I had two phone call back-to-back this week.  Both potential buyers said that they only wanted to look at short sales and foreclosures Scottsdale.

While I tried to explain the realities of the current Scottsdale real estate market, I don’t think that buyers understand just how few houses are for sale, and how many buyers are competing for this limited inventory.  And that by eliminating 75% of the properties for sale, buyers are going to be challenged to find and win the bidding war for this limited pool of homes.

That’s not to say that it can’t be done. Or that it will be easy.

But, I do think buyers needs to know the facts about our real estate market.

Housing inventory in Scottsdale has dropped by 50% over the past 2 years.

Appreciation is now in the positive ranges, approaching 8% in late March.

Buyer are anxious to get in the market. With about 50% of the buyers paying cash, the appraisal contingency is no longer in play, and many of those buyers are more willing to go over the listing price. Buyers who assume that they can offer less, because they are paying cash, are not up-to-date on the current realities of the market.

So, if you want to buy a house in Scottsdale, I recommend that you look at all the properties that are on the market. Then, write a very strong offer when you find the house you want.

For more on getting your offer accepted in Scottsdale’s competitive real estate market, read:  Ten Ways to Get an Offer Accepted

Kris Berg at San Diego Castles Realty created the following video to put it all in perspective!  ☺

I just published a post over at Click2AZ.com on the current foreclosure situation in the Phoenix Metro area.  Mike Orr at the CromfordReport.com has done some number-crunching to keep us in the know.

Is the REO bubble over in Phoenix?

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photo credit: TheTruthAbout…

The real estate auction company, Hudson & Marshall, is in town this weekend, for an auction of foreclosed properties to be held at the JW Marriot at Desert Ridge. 

We had a 2 bedroom single family home listed that the bank entered into the auction about 2 weeks ago.  Several pre-auction offers came in, so that property in Surprise has been pulled from the auction.  However, there are still quite a few other properties available.

You may want to know a few of the helpful home buyer tips that the auction company provided to me: 

• Anyone can attend the auction, it’s free and open to the public.
• The auction moves fast and the bidding process on 20 properties typically take less than 40 minutes.
• Hudson and Marshall does not have an opening bid, although I’m under the impression that there is a reserve on some properties.
• You should definitely pre-inspect the home(s) you may are interested in prior to the auction.
• You can bring your real estate agent with you to the auction.
• Arrive early to register for the auction. Bring your photo ID and $2500, in the form of a cashier’s check or cash, if you are going to bid.
• The $2500 earnest deposit is required upon winning the bidding for a property.
• Homes are sold with a “clean title”, free and clear of back taxes and liens.  Seller pays for title insurance.
• Property is sold in “AS IS” condition.
• Closings typically take place within 30-45 days.

Auction starts at 1 pm, both today and tomorrow, May 16/17.

And a view from the upstairs loft.

Photo credit: D. Patrick Lewis
 
What can you say?

Mostly we are speechless.

If you are buying a bank-owned home, please, please, please, do yourself a favor and get a home inspection.

I just stumbled across this article, ” Firm Helps Renters Avoid Foreclosure Homes“, this morning.  Seems like it could be a big help for someone looking to rent a home, or for someone already renting who wants to keep tabs on their landlord.

photo credit: Dru Bloomfield – At Home in Scottsdale

I’ve been pretty quiet on the blog-front this past month and a half.  However, it’s been six weeks of massive action, and an introduction to the world of bank-owned (REO) properties, where the majority of home buying and selling appears to be occurring in the Phoenix metropolitan real estate market.

Last year, most of my business was in Scottsdale.  In the past, I’ve worked in a much broader area, and this year will be similar. I currently have homes listed all over the Valley of the Sun, and about 75% of them are foreclosures, priced at $200,000 and under. 

Our market has changed, and, in my opinion, Scottsdale is out of sync.  Granted, it’s a unique city, land-locked, with many beautiful homes.  Foreclosures are few and far between.  Short sales are becoming much more common.  However, as a whole, it’s not a moving market.

While home sales demand is increasing in Phoenix, Glendale, Mesa, and Goodyear, in Scottsdale it’s decreasing.

Click for full-size view of Scottsdale real estate supply demand graph

Click for full-size view of Scottsdale real estate supply index graph

And when you look at the appreciation rates, comparing the City of Phoenix with Scottsdale, you can see that Scottsdale has experienced a much lower rate of depreciation, appearing to bottom out at about 20%. In Phoenix, the depreciation is much greater hovering at 40%.

Click chart for full-size view of Scottsdale vs. Phoenix Home Appreciation / Depreciation Rates

So, I’ve been pondering the reason that Scottsdale is experiencing a different real estate market.  Do you think it’s because:

1. Fewer number of foreclosures in the city, and many buyers are only looking at bank-owned properties, thinking they will get a better deal.
2. Reluctance of Scottsdale home sellers to reduce home listing prices to incent on-the-fence buyers to make a buying decision.
3. First time home buyers are looking to other communities where they can buy a larger and newer house for the same price.
4. A trend towards smaller is better.
5. Challenges in getting a jumbo loan (greater than $417K)
6. General uncertainty and conservatism in spending.

I’m curious.  What do you think?