Archive for Phoenix
PHOENIX HOUSING MARKET
There’s some good news for the Phoenix housing
market. Unbelievable that it’s been 27 months of declining prices for homes in the metropolitan Phoenix housing market. Started out slower, then boom! In any event, after 27 months, according to ASU Professor Guntermann, a 3-month period of prices holding, sends indications that we’ve most likely hit the bottom of this decline. There will most likely be certain markets that will continue to see drops in pricing….i.e., luxury home market. Some areas will be harder hit than others, but it’s a positive sign that buyers are once again entering the marketplace.
Most buyers are under $200k and first time buyers, but they are keeping the market going. We’ll most likely continue to see short sales and foreclosures for sometime to come. This can change the scenario because foreclosures drive down the value of the “regular” sales. Stay tuned….I’ll keep you updated as I find information.
WHY ISN’T MY HOUSE SELLING?
This is a common lament from a lot of homeowners.
There are a number of reasons why your home may not be selling. Let’s start with the current market. Owners need to be out of the mindset of several years ago….that is past and hopefully, will stay in the past. Those were way overinflated times and we don’t need that again. Unfortunately, if you bought during the highest point, you may be out of luck. This is why we are seeing, and will most likely continue to see, short sales and forclosures.
You need to objectively look at your home as a “buyer”…..I often suggest that my sellers view similar homes to see where they rank in the “wow” factor. There will be both nice and not so nice listings and it’s good to actually see the homes in person. Don’t just rely on the pictures on the internet…..sometimes photos hide all manner of mistakes.
It’s VERY important that you stage your property. I am a huge proponent of first impressions are lasting ones. Curb appeal is key to getting the buyer into the right mindset once they’ve entered the house. If they don’t like what they see outside, chances are that they’ve already got preconceived notions of what’s awaiting them inside. Some buyers I’ve been with will not even go inside if they don’t like the outside. While there are exceptions to this rule, why take the chance. Make sure your yard is freshly landscaped. Make sure all bushes and trees are trimmed so that potential buyers can see the house. Remove all hoses from the front. Sweep the doorway. Make sure your door is clean and any windows clean as well (this goes for the entire home…no one wants to look through dirty windows–let the light in!). Stand on your curb, look at the house….really LOOK….be critical; pretend you are a buyer! If your home looks tired, spruce it up a little.
You MUST, MUST think of yourself as moving. There’s no use in putting your home “on the market” to test the waters. This is a waste of time for you, your agent and others. If you’re not serious and you cannot wrap your brain around moving, wait until you can. Prior to listing, I suggest starting your packing. Remove personal items, i.e., religious icons, photographs, books that are controversial, etc. This way, buyers will look at the space and not focus on who lives there. People are funny that way, perhaps they won’t buy because of your religion….you just never know; why give them the opportunity to walk away because of that.
Straighten your closets….this doesn’t mean call Classy Closets, it means pick things up off the floor and/or pack. Plastic bins are terrific organizing tools. Make sure that your clothing is neatly on hangars. Also, linen closets need to be straightened up….don’t give buyers a chance to fixate on the messy closets and not the storage space they offer.
If you’re going to pack, stack the boxes — neatly — in the garage. If you have a lot of things in the garage, clean it up. Have a garage sale and get rid of everything you don’t use/need. Call a charitable organization to come by the day or so after to pick up everything that doesn’t sell. Are you going to move and put the same things into your new home that you didn’t use in your current home?
Kitchens need to be clutter free. Clear the countertops as much as you can. Put papers away. Put small appliances away. Let buyers see the space. Make sure surfaces are clean and the sink is sparkling. Also, buyers may open your refrigerator….be prepared. A pantry, if you have one, is also something that needs attention….make sure it looks neat.
If you have children, now is a good time to teach them to pick up their toys. You’re not expected to remove everything, but keep toys to a minimum. If you have a playroom, make sure that the floor is clear for entrance.
Look at the walls, do you need to paint? I suggest a fresh coat if need be…..most buyers will feel differently about a freshly painted home….it feels cleaner. Buyers will like that they can move into a home without worrying about painting.
Don’t take anything that your selling agent says personally. He/she wants to sell your home as much as you do. Better for one of them to tell you about negatives than hearing it constantly from potential buyers. Get a head start on preparing your home properly for sale.
Last, but certainly not least, PRICE is key. It’s better to price competitively in the beginning than to keep dropping the price. Remember, if your home is priced appropriately you’ll get showings. You should have the greatest amount of actively in the first few weeks a listing is on the market……this will tell you if it’s priced right. Be prepared for a lot of competition. You must also be aware of the way appraisers are viewing properties today. If your price is too high, it may not appraise out and then you’ll have to negotiate down or lose the sale.
Ultimately, chose a realtor who is honest, fair and who you like. This is a very personal decision and oftentimes very emotional. Think of your home as a commodity. You’ve decided to sell, it’s time to move on!
PHOENIX LUXURY HOME MARKET
In reviewing the metropolitan phoenix luxury homes
market, I rely on the Cromford Report for the update of inventory as far as days on the market and and inventory in terms of months supply. These statistics are for Paradise Valley homes — all price points. July’s number of months inventor was 26.5 and so far this month we’re down to 19.2. If the month holds out, that is a good indicator that 1) homes are selling and 2) with the inventory down, this will once again stabilize our market.
Homes in the Scottsdale area are about the same from July, however the inventory is down from last quarter. Scottsdale is also a larger area than Phoenix. The month’s inventory is about 7.7 months currently. These numbers reflect all price points and not just high end.
We’ll most likely continue to see foreclosures here and there, however, there’s definitely been a slow down.
ANTI-DEFICIENCY LAW IN AZ
The anti-deficiency legislation proposed by Congress-
man Pierce is inextricably tied to the state budget. In other words, if the budget fails to pass, we will need to find another way to circumvent the legislation that is supposed to take effect on September 30th.
This could really hurt our housing/economic recovery. If investors have to prove that they’ve personally lived in a property for at least 6 months before they qualify for foreclosure protection, this will be a mess! Keep your eyes and ears open for news relating to this subject matter as it will affect ALL of us here in the State of Arizona……
SHORT SALES - DO YOU UNDERSTAND THEM?
Short sales. You see them everywhere. Perhaps
you are thinking of doing this with your property. As realtors, we have been faced with a market that is to put it mildly, crazy! Homeowners who are upside down in their property (owe more than the property is worth) are facing heart wrentching decisions…do I leave my home? What choice do I have. Especially if you bought at the height of the market and perhaps you’ve had a curtailment of income.
Statistically speaking, few homeowners contact their bank directly. However, to be fair, most banks are so overwhelmed that they are not able to take good care of their customers–this is not an excuse, just a fact. The process is getting better because this market is not going away anytime soon. I saw an economist on a news show today that said that if the banks don’t “re-adjust” the mortgage value of the home (when they are so under water), we will have more trouble getting the economy back on track.
The loan modifications won’t do any good if your property value is not increasing. This is particularly true for hardest hit areas. So, people try to short sell their homes. You should always seek appropriate financial/legal counsel when it comes to short sales or foreclosures. The short sale WILL affect your credit.
FORECLOSURES–BANKS BEST INTERESTS??
What is the government doing to stop/slow them
down? While the admininstration continues to grapple with the enormity of the housing crisis vis a vis foreclosures, lenders are not helping people stay in their homes by modifying their loans. Some lending institutions feel that letting the home go into foreclosure is actually cheaper for them. Out of the 1.5 million foreclosures, a mere 200,000 loans have been modified….less than 3%. The banks are of the mind that even if they modify a loan there’s a chance that the homeowner will eventually default even with a smaller payment. (Washington Post, July 28, 2009 by Renae Merle)
The unemployment rate is contributing to that scenario as well. People are struggling to stay in their homes, but when they lose their job(s), they don’t have a choice but to walk away. The news was good for June that the real estate market has ticked up, however, we still have a long way to go. The foreclosures will continue to drive down value and until we can clear the inventory, we have to play the waiting game. In the end, I don’t think anyone knows how this will turn out.
SB 1271
Good news on the anti-deficiency legislation
in Arizona. Senator Steve Pierce (who was the sponsor of the bill in question) has requested that the legislature revisit the bill to address the unintended consequences to homeowners that this bill carries. Mr. Pierce met with the Arizona Association of Realtors yesterday to discuss how best to help Arizona’s small banks who are suffering from the mounting number of foreclosures and the lack of TARP funds to help the banks.
Thank you to Mr. Pierce for taking the time to listen to our concerns for homeowners in the State of Arizona.
SUMMER IN PHOENIX
I have a friend who wishes he was in San Diego.
Frankly, I think Arizona is pretty terrific. Yes, summers are hot. It’s the desert. We’ve lived here 12 years and you do not get used to it, you tolerate it. It’s the same every year, people complain about how hot it is. It’s this hot every year! We suffer through several months, because the remainder of the year is wonderful…..
The days are getting shorter. This means that the desert has more time to cool down. It’s only the end of July. We don’t start getting cooler nights until September. We had a really wonderful June. I don’t ever recall having to shovel sunshine. And, if you want to get out of the heat, you only need drive to Show Low or Flagstaff to experience cooler temps….what more could we want?
To that end, I saw an article in the local paper this past weekend that the prices for “summer homes” is amazing in the mountains….great time to buy up there……we did 3 years ago and it is wonderful…..even in the winter!!
JULY REPORT ON PHOENIX HOUSING MARKET
Phoenix real estate market report for June, 2009
shows the following statistics according to The Cromford Report: Regarding active listings in Phoenix beginning in March-July 2009, actives went from approximately 9,000 down to 6,000 …. about one-third. In Scottsdale for the same time period March-July, 2009, active listings decreased by slightly less — 4,100 to 3,100 about one-fourth.
In addition, the number of pending listings has dropped a little in most major cities within phoenix. This is most likely attributable to the economy and the fact that the inventory is down a little. We will still need to see some movement upward to give us hope that we have indeed turned the corner in the downward spiral and are heading up.
Overall, there’s about a 9 month inventory of homes. This will vary slightly from city to city and the higher end homes (over $500k) are sitting longer as the pool of buyers for those properties is smaller. The pending sales are down a little from last month, however, sales are up. This is a good sign. We want fewer homes on the market. This creates “need”.
There are many investors still coming in and buying homes, fixing them and either renting them or turning them around and making a few thousand dollars. This is a good thing in that fixing the properties that have been foreclosed on only improves the value within an entire neighborhood.
There continues to be good news on the home front as people’s confidence levels come back. I believe that the jobless rate will keep things in check, but overall the news is positive. First time homebuyers and investors continue to drive our market. The higher priced homes move slower, but there is great opportunity out there.
PHOENIX DEFICIENCY AMENDMENT
Recently, the Governor of Arizona, Jan Brewer
is getting ready to sign legislation that is supposed to take effect on September 1, 2009 eliminating our current anti-deficiency policy in the State of Arizona. This is HUGE. The banks, who are the ones on the band wagon here, have lobbied the Governor to change this law. Essentially, SB1271 would allow banks to go after homeowners for the balance owned on their home after foreclosure…..the difference between the amount they received for the foreclosure and the amount owed on the house. This also will affect investors because in order to be covered by the anti-deficiency law, the investor will have to prove that they have lived in the home(s) for a period of not less than 6 months.
Here’s a quote as described in layman’s terms:
Cause: One of the problems Arizonans facing foreclosure have is the very short timeline involved. We have one of the shortest in the nation – only 90 days from default. And now we are going to let banks chase defaulting borrowers for recovery above and beyond that which is recouped when the bank sells off the foreclosed house.
Effect: So suddenly the banks no longer have any incentive whatsoever to work with a borrower to resolve delinquencies. Now the bank can quickly foreclose, sell the house below market value and then go after the defaulting owner for the difference! This will in turn drive down Arizona real estate prices even further. Perpetuating falling real estate prices will only worsen our struggling economy. Furthermore, the relationship between the lender’s rights and the borrower’s rights will be seriously imbalanced by this change to the current law. The only winners here will be the banks who got us into this financial mess in the first place.
Our real estate market has taken enough of a hit, this will virtually kill it. If you can, call Governor Brewer’s office and express your concern about this terrible piece of legislation and tell her you support the Arizona Association of Realtors plea to her to revisit this decision as soon as possible through the special session.
I don’t know about you, but I’m getting worn out from all this government intervention and having to put my 2 cents in!
