The August Market Update shows a continued strong summer. Buyers are having a hard time below $200,000, unless you are looking at condos. Sellers are seeing a continued steady upward climb.

See below for greater details.

This trend is intensified in downtown, as we see more people wanting to live in dense areas.

This graphic is almost a month old, but it is still holding up. Our friends at the Cromford Report are doing a good job turning dry numbers in to digestible graphics.

For Buyers:
Unless you’re looking for a property in the lowest price ranges, there’s a decent amount of supply to choose from in the Phoenix Metropolitan Area.

As prices rise, most buyers will adjust what they buy in terms of size or location in accordance with their budget.  Over time, we’ve seen the average size home purchased continue to rise, even when prices were at their highest.

For example, in 2002 the average sized home purchased was 1,607sf.  It rose to 1,632sf in 2006, then 1,715 in 2011 and 1,762sf so far in 2016.  Of properties sold under $200K in 2006, the average size is currently 1,388sf.  Between $200K-$300K, the average size is 1,829sf.  $300K-$500K is 2,385sf.  $500K-$1M is 3,189sf.  $1M-$2M is 4,421sf and over $2M is 6,338sf.

For Sellers:
The median sales price has risen a whopping $20,000 since January’s measure of $210,000, a 9.5% increase.  This type of disparity can spur articles and discussion about real estate “bubbles” and rapid price appreciation.

This looks very exciting for sellers until it’s compared to the price per square foot measure, which has only increased 1.5% from $138.73 to $140.84 during the same time frame.  The difference in growth rates between the median sales price and the average sales price per square foot can be attributed to a shift in the composition of sales by price range.

Due to the lack of supply of properties below $150,000, the Phoenix Metropolitan Area has seen a significant drop in percentage of sales in this price range.  Simultaneously, there has been an increase in market share within the $200,000 – $300,000 price range where there is also more supply.  The increase in supply over $200,000 keeps individual property appreciation per square foot more sustainable.

However, because the under $150,000 market continues to lose market share as the over $200,000 market gains, the median sales price measure is pushed up higher than the rate of the average price per square foot.  For the median measure to increase, sales over $230,000 would need to achieve 51% market share or more.

Those of you who know me know that I’m very in to sustainability and protecting our environment. So, I figured its about time that I team up with a locally-owned business to bring you some tips about green cleaning to sell.

My friends at GoinGreenHouse.com are practicing what they preach in house cleaning and I’ve been impressed with their efforts. And they’ve got some good tips for you.

So, here is the first of many articles that we’ve collaborated on. This issue: green cleaning to sell your home. Enjoy.

———

Not many people know this, but you can lose a sale in the first 30 seconds that a buyer is in your home.

You’ve often heard that cleaning and de-cluttering any room appear more spacious and attractive to the buyer, allowing them to visualize how their own items would fit.

But cleaning works more at the subconscious level, which can be much more dangerous for your sale.

If these folks can’t keep the countertops clutter free for showing, what kind of clutter do they allow in the pipes?

If you don’t clean and de-clutter, you are signaling to the buyer a red flag that there may be other things that you are also not maintaining, like the air conditioner or the plumbing.

However, the easiest, cheapest and most-recommended DIY improvement for sellers is to CLEAN AND DE-CLUTTER. It’s easy to begin by removing clutter and personal items.

To get the most bang for your buck, you need to focus on the FOUR rooms that buyers are most interested in:

• Living Room
  • Store remotes, magazines, blankets, and other personal items
• Dining room
  • Streamline décor
• Kitchen
  • Keep out ONLY appliances that are used every few days, make sure to wipe them clean
  • Maintain a spotless stovetop and clean, dish-less sink
• Bathroom
  • Scrub grout free of mold and mildew
  • After each shower, towel dry or use a squeegee to prevent water spots on glass
  • Clear off countertops of non-essentials and store them in containers

In order to give the overall impression of a well-maintained home:

• Dust and wipe all surfaces, making sure not to forget baseboards, windowsills, and fans
• Wipe away dirty fingerprints from light switches, doors, handles, cabinet and drawer fronts
• Mop floors and vacuum carpets regularly
• Polish wood floors to a shine and be sure to clean grout on tile floors

But, don’t stop there. If you are going to go through all of this effort, I suggest that you green clean using environmental friendly and heavy chemical-free cleaners.  I’ve been in homes many times, especially renovations, where the chemical smell is overwhelming.

Buyers are increasingly aware of the negative health impacts of VOCs (volatile organic chemicals) and, just as in the case of an unclean house, it sends a subconscious signal that this space may be unsafe.

If all of these things are maintained on a daily basis, you’ll be ready for any buyers that come your way! So, if you are thinking to sell in a few months, or if you just need help, contact April at GoingGreenHouse.com and she will hook you up.

Then, once every couple weeks while the house is on the market, they can help you keep on top of the cleaning chores. This will make it easy to have the house ready for that final walk-through before closing!

And, as usual, if you need help building a successful strategy to sell your home, please contact us at 602-456-9388.

We have another world premier movie at the August Get Your PHX.

NOTE: We are starting this event later than our usual events. We will start this event at 7:30.

A few months ago, we highlighted a local filmmaker, Matty Steinkamp, and a the documentary that he has produced called Play, The Documentary.

So, naturally, we called dibs on hosting one of his two upcoming premiers for the August Get Your PHX event on the 18th. Since seating is limited, we are asking you to buy your tickets right away.

Play The Documentary is a  film created in hopes of inspiring more people to play music. The documentary was shot in locations all over the US, in addition to captivating footage from Ireland, over the course of two years and features over 40 musicians each playing their particular instrument and discussing their perception of the personal impact of playing music.  The film also touches on US budget cuts to music education in recent years and what is being done to combat the cuts. In particular, the film delves into the work of game-changing national nonprofit Little Kids Rock program.

First time filmmaker Matty Steinkamp is excited to see the impact the film is having locally and looks forward to seeing similar impact in other cities across the US.  Steinkamp says, “I want to help create a positive change in my community, and throughout the world if possible. This film, I hope can achieve that change.”

The screenings will help raise funds for Arizona School of the Arts and there will be a silent auction with proceeds directly benefiting Phoenix-based music and arts programs.  Tickets for the screenings are $12 and are on sale now.

What: August Get Your PHX
When: August 18th, 2016 at 7:30pm
Where: FilmBar at 815 N 2nd St., Phoenix
Tickets: Please purchase your tickets directly from FilmBar for this one.

Prices have been going up for houses in Phoenix over the last few years. Not drastically, though. Its not 2007 all over again. But prices have been climbing in a healthy manner for a while.

So, you say to yourself, “Self, I don’t think I can purchase a home right now. Those prices are too high!”

But the price is not the whole story. Consider the interest rate!

Here’s what I mean.

In December 2013, according to Freddie Mac, average interest rates were about 4.46%. Had you bought a house in CenPho then, you would have paid about $140/square foot.

Let’s say you purchase a 2,000sf home then. The cost would have been $280,000. At 4.46% interest, your Principle + Interest (P&I) would be $1,412.07. (This does not count fees, taxes and insurance. We are not mortgage brokers, so check with them for those details.)

Okay, so fast forward to today. Average prices are over $200/sf in Cenpho. That same 2,000sf home will cost $360,000. At 3.57% interest, that’s $1,630.66, P&I.

To which you say, “Hey, that’s definitely more expensive.”

Yes, but had that loan been at 4.46% interest, the house would have cost $1,815.52, P&I.

Another way to look at it is that you could have purchased a $320,000 home for roughly the same monthly cost with rates at 3.57% as a $280,000 home when rates were at 4.46%.

Does that mean you can afford that house? Maybe. Maybe not. But you are definitely saving $200 per month over where it was when homes were selling for $140/sf.

Interest rates are lower right now and they will not always stay low. On the other hand, there is not much room for new homes in CenPho, other than condos and townhouses, which are not being built in great enough numbers. So, those prices are likely to go up further before they go down. Your chances of getting a home while the interest rates are lower and the prices are lower may be slipping away.

We can help you think through your options. Buy now? Rent for a while longer? Purchase in a different area?

We can help you buy or sell your home. Please give us a call at 602-456-9388.

You’ve probably seen the north east corner of Camelback and Central transforming, with new restaurants, and such.

But have you noticed the changes on the west side of the street, as more businesses move in?

Modern home décor shop For the People just snagged a spot there, along with local favorites like Stinkweeds, Frances, Practical Art, the Upwards Project Concepts, Curious Nature Shop and Cowtown Skateboards. The new shop offers functional home furnishings and unique one-of-a-kind pieces.

Rows of handmade products line walls and tables and is just enough to make even the most experienced window shopper step inside for a purchase. Pillows, photography, jewelry, and mid-century style furniture are neatly grouped together and there’s even an interesting reading area near the back of the store.

For the People first launched their small business at the Union inside the Biltmore Fashion Park in 2012. Although the 500 sq. ft. space gave owners Shawn Silberblatt and Chad Campbell a great start, their new space offers 2500 sq. ft, which is a massive upgrade that opens the door for more local artists and collections.

“I think we went from about 13 [local artists] at our old space to about 20, or 21, and that’s just in a month,” boasts Campbell.

Shawn and Chad feel right at home in their new space, which is centered on community, walkability and local with neighboring businesses that have helped to transform the once abandoned area into a flourishing destination.

Says Campbell, “We didn’t think a bike rack would be one of the first things we would need to have, but we need a bike rack. You don’t realize how neighborly this area is until you’re actually here every day.”

Step inside the newest creative space to hit downtown Phoenix this month! As always, sign up below.

Date: Thursday, July 21st
Time: 5:30PM – 7:30PM
Location: For the People: 5102 North Central Avenue
RSVP HERE

Look for us on Facebook here.

Here’s your July Market Update.

As usual, our friends at the Cromford Report give us the broad outlines for the entire state. Highlights:

“The market conditions improved a little for sellers during June, with the Cromford® Market Index breaking through the 140 level as we enter July. However there is no dramatic new trend, just a continuation of what we have been seeing for several months now. Sales volume was strong during June but it is clear that July will be much quieter for closings since the number of homes under contract has fallen quite a bit. This is quite normal for the season.

…

The ranges from $200,000 to $350,000 saw strong growth in closed sales over June last year – up almost 19%. Between $350,000 and $400,000 we saw a little weakness, down 2%, but sales from $400,000 all the way up to $1.5 million were strong – up an impressive 21%. Sales over $1.5 million were very much weaker than last year – down 44%. Sales below $175,000 were also well down, but this was caused by a lack of supply. The segment over $1.5 million cannot use that excuse. There are plenty of homes available, even though a large number have been removed from the market for the summer. Many of these are likely to be relisted at the end of September.

…

We expect overall prices to be flat to slightly lower over the next 3 months as luxury homes make a smaller contribution when the temperatures exceed 100 degrees. Prices are still rising below $200,000 and falling for most homes over $1 million.”

When we look at some of the indicators for Central Phoenix for the July Market Update we continue to see a strong market, as folks really want to live in central.

The chart, above, shows that the price per square foot for detached residential as well as for condos is steadily climbing. No upward bursts that would indicate a bubble.

The chart here shows the contract ratio. That is the ratio of homes on the market that actually close. We are in a hot market when we are over 60%. So, we are right in line with last year, this time.

Anecdotally, we are seeing a lot of renovations. At first we could not figure out how these renovators were making money with the market so high. How can they purchase a property, renovate it and still make a profit.

Then I realized that they are getting low-priced homes from people who respond to those offers they get in the mail to purchase their homes. You know, the ones that say “I love your house and I’ll pay you cash to leave it.” That kind of deal.

But for the numbers to work out, the renovators must be getting these homes pretty cheap, by comparison to what the market will bear.

That tells me that they did not have representation from a realtor. Because they certainly would not have let their homes go for this cheap.

If you get a letter in the mail claiming that somebody wants to buy your house today for cash, please call us at 602-456-9388 and we will help you negotiate a better deal. 

I’ve had several folks say to me “I think the economy is going downhill because people are freaked out by the election.” Are we pitting elections vs home sales?

Personally, I have heard this in previous election years. But, let’s dig in to this a little.

I called the famous Tina Tamboer of the Cromford Report, who is always a great source of analysis and information.

So, I asked, “Is there an impact on the market, due to fears about the possible outcome this election year?”

According to Tina, a resounding “No.”

She gave several reasons.

First, if you are hearing negative news about jobs numbers in Arizona, remember that our jobs are often very cyclical and the jobs numbers often drop around this time when people leave for the summer. So, its not likely that things are as bad as the daily news makes them sound.

Second, the real estate market is not likely to respond quickly to speculation about the up-coming presidential election. The fact remains, says Tina, that people make real estate decisions based on need more than what the candidates promise.

In other words, the typical annual rhythms of the market do more to influence price and availability than campaigns.

Third, if you look at the diagram, you can see that the contract ratio still shows that things are good, even better than last year. This is the ratio of all listings that get under contract. We are still in a “hot” market. If you are going in to the summer hot, then you will probably stay that way.

Questions like these often permeate the news, and especially social media. I think the key is to speak with professionals like Tina or we-truly to help weed out the hype from the facts.

If you have any questions about buying or selling, please let us know at 602-456-9388.

I love to see articles like this, from the New York Times, which describe what we’ve known for a long time: Phoenix is a great place to live and start a business and our downtown is getting better all the time.

What we need to continue to watch, however, is affordable housing. Specifically, I believe that we have learned over many decades that affordable housing cannot be simply built in isolation and stacked atop each other, as in Chicago.

Nor, can we only put affordable housing alone, out in the suburbs.

The same motivation to live close to work is apparent in all income levels. Indeed, years of research indicates that the best approach is to encourage affordable housing right along side those shiny, feature-rich new-builds that we’ve seen going up recently.

The same goes for creating a good mix of rentals and owner-occupied homes.

Its, you know, diversity. Diversity helps any system thrive, whether ecological or economic.

So, I’ve been concerned in recent years about the ratio of apartment units to owner-occupied units have been build in CenPho. Last I checked, it was a six to one ratio. That means that the only owner-occupied units being built are mainly only within reach of those earning over about $70,000 per year.

Its just my personal opinion, but if we are going to continue our revitalization in Phoenix, we need a good mix of options for all kinds of folks.

If you are thinking of buying a home, whether that is a condo or detached house, whether in downtown or elsewhere, give us a call at 602-456-9388. We can help you put together the right strategy.

I don’t like to get political in this newsletter, but this issue affects all of us, regardless of your political leaning.

Dark money –undisclosed money that is funneled in support or against candidates and elected officials in Arizona– is a corrupting influence. Not only do you not get to see who is trying to influence your vote, but dark money is also used to pressure politicians from the governor level all the way down to school board –even obscure water district boards.

And that is the connection to real estate and the economy.

Imagine that a water company wants to use its money muscle to influence a local water district board –the board members of which seldom spend more than $200 to get elected. That company could over-whelm and control that board with a couple thousand dollars!

If you hope that policies will be made on the basis of the merits of laws, rather than who can pressure whom with dark money, then you will want to understand more about the effort to repeal SB1516, “The Dark Money Act.”

Go to StopCorruptionNowAZ.com to learn more.

If you favor an open market, for real estate or almost anything, then you don’t want policy decisions made based on this kind of pressure.

Here’s a video to explain more.

The June Get Your PHX at Tuft & Needle is just a few weeks away. I’m excited to tour an actual manufacturing facility in downtown Phoenix –in an era when manufacturing seems to happen only in other countries.

Tuft & Needle has just moved into the historic O.S. Stapley building on Grand Avenue and Get Your PHX will be one of the first to take a look inside and tour the new headquarters.

Daehee Park and JT Marino met in college and were hired at the same startup company in Silicon Valley. The two were working long hours, barely seeing their families and yet even with all of their time and effort, the business was barely eking by.

“We worked more hours per week than what seemed humanly possible. One colleague joked that we were “burning vats of midnight oil”—and this was a boast, not a complaint,” says Park & Marino.

Amid exhaustion and striving for success at work, JT and his wife began shopping for their first piece of furniture together – a new mattress. Pushy salesmen, unnecessary upgrades and a $3,300 mattress later, the newlyweds were stuck with an uncomfortable mattress they couldn’t even return. JT along Daehee decided to do something about it and in 2012 they launched Tuft & Needle.

Since then, T&N has grown into one of the most successful businesses in the market. In just nearly four years they’ve grown their initial investment of $6,000 to over $100 million in revenue while employing over 100 people.

The decision to move their headquarters to Phoenix was not only an easy choice, but also one that has helped their company continue to reach new goals. From the cost of living to business climate, Park and Marino have found Phoenix and its residents the perfect place to raise a business.

“… It’s been our experience that people here want to build careers and businesses—not resumes. They aren’t hopscotching around, waiting for the latest startup to close a round so they can go off and join the next big thing. No, they’re committed: When equity vests, it’s not time to leave. It’s time to continue to make that equity worth something. They’re fighters, and they’re in it for the long haul. If you’re a founder, you can’t put a price on that kind of loyalty.”

Join Get Your PHX and Local First Arizona for tours inside Tuft & Needle’s new space! As always, please RSVP below.

Date: Thursday, June 23^rd
Time: 6:00PM – 8:00PM*
Location: 735 Grand Ave., 85007
RSVP Here
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