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

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

Prices Up, Sales Down

Prices Up, Sales Down…That is not a recipe for an ideal real estate market. Add the increasing interest rates and, once again, I have to advise that if you are looking to buy or sell a home, now is the time to act.

Here’s why:

First, let’s look at the market numbers from September that were just released by ARMLS. As you see, for the 4th month in a row the statistics, on the surface, look good for sellers. However, if we dig deeper we see that while pricing continues to rise (up 7.8%), new contracts are down (9.2%). Buyers are simply not paying the higher prices.

 

Last month, listings that sold were down considerably (14.4%). A slow in sales at this time of year is somewhat normal. School is back in session, the holidays are looming, the weather is nice so after a long, hot summer. People tend to want to get out and enjoy it rather than shop for a home. Totally understandable. September showed a drop that was over 2 times larger than last year at this time. That is significant and a red flag that prices will have to follow, soon. They are already showing a 1.5% shift.

 

Add to the “Market Adjustments” a rising interest rate, and projections of as many as 3 more increases this year, and we have a market that demands action (in my opinion) right now.

 

Bottom Line:

Sellers. Don’t let an agent deliver you false hope when it comes to pricing your home. You’ll see trends of pricing going up and that can inspire you to price higher trying to grab more, more, more. You stand the chance of chasing a falling market. Be sure that you are seeing the trends in your area, but also the market forecast.

Also, get your home ready to sell. Make minor repairs, don’t make it “the buyers problem”. Refresh the home with paint, maybe even carpet, fixtures, simple landscaping. Pretty homes sell faster.

 

Buyers. The simple thought would be, “Prices are dropping? I’ll wait and pay less!” Seems logical right? It would be if the interest rates weren’t rising. Keep in mind that a higher interest rate means your new loan is more expensive. This year the rates have risen about three quarters of a percent already, how does that impact you?

You likely have a budget for your monthly mortgage payment, most do. Well, a simple .25-.5% rate hike will mean that you will either have to come out of pocket with a higher down payment, or buy less home in order to stay in your budget.  How much less? A .5% rate hike could be the equivalent to as much as $15,000 less home (or more out of pocket up front).

Do you give up a pool, garage space, home office, upgraded kitchen?

 

The point is, don’t wait. The market has seemingly reached the peak and is “adjusting” right now. In a matter of months your home will sell for less, and the home you want to buy will cost you more.

Call me today to take a look at your individual situation and let’s get started.

(602) 818-6065 – Kevin@GiantAgent.com

 

Posted on October 10, 2018 at 5:09 pm
Kevin Jacobs | Category: 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 , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Is the real estate market slowing down?

Is the real estate market slowing down, or is it just the summertime lull?  Let’s take a quick look at the numbers from June 2018.

As you can see from the chart below showing the monthly sales tracker, it is not unusual for a reduction in total sales as we head in to the hotter months of the year. I think we can all agree, that makes perfect sense. It’s hot out there!

However, it does seem to show that the brakes were applied with a touch more “force” this year over last with a drop in sales of 8.4% month over month (May ’18-June’18). Beside the heat, there are other contributing factors to this. Low overall inventory could be reflected in that drop.  Buyers are coming to me stating that they have “Seen everything available”, so now they are sitting it out and waiting for new inventory. But is that new inventory coming?

 

 

 

The trend that we have seen all year is that new listings are scarce, and that trend is continuing as you can see below. 4% Fewer homes were added to the market in June than in May. This could also be attributed to the summer season, however there are even fewer homes on the market today than this time last year. It seems that homeowners are content with their current situation which includes the location and size of their home or, in many cases, this can be attributed to their current interest rate on their mortgage. Keep in mind, many homeowners purchased, or refinanced their homes when interest rates were in the 3-4% range. If they sold now, they would have to buy again at 4.7-5%. That in it self is a huge incentive to stay put, and reduces the amount of homes on the market.

 

 

 

For those that are interested in selling, don’t let the low inventory pull you into bad pricing. It may be tempting to reach for the stars on price with a mindset thinking that there is “no competition so I control the pricing”, that is not a good idea. It can only create a longer listing time, or a perception that the seller is unreasonable. As you can see in the chart below, there is a significant difference between the averages in “List Price” and the actual “Sale Price”. It shows that buyers are still willing to pay a fair price, but they won’t be taken advantage of in this sellers market.

 

 

In summary:

For Buyers:  Because of the summer heat, this is a very good time to buy a home. Many buyers are pulling out of the hunt because of the summer temperatures. That means less competition, and more opportunity for you to get what you want at a reasonable price. In addition to that, interest rates are steady right now but they will grow as the “buying season” returns.

For Sellers:  Homes are selling quickly. With the right agent, and some great “Coming Soon” marketing many sell before they even hit the market. Hire a professional REALTOR®, perhaps me, to price and market your home appropriately.

Questions? Want to chat about buying or selling a home? Give me a call…it’s free to talk. (602) 818-6065

 

Posted on July 23, 2018 at 5:44 pm
Kevin Jacobs | Category: Market Information | Tagged , , , , , , , , , , , , , , , ,

‘Tis the Season for Phoenix Area Real Estate

The real estate market in the Phoenix Metro area continues to strengthen. We are “in season” some might say, buyers are out shopping and that is creating a healthy increase in sale prices. 

We are still not seeing a plethora of bidding wars driving pricing to unsustainable levels as we have seen in the past (circa 2005-2008). Personally, I don’t see that happening again anytime soon.

We do see a steady, healthy increase of pricing that is considered to be normal growth in a healthy economy.

Below are some statistics from the month of March showing the continued growth. Couple these stats with increasing mortgage interest rates and the results are going to be:

For Buyers. Waiting too long to buy could result in a higher purchase price and a higher monthly payment. You may be forced to give up a want or need in your new home to keep your monthly payment within your budget.

For Sellers. The value of your home is increasing, however, history shows that it could be short lived. Just like the stock market you want to “sell high”, but waiting too long could find you on the other side of the hill where you need to lower your price and offer many concessions.  Buyers are out there, but they are savvy. A fair deal now sells at a very good price. Waiting could put you in a less positive position. 

Consider too that you are likely looking to buy a new home. The increased cost of the new home will offset the “few thousand more” that you might get by waiting. Now is a good time to sell.

Let’s look at the numbers:

Monthly sales are up! As I said before, this is a great time of year to sell as buyers are shopping before the summer heat hits us. 

 

There are more homes coming on the market, again due to the time of the year, but we are still well below average for total listings available. This is a “sellers market”, but buyers are seeking out fairness. Overpriced homes tend to sit.

Take the advice of your listing agent on pricing and strategy in order to sell as quickly as possible for top dollar.

 

Not a surprise to see the total days on the market go down a bit this time of year. This number is the average in the entire Phoenix Metro area. Your neighborhood will vary.  Some areas are selling in a matter of days.  Contact me if you would like more specific information. 

 

To illustrate the “Sellers Market” a bit more.  If there were no more listings added, and the pace of sales continued as they are, there would be no homes for sale in the Valley in just over 2 months. Of course that’s not going to happen, but it shows that it pays for you to have a well connected real estate agent to find your home, get your offer accepted, and get it closed  before someone else snatches it up. 

 

To Summarize:

Sellers – Now is the time to get a great price on your home. Use an experienced REALTOR® to advise on pricing in your neighborhood, and market your home directly to buyers and buyers agents, stage your home beautifully, and get it sold fast!

BuyersDon’t wait! Interest rates are on the rise as expected. Just last week they went up about .15%. That may not sound like a lot, but when you look at the monthly mortgage payment that you have allowed in your budget, an increase of .15% could force you into a lower priced home for the same monthly payment.  Perhaps you won’t be able to afford that 3rd garage, or extra bedroom?

Bottom line. REALTORS® are here to maximize your value, buying or selling. We work for you in your best interest, and I would love to be YOUR REALTOR®.

 

 

 

 

 

Posted on April 27, 2018 at 6:16 pm
Kevin Jacobs | Category: Affordability, Market Information, Mortgage Rates, Uncategorized | Tagged , , , , , , , , , , , , , , , , , , , , , , , ,

Market Happenings You Should Know

Whether you (or someone you know) are considering buying or selling a home, or you just want to keep up on the market to know what your home might be worth today, you should know these simple statistics courtesy of the Arizona Regional Multiple Listing Service. Overall, the market is strong, prices are up and holding steady.
If you are a seller, experts feel that now is the time to sell as they predict a slight market correction in 2018. According to “The National Real Estate Post”, we could be seeing the peak of pricing right now, followed by a small dip in values. Now could be the exact right time to sell.
If you are a buyer. Inventory is low, the selections are highly sought after.  More importantly, interest rates are rising! If you wait for pricing to come down, you will likely pay more for your loan, therefore afford less home at a higher overall price. Now is the time to buy!
Here are some stats (through Feb 2018) that you may find interesting:
NOTE: These numbers are broad, they vary by community and neighborhood. If you are interested in what they look like in your neighborhood, or desired area to live, call me and we can take a closer look.
February was a great month for sales.  Up 13.6% over January, and 7.4% higher than 2017:
In the next 2 charts you see that: 
A) New Inventory is declining, fewer homes being listed.
B) Total inventory has stayed roughly even this past year.  Still well below Phoenix area averages. 
Sale prices are healthy, but you can see a small decline. This could be due to over pricing in the 
original listings, then adjusting down to actual market value. 
(*It is very important to price right at the list date and not reach for an unrealistic asking price.)
Average Days on the Market is down year over year, however still a bit high in my opinion.  
This could be due to the asking price issues addressed above. 
A home with an unrealistic asking price will sit until the price comes down. 
 
MORTGAGE RATES ARE ON THE WAY UP!! 
If you have been hesitating to buy your home, the .38% increase in rates in the last 3 months 
may have cost you something on your “want” list. (Pool, extra bedroom, 3rd garage, etc)
 
Quite simply, it is going to cost you more to get a loan. Your buying power suffers unless you’re willing to 
increase your overall budget.  
Today’s Mortgage Interest Rates (Source: BankRate.com 3/22/18)
3-month trend
3/21/2018
4.58%
4.00%
4.05%
4.55%
3/14/2018
4.54%
3.95%
4.04%
4.51%
3/7/2018
4.59%
4.00%
4.01%
4.53%
2/28/2018
4.57%
4.00%
4.00%
4.51%
2/21/2018
4.52%
3.94%
3.98%
4.51%
2/14/2018
4.51%
3.90%
3.93%
4.45%
2/7/2018
4.44%
3.87%
3.94%
4.38%
1/31/2018
4.38%
3.77%
3.86%
4.34%
1/24/2018
4.27%
3.71%
3.81%
4.28%
1/17/2018
4.20%
3.62%
3.80%
4.25%
Questions?  Call or Email me.  I am happy to help.  Also, I am NEVER too busy for your referrals.  Please feel free to send them my way…and thank you!
Posted on March 22, 2018 at 8:59 pm
Kevin Jacobs | Category: Market Information | Tagged , , , , , , , , , , , , , , , , , ,