Its that time of month when we remember to check our fire alarm batteries, we clean out the gutters after all the rain and, oh yeah, we check in with our friends at the Cromford Report.

Around mid-month, they saw a sales $/SF of $147.97 averaged for all areas and types across the ARMLS database. This is up a very strong 2.0% from the $145.07 we now measure for January 15.

They caution, however, “This may sound like a big difference but the monthly average $/SF can change quite a bit over a short period. For example between January 16 and January 21 it rose from $144.88 to $147.00, a change of 1.5% in just 6 days.”

This seems to track (in the very short term, at least) with a small down-tick in “month’s supply of homes.” In other words, if no more homes came on the market today, how many months would it take us to exhaust the inventory? Supply goes down, prices go up.

In the CenPho market, we are seeing a small up-tick in days-on-market. I think this is probably still reflects those folks who listed around the holidays and just accumulated days-on-market, while everybody else ate Thanksgiving dinner and celebrated the New Year, nary a thought of buying a home.

Anecdotally, we are still seeing strong interest from people who want to sell their homes and we are constantly getting calls from new buyers. Over-all right about where we would expect to be this time of year.

See below for the monthly info-graphic from the Cromford Report Folks.

If you are looking for more statistical information for your home sale or purchase, hit us up at 602-456-9388.

Your February Market update indicates a continued strong market with sellers having the advantage as we go in to the busiest time of year.

Here’s what our friends at the Cromford Report have to say:

“New listings have been arriving at a slower rate than last year, adding to the problems faced by buyers. Although the overall number of active listings excluding UCB increased by 2.4% during the month, this is an unusually low growth for January and many areas have experienced an unexpected decline in listings over the past 31 days.

This imbalance between supply and demand is true throughout most of the low and mid price ranges, but is less of a factor in the higher price areas, particularly in the outer locations. While this imbalance persists, it is likely to lead to further price rises. We saw a substantial 1.1% rise in the average price per sq. ft. during last month, but the median sales price remained flat for the second month. The average price per sq. ft. is a better reflection of what is going on.”

Anecdotally in CenPho and the historic neighborhoods, we are continuing to see a strong seller’s market, as well as new listings. There is a little dip in prices in the chart below, but it is yet to be seen as to whether this is the hold-over from the end of the year. I would guess that it is more of a blip because the contract ratios are still moving upward, as we would expect this time of year.

In short, if you are looking purchase, you will want to either get on it now or wait for at least a year.

If you are thinking of selling, 2017 is definitely the time to do it.

By the way, we also work in other areas of town. We do this analysis for CenPho and the historic neighborhoods because we get most requests for that analysis.

If you would like us to analyze the market for you in any other area of Maricopa county, please give us a call at 602-456-9388.

Handy-dandy charts for your February Market Update are below:

The market analysis shows a small shift in prices, but probably not significant.

The seller’s advantage continues upward as the year begins.

The number of listings continues to climb. Will that eventually put a downward pressure on prices?

Contract Ratios -the ratio of homes that close in any given month, of all of those on the market of any status

Real estate is like surfing. If you observe the waves long enough, you get to know the rhythms of the market. You can see how certain seasons advantage buyers vs sellers, or even when conditions might be better for new home buyers.

Have a look at this graph to illustrate. This is called the “contract ratio”. Its the ratio of all properties that actually sell and close, out of all of those listed each month.

For our purposes, the ratios represented in of this chart are not as important as the pattern you can see – the rhythms of the market. Notice that the percent of homes that sell and close tends to go down at about the same time every year: July – January. The percent goes up at about the same time every year: February – June. If you look closer, you will also see that Sept – Oct often stay very stable.

Why?

Well, more people are looking and purchasing from February to June. That means more buyers and more sellers. But, look. If you consider that most homes take 4-6 weeks to close from the time they are listed, then you can see that the homes listed in January represent the up-tick that you start to see each February.

The converse is true, too. If you are listing a home to sell in June, you have already crested that wave and fewer people are out looking for homes.

What I’ve observed by watching the rhythms of the market over the years is that you should list in January if you can. If you can list in the first half of the year, then aim for September. People tend to be back from vacation, and they get serious until Thanksgiving, when the tryptophan in their turkey puts them to sleep until about mid-January.

What you absolutely want to avoid doing, if you can, is listing in October or November. You will likely just accumulate days on market with fewer people out looking for homes.

Michelle and I have several new listings coming on in January and February. We know already that 2017 is supposed to see Phoenix as one of the busiest markets in the country. Now is the time to look (before interest rates go up) and now is the time to list (when people are the most active).

If you have questions about listing your home, give me a call at 602-456-9388. We can help you surf those market waves.

Your January Market Update finds the market generally healthy and likely to start the year strong, according to our friends at the Cromford Report.

“There is both good and bad news for first-time home buyers this month.  The good news is that there’s been a 22% increase in single family active listings asking between $175,000-$200,000 over the last 10 weeks, going from 1,065 to 1,295.  Current inventory is 10% higher than where it was in week 49 of last year, adding some much needed choice to a high demand price range.  The added supply is not universal across the valley; increases have been marked specifically in Buckeye, Surprise, Sun City, Peoria and Mesa.”

As you know, we do most of our work in Central Phoenix, North Phoenix, Downtown and East Phoenix (although we work everywhere in Maricopa County). The bad news for first time home buyers in the January Market Update is that this increase in affordable inventory is not as apparent in the sought-after areas of CenPho and downtown. We can only hope that this bubble of apartment building in CenPho will break and we will see some affordable owner-occupied developments in 2017.

Despite the bad news in this category, don’t give up. We know the area really well and we can point first time home buyers to the up-and-coming areas that are more affordable and undergoing redevelopment.

Back to Tina Tamboer at the Cromford Report:

“The bad news for home buyers is that supply overall is down 3.7% while the level of competing buyers is remaining seasonally consistent.  The Southeast Valley specifically has not seen the typical increase in supply that happens this time of year.  This indicates that the area will kick off 2017 with low supply just before the expected increase in buyer activity come February.  In this case, the cost of waiting to purchase will be a lack of choice and possibly having to compromise on the condition or location of the property they choose to buy.”

For Sellers in this January Market Update:

“Bad news for buyers usually translates into good news for sellers, especially after positive news reports of Realtor.com ranking Phoenix as the #1 projected real estate market in the country for 2017.  However, it’s still not a market to be overpriced regardless of the strong demand for homes.  Some price ranges have more competing listings than others, especially in areas such as North Phoenix, Mesa, Gilbert and Peoria where there is competition from new home subdivisions.  Permits for single family homes have been on the rise to accommodate the demand.  This provides more choice for buyers in those areas, balances out the market and keeps annual appreciation in check.  The areas projected to have the highest appreciation rates are those where there is a high level of fix and flip activity along with a more affordable price range under $175,000.”

In the end, we can help you navigate this new year –whether you are buying or selling. Just give Ken a call at 602-456-9388.

Source: MSNBC

Here is more on deportation from the Phoenix market. In a previous post, I touched on how plans to deport millions of undocumented residents could impact the real estate market in Phoenix.

I told you that we are not likely to see any mass movement any time soon.

But there is one shift that could happen if there is deportation from the Phoenix market, and it has to do with jobs and interest rates, nationally. You’ll want to keep an eye on this.

First, know that the unemployment rate just hit the lowest in 9 years on December 2nd, 2016. That is good, over-all. It does not mean that everybody is fully-employed or that they improving wages. But, it is better than it has been.

But it means that the Federal Reserve Bank is watching out to make certain that the economy is not about to overheat. What happens with full employment? When there is full-employment, employees begin to demand higher wages and that puts up-ward pressure on inflation. So, the Fed raises interest rates to slow that growth, reduce wages and inflation.

So, as reported on the Marketplace Morning Report today, if a Trump presidency is able to deport millions of workers just at a time when the economy needs them, unemployment will reduce further, and the Fed will be pushed to increase interest rates even further to slow inflation.

That could affect the housing market, too.

I know, all of this is highly speculative. But my point is that you will want to watch what happens in this sector to see what could happen in the housing market in late 2017.

In good news, Phoenix is expected to be the top market in the country in 2017. I take this with a grain of salt, as you might guess.

“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year,”   –Jonathan Smoke, chief economist for Realtor.com in Phoenix Biz Journal, Nov 30, 2016

We will be keeping an eye on the market and the political landscape. If you have questions about how this might affect you, give us a call at 602-456-9388.

The December 2016 Market Update is based on the latest numbers from November. Our friends at the Cromford Report provide us with the most reliable data to share with you.

“After the usual summer lull, pricing has regained a lot of upward momentum over the last 2 months. However that upward momentum is petering out now and increases in the rest of the year are likely to be modest. Nevertheless it still seems probable that will see the highest average price per square foot for 2016 posted during December.

For the monthly period ending November 15, we are currently recording a sales $/SF of $145.44 averaged for all areas and types across the ARMLS database. This is up 1.8% from the $142.84 we now measure for October 15.

On November 15 the pending listings for all areas & types shows an average list $/SF of $147.84, up 0.2% from the reading for October 15.

Our mid-point forecast in the December Market Update for the average monthly sales $/SF on November 15 is $145.81, which is 0.2% above the November 15 reading.

Currently we are seeing additional supply arriving for the West Valley, especially Surprise, while supply in parts of the Southeast Valley is becoming tighter, especially in Chandler. On its own this change is likely to cool average pricing a little because the future sales mix will slightly favor the cheaper homes in the West Valley which sell extremely quickly.”

What does this mean for you? Well, I think prices will continue to rise, generally, and specifically in the CenPho and historic neighborhoods. There are few new houses being built in this area and people still want to live more centrally.

While there is increased pressure on the Federal Reserve Bank to raise interest rates, especially with news that we just hit the lowest unemployment rate in 9 years on December 2nd, even a one-point increase in interest rates probably won’t slow that demand. We are already at historically-low levels. So, we would be at “historically low + 1%.”

So, if you are looking to sell, I would do that between January and June, before any possible negative outcomes from an aggressive Trump immigration policy might take hold. Plus, that is the busiest time of the year. Please see my post on that issue, here.

If you are looking purchase, I would do that sooner, rather than later. If prices are going up and interest rates are going up, you could get hit with a double-whammy.

Give us a call and we can help you build the best strategy, 602-456-9388.

So, were you waiting for the election to purchase a home?

Well, the election is over and people are asking me whether its safe to purchase a home, or whether we should expect market turmoil under our new president.

They’ve seen stories like this one from the Arizona Republic, which speaks to scarcity in the housing market and makes a tenuous tie to the presidential election.

Here’s another article from Slate indicating that people have been putting off major buying decisions due to the election. While I’m sure some people have held off on major decisions, we have not seen that among our clients. We’ve been busy!

Even so, if folks have been waiting for the election to decide until now, we will know it in about a month. If monthly sales numbers bounce, then you will know that people are re-entering the market. I’ll look back in about a month and let you know what we see. If you are inclined to believe that people have been waiting to act, then you will want to act before that bounce happens.

More than anything, let me put these fears to rest: the real estate market is not likely to undergo some serious upheaval any time soon.

First, here’s some advice that I found to be accurate in this article, which really points to how short-term fears about a presidential election might benefit a few, but are not a good reason to act quickly for most. Here’s the key take-away quote:

“I don’t think it’s a wise idea to try to time any markets, especially housing,” says real estate expert Kurt Westfield at WCE Equity Group. “Housing markets are very localized, subject to microeconomic shifts. The election takes place on a much larger macroeconomic scale.”

Second, let’s talk about the nature of the real estate market and why you should not act in haste. Nor should you hold off if you need to buy or sell. In other words, just act on your housing needs as they are today.

The most important thing to keep in mind is that the markets move very slowly. I know. It did not feel that way in 2008 when people’s homes seemed to lose value in months. But, when you look at that data, it still took months, not days or weeks for major movements to take place.

Sure, you will see small changes around the end-of-year holidays when people are focussed family and parties, but that’s an annual deal and does not change the market too much.

The thing you should most be aware of in the short term (3-6 months) is interest rates. While they are still historically low and probably won’t jump too quickly, a one percent increase represents a lot of money over the life of a loan. We know that the Federal Reserve Bank is talking about interest rate increases, so we encourage you to speak with your lender about what he or she is seeing.

In other words, don’t hit the panic button on interest rates. Just keep an eye on it. Make your decision based on what you need when you need it.

Let’s turn for a second to the long-term view (18 months to 2 years) just so I can make one point about Donald Trump’s threats to deport 11 million people. If his threats are carried out in whole or in part, then you will definitely see a major hit to our real estate market, according to Tina Tamboer of the Cromford Report.

I want to be careful here and temper that previous comment. That is IF he can forcibly deport people or IF they choose to leave on their own. And even then, the affects would be seen 3-6 months after he takes action.

According to Tina, we would see a dramatic increase in supply of homes (as people move away) at the same time we would see a huge reduction in demand (as immigrants would no longer purchase homes). Yes, immigrants own homes.

But this would also impact those folks who own rental properties. Many of whom voted for our next president. Further, according to Tina, the impact would not be localized to certain neighborhoods. The impact would be valley-wide.

In the even longer term, according to Tina, Arizona’s population is aging quickly and we don’t have younger people to replace the aging population who can afford to purchase homes.  Otherwise in the next 15-20 years we will have a huge excess of homes and prices will depress significantly.

This means that we need to find some solution to the immigration issue, which allows immigration in to Arizona.

You know, the very thing that the next president ran against.

We can help you make the right decision on your sale or purchase. Contact us at 602-456-9388.

We check in again with our friends at the Cromford Report for another market update.

Each month about this time they look back at the previous month, analyze how pricing has behaved and report on how well their forecasting techniques performed. They also give a forecast for how pricing will move over the next 30 days.

Important take-aways…

“For the monthly period ending October 15, we are currently recording a sales $/SF of $142.45 averaged for all areas and types across the ARMLS database. This is up 2.2% from the $139.37 we now measure for September 15.”

“After the usual summer lull, pricing has regained upward momentum and it seems probable that will see the highest average price per square foot for 2016 posted during December.”

Anecdotally, Michelle and I are seeing a lot of activity. If you list it, price it well and prepare it to show nicely, it will sell quickly.

We are seeing listings that go under contract stay under contract. So, cancelled listings are pretty rare, at least in the CenPho and historic areas.

We are still concerned that the market is over-building apartments and ignoring the needs of moderate-income folks who want to live centrally. In other words, we need more owner-occupied. We don’t say this because we want to sell them all. But we know that neighborhoods need a good diversity, even if more folks are choosing not to purchase.

Interest rates continue to stay low, and people are taking advantage of it.

The historic areas have seen a steady upward climb in prices. People are getting solid financing, so we don’t expect the troubles of 2008. There will always be market corrections, but we feel confident that CenPho and Downtown will stay strong because there is a country-wide trend toward living in urban cores.

If you are thinking of selling or buying, please contact us at 602-456-9388. We will help you get the information you need for the right decision the first time.

Just in the last 4-5 weeks we found ourselves swamped: listings, buyers, lots of activity.

Something about the impending cooler weather gets people’s juices flowing.

That activity is born out in what the Big Brains™ at the Cromford Report are seeing in their tea leaves.

“For the monthly period ending September 15, we are currently recording a sales $/SF of $139.28 averaged for all areas and types across the ARMLS database. This is up 1.1% from the $137.83 we now measure for August 15.”

6-month moving averages for price per square foot for the areas of CenPho which contain most of the historic and downtown neighborhoods. No wild swings here.

It is interesting to note that, despite the strong seller’s market, the active list prices are still a little bit above the final sold price. “On September 15 the pending listings for all areas & types shows an average list $/SF of $146.50, up 0.6% from the reading for August 15.”

That means that properties sold for about 6% less (in PPSF) than what they were listed for. That’s expected as people negotiate prices. Further, these numbers are from all areas. So, you may not see that drop off everywhere.

That’s good news for buyers. Even in this strong market, it does not hurt (unless you know there are other offers coming in) for you to try to slice a little off that price.

Its also interesting to see that the distressed sector of the market is back to pre-recession levels. “Among those pending listings we have 92.4% normal, 2.8% in REOs and 4.8% in short sales and pre-foreclosures.”

In other words, no, there really are not many distressed properties out there anymore –he says for the benefit of those who call him every few weeks asking if they can find a foreclosure to purchase for half the going market rate for homes.

Same historic and CenPho zip codes, 3-month moving average.

The Crazy Cromford Calc Crew™ is predicting slightly higher prices still in October. “Our mid-point forecast for the average monthly sales $/SF on October 15 is $140.36, which is 0.8% above the September 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $138.27 to $143.91.”

Again, this is county-wide. It could be higher or lower, depending on the area.

The nice thing is, dear reader, that your Get Your PHX Team really knows the neighborhoods. So, we can help you take advantage of these trends, regardless of whether you are buying or selling.

Contact us for more at 602-456-9388.

Don’t you hate it when people start talking about the holidays in October?

Well, hate away, because here we go (with our apologies).

Our friends at Going Green House have some tips for you, which I think you can also apply to preparing to list your home.

Fall is finally here and the holidays are approaching fast. Before you know it you’ll be scrambling to get every thing in order before your houseguests arrive.

To take some of the stress off this holiday madness, it’s beneficial to be proactive about cleaning your home.

You know. Plan ahead. The thing we all find difficult to do in our hectic lives. But you can break up the task with a pre-holiday deep clean—hitting all those areas that you don’t typically get to during your regular maintenance cleanings.

That way, you won’t have to worry that your mother-in-law is judging you for those cobwebs growing in the corner.

To help get you started, here is a list of deep cleaning items to add to your pre-holiday prepping:

Kitchen

• Wipe down all kitchen cabinets and drawers free of dust, fingerprints, food and drink splatter
• Clean inside the oven and make sure to clean the range top, face, and hood
• Clean inside microwave
• Wipe off any dirty knobs, light switches, outlets, and windowsills
• Dust or wipe clean light fixtures and blinds
• Use a vacuum extension or duster to get rid of any cobwebs near the ceiling

Bathroom

• Wipe down fronts of all cabinets and drawers and any shelving with damp rag
• Dust or wipe clean light fixtures and blinds
• Wipe all baseboards, door frames, and light switches
• Wipe all bathroom fixtures, including towel and toilet paper holders
• Don’t forget the base of your toilet!

Main Living Areas

• Dust or wipe clean all blinds and windowsills
• Use a Swiffer duster or damp rag to wipe all fan blades and light fixtures
• Wipe clean all baseboards, doors, and door frames
• Clean any dirty or dusty light switches and outlets
• Use a vacuum extension or Swiffer duster to get rid of cobwebs hiding in the corners
• Clean all sliding glass or entryway doors, making sure to wipe the threshold
• When dusting furniture, use a damp rag in order to collect more dust and prevent settling
• Vacuum all couches and upholstered furniture free of pet hair, dust, and crumbs

April Prothero of Going Green House

This may seem overwhelming to add to your regular cleaning routine at first, but if you get started now, you’ll be a lot less stressed about having a sparkling house when the holiday craziness reaches its peak, or when you are about to list your home.

And of course, if you already have a lot on your plate, April Prothero and the Going Greenhouse crew would be happy to help alleviate the stress. Call her at (602) 476-9321.

If this tip is helpful, or if you need more advice on getting ready to list your home, contact the Get Your PHX Team at 602-456-9388.