It’s Fall!

Finally! It’s Fall!

The summer heat is behind us and we are being reminded of why we love Arizona!

CLICK HERE to access the flyer below for a list of Fun Fall Events around the state!


This is also the beginning of the Pre-Holiday home buying season!

If you, or someone you know, are considering buying or selling a home, I would be honored of you would consider allowing me to represent you.

Thank You!

Posted on October 1, 2019 at 5:49 pm
Kevin Jacobs | Category: Fun N Games | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

State of the Market

My fellow Phoenicians, the State of the Market, is strong!

If you listen to the national news, and look at the stock market bounces in the last week or so you’d think that we are plummeting into an abyss and doomed to repeat the past economic bubble burst. I have a different view of things.

Personally I believe, being that we are in a heated election season…again…the “panic” is more for votes than a reality. I also tend to believe that markets are manipulated in sync with the politics by those that have the most control in order to drop stock values, only to gobble them up and grow them again, thus making more money.

But enough of that…let’s talk about how this effects real estate.

People tend to hear the news, look at the ebbs and flows of the stock market, and make their decisions on buying or selling a home based on the media interpretations. What I feel they should do is buy and sell based on your community, and your needs at that time.

So…that said, Phoenix is doing very well. Pricing is fair, homes are selling. Let’s take a look.

 

Starting with Monthly Sales, according to the ARMLS in July the Phoenix market was very active. Historically speaking, summertime sales slow a touch. Not for the heat, but for the fact that people tend to take vacations, and just aren’t thinking of buying a home. The exception being families that relocated to different areas and don’t want to move their kids during a school year.

This past July showed a different trend, sales flattened out for the most part rather than fall. Buyers were more active than they typically are this time of year. Why is that? 

 

Well, it wasn’t due to added inventory.

In this market we have always been accustom to almost twice the amount of available listings at any given time. The inventory levels today have gone from “Oh my…it’s a sellers market…prices are going to explode and we are going to have another bubble”

To

“This is the new normal.”

We can expect the amount of homes available for sale to stay around the levels you see below. This tends to be the byproduct of the low prices and low interest rates we experienced as we dug out of the downturn that started in  2004-05.

Many buyers on the way back up were able to get their “Forever home” at a great price and have no need to sell. This results in lower availability, and our “New Normal”.

What feels odd to many is the old adage of “Low inventory creates higher demand, thus uncontrollable growing prices.”  This market has tossed that adage out the window, and buyers understanding of what happened in 2004-2005, chasing pricing up, has prevented us from repeating the woes of the past and simply accepted that this inventory is, indeed, normal.

 

Below shows how the buyer is controlling the market, even at these inventory levels, rather than the seller controlling it as if it was a supply and demand situation.

Look at the “New List Price” chart from prior to March 2019, and then what has happened from March to July. Prior to March, especially in January, asking prices were climbing. This was the result of sellers, and sellers agents, living in the world of “Supply and Demand” and reaching for higher and higher prices based on what they perceived as low inventory. The old way of thinking.

Compare that to the actual sales prices in the next chart. Prices that buyers were willing to pay. Actual sale prices didn’t follow the asking prices up. They seemingly stayed somewhat flat until the asking prices began to come back to those sales levels. When they got close enough to be comfortable, and normal, buyers began to buy, compete, and eventually you see the sale prices begin to increase.

There is no such thing as a “Sellers Market” anymore.  There is “Fair Market”.

The fair market falls in line with healthy appreciation as you will see next.

This chart is probably the most important one I am showing you.

The shaded area is a healthy 2-3% annual appreciation of home values. That is now, and has always been, the goal for growth in your investment.

The squiggly line is a chart of average sale price per square foot.

A couple of points to look at:

  • In 2004 we see that the sale prices began to out pace the actual value of homes in Phoenix. That created the panicked feeling in buyers of “If I don’t buy NOW I’ll be priced out of the market and never own a home!” Couple that with lenders that were more than happy to loan you as much money as you could want and more, and buyers pushed sale prices way too high. Miles above the appreciation values.  That, is your bubble.
  • In 2006-2007 that bubble broke. Loans came due, people couldn’t pay, foreclosures and bankruptcy were taking over and the real estate market collapsed taking the economy down with it.
  • Jump ahead to 2019. See where in roughly January (recall the pricing above)? We spiked! Sellers agents fell into the ‘Supply and Demand” mindset and pushed asking prices, and yes some sale prices higher.  Again, right out of the appreciation levels (or actual value). The difference here…as you saw above, buyers didn’t come with them.

Where are we today?

  • As you can see, we are currently holding at the very peak of the appreciation levels. Homes are selling for top dollar (Good for Sellers).
  • Homes are not selling for more than they are worth. (Good for buyers)
  • As long as we hold steady at these levels, appreciation will grow a touch beyond the sale price levels, and the market will eventually follow it up…we just can’t allow the sale prices to out pace the appreciation…and buyers seem to be savvy enough to keep that from happening.

One final piece of good news, “Home Affordability”. This is a measure of household income. Regardless of what we hear in the media, the numbers show that wages are up, income is higher, consumers are feeling good, and potential buyers can afford homes.

If we can keep homes priced within the appreciation range, and Phoenicians keep working hard, the State of the Market will continue to stay strong!

Bottom Line:

Sellers. Understand that there is no such thing as “Supply and Demand” driven pricing in our real estate market anymore. It’s about fairness. If you sell at the high end of your appreciation value, you did well. Let’s visit your home and see what we need to do to get those buyers interested.

Buyers. Keep up the good work. You are in control of this market. Keep playing fair, understand the value of a well-finished home, and make strong offers. Let me help you navigate the neighborhoods you are most interested in and develop your home plan to get into your new home.

I have an awesome team of professionals in our corner to ensure a smooth transaction.

If you’re not ready yet, we can help you set a plan to get there with free advice and guidance.

I would be honored to earn your trust, your business, and your referrals. Give me a call, let’s get started today! (602) 818-6065 or Kevin@GiantAgent.com

 

Posted on August 20, 2019 at 8:11 pm
Kevin Jacobs | Category: Affordability, Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Market Looks Steady and Competitive

The Arizona Regional Multiple Listing Service (ARMLS) has released their latest market statistics, and the market looks steady an competitive. Let’s dive in to the data:

Starting with the overall monthly sales chart, while we do see a decline in total sales in the month of June, that is expected, and quite normal annually as we head into the Arizona summer. The total amount of sales was higher year over year, that’s good to see.

 

 

As you will see below, we are still in what is considered a “Low Inventory” situation. As homes sell, there are not enough new listings coming on the market, so total available homes are still dipping.

This is good news if you have been considering selling. The buyers are out there, but their choices are limited.

The analysts at ARMLS are beginning to view this as “The new normal”, which will keep the market competitive, and keep pricing steady.

One reason for the “New Normal” could be that many people purchased their homes when the market was at its lowest. They were able to get, in many cases perhaps, more home than they needed at the time and grow into it. For this reason, they don’t have a need to sell to upgrade so they are staying put.

Another contributing thought would be that new home builders have in recent years not been building entry level homes. The entry level buyer from 5-7 years ago, in what would have been smaller new homes, would now be  looking to expand and move to something larger. Since those smaller homes simply do not exist, the inventory is not there, and first time home buyers have few choices for a home under $200,000.

But all is not lost! I’ll explain in the “Bottom Line”.

 

Before we get to the final thoughts, let’s see what pricing has been doing recently. If you recall, I was beating the “Bring your asking prices down” drum for quite a while (see previous blogs).

In mid-January early February, that happened.  Sales were slowing, pricing was too high. Then, as you can see below, the asking prices started coming down. It wasn’t a huge drop, simply an adjustment looking for where the buyers were. When these points came closer together, sales grew drastically.

As you can see in the chart below, the asking prices have stayed steady, and the sale prices have actually gone up as buyers are more willing to compete for their purchase…within a reasonable margin.

This shows a healthy, steady market.

 

 

Bottom Line:

Sellers. If you want to sell…DO IT NOW! With interest rates as low as they have ever been (3.84% as of today) buyers are out and trying to make their purchase in order to lock that low rate for the next 30 years.

All you need to do is, get your home ready to show (make it stand out), price accurately for your neighborhood, and watch the offers roll in.

I happen to be pretty good at assisting with all the above, call me for a free market analysis and tips on how you can make the most money with your sale.

 

Buyers: Did you read above? 3.84%!! Wow! It doesn’t get better than that, and it cannot last much longer. If you have been even thinking about buying a home, having that LOW interest rate for 30 years equals THOUSANDS of dollars in savings!

If you have ever thought that the reason you haven’t purchased is because you wanted to be able to afford more home, like a pool, 3rd or 4th garage, extra bedroom, upgraded kitchen, etc. Now you can.

A 1% change in interest rate can equal roughly $20,000 – $30,000 in buying power while keeping your payments the same. So, if you wait for rates to grow to say 4.8%, you loose your pool (or come out of pocket with more cash up front, or in monthly payment.)

This is the time to buy, call me, I would love to earn your business.

I have an awesome team of professionals in our corner to ensure a smooth transaction.

If you’re not ready yet, we can help you set a plan to get there with free advice and guidance.

I would be honored to earn your trust, your business, and your referrals. Give me a call, let’s get started today! (602) 818-6065 or Kevin@GiantAgent.com

Posted on July 17, 2019 at 7:41 pm
Kevin Jacobs | Category: Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Room for Tech Companies In Real Estate

I am going to open here by saying, there is room for the tech companies in real estate, we just don’t have room for their, we’ll call it, “Misleading Information”.

They are good if you are in a situation where you simply must sell, and losing money in the end is a non-factor. For example, maybe you inherited a home from a relative that passed and you don’t have the time, or don’t live locally to deal with it. Fine, quick sell it and move on.

Maybe you got a job out of state and have to get out fast, OK…sell it to them and move on.

Just understand, that they are in the business to make money, and that money comes from YOUR equity.

Recently, I saw a sign for Opendoor go up in my neighborhood. Being that this is my business, and that sign is on my neighbors house, I was very curious about the price they let the home go for. As it turns out they sold for about $5,000 below a recent comp on the same street (loss of money to the seller), and Opendoor is now asking $20,000 more than the same comp. Assuming they get their price, that’s a $25,000 LOSS for the seller.

But that’s not what caught my eye when on the Opendoor website.

Below is a chart that they put together comparing using them to buy a home with a “Discount Brokerage”  where in many cases you do all the work for viewing, negotiations, contracts, inspection, etc., and they simply file the documents.

The 3rd column is how they compare themselves to using a traditional agent, like me. The notes in red are my rebuttal, if you will, to their mis-information.

Here’s a summary:

1) They say that they “Give you a refund on a home purchase” and traditional agents do not.    

  • The Truth: Most lenders will not approve of a “Refund” to a buyer. They will, in many cases, allow a contribution to closing costs, likely NOT $3000.
  • Personally, I have contributed to closing costs many times where needed to ensure my client can get the home they want. For them to leave that blank, as if your agent will not contribute, is disingenuous to say the least.

2) They offer “Online support”.

  • Why is that better than “In-Person Support”? Need help? Call your agent…we are here to help, and happy to do so,

3) Free Property Reports!

  • I have never heard of an agent that would charge to give you information about a property. To pretend that we do, again, disingenuous.

4) Free On Demand Tours.

  • When you schedule showings with your agent, you not only gain access to the home to view it, you have an extra pair of eyes that have experience in looking for signs of issues that may be present, information to pass on to an inspector to further investigate. You have area information, neighborhood comps, offer price suggestions, the ability to negotiate with the seller, and someone who knows the contracts to review, advise, and protect you in your transaction.

5) They “Manage Offers Online”.

  • We manage your offer In-Person.

6) Top Rated Buying Agent.

  • They have the same Arizona State Real Estate License that we do. If you want to know how good your agent is, ask to speak to their former clients. Or, better yet, get to know your agent on a more personal level, have them buy you lunch!. That will determine how they will care for you. I guarantee it will be more personable than a computer.

7) Option to work Directly.

  • Why in the world is it an “Option” for you to work directly with the individuals that are responsible to protect you in your biggest life investment? You are spending Hundreds of thousands of dollars! Direct attention should be required, and expected.

8) Finally, did you see the disclaimer?

  • I have never used, nor will I ever use a disclaimer. My duties to you are clearly spelled out in the first disclosure I give you. They are Fiduciary. They are governed by Ethical Rules. No disclaimers, no surprises.

Bottom Line:

Whether you are buying or selling a home, you deserve the one on one, honest, ethical support of a traditional real estate agent.

Don’t be fooled when the tech companies try to make the word “commission” dirty. In the end, many sellers pay MORE in a lower sale price plus “Fees” than they would in commission. I can demonstrate that to you if you are interested in learning more.

You simply cannot beat the one on one, personal attention you get from a professional real estate agent. Technology is not always to your benefit.

I have an awesome team of professionals in our corner to ensure a smooth transaction.

If you’re not ready yet, we can help you set a plan to get there with free advice and guidance.

I would be honored to earn your trust, your business, and your referrals. Give me a call, let’s get started today! (602) 818-6065 or Kevin@GiantAgent.com

Posted on July 15, 2019 at 7:30 pm
Kevin Jacobs | Category: Market Information, Real Estate Industry News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Welcome to the party!

Welcome to the party! That’s my message for the agents that spent the last 6-8 months giving bad advice on pricing. Welcome to where the buyers are.

If you read my blogs, or follow my social media I have been hammering home that buyers are not interested in the “Sellers Market” that most agents felt we were in. As the low inventory created a mindset of “You can ask a higher price”, the actual contracts have been showing that simply thinking your home was worth more was not a great sales technique.

Here’s a refresher from March 2019 where I pointed out that asking prices were slowly coming back to where the buyers are. Make note of the bottom right where sales prices were going up, yet contracts were going down. 

At this point in March, these numbers had already shown great signs of improvement, even though they were still moving away from each other telling us that, for the most part, buyers weren’t interested in rising prices.

I pointed out, in February and March, a trend that was showing asking prices coming down (just a little), and as a result more homes were going under contract.

April seems to have found the sweet spot where sellers are being realistic with their pricing, and buyers are willing to jump in and make offers close to, or at, asking price.

In short, homes are selling! Here…take a look…

Notice that the Average Sale Price has settled, and as a result contracts are showing improvement. The asking prices have backed up to a palatable level. Not to say that there is no growth, or that the market is crashing. To the contrary, this is showing steady growth and active buyers. The market is strong!

My point is that over priced homes don’t sell. Well priced homes do…and fast!

Bottom Line:

Sellers – Be sure that you don’t let false promises lure you into a listing contract. Look very closely at the comparable sales in your neighborhood (within 1 mile and 6 months). Try to separate the emotion from the reality and price accordingly.

HIRE A REALTOR®!!!  

Don’t get suckered in to the “Hassle Free” “We buy your house TODAY for top dollar, and you can pick the day you move”…if those guys were really giving you “Market Price”, THEY WOULD GO OUT OF BUSINESS! HAHA. They are in it for profit…that profit should be YOURS! I can show you…call me for a free consultation.

 

Buyers – Pricing is fair and homes are selling fast! If you are thinking of buying a home, now is the perfect time considering that interest rates are still very low. Give me a call, let me go to work for you. A buyers agent is free to you…yeah…you don’t pay me to represent you, so you have nothing to lose! Let’s get started!

I have an awesome team of professionals in our corner to ensure a smooth transaction.

If you’re not ready yet, we can help you set a plan to get there with free advice and guidance.

I would be honored to earn your trust, your business, and your referrals. Give me a call, let’s get started today! (602) 818-6065 or Kevin@GiantAgent.com

Posted on May 7, 2019 at 10:07 pm
Kevin Jacobs | Category: Affordability, Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Sales are slowing in Phoenix

There has been a lot of chatter lately about the real estate market taking a turn and many are wondering if another crash is coming. While we don’t have a crystal ball to look into the future, one thing we do know is that sales are slowing in Phoenix.

There are many theories about why, and even more about what it mean. I’ll address my thoughts at the end of this blog, but for now some market numbers that you should find interesting.

Let’s start with the first graph I developed for you after researching information from the ARMLS. The following is a derived from a search of the Phoenix Metro area (roughly Anthem to Maricopa, Wickenburg to San Tan Valley). The criteria was for single family homes from 1500-3000 square feet with 3+ bedrooms and 2+ bathrooms that closed in the months of April through July. I thought that would be a good sampling.

As you see in this initial graph of sale prices year over year, on the surface this looks really good. We seem to be up to somewhat normal prices for a healthy market, and steadily growing month to month.

 

In the next graph, I split the sales into “half months” to see what the trends were last year vs. this year in relation to sales price fluctuation. As you can see, the prices tend to stay strong reflecting growth and stability. This shows that buyers have been willing to pay what the market has demanded, even with the rise in pricing. Again, this seems to be healthy for the market.

 

In the graph below we find the issue that some are wary of with the current market. The reaction has been mixed as to what this means. When looking at “Units Sold” we have seen a sharp decline in the month of July. While the summer heat does slow sales a bit, this July seems to be an extreme shift.

 

Take a look at the July number year over year for total units sold.

In 2017 the total number of homes sold in the month of July was 3,669. That was 401 fewer homes than in June 2017.

This year (as of about 4p on July 31st) we show 1,816 homes sold in the month. That 2,084 fewer sales than the month of June 2018. So, why did the sales slow so drastically this year?

 

As I said, there are many theories. Some feel as if it is the heat that is preventing buyers from diving in to the market. Others feel that the political climate effects peoples willingness to make a major purchase. There is a school of thought that many folks bought a home in the downturn at a great price, they have an unbeatable interest rate and no desire to move. Still more are running around screaming that the “sky is falling”! I personally don’t buy into that theory because the nations economy is strong. That is something that could not have been said in the crash of ’08

Personally, I feel that pricing has reached a peak. After all, your home is only worth what buyers are willing to pay for it and they don’t seem to want to pay the current asking prices. (Note: This is just an opinion…like I said, I don’t have a crystal ball.)

Whatever the case I HIGHLY recommend that if you are considering selling your home, NOW IS THE TIME! The last thing you want to find yourself doing is chasing a down turn in the market. Nothing will frustrate you more as a seller than reducing your price repeatedly because values are declining right under your feet.

In addition, IF this is a market downturn and you sell as it turns, you should get a decent deal on your next home purchase. Timing is everything!

Curious what your home is worth? Call me for a FREE comparative market analysis (CMA).

Please also think of me when you hear anyone talking about buying or selling a home. I am NEVER too busy for you and your referrals. (602) 818-6065.

 

Posted on August 1, 2018 at 4:29 am
Kevin Jacobs | Category: Affordability, Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Why rent? You CAN buy!

Recently, I saw an article from the Urban Institute about a new metric they created called HARI (Housing Affordability for Renters Index). The index measures the percentage of renters who can actually afford to own a home.

To simplify, they examine the price range of homes available on the market, what the cost of ownership would be, and compare it to what renters are currently paying monthly. The results paint a picture that renters should explore.  

I was surprised to see that 31% of renters may not be aware that they can own a home in the Phoenix Metro area. 

Yes! You read that right. Almost 1/3 of renters may not realize that they have the option to own a home. It seems that the healthy economy paired with loosening lending restrictions has created new opportunities for people that they aren’t aware of.

Are you one of those renters? Do you know someone that may be? 

Reach out to me today. Along with my lending partners we can review your current situation and lay out a roadmap to home ownership. Let’s flip that monthly rent payment around and get it to work for YOU, and not some landlord.

 

(CLICK HERE to read the article from the Urban Institute.)

 

Posted on April 3, 2018 at 5:06 pm
Kevin Jacobs | Category: Affordability, First Time Buyer, Market Information, Mortgage Rates | Tagged , , , , , , , , , , , , , , , ,