Stats from the MLS

The latest stats from the ARMLS have been released, here are the highlights.
First, let’s look at the monthly sales.
As is normal for this time of year sales are slowing down headed into the holidays. They won’t come to s screeching halt, but folks tend to get a bit more focused on holiday events, travel, etc.  We should see this flatten out for October-November, small decline around Christmas and New Year, then we are headed into the spring season that tends to be rather active.
Year over year, however, there is an increase in total sales showing that buyers are buying, the market is healthy.
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Now, take a look at “New List Prices” below. Notice the August and September spike in “Asking Prices”.
As I have said in previous blogs…many, many times…this is a problem because it is typically due to agents “Getting the listing” with false hope of sales price like, “I can sell your house for $xxx.xxx”, knowing that they will get you under contract and then drop the price 5%, 10%, or more a few weeks later.
(Small adjustments are normal to pique buyer interest, but if they are coming to you with massive decreases, they should have either done better research, or been more honest before the seller signed a listing agreement.)
The indicator to this is also in the next chart. It shows the “Sales Prices”.  Take a look at the gap between the average list price, to the average actual sale price. Pretty large gap. 
Buyers are not chasing the pricing up. GOOD! That’s how we create bubbles and volatile markets.
It also shows a slight decline in average sales price…very slight, but that is the reason we see, and will likely see more asking price reductions across the board.
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This is not bad news…it just shows that asking prices are out pacing appreciation (this year roughly 5%…which is great!).
Sale prices are keeping with the 5% appreciation through the year.  
Buyers are willing to pay that…just not more than that. 
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All taken into consideration, the market is healthy, homes are selling, you just need to find the “sweet spot” where the buyers are comfortable. I can help!
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Bottom Line: (Remains the same as prior “Bottom Line’s”)

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 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 October 21, 2019 at 8:43 pm
Kevin Jacobs | Category: Market Information | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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

“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 , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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

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

Are “Buy it Now” Companies Worth it?

I have noticed recently more and more “Buy it now”, “Why hassle with a Real Estate Agent” groups advertising to buy your home.  That got me wondering. Are the “Buy it Now” companies worth it? So, I went to the real numbers to see how selling the “No Hassle” way affects your bottom line. The results are astonishing…assuming you like your money.

Below is a selection of recently closed homes that 2 of these companies have closed in the past few weeks. This is not the price they gave the owner to purchase the homes, this is what they sold the property for after acquiring it. Names of the companies and the sellers have been redacted for privacy.

In the chart below:

“Original Seller” is the party that sold their home the easy way, direct to the investment company.

“New owner” would be the party that purchased the home from the company. Take a close look at the amount of money lost by the original homeowner by not selling the home traditionally with, perhaps, a few cosmetic updates.  10’s of thousands of dollars that could have been in their pocket.

Now, I understand that there are some cases where a quick sale could be desirable to a seller. Perhaps the home came in a deed of survivorship, perhaps it was a financial emergency, or a new job out of state that requires a quick sale. I get it. There is room for these types of deals. However, I don’t know if the seller is given the whole picture prior to signing one of these deals.

First. What is your home actually worth in it’s current condition? In many cases, more than what you will receive in one of these types of transactions.

Another question that is likely not addressed is, what would it cost to update the home cosmetically, and how would that transfer to the overall sale price? Chances are, the basic “Beauty Update” would be more affordable than most think, and could translate into a higher sales price. A sale that would not only get your investment back, but add additional profit resulting in more money in your pocket.

These companies are in the business of making money, that is the American Way. No complaints about them for finding opportunity and earning from it. However, they tend to do, in most cases, only simple cosmetic updates after they purchase a home, and the resulting profit for them…well…see below. $7,000 to $20,000 in just this small sampling. (Less expenses)

I have one simple ask for you. Before selling your home in this manner, let me come in and give suggestions as to what it would take to freshen your home, and what the potential sale price could be with a small up front investment.

With a little patience and elbow grease I can help you put that $7,000 to $20,000 in your pocket…where it belongs.

Call me, refer me to your friends and family. I always have time for you.  (602) 818-6065.

 

Posted on August 22, 2018 at 12:21 am
Kevin Jacobs | Category: Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , ,