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 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

“PurpleOpenZillPad”

Remember the old song “One eyed, one horned, flying Purple People Eater”? Well, that monster has been replaced. Today it’s a “PurpleOpenZillPad” Equity Eater! It’s gobbling up homeowners equity all around you!

Allow me to explain, and help you avoid the beast!

You see, there is this really convenient, “No Hassle”, “No Showings”, way to sell your home with the onslaught of Real Estate Tech Companies pounding their message into your head on TV, Radio, Billboards, etc. etc. They promise a “Fair market value” and a “No hassle purchase”, and ask you “Why pay commissions to a real estate agent?”

  • Let’s start with the first promise, fair market value. Common sense tells you that cannot be factual because if they paid you fair market value they, in turn, would not make any money. They have to resell the home in order to profit. That means they pay you BELOW FAIR MARKET VALUE, then turn and sell the home AT MARKET VALUE. Your equity, is their profit.

 

  • They tout that “Showing your home is a hassle…we buy it and you don’t even have to show the home”.  Translation, “We [the tech buyers] won’t have to compete with other buyers that may be willing to pay you more for your home.” Why would you not want competitive offers that maximize your “Cash in hand” potential? 

 

  • Then they try to tell you that they don’t charge that nasty “6% Commission” that your agent charges. True…they don’t charge a commission. They charge “Fees”. “Holding fee”, “Repair fees”, “Processing fees”, “Title fees”, etc. that typically equal 7.5% or MORE…and that’s AFTER they buy your home for thousands, even tens of thousands LESS than actual value. (NOTE: That 6% commission charged by a Real Estate agent can, in many cases, be negotiated on.)

Below are randomly selected tax records of sale that illustrate to you just how much money these companies are taking from you (the seller that doesn’t want to be hassled).

You will see the sale price from when the original owner sold to the “PurpleOpenZillPad Monster”, then what the monster re-sold the home for weeks later.

In the 6 examples above, the total amount of money lost to the 6 people (or couples) that sold to these companies is up to $133,915! 

Bear in mind that that is money that is not only lost to the sellers, but to the local community. This money goes to the company headquarters, San Francisco for example. Now, it’s not in the hands of the seller, or the local realtor that shop in our communities. The economy grows when you and I spend our hard earned dollars at local stores, restaurants, and entertainment. It is very important to keep those dollars local so we can all succeed.

Bottom line: Share the facts with your neighbors. Stop feeding the monster. KEEP YOUR MONEY! Hire a LOCAL, PROFESSIONAL, ETHICAL REALTOR.

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 June 18, 2019 at 11:56 pm
Kevin Jacobs | Category: Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Call it “Consumer Confidence”

Call it “Consumer Confidence”, maybe it’s the fact that school is out and families can move without disrupting their kids routine. Whatever it is, the market is feeling pretty good right now and if you have been considering selling your home, now is the time to do it!

See below for the market statistics that, in a nut shell, show that buyers are out there, and their choices are slim.

Interested in a free market analysis on your home? Call me and we can take a look at your personal situation…it could be much better than you expected!

(602) 818-6065 – Kevin@GiantAgent.com

 

 

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 June 4, 2019 at 7:43 pm
Kevin Jacobs | Category: Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Cool off in Northern Arizona

The heat has taken it’s time getting here this year, no complaints about that I’m sure, but we all know it’s coming. Road trips to cool off in Northern Arizona are in order!

CLICK HERE to access my interactive “Northern AZ Fun Finder” previewed below!

Get out, have fun, cool off!

Posted on June 1, 2019 at 6:03 pm
Kevin Jacobs | Category: Fun N Games | 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 , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Adjustment in Mindset

As I have been telling you for months now, real estate in the Phoenix area has been a bit non-traditional for the last year or two. Market adjustments are happening, and the numbers are reflecting that, but it’s not an adjustment based on inventory as in normal circumstances, this seems to be an adjustment in mindset.

Let’s take a look at the latest numbers from the Arizona Multiple Listing Service (ARMLS) from February.

First, the sales in the month of February 2019 looked really good. In keeping with “seasonal trends” the are up from the last quarter of 2018 and we would expect that to have continued through March. Spring is typically very good for sales overall.

Also keeping with the seasonal trends are the amount of new listings coming on the market. This typically reflects most sellers getting their homes on the market after the holidays and before the spring buying season.

While the inventory of available homes grew in January, it is important to note that total inventory is still lower than normal. The best explanation for this is that many homeowners purchased when the market was at its lowest or still recovering after the downfall. Simply put, they got a great deal then, likely an historically low interest rate, and now have lots of equity that they don’t care to lose by selling and purchasing a new home that would cost more. They truly have a nest-egg and are “sittin’ pretty”.

Now, we get into where the market adjustments or mindset adjustment is reflected in the market, and it is positive overall. The adjustment? Asking prices of homes for sale.

As I have been shouting from the hilltop for months, sellers have been reaching for the stars with their asking prices. In my opinion, this came from bad advice from their real estate professionals.

Typically low inventory lends itself to higher prices, it is simple supply and demand, right? Well, if your agent was really watching the numbers they would have identified that the “demand” was simply not there. Buyers are buying, but they were not comfortable with the increases in pricing. It felt like a bubble to them, and they weren’t scrambling to buy. As pricing went up, the sales slowed. If your home was priced fairly, it would sell quickly, if not, it would sit on the market until the price was reduced.

See the chart below and you will notice that “New List Prices” have been creeping down. This is good for our market. The pricing is coming back to where the buyers are more comfortable. These are closer to “fair” prices…buyers are willing to take a fair deal, and sellers are not sitting in wait as much as they have been.

Make note of the “Sales Price” graph below. It is a flat line for the past 5-6 months. That is where the buyer is, and they are not budging.

So, where are we headed for the remaineder of the spring selling season? 

According to the ARMLS projection, we are staying put where we are. Buyers are comfortable with the current sale prices, so sellers should take note and meet them there. We should see more pricing adjustments down, or better yet, new listings at the fair market value and not reaching for the false premise of “Low supply means high demand, so reach for more and more”. In most cases, supply and demand does effect pricing, pushing it up. As for the Phoenix real estate market…I’ve been saying this for months (scroll down to previous blogs to see) low supply doesn’t equal sale prices higher than actual value.

Bottom Line:

Sellers: You are getting great offers on homes that are priced fairly. Pricing has risen considerably in the last few years, but that was a return to normal, NOT supply and demand. Your agent should be knowledgeable and show you what homes in your area are actually selling for. They should NOT promise the highest price in the neighborhood by thousands more than your comparable sales…if they do, they are likely trying to get you to sign the listing contract knowing that they will simply drop the price later. Please feel free to reach out to me for a free, no obligation market analysis so you know what your home is worth.

Buyers: Stay the course. You are in control of this market. You will probably not get the amazing deal where you buy a home for tens of thousands less than value as in years past, but you will get a fair deal and know that you paid the correct price for your new home.

_

Are you ready to buy or sell your 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 April 4, 2019 at 6:11 pm
Kevin Jacobs | Category: Affordability | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

“Who I Am”

When you are an independent operator of a small business, every now and then you need to sell more than “What I do for you”, you have to sell “Who I am” to potential clients.

With this in mind, I thought it would be fun to take a few online personality quizzes that recommend, based on your answers, what your profession should be. The trick is to hold yourself accountable to your answers, be honest so as not to simply get the results you want, rather an accurate depiction of where you should be.

I took 3 different quizzes, random selections after a google search, and the results tell me that I am where I am meant to be.

Here’s the first:

Nailed it! People person with a focus on helping others…you and your friends and family!

These results were interesting to me because my first passion, and study direction (24 years ago) was law enforcement. Note, one of the career recommendations was “Police Officer”, but one was also what I do now…”Sales”.

 

The second quiz results were:

Again…”People person” popped up, with a focus on “Respect, Loyalty, and PATIENCE”! All traits that are important for me to properly serve you in your real estate transactions. These are a top priority to me, and I think my clients would agree that this is the way I serve.

 

The final quiz shows:

I learn from you every day. For that, I am grateful. I am where I should be as “My own boss” and I sincerely hope to continue serving you and your referrals with the upmost respect, integrity, and ethics for years to come.

I cannot do it without you, so please don’t hesitate to refer me to everyone you know, and meet.

Thank you!

(602) 818-6065 or Kevin@GiantAgent.com

 

Posted on March 13, 2019 at 6:25 pm
Kevin Jacobs | Category: Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Appreciation for Appreciation

For months now I have been beating the drums and sending the message to sellers and agents alike that when pricing your home, you must have appreciation for appreciation.

What I mean by that is illustrated in the graph below courtesy of The Cromford Report. There is a lot of information on the graph, so let’s try to simplify it a bit.

First, the good news. We see that despite some folks fears, we are not in a “bubble”. In 2006 the average sales prices (here shown as price per square foot) were towering over actual home value, as shown on the “Annual Appreciation” shaded area of the graph. Basically, we were all clamoring for a home, paying whatever it took to get it, way over the homes value…and predatory lenders were more than willing to lock us into contracts for homes that we couldn’t afford driving pricing up, up, up!

Skip ahead on the graph to the last year or so. Home values continued to increase at the annual 2-3% appreciation, sale prices seemed to lag behind until recently when we jumped above the homes value with higher and higher asking prices. The result? Coupled with low inventory, sales began to slow.

Are the slowing sales and available inventory cause for concern? In my opinion, no.

There are a couple of reasons for the slow down. For example, many people bought their homes at the bottom of the market. Low price, low interest rates, they got the home they wanted, they have equity and no desire to sell it. As a result, listing inventory is low.

However, the biggest reason for the slow down in sales, as I see it, is illustrated in the graph. Asking prices are growing faster than home values, or appreciation. Buyers that have memories of 2006-08 and the bubble/crash are very savvy, and smart to not chase the pricing up. They have a value threshold of “the actual value”, and that is what they are willing to pay.

Sellers agents are, in many cases, giving bad advice to their sellers telling them “Low inventory means Sellers Market! We can push the asking price up because there isn’t much competition.” In the past that may have been the case, it’s supply and demand, right? In this situation, with the experience many of us had in 2006-08 and no desire to repeat that, it’s about fair value.

Today’s buyers want a fair price.

Recently we have seen an increase in inventory for the “Spring selling season” (see the graph courtesy of ARMLS below). This makes your initial asking price even more vital. Over priced homes will sit on the market.

There is something to be said for a “Stale Listing”. The longer it sits, the more buyers begin to wonder if there is something wrong with it and seem to put it on the bottom of the “Gotta see it” list.

I have seen quite a few “Price Reduced” signs as of late, some as much as $20,000! I think we can agree that a $20,000 price drop is a clear sign that the initial asking price was a bit aggressive. 

Bad advise from the listing agent, or are they just telling the seller what they want to hear in order to lock them into the listing contract? Either way, I bet those sellers wish they would have shopped around for their representation. That kind of disappointment is avoidable and should never happen.

 

The Bottom Line:

Sellers.  Always shop around for your agent. Don’t get trapped in a situation where you are being told what they think you “want to hear” rather than the actual facts and market situations in your neighborhood.

Personally, I think it’s highly unethical to give the seller false hopes for an unreachable sale price in order to lock them into a listing contract and months of “price drops”.

If you have questions about your property value, or questions about what you should be asking an agent prior to signing a listing contract, call me. I am happy to advise you. Even if you choose someone else to list your home, I will feel better that you went into it knowing you have an honest agent, and an honest valuation of your home.

 

Buyers.  Your agent should be advising you on the fair sale prices of the home based on comparable sales in the neighborhood.

While everyone is looking for the best deal, you should have an initial mindset of “What is the best house for me?”, followed closely by “Is this a fair price”. Not too high, but it will likely also not be too low either.

In the end you should feel as if you, and the seller walked away feeling as if the transaction was a fair one, and everyone is happy.

Are you ready to buy or sell you 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 February 26, 2019 at 6:34 pm
Kevin Jacobs | Category: Affordability, First Time Buyer, Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , ,

Interest Rates Have Risen

As expected, mortgage interest rates have risen. Many consumers understand that a change in rates will effect the cost of buying a home, but few realize the impact it has on your pocketbook.

In January, I posted a blog with a chart that showed the potential impact of rate increases in 2018. Some feedback was, “They won’t increase THAT much this year”. Well as you see above, they did. Those same people that felt it wouldn’t be a big impact are likely regretting waiting to purchase their new home. Let’s take a look at where we were, where we are now, and where we may be heading.

The afore mentioned chart is below, remember this was drafted in January when the “Current Rate” was around 4.35%.

In a simple purchase scenario where the buyers monthly mortgage payment budget is about $1525 per month, a conventional 30 year mortgage at 4.35%, with a 20% down payment would have yielded a purchase price of about $383,000. That was then…what would the purchase price be today at a rate of about 5.1%?

Looking at the same 30 yr mortgage, with a 20% down payment and the intention of keeping the monthly payments in the $1500-1525 range, todays buyer can now afford a total purchase price of approx. $331,800.

That is a difference of $51,200! In order to get the same house, today’s buyer can either increase the monthly budget over $150 per month, or come out of pocket with a larger down payment, north of 20%.

The other option is to just buy less home. So what should they give up? Location, size, a pool, home office, chef’s kitchen? Tough decisions to make there.

So where are we going now? Well, the experts in the industry see more rate increases coming, maybe even by the end of 2018, certainly in 2019. Another 1/2 to 1% increase may just price some potential homeowners out of the market.

My advice, let’s go get your home today! I have great business partners in the lending industry that will work tirelessly for you to ensure that you get the best possible loan terms, and you get into your home before rates increase more.

Call me, let’s chat about your individual situation today.

(602) 818-6065 – Kevin@GiantAgent.com – www.GiantAgent.com

Posted on November 2, 2018 at 8:01 pm
Kevin Jacobs | Category: Affordability, Mortgage Rates | 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 , , , , , , , , , , , , , , , , , , , , , , , , , , ,