This is the sweet time of year, yeah? I’ve got some great reads and fun events for you.

Your Brain on the Internet. I’m not sure how many of y’all take my suggestions for interesting reads or viewings. But if you don’t usually, I encourage you to watch this video. It’s from one of my favorite science-related YouTube channels, called Kurzgesagt, and it describes what scientists have recently learned about how the Internet affects our brains, how it is breaking down our social order, and what we can do about it. Left, right or center, this is worth a watch.

Cosmic Sleighride. Climb aboard your cosmic sleigh with your host Shiny the Star on a mystical holiday adventure that is out of this world at Cosmic Sleighride produced by World of Illumination. Shoot past the sun, race among the stars and pass through Kris Kringle’s celestial portal where toys prepare for launch. Orbit around a team of astro elves hoverboarding through the cosmos as you enter the stratosphere of Santa City, where all the holiday magic happens. Hold on to your seat — you’re in for one stellar ride.

You Can Choose Your Local Power Company’s Board of Directors. SRP has severely restricted residential solar an is installing over 2,000 MW more of dirty methane gas. They are ignoring climate science. You may have the right to vote in the Salt River Project election in March and not even know it. Even parts of APS territory used to be SRP territory and you still may have voting rights. For instance, I live at about Central and McDowell, I’m an APS customer and I can vote in the SRP board election. Funny how they don’t advertise that, huh? Even if you are not certain, go ahead and register at this link and find out. You can see a map of the SRP voting districts at this link. Be sure to scroll down to see it.

Lawn Care Going Electric. If you own a home, there is a good chance you either mow or blow your lawn or desert garden. Gasoline-powered lawn and garden equipment, which don’t have pollution controls, often emit as much pollution in an hour as driving hundreds of miles in a car. Let’s set aside for a moment the war machine-level of noise that leaf blowers set off when they invariably start going on a Saturday morning in your neighbor’s yard. =These things are a huge contributor to Phoenix air pollution and one of the reasons that we are usually in the top 5 or 6 most polluted cities in the nation. Lawn equipment alone in Arizona contributes 985 tons of nitrogen oxide and 333 tons of particulates, which are small enough to invade your lungs. You can learn on this website about ways that you can push our local government to encourage a move to clean, quieter electric lawn equipment.

While we are on the topic, please take a moment to tell the Maricopa Association of Governments what you think they should do to help reduce air pollution at this public survey. The results will help them build a Climate Action Plan and access tens of millions of dollars from the federal government.

Lights on the Farm. Lights at the Farm and Vertuccio Farms have partnered together to bring Arizona’s Largest Walk-Thru Synchronized Light Show. Come on out and unwrap new traditions and make memories with your family and friends as you make your way through the dazzling lights, larger-than-life lighted displays, mesmerizing tunnel of lights and so much more. Lights at the Farm offers a holiday entertainment experience for all ages. They’ve decked the farm with 2 million dazzling lights, brilliant decor, and inspiring displays to create a Christmas light show. Each display is synchronized to a variety of Christmas classics that will have you singing along. It is stretched out over 10 acres; these dazzling lights will take you through a spectacular journey that will delight your senses and put you in the Holiday spirit.

Did we Abandon the Greatest Economy in History? This is relevant to why so few people can afford a house now, at least the long term view of it. This is a great article on the history of the political shifts that took us from economic domination in the 1950s to space where the disparity of income is about as large as it was during the gilded age. Hint: if you are thinking its an all-left or all-right account of history, you’d be wrong.

Clean Energy Jobs in AZ To Date. Expect the Arizona economy to grow and people to continue to want to move here, as Arizona is now an EV manufacturing state and clean energy jobs are growing. Since the passage of the Inflation Reduction Act (IRA), we’ve seen more than 13,000 new jobs in Arizona, from about $12 billion in investment.  As you can see in this data, Arizona is becoming a battery manufacturing powerhouse, according to the latest report from Climate Power.  As you think about whether to buy or hold in Arizona, this lends support to long-term investment.

How to Shop Local with Ease. Local First Arizona has a great online shopping portal so that you can support local businesses with a click of a few buttons. Many Phoestivus vendors are on the portal, as well. So, if you don’t feel comfortable in the crowd, you can still delight your friends and family with original gifts. 30% more of your dollar goes to support local police, fire and community services when you shop local.

Southwest Gas is the new Marlboro Man. Well, more specifically, the methane gas industry is the new version of that 1960s doctor telling you smoking is good for you. Recent reporting from NPR revealed that the “natural” gas industry quite literally used the Tobacco industry playbook to mislead the public about the health threat of gas stoves. The American Gas Association (AGA) hired the Tobacco industry’s go-to public relations firm and the same industry-friendly researchers to deploy the same tactics to cast doubt on the science. These tactics continue to this day — the AGA hired a Tobacco-linked consultant to sow doubt about the science earlier this year.

Why aren’t we Recycling Lithium Batteries? The best way to avoid opening more lithium mines is to recycle more. After all, we recylce 99% of lead-acid batteries from cars. Why is less than 5% of all lithium recycled? Is it because the government started requiring car batteries be recycled back in the 1960s, but now anybody can sell lithium batteries and leave society with the cost of finding more? Here’s an informative treatment on what’s going on. The EPA has a nice primer on lithium mining here, too.

I’ll leave you with this thought. Critics of climate change policy claim that China pollutes more, so they should fix the problem first. Set aside that this is only true if you look at today. Over the last 150 years, the US has added about 4 times as much carbon to the atmosphere as China. Once we look at current investment in renewables –and the potential to capture more global market share in clean energy manufacturing and technology–, you can see that the US is giving up its leadership position to China. China invests about $266 billion per year in renewables. The US sits at about $115B, with a much larger economy. Who’s winning that space race now and who is ceding leadership? (Source: Bloomberg)

As you may know, I serve on the Advisory Board of Voter Choice Arizona (VCA), a non-partisan, nonprofit that, for the past three years, has been educating Arizonans about election reform and the incredible benefits it can bring to our state by giving Voters more voice and more choice. 

VCA’s sister organization, Better Ballot Arizona (BBA) has recently filed for a citizen’s initiative that, when passed, will equalize signature requirements for all candidates, establish a single, non-partisan primary, and allow voters to use Ranked Choice Voting in a top-5 general election.

If you don’t know about how these reforms can reduce negative campaigning, eliminate the “spoiler effect,” and lead to better governance, please invite the VCA team to share their presentation with you and your friends, or meet up for a one-on-one conversation.

If you already understand how better ballots can improve our elections, please consider joining me in donating to Better Ballots Arizona. They have a $10k match from a donor that expires on October 31.

You can donate and learn more about the campaign at betterballotaz.org.

To arrange for a presentation at a house party or group meeting, visit VoterChoiceArizona.org.

If you have further questions, feel free to reach out to me, or VCA Executive Director, Kazz Fernandes at Kazz@voterchoicearizona.org.

Don’t you love those mornings where you walk outside and get a little puff of “almost chilly” air on your cheek?

Well, along with the cooler temperatures come a little more activity in the market, at least compared to summer. Yet, that comparison between summer and fall does not over-come the year-over-year doldrums that we are experiencing as a result of higher interest rates.

Here is what our friends at the Cromford Report are, er, well, reporting. Notice, if you will that sales prices are actually up from last year by a smidge.

“Here are the basics – the ARMLS numbers for September 1, 2023 compared with September 1, 2022 for all areas & types:

• Active Listings (excluding UCB & CCBS): 13,404 versus 20,084 last year – down 33% – but up 12% from 11,969 last month
• Pending Listings: 4,264 versus 4,862 last year – down 12% – and down 7.4% from 4,604 last month
• Monthly Sales: 5,563 versus 6,460 last year – down 14% – and down 11% from 6,261 last month
• Monthly Average Sales Price per Sq. Ft.: $285.08 versus $276.60 last year – up 3.1% – and up 1.1% from $281.99 last month
• Monthly Median Sales Price: $432,000 versus $439,000 last year – down 1.6% – and down 0.7% from $435,000 last month

Mortgage rates have hit their highest levels in 20 years and the impact on demand can be seen in the numbers. Listings under contract fell another 8.6% from the dismal level of last month. Closed sales were also disappointing dropping another 11% from last month.

New listings remain scarce, but the flow has increased over the last 2 months. Demand is so poor that the active listing count is starting to build, up 12% over the last month. However it remains well below last year at this time.

The balance between supply and demand still favors sellers in the majority of markets, (emphasis added) but negotiating power is swinging towards buyers with every day that passes. Supply rising and demand falling means this trend is gathering strength. If interest rates remain in the high sevens or increase further, then we can expect market balance to hit within 2 months or so. However we usually see a significant weakening of supply from the middle of November to the end of the year and this could temper the downward direction in the Cromford® Market Index.

Demand remains much better in the new home market, though even here buyers will find it increasingly hard to qualify for loans if interest rates get closer to 8%.”

As the weather cools the listings and the buyers re-emerge to buy and sell.

520 W. Clarendon Ave, Unit G2. $288,000, 2br/1.75 ba, 1,320sf. There are a few pristine co-op apartments still in central and downtown Phoenix. Most were built in the 1960s and only a few maintain that mid-century charm. This is one of them. But, on top of that, the owners of this unit opened up the kitchen since and completely remodeled since they purchased the home in 2021. This home is being sold with all of the unique furniture, as an option for the buyer. This secure community is just steps from dining, light rail and shopping. You can lounge in the pool or chill in the historic commons knowing that your investment is being maintained and cared for as a co-op uniquely is. See the listing and more photos here.

745 E McKinley St, $399,000, 3br/1ba, 1,026sf. The Garfield neighborhood has undergone a transformation over the last decade, with many historic bungalows being renovated and improved. Yet it maintains its charm, with eateries, art galleries and fitness spaces still in the neighborhood. You can hop over to the Saturday downtown farmer’s market for fresh food and treats, or you can visit any one of the many restaurants or coffee shops. The home has been well-maintained, with space in the back for gardening and shade. You’ll enjoy the wood floors, the functional kitchen and well-lit rooms. See this one today.

As we wait for the worst of the summer to be over, periodically suffering those straggling 110˚ days that pop up later than it feels they should, here are some more indoor-centered activities and good reads for you.

Historic Orpheum Tour. September 12th at noon. The Orpheum Theatre is a fully-restored 1929 atmospheric theatre complete with a disappearing Mighty Wurlitzer Theatre Organ! Guided tours of the theatre include all public and many non-public areas and offer visitors a glimpse behind the scenes of a movie palace. I went to see All Puppet Players’ summer movie series there. I always love seeing this irreverent group of comedians playing to this most beautiful and historic house. All regular tours last approximately 60 minutes. Free. Ticket info.

Methane gas (marketed as “natural”) is 80x more potent as a greenhouse gas than CO2. Yet both Arizona utilities are talking about adding more gas power plants to our state. Many older ones are nestled in our neighborhoods. Join Poder Latinx, Vote Solar, Western Resource Advocates, and other organizations on September 8th. to learn about the connection between methane gas power plants and health. Plus, hear about clean energy alternatives and how you can get involved in energy policy decisions. Register at this link.

The Frog Prince. Sept 13th at 10am. A favorite fairy tale is back indoors on the big stage, performed with rod puppets and projected scenery! Come enjoy this classic story about a spoiled princess who learns important lessons about friendship and keeping her promises. Singing and dancing to original music make this a great show recommended for ages 5 and up. $10 – $12. Ticket info.

Interfaith 2023 on September 28, 2023 at the Sikh “Guru Nanak Dwara” Gurdwara. There will be a faith Fair in the downstairs Courtyard, Interfaith Discussion in small groups, followed by a “Langar” or community meal. Sikh-owned Indian Restaurants will donate the vegetarian dinner. This tradition involves sitting on the carpet in long rows, then being served by the Sikh Community. Initially, this was done to show value in all people, regardless of the caste system of the times. (There will be some tables / chairs for those unable to sit on the floor.) Register here. For more questions, email Albert@azifm.org.

Thousands of Bats at 44th and Camelback. Most of my readers know about this, but in case you do not, go see the thousands of bats that fly out of a culvert just west of 44th and Camelback at sunset. You can see a fuller report in this article in Atlas Obscura. They will all fly south to Mexico in October, so you will want to do this soon. It’s a treat to watch them duck and dive to eat the thousands of bugs that come out at sunset. Be sure to take somebody who is afraid of bats so that they can see just how amazing and harmless (and necessary) they are.

Why are we paying money so we can pay taxes? It has been documented for a long time that companies like TurboTax and others have spent million of dollars to convince the US government to require most Americans to continue to pay for their products, even though most people could prepare their taxes for free. Learn more in this video about that corruption that forces Americans to pay private companies to do something that they could do for free –and one ray of hope that has emerged. Check out this short video on just how we are getting fleeced.

Local First’s Member Appreciation Event. September 13th from 6-8pm. This September 13, we invite you to an evening of appreciation and celebration, hosted by Local First Arizona and Fuerza Local, at the prestigious Phoenix Art Museum. As the heartbeat of our state’s economy, local businesses deserve to be recognized and honored for their unwavering commitment to making Arizona thrive. Join fellow members and local businesses to access new and exciting materials to showcase your business as locally-owned in Arizona. Register here.

This is the motto that I’d love to see on a million cars around the United States.

I’ve opined in the past that I think the proliferation of investors (mostly institutional) have had a damaging impact on our neighborhoods, specifically, but have also increased homelessness. I think that trend continues and I think we need to begin to take action.

Here’s how the damage has been done.

Over 10 years ago, investors played an important role in making certain that foreclosed homes could be purchased and put to good use. But they learned from those days that they could treat neighborhoods like commodities, bundling them in to real estate investment trusts (REITs) and selling them to everyone.

So, what’s wrong with that?

First, when investors purchase homes, they have a different money calculus than does a home owner. They are willing to pay more because they will be able to pass that on to a future renter to pay their debt. Or, in some cases, they don’t have debt to pay off. But they do have shareholders that demand huge profits.

This goes for both investors in homes that they turn in to rentals and also short term rentals.

So, the increase of investors drives prices up because they are willing to pay more, and for cash. This drives mortgage-backed home owners out of the market.

And, yes, all of this trend started long before interest rates got as high as they are now.

This trend drives up homelessness.

“But what about the mom-and-pop investors?” After all, you might be one and you don’t want to think that you are part of the problem.

Don’t worry too much. Data indicates that it is the increasing amount of investors that are causing the problem, not mom-and-pop investors. This coverage indicates that an increasing amount of institutional investors (state retirement funds, union funds, etc) are investing in single family residences.

According to my friends at the Cromford Report, the total amount of rental properties remains at about 10% of the total inventory, but that the make-up of the ownership has changed, with an increasing amount of investors and a decreasing amount of mom-and-pop owners.

Note: Cromford analysts tell me that it is very difficult to track exactly how much of the total number of homes in the state are owned by investors. This is because some people don’t report honestly what they intend to do with the house. In some cases, the title company overseeing the transaction reports the affidavit of value to the county automatically as “owner occupied”, and nobody challenges it. Further, there is no comprehensive way (at least in AZ) to report a change in use if there is a change in ownership.

However, the increased proportion of investors to mom-and-pops represents the second way that investors drive up rents and contribute to homelessness. Investors, with automated systems and tens of thousands of properties create a less humane landscape driven by high expectations for profits over people. (This On the Media podcast covered the issue.)

The case is often made, quite accurately I think, that homes owned by companies both raise rents faster and are less tolerant of late payments, as detailed in this reporting. If a renter has a problem making rent, they are in a better situation if they know their landlord than if they are interfacing with a bureaucratic brick wall, which has the power to report them to other landlords as a bad renter (even if they are not).

This has created a situation where state governments are trying to solve a problem that they are helping to create. It is difficult to parse out causation and correlation, but I believe that it is possible that Arizona’s very own retirement system is investing in real estate in a way that helps drive up rents and increases homelessness, which taxpayers must pay for in many ways.

See page 11 of the Arizona State Retirement System’s Real Estate Investment Plan. While not all in Arizona, 35% of retiree money is invested in multi-family investments. Other state retirement systems invest in Arizona’s residential real estate. As the entities that run those apartments raise rates, the retirement fund makes more money, but at the cost of low and moderate-income people. It is unclear from this document whether some of this multi-family money is in REITs and/or single family residences.

Third, as we all probably know, the increased number of short and long-term rentals in neighborhoods are increasing turn-over in neighborhoods, decreasing our connection to our neighbors and undermining communities. We’ve seen people organizing around the damage done by short-term rentals. But I think it is a matter of time before we see people beginning to organize around investors treating our neighborhoods like commodity markets.

Fourth, like any investment trend, the trend ends. Investors who flock to an investment from anywhere else will eventually leave. It’s a fact of investing. Is it possible for investors to begin selling of tens of thousands of homes at once in a panic? What will that do to our home values? Or, could this go the other way so that fewer and fewer people can even own a home? In that case, will an investor class becomes the new landed gentry, with the rest of us renting with no intergenerational wealth?

Am I weaving unfairly scary scenarios here? Maybe. I hope I’m wrong. But we are not talking enough about it. All of this lands on top of an urban planning system in the US that favors sprawl and a current legal landscape that discourages dense condo development.

What can be done?

• I’m not sure we can outlaw institutional investors from buying in residential neighborhoods. But I think we should explore that.
• I am certain that we can at least ask state retirement systems to demonstrate that their investments are NOT contributing to increased rents. If they are, then our state retirement funds should not be contributing the problem. I think union retirement funds should do the same.
• States and counties should demand better tracking of whether properties are owner-occupied or used as rentals.
• If nothing else, we should be talking more about this.

From our friends at the Cromford Report. The take-aways:

• No, Karen, we are not in a bubble.
• We have a shortage, and we need more listings.
• Interest rates are very high, but that does not affect all parts of the market equally.

Here are the basics – the ARMLS numbers for September 1, 2023 compared with September 1, 2022 for all areas & types:

• Active Listings (excluding UCB & CCBS): 11,969 versus 18,694 last year – down 36% – but up 6.5% from 11,241 last month
• Active Listings (including UCB & CCBS): 14,476 versus 21,506 last year – down 33% – but up 3.8% compared with 13,945 last month
• Pending Listings: 4,604 versus 5,607 last year – down 18% – and down 4.9% from 4,842 last month
• Under Contract Listings (including Pending, CCBS & UCB): 7,111 versus 8,419 last year – down 16% – and down 5.8% from 7,546 last month
• Monthly Sales: 6,211 versus 5,916 last year – up 5.0% – but down 1.7% from 6,317 last month
• Monthly Average Sales Price per Sq. Ft.: $282.52 versus $286.71 last year – down 1.5% – but up a tiny 0.01% from $282.48 last month

Despite comparisons becoming easier with last year, the market still looks in poor shape. We can see that demand is very weak with listings under contract down 16% from this time last year. The August closing count offers some relief from the gloom, rising 5% from August 2022, but with the 30-year fixed mortgage rate still north of 7%, qualified buyers are thin on the ground.

Sellers are also scarce. Some simplistic commentators are obsessed with imaginary bubbles and assume that if demand is weaker then prices will fall. Not the case. The fact that so many people think we are in a bubble is conclusive evidence that we are not in a bubble. The important measure is the balance between supply and demand, not demand on its own. Supply has been low for several years apart from the brief surge in the summer of last year. This was caused by panic among iBuyers and speculators, both trying to exit the market in too much of a hurry. At the moment supply is down more than demand is down, so prices are firm.

Without a large and prolonged increase in sellers, we won’t have the lop-sided market that causes prices to fall. We do have a small increase in supply compared with last month, but we are still down 36% from this time last year. If supply continues to grow at 6% or more for six months or more, then we could get back close to a balanced market, but at the moment we are seeing just the usual seasonal pattern. Supply tends to expand from August until mid November and then contract again.

It might seem that prices are weakening given that the median sales price is $435,000, having been $443,000 two months ago. This is a drop of 1.8%. However, luxury home sales are relatively scare in July and August and we can see evidence of this from the fall in the average home size between June and August. This dropped almost 3% from 2,022 to 1,965 over the same two months, so median prices falling less than 2% tells us the underlying trend is still positive. The luxury home market share and average home size will no doubt bounce back in October and we should be able to see the upward trend reasserting itself more visibly.

One geographic segment of the market looks more favorable to buyers than the rest, that being Casa Grande. Here supply is relatively plentiful with 296 active listings without a contract. To compensate for this, sales have been much stronger than last year. If pricing were to weaken, this would likely be the first place to detect it.

I was standing in the dog park the other day, a place I can only go before the sun tops the trees from the east or after it’s ducked behind the trees to the west. One of the other dog owners said to me, “only two and a half months to go!”

That was more than a little bit depressing. I immediately imagined waking up every morning for the next 75 days and struggling to brave out in to the heat. It’s what we do for our pets, right?

I’m constantly on the look-out for things to do to break the monotony, or interesting topics to follow down a rabbit hole while sipping an iced coffee in some darkened coffee shop around town.

Here are a few for August.

“The future, my boy, is in EVs.” Y’all know I’m a broken record about all things sustainable, including EVs. So, it was nice to see this study from the Arizona Public Interest Research Group, as reported in AZ Central, that detailed how save over $280 million over the next ten years simply by replacing its aging fleet with EVs. We are not talking about selling thousands of cars tomorrow. The state just needs to replace aging light duty vehicles with EVs when they would have gone out of service anyway. Nothing radical. (BTW, here’s a little myth busting video about the lie that EVs are worse for the environment than internal combustion engines.)

While you are doing down that rabbit hole. As much as I extoll the virtues of EVs, we need to think radically differently about how we design our cities, and we can start today. There’s a new podcast from Rollie Williams, the creator of the hilarious “Climate Town” Youtube channel. It is called the Climate Denier’s Playbook, and here’s an episode on how EV’s can be a pyrric solution if we don’t deal with traffic and city planning, as well. Check out this great video on the history of parking laws and how they has contributed to climate change and even the heat island that is making your nights so unbearable right now.

Coming back out of the rabbit hole. And back in to the heat of summer in AZ, I used the city of Phoenix’s new at-home pick-up service for my hazardous materials. This may seem like a mundane issue, but if you are trying to properly dispose of old batteries, electronics and chemicals, this is a game changer! You may have seen my older articles on how to find monthly hazardous waste drop-off locations. Since Covid, the City of Phoenix has started coming to you. All I had to do was follow the instructions to notify the city, sort the waste and set it out for them to pick up. Hopefully we will increase the amount of lithium-ion batteries recycled from the abysmal 1% to something a little more civilized, like 90%.

All Puppet Players meets MST3K. If you know All Puppet Players, you know All Puppet Players. If you know Mystery Science Theater 3000, you know Mystery Science Theater 3000. I hope for your sake, you know them both and you get a chance to see the All Puppet Players’ summer film series, which helps us get through those dry summer months until their 2023/24 season starts in September. The summer series takes place in the beautiful Orpheum Theater, with a whole series of cringe-worthy movies. I love the juxtaposition of puppets making fun of pulp, junk movies in the beauty of this old theater. Personally, I laughed non-stop through the whole show.

Jane Goodall has hope for the future. As we suffer through 31 straight days over 100º, it is difficult to maintain optimism. However, Jane Goodall – Reasons for Hope is an uplifting journey around the globe to highlight good news stories that inspire people to make a difference in the world around them. Featured stories such as the Northern Bald Ibis’ migration over the Alps, the re-introduction of the American Bison by the Blackfeet Nation, the worldwide recognized Sudbury Regreening Story, and inspiring youth-led initiatives involved in Jane Goodall’s Roots & Shoots align with historical footage of Jane’s beginnings as a chimpanzee researcher. Join her on this adventure of inspiration and hope. Irene P. Flinn Theatre. $9 plus general admission. Daily showings at the Arizona Science Center.

The Moth – Phoenix Stories. If you’ve ever listened to the Moth Podcast, you know that these live, true stories can be funny, heartwarming or even heartbreaking. In any case, they are very accessible. They are open to anyone with a five-minute story to share on the night’s theme. I’ve been approached to tell one of these stories, but I always hesitate to be that vulnerable on state. So, I admire those who are willing to do it. You can tell a story, or just enjoy the show at the Crescent Ballroom. $15.

The Juno Show. To hell with anybody who tells us that drag shows are deviant or harmful, especially when the drag queen is also an alien. Welcome to The Juno Show! Everyone’s favorite alien drag queen Juno Birch, stars in her theatrical one-woman show. Witness the alien queen express her delusional self-love through slapstick song and “dance.” Her plastic puppet daughter will join her on a chaotic stage adventure full of lobsters, legs, and laughter. Planet Earth, prepare to be stunned! Yes, that’s happening! $35 – $70.

Local First Good Food Forum. After more than a decade of supporting Arizona’s localized food system through two signature events – Arizona’s Food and Farm Forum and the Good Food Expo – Local First Arizona is combining the two events into the Good Food Forum + Expo. Come learn about Arizona’s local food system and experience Arizona’s finest food and ingredients at this combined Local First Arizona signature event. Tuesday, August 29th. Forum runs from 9 am to 12:15 pm. The Expo runs from 11 am to 2 pm. Mesa Convention Center, Building B & C- 263 North Center Street Mesa, AZ 85201

We can expect more tightness in the market, as we move in to August and September.

Not a shocking theory, I know. For those of you who have read this blog for a while, you know that there is a rhythm to the market that happens throughout the year, regardless of whether it is a high or low market.

From February until the end of June there are more buyers and sellers relative to other parts of the year. It cools from July until September. Then we begin the second heaviest season, which ends around Thanksgiving. Then people almost totally disappear until January.

Get ready for the more buyers beginning in late August or September.

The problem is that, if you look at inventory you can see that inventory has been dropping, and may flatten towards the end of the year. As I see it, buyers will come on when the nights begin to cool off, but any increase in inventory won’t be enough to balance the demand.

In short, if you are thinking of selling, listing in September will be a good time to do it. If you have repairs to do on your home to prepare it for sale (remember, you are competing against total renovation homes), then now is the time to start planning.

Here’s what the folks at the Cromford Report have to say about where we are…

ARMLS numbers for August 1, 2023 compared with August 1, 2022 for all areas & types:

• Active Listings (excluding UCB & CCBS): 11,241 versus 17,957 last year – down 37% – and down 2.6% from 11,545 last month
• Pending Listings: 4,842 versus 5,291 last year – down 8.5% – and down 3.1% from 4,997 last month
• Under Contract Listings (including Pending, CCBS & UCB): 7,546 versus 8,058 last year – down 6.4% – and down 4.0% from 7,858 last month
• Monthly Sales: 5,906 versus 6,190 last year – down 4.6% – and down 21% from 7,452 last month
• Monthly Average Sales Price per Sq. Ft.: $282.34 versus $286.03 last year – down 1.3% – and down 1.9% from $287.78 last month

Comparisons with this time last year continue to get easier, as a year ago the market was deteriorating quickly as institutional investors and iBuyers pulled out of the market.

Now we have a re-sale market which is plodding along slowly with poor demand and weak supply. There is little to get excited about unless you are in the new home construction business. At the time of writing the typical 30 year fixed mortgage rate is up to 7.20%, so affording to buy a home just got a little harder. Selling an existing home with a mortgage looks even less attractive, so new MLS listings are arriving in very low numbers, as they have done all year.

Some badly informed observers still think there is a bubble popping situation ahead, but they completely misunderstand the situation. For prices to fall, we have to have an excess supply compared to demand. Even though demand is very weak, supply actually got 2.6% smaller over the last month. There is very low delinquency in residential real estate lending right now, so it takes a ridiculous leap of great imagination to believe that foreclosures are going to have any significant effect on supply in the foreseeable future.

In a market where flippers or sellers sometimes plaster over issues in the pursuit of the all-mighty dollar, here is a case study on how to do it right.

You may recall our 2br/2ba, 976sf cute bungalow in Central Phoenix that closed just last week. The sellers encountered a problem. There was a minor bit of settling around a stem wall, where some plumbing work had been done, or there had been some leaking over years. The source of the problem is inconclusive.

They called a foundation repair specialty company to give them an estimate for repairs. I can’t say exactly what the amount was, but it was significant. So significant that they did not have the available cash to fix it. Furthermore, it would take more than a month for the foundation company to get around to this job, and the sellers needed to get the property sold.

Naturally, we advised them to disclose this material fact of the sale. To do otherwise would have left them open to law suits in the future. They disclosed the issue on the Seller Property Disclosure Statement and made it public.

They had several options.

They could have just disclosed the problem and reduced the price by the amount of the estimate for the repairs. The problem with this approach is that it creates an incentive for buyers to offer even less for the home, even though the sellers have an estimate for repairs. Further, it narrows the field of potential buyers to those who can afford to do the repairs at some later date.

They could have disclosed the issue, kept the price where it was and simply said, “Hey, it’s an old house. That’s the way it is around here.” They would be hoping, of course, that the tight home market would result in a sale anyway. Our advice was that such a move would probably mean they would not get an offer right away, resulting in a “stale” property that sits on the market for months because people see that others have not made an offer. This would result in a series of price reductions that would probably reduce their profit even further than if they just fixed it up front.

So, our advice: disclose, initiate a work contract with the foundation company to be completed after the sale of the home, with the cost of the work being subtracted from the sale profits and held by the title company. When the work is completed, with a warranty, the foundation company is paid from the escrow account.

This is not idea, but it meant that the sale could go through, the buyers could move in and know that the work would be completed with a multi-year warranty on the work.

It all started from the sellers being up-front about the condition of the foundation and willing to cut their profits, but also their losses.

When you sell your home, consider using an experienced team like us who knows how to solve problems.