Click to enlarge supply price range

The April Market Report, with the help of our friends at the Cromford Report, is here for your viewing pleasure.

First, the supply price range:

When they examine the number of active single family listings by price range, they can clearly see the long term shortage of affordable homes, the adequate supply in the mid-range and the glut of luxury homes for sale.

To put that another way, from $400,000 upwards we have more active listings than we have seen in the last 6 years, so buyers have plenty of choice and therefore negotiating power.

However, below $200,000 we have a chronic shortage of homes available for purchase, and there is precious little to rent too. Here sellers have most of the negotiating power.

Click to enlarge demand price range.

Now, let’s look at the demand price range:

From $225,000 to $600,000 we have far more listings under contract that at this time last year. We also see very strong growth for the sector from $800,000 to $1 million.

From $175,000 to $225,000 and from $1.5 million to $2 million we have moderate increases in listings under contract of between 10% and 15%. For the sector from $1.5 to $2 million this goes a little way to mitigating the increase in supply.

In plain English, th shortage of supply means the market under $175,000 is much smaller than last year, showing there is no lack of buyer interest. Below $125,000 there is not much for sale and buyer interest is lower than last year too.

So, what does the April Market Report mean for you?

1. If you are looking for a home between $200,000 and $600,000 expect languid growth in the number of listings compared to last year, yet a strong increase in the number of those homes that are pending or under contract.
2. If you are looking to sell a home between $200,000 and $600,000, expect to sell quickly if you price right.

To build the right strategy for you, call us at 602-456-9388 and we can help.

We’ve had clients ask us, “How much clutter is too much clutter?” when it comes to preparing their homes for sale.

The quick answer is that buyers need to imagine their stuff in your home. If you have too much clutter on the walls, on surfaces or on the floor, they can’t do that.

Is there a house around those dolls?

My realtor friend –or a friend who is also a realtor– Leif Swanson has a snarky little website called uglyhousephotos.com where he documents some of the worst cases.

You can get lost looking at some of the worse atrocities. And, if case you think we are picking on just doll owners, here’s a great example of how this lover of all things “rock poster” may have shaved thousands off the sale of the home.

Rock out.

So, all fun aside, what should you do? We often find ourselves telling folks to remove about 50% of what you have on each shelf. This may not apply to you if you are a minimalist with that one vase on an otherwise empty book shelf. But, we find that most folks could benefit from this rule.

If you are not moving before you list, consider getting storage for that extra stuff. Or, take an opportunity to purge those things that just don’t speak to you anymore. The purge might help your eventual move, anyway.

If you are moving before the sale, we suggest you leave just enough things in the house to help demonstrate how each room could be used. Say, for instance, a bed with a night stand and some flowers –nothing else.

For the most part, keep it simple and you will be fine. Of course we are happy to do a tour of your home to give you advice. Don’t worry. We won’t judge your clutter. We have it in our homes, too!

If you need help building a strategy around your sale or purchase, please contact us at 602-456-9388.

You refer, we donate. Call me today to find out how we can support your favorite charity. We appreciate your referrals!

We’ve been seeing some shifting in the central Phoenix market recently, so I figured we might check in early with the Cromford Report for a Central Phoenix Market Update.

Anecdotally, we’ve seen listings starting to sell more quickly. We expect that as we go in to the high season for home sales –February through June.

Central Phoenix Active Listings

The end of 2015 was a little slow for our folks listing properties. It was to the point where we were advising prospective sellers to hold off and watch. We are seeing better activity, so we are encouraging those folks to list now, rather than later.

Cromford confirms what we are seeing in our central phoenix market update. See how the active listings in CenPho zip codes dropped quickly at the end of last year, but they are rebounding now.

What I find interesting is how the Cromford Index responds quickly to that. We see that little dip in the pink line on the index. That corresponds to the increased number of listings –the greater the number of listings, the less of a seller’s market it is.

To be precise, there are a lot of factors that go in to the Cromford Index. It is proprietary, so I don’t know all of them. But some have been explained to me, and inventory is one of them.

Regardless, and despite the small drop, I find it interesting that we are still at a higher point on the index that almost any time last year.

So, what does that mean? Well, I take it to mean that if folks continue to list, we could see a turn in the Cromford Index. However, if the preponderance of people listing get a little greedy and price above market, then sales of well-priced homes will continue to be robust.

If you need help building a strategy around your sale or purchase, please contact us at 602-456-9388.

You refer, we donate. Call me today to find out how we can support your favorite charity. We appreciate your referrals!

Here’s your January Phoenix Market Update. Our friends at the Cromford Report are showing a very slight increase in sold price over December.

Price per square foot – Phoenix

“For the monthly period ending January 15, we are currently recording a sales $/SF of $138.24 averaged for all areas and types across the ARMLS database. This is very little changed from the $138.32 we now measure for December 15.

On January 15 the pending listings for all areas & types shows an average list $/SF of $142.04, 0.7% above the reading for December 15. Among those pending listings we have 88.0% normal, 4.6% in REOs and 7.3% in short sales and pre-foreclosures. This has changed little from this time last month.

So we are not expecting a lot of movement between January and February, although any direction is more likely to be to the upside.”

Anecdotally, Michelle and I were seeing sellers staying on the market a little longer in December, and sold prices coming in a little lower than list price. But, that’s to be expected around the holidays.

Seller’s vs. Buyer’s Market?

We are in a bit of a waiting period right now in the CenPho area. Will the market get active, as it usually does between February and July? Or, will we see a continuation of the slacking seller’s market from December?

If you are a seller, price realistically. We discourage “going fishing” –listing at a high price, hoping somebody will pay higher than market value. That usually leads to people passing up your listing for more attractively priced homes –then your listing goes stale.

Buyers, don’t be afraid to offer what the market shows to be reality, but don’t expect price drops. The seller’s market is went a little slack, but it is still in seller’s market range (according to the Cromford Index).

As always, please give us a call for any of your real estate needs at 602-456-9388.

I had the pleasure this month of doing a presentation to a One Community business lunch group with the esteemed Tina Tamboer of the Cromford Report.

We were exploring the larger questions of why people perceive changes in the market as they do, as well as noting the market shift we are under-going right now.

For instance, there is always a lag between when the Cromford Index starts to see a shift between seller’s and buyer’s market conditions and when the market actually changes. This is as close to a crystal ball as I’ve ever seen.

The chart to the right is a little hard to see because I grabbed it from Tina’s powerpoint presentation. But, generally, you can see that the shift in the Cromford Index almost always precedes shifts in the market.

Paradoxically, you CAN see the market index dropping while prices are still increasing. But once sellers see fewer and fewer buyers, or stay on the market longer, prices begin to drop.

That is what we are seeing right now. We see the Index shifting back toward a balanced market, or maybe even a buyer’s market. Tina figures that this trend will persist over the next few months.

That is why this month’s update from Cromford seems odd at first, but makes sense when you learn more about how the Cromford Index works.

“Our mid-point forecast for the average monthly sales $/SF on November 15 is $135.55, which is 0.3% lower than the November 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $132.84 to $138.26.”

What they are saying is that the prices are staying pretty close to the same as last month, even going up a small amount. But, in the next few months, they will likely chase the Cromford Index downward.

What does this mean? It means if you are a seller right now, price aggressively. Don’t think that because your buddy Frank sold his house 3 months ago for a huge profit that the market is in that same place. If he sold it three months ago, then he probably priced it based on comparable properties that sold six months ago. Thats, like, a different epoch altogether!

So, sellers, either be competitive and get ahead of this line or find yourself chasing it downward after being on the market for a while. Buyers, this is not a market where you can offer 10% less than asking and get it. But the advantage is trending your way.

Over-all, too, our market still remains generally affordable, despite price increases since 2014. This chart says that right now a family making the median household income can afford 70.9 percent of all houses on the market. Not bad.

We do, however, need homes for first time home buyers and moderate-income buyers, especially in the CenPho market. I hear there are some developments on the way on that. More later.

If you need advice on how to buy or sell, let’s consult the market data tea leaves together. Call me at 602-456-9388.

The cooling trend that started gently in August has now developed more momentum. Supply is still growing faster than it did last year while demand continues to show a slow weakening trend. Things are getting better for buyers and worse for sellers.

It remains a seller’s market in most areas where properties can be easily found for the median sales price of $213,000 or less. Elsewhere we are dropping towards a balanced market and one or two areas have retreated to a level where buyers have a small advantage.

The Cromford® Market Index moved from around the 144 mark at the beginning of October to around the 134 mark at the beginning of November (all cities). This has now become a significant enough change for most people to feel a difference. More sellers are becoming frustrated, especially those in those with the highest growth in active listings and relatively weak demand.

We’ve advised our clients to price competitively. If you are thinking about selling, let’s talk about how to build a strategy. It is easy to believe that a seller’s market might return in January, after the holidays. But, previous years indicate that this may not always be the case.

Call me at 602-456-9388 for more information.

September developed a bit of a cooling trend, as compared to earlier in the year with a very strong seller’s market. Supply has started to grow and demand weakened slightly again. This is not really a major market development like we saw around this time two years ago, but it might be considered mildly disappointing for those rooting for the market to go from strength to strength.

It remains a seller’s market overall. The Cromford® Market Index moved from around the 148 mark at the beginning of August to around the 144 mark at the beginning of October, reversing the gains in August. This is not enough change for my friends at the Index to predict a major change.  But it is fair to say that market balance moved to give seller’s slightly less of an advantage in most areas.

Here are the basic ARMLS numbers for October 1, 2015 relative to October 1, 2014 for all areas & types:
    •    Active Listings (excluding UCB): 20,024 versus 23,514 last year – down 14.8% – but up 4.8% from 19,101 last month
    •    Active Listings (including UCB): 23,238 versus 26,336 last year – down 11.8% – but up 3.7% compared with 22,413 last month
    •    Pending Listings: 5,789 versus 5,481 last year – up 5.6% – but down 7.5% from 6,259 last month
    •    Under Contract Listings (including Pending & UCB): 9,003 versus 8,303 last year – up 8.4% – but down 5.9% from 9,571 last month
    •    Monthly Sales: 6,966 versus 6,230 last year – up 11.8% – but down 0.9% from 7,100 last month
    •    Monthly Average Sales Price per Sq. Ft.: $133.24 versus $126.82 last year – up 5.1% – but up 0.7% from $132.26 last month
    •    Monthly Median Sales Price: $211,000 versus $195,000 last year – up 8.2% – but up 1.4% from $208,000 last month

–Source. Cromfordreport.com

The Cromford Report folks track household formation to see how many new buyers are coming on the market.

I think its an interesting story for Phoenix, in particular. After the recession, we saw young couples choosing to rent longer, or even live with family for a while. Add that to the fact that this new generation of home buyer is coming on the market with higher levels of debt than ever before, and we see the makings of some serious downward pressure on the sub-$200k market.

However, and there is always a however, CenPho and historic neighborhoods are a little different. Well, in regards to sub-$200k, all of the valley is in the same boat. See in my previous post why we have a shortage, sub $200k. But, its particularly difficult in the urban dense areas because more people are moving in to those areas.

I also covered a few months ago how I believe we are over-building apartment complexes at the peril of owner-occupied properties. There is a six to one ratio of apartment to owner-occupied being built in downtown. That seems way off.

I think we will have options for young couples to own their own home if they want it, but we need to build more in-fill and the city needs to find a way to help.  With 43% of the land mass of Phoenix comprised of empty lots, and many of those owners holding to speculate, we need to get some of those properties in the hands of in-fill developers without the prices being prohibitively high.

Watch this trend if you are looking to buy in the next year to year-and-a-half.

If you are looking for more information, please call me at 602-456-9388.

Thanks again to our friends at the Cromford Report for their excellent analysis on all things real estate.

Here are a few highlights:

“For the monthly period ending August 15, we are currently recording a sales $/SF of $132.74 averaged for all areas and types across the ARMLS database. This is 2.0% below the $135.42 we now measure for July 15. Our forecast range was $131.71 to $137.09 with a mid-point of $134.40. Last month’s mid-point forecast was $1.66 above the actual price per square foot measured, but the actual result was well within the 90% confidence interval.

On August 15 the pending listings for all areas & types showed an average list $/SF of $135.41, 0.5% below the reading for July 15. Among those pending listings we have 86.9% normal, 4.7% in REOs and 8.5% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on August 15 in each category was: $140.36 for normal, $98.69 for short sales & pre-foreclosures and $89.08 for REOs.

Our mid-point forecast for the average monthly sales $/SF on September 15 is $131.55, which is 0.9% lower than the August 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $128.92 to $134.18. We have already experienced considerable seasonal price weakness this summer and our forecast this month is for this weakness to continue until mid September at least.”

Single Family Homes and Condos

So, how does that translate in to the Cenpho and historic markets? Well, while we see higher prices than most areas, generally, and tighter supply, we have seen a similar dip in prices. Interestingly, though, we only see that dip when we include condos in the mix, along with single family residences. See below.

Single Family Homes and Condos

Condos typically take longer to sell, as people are weary to take on HOA dues. This could be part of it. It is certainly interesting news if you are in the condo market.

Watch for these prices to go up again after late September.

If you are looking for more information, please call me at 602-456-9388. 

In my last post, we looked at the number of houses coming on the market and the number selling, as compared to previous years.

Here’s another interesting indicator: how many listings are cancelled after being on the market for a while.

“Listing cancellations remain very low in 2015 thus far at 11,248 year-to-date; 19% down from this time last year.  Only 3 years in the last 15 years have had a lower number of cumulative cancellations in week 30. 

Those years are 2005, 2013 and 2012.  2008 was the worst year by week 30 at 32,628, which is nearly triple today’s level.”

So, why so few cancellations in 2008? I suspect that it had to do with the fact that people felt like they had no other option than to sell. Many were in houses they could not afford. They had to sell, short sell or foreclose. Whereas in other years, people might have chosen to wait for another year for prices to rise. Their payments were in line with what they could afford, so they had options.

Also notice that the number of days on market (average) is a little lower than last year. So, this year they are selling. Prices are increasing slightly over last year and people are selling homes. I don’t see any indication that these price increases are irrational. However if interest rates rise later this year and buyers can’t get loans as easily, those prices may be forced to come down and this dynamic will change. If that happens, I don’t see major changes in 2015 –probably next year.

So, what does this mean for you? It means that it is a good time to list, especially as people return from summer vacation in about a month. It means that you might want to buy before those people return and enter the market.

Let’s look at your specific situation and build a strategy. Call me a 602-456-9388.

Info Source: The Comford Report