by Dru Bloomfield on August 29, 2009
Hard to believe that here in Phoenix, buyers and their Realtors are feeling like there’s a housing shortage. Home buyers are frustrated, because they are making offer after offer, with no success. Investors are grumping that they can’t buy a foreclosure or a fix-up, when they are competing against each other for the dwindling supply of homes. Multiple offers are common, particularly for homes priced aggressively in the range up to $250,000.
Buyers have started making offers over list price, and now I’m seeing escalation clauses, where a buyer will say something like “will pay $xxx over highest offer, up to $xxx,xxx”. I even saw one this week, with no ceiling.
If you look at what’s going on in the market for cities like Phoenix, Scottsdale, and Chandler, you can see that we do have a dwindling supply of homes. In Phoenix, the number of homes for sale has dropped significantly and is now lower than the latter half of 2006, although inventory has remained stable throughout the summer.
You can see that Scottsdale is experiencing a similar trend, although not to the extent of Phoenix. Inventory levels still remain just above the 2006 figures.
In Chandler, the pattern is a bit different historically, but housing inventory is still decreasing, and rapidly approaching the levels seen in the latter portion of 2005.
The number of Tempe homes for sale has also decreased this year, and is now less than this same time of the year in 2006.
The town of Paradise Valley hasn’t followed same trend you have seen in these other Phoenix-area cities. This town did not reach an all-time high home supply level until earlier this year, where in the other cities, highs were noted in either 2007 or 2008. Home supply is dropping and is just now approaching last year’s levels.
Buyers need to know what they are getting into when they are looking for a home. Besides lining up financing, and starting their on-line home search, it’s important to know that there’s a lot of competition, especially for foreclosures, and even for short sales. Diligence, creativity, flexibility, and patience are needed to find the right house, craft a winning offer, and complete the sale.
Finding the right house has always been a game of give and take. In today’s market, even more so. Buyers may need to expand the areas that they are willing to living in, or decide to sell their current home first, so they can consider purchasing a short sale. Some will decide to expand the price range they are shopping in, and others may decide that certain features like a pool or garage are not imperative. Whatever the choices made, buyer need to understand what today’s real estate market look like. It’s not exactly a housing shortage, but in many Phoenix metro cities, the shelves aren’t fully stocked either.
by Dru Bloomfield on August 25, 2009
Last week, I had a buyer ask me if she could write offers on three separate properties, and then just go with the one that was accepted first. In theory, she could do this, although some would recommend disclosing that a buyer is writing multiple offers. In fact, this type of disclosure was done in the height of the market several years ago.
That market was very different from today’s market. Response time then was in hours and days, not weeks and months. Short sales were virtually non-existent and foreclosures making it into the MLS were not that common either.
The question my client asked is a tough one. And, from what I’m reading from other Phoenix Realtors, I’m not the only one getting this question.
The comments on Jay’s post show just how challenging it is for buyer’s right now.
My client just submitted her fifth offer to purchase a home, which is not all that many in this market. She was outbid on a several foreclosures. One short seller didn’t even respond to a full-price offer. And, this buyer is watching Phoenix home prices begin to increase in her price range, and she’s trying very hard not to panic. You can understand why she asked the question.
In the end, she opted to write one offer for the property that she really wanted. There’s still something about real estate, where a house becomes a home. And the look in her eye, as she walked through the door of the house, said it all. "This is where I want to live." Multiple offers or not, that’s what real estate is still about for most home buyers.
by Dru Bloomfield on August 3, 2009
If you planning to purchase a home before the $8,000 tax credit deadline hits, or you’ve had your eye on the luxury market, you need to know where you stand as you craft your offer to purchase real estate in Scottsdale, or any of the surrounding cities.
If you are looking for a home priced under $350,000, know that you are not alone, and the pickings are thin. Multiple offers and competing with cash buyers are just two of the challenges, particularly with foreclosures. The good news is that I’m seeing more listings from primary home owners who are motivated to sell their homes and are pricing them to compete with the bank. And when these well cared for and lived-in homes are priced aggressively, they do sell in very short periods of time.
We are no longer in a real estate market where a buyer can assume that they will find the house of their dreams in their price range, located in just the perfect area. Not when there’s less than a 3-4 month supply of homes in these most affordable price ranges. It’s tough. Home buyers quickly get an extreme appreciation of just how competitive the market is right now.
For those looking in the price range of $350-500K, the market is considered “balanced”. About the right number of homes, when balanced with the number of home buyers.
Once you start looking above the $500K range, and especially above $800K, you can see that there is a glut of inventory. Home sellers in this price range have more staying power, and unless they are truly motivated, have not reduced their prices to what the few luxury home buyers are willing to pay. This is where I think we will see the biggest price changes in the next 12-18 months. At least that’s my hope. Seven years of inventory is unheard of, yet that is where the market over $3M sits.
If you are a home buyer, before you do anything, get your financing in order. So much has changed, and even well-qualified buyers are jumping through hoops to provide all the documentation that is needed now. Then, roll up your sleeves and get ready to move quickly. That is what it takes! Time really is of the essence.
And, if you are home seller, with a home that should be priced $350K or less, know that you have some power in the home sale negotiation again. Clean it up, price it well, and make it easy to show!
by Dru Bloomfield on June 21, 2009
Here’s the latest “Good News” from the Cromford Report:
On June 20, 2009 for “all areas and types” we recorded a Monthly Median Sales Price of $124,000, up 7.8% from the $115,000 we recorded on April 30.
This is for ALL ARMLS listings and all types of dwellings, so it represents the median across this entire market. But specific sectors may be performing quite differently. The principal reason for the price increase is the change in the market in west Phoenix, where properties below $50,000 have become much scarcer and purchase prices have risen sharply due to intense competition and reduced supply. A similar increase in pricing, but less pronounced, can be seen in many other affordable areas of the valley. In addition, lender owned properties now comprise a diminishing percentage of the total number of homes sold, diluting their power to bring the median sales price down to the extreme lows we saw in April.
Pricing above the $500,000 level is still falling, but these homes now constitute a very small part of the market compared with a few years ago.
I’m representing a number of buyers and it’s been tough to get an offer accepted in the lower price ranges. Competition is fierce, even for short sales. Multiple offers are much more the norm, rather than the exception.
If you are planning to purchase a home before the end of the year, you must get your loan pre-approval before you start looking. If you find a home before you have your paperwork in order, you will be at a real disadvantage. Lenders have geared up and are able to get you the Arizona required paper work (LSR – Loan Status Report) much more quickly. However, it does take some time, so plan ahead!
