For this January Market Update we are watching and hoping that more people put more listings on the market.

Heck, we could see twice as many listings out in the January market as there are now and I doubt prices would drop. They might flatten, but at sellers would still have a huge advantage.

Before I share the numbers lemme just kvetch for a moment.

Our buyers are fighting right now, not only against the short supply, but also with terrible flips. In once case, our client made a full priced offer on a home that looked good when he made the offer. The inspection resulted in a sizable, but not unthinkable list of things that the seller could repair. The owner/agent could have done it for less than $5,000 on a $350,000 sale.

The owner/agent responded with a paltry list of items he would repair because he knows somebody else will come along and may not even ask for repairs.

We had to advise our client to back out, since we saw that the agent’s approach was a red flag. He did not even get a permit for a very small thing, and the only thing that he needed to get a permit for, a water heater replacement. If he was like this on what we found, what else could be out there?

The moral of the story is to be aware of flippers right now. Be cautious and inspect everything. In the case of this one, it was particularly sad to see an agent who flipped this property and was willing to skip important details like that. We only hope that he disclosed all of the problems that our client’s inspector discovered and reported to the him. If not, he could be in deep, deep trouble –both as a seller and as an agent.

And be particularly cautious of those ibuyer companies that promise you a discount commission. Watch my short video here on how that system is manipulated to make them lots of money while delivering a terrible product to the next buyer.

Any-who, back to the January Market Update. Our friends at the Cromford Report are predicting continued tight supply and high prices through 2021.

Some highlights:

• Active Listings: 6,055 versus 12,141 last year – down 50.1% – and down 18.0% from 7,388 last month
• Monthly Sales: 9,989 versus 7,788 last year – up 28.3% – and up 8.9% from 9,175 last month
• Monthly Average Sales Price per Sq. Ft.: $211.62 versus $179.97 last year – up 17.6% – and up 1.8% from $207.84 last month
• Monthly Median Sales Price: $332,000 versus $289,500 last year – up 14.7% – and up 0.6% from $330,000 last month

It is interesting, isn’t it, that the number of monthly sales is similar to last year, but the number of listings is cut in half. That tells us that somebody is buying homes every month, but that so many more are not.

To continue from Cromford:

“Buyers cannot be blamed if they in despair about the lack of supply. We have less than half the number of active listings without a contract that we had a year ago. This time last year we described the lack of supply as shocking, so what do we call the current situation? We actually saw more new listings arrive during 2020 than we did during 2019, but only 1.4% more. The annual sales rate increased by 6% so the extra supply proved thoroughly inadequate in the face of the demand.

Prices have accelerated due to the huge imbalance between supply and demand, but as yet we have only seen part of that reaction. Sales prices are a trailing indicator and lag behind the leading indicators by up to 15 months. We can therefore expect to see prices move even higher during the next 12 to 15 months with appreciation rates possibly rising over 20%.

Those who think the increases in mortgage delinquency are going to to halt these rise are wishful thinking. The level of delinquency is nothing like as bad as it was during the 2006 to 2008 crisis and the level of delinquency has improved for the last 6 consecutive months. Any extra supply coming onto the market, due to home owner financial distress, is likely to be snatched up quickly by desperate buyers. Few of the homes with delinquent loans are likely to make it to foreclosure. They can be quickly sold prior to foreclosure to pay off any loans and the record levels of home equity will leave the vast majority of sellers in the black even if they can no longer afford their mortgage payment. It is the strong home equity levels that will motivate distressed buyers to sell up rather than walk away. In 2007 prices started to crumble due to huge excess supply, meaning many homes went underwater quickly and homeowners could see no advantage from avoiding foreclosure. The current situation is opposite, not similar.

January is usually the strongest month of the year for new listings… Therefore if we are going to see any relief for buyers, it should arrive during the next 4 weeks. If it does not, then the peak selling season of February through May is likely to be limited by what little is available. This may put a cap on any growth in unit sales, but it will not put much restraint on dollar volume as prices rise to compensate.

If you are getting ready to navigate the real estate market, give us a call a 602-456-9388 and we will help.

As we watch the Covid numbers spiking again, it is even more difficult to find a December event to keep you in the holiday spirit. Here are some of my personal favorites.

Here are a few items that you might enjoy, in addition to Phoestivus on line, of course.

Japanese Friendship Garden – Illumination Garden Lights. The already-beautiful Japanese Friendship Garden is lit up every Tuesday through Sunday from 6:30 to 9pm for $15 per person. It’s one of the December events that people often skip, but should not. I enjoy this one, particularly, because it is walking distance from a few nice restaurants. So, you can make the whole dine and walk experience.

Los Noches de las Luminarias – Phoenix Botanical Garden. I go to this December event almost every year and I particularly like to take people from out of town. It’s a two-fer. You get to see the amazing light displays and also learn about the unique desert plants that you can only find here. Add a three-fer by getting there at sunset. Dec. 11-13, 17 – 23, 26 – 31. Be sure to look at their website for more information about their Covid adaptations. In some cases they won’t have live music as they have in the past, but they will still have most of the things you enjoy.

Zoolights – Phoenix Zoo. You can either walk or drive through the zoo lights experience this year. The still have food treats, as they have in the past. So, you won’t be left out in the zoo alone with no sustenance. You have a little more time on this one, if you need to prioritize. This is daily 5:30 to 10:30 through January 31st.

Holiday Lights – Salt River Fields. This is a 1.2 mile drive-through with over 5 million lights and music. You can tune in to their music through your car radio, too.

We have some more ideas for you on the little graphic below.

Enjoy your December and your holidays. It is a particularly important year to stay close while staying distanced.

And, please always remember that we appreciate your referrals and will make a contribution to your favorite charity when your referral closes escrow.

I’ve been a reform-minded guy for a long time, in addition to being a realtor. Over the years, I’ve written about necessary political reforms that impact you as a home owner. These following four reforms are pretty crucial to healing our democracy.

As we start 2021 (hopefully fresh), we need to take a deeper look at reforms.

You can’t have good outcomes if your voting system is a mess. Our is.

The system intentionally discourages participation (at least in Arizona), even as individuals work to bring out more voters. The system creates a feeling among voters that their votes don’t count. I excludes many people.

Setting aside lies about voter fraud in America and the many laws in place that are nothing other than voter suppression, I put together these four reforms that politicians will never get behind, but which could dramatically improve our democracy if regular people like you step up and make it happen.

I’ll summarize here, with links so you can dig in a little, if you are so inclined. These four reforms address specific and inter-related issues around corruption, fair representation, finding common ground.

1. Lobbying Reform

We don’t like lobbyists. They seem so sketchy. However, lobbying is protected in the first amendment as your right to “petition the government for the redress of grievances.” So, we can’t outlaw lobbying.

What you call a “bad lobbyist” may be my “protector of freedoms.”

However, nothing in the Constitution says we can’t restrict how much money lobbyists or the companies that employ them can give to elected officials as campaign contributions. In fact, I discovered when I was in office that there is clear legal precedence from Wall Street for dramatically restricting how much money lobbyists can contribute to politicians.

In other words, lobby all you want, but you need to win on the argument, not on the weight of stack of dollars you hand over.

In the 1940’s the investment industry restricted how much individuals can give to politicians because they did not want undue influence to corrupt the market, particularly the municipal bond market.

Why can’t this same reasoning about conflict of interest be applied to the lobbying industry?

Have a look at my piece laying out that argument here.

2. Ranked Choice Voting

Ranked Choice Voting, or “RCV” is all the rage. Conservative-leaning Alaska just passed an initiative to vote using this system and the more moderate-leaning Maine did in 2018.

It is an intuitive system, especially once you try it.

In short, it allows you to vote for the candidates in the order you’d like to see them win.

In our state, with a very independent and “maverick” tradition, RCV is perfect and would result in candidates who have to appeal beyond their extreme base, either right or left.

In other words, the political parties will fight it.

This reform would result in a legislature that is more likely to find common ground and laws that work for more people.

Have a look at this article, which describes how it works and introduces you to a group in Arizona that is organizing toward the reform.

3. Independent Redistricting

Redistricting informs everything, but the public knows the least about the process. Further, in many states the elected officials draw their own lines.

And, while Arizona created an independent redistricting commission in 2000, both parties have over the years discovered ways to manipulate the process.

We are in a position now that I predicted years ago –the governor has rigged the system of appointing the next commission to favor his party.

I don’t care which party it is, that is wrong.

Our commission is made up of 5 members, 2 Dems, 2 Republicans and 1 independent. That creates a terrible situation in which both parties try to put a phony independent in that seat.

I hate to be the guy who said, “I told you so”, but we could have fixed this years ago.

We need to have a commission made up of 9 members: 3 Dems, 3 Republicans and 3 Independents. We need to remove the power that the governor has over vetting commissioners and we need to allow the commission to make a greater number of competitive districts so that we all have actual choices in our elections.

See this piece on some efforts in early 2020 that would have undermined the Voting Rights Act in Arizona redistricting

4. Dark Money

People have been mis-using the term “dark money” to mean “money that my political enemies use to influence the election.”

Dark money is actually something very specific. It is money that corporations (read “companies, unions, charities, uber-wealthy or political non-profits”) can use to influence the election without disclosing who is behind it.

In other words, they can spend incredible amounts of money to lie or mislead people and we don’t know who’s doing the lying.

And the reality is that both parties have become addicted to dark money.

Why is this a problem? Proponents say it’s our 1st amendment right to spend as much money as we want on elections, right?

That is true. Kinda.

The amounts are unlimited and can come from corporations (per a Supreme Court ruling called Citizen’s United v. FEC), but disclosure can still happen –even though few states or the federal government require it.

Even the very conservative Justice Scalia, while ruling that the amount of money corporations spend should be unlimited, was very clear that we have the right to force disclosure of who is behind those expenditures.

He said, “(r)equiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously . . . hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave.“

In Arizona, former Attorney General Terry Goddard has pointed the way to how we can create this disclosure, via a couple ballot measure attempts. He has just missed the mark, in part because of GOP roadblocks to the citizen initiative process and in part because Democratic-leaning groups are equally addicted to dark money and resisted his efforts.

You can read about that a little here, but unfortunately the Outlaw Dirty Money website is down as they decide whether to try to run another initiative in 2022.

Without reforms like these four, we are going to find ourselves continuing the our path toward less democracy and more corruption.

Meet “ranked choice voting”, a form of voting that is difficult to explain but refreshingly intuitive, once you try it.

Actually. Lemme rephrase that. It’s not difficult to explain. But, it takes more time to explain than the 30 seconds allotted in our Twitter feed quick consumption media landscape.

But not much longer.

Furthermore, it holds a key to how our American democratic experiment might survive.

Ask people who have used the system and they immediately get it. It is an experience thing.

Here. I’ll explain it.

Ready?

You rank the candidates in the order you want to see them win.

Tadaaaaah!

I really like how this video explains the concept and how the votes are counted.

There are huge benefits to that. In our current “winner take all” system, you may have a majority of people who are unhappy with the winner because the vote was so divided that the winner had less than 50% of the vote, or a plurality.

Or, as we all know, we get divided in to political camps that are dominated by the extremes in each camp. You know, the thing that our founding fathers did not want to happen.

Did I mention that ranked choice voting, or “RCV” eliminates the primary election? That is why it is also referred to as an “instant run-off election.”

Imagine the cost savings and seeing fewer campaign signs since there would no longer be a primary and a general election.

Further, RCV creates a system where candidates have to do reach out beyond their base voters, since they are running against everybody else.

This is not an academic discussion for me. I was honored to work on an RCV election in Australia in 2006. I saw how simple it was. But, more importantly, the people there were less wedded to their parties, to their tribes. There were more parties, as a result –and more ideas.

If their #1 choice did not get in, then their #2 might have, so they were less likely to be dissatisfied and they felt that the system offered them more.

Less tribalism, more finding common ground, saving money on elections. Who doesn’t wan’t that? RCV just passed in Alaska and it has been in effect in Maine for one election.

Alaska, BTW, is a very conservative state and Maine is more liberal. In Australia, the conservatives win just as often as the liberals.

So, in case you are thinking that RCV favors one party over another, it does not.

There is an effort in Arizona to bring this to our state. It is a hard uphill battle, since neither political party wants it. They know that it will dilute their power.

But, I’m an American first and my party comes second. I hope you feel the same way.

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 Phoenix history and memorials. This month, she tells us about the few times that it snowed in Phoenix, as the city first began to grow.

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 “at” hotmail.com.

Let it snow, let it snow. Yes, it’s winter and in true Phoenix fashion, we wait for the snow…..to fall and pile up in the mountains. Many of us like to play in it and others want it to snow for its benefits to the watershed.

After recently spending ten days in Winnipeg, Manitoba, the geographic center of North America, I became acquainted with huge mounds of snow, grey days, and very, very cold temperatures. For this Phoenician, snow is best in the mountains so one can ski or sled. Fortunately, it infrequently happens here.

Picture this at noon, November 19, 1919. You are downtown and walk outside. You see strange flakes falling from the sky and they are not soot. Our local weatherman attested that snow fell in Phoenix that day and time. Yes, in November at noon and a whole .1 inch! Ok, it was not normal. In fact, that was the earliest it had snowed in Phoenix since the US Weather Station had been established here. (It had snowed .2 inches in March 1917, but it melted far too quickly to be any fun.)

It snowed or flurried, enough to count, again the following year, but nothing significant until January 1933. Drumroll….it actually snowed for nearly two hours on the evening of January 20th and the weather bureau reported 1 inch. Too bad the temperature rose and the precipitation turned to rain and destroyed the snow.

Four years later almost to the day, it snowed again in Phoenix. But this time during the day and that 1 inch of white fluffy stuff stuck for several hours so children and adults had fun making snowmen and having snowball fights. Great fun for all the desert dwellers who were not used to such weather. If you lived further out from town, you might have experienced up to four inches.

And looking back over the past 82 years, those two instances, 1933 and 1937, have been Phoenix’s heaviest recorded snowfall. A half-inch or less or flurries, while recorded by the weather bureau, are not much to brag about to friends and relatives.

If it snows now at the end of January (not necessarily within our city limits or where it can be officially recorded), there is a clear reason as explained by my son. “Mom, it’s the Waste Management (Phoenix) Open.”

The December Market Update shows the supply problem getting worse. There are only 7,388 listings available in this market, versus 13,869 last year – down 46.7% – and down 14.9% from 8,682 last month.

People continue to ask whether this December market condition is due to Covid. Perhaps. But, I think there are a lot of reasons. I’ve felt for a long time that this problem dates back to the Great Recession. Individuals and corporations starting in about 2009 were buying properties, sometimes 100 at a time, to turn in to rentals. Then, over the past 10 years, people and corporations bought more homes to turn in to short term rentals.

In addition, as prices went up, people who might have wanted to sell and then buy a new home felt they could not afford the move.

In all, these have created a perfect storm in which homes that typically cycle on and off market about every 7-10 years are not.

Here’s what our friends at the Cromford Report have to say about the December market.

“The supply situation has gone from bad to worse with many areas hitting record lows for the number of homes available to buy. This is not because of a low number of new listings. The flow of new listings was respectable in November and exceeded the total for November 2019 and 2018. However, it increased by far less than the annual increase in demand and many of these new listings went under contract within days of listing. We exited November with 15% fewer homes for sale than we entered it. We have run out of adjectives to describe the weakness of the supply situation. It looks almost certain that supply will collapse further during December, so if we had a good adjective we would need a better one for January 3. Demand is extraordinarily strong for this late in the season, so we currently have a market that is more unbalanced (in favor of sellers) than we have ever seen before, even at the height of the 2005 bubble. But next month will be be even more extreme.

There seems to be a certain amount of denial in some quarters. Concerns about delinquency rates and forbearance are being widely discussed. The idea is often expressed that this can reverse the current situation, as if this is a foregone conclusion. We do not think the level of delinquency is anything like high enough to seriously disrupt the housing market. For such drama you probably need to look to the commercial real estate market, particularly the retail, office and hotel sectors. Housing has been bolstered by the pandemic. This is a worldwide phenomenon, not confined to Arizona or even the USA. At times of medical emergency, people really value their homes across the globe.

We would agree that a market cannot keep getting hotter forever, but according to Black Knight Financial Services, the level of delinquency has fallen for the last 5 months. Pre-payment activity is the highest since 2004. It is likely that we will see more distressed sales in 2021 than 2020, but 2020 was a record all-time low and reverting to normal would help a bit with the supply situation. In fact we would have to see a colossal increase in delinquency from current levels just to get back to normal supply conditions.”

We can help you make the best choice in this uncertain market. Contact us or subscribe to the newsletter on the right panel on our home page

Phoestivus is happening, virtually.

We are following the advice of the CDC and scientists and have opted not to create a super spreader event in the heart of downtown Phoenix.

In light of all that, we are highlighting all our vendors on line for the entire month of December, with the help of Local First’s Shop Local platform, coming soon.

We are taking applications at the Phoestivus website for vendors. You need to be locally-owned, you need to create your own goods for sale and you need to fill out the application. We prefer if you are also a member of Local First, as they will ask you to be one if you want to sell through their website.

Unlike in past years when the Phoestivus Market has been a fundraiser for the Downtown Phoenix Farmer’s Market, this year we are devoting all of our energy to just help those amazing local vendors to survive and thrive.

We’ve always found that adverse circumstances often lead to new and creative ideas. We expect many to come out of this experience.

So, please follow Phoestivus on Instagram, where you will soon see announcements for the many amazing vendors that we have lined up for you.

In the end, we know that Phoestivus is unique. You could buy something from Amazon, and just make its CEO even more absurdly wealthy than he already is. Or, you could be part of an experience, a community and a feeling of unity.

You’ve always been amazing in how you support our community while you have fun doing it.

So, stick with us. There is more to come!

For our November listing update, we have nothing!

Okay, that’s a fib.

We never have nothing. We are working with a couple sellers who will have their properties ready for sale in the next couple months.

We also sold that efficiency condo at the Embassy Condominiums, the one with the great views. We also helped our other clients sell their townhome and find the right new home, which they will begin major work on soon. They will be expanding it to make their dream home.

But, between nervousness over the election and the extreme shortage of listings, we are taking a little breath in the November update.

I want to take this pause to re-assure you that the market stable, if priced high. This is not the market of 2006, when people were getting zero-down liar loans. Certainly we don’t know what is coming around the corner, but with all the election drang and sturm, it can feel like nothing will ever be normal again.

But the thing to remember about the real estate market is that it changes course more like an aircraft carrier, than like a schooner. If you are out looking for a home, every indication we have is that prices will continue to climb. This is due to the fact that so many homes have been taken out of circulation by companies and individuals buying them up as rental and as AirBnB, plus the lack of new in-fill developments where people want to live.

That dynamic is not going to change any time soon. The number of interested buyers would have to drop by over 50% in order to see any change in prices. And, if the pandemic didn’t do that, there is not much else that would.

If you are thinking of buying a property, you can feel comfortable moving forward. If you need to sell, don’t be afraid. You will definitely do well.

If you are thinking of renovating and selling your property, call us at 602-456-9388. We can help you plan to stand out in this market.

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 Phoenix history and memorials. This month, she tells us about the Avery House, a distinct bungalow that has its origins in citrus.

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 “at” hotmail.com.

On 44^th Street just north of Indian School Road stands a Craftsman Bungalow amidst much younger mid-century modern homes. Newcomers might think that it’s a new build in the style of; but while it looks rather spiffy with its new paint and landscaping, the house will actually be 100 years old next year!

How that house came to be at that location is a bit of early Phoenix history with citrus overtones.

Back in January of 1910, Frank and Emma Avery arrived in Phoenix. They came in part to visit friends from Spearfish, North Dakota, and in part to determine if this would be a good environment for Emma and her respiratory issues. Frank had been ranching in Wyoming, but his interested was peaked by the acres and acres of citrus growing in the east Phoenix Orange Belt especially near the Arizona Canal.

Avery’s good friend Henry Leppla must have sold Frank on trying his hand at raising citrus since the Averys quickly became the proud owners of 10 acres complete with a small wood-frame house. Frank and Emma headed back to Wyoming in June and it did not take them long to decide that a permanent move to Phoenix was going to happen by October 1^st.

Citrus can have its ups and downs depending on the weather and rain, but this property was ideal. Avery even discovered a “new” orange variety on his property and propagated it. That orange ripened early and was quite sweet. Thus, it became called the Early Avery.

But Avery was not merely content with raising citrus. No, he became involved with the Arizona Citrus Growers Association and eventually served as president of the association for 9 years. During that time, this co-operative rapidly expanded as the amount of citrus grown in the greater Phoenix area increased and the demand for Arizona “sweets” in other parts of the country exponentially grew.

Curious about the house? His first home on the property burned and the Averys rebuilt. Avery had the current house built in 1920. One story, it has a full basement with a fireplace connecting to the living room fireplace and a cistern. It was a comfortable place for the Averys who had no children, but did have live-in help.

Today when you drive by you will not see any citrus. What happened? By 1949, the 10 acres were bare. By 1963, the house was surrounded by subdivisions of new homes. An office now, the Avery House stands as a testament to times gone by.

In this November Market Update, we are continuing to monitor a dramatically lower number of listing as compared to this time in 2019. This data comes to you from The Cromford Report and covers all areas and all types of homes.

• Active Listings (excluding UCB & CCBS): 8,682 versus 14,525 last year – down 40.2% – but up 7.4% from 8,101 last month
• Active Listings (including UCB & CCBS): 13,901 versus 18,322 last year – down 24.1% – but up 4.5% compared with 13,305 last month
• Pending Listings: 7,862 versus 5,919 last year – up 32.8% – but down 1.7% from 7,999 last month
• Under Contract Listings (including Pending, CCBS & UCB): 13,081 versus 9,716 last year – up 34.6% – but down 0.9% from 13,203 last month
• Monthly Sales: 9,992 versus 8,037 last year – up 20.5% – and up 3.6% from 9,641 last month
• Monthly Average Sales Price per Sq. Ft.: $207.37 versus $174.14 last year – up 19.1% – and up 4.3% from $198.84 last month
• Monthly Median Sales Price: $332,000 versus $285,000 last year – up 16.5% – and up 1.6% from $326,800 last month

The flow of new listings remained strong until late October but has started to fade noticeably over the last weeks. Since we are already very short of supply, this does not bode well for buyers who are likely to be fighting each other over a dwindling list of homes for sale during the last 2 months of the year. With demand at a very high level, especially for the normally quiet fourth quarter, the market is even more out of balance than it was last month.

Closed sales were over 20% higher than in 2019 during October. This is even more remarkable given that in 2019 October had 23 working days, 1 more than in 2020. With the average price per square foot up over 19% from last year, the dollar volume is exceptionally high at $4,272 million, up from $2,786 million last year. And last year we thought we had a strong market. We are running out of superlatives to describe the state of the current market.

Average and median prices are running away skywards, but some of this is fueled by a sales mix which increasingly favors upscale properties. During October we saw 37 closed listings over $3 million. This is not only the highest total for any October in history, it is the highest total for any month in history. The average for all months since 2001 is 9 and in October 2019 we counted 10.

The size of the market below $300,000 is shrinking fast, constrained by lack of supply and by the fact that last year’s home at $270,000 is now priced well over $300,000. However any home priced under $300,000 is likely to see hordes of buyers.

Is there any sign of the upward surge in pricing losing pace as we enter the November market? In a word – No.

At this time last year we had no idea of the impending pandemic, but unless something similarly surprising happens in the next few months, the housing market in Greater Phoenix is unlikely to stop rising.

We can help you build a strategy to buy or sell a home, even in this crazy market. We have the experience to help guide you. Call us at 602-456-9388.