Is There a Reason 2015 Is Shaping up to Be a Record Year?

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Many people in the area have asked me why the 2015 real estate market is so hot. Today, I thought I would venture an answer.

There are a few reasons we're seeing an active market. First, most people who lost their homes in a short sale or foreclosure were unable to get back into the market until this year, so a lot of those people are reentering the market now. Second, interest rates are rumored to rise this summer or fall; since most people understand higher rates equal higher monthly payments, many are jumping off the fence in order to lock in low interest rates. 

Another reason people are entering the market is property values are cheap. When property values begin to rise, many enter the market to grab properties at a fair price before the market begins to stagnate. Since many people buy properties for tax reasons, grabbing cheaply valued properties while they're available is a common strategy. Since inventory is lower than last year, we're starting to see values rise and people enter the market as a result.

If you want to know what conditions are like in your area, or if you want to take advantage of these favorable market conditions, give me a call or shoot me a quick email. I would love to discuss your particular situation with you and figure out if we can make a beneficial real estate transaction in the current marketplace.

I look forward to hearing from you soon! 

Where Is the Phoenix Market Heading?

Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation  Call me at (480) 596-2900 for a FREE home buying or selling consultation March fulfilled and even exceeded most sellers hopes with strong sales across the vast majority of price ranges and geographic areas. The major improvement in demand that we first saw in February has spread to more areas and has moved strongly upmarket too.

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

• Active Listings (excluding UCB): 22,303 versus 26,442 last year - down 15.7% - and down 4.8% from 23,541 last month
• Active Listings (including UCB): 26,436 versus 29,907 last year - down 11.6% - and down 3.2% compared with 27,315 last month
• Pending Listings: 7,853 versus 7,333 last year - up 7.1% - and up 17.1% from 6,709 last month
• Under Contract Listings (including Pending & UCB): 11,988 versus 10,798 last year - up 11.0% - and up 14.3% from 10,483 last month
• Monthly Sales: 7,855 versus 6,680 last year - up 17.6% - and up 35.2% from 5,812 last month
• Monthly Average Sales Price per Sq. Ft.: $131.95 versus $130.74 last year - up 0.9% - and up 1.3% from $130.27 last month
• Monthly Median Sales Price: $200,000 versus $189,500 last year - up 5.5% - and up 2.6% from $195,000 last month
• There is very little to dislike in this batch of numbers, if you are a seller. However buyers are facing the prospect of prices increasing if these conditions prevail for a few more months.

The rise in the under contract count over last year - up 11.0% - understates the magnitude of the improvement because the concurrent reduction in distressed listings keeps a lid on this measure. The same is true of the sales improvement. It is instructive to look at the same measures restricted to normal listings across Greater Phoenix:

• Active Listings (excluding UCB): 19,835 versus 23,096 last year - down 14.1% - and down 6.0% from 21,103 last month
• Active Listings (including UCB): 23,148 versus 25,493 last year - down 9.2% - and down 3.9% compared with 24,075 last month
• Pending Listings: 6,726 versus 5,776 last year - up 16.4% - and up 18.9% from 5,656 last month
• Under Contract Listings (including Pending & UCB): 10,039 versus 8,173 last year - up 22.8% - and up 16.4% from 8,628 last month
• Monthly Sales: 7,174 versus 5,825 last year - up 23.2% - and up 38.8% from 5,170 last month
• Monthly Average Sales Price per Sq. Ft.: $134.78 versus $135.18 last year - down 0.3% - but up 0.6% from $134.04 last month
• Monthly Median Sales Price: $207,000 versus $198,050 last year - up 4.5% - and up 2.0% from $203,000 last month
• We note that the median sales price and average price per sq. ft. are behaving differently, a sure sign of change in the mix, with the buoyant mid-range keeping the average $/SF down but pushing the median price up.

We can also see the huge growth in the usage of UCB to replace Pending status for normal listings. We estimate 60% of normal UCB listings are really pending and falsely marked as UCB. Last year at this time the number was 55% and the year before that 40%. The price ranges showing the greatest improvement in demand over supply compared to their long term average are:

1. Over $3M +64%
2. $250-275K +35%
3. $225-250K +32%
4. $200-225K +28%
5. $2-3M +26%
6. $600-800K +23%
7. $1.5-2M +22%
8. $400-500K +15%
9. $275-300K +14%
10. $175-200K +12%
11. $125-150K +10%
12. $300-350K +7%
13. $1-1.5M +5%
14. $150-175K +4%
15. $350-400K +2%
16. $500-600K +2%

These numbers are for single family homes only. They are based on comparing the current contract ratio with the long term average ratio for that price range. Contract ratios decline dramatically as you look at higher price ranges, and this applies in all market conditions. The price ranges over $800K were looking tired at the end of February, but just look at them now, especially the ultra-luxury segment. There were 29 homes over $3 million under contract as of April 1 compared with just 16 last year. This is the most we have seen since 2007. A few ranges are not looking so hot: below $100K is experiencing low supply and even lower demand while $800K to $1M is stuck at its long term average. We are seeing the first signs of some extra supply coming along, as in the last week the rate of new listings has ticked up just a tad. It is quite natural for news of the stronger market to bring out some more sellers. If this continues it will help keep the market from getting too frenzied. This is certainly a lot more interesting and exciting than last year. Source: Cromford Report

Is Now the Time to Sell Your Phoenix Home?

Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation  Call me at (480) 596-2900 for a FREE home buying or selling consultation
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.

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

Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation  Call me at (480) 596-2900 for a FREE home buying or selling consultation

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

Buying a home? Click here to perform a full home search Selling a home? Click here for a FREE Home Price Evaluation  Call me at (480) 596-2900 for a FREE home buying or selling consultation

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.