You’ll either laugh or cry! Buying a bank-owned home in Phoenix can be a contact sport.
Kris Berg at San Diego Castles Realty created the following video to put it all in perspective! ☺
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Real Estate
Paradise Valley is a real estate microcosm. Homes are much larger and median prices are significantly higher than anywhere else in the Phoenix area, including it’s neighbor, Scottsdale.
Commonly call “PV”, this city has irregular boundaries, that extend from Camelback Road on the south, to Shea Boulevard on the north. The area is filled with acre plus lots, beautiful homes, and magnificent views of Camelback and Mummy Mountains. Some homes border the Phoenix Mountain preserve.
The city of Paradise Valley shouldn’t be confused with the geographical area to the Northwest that is home to the Paradise Valley School district. This area is home to a number of private and charter schools, as well as sitting in mostly in Scottsdale Unified School District.
The number of homes for sale in Paradise Valley has been at an all-time high, but you can see that since April, there has been a drop of almost 20%. In August, the number of listings dropped below 500, for the first time since October 2008.
One of the other changes occurring in the PV market is that time that the number of days of inventory (how long it would take to sell current home listings at the current sales rate) started has been decreasing since May of this year.
Paradise Valley has relatively few properties identified as short sales, and even fewer that are bank-owned (foreclosures). These properties however are impacting the local real estate market since they are being listed at significantly lower prices, around $300/square foot, as compared to $500/square foot for a typical listing. When it comes to actual sales, short sales and foreclosures account for more than 25% of the sale in July. Sales prices for typical sales are averaging almost $350/square foot, while short sales and foreclosures are selling at an average of $100/square foot less.
Taking a more historical look at the Paradise Valley sales price trends, you will see that the annualized average sales price per square foot has steadily decreased from $450 per square foot a year ago. Comparing last year’s average sales price to this year’s (on a per square foot basis) shows that depreciation has been 19%. Recent trends, comparing last month to this year, do shows that depreciation is slowing slightly.
A few definitions (courtesy of the Cromford Report) that may help you further understand the charts above:
- REOs or lender-owned properties have already been through the foreclosure process and completed their trustee sale. These properties were sold by the trustee to the beneficiary (lender). In a few trustee sales (typically less than 5% at the moment), the property may be sold to an investor or wholesaler who is prepared to bid higher than the bank. These properties are not classified as lender-owned. The lenders use the ARMLS system quite heavily to market their inventory of homes and compete aggressively on price. At the moment we lender-owned properties constituting a significant share of the homes listed for sale, and an even large proportion of the homes sold.
- The Pre-foreclosure category includes those properties that have started the foreclosure process but have not yet had the trustee sale. We also include those which are being marketed in a short-sale situation, even if a notice of trustee sale has not been issued. In a full pre-foreclosure situation, the owner(s) have received a notice of trustee sale and the property is being marketed in order to try to sell the home before foreclosure completes. Many of pre-foreclosures are in a “short sale” situation, where the price asked is lower than the outstanding debt secured by the home. Such sales require the approval of the lender. A few may also (or instead) be the subject of bankruptcy proceedings and the sale may require approval by the court. We generally refer to all these situations as “distressed sales”
- Normal sales are those where the owner has the unencumbered right to sell the property without requiring approval from a lender, court or external corporation of any kind, and the owner is not a financial institution. In a normal market these constitute the vast majority of all listings and sales. The degree to which these sales become a smaller proportion of all sales indicates the level of distress being felt in the market.
My husband got a kick out of telling me I was in the paper yesterday. I knew the article on Twitter and real estate blogging might be coming out since I’d been interviewed a few weeks ago, and I’d met the photographer at one of my rapidly dwindling listings, but I still was taken by surprise.
I thoroughly enjoy connecting with people, on-line and in person. I first discovered the power of social media through my blog and then via Twitter a couple years ago. Then, Flickr caught my attention, and I started sharing photos and learning more about photography. I signed up for the more professional LinkedIn, and starting finding old buddies from my previous career. Then, there was Facebook, where I seem to connect to my friends, family, old classmates, and other Realtors. Recently, I started playing with music over at blip.fm.
Social media in its infinite forms is here. I watch my son work Facebook, Skype, and text message all at the same time. It’s how his generation communicates. And, for me, it’s been an eye-opening way to connect with a world of people that I never would have met, if I’d restricted myself to face-to-face meetings.
One of the best parts of this recent media experience was during the photo session. I was explaining Twitter to the photographer, and this tweet arrived on my phone:
I couldn’t believe that I was actually seeing this happen while I was explaining how and why I use Twitter. Total synchonicity!
Twitter can be whatever you make it. It can be totally a business tool, to share a business or do to research about one, but that’s not what makes it interesting and keeps people coming back for more.
I found that the more I let myself play with it, the more the real me came out. I can share the latest real estate stats, or I can play "Taking Care of Business", or I can upload a photo of a dust storm rolling into Scottsdale. It helps me paint a picture of the Scottsdale real estate market in a really unique way.
I think Twitter has applications across a wide range of business. Ask Christy. She works with major league businesses every day, showing them how to use social media to expand their reach.
And, if you looking to buy or sell a home, it really could be worth your time to explore Twitter a bit. You’ll get a pretty good feel for the person you might be hiring for your next real estate transaction.
Realtors often say things like “Location, location, location”, and “Real estate is local”.
Comparing Phoenix and Scottsdale real estate stats really is like comparing apples to oranges, but I’m going to do it anyway.
A few facts:
- Phoenix covers a much larger area, 517 square miles, as compared to Scottsdale’s 184 square miles.
- Phoenix has more than 495,000 housing units, while Scottsdale has 116,000+ housing units.
- In 2008, home sales in Phoenix totaled 13,028, and 4,456 in Scottsdale.
- Year-to-date home sales (as calculated via the Arizona Regional MLS through 5/31/09) in Phoenix were 10,298 and 1,901 for Scottsdale.
From the figures above, sales are up dramatically in Phoenix this year, and may surpass last year’s total number of sales, by mid-year this year. Scottsdale may approach last year’s sales numbers by the end of the year, but it’s really too early to say.
Phoenix Real Estate
Phoenix Foreclosures (REO) made up less that 25% of the active listings, yet accounted for over 75% of the actual sales in the prior 30 days (from June 2, 2009). Normal listing (not a short or REO) accounted for 40-45% of active listings, but only 10-15% of sales. On the lower two bar charts, you can see that, foreclosures and short sales are being listed and selling at a significantly lower price, per square foot. Average price for a normal sale is about $120 per square foot, as compared to an average of $55/sf for a foreclosure. Phoenix home sales prices have depreciated about 45% since this same time last year.
Scottsdale Real Estate
Foreclosures make up a very small part of the homes for sale in Scottsdale, less than 10%, yet account for over 25% of the sales. Normal sales predominate the market (just over 75% of homes listed), and do account for just over half of the sales. Short sales are closing at a proportionately higher level in Scottsdale, too.
Listing prices for both REO and short sales (on a $ per square foot basis) are significantly lower than for a normal home. Sales prices of these normal transactions are being brought down as a result. While the average price per square foot for a normal listing is close to $350/sf, those selling are actually closing significantly less, at and average of $225/sf. Both short sales and foreclosures are listed at an average of $200 per square foot. Short sales are closing at an average of $175 per square foot, while foreclosures are closing at an average of $150 per square foot. Home sales prices (again on a per square foot basis) are down about 22% this year.
Two Cities – Two Markets
Comparing home sales statistics shows just how different the current real estate situation is in these two neighboring cities. Phoenix homes prices are down dramatically, but sales are going through the roof. In Scottsdale, there has been a slowdown, but prices have not been impacted as severely.
What both of these cities do have in common is that sellers are selling, and buyers are buying. Real estate is a local business, and it’s important to know what’s going on in the specific market at the time you are considering making a move.
Ask questions. I’ll do my best to answer.
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.
