Thanks again to our friends at the Cromford Report for their excellent analysis on all things real estate.

Here are a few highlights:

“For the monthly period ending August 15, we are currently recording a sales $/SF of $132.74 averaged for all areas and types across the ARMLS database. This is 2.0% below the $135.42 we now measure for July 15. Our forecast range was $131.71 to $137.09 with a mid-point of $134.40. Last month’s mid-point forecast was $1.66 above the actual price per square foot measured, but the actual result was well within the 90% confidence interval.

On August 15 the pending listings for all areas & types showed an average list $/SF of $135.41, 0.5% below the reading for July 15. Among those pending listings we have 86.9% normal, 4.7% in REOs and 8.5% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on August 15 in each category was: $140.36 for normal, $98.69 for short sales & pre-foreclosures and $89.08 for REOs.

Our mid-point forecast for the average monthly sales $/SF on September 15 is $131.55, which is 0.9% lower than the August 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $128.92 to $134.18. We have already experienced considerable seasonal price weakness this summer and our forecast this month is for this weakness to continue until mid September at least.”

Single Family Homes and Condos

So, how does that translate in to the Cenpho and historic markets? Well, while we see higher prices than most areas, generally, and tighter supply, we have seen a similar dip in prices. Interestingly, though, we only see that dip when we include condos in the mix, along with single family residences. See below.

Single Family Homes and Condos

Condos typically take longer to sell, as people are weary to take on HOA dues. This could be part of it. It is certainly interesting news if you are in the condo market.

Watch for these prices to go up again after late September.

If you are looking for more information, please call me at 602-456-9388. 

This month, we will visit a tiny space with a big history in Phoenix –the Dressing room.

Boasting “elevated shack” cuisine, the Dressing Room is certainly something of a gem. This previously non-descript  micro building  connected to MonOrchid has some big plans. You may have seen the incredibly successful Kickstarter campaign created by owners and founders Kyu Utsunomiya and Troy Watkins, which raised over $38,000 to build an extended back patio and rooftop deck! Stay tuned for more…

Troy and Kyu have flipped, sautéed and cooked in top restaurants and hotels all around the world, finally realizing their dream of opening their own restaurant here in the downtown area. The concept of this micro-restaurant is “elevated shack” food. As Troy puts it, “Burgers, some salads, sandwiches; just very elevated ingredients at a very value driven price point.”

We all know Roosevelt Row is seeing some changes coming down the pipeline, but for Troy and Kyu, it’s also important to keep a bit of history too. The name “The Dressing Room” comes from the fact that the building was once used as a dressing room for the first drag bar in Phoenix, (what was Green Haus until recently). They’re also incorporating a new mural by local artists JB Snyder and Tato Careveo, updating the existing mural also by JB Snyder.

As if starting one restaurant wasn’t enough, this creative duo opened Be: Coffee + Food + Stuff in the space once occupied by Songbird Coffee. A rotating menu of open-faced sandwiches, infusion coffee and tea, plus pastries from local bakeries and even soft serve ice cream are fast-making loyal fans.

For the moment, The Dressing Room and Be are separated by a wall, but not for long. Along with plans for the extended back patio and rooftop deck, they plan to break through and join the two concepts for a cohesive space to work, meet and connect.

We’re excited to check out the opening of Be and get exclusive access to the progress of The Dressing Room, set to serve diners this fall. RSVP below to save your seat!

When: Thursday, August 20^th from 5:30PM – 7:30PM
Where: Be: Coffee + Food + Stuff & The Dressing Room:
214 E. Roosevelt St., Phoenix (map it)
Details: Raffle prizes and small bites!
Click here to RSVP

Find us on Facebook!

In my last post, we looked at the number of houses coming on the market and the number selling, as compared to previous years.

Here’s another interesting indicator: how many listings are cancelled after being on the market for a while.

“Listing cancellations remain very low in 2015 thus far at 11,248 year-to-date; 19% down from this time last year.  Only 3 years in the last 15 years have had a lower number of cumulative cancellations in week 30. 

Those years are 2005, 2013 and 2012.  2008 was the worst year by week 30 at 32,628, which is nearly triple today’s level.”

So, why so few cancellations in 2008? I suspect that it had to do with the fact that people felt like they had no other option than to sell. Many were in houses they could not afford. They had to sell, short sell or foreclose. Whereas in other years, people might have chosen to wait for another year for prices to rise. Their payments were in line with what they could afford, so they had options.

Also notice that the number of days on market (average) is a little lower than last year. So, this year they are selling. Prices are increasing slightly over last year and people are selling homes. I don’t see any indication that these price increases are irrational. However if interest rates rise later this year and buyers can’t get loans as easily, those prices may be forced to come down and this dynamic will change. If that happens, I don’t see major changes in 2015 –probably next year.

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

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.