We had another active month last month. We had two great properties that just sold, and very quickly. In both cases, the owners planned well in advance to make a move. They upgraded the homes to meet the market and they priced the homes just right, with our help.

This town home on Medlock is in a popular mid-century modern community that has maintained its historic integrity over the decades. The owners purchased this property over a year ago and quickly set about improving on elements that had been neglected. The open floor plan was a challenge, as they were considering taking out more of the wall between the kitchen and the living room. In the end, they decided that the flow of the property made more sense, as is.

We helped our clients purchase this home on west Earll back in 2011. Since that time, they updated mostly decorative elements. The kitchen, while small, had the potential to be opened up significantly. So, there came a decision point: is it worth it to upgrade the kitchen and seek a higher price? Or, should we list the home at a price where somebody else could do that work? Given that our clients were looking for a new home, it made more sense to leave the demolition to somebody else. The price was just right, as we got offers quickly, but still did not leave money on the table.

Those clients are happily settling in to a new patio home in North Central.

The lesson in this market is that you really want to plan ahead. Set your renovation and upgrade goals and work toward them at a pace that does not make the process overly-frustrating.

If you work with us to watch the market on a regular basis, we can pick just the right time to list. Call us at 602-456-9388. 

The 2018 listing activity (aka supply) has been consistently lower than that of 2017.

Seems odd, doesn’t it? I mean, doesn’t it seem like you see another flipper home every time you look around a street corner?

Ask the folks in the greater Coronado neighborhood and they’ll tell you that, I think. Of course, they have other concerns, as older homes are being gutted and doubled in size so that they often look very little like their original historic predecessors –despite the hopes to protect historic homes.

But, I digress…

Back to the listings.  Have a look at the 2018 supply compared to the 2017 supply for Phoenix. Supply has lagged anywhere from 5% (now) to 12% (March).

Why? What’s up with that? What does that mean for you?

First, the “why.” When I’ve spoken to our friends at the Cromford Report, they’ve confirmed to me the same factors we’ve seen brewing for a while: there is an insufficient amount of new construction and labor is tight. So, if developers can’t build or flip quickly due to a labor shortage, we won’t see new listings coming on the market.

What I find particularly interesting is how this breaks down by area.

See this chart. This shows the difference in supply between 2017 and 2018 by major valley areas.

What accounts for this difference? According to Tina at the Cromford Report, South Phoenix has gone gangbusters since week 23 in the median sales price zone. She believes this is one of the only areas where they are building affordable housing in gated communities.

Second, the “what does that mean for you?” If you are selling, this is great for you. Of course, over-price your home in a fit of irrational exuberance, but don’t leave money on the table. We can help with pricing your listing right.

However, if you are buying, it means you are up against an excess of demand. Too many buyers for the supply. Be prepared to compete.

We need to analyze two things if you are thinking of getting in the market: location and availability. Are you looking in an area where a lot of building and flipping is going on? Are you looking in areas that are in need to new inventory?

Call us at 602-456-9388 and we can build a plan together.

Donna Reiner, a local historian and a good friend of Get Your PHX, has written many articles over the years for the Arizona Republic and others about what came before us. We use her services when we list properties of historic significance to help us tell the stories behind the homes.

We are happy that Donna is allowing us to re-publish some of her articles on a monthly basis. If you or your business ever needs a historian, let Donna know at laydeescholar@hotmail.com.

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Mention the name John F. Long to old timers, and the first thing they probably mention is Maryvale.  But it is known to only a few long-time residents of Coronado neighborhood that John F. Long designed homes exist there.  What?  Yes, one of the first, if not the first formally planned infill project in the city of Phoenix in the late 1970s consisted of 15 homes designed by John F. Long being placed on long-standing empty lots in what is now a designated historic residential district. ­

It began in the mid-1970s, when the need for neighborhood revitalization within a city’s inner core swept the nation. White flight or in Phoenix’s case, suburban flight, reduced concern and care for older homes. And those who remained in the inner city were part of an aging and poorer population.

Former Mayor John Driggs spearheaded a group which eventually led to the creation of a Neighborhood Housing Services site selection committee. The pilot site, selected in September 1975, encompassed McDowell Road to Virginia and 7^th to 16^th Streets. While most of the homes within these boundaries dated from the early 1920s and 1930s, it also included lots that had always been empty.

Fourteen financial institutions plus the City of Phoenix, along with a fledging non-profit, Neighborhood Housing Services (NHS), aimed to upgrade this central Phoenix neighborhood. NHS intended to provide a means of neighborhood preservation by offering home improvement loans to owners whose homes in the selected area were in “early stages of deterioration.”

But Mr. Driggs had another idea.  As an executive of Western Savings and Loan Association, he persuaded the institution to purchase often weedy 21 lots in the project site.  He then persuaded John F. Long to be the builder. Driggs’ argument was “new homes on vacant lots could ease central blight.”

Long began construction of the first six homes using two of his long standing designs: The Challenger and The Champion. The former was a two-bedroom model and the latter had three-bedrooms. Only one of these was constructed in the first phase.

Long managed to “fit” his prefabricated homes on odd-shaped lots that were often smaller than those found in Maryvale. However, he was definitely not happy when he had to reduce at least one house by four inches so it would fit the required setbacks. Perhaps that was the primary reason that Long did not continue this type of project beyond his original commitment to John Driggs and Western Savings.

From the 30 applicants, a drawing was conducted May 30, 1978. Six buyers were selected.  Seven more homes were then started for fall occupancy. All total, John F. Long and Western Savings and Loan completed the construction of fifteen homes in the Coronado neighborhood.

Photos by Donna Reiner.

Have you noticed how the Coronado Neighborhood has been really popping recently? Whether its the active neighborhood associations or the Front Porch Concerts, people are gravitating to this part of town.

This 3br/2ba, 1,544sf home is on the  market for $349,900 and we expect it to go quickly with such tight inventory.

Check out our listing page, here.

The Coronado Neighborhood is close enough to downtown and transportation that its convenient, but it is far enough away that its still quite. The restaurants that have popped up along 7th St from McDowell to Indian School include impressive vegetarian options and a whole array of different culinary traditions.

The park in the neighborhood has a pool and lots of space to play, and there are even hidden gems, like the art ally at 13th and about Palm. This is where people have lined the alley with fun and kitschy pieces of art in an alley between the homes. Its one of those things that you don’t know is there until you know its there!

You may feel the same way when you see this listing. It’s a 1925 Santa Fe-style home that is charming and unassuming from the front. But, inside, the owners have added some impressive features. The high-tech smart fan and smart lock technology are convenient and can even save money.

The home had updates in both 2014 and 2016, with new bathrooms, recessed LED lights and low-E windows. The master suite is large, with a walk-in closet and plenty of light.

The lot is large in back and ready for entertaining. You can easily imagine hosting a garden party under the long patio lights, which have been hung from properly-set, large posts. Maybe you’ll host the next Front Porch Concert, but in your perfect back yard.

Don’t miss this one on your tour this weekend.

We can’t help but trumpet the home that we just sold. You can have a look at the historic description that we did of the home in this article from earlier this year.

This is a unique home in Phoenix, in a neighborhood that you would not know is there, almost unless you just stumble on it. Homes of this nature are often on the market longer, just given their price point. What we have found, as well, is that many people who are seeking out larger homes like this are accustomed to open floor plans, which were not a thing when this home was built.

People seeking historic properties seem to come in two varieties: those who are comfortable with the older, smaller kitchens and formal, separated dining rooms; and those who can’t figure out why none of the homes they are looking at have great rooms. In this case, the buyer intends to open up the kitchen in to the dining room.

For purists among historic advocates, this is heresy. Oddly enough, we have been hearing clients recently talking about how the great room concept is less appealing. They don’t want to have to keep their kitchen spotless in the off-chance that somebody drops by. So, perhaps we are seeing a swing back toward the days of smaller kitchens and separate dining.

This may be especially true as people seem to be more comfortable living in smaller homes and condos.

Either way, we are ready. We’ve seen it all.

If you are thinking to sell a unique home like this, please contact us at 602-456-9388.

This month’s Market Update is about the larger direction in the Phoenix real estate market.

Before I get in to that, let’s look at what the staff at the Cromford Report has to say about the market:

“For the monthly period ending June 15, we are currently recording a sales $/SF of $164.10 averaged for all areas and types across the ARMLS database. This is up 1.0% or $1.64 cents from the $162.44 we now measure for May 15.

Our mid-point forecast for the average monthly sales $/SF on July 15 is $163.80, which is 0.2% below the June 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $160.52 to $167.08.

We are now faced with the third quarter which is almost always a weak period for average price per sq. ft. A forecast decline of 0.2% between now and July 15 would be less than average and has no real significance over the longer term.”

From Cromford Report presentations and our experience in the field, Michelle and I are seeing that we are still dealing with a shortage of supply and an increased demand –despite the fact that permits for multi-family and detached residential have been up since last year.

The new construction of multi-family has been small in CenPho and downtown by comparison to the rest of the valley. Indeed, those condo projects that have happened in CenPho and downtown are largely completed now and sold off. So, what is coming next amid this sea of apartments?

To put this another way, the increasing prices have more to do with supply and demand than they do with loose financing, as we saw prior to the “recession who’s name shall not be spoken.” See below. Yet, the increased number of permits is not keeping up.

At the same time, the number of flipped houses it an all-time high, despite the fact that profits on flips don’t seem to be as high as you might think they would be. Conversations with Cromford indicate that flipped homes will continue to be a dominant force in the market. We want to make certain that the work has been done properly on any flip that our clients consider, and that the flippers complete a full disclosure.

Here are some projections from Cromford:

•Despite reports of Phoenix being overvalued, prices are projected to continue to rise over the next 3-6 months. (We are still in a reasonable range of affordability, but lesser so downtown).

•Luxury homes are expected to continue to be positive due to tax reform changes, exchange rates and stock performance. (Tariffs?)

•Tariffs on lumber and other building materials will have an affect on new home prices, flip costs and remodeling.

•If prices surpass where the Valley should be historically along the 3% annual growth line, then appreciation will probably slow down. This could NOT FEASIBLY happen until early 2019.

So, what does this mean for you if you are buying a home?

It means that you need an experience set of eyes on any home that you purchase, especially a flipper.

Sellers need to still price aggressively, especially going in to the summer. We continue to run in to sellers who (despite our warnings pay too much attention to Zillow, Realtor.com and Trulia), want to list too high. In 90% of the cases, they will learn where the market actually is only after a few months of dropping their prices.

You want to remember that you are up against fully-remodeled homes that feel completely new to buyers.

You can feel free to use the data that we provide. Ask us questions and we will confer with the experts at the Cromford Index, if we don’t know the answer.

We have access to the best data in the state and we are ready to share that knowledge with you.

Contact us at 602-456-9388 if you are thinking of buying or selling.

This cute 2br/2ba, 1,283sf home in Wilshire Park is a great starter home with a huge back yard and room to grow. This home is a great value at $232,900.

This was the second home that we put on the market since the last Clark Report came out. (May was busy!)

The owners have maintained it beautifully, and have recently updated flooring and tub glazing (with 5-year warranty).

The home will convey with the extra freezer and the Kitchen Aid barbecue. The neighborhood is sought-after, due to its proximity to downtown and transportation. Yet, it is secluded enough to be quiet and peaceful.

Learn more on our listings page.

If you are interested in this property, another property or if you are thinking to sell a property, please call us at 602-456-9388.

If you’ve not seen this listing in the Medlock Historic Neighborhood, we hope you don’t feel that you’ve missed the big news.

May was big for our team. Just after our last newsletter, we brought on two new listings. Just missed it!

This massive home is an outlier in Central Phoenix, with six bedrooms and four baths and a two-car garage on a sizable lot. This is a home with room to grow. You will feel like you are in the north country, with all of the dense trees and private landscaping.

All this for $510,000!

Every room benefits from the soft light filtered through the trees outside. The Palo Baracho tree in the front ads an exotic touch. To top it off, this home is in the Medlock Historic Neighborhood, close to shopping, light rail and entertainment.

The home is priced well below the market, as the owner knows that you will probably want to make updates. With homes flying off the market, this is your chance to get a HUGE home in Central Phoenix, to customize to your liking.

See more on our listing page here.

If you have a historic home that you would like to sell, or buy, please give us a call at 602-456-9388.

In this month’s market update, it certainly feels like some changes are coming, but it may be too soon to tell what they will be.

Our friends at the Cromford Report are seeing some tightening in supply, and thus increased prices.

“We can see that the supply of active listings without a contract dropped again during the month of May but the deficit compared with 2017 narrowed slightly to 13.3%. May was a weaker month for new listings, down about 1% compared to last year. This was a contrast to April which had seen a stronger rate than 2017. We normally see total supply drop between May and June and we still expect this downward trend to continue until September.

The sales count for May was very strong, topping 10,000 for the first time since 2011. However the number of listings under contract at the beginning of June is much lower than last year – down 6%. Even with this possible sign of wavering demand, supply is so weak that sellers still have a huge advantage in negotiations. This situation inevitably leads to price increases and the annual rate of change has reached 9% for average $/SF and 9.5% for median sales price. This growth is about 4 times the inflation rate and with interest rates rising, homes are obviously getting less affordable. At some point this trend will impact demand, which is why we are keeping a close watch on the annual sales rate and the number of listings under contract.

The rise in interest rates does not just tend to lower demand, in the current circumstances it can lower supply too. Home owners with an existing mortgage will be less inclined to move if their next mortgage is going to be at a much higher rate than their existing one. This is more likely to be the case with every passing month. As a result we do not see prices as likely to fall because of interest rate rises, but we do anticipate limited growth in sales volumes.

It is important to compare sales numbers year over year, but we should also point out that the presence of iBuyers means that there are more transactions than there would be without them. In situations where a seller accepts an iBuyer offer, the home is resold again in a matter of months, so we see 2 transactions instead of 1. The first sale is not shown within the MLS numbers but the second almost always is. Both sales appear in the counts when we look at recorded deeds. With iBuyers representing 4% of the re-sale market, counts of recorded sales are about 2% higher than they otherwise would be.

We started referring to the chronic low inventory over 5 years ago and it is now at the lowest level we have seen during those 5 years. Fluctuations in demand are unlikely to have much impact on the market until we see an increasing trend in listing counts. This was the first sign of a slowdown in April 2005 and will be the first sign of a slowdown if and when we get one in the future. It came suddenly and unexpectedly in April 2005 and it may do the same at any time. However, nobody paid any attention in 2005 and I am assuming we are all older and wiser now. Any unusual activity in the listing counts will show up in the daily Tableau charts which we create and study each and every day.”

This month’s market update shows a transition in to the spring/summer level of activity. While its still a strong market, fewer listings are coming on.

Here is what our friends at the Cromford Report have to say about what we can expect.

“The supply of active listings without a contract got worse compared to last year, 15.1% down compared to 14.3% lower last month. We normally see supply drop between April and May and expect this trend to continue until September. Buyers can expect fewer homes to choose from, but at least there will also be a fall in the number of buyers looking at them. Buying activity tends to drop as the temperatures rise. Pending listings are still lower than last year but the gap has reduced from 5.9% to 2.1% over the last month. The number of listings under contract is also down compared to last year, but up 4.3% from last month suggesting a strong sales month in May.

Prices continued to rise during April but quite a bit slower than in March. The average price for homes under contract suggests another modest rise by the end of May.

The situation below $500,000 remains largely unchanged, still a tough place to be a buyer and little sign of any relief. The next price range up, between $500,000 and $1,000,000 has started to go a similar way, with falling inventory and price rises beginning to gain momentum. Demand is very strong over $1,000,000 but relatively plentiful inventory has been stopping prices from rising quickly until recently.

Despite a slight dampening effect of demand from the higher interest rates, there is still more than enough demand for homes to overwhelm the inadequate supply in the general market. For the highest price ranges, where excessive supply had been a problem since 2015, demand has increased to the point where the supply is now looking quite normal and prices can make some progress again.

For sellers, the situation continues to look very good while any bargaining power that buyers possessed is gradually drifting away from them.”

We are preparing our clients for the summer months. If you are thinking of selling or buying, please give us a call at 602-456-9388 and we can help you make the right plans.