We certainly have had our share of dispiriting market news for Arizona lately.
Well, today the American Association of Realtors dropped the lastest bomb on the our local real estate market. Arizona was include in the three most heavily impacted real estate markets in the country.
Negatively impacted that is.
So, according to the Association, Arizona, California and New Mexico are experiencing the deepest market corrections.
If you have been trying to sell or buy a home, this is not new news for you.
Almost everyone who owned real estate in the Phoenix area experienced a 50% or so increase in the value of their home during 2005. Now it appears, we are having to give some of it back.
If you are down in the dumps because of curent prices, here is one way to look at it. Before the big surge in 2005, home prices were increasing a predictable 1 - 1 1/2 percent per month. Investor money changed all that last year.
But in evaluating what your home should really be worth, take its value at the beginning of 2005, factor in a 1% per month increase (12% for the year), add that to the initial value and that is close to what you home would be worth without last year's artifical run up.
Now, you can probably currently get more than that amount for your home but until prices fall below that recalculated amount, you are still ahead of the game.
So cheer up. No one has actually lost money in Phoenix area real estate over the past 18 months or so, nor are they likely to. Unless you house burned down or a car drove into the living room, you are still in a pretty good investment.
If you borrowed against all that new equity, do your darnest to get that equity loan paid down or paid off. You will sleep better at night.
If you want help establishing the current value of your home, give me a call or email me and I'll help you sort it out.
Richard
Monday, November 20, 2006
Tuesday, June 27, 2006
Current Market Outlook June 27th
There have been lots and lots of real estate headlines. If you read them all, I won't blame you for being confused.
Here are some basic facts about the Phoenix real estate market.
We currently have a surplus of inventory new homes. New home builders are offering large discounts to sell these homes. Best estimates of how long this oversupply will last is 6 months (it could be shorter).
This situation is unbalancing the housing market for resale homes as well. Buyers can afford to be more choosy.
Recent newspaper reports have created the impression that home prices may be declining. If buyers don't have to buy, they are waiting until prices stabilize rather than buy a house and risk loosing value in a declining market.
According to a recent Census Bureau review, Maricopa County has gained 313 people a day since 2000. This translates into more people needing places to live which will tend to keep an upward pressure on housing prices. This is a MUCH longer trend than recent ups and downs in the housing market and is the best guarantee that we will shortly return to a steady upward trend in home values that has been the hallmark of the Phoenix housing market for the past decade.
If you have questions about your particular housing situation, send me an email through www.freephoenixhomeinfo.com or give me a call at 602-370-1450.
Richard
Here are some basic facts about the Phoenix real estate market.
We currently have a surplus of inventory new homes. New home builders are offering large discounts to sell these homes. Best estimates of how long this oversupply will last is 6 months (it could be shorter).
This situation is unbalancing the housing market for resale homes as well. Buyers can afford to be more choosy.
Recent newspaper reports have created the impression that home prices may be declining. If buyers don't have to buy, they are waiting until prices stabilize rather than buy a house and risk loosing value in a declining market.
According to a recent Census Bureau review, Maricopa County has gained 313 people a day since 2000. This translates into more people needing places to live which will tend to keep an upward pressure on housing prices. This is a MUCH longer trend than recent ups and downs in the housing market and is the best guarantee that we will shortly return to a steady upward trend in home values that has been the hallmark of the Phoenix housing market for the past decade.
If you have questions about your particular housing situation, send me an email through www.freephoenixhomeinfo.com or give me a call at 602-370-1450.
Richard
Wednesday, June 07, 2006
New Home Builders Cutting Back
Several recent articles in the local newspaper have indicated that several major home builders are expecting a 25% or greater sales dip.
While that may be true, what is crucial here is which years are being compared.
2005 was a very different year. If we are to have a meaningful comparison, this year's housing figures must be looked at from a 2004 (or earlier) perspective.
So, when you see these scary headlines, read the article to find out which years are being compared. Don't let the headlines scare you.
Literally EVERYTHING in the housing industry is down from last year but we are close to the 2004 housing sales figures. That is a much more meaningful comparison.
Email me or call me if you have specific questions about your own situation.
The only people who are really hurting are those that bought new or resale homes last year (2005) between May and December.
Richard
While that may be true, what is crucial here is which years are being compared.
2005 was a very different year. If we are to have a meaningful comparison, this year's housing figures must be looked at from a 2004 (or earlier) perspective.
So, when you see these scary headlines, read the article to find out which years are being compared. Don't let the headlines scare you.
Literally EVERYTHING in the housing industry is down from last year but we are close to the 2004 housing sales figures. That is a much more meaningful comparison.
Email me or call me if you have specific questions about your own situation.
The only people who are really hurting are those that bought new or resale homes last year (2005) between May and December.
Richard
Sunday, June 04, 2006
Phoenix Market Update-June 2006
There are still plenty of (confusing) newspaper headlines about the housing market. From new home permits being down 20% (they are), to the Pinal County housing market cooling (it is), to the Northwest Valley home prices holding their own (they are), one could get confused by it all.
Our basic situation is an oversupply of new home inventory that is being offered with large buyer incentives and Realtor commissions topping out at 8%! A year ago, most builders were not paying any Realtor fees! Now I am seeing almost daily offers of Realtor fees of 6% - 8% with large buyer incentives to boot.
We (the housing market) need to work our way through this excess new home inventory before we get back to "normal" ( defined as the way the market was in 2004). How long will it take to do this? No one that I know of is predicting how long it will take. My own educated guess is no longer that 12 months.
New home permits are down, so builders are reigning themselves in until the excess new home inventory is down. The nice thing is that we still have far more people moving here than are leaving, so there is a continuing demand for housing, both resale and new.
The best indicator of returning to normal will be when I stop receiving the blizzard of emails offering 6-8% Realtor fees. I will definitely let you know when that happens.
Resale homes are selling. I sold one last week in 10 days. However, it was a very very nice home with a heated pool & spa that backed up to a common area. We priced it just below the market and it sold quickly. I have other listings that are languishing a bit.
THERE ARE BUYERS OUT THERE. They are just being choosy now because they can be.
Stay tuned for the next update.
If anyone has specific questions on their home, please email me through my web site at www.freephoenixhomeinfo.com. Or just give me a call at 602-370-1450.
Richard
Our basic situation is an oversupply of new home inventory that is being offered with large buyer incentives and Realtor commissions topping out at 8%! A year ago, most builders were not paying any Realtor fees! Now I am seeing almost daily offers of Realtor fees of 6% - 8% with large buyer incentives to boot.
We (the housing market) need to work our way through this excess new home inventory before we get back to "normal" ( defined as the way the market was in 2004). How long will it take to do this? No one that I know of is predicting how long it will take. My own educated guess is no longer that 12 months.
New home permits are down, so builders are reigning themselves in until the excess new home inventory is down. The nice thing is that we still have far more people moving here than are leaving, so there is a continuing demand for housing, both resale and new.
The best indicator of returning to normal will be when I stop receiving the blizzard of emails offering 6-8% Realtor fees. I will definitely let you know when that happens.
Resale homes are selling. I sold one last week in 10 days. However, it was a very very nice home with a heated pool & spa that backed up to a common area. We priced it just below the market and it sold quickly. I have other listings that are languishing a bit.
THERE ARE BUYERS OUT THERE. They are just being choosy now because they can be.
Stay tuned for the next update.
If anyone has specific questions on their home, please email me through my web site at www.freephoenixhomeinfo.com. Or just give me a call at 602-370-1450.
Richard
Thursday, May 04, 2006
Credit Scoring System May Change
In evident response to consumer complaints, the three main credit reporting agencies have decided to change the way your credit score is calculated and scored. In the past you could have different scores with all three companies (lenders would use the middle score). This system has been a thorn in the side of consumers for years and is largely hidden from view, which is its main problem.
No word yet on when this new system will be implemented (it may already be in place) but here are some details:
"The three major consumer credit reporting agencies recently unveiled a new way of calculating credit scores, introducing A through F letter grades designed to give consumers a better idea of where they stand.
With the new system, a single methodology will be used to create the scores for all three credit bureaus. Credit scores traditionally have been three- digit numbers that lenders used to evaluate the creditworthiness of borrowers. Current scores range from 300 to 850.
The new credit scores will be issued on a scale ranging from 501 to 990, with higher scores being better. To help consumers better understand the scores, they are also assigning them letter grades: A score between 901 and 990 is an A, 801 to 900 is a B, 701 to 800 is a C, 601 to 700 is a D, and 501 to 600 is an F."
Recent information indicates that this change is still a ways off. I'll pass along more information as it becomes available.
Richard
No word yet on when this new system will be implemented (it may already be in place) but here are some details:
"The three major consumer credit reporting agencies recently unveiled a new way of calculating credit scores, introducing A through F letter grades designed to give consumers a better idea of where they stand.
With the new system, a single methodology will be used to create the scores for all three credit bureaus. Credit scores traditionally have been three- digit numbers that lenders used to evaluate the creditworthiness of borrowers. Current scores range from 300 to 850.
The new credit scores will be issued on a scale ranging from 501 to 990, with higher scores being better. To help consumers better understand the scores, they are also assigning them letter grades: A score between 901 and 990 is an A, 801 to 900 is a B, 701 to 800 is a C, 601 to 700 is a D, and 501 to 600 is an F."
Recent information indicates that this change is still a ways off. I'll pass along more information as it becomes available.
Richard
Monday, May 01, 2006
Phoenix Market Update 5-1-2006
We still have plenty of real estate headlines - both good and bad sounding.
My recent personal favorite was "Phoenix loses home-building title but performs well". So, we lost our top billing nationally but overall things are back to what they were before last year's gold rush.
There are buyers out there and mortgage rates, while rising, are not yet too high. Inventory of resale homes on the market is up and is being described as "higher than ever". While true, that fact itself does not portend disaster.
Considering the number of people moving to the area each year and the number of new homes built over a 12 month period, there should be more homes on the market each year. Something would be wrong if there weren't more homes available.
So, overall, we are in about the same situation we were two years ago with a small but steady increase in the average home's value. Don't buy into comparisons of the market to a year ago; 2005 was a special case.
By the way, I still have California investors making offers on the listings I have. They are, I think, here to stay.
My recent personal favorite was "Phoenix loses home-building title but performs well". So, we lost our top billing nationally but overall things are back to what they were before last year's gold rush.
There are buyers out there and mortgage rates, while rising, are not yet too high. Inventory of resale homes on the market is up and is being described as "higher than ever". While true, that fact itself does not portend disaster.
Considering the number of people moving to the area each year and the number of new homes built over a 12 month period, there should be more homes on the market each year. Something would be wrong if there weren't more homes available.
So, overall, we are in about the same situation we were two years ago with a small but steady increase in the average home's value. Don't buy into comparisons of the market to a year ago; 2005 was a special case.
By the way, I still have California investors making offers on the listings I have. They are, I think, here to stay.
Friday, March 31, 2006
Phoenix Market Update - March 2006
If the number of headlines regarding real estate is any indication, it has been an active several months.
But just reading the various headlines could leave one awfully confused. From "Phoenix a buyer's market" to "Don't fret drop in new-home permits" to reports of the average home price still going up, headlines tell a confusing tale.
Here is what is happening in the Phoenix home real estate market from where I sit.
Yes, there are more homes on the market than in the last 12 months. Yes, new home builders are offering an increasing number of incentives to lure buyers for their existing homes (inventory homes).
But, the average price of a resale home is still increasing, and while days on the market to sell a home are up over last year, they still are reasonable (less than 60 days).
Overall, we have slowed down but it is still fundamentally a robust real estate market. Why? primarily because we have 100,000 people moving to Arizona each year, the bulk of whom come to the Valley of the Sun.
The only really valid comparsion for this year's sales figures is from TWO years ago. Last year was an exception. That is behind us now. But every indication I can see is that we have just returned to the way things were in 2004 and earlier - a slow steady increase in home values.
Why are there so many "Price Reduced" signs on homes you ask? More than a few sellers are stuck in last year's market. They begin a listing with an unreal price and, when they get no traffic and no offers, they bite the bullet and reduce the price.
This too shall pass.
Call me for additional information or for a market analysis for your home.
Richard
602-370-1450 cell
But just reading the various headlines could leave one awfully confused. From "Phoenix a buyer's market" to "Don't fret drop in new-home permits" to reports of the average home price still going up, headlines tell a confusing tale.
Here is what is happening in the Phoenix home real estate market from where I sit.
Yes, there are more homes on the market than in the last 12 months. Yes, new home builders are offering an increasing number of incentives to lure buyers for their existing homes (inventory homes).
But, the average price of a resale home is still increasing, and while days on the market to sell a home are up over last year, they still are reasonable (less than 60 days).
Overall, we have slowed down but it is still fundamentally a robust real estate market. Why? primarily because we have 100,000 people moving to Arizona each year, the bulk of whom come to the Valley of the Sun.
The only really valid comparsion for this year's sales figures is from TWO years ago. Last year was an exception. That is behind us now. But every indication I can see is that we have just returned to the way things were in 2004 and earlier - a slow steady increase in home values.
Why are there so many "Price Reduced" signs on homes you ask? More than a few sellers are stuck in last year's market. They begin a listing with an unreal price and, when they get no traffic and no offers, they bite the bullet and reduce the price.
This too shall pass.
Call me for additional information or for a market analysis for your home.
Richard
602-370-1450 cell
Tuesday, February 14, 2006
NAR Sees Cooling Trend
Here is an exerpt from a fourth quarter 2005 report from a National Assocation of Realtors economist focused on the Phoenix area.
While it is from December 2005 figures, it illustrates rather well what happened ( and is still happening) to the Phoenix market since we left the "boom days" of earlier in 2005.
Richard
Trends
But What Does a Slowing Market Mean?
Ken Fears, Economist
Newspaper pundits have been harkening a bubble in the housing market for years. For the first time the markets are actually starting to show signs of slowing. Sharp increases in prices in 2005 and a fifty basis point increase in the 30-year fixed rate mortgage in the fourth quarter of 2005 eroded affordability conditions leading to this cooling.
But the data indicates that it is just that; the market is cooling based on fundamental
factors. Days on the market have increased in roughly half of the metropolitan areas that NAR® Research monitors.
With affordability declining demand will shrink and homes will sit on the market longer. Compounding the problem, the stock of homes for sale will begin to build up. Consequently downward price pressure will develop forcing sellers to make concessions, causing a decline in the ratio of sale price to list price, in order to meet buyer’s ability to finance their purchase.
However, are we there yet? There are several reasons that may explain an increase in the concession. First, Realtors® may be listing prices high in an attempt to boost up the sale price by listing well above comparable sales prices and accepting a slightly lower selling price that is still above the current comparables.
Secondly, the market may be changing and Realtors® who are used to a certain quarterly increase can no longer use this guide for pricing. For example, a year ago when pricing a home a Realtor® may have taken a recent selling price and asked 3% more assuming prices where continuing to rise, but with demand flattening, only the recent selling price is realized, creating a 3% concession from the inaccurate list price.
Finally, if the market is truly oversaturated and has been stagnant for a protracted period, the only way to move homes may be to accept prices below recent realized sale prices…this last scenario is one in which there is a true concession.
While it is from December 2005 figures, it illustrates rather well what happened ( and is still happening) to the Phoenix market since we left the "boom days" of earlier in 2005.
Richard
Trends
But What Does a Slowing Market Mean?
Ken Fears, Economist
Newspaper pundits have been harkening a bubble in the housing market for years. For the first time the markets are actually starting to show signs of slowing. Sharp increases in prices in 2005 and a fifty basis point increase in the 30-year fixed rate mortgage in the fourth quarter of 2005 eroded affordability conditions leading to this cooling.
But the data indicates that it is just that; the market is cooling based on fundamental
factors. Days on the market have increased in roughly half of the metropolitan areas that NAR® Research monitors.
With affordability declining demand will shrink and homes will sit on the market longer. Compounding the problem, the stock of homes for sale will begin to build up. Consequently downward price pressure will develop forcing sellers to make concessions, causing a decline in the ratio of sale price to list price, in order to meet buyer’s ability to finance their purchase.
However, are we there yet? There are several reasons that may explain an increase in the concession. First, Realtors® may be listing prices high in an attempt to boost up the sale price by listing well above comparable sales prices and accepting a slightly lower selling price that is still above the current comparables.
Secondly, the market may be changing and Realtors® who are used to a certain quarterly increase can no longer use this guide for pricing. For example, a year ago when pricing a home a Realtor® may have taken a recent selling price and asked 3% more assuming prices where continuing to rise, but with demand flattening, only the recent selling price is realized, creating a 3% concession from the inaccurate list price.
Finally, if the market is truly oversaturated and has been stagnant for a protracted period, the only way to move homes may be to accept prices below recent realized sale prices…this last scenario is one in which there is a true concession.
Wednesday, February 01, 2006
Phoenix Housing Market Update for January
In January we were once again treated to a variety of headlines in the local press concerning our Phoenix housing market.
Chief among these was from a week ago where it was reported that the new-home market was staying on a "fast track". Noted local housing analyist, RL Brown, said that population growth, increasing number of jobs, relative affordability, moderate mortgage interest rates, available land, warm weather and retirement buyers all were positive influences that fueled the local housing market.
About the same time as Mr. Brown's predictions was an article indicating that, statewide, Arizona added 97,500 positions in 2005, the largest boost in the past 10 years. This places Arizona among the top states in the country for job growth.
Did you notice the article on the insurance company that is adding 1100 jobs at its headquarters here?
About the only thing that could seriously threaten the housing market here is a strong rise in interest rates. The Fed just raised their interest rate another 1/4 point yesterday but that is predicted to be the last increase for a while now that Alan Greenspan is stepping down as head of the Federal Reserve.
So far, so good for 2006. I'll keep you posted.
Richard
Chief among these was from a week ago where it was reported that the new-home market was staying on a "fast track". Noted local housing analyist, RL Brown, said that population growth, increasing number of jobs, relative affordability, moderate mortgage interest rates, available land, warm weather and retirement buyers all were positive influences that fueled the local housing market.
About the same time as Mr. Brown's predictions was an article indicating that, statewide, Arizona added 97,500 positions in 2005, the largest boost in the past 10 years. This places Arizona among the top states in the country for job growth.
Did you notice the article on the insurance company that is adding 1100 jobs at its headquarters here?
About the only thing that could seriously threaten the housing market here is a strong rise in interest rates. The Fed just raised their interest rate another 1/4 point yesterday but that is predicted to be the last increase for a while now that Alan Greenspan is stepping down as head of the Federal Reserve.
So far, so good for 2006. I'll keep you posted.
Richard
Ameriquest Mtg. customers due refund
According to a newspaper article last week, Arizona customers of Ameriquest Mortgage who took out loans with the company from 1999 to 2005 may be eligible for compensation to receive more than $600 each.
This results from a consumer protection legal action against Ameriquest alleging that the company engaged in several deceptive loan practices during the period in question that cost their customers additional money.
They are using company records to contact consumers who might be eligible to participate in the settlement. If you think you might be entitled to part of the settlement or you have recently done business with Ameriquest , you can contact the Arizona Attorney General's Office in Phoenix to check. Ask about the Ameriquest settlement.
Ameriquest is instituting new lending policies as part of the settlement.
Richard
This results from a consumer protection legal action against Ameriquest alleging that the company engaged in several deceptive loan practices during the period in question that cost their customers additional money.
They are using company records to contact consumers who might be eligible to participate in the settlement. If you think you might be entitled to part of the settlement or you have recently done business with Ameriquest , you can contact the Arizona Attorney General's Office in Phoenix to check. Ask about the Ameriquest settlement.
Ameriquest is instituting new lending policies as part of the settlement.
Richard
Monday, January 16, 2006
Jan. 2006 Phoenix Real Estate Update
If you have been reading the newspapers recently, you have been treated to a variety of headlines and articles giving contrary messages. "Homeowners cash in, hope market cools off" and "Home prices, sales hit highs" were two of the more recent stories.
It turns out that the first article about homeowners cashing in was about one couple who sold their home at what they thought was the market maximum and were living in an apartment waiting for the next opportunity.
The second article was better and was from the Arizona Real Estate Center at ASU which tracks sales numbers and trends in the Phoenix residential real estate market. As a lot of us know by now, the real estate market is tapering off. There are more homes on the market and they are taking longer to sell than 6 months ago. Price reductions are becoming common as sellers realize that the bull market in homes is over.
Predictions from knowledgable experts still indicate that our housing prices will increase from 1% to 1.5 % per month for 2006. Not the blistering pace of 2005 but still nothing to be worried about.
The main factor in housing still appears to be interest rates. That determines how many families will be able to afford our higher priced homes. The average price for a valley home is about $260,000 presently with the figure bouncing around some from month to month.
So, don't panic despite the headlines. We had 200,000 people move to Arizona in 2005 according to state records. Sure we lost some too, but with that many people coming in, the demand for housing should be healthy.
You can always contact me directly for a detailed analysis of your home's value and trends in your neighborhood.
Richard
It turns out that the first article about homeowners cashing in was about one couple who sold their home at what they thought was the market maximum and were living in an apartment waiting for the next opportunity.
The second article was better and was from the Arizona Real Estate Center at ASU which tracks sales numbers and trends in the Phoenix residential real estate market. As a lot of us know by now, the real estate market is tapering off. There are more homes on the market and they are taking longer to sell than 6 months ago. Price reductions are becoming common as sellers realize that the bull market in homes is over.
Predictions from knowledgable experts still indicate that our housing prices will increase from 1% to 1.5 % per month for 2006. Not the blistering pace of 2005 but still nothing to be worried about.
The main factor in housing still appears to be interest rates. That determines how many families will be able to afford our higher priced homes. The average price for a valley home is about $260,000 presently with the figure bouncing around some from month to month.
So, don't panic despite the headlines. We had 200,000 people move to Arizona in 2005 according to state records. Sure we lost some too, but with that many people coming in, the demand for housing should be healthy.
You can always contact me directly for a detailed analysis of your home's value and trends in your neighborhood.
Richard
"Gas Pack" Recall Notice
I received an Alert recently from a home inspection company called "Pillar to post". It concerned a Gas Pack recall notice from the U.S. Consumer Product Safety Commission.
A Gas Pack is a roof mounted heating unit added to air conditioning units (not heat pumps) that allows the unit to produce heat when needed. These installations are fairly common in Arizona. Certain units are being recalled due to a possible overheating problem that may result in a fire.
The manufacturer is International Comfort Products, LLC of Lewisburg, Tenn.
According to the Alert, the following brand names are involved. Airqust, Arcoaire, Comfortmaker, Heil, Keeprite, Kenmore, ICP Commercial and Tempstar. The recall includes configuratoins of "A" chassis units with a 3-ton or 5-ton cooling capacity manufactured between the 42st week of 2000 and the 26th week of 2003. These units were sold between October 2000 and September 2005
You can contact your A/C company or the manufacturer of your unit to see if your unit is included in the recall.
For more information, contract ICP at (800) 649-4706 anytime or visit the ICP website at www.icpusa.com
Richard
A Gas Pack is a roof mounted heating unit added to air conditioning units (not heat pumps) that allows the unit to produce heat when needed. These installations are fairly common in Arizona. Certain units are being recalled due to a possible overheating problem that may result in a fire.
The manufacturer is International Comfort Products, LLC of Lewisburg, Tenn.
According to the Alert, the following brand names are involved. Airqust, Arcoaire, Comfortmaker, Heil, Keeprite, Kenmore, ICP Commercial and Tempstar. The recall includes configuratoins of "A" chassis units with a 3-ton or 5-ton cooling capacity manufactured between the 42st week of 2000 and the 26th week of 2003. These units were sold between October 2000 and September 2005
You can contact your A/C company or the manufacturer of your unit to see if your unit is included in the recall.
For more information, contract ICP at (800) 649-4706 anytime or visit the ICP website at www.icpusa.com
Richard
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