Q: Why Is the Real Estate Market so Hot?

Here’s why our real estate market is so hot right now.

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The Phoenix real estate market is scalding hot right now. Many people thought that COVID would decimate the market, but the opposite has happened.

We have freeware homes on the market for sale, more buyers than I’ve ever seen, and bidding wars on properties. What’s causing this?

First, we’re one of the states that have more people moving in than moving out. We have a lot of people relocating here, but there aren’t enough homes to sell. As a result, prices are going up.

Rent has been going up for some time as well, so many buyers are jumping into the market and buying because they can have a mortgage payment that is the same or even less than their rent.

Many people are moving here, but there aren’t enough homes available.

There’s also a fear of the Fed printing so much money will result in inflation and buyers will eventually be priced out of the market. If you’re going to trade up, why wouldn’t you want to trade up with interest rates under 3%?

If you have any questions about buying, selling, or real estate in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you.

Are We Headed for a Market Crash in 2018?

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Will the real estate market crash in 2018?

Let me get this full disclaimer out of the way—I’m not an attorney, I’m not a CPA, and I can’t predict the future.

That being said, I’m sure you’ve read articles online or heard rumors that our market is headed for a recession. I will say that it’s definitely possible—we haven’t had a recession since 2008 and 2009, and we get a recession every eight to 10 years, so technically we’re overdue.

Should you sell your home now, though? I would definitely consider it if you don’t want to be in that home for the next five to 10 years. If that’s the case, it would probably be wise to sell the home, take the equity, and buy another house you see yourself living in for the next seven to 10 years so you can lock in the interest rates while they’re still below 4%.

Be happy where you’re at—that’s the key. If you’re not happy where you’re at, sell now. Don’t wait a year or two. Every year you wait, you increase your chances of selling in a buyers market with declining prices.

If you’re a buyer thinking you’d rather rent for the next five to seven years and wait this possible recession out, that’s fine, but renting at $1,500 per month for five years means you’d be throwing away $90,000 on rent. That’s $0 toward your financial future.

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If you’re still renting, you need to buy and start working on building equity for your future.

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If you buy a home and make payments on it for the next five to seven years, it’s no big deal if the market adjusts. Just stay in the house and keep making your payments until the house is paid off and you’re mortgage and debt-free. When you retire, you want a home that’s paid for—you don’t want to be paying rent when you retire. The average mortgage lifespan is 30 years. Think about that. How old will you be in 30 years?

If you’re still renting, you need to buy and start working on building equity for your future.


I’d love to talk more with you about whether it makes sense for you to sell now, keep your house, or buy for the first time. If you have any questions or are thinking about making a move, just give me a call or send me an email and I’d be happy to help you.

Should You Invest in Stocks or Real Estate?

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The stock market has been hitting all-time highs lately, which has many people wondering, “Should I put my money into the stock market or into real estate?”

I am not a financial advisor, so I can’t give you any financial advice. What I can do is talk with you about real estate investing and how it’s been done in the past.

There are a few things to consider when deciding whether to invest in real estate or stocks.

For example, when you buy stock, you own a piece of a company. Theoretically speaking, can that company go to zero? Sure it can. It can go on the penny stocks, become delisted, or go down in value.

Real estate can go down in value. However, can you buy a piece of property, rent the property, let the tenant pay off the mortgage, and own a free and clear property to provide income for you during retirement? Of course you can.

When you invest in real estate, you can make money on the appreciation. Of course, the real estate market can be volatile as well.

When deciding whether to invest in real estate or not, it all depends on your long-term motives.

Do you want to own a property that pays you an income stream every month for retirement? Are you looking for a fairly stable income stream? Are you looking for an income stream that you can increase year over year to match inflation?

If you are still worried, consider it this way. Are rents higher now than they were in the 1970s, 1980s, 2000s, or even 2010? Of course.

Rental rates have gone up year over year in most cases. They can tick down sometimes if the real estate market gets really hot, but they have never dipped as low as they were 30 or 40 years ago.

Owning a rental property that has been completely paid off can provide great financial security for you during retirement.

Again, I am not a financial advisor. I am simply sharing what has worked for myself and my clients who invest in real estate.

If you have any questions or are interested in investment properties, just give me a call or send me an email. I would be happy to help you!

Should You Wait Until Prices Go Down to Buy Your First Home?

In most cases, it doesn’t make sense to wait until prices go down to purchase your first home and rent in the meantime. Here’s why.

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If you’re a first-time homebuyer, does it make more sense to rent now and wait for real estate prices to come down and buy a home at a lower price in the future?

There are a couple factors you need to consider. First, how long are you planning on renting the home? Second, how much would you pay monthly for rent?

If you’re paying $1,500 a month, that equates to $18,000 a year. If you’re going to wait—say—three years for prices to go down and you’re paying $18,000 a year in the meantime, you’d end up paying $54,000. That’s a lot of money! You’re banking on the hope that the home you intend to buy will decrease $54,000 in the next three years just to break even.

In most cases, it doesn’t make sense to wait and rent until prices go down because of all the money you’d throw away on rent. There’s no equity and there aren’t any tax write-offs when it comes to renting properties.

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The sooner you buy, the sooner you’ll be able to pay off your home.

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If you buy now, you start making payments on your home now. When you retire in 20 or 30 years, would it make more sense to have a home that’s paid for or would you rather still be renting? Whatever your age is now, add 30 years to it—is your home going to be paid off by then?

Only if you buy a home now. Think about it.

If you have any questions or are thinking about buying your first home, don’t hesitate to give me a call. I look forward to hearing from you.

Real Estate Teams vs. Single Agents

Should you hire a real estate team or an individual agent to help you buy or sell a home?

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There are a few reasons why you should hire a real estate team instead of an individual agent.

The main challenge is that single agents work with both buyers and sellers, so they get pulled in two different directions. If you hire a single agent to list your home, they are not 100% dedicated to selling your home. They are driving all over town doing showings for buyers and trying to make a paycheck, which is understandable but not very good for your home sale.

When you hire a real estate team, there will be multiple agents who can show your home so that your property is shown on the prospective buyer’s schedule, which ultimately gets you more showings and better offers.

If you hire an individual agent to help you buy a home, they will also be working with sellers. How can they service the sellers and still take you out to look at homes when you are available? If the home you want hits the market and your agent isn’t available to take you to a showing, then you risk losing that home to another buyer. When you work with a real estate team, it is much easier to look for the homes you want on your schedule.

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A real estate team is able to create smoother transactions.

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Finally, single agents have a hard time dealing with escrow. Escrow is when you are under contract on a home. Most individual agents work on their own escrow, which means they spend all day working with buyers and sellers before turning to escrow when they have extra time.

If an agent waits until the end of the day to work on escrow, they might miss timelines, overlook certain details, and create unnecessary drama in the transaction. Our real estate team has a dedicated escrow manager who handles all of the details and helps the other agent to make the entire transaction go smoothly. That’s why our team is able to offer better customer service and less stressful transactions.

If you have any other questions about working with a real estate team, just give us a call or send us an email. We would be happy to help you!

How Will the Canadian Dollar Affect Your Phoenix Home Sale?

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This last February we had 9.3% more new homes come onto the real estate market, and overall active inventory has increased by 1.3%. However, there has been a 10.2% decrease in the number of homes sold, and inventory has increased by 12% since last February. So, with inventory up and sales down, what does this mean?

We’re trending back towards a balanced market, and this is true for a few different reasons:

• The stock market has been choppy, causing hesitation
• Oil prices have taken a hit, weakening the Canadian dollar
• This has hurt the exchange rate, causing many Canadians to sell their homes because they can make a premium when they sell in Phoenix

If you have any further questions about our market here in Phoenix, please don’t hesitate to contact me. I would be happy to speak to you about it!

2016 Predictions for the Phoenix Real Estate Market

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We have certain expectations from the Phoenix real estate market in 2016 here in the Valley. While no one can predict what the market will do exactly in 2016, there are a few trends we'll watch together.

We know many homeowners have gained equity in their home if they bought from 2010 to 2016. A lot of these people want to sell and trade up to a bigger or nicer home. We're going to watch their decisions as the new year peaks. That means that there should be more homes available for buyers to choose from. This is great because low rates attracted buyers.

About one-third of millennials still live at home, because they are trapped by student loan debt or limited job prospects. Meanwhile, two-thirds are out there looking for a property. It's good for them to have those options available.

Because interest rates are low and because homeowners have equity, we're expecting a lot of movement in 2016. Historically speaking, an election year is a good year for real estate.

If you have any questions, give us a call or send us an email. We look forward to hearing from you!

Is the Stock Market Affecting the Real Estate Market?

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I’ve been getting a lot of questions lately about the stock market and how it will affect home values as we continue into 2015. Today we are going to talk about the stock market, along with last month’s real estate market recap, to show you how they are intertwined.

When looking at the numbers for August of 2015, you can see we had 8,755 homes on the market, which was up from 8,390 in 2014.

Our active listings are sitting at 21,858 vs. 26,066 at this time in 2014. That is a 16% decrease in homes for sale! As for the number of sales last month, we had 7,092 compared to the 6,462 we had in 2014.

Between interest rates being near 4% and active inventory being down 16%, now is the perfect time to sell. There are less homes on the market, you can buy cheaper with low interest rates, and buyer demand is just starting to pick up.

Now, to talk about the stock market. Things have been pretty bumpy the last few weeks, and people have been asking us if we can expect a market correction coming soon

While we can’t say for certain that we know what’s going to happen, what we do know is that it’s a great time to sell and move while rates and inventory are low, giving you the best opportunity to sell your home for top dollar.

If you have any questions for us, or are thinking about buying or selling in Phoenix, don’t hesitate to reach out and give us a call. We look forward to hearing from you!

Is Now the Time to Sell Your Phoenix Home?

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Many on-the-fence homeowners ask me if there is a "right" time to sell their home. Today, I'll share my thoughts on the topic so you can decide the best possible time for you and your family. 

If you have a home that's in a 55+ community, there are more buyers in town during the fall and winter months. This is because older buyers flee cold weather areas in the winter to enjoy the wonderful Phoenix weather. While they're here, they will often look at properties to see if they can find a retirement or vacation home that suits their needs. 

If you have a larger home (4+ bedrooms), the crowd you want to market to will be more receptive in the late spring and early summer months. Single-family homes are usually sought by buyers looking to relocate and who come to Phoenix while their kids are out of school. 

If your home doesn't fall into either of these categories, give me a call or shoot me an email. I can pull up the history of your neighborhood and tell you what time of year is best for your specific situation. 

I look forward to hearing from you soon.

What You Need to Know Before Refinancing Your Mortgage

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Recently, I was asked by a client whether switching to a 15-year mortgage from a 30-year mortgage would be a good idea. If you're in a similar situation where you're thinking about refinancing, it's helpful to answer three questions first:

1. Is it going to reduce your interest rate by at least 1%?
2. How much is your payment going up, will it cause financial hardship?
3. Can you rent the home for the 15-year payment? 
   

These are all things you need to think about if you're considering switching to a 15-year mortgage. I personally prefer the conservative approach of keeping the 30-year mortgage and paying it off early. That way, if for some reason you find yourself in a tight financial situation, you're not stuck with a 15-year mortgage payment.

If you know anyone who might be interested in this topic, be sure to share this information with them. If you have any questions, or need real estate assistance of any kind, give us a call or shoot us an email. We would love to hear from you!

How an Amateur Agent Could Cost You Money When Selling Your Home

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With so many Realtors in the Greater Phoenix area, it can be very difficult to select the right one. Today, we share with you some of the most common mistakes people make when choosing an agent, so you can avoid these pitfalls when the time comes for you to make your move.

Most homeowners will use a friend or family member to sell their home. While there is a relationship there, it doesn't necessarily mean they're the right person for the job. Here's a few things to consider:

1. 87% of Realtors are part-time: You don't want to work with someone who isn't completely dedicated to the success of your home sale. You'll leave money on the table and may even make yourself liable for lawsuits. 
   
2. Work with a reputable firm: Work with an agent who is with an experienced team, who has seen everything the world of real estate has to offer. 
3. Hire an expert negotiator: A good agent will be able to get you the best possible deal when buying or selling a home. An agent who sells at least 100 homes a year has the expertise necessary to get you what you want.
4. Check the commission: If an agent is charging less than 6%, chances are they're going to do a list-and-leave, where they'll throw your home up on the MLS and sit around hoping someone will come along and buy it. There's no marketing plan to get you more money for your home, and that could cost you.

If you are moving out of town, we can put you in touch with the best agents in other areas, so you're taken care of and your interests are defended. We want to make sure you achieve your real estate goals! If you have questions about selecting the right agent, so you don't leave money on the table, give us a call or shoot us a quick email. We would love to show you how we can help you get the most out of your real estate experience! 

How You Can Take Advantage of the Phoenix Real Estate Market

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February was an excellent month for the real estate market in and around Phoenix. There were improvements for sellers across the majority of price ranges and geographic areas, but the main exception was the luxury market, where supply has been growing and demand has been diminishing.

Here are the basic ARMLS numbers for March 1, 2015 relative to March 1, 2014 for all areas & types:

• Active Listings (excluding UCB): 23,541 versus 26,589 last year - down 11.5% - and down 1.7% from 23,950 last month
  
• Active Listings (including UCB): 27,315 versus 29,613 last year - down 7.8% - but up 0.8% compared with 27,095 last month
• A total of 9,307 homes came on the market in 2015, compared to 9,908 in 2014
• Pending Listings: 6,709 versus 6,462 last year - up 3.8% - and up 25.1% from 5,631 last month
• Under Contract Listings (including Pending & UCB): 10,483 versus 9,486 last year - up 10.5% - and up 30.5% from 8,776 last month
• Monthly Sales: 5,982 versus 5,444 last year - up 9.9% - and up 24.9% from 4,790 last month
• Monthly Average Sales Price per Sq. Ft.: $130.08 versus $127.38 last year - up 2.1% - but down 0.6% from $130.86 last month
• Monthly Median Sales Price: $195,000 versus $182,000 last year - up 7.1% - and the same as last month

 The rise in the under contract count over last year - up 10.5% - understates the magnitude of the improvement because it includes all areas and types of homes.The balance between supply and demand has altered the most for the price ranges between $75,000 and $800,000. Outside that price range, things don't look like they are improving much at all. 

The luxury market has certainly weakened, but it has had a very good run for the past 2 years while the rest of the market has floundered. Everything in real estate is cyclical, so it's probably time for the luxury market to rest for a while and let the lower and mid-range markets have their turn.

Sales in January were slightly below January 2014, but February more than made up for that and we saw an increase of almost 10% over February 2014. Also, the most encouraging development is the return of the entry level home buyer, and this can be seen in the places where demand is clearly outstripping supply. Specific examples include Mesa, Phoenix, El Mirage, Avondale, Glendale, Chandler, Youngtown, Tolleson and Tempe. All of these areas have a Contract Ratio over 90, qualifying them as "hot spots". Last year at this time only 2 ZIP codes - Youngtown and Mesa were higher than 90 across the entire valley.

Last month we commented that the first-time home buyer is critical to the next stage of the recovery, and it looks like we finally got what we have been waiting for. Now we have to hope that February was not a one-time blip and that the trend will continue through the spring.

Click here to read the full Cromford Report. 

Why Your Phoenix Home Won't Sell

There are many great homes for sale in the Greater Phoenix Metropolitan area. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (480) 596-2900 for a FREE home buying or selling consultation to answer any of your real estate questions.
If you listed your Phoenix home, but were unable to sell it, I'm guessing you've been getting a ton of calls. You've probably had multiple agents promise you that they can get you more money, will charge a lower commission, and have more marketing acumen than your last agent, among many other big claims. You're probably thinking, "My home was on the market before, what makes you think it will sell now?"

Having an expired listing can be a very stressful experience, but it doesn't have to be. I want to share the marketing plan that most sellers use in your situation to get your home sold quickly and for top dollar. Give me a call at (602) 738-9943 and I'll fill you in. Or, if you're not ready to talk to someone yet, you can visit www.ThePenroseTeam.com to get an automated home evaluation for your property to get an idea of what homes are selling for in your neighborhood. This is free, with no obligations required. I want to get you this information so you can make informed decisions in the marketplace!

If you have any questions, or if you would like our assistance, give us a call or shoot us an email at any time. We would love to help you out! 

What Can You Expect from the Arizona Market in the Months Ahead?

There are many great homes for sale in the Greater Phoenix Metropolitan area. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at (480) 596-2900 for a FREE home buying or selling consultation to answer any of your real estate questions.
As you can imagine, we've had a lot of people in the Phoenix area over the last 30 days. This town has been very crowded, and a lot of money has flowed into our state due to the Super Bowl, the Waste Management Open, and Barrett Jackson, which has been fantastic. Today, we want to give you a quick recap of the last month in real estate, so you know what to expect moving forward.

In January, 10,438 homes were put on the market, which is down 679 homes over January of 2014. There were 25,996 active listings last month, as compared to the 27,137 homes that were on the market in 2014. We also sold fewer homes this January when compared to last year, as only 4,779 homes were sold last month, which is down from 4,816 at this time last year. On the inventory side of things, we've seen a slight increase, as we currently have 5.44 months worth, which is down from 5.63 months last year.

What do all these numbers mean for our market? Well, the changes we've seen are pretty negligible. Our market is actually doing slightly better this year than it was at this time last year because we have fewer homes coming onto the market and have only seen a slight dip in sales. Sellers aren't listing their homes like they did last year, as many of them are holding firmer on prices, which is actually shoring up the market and stabilizing home prices across the board.

To see the in-depth numbers on what's happening in our market, click on the graphs below: 

 

If you would like to know the specific market conditions in your neighborhood, don't hesitate to reach out to me via phone or email. I look forward to hearing from you soon!