Scottsdale has a serious shortage of homes for sale right now. And cash buyers are out in droves.  In 2011, 47% of the more 100,000 home purchases in Phoenix were cash transactions.

I can talk through the past couple of days with you, just to illustrate the real situations that buyers are encountering.

Buyer made a full-price offer on a bank owned property that had been on the market for a LONG time (over 6 months). However, the bank had just took another major price reduction, so the property finally caught my clients’ attention. We wrote an offer.  The bank received multiple offers, so Best & Final offer was requested,  and while the buyer increased their offer to over list price, but other cash buyer went even higher. 

So we went on to Plan B, which in actuality was more like Plan J, based on the number of houses that they’d tried to purchase.  I call to set up showing for this property, but occupant says that she thinks the house might be under contract.  I call the agent who says, “Yes, we got six offers the first day the house was on the market, three were cash, all over list price.”

Needless to say, my client is now VERY frustrated.

I get an email and a call yesterday afternoon.  She says, “New house on the market today. We want it. Write the contract now.” I did and we negotiated to acceptable terms within the next six hours. Today, I hear that property has a  cash offer in backup position.

When we were in the boom years, people threw contracts at houses, with escalation clauses, and more and more money. And it’s not much different right now, and that seems really odd.

Interest rates are incredibly low.

There aren’t many houses on the market.

Prices are in almost the same place they were before the boom.

People still want to buy houses, yet have a much more conservative mindset.

Buyers are wanting to make sure they get a good value, but finding very quickly that values really are appreciating, and demand is very, very high for an inventory that is very, very low.

Sellers are getting savvy, and removing the appraisal contingency on purchase contracts. When this happens and the buyer is getting a loan, they must come up with any difference between the appraisal and the purchase price, if there is one. And in some cases, buyers are complying.

We’ve all been wondering when home prices would start to appreciate. Last year, we saw just over 6% appreciation in homes priced under $100,000.

Based on the dramatic change in buyer and seller perception over the past several weeks and months, it sure looks like me may see that appreciation creep up into higher price ranges.

As prices increase, more sellers will consider selling which will add to a desperately low inventory, and give some of these buyers who have been writing 5-10 offers, just to get one accepted, some hope that they may actually be able to buy a home. 

And in part, they will have some of the cash buyers who beat them out of their first home buying attempts to thank. Odd, isn’t it?

Use the Internet. Drive neighborhoods.

Categorize your “Got to have’s” and “Want to have’s”, because really there is no such thing as the perfect house. Ask someone who has built a custom home, if there’s anything they’d change!

If you’d like to see how the various zip codes and areas of Scottsdale match to your preferences, try the home search tool I mentioned in the video, the Scottsdale Neighborhood Suggestor.

If you are thinking about buying a house, there are a couple good reasons to have your representation, a buyer’s agent:

1. You have an advocate looking out to YOUR best interests.
2. A buyers agent will focus on YOUR home search, not selling their listing.

After you choose your agent, searching on-line plays a big part in finding your next home.  One of the most helpful tools is a custom home search web site where get the latest updates on properties that match your preferences.  You can also make notes of your favorite homes, and we can communicate (message) privately about each home. 

Once you have your loan approval (or proof of funds for cash buyers), we get in the car and start looking. The first time out is really a time to calibrate. You’ll see in real life, what you’ve been viewing in listing photos. You’ll get the feel for floor plans you prefer. You’ll get a good sense of pricing and value.

From there, you home search begins in earnest. It may take a couple times, out, or more, but for most buyers, getting in the car is the next step in the adventure of buying a new home.

More home buying tips:

• First Steps for Scottsdale Home Buyers

• How real estate agents get paid

• You found the perfect house – now what?

• Home buyers ask: “What happens after my offer is accepted?”

I’ve just added this cool new search to AtHomeInScottsdale.com where you can search for a neighborhood by a list of attributes that include:

• Local Culture
• Quality Schools
• Fun and Hip
• Family Friendly
• Pet Friendly
• Golfers Paradise
• Near Everyday Needs
• Near Shopping
• Rural
• Small Town
• Suburban
• Urban
• Most walk or bike
• Most ride public transportation
• Nearby synagogues
• Nearby churches
• Nearby mosques

To get started, click on “Neighborhoods” on the menu bar above.

You pick up to six of these attributes and then put them in your prioritized order.

The results are then displayed by zip code, first showing the top match of the top ten matches, which you can click through, using the “Next Match” button.

If you prefer to see your results by Neighborhood, click on the “Neighborhoods” button to the right of “Zip Codes”.

This is a pretty cool way to start or improve your search for homes in Scottsdale.  If you try it, let me know what you think. 

Other ways to search for homes in Scottsdale:

• Starting with a map 
• Starting with a basic search
• Search for new homes in Scottsdale

I’ve been working with a home buyer over the past month.  He’s a pretty easy going guy, looking to purchase his first home, with cash.

Should be easy. Right?

First, there was the challenge of finding properties. With the ever dwindling number of active listings, finding homes that matched his preferences was a lesson if pursuit. He would give me a list of 20 possibilities. I would go to schedule showings. Three would be still on the market.

We would visit active listings. Even wrote an offer or two. The challenge became writing an offer that would be “best and final”, that still was a good value compared to the “comps” (i.e. comparable sales in the last 3-6 months).

One day, this buyer turned to me and said, “I sure wish the media would tell the truth about the real estate market!” He felt that if more home owners knew there were ready, willing, and able buyers, ready to jump in and buy, that more people would be selling their homes. And, he would have more listings to look at.

I understand his pain.

This year, my first job when working with any new buyer client is to explain the market. I work with a lot of out-of-town buyers, many who fly in for a few days, expecting to buy one or more properties and fly out. This year most have flown home, shocked, and empty handed. Local buyers quickly come to grips with the challenge and are ready to pounce the minute a new property comes on the market. It’s really a different world than we read about and hear about in most of the news.

So, any of you home owners out there, thinking about selling, do give me a call. Buyers really want to see more listings. And, I do want to help!

More on the local real estate market:

• Listing & Selling Your Home: Connection and Communication are Key
• Home listing prices inching up in Scottsdale, especially in some luxury markets
• Scottsdale Condos are becoming a hot commodity

Here’s a quick overview of how I estimate a home’s market value for Scottsdale home sellers. The same process is used for buyers, too.

More info on the current Scottsdale real estate market: Scottsdale Real Estate Market Reports from AtHomeInScottsdale.com

The number of active listings (housing inventory) continues to drop significantly in Scottsdale.

On April 27, 2011, the number of active listings in Scottsdale was 2,623 and thirty days later, the number had dropped to 2,409. This equates to a reduction on 8.7% in that time period.  Taking a longer term look, Scottsdale inventory for single family homes has dropped 22% in the last year.

And while home prices are not on the rise yet, there are some subtle indications that the Scottsdale housing market has stabilized, where the recent monthly average matches the annual average.

Buyer activity in Scottsdale remains high, even as we go into the heat of the summer months.  I have record number of clients flying in to town to purchase and I’m hearing the same from my fellow real estate agents.  We don’t have stats to document buyer interest, yet this is truly the first step in the home buying process.  Lookers turned into buyers pretty quickly in a active market like we are experiencing now.