Thinking about buying a house in Phoenix?

One of the questions that I get asked most often from buyers is how much should I offer. Many out-of-state and out-of-the country buyers often think that Phoenix real estate is still in a desperate situation, but it’s not, and hasn’t been for quite some time.

Take a look at these stats documenting the real estate market changes for Maricopa County (aka Phoenix Metro) in the past year, that were just released by the Arizona Regional MLS this morning:

• Median Sale price – up 33%
• Average Sales Price – up 28%
• Percent of List Price Received (Offer price compared to listing price) – 100.2% (This is a biggie, since many buyers often want to start low, afraid that they will be paying too much.)
• Homes for Sale – -19%
• Closed Sales – -16% (If there were more homes for sale, this number would presumably increase.)
• Months Supply of Homes – -7% (If all the homes listed, sold at the current rate, they would all be sold in less than 3 months!)
• Days on Market – 45 days, down 32%

The market is strong. More buyers would be buying if there were more homes on the market. While some reports are showing that the market is slowing a bit, my perspective is that’s healthy. Too much change, too fast can be traumatic.  As we’ve seen in the past.

If you’d like a full copy of the ARMLS report, just send me email, and I’ll get it to you ASAP.

More on Phoenix real estate:Is Atlanta the next Phoenix?”

• Phoenix is a Seller’s Market for Homes Priced under $500K
• Phoenix Real Estate Update: More new homes sold than lender owned

Here’s an interesting article, Phoenix Picked Clean, Private Equity Descends on Atlanta that I discovered in Bloomberg Businessweek. While the focus is on Atlanta, I thought it was a great read and recommend it to get a handle on how far the Phoenix real estate market has come in such a short time:

Michael Orr, director of real estate research at Arizona State University’s W.P. Carey School of Business and creator of the Cromford Report, is quoted extensively, with his usual well-grounded insights:

“We’ve seen some big players move away and others replace them,” Orr said in a telephone interview from Phoenix. “The new players are happy with 6 percent cash-on-cash return. Last year they would scoff at that. They wanted 12 percent to 15 percent last year, but that’s not possible here anymore.”

Phoenix entered the recession and came out of it before Atlanta, Orr said. Phoenix hit a post-bubble trough last September, according to the Case-Shiller index.

And Trulia weighs in, too:

In Phoenix, owning is 49 percent cheaper than renting, narrowing from 55 percent cheaper a year earlier. The gap narrowed even as 30-year mortgage rates fell by an average 1 percentage point to 3.5 percent, according to Trulia economist Jed Kolko.

Good info!

Have a house to sell that you’ll list for less than $500K? In today’s market, you have a property that’s in demand. Over the past two years, the Phoenix real estate market has changed dramatically!

Back in August 2010, the Sellers’ Market consisted of homes priced $75,000 and under.

Almost a year later, in June 2011, the Sellers’ Market had surged up to the $350,000 and under price range.

Wondering what a Seller’s market is?  It’s when there is less that a 5 month supply of homes on the market.  A balanced market is a 5-7 months supply, and a Buyer’s market is anything over a 7 months supply.

So, if you’re thinking about selling, please let me do a market analysis for your property, so you can get a good sense of what your home is worth and about how long it might take to sell. 

Here are a few video tips, just for home sellers, that will give you an idea of who I am and how I can help you  in today’s market.

• How Much is Your Scottsdale Home Worth

• Common Home Seller Mistakes

• What is Home Staging? Re-staging? Web Staging?

• Selling Your Scottsdale Home Online

• Showing Your Home for Sale

Here’s some great news from the Cromford Report:

September 23 – It is a very long time since we had a month in which home builders sold more single family homes than lenders sold REOs, but in Maricopa County in August we saw 805 new homes and 783 REOs (combining commercial lenders, GSEs and HUD).

Last week, Bloomberg News reported on the dramatic upswing in Arizona’s new home market and the challenges that builders are having finding skilled labor.

After being decimated by the housing crash, Arizona’s builders are now scrounging for workers as demand for new homes climbs. Building permits are at an almost three-year high, creating a scarcity of framers, roofers and masons, many of whom moved elsewhere when work dried up. Laws aimed at curbing illegal immigration only added to the shortage by pushing experienced laborers out of the state.

New homes are in ever-increasing demand due the limited number of existing homes on the market. Investors have again fueled the market and are forcing owner-occupant buyers to consider purchasing new homes. And the limited number of workers, is slowing the speed of new home building.

For the full article, read here: Arizona’s Homebuilding Revival Sparks Bidding Wars for Workers

More on real estate around Arizona:

• Arizona Real Estate–Definitely on the Upswing
• Phoenix Real Estate Update: Median Sales Price Skyrockets
• Scottsdale real estate appreciation lags behind rest of Phoenix Metro

Just picked up this tidbit from the Cromford Report. A new record for number of offers.

June 19 – We have a new contender for the greatest number of offers for a single listing. This time it is a normal listing in Glendale 85308 (not an REO in Chandler like the previous champion). MLS # 4745038 was listed at $119,900 and received a total of 95 offers, finally selling for $140,000 cash. Among the 95 offers, 38 were all cash, 28 were conventional and 28 were FHA/VA. 51 offers came from investors and 44 from owner occupiers. The home is already listed for rent at $1,200 per month by the winning investor.

Seriously, buyers in Phoenix are searching for homes and when a home is listed for sale at a market, or near market, price, it’s like a feeding frenzy.  Buyers are quickly learning that they must be totally prepared by being pre-qualified (or having their proof of funds), be flexible in some of their requirements, and make an offer that they can live with.

Home owners are starting to consider selling. Even with home prices are on the rise, Phoenix home sellers must price their home to the market.  Appraisals can be a gating factor, so cash offers are often snapped up or appraisal contingencies are being waived. At the same time, overpriced homes are languishing on the market.  Buyers are savvy and they just won’t overpay, if they don’t see the value.

Sellers take note, it’s definitely a time to consider selling. Even in the heat of summer, buyers are out looking for homes, and you can be sure they are serious when it’s 112°F out! 

More on the local real estate market:

• Phoenix Real Estate Update: Median Sales Price Skyrockets
• Scottsdale real estate appreciation lags behind rest of Phoenix Metro
• Yes, the real estate market is crazy in Phoenix. Again.

Huge gains in the Phoenix real estate market this year.

Monthly median sales price for the first week of the year was $118,700. And in the 20th week of the year, just four short months later, the median sales price is $142,500.

That’s a 20% increase!  In four months.

If you look at the point where the pricing surge began, which was the last week of February (Week 8), and compute the increase over the next 12 weeks, you’ll see that the rate of appreciation is 18.75%. Then, multiplying that rate by 4, to get a projected annualized rate, you get a fantastic, and unsustainable increase of 75%.

Yesterday, the Cromford Report shared the following perspective:

Prices very rarely go up at this phenomenal rate for an extended period of time. They need an occasional rest to let the rest of the world (especially appraisers) catch up. However, supply has not improved, so the upward pressure building under prices is still strong.

However, cash purchases continue to play a strong role in the current rate of appreciation, with about 40% of all homes being purchased with cash.

And, the number of homes on market continues to dwindle, especially when compared to the number of homes being sold.

Buyers are scrambling. Equity owner are considering selling. Offers before the home is listed, and multiple offers are the order of the day.

One thing about Phoenix real estate, it’s always changing.  And, it’s never boring!

More on the current state of the Phoenix real estate market:

• Yes, the real estate market is crazy in Phoenix. Again.
• Phoenix Real Estate Update: “Absolute positive signs of what’s happening on the price front”
• Severe shortage of homes for sale in Phoenix