Its mid-year and time to take stock of where the market stands.

“Sales volume year-to-date so far in 2015 is 47,661 closings, up 8.8% from this week in 2014 but still 8.7% below 2013.

2006 and 2014 saw similar annual sales volume. 2015 has had 57% more closings than 2008, which was the infamous year prices crashed due to increasing foreclosure supply and decreased demand due to tightened lending standards.”

In other words, people in 2008 were listing them, but not closing. Whereas this year, they are listing them and closing them.

But, don’t take that strong activity to mean that we are heading toward another bubble. We’ve seen this year how there are not as many houses coming on the market as there were in 2008. This year’s price increases seem to be due to shortages, rather than people throwing houses on the market in reaction to a bubble.

That is why you saw 91,191 listings in July of 2008 but only 63,810 as of this month in 2015.  I suspect if prices continue to rise, more folks will be inspired to list their homes. But, we don’t seem to see that kind of irrational upward pressure right now.

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

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

Info Source: The Comford Report

We’ve been watching for a while how the inventory of homes under $200k have simply not been increasing. See here and here for more background on that.

It has caused an interesting split in the growth of sales of homes in different prices ranges.

According to the Cromford Report, “Sales during June were substantially higher than in June last year, but the gains were almost entirely in the price ranges over $200,000. Under $200,000 there just is not enough supply to generate any growth in sales.”

In other words, as much as people want to purchase homes under $200k, sellers don’t want to sell them. Whereas, in higher price points, the sellers have been motivated by the increase in buyer interest and they put their homes on the market.

My guess is that this situation could become more acute if interest rates continue to rise. There will be more homes for sale over $200k, but they will be less affordable for an entire sector of the buying public.

The lesson is to plan ahead. Even if you don’t plan to purchase for six months, we should get together now to build a strategy. Please give me a call at 602-456-9388.

My friend Tina over at the Cromford Report was telling me about “flash sales” and how they change with a changing market.

Have you ever been out looking for homes just to be shocked that the home you identify is under contract within 24 hours? It happens all the time. But it happens more in a market that has shifted from a buyer’s market to a seller’s market. There are fewer homes in a seller’s market (in most cases) and buyer have to jump quickly to get what they want.

What is most amazing to watch is when the home that goes in a heartbeat is one that clearly needs work or one that has some serious deferred maintenance issues. Or, even crazier, when a really beat-up home has been sitting on the market for 5 months and then, all of the sudden, three offers come in.

Why is this? Well, its because the supply at that point has shrunk so much that buyers have little choice but to buy that home which needs all the repairs. We’ve seen this a lot in the sub-$200k range these days.

To put is more diplomatically, as Tina does, “As inventory declines sharply, properties that were once continually rejected due to price or condition are found attractive again in the absence of choice.”

Most interestingly, according to Tina, is to see how often homes in the higher prices go in flash sales. Yep, it still happens. See the chart, below.

So, how to you avoid this problem? I tell my clients to start looking before you think you need to. We usually get together as much as 6 months before you think you need to look. We will consider the market trends, your personal situation and then we set up a strategy. If we see some market shifting coming along (which we properly predicted this year), then we will make adjustments to your plans.

We don’t want you getting suck with too few choices. So, call me at 602-456-9388 and we can build your strategy together.

It’s a “two-for-one” Get Your PHX this month as we check out Crescent Ballroom’s new sister venue, Valley Bar, featuring Short Leash as the in-house purveyor of all that wonderful nosh!

When the Phoenix New Times asked Crescent Ballroom co-owner, Charlie Levy, why he and his business partner wanted to open a second music venue/lounge, he responded, “Because I’m crazy and Tucker and I are stupid and like to work ourselves to death.” Just about the best answer we’ve ever heard.

Open only since May, Valley Bar brings a bounty of musical acts, comedians and the like to downtown Phoenix as well as weeklies, like cumbia on Fridays.

In addition to Crescent, Charlie Levy runs Stateside Presents promotions, whose offices are in the same building as Valley Bar.

Levy recalls, “One day I asked the landlord what it [the basement] was like, and he showed me and it was filled with junk. And I was like, ‘Can I rent it out? This could be a really cool music venue down here with a big lounge with pool tables.’ And he let us do it!”

Inside the 8,000 sq. ft. space are pool tables, a performance stage and the Rose Room lounge, named in honor of Arizona’s first female governor, Rose Mofford. A long list of signature cocktails features hilarious nods and winks to famous (and infamous) Arizona politicians, such as The Stanton, The McCain and That’s a Ducey.

Short Leash has signed on to run the kitchen at Valley Bar as well as opening a third location in the former Downtown Deli space on the ground floor. Owners, Brad and Kat Moore have some big ideas for the new project, which makes us salivate instantly.

In their new restaurant location on the ground level “upstairs”, Brad and Kat will serve their famous Rollover brioche doughnuts and coffee for breakfast and the delicious hot dog creations for lunch.

Join us this month for complementary samples from Short Leash and happy hour priced drinks from Phoenix’s newest music venue and lounge, Valley Bar.As always, please RSVP below.

When: Thursday, July 23^rd from 5:30-7:30PM
Where: Valley Bar: 130 N. Central Ave., Phoenix, 85004 (Map it)
Details: Complementary bites from Short Leash, free raffle ticket and happy hour pricing on drinks

RSVP HERE

Check out the Facebook page here.

Our friends at the Cromford Report did a little analysis recently of days on market (DOM) over the last 90 days. They showed zip code 85004 with an incredibly low DOM, at 19.

To quote:

Today we look at those zip codes with the lowest Average Cumulative Days on Market for sales of Single Family Residences sold in the last 90 days since June 21st, 2015.

All of the zip codes depicted in the map below had an average CDOM of less than 60 days. The CDOM is the count of days from the time a listing goes active in the MLS to when the status is changed to Pending (not UCB). Many people are placing their listings in UCB status instead of Pending in order to continue marketing them on sites such as Zillow. The UCB status keeps the CDOM counting, while Pending will stop the count. As a result of this behavior, many of our “Fastest Selling” zip codes show a higher CDOM measurement than one might expect. In fact, many of the listings in these areas saw an accepted contract within hours of going active.

Area                                       Zip Code          Avg CDOM for SFR sales last 90 days
Central Phoenix                  85004                19
South Phoenix                    85040                 32.9
El Mirage                             85335                 40.7
West Phoenix                     85027                  42.1
South Phoenix                    85009                  45.5
Youngtown                         85363                  46.6
West Phoenix                    85053                   47.3
West Phoenix                    85019                   47.6
Tempe                                 85282                  48.4
West Phoenix                    85037                   49.1
West Phoenix                    85031                   49.4
Mesa                                    85210                  49.4
Glendale                            85304                   50.7
Mesa                                   85202                  52.1
Chandler                            85224                  53.1
Mesa                                   85201                   53.7
Gilbert                                85233                  55.1
Avondale                            85392                 55.2
West Phoenix                    85023                 55.3
Glendale                             85302                 56.8
Tempe                                 85283                 57.1
North Phoenix                   85024                 57.3
South Phoenix                   85042                 57.5
Mesa                                    85204                57.5
Gilbert                                 85295                58.6
Tempe                                 85281                 58.9
West Phoenix                     85051                59.2
Scottsdale                           85251                 59.4
South Phoenix                   85043                59.5

But, that 85004 zip code really seems like an outlier for some reason. If you look at the zip codes that primarily house the historic neighborhoods in CenPho, the picture looks more like this:

  While the number jumped in March, they are generally dropping and hovering around 80 days. Part of this is because, as Cromford said, the way agents classify UBC vs. Pending changes the count. But also I think it is true that homes even in the popular CenPho and historic areas are on the market for this long. Sometimes the sellers list too high, thinking they will get more than they can. Sometimes people over-value a home that needs renovation.

Regardless, if inventories don’t increase, we can expect average days on market to decrease in CenPho.

If you need help building a strategy for your purchase, please give me a call at 602-456-9388. We specialize in this area and we can help you make the right move.

More often than not, first time home buyers need to purchase under $200,000.

Well, according to our friends at the Cromford Report, those first-time home buyers hoping to buy a single family home for under $200,000 may want to hurry it up.

New single family listings per month in this price range have been steadily declining since 2010 and have dipped below the level of sales for the past two months with June looking to follow suit.

Very few single family homes have been built to add to supply for entry-level buyers as most builders have been placing their bets on multi-family (apartments and condos) for the past few years. Thus far in 2015, condos and townhomes accounted for 24% of new listings under $200k compared to 22.5% last year and 23% of sales compared to 21% last year. As supply in the single family market continues to restrict on the low end, condos and townhomes may become more attractive. However due to high percentages of investor-owned units, financing may prove difficult.

Notice that in April and May (below) that the number of listings surpassed the number of sales. So, it was listed, it was sold. Personally, I suspect that this will change for the summer, as there are fewer people around to purchase.

My advice: First, if you are looking under $200k, the summer might be the best time for you. You might have to deal with the heat while you look, but I fear that this trend will get worse once the temperature drops. Second, leave yourself open to condos, patio homes or town homes.

Regardless, give me a call at 602-456-9388 and let’s build a strategy that works for you.

Here are some take-aways as we enter the June market, from our friends at the Cromford Report:

1) May continued to be a good time to be a seller in most areas & price ranges.

2) Demand quickly recovered from well below normal in January to slightly above normal by mid April and it has stayed there throughout May.

3) Meanwhile supply continues to drop for an ever-widening collection of areas & price ranges, giving plenty of problems for most buyers who are bumping into each other at the few listings that remain. Multiple offer situations are increasing.

4) If buyers are wanting to spend more than $500,000 then they are in luck – supply is much more plentiful above that mark, though a few very popular areas like Arcadia have relatively slim pickings.  During May even those upper price ranges saw a downward trend in active listing counts, but not enough to cause any real problems for most buyers.

5) If today’s normal demand can cause supply to drop as much as it did in the last month, then buyers are going to have an even harder time if demand were to grow.

6) This market is particularly brutal for the entry level market, which is desperately short of homes for sale or rent.

More points:
Active Listings: 20,351 versus 25,555 last year – down 20.4% – and down 5.4% from 21,512 last month.

Pending Listings: 7,819 versus 6,965 last year – up 12.3% – but down 1.7% from 7,951 last month.

Under Contract Listings: 12,063 versus 10,360 last year – up 16.4% – but down 1.7% from 12,276 last month.

Monthly Sales: 8,293 versus 7,509 last year – up 10.4% – but down 2.3% from 8,490 last month.

Monthly Average Sales Price per Sq. Ft.: $136.19 versus $127.65 last year – up 6.7% – and up 0.5% from $135.45 last month.

Monthly Median Sales Price: $211,000 versus $192,500 last year – up 9.6% – and up 4.5% from $202,000 last month

This increase in sales prices over last year is more acute in historic areas from what I’ve seen anecdotally.

The Cromford Index seems to be flattening out a little bit, as I would expect in the summer. This means the degree to which it is a seller’s market is just not increasing as quickly as it was in April. It is still a solid seller’s market.

I was driving down the road yesterday, minding my own business, when another ad for Zillow came on the radio.

They claimed that their service helps you compare prices, find rentals and maybe even train your cat to dance the polka. I might be wrong on that last point, but it sounded like he was saying that.

But, it brought me all back to the various reasons why Zillow is not necessarily your friend when it comes to buying or selling a home.

Here, here, here and here are four posts that I’ve done since 2011 which give you good details on what is wrong with this and other services like them. After hearing these ads, I feel obliged to educate the world.

1) Zillow and other services make money by selling ad space to realtors, to show up just at that moment you are looking at a nice home on their website. The agents who purchase your data may not be specialists in your area or the type of home you want. This is particularly important in historic areas.

2) The data that these services use comes from the data that we agents update every day, but these services don’t get all of that data. We reserve the most important (and most private) for our professional industry and for our clients. So, you may log on to these services, give them your data to use, but you won’t necessarily get the most up-to-date information.

3) There is a time delay from when we agents update listings (active, pending, closed) and when the services see the change. So, if you need to react quickly to the market, you may not be able to.

4) The data also impacts the estimates that you get from these sites. These services don’t get the most accurate data, so they have to construct some other estimate using older information, extrapolations and duct tape. They often give you an inaccurate picture of your home value, or the home you are looking at. This is especially true with historic homes.

If you want accurate statistical market analysis, specialty in the market and personalized representation, just call and agent so that you can use his or her MLS portal.

I can help you, so call me at 602-456-9388.

Join Get Your PHX this month as we check out an atypical bike shop that’s turning heads in downtown Phoenix: The Velo Bike Shop & Café.

 Everyday, Phoenix’s core is transforming into a more walkable and rider-friendly city. Sidewalks are widening, trees are being planted and neon green bike lanes are popping up all around. The only thing missing was a community bike shop… until now.

On the corner of Garfield and Second Streets sits a gray building surrounded by a wave of metal poles and a metal cyclist statue in the center. If it were not for the hoard of bikes parked out front, you might mistake it for an art gallery – an intentional move by owner Jason Boles who adds, “At the end of the day we’re near Roosevelt Row and we knew art had to be part of the experience.”

Let’s get one thing straight this is not your average bike shop. It’s a gathering space for bicycle enthusiasts, students, downtowners, and really anyone looking for a place to relax and connect with the community. Where you can service your bike, grab a cup of coffee or just hang out with friends.

“Cycling should be a social based event, so a quality cycling store or retail location should also be a hub for the community,” Boles said.

Stepping inside, you’ll be amazed by the incredible revamp Jason made with the space. The shop features sustainably sourced wood counter tops and sleek light fixtures overhead.

Among the array of bicycles and skateboards neatly snaking around the shop, you can expect to find local bike brand State Bicycle Co., which is headquartered in Tempe. Keeping as much local and sustainable was an important part of Jason’s mission.

The expansive space is also home to an espresso bar café with a couple pocket-seating areas. Local beans from Flagstaff fill each cup, and local craft beer fills the fridge. That’s right folks, The Velo is among the few bike shops here in the state licensed to sell beer and bicycles at the same time!

Anyone looking for a group of gung-ho cyclists wanting to “get out of the office” and head down to South Mountain? The Velo has become a hub for such adventures where cyclists of all levels are invited to take part. Check out their Facebook for upcoming bike events.

Walk, ride or drive down to this month’s Get Your PHX local pick: The Velo Bike Shop & Café. Thank you to our host/bike shop owner, Jason Boles, for supplying the wine and music all night long!

As always, RSVP below.

When: Thursday, June 18^th, 5:30P – 7:30P
Where: The Velo Bike Shop and Café: 828 N. 2^nd St., Phoenix, 85004
Details: Wine will be pouring all night by our great hosts and entry includes a complimentary raffle ticket

RSVP HERE please so we can get an accurate head count.

Our friends at the Cromford Report are predicting a slight decrease in prices across the valley in June, over May.

But, first, we saw impressive price increases since March.

“For the monthly period ending May 15, we are currently recording a sales $/SF of $136.34 averaged for all areas and types across the ARMLS database. This is 2.2% above the $133.42 we now measure for April 15 and represents the second month in a row with a significant increase in average pricing.”

Cromford folks are predicting a small correction for June. This makes intuitive sense to me, as the market slows a little bit going in to the summer months. Of course, that is anecdotal.

“Our mid-point forecast for the average monthly sales $/SF on June 15 is $134.54, which is 1.3% lower than the May 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $131.85 to $137.23. Our forecast this month is therefore for a small correction after strong moves higher in sales pricing over the last two months.”

The interesting thing to think about for me will be whether we maintain this tight market of homes through the summer in the CenPho and historic neighborhoods.

Normally, I would assume that there will be downward pressure on prices in the summer, as there are often fewer buyers around. However, Michelle and I have been working hard with our clients to find the right properties, given the tight supply. So, that might carry over as some folks are still looking for the right house.

Also in the CenPho area, I expect some folks to list their homes, having seen how prices have gone up.

And, of course, don’t forget that many people want to get their house closed before the interest rates go up later this year.

What do you think will happen?

If you need help navigating this market, let me know at 602-456-9388.