plan to do with nearly 225,000 homes they own in metro Phoenix is the multibillion-dollar question. When a handful of major investors, who together have purchased more than 10,000 Phoenix-area homes this year, decide to buy, sell or hold, their decisions will affect the rest of the market. Now, the majority of investors are renovating and renting out the properties. But if the big companies decide to take their profit in five to seven years and move on, real-estate insiders worry that a flood of houses back on the market could send prices spiraling down again.
“Investors helped stabilize Phoenix’s housing market,” said Mark Stapp, director of real-estate development for Arizona State University’s W.P. Carey School of Business. “My concerns are that too many investors are treating Phoenix’s homes as a commodity, and not the area as a community.”
Investors have purchased more than 30 percent of all single-family houses and condominiums sold this year, and their purchases have grown to an even bigger percentage of all sales in the past few months.
The type of investor has shifted dramatically this year, from small and large local investors to billion-dollar funds based in New York and Los Angeles. A Republic analysis of purchases, provided by real-estate data firm Information Market, found that in some areas of metro Phoenix, the most active three or four investors own more than half of the rentals.
The most prolific homebuyers are New York-based Blackstone Real Estate, Los Angeles-based Colony Capital and Scottsdale-based American Residential Properties. Those groups alone have purchased more than 3,000 houses in the area so far this year.
Local investor and real-estate agent Julie Bieganski is selling a 2,000-square-foot south Phoenix house for $82,000. The day the house went on the market in early October, a real-estate agent representing Tempe-based Treehouse Group made her a full-cash offer to buy the house “as is” for cash and close within 30 days. Treehouse is buying homes for Blackstone and other investors.
“According to the contract, the buyer has purchased 1,400 houses in Maricopa County in the past 90 days and plans to own the home and rent it out for five to seven years,” she said.
The investor-buying frenzy in metro Phoenix began with smaller investors like Bieganski with the cash to pick up a couple of houses as foreclosures peaked more than two years ago. With auctions running all day in front of the Maricopa County Courthouse, large out-of-state buyers’ interest in the market grew. As foreclosures slowed, many of these investors turned to short sales. But those deals must be lender-approved and take longer to close. Now, the biggest and richest of the investors have stepped in, often purchasing foreclosure houses previously bought by those earlier investors. Still bullish on the Phoenix market even as prices rise, these big investors sometimes buy one home at a time — and often 50 to 100 homes at once.
Investors now own 225,000 homes, the same number of all homes typically found in a city the size of Glendale. Their profit-focused strategy is a key issue for everyone else with a stake in the housing market.
Because of the high demand for rental homes and relatively low prices to buy, most are making 5 to 10 percent annual returns on houses by leasing them to tenants. But investors don’t hold on to properties forever, and those that control hundreds or thousands of properties can have outsize impact. If too many big property-holders try to sell at the same time, it could lead to another drop in Valley home prices.
Large investors are guarded about strategies. Publicly traded companies such as Blackstone can’t talk about future plans because that violates shareholders’ rights. Many of the latest investors in the Phoenix market want to become publicly traded real-estate investment trusts to attract smaller investors looking to grab a stake in real estate.
Colony said it plans to keep most of its metro Phoenix homes as rentals for five to seven years. The company is planning to go public next year. “We started looking at investing in housing a year ago. There’s a real opportunity to renovate homes and lease them to people who need them,” said Justin Chang, principal of Colony Capital and acting CEO of Colony American Homes. “We like what we have bought in Phoenix and the value there.”
American Residential also has a long-term buy and hold strategy. “We are not in business to flip real estate. American Residential hasn’t sold one of the 1,000 houses it has purchased in Phoenix since 2008,” said Steve Schmitz, CEO and founder of the firm. “We are in the business of providing nice, clean housing to families.”
Mike Orr, who analyzes real-estate information for ASU’s W.P. Carey School of Business, is another market analyst with concerns about the investor influx. “We don’t know their plans. They don’t want their competitors to know their plans. But they clearly have a lot of money to spend.”
The rental market
In Avondale ZIP code 85323, Liz Moad, who said she has owned her home there for three years, pointed across the street and said, “This house has had four families move in and out in the last two years.”
Empty houses that had been foreclosed on and auctioned are now rentals, said Chris Sammons, who said he has owned his home there for five years.
“Definitely you don’t want to see them just sitting there empty,” Sammons said.
“Probably within the last month there’s been half a dozen different houses where the ‘for rent’ signs have come up.”
“I think eventually when the economy picks up more, you are going to have more people that will take the next step to actually owning their own home,” he said.
Renter demand so far has kept up with the number of investor-home purchases in metro Phoenix, mostly because there are now more potential tenants. In addition to the typical renter who can’t afford to purchase a home, and newcomers moving to Arizona from out of state, former homeowners who lost houses to foreclosure must rent to rebuild their credit. Then there are the prospective homebuyers who are getting outbid by investors. Finally, there is a new group of people who can afford to buy but choose to rent.
A record 3,500 leases a month for rental homes in the Valley were signed in June, July and August, according to the Arizona Regional Multiple Listing Service. Houses in the best locations often draw competing offers.
“We were astounded by the rental market here,” said Mara Lewis, who relocated to Phoenix from Wisconsin. “Not only the up-front fees, and the methods by which they had to be paid (cashier’s checks), but the rules for what a (rental) house has to have here is very lax. We had to purchase our own washer and dryer.”
She and her husband own rental properties in Wisconsin and chose to rent here instead of buying. Lewis leased through a real-estate agency and isn’t sure who owns the house.
Jennifer Taylor said she moved out of a north Phoenix condominium because most of the units in the building were owned by different investors, and the maintenance varied by condo, as did the type of tenant. “The neighbors were messy, and I always had my stuff vandalized,” said Taylor, who recently moved to a central Phoenix condo. “Now I know my landlord, and the issues I had since moving in were all fixed that same week.”
Forecast for future
Before the boom, investors owned 8 to 10 percent of metro Phoenix’s houses. The current rate of 18.2 percent is double that. The shift is so new that it’s difficult to predict what might happen.
Stapp said, “A valid concern is whether people will want to buy homes in neighborhoods where there are the most rentals. We don’t know yet.”
But market analysts offer some scenarios.
The best-case scenario is for investors to hold onto houses for at least a few years and slowly sell to regular buyers before home prices soar. It wouldn’t have too large of a negative impact on the market if one major investor sold all of its homes as long as other major investors continued to hold on and lease out their properties until the supply of houses stabilizes again, market analysts said. Then there’s the worst-case scenario: Home prices continue to climb, and all of the major investors want to lock in their return and try to sell at once.
“It was good when all of the investors came into metro Phoenix and bought when no one else was buying,” said Orr, an early investor himself. “But it might be time for investors to take a rest, and let regular buyers have a chance.”
Source: Arizona Republic. Includes information from data reporter Matthew Dempsey and 12 News reporter Melissa Blasius.
When it rains, it pours.
Though I’m not featured as prominently (or with a photo!) as I was in my recent interview with the Phoenix Business Journal, I was contacted out of the blue by The Globe and Mail (Toronto, ON) to comment on rising investor participation in the Greater Phoenix real estate market. Pleasant surprises like this are uncommon and I am privileged by the opportunity. I do not advertise in either publication, so this was truly “earned media coverage.”
Read the full article here or below. They saved the best comments for last… 😉
In hard-hit cities like Phoenix, the home market rises
Foreclosures are down and bidding wars are back as U.S. real estate begins to bounce back in areas like Arizona, Miami and southern California
The Phoenix real estate market is suddenly experiencing something it hasn’t seen in years: Bidding wars.
Phoenix used to represent just about the worst of the U.S. housing market, with suburbs full of empty homes and foreclosures running so high that investors gathered like vultures at the county courthouse to snap up distressed properties.
But like its namesake, Phoenix’s housing market is rising. Foreclosures have dropped 20 per cent in the past year and the median house price has climbed about 25 per cent, making the city one of the hottest real estate markets in the U.S. But perhaps the most telling sign of a recovery is the return of heated bidding that has been a long time coming for agents like Maureen Porter.
“A good house in a good neighbourhood will go on the market for two days and they’ll already have five or 10 offers,” Ms. Porter said. “When I started my business [four years ago]there were around 56,000 homes for sale in Maricopa County [which includes Phoenix] Now there’s about 12,000 homes for sale.”
Ms. Porter said she recently took two clients from Vancouver to look at a 70-lot housing development in Goodyear, a community outside Phoenix.
“It was all dirt, there were maybe two homes built,” Ms. Porter recalled. “We walked into the presentation centre and everything but two lots were sold out.”
The housing market is showing signs of life across the U.S., with existing home sales and the median price up about 10 per cent year-over-year, hitting levels not seen since the summer of 2010. Sales and prices have been rising steadily for months, proof that the long-suffering real estate sector may have finally turned the corner. Buyers are returning thanks to an improved employment picture, record-low mortgage rates and near-bottom prices.
Housing is a critical component to the U.S. economy and improvements in the sector usually lead to a boost in consumer confidence, employment and spending. All of which is good news for the Canadian economy, as well.
The real impact of the recovery can be seen in places like Phoenix, Miami and southern California, which were among the hardest hit during the recession. The supply of homes for sale has dropped in all three locations as banks move quickly to unload troubled properties, often through “short sales” where mortgage holders get permission from lenders to sell their property for less than the amount owed. Banks often prefer short sales to foreclosures because they are a faster way to deal with borrowers.
In Miami, the median price is up 15 per cent from a year ago and the occupancy rates in downtown condominiums is 94 per cent. Southern California has a four-month supply of homes for sale, roughly two months less than what is considered a healthy market, and foreclosure sales have reached a four-year low.
Phoenix offers some of the most dramatic evidence of the turnaround. This is a city where house prices fell by up to 50 per cent during the recession and people walked away from their homes in droves, leaving vast stretches of empty neighbourhoods. Today the number of homes listed for sale has dropped by 64 per cent in the last year and foreclosures have fallen by 20 per cent. The market has tightened up so much that prices are jumping 5 per cent each month and buyers are competing fiercely for just about anything that’s available.
“We’ve now got a fully fledged buying frenzy going on while people try to buy something before they miss the boat,” said Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University.
Last week there were roughly 12,000 homes listed for sale across the city. That compared to more than 50,000 around the same time last year.
Despite the current boom, the market still has a long way to go. The median price is now about $135,000 (U.S.). That’s still well below the peak in 2006, when it reached $265,000, and it puts prices at about the same level as in 2000. And although the number of existing homes sold in April across the country rose to an annualized rate of 4.6 million, economists say a healthy U.S. housing market would see almost 6 million sales of existing homes a year.
Much of the activity is also being driven by outsiders, many from Canada, eager to snap up investments. In Phoenix, the number of “investor flips,” people who buy houses and then re-sell them quickly for a profit, has increased 31 per cent year-over-year, according to Mr. Orr.
But with prices rising quickly, good deals are harder to find. Three years ago, dozens of investors lined the steps of the courthouse in downtown Phoenix to bid on foreclosed properties, many going for well below $100,000. This week only a handful of bidders showed up for the auction and just four houses sold.
“The days of getting a property under $125,000 are slim to nil,” said Diane Olson, a real estate agent who caters largely to Canadians.
The question for many agents like Justin Lombard is whether this is a blip or a real recovery. He is cautiously optimistic.
“We’ve seen such steady progress in the way of inventory absorption that I’d be really surprised if we took a big backward step,” he said. “We hit bottom a long time ago. It’s just that a lot of people didn’t realize it because our bottom was so bad.”
There are few absolute certainties when it comes to Phoenix real estate, and the debate about the so-called “shadow inventory” is no exception. If you’re not aware of that term, it refers to real estate that the banks have already acquired via foreclosure and are holding onto for the perfect moment to dump them back on the market.
Many real estate aficionados believe that the shadow inventory is not only going to quell our current market recovery, but is actually going to lead to a double-dip housing bust.
The truth will only be borne out in time, as it is impossible to accurately determine numbers of properties being held across all the different lending institutions, as well as the status of negotiations with existing homeowners in default.
A number of details seem to indicate that the Phoenix area housing market won’t be subject to a shadow inventory effect.
- Mike Orr, real estate analyst at ASU’s W.P. Carey School of Business, recently reported, “There is still no sign of any significant new supply of homes coming onto the market, and those who anticipate a flood of bank-owned ‘shadow inventory’ are likely to be very disappointed.“
- The Mortgage Bankers’ Association reported last week that Arizona’s mortgage delinquency rate fell from 6.5% to 6.2% since the start of 2012, placing Arizona 35th in the nation in delinquency rates.
- Filing of Notices of Trustee Sales in Maricopa County fell again to 3,219 in July 2012. It was 4,328 in May and 3,711 in June.
- Bank owned sales as a percentage of total monthly sales has also fallen steadily, despite a very tight inventory supply. Here’s a graphic from R.L. Brown Reports that illustrates the trend:
At the moment, most indicators point towards the fact that there will not be a shadow inventory dump in the Greater Phoenix housing market, but only time will tell. If the banks are holding significant inventory, with a 25% rise in the median sales price in the last 12 months and continued tight inventory levels, now would be a good time to start selling it off.
What do you think? Are we going to see a shadow inventory release in the upcoming months?
This article from FoxNews.com highlights one of the main attractions to the Greater Phoenix area real estate market — even as our supply dwindles, prices remain low relative to “the boom years” of the mid-2000’s. For those who qualify for financing, interest rates remain close to all-time lows. Neither of these dynamics will last forever.
Here’s the article:
It’s hard to make any firm categorical statements about today’s economy, but recent data and anecdotal evidence suggests that the battered housing market is finally on the rebound.
Homeowners, if they’re still fortunate to own a home through the past few years, have endured precipitous drops in valuation, and many still have homes that are worth less than what is owed to the bank. Nonetheless, in places across the country there’s evidence that prices are on the rise.
Analysts report that historically low interests rates, foreign investors and natural market forces are driving home prices back up. This week’s report by S&P/Case-Shiller showing prices in the nation’s largest metropolitan areas up by 2.2 percent gives credence to the sense that at least in some places the housing market is on an upward trend.
After delaying her retirement by a year because of the economy, Sheri Gingerich is now a new homeowner in one of the hottest places in the country–Phoenix. The housing market there is heating up, too.
“To find [a home] on a golf course that was affordable compared to five years ago was to me astronomically the exact thing that worked out to our benefit,” Gingerich said while taking a break from moving into her new home outside Phoenix. The Minnesota native paid $240,000 for the home far enough from the fairway–she hopes–not to attract wayward golf balls. She says the house would have cost considerably more a few years ago and that she wouldn’t have been able to afford it then. But now, the perfect retirement home fits perfectly into her budget.
Gingerich’s realtor says business really picked up at the start of the year and has kept on going strong even into the usually slow summer months. “Oh my God, it’s just been a really great experience the last couple of months with people coming in and really feeling like this is the time to buy,” Kathleen McMullen said. “So I think [buyers] attitudes are all upbeat and I think the economy is taking a shift and Phoenix is really coming back–bouncing back quickly.”
McMullen’s data shows homes that once were on the market for nearly a year are now selling in a month or two and that Gingerich is part of a trend. “Right now, the good news is, in the Phoenix area — all the cities around Phoenix — all of the home values have increased up to 3 percent. And in other places [too]. So, this is not a unique experience at all.”
The chief economist for the National Association of Realtors says while Phoenix may be a hotter market than other places it’s not too far out of line from the national picture. “The market is showing improving signs,” Lawrence Yun recently told Fox News. “We have seen the home sales rise roughly 10 percent higher this year compared to last year. And it looks to close out the year at a five-year high. So we are beginning to see a much improved condition after some tough years in the prior years.”
Yun attributes the rise in prices to an influx of buyers from overseas or investors with lots of cash who are able to buy homes as investments. Nonetheless, he added, “the first time buyer still comprise about one-third of the market. So you are seeing a very broad-based recovery. Everything from New England, Florida, middle America to the Western coast, the sales are improving.”
As for the rest of the year, Yun predicts a modest increase in home prices and bases that on historical trends of supply and demand about inventory.
“Historically, the supply and demand balance has been about a six month supply of inventory. Now in the past few years it’s been in the double digit months of inventory so there are too many sellers in relation to the buyers. Now the market is roughly in balance and historically when that is the case home values rise roughly three to five percent annually.”
Record tight inventories are making it increasingly difficult for growing numbers of buyers, who are creating multiple bid environments in markets that haven’t seen buyers battle over homes in six years.
Buyers are back but sellers aren’t, especially in Western markets recovering from large volumes of foreclosures. The result is that inventories are still tightening as the spring buying season ends. Buyers are fighting over what’s available, often to the benefit of those sellers who took a risk in this year’s evolving marketplace.
Prices are reported to be on the uptrend with 62 percent of Realtors reporting constant or increasing prices compared to the same time a year ago in the National Association of Realtors’ Realtor Confidence Index for May29 -June 8, 2012 that was released yesterday.
Buyer demand is reported to be growing faster than supply, and many Realtors are reporting multiple offers. However, buyer foot traffic slowed in May compared to last year, perhaps as buyers grew discouraged by slim pickings.
However, buyer traffic is still well above the moderate level, but seller traffic is flat, according to the NAR survey. First time home buyers accounted for 34 percent of total buyers. Normally first-time buyers are in the neighborhood of 40 percent of total residential sales, according to NAR’s Profile of Home Buyers and Sellers.
A majority of the 145 markets monitored by NAR Research experienced slower foot traffic in May of this year relative to the same time in 2011.
The data, provided by SentriLock, LLC., is based on the total number of visits to properties as recorded on electronic clock boxes. Foot traffic was lower over the 12 months ending in May in 60 percent of the markets, while 35 percent expanded and 5 percent were unchanged.
This moderating pattern suggests a broad based decline in the late spring following an equally broad-based expansion in the last spring/summer of 2011 and early spring of this year
Multiple bids are changing the playing field in a number of markets this spring and summer. Many agents new to the business who have little experience with them are dealing with a sudden and unexpected competition for homes brought about by inventors more than 20 percent below those of a year ago.
“Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose.
Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory,” reported Realtor Noel Crider of Auburn, CA on the Active Rain blog.
“The Phoenix Metro Area Housing Market faces multiple offers even in the higher end and luxury market as buyers try to snag homes before the market rises further. We have seen multiple offers for quite some time in the lower price ranges, but now as the market is returning, and returning strong, we are seeing multiple offers in the higher price ranges. We are now seeing multiple offers on homes in the move up and luxury home market. We are seeing offers that are $50,000 over asking that are not the winning bid. This is causing quite a bit of frustration as buyers are trying to get into a home before the market prices go up further,” reported Brenda & Ron Cunningham of Phoenix Metro Homes for Sale.
In Seattle, multiple offers on beginner houses in Seattle are common again reports Phil Leng of Kirkland, WA and in Austin, broker Gwynn Teal Carpenter reports, “It’s happened again! We are in one of those real estate markets where we are seeing homes with multiple offers. In Austin Texas, the market is so sizzling hot that it isn’t unusual to have more than 2 offers on a fantastic priced and conditioned home.
Even in Tulsa, a market that experienced neither the housing boom nor the bust, buyers are “scratching their heads because a Tulsa home for sale with which they fell in love wound up in a multiple offer situation – while we are in a Buyer’s market!!! How could this happen?? Any area with more than a six month inventory of homes for sale is considered to be a buyer’s market. But, just as the prettier girls get asked to dance before the less attractive gals, the same goes with Tulsa homes for sale. The more attractive and updated homes will receive offers quickly, while the less attractive homes will remain on the market,” said Lori Cain or Midtown Tulsa Real Estate.
Source: Steve Cook, Real Estate Economy Watch
This article from Bloomberg today reports that the Phoenix real estate market was up 2.3% from March to April 2012, which was the highest reported. Is the Phoenix residential real estate market in recovery? With month after month of price gains and inventory drops, I personally believe we are. With 5-6 more months of similar trends under our belt, it will be official.
Interested in detailed Phoenix real estate market statistics? Check here: https://www.trust-in-justin.com/phoenix-real-estate-update-062112/
Here’s the article from Bloomberg:
Home Prices In U.S. Cities Fall At Slowest Pace Since ’10
Residential real estate prices fell in April at the slowest pace in more than a year, adding to signs the U.S. housing market was firming.
The S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010, after decreasing 2.6 percent in the year ended March, the group said today in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5 percent drop.
A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2 percent unemployment rate.
“Housing has picked up since the middle of last year,” saidRyan Wang, an economist at HSBC Securities USA Inc. in New York, who correctly forecast the monthly gain in prices. “Sales have improved and the inventory of homes for sale has been falling, which has brought a bit more balance into the market and fed into a bit of stabilization of prices.”
Estimates in the Bloomberg survey ranged from declines of 1.7 percent to 3.1 percent. The Case-Shiller index is based on a three-month average, which means the April data was influenced by transactions in March and February.
Another report showed consumer confidence in June fell to a five-month low as Americans became less sanguine about the outlook for jobs and incomes. The Conference Board’s indexdropped to 62 from a revised 64.4 in the prior month.
Stocks fluctuated after yesterday’s selloff in global equities. The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,314.52 at 11:37 a.m. in New York.
Home prices adjusted for seasonal variations climbed 0.7 percent in April, matching the prior month’s gain, which was revised up from a previously reported 0.1 percent increase. It was the best back-to-back gain since mid 2009. Unadjusted prices increased 1.3 percent in April as 19 of 20 cities showed gains.
Phoenix showed the biggest adjusted monthly increase, with prices rising 2.3 percent from March. Detroit showed the biggest decrease at 2.1 percent.
The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.
Ten of the 20 cities in the index showed a year-over-year decline, led by a 17 percent drop in Atlanta, the only city to show a double-digit decrease.
Phoenix showed the biggest year-over-year increase, with prices rising 8.6 percent in the 12 months to April.
“We finally saw some rising home prices,” David Blitzer, chairman of the S&P index committee, said in a statement. “While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.”
Prices may be on an upward trajectory as the glut of unsold houses that went on the market after the recession shrinks. There were 2.49 million existing homes for sale in May, down from an average supply of 2.93 million in 2011 and 3.22 million in 2010, data from the National Association of Realtors show.
The same NAR report indicated the median price of an existing home climbed 7.9 percent to $182,600 last month, the highest since June 2010, from $169,300 in May 2011.
“Nobody feels like prices are going down anymore,” Larry Nicholson, president and chief executive officer of homebuilder Ryland Group Inc. (RYL), said during a June 13 investor conference. “Everything we see now would tell us the second half of the year will be better than last year. We’re seeing the quality of the traffic pick up. We’re seeing new traffic. The business has gotten better and moving back towards a normalized process.”
Even so, Federal Reserve Chairman Ben S. Bernanke said last week the economy wasn’t getting a typical boost from a real estate recovery. To spur faster economic growth and more activity in housing, the central bank announced last week it would buy securities to extend the maturities of assets on its balance sheet, thereby lowering longer-term interest rates.
Competitive Phoenix Real Estate Market Inspires Insanity
As more and more local property owners clue in to the state of today’s frenzied market, we’re starting to see some of the crazy cockiness that sellers exhibited in the mid-2000’s during the height of the boom.
Yes, our market is looking better for sellers than it has for 6-7 years, but I’m not yet convinced that some of today’s tactics are justified…if they ever are.
Here are some of my ‘favorites,’ if you can call them that.
“We’re not considering any offers that are less than asking price.”
Yep, I recently showed a property in Chandler where the Listing Agents had been instructed by their seller to not even present any offers below asking price…which was 20% over market value. I’ve been around the block. I understand that there are opportunists who are willing to try and capitalize on extreme market conditions. However, this was short-sighted. After years of negative media, excessive inventory, and fire sales, most Phoenix real estate buyers aren’t yet accustomed to the idea that they can’t at least negotiate a few thousand dollars off the asking price. Even the savviest of buyers who are in tune with today’s aggressive conditions aren’t prepared to pay 20% over market value. As for the sellers, if they want 20% over fair market value, that’s completely their prerogative. However, they should ask 21% over market value so they can at least give the appearance of negotiating.
“Buyers Must Waive All Contingencies in the Contract After 15 Days”
This is a flashback to the “good ol’ days” that I’ve even used myself. Unfortunately, today’s market is different than even that of 6-7 years ago. Lending guidelines have become tighter and HOAs are less cooperative than ever with delivering docs in the contractual timeline…among other issues. In short, my job as a Buyer’s Agent is to advise my clients of the risks of accepting this condition. It’s up to them to determine whether or not the potential reward is worth the risk. Personally, I wouldn’t do it today because too many things can go sideways in a transaction that one can’t foresee or prevent.
“Showings only at 2pm on Tuesdays and Thursdays”
Seriously. I called a Listing Agent today to confirm availability on a property and she said her clients only allow showings on Tuesdays and Thursdays at 2pm. Not 1:45. Not 2:30. 2pm. I explained to her that my clients were only in town on Friday, Saturday, and Sunday and were going to make a decision while they’re here. Too bad, she said. Wow! If she was advocating her client’s interests, she would have called them and explained the extenuating circumstances and allowed them to decide whether or not to allow the showing.
As Phoenix real estate continues to sell at a torrid pace, I expect to see more unique terms and conditions from sellers that show they’ve indeed gotten their cocky back
Phoenix real estate is in full recovery.
The excerpt below was posted by Inman News on Thursday, and it calls attention to the top 10 US markets (among 146 anaylzed) for median price increases. The Phoenix, AZ real estate market topped the list with a 23.5% increase in median home prices from March 2011.
Anyone following the Phoenix real estate market (or my blog postings!) has recognized that the Phoenix housing market has been slowly strengthening in terms of inventory (supply) and unit sales (demand). We just hadn’t experienced the price increases that are to be expected with the law of supply and demand. Earlier this year we hit a point where ‘the market’ suddenly woke up and realized that dwindling inventory coupled with continued solid demand for Phoenix real estate has reached a critical level. Now it’s a strong seller’s market in the sub-$300k segment.
Whether you’re a real estate investor, a first time home buyer, or a local Phoenician looking for a move-up home, now might be the time to capitalize on the upswing as Phoenix real estate continues its turn around.
Here’s an excerpt from the Inman News article:
Top 10 markets for rising list prices
Realtor.com finds list prices up nationwide in March
Editor’s note: Data from Realtor.com’s first-quarter real estate trend data report. The report analyzes data for 146 U.S. metros and includes single-family homes, condos, townhomes and co-ops.
The spring homebuying season continues its brush with optimism with median list prices of homes for sale nationwide up 5.56 percent over the last year, according to Realtor.com data updated through March 2012. The jump to $189,900 brings the national median list price close to what it was two years ago.
Continuing a distressed-market turnaround trend, the Phoenix-Mesa, Ariz., metro took the No. 1 position on the list with a 23.5 percent jump from a year ago, to $179,000. The Miami metro made No. 2 on the list with a 22.27 percent list-price increase from a year ago, to $269,000. Both Phoenix and Miami were among the top 10 metros for year-over-year reductions in for-sale inventory, ranking No. 3 and No. 5, respectively.
Florida showed especially strong in median list-price growth in the last year, with five of the top 10 metros located in the Sunshine State. In addition to Miami, Punta Gorda made the list at No. 4 (17.5 percent), along with Daytona Beach (No. 8 at 15.47 percent), West Palm Beach-Boca Raton (No. 9 at 15.38 percent) and Naples (No. 10 at 15.38 percent).
Although they didn’t make the top 10 list, strong growth in median list prices in other Realtor.com-tracked Florida and Arizona metros like Fort Myers-Cape Coral (up 15.31 percent), the West-Ariz. rural statistical area (up 13.64 percent) and Fort Lauderdale (up 8.39 percent) suggest a bottom has formed in these hard-hit housing markets.
However, Realtor.com analysts noted that the large shadow inventory of potential foreclosures in these states could undermine this optimism and keep prices low as supply floods the market.
The Phoenix metro area has had a particularly notable shift in fortunes. In March 2011, it was No. 4 in the top 10 metros Realtor.com tracks for year-over-year median list-price declines. The median list price was down 14.2 percent from March 2010. List prices are a leading indicator, and may reflect optimism about a market that doesn’t always translate into actual sale prices.
The current median existing-home price in the Phoenix metro area is $124,500, less than half of the metro’s peak list price of $267,000, seen in the summer of 2006 at the height of the housing boom.
Source: Inman News, 4/26/12
Tips for Phoenix Home Sellers – Part 2
A few postings ago, I offered a list of ideas that Phoenix real estate owners can do to attract more buyers and faster, higher offers.
This is the continuation of that posting, which was born from an article I read about was to turn off homebuyers, which you can read here. While I definitely agree with the list, I have several other ideas and additional commentary to add to the mix. It never ceases to amaze me that, as broadly-covered as this topic has been, so many Phoenix and Scottsdale property owners fail to capitalize on these easy-to-accomplish tips.
To recap, here are the previous tips:
Tip #1: A Clean Home is a Happy Home
Tip #2: Eliminate Odors and Freshen Up!
Tip #3: Update Any Dated Fixtures
Tip #4: Neutralize Wall Coverings
Now let’s get to the next batch of suggestions…
Tip #5: Say “Goodbye!” to Popcorn Ceilings
There is a time and a place for popcorn (acoustic material) ceilings. Unfortunately, it was in 1975. And for the many, many homes that have been slathered in this most unfortunate of finishes, it’s time to consider a good stripping!
You see, not only is the material unsightly and dated looking, it’s porous and highly absorbent. There’s no better way to absorb and preserve off-putting odors than popcorn ceilings. And we know that foul odors are a no-no! (see Tip #2) So to bring your home into the 21st Century and enhance it’s fresh appeal, remove the popcorn!
It’s very important to be aware, however, that your popcorn ceiling material may contain asbestos, a known carcinogen. In fact, anyone engaging in removal should assume it does and take necessary precautions to avoid risky exposure.
Tip #6: Depersonalize
One of your many main goals when staging your Phoenix real estate to sell is to try and present an environment in which prospective Phoenix home buyers can easily imagine living. The more personalized the environment, the more challenging it becomes to do that.
While you might be tempted to think that this tip only pertains to your award-winning, 67 unit Snow-Baby collection that’s proudly displayed in your living room, that’s just part of the story. Yes, put the Snow Babies on ice, but also remove family photos, diplomas, awards, ‘unique’ artwork and furniture, and anything else that brands the home as “YOU”.
Besides conflicting with your goal of helping the buyers imagine the property as theirs, personal effects can also be distracting. “Oh, honey, look!” (Prospective buyer points to diploma on the wall) “He went to ASU, too! I wonder if we know him? Look, there are some photos over there…let’s take a look to see if we recognize him…” Don’t laugh. It happens. A lot.
Tip #7: Leave Already!!
Another goal of any Phoenix home seller is to do what you can to get buyers talking about your home while they’re at the property. I emphasize while they’re at the property because by the end of a long day of looking at homes, they’ll forget a lot of the details of yours.
What does this mean for you? Do your best to leave your home when it is being shown. That encourages home buyers and their agents to discuss the property freely — the pros and the cons — while they’re onsite. Dialogue gets proverbial ‘juices flowing’ and ensures your home has the opportunity to shine while it’s in the spotlight.
Tip #8: Don’t Misrepresent
In real estate, I think of misrepresentation as being closely tied to disclosure. There can be a fine line between showing your home in the most positive light and actually taking proactive steps to hide negatives. The former is encouraged, while the latter can get you in big legal trouble!
Licensed real estate agents consistently have the message, “Disclose! Disclose! Disclose!” driven into their heads. The message is conveyed to us, among other ways, in continuing education, from various associations and groups that we belong to, from the Department of Real Estate, the contracts and forms that we use, and from legal verdicts.
A good REALTOR will advise their clients to disclose anything and everything that could be of potential material importance to a prospective home buyer. In fact, your agent is obligated to disclose any issues that they’re aware of, even if you instruct them not to. You authorize them to do as much in the Listing Agreement. But that’s another posting for another day…
Back on topic. If you know there’s a carpet stain in the living room that you’ve unsuccessfully tried to remove, then don’t you think it’s reasonable that a home buyer might want to know they’ll need to budget for carpet replacement? Because of the potential financial impact on the home buyer, it’s a material fact. If you intentionally cover the stain with an area rug and fail to disclose it in writing to the buyers, you’re asking for problems after the sale when the buyers realize they’ve been tricked.
Here’s what I recommend to my Phoenix real estate clients: By all means, enhance the cosmetic appearance of old repairs and do an additional repairs that financially make sense.
That old water stain in the garage ceiling from 8 years ago…the one that signaled it was time for a new roof, but that you never got around to painting over after the roof was replaced? Paint over it! Then disclose it to the buyers when you receive an offer.
The toilet in the master bedroom that runs constantly? Fix it! Then disclose it.
The baseboard under the vanity in the bathroom that swelled like a balloon when you had that leak last year? Replace it! Then disclose it.
See the common theme? You can repair and enhance your home, but you need to disclose the issues so the buyer has an opportunity to do their due diligence, such as hiring a roofer to confirm the roof was properly installed or hiring a plumber to confirm the pipes were re-connected properly.
Tip #9: Curb Appeal Matters
I like to say that the key to a successful Phoenix real estate sale begins at the curb. Others say that “you only get one chance to make a first impression.” Regardless of the credo, the fact remains the same: To sell your Phoenix property, you should create the best possible experience from the front of the property through to the back yard.
Pull weeds, rake up leaves, sweep gravel off the sidewalk, keep the lawn green and neatly trimmed, ditto for shrubs, replace dead plants, add some colorful flowers and a new welcome mat at the front door. You want home buyers to say, “WOW!” before they ever set foot inside your home. A little attention to your front yard will go a long way in accomplishing this goal.
Tip #10: Declutter
This tip really goes hand-in-hand with Tip #6 (Depersonalize). If, like many homeowners, you’ve outgrown your current home and are bulging at the seams with overflowing closets and a disaster of a garage, then consider renting a storage locker on a month-to-month basis. Remove everything you can live without, within reason. You can leave your coffeemaker and toaster oven on the countertops in the kitchen, but remove the gelato machine, food dehydrator, and baby food maker that you haven’t used in 6 months.
Eighteen sets of towels? Store ’em away.
Extra china settings packed in the pantry? Store ’em away.
Tools, boxes, and equipment in the garage that you forgot even existed? Store it away.
Winter snow gear in your closet and it’s June? Store it away.
Do your best to create the appearance of space everywhere you can: closets, counter tops, drawers, cabinets, and shelves.
Tips #11 and Beyond: Staging Tips and MLS Success
There are a number of other recommendations that I can make to help sell your Phoenix real estate that weren’t covered in the original article. The first tips relate to staging your home.
In keeping with the notion of encouraging prospective buyers to stay in your home as long as possible and creating a pleasant environment, consider the following:
- Remove pets from the property, especially noisy ones.
- Leave the thermostat at a comfortable level (even if your home is vacant!): Nobody will spend long in a Phoenix house in July if the AC is off!
- If you know there’s going to be a showing: turn on all lights and ceiling fans, open up window coverings to let light in, light a few aromatic candles and/or spritz some unoffensive air freshener, and turn on some soothing music when you know your home is going to be shown. Even though everyone will know it’s a contrived staging, it will work.
Finally, let’s talk about the most important piece of staging your real estate for sale: your property’s listing sheet. The listing sheet is your home’s face to the world. Not only is it used to attract real estate agents to your property, but many people don’t realize that the MLS information (including photos) are automatically distributed to affiliate websites through IDX agreements. So the way your home appears in the MLS is also how it will appear on Realtor.com and Zillow, among hundreds of others. Prospective buyers will see your listing sheet.
I’ll cover these in detail in an upcoming blog post, but here are some tips for a successful MLS listing:
- Lots of photos and compelling photos (optimized, if possible, and taken AFTER improvements to property, if any)
- Virtual tour
- Accurate directions
- Accurate mapping in the MLS system
- Room measurements
- Compelling verbiage
- Complete and accurate accounting of all features
- Avoidance of verbiage that makes you appear to be difficult to work with
- Disclosure of any terms that might be material prior to showing (e.g. “In the process of painting, to be completed by Friday.”)
Phoenix real estate is a tough business in any market. Indeed, even in the strongest of seller’s markets there steps that any home seller can take to get top dollar offers and help their home stand out from the crowd. Sure, it’s possible to not follow a single tip that I’ve listed and still sell your home for asking price on the very first day it’s listed. However, following the tips here might put thousands of dollars more in your pocket, and what seller wants to leave equity on the table?