Sellers Rejoice!
February 18, 2012 by admin · Leave a Comment
market has been dropping in value. Five years of sliding values has been demoralizing to both sellers and frankly, most agents. Foreclosures soared, short sales have become the new “normal’ sale and most seller’s primary worry has been “can we even find a buyer for this house?” For those who prefer we bottom line this – prices are for the first time since 2005 moving stably up. There are more buyers than there are properties to satisfy those buyers, most sellers are receiving multiple offers on their homes, new supplies of listings are limited due to a severe drop in foreclosures and builders are not producing many new homes to fill the void. Welcome to March 2012. So of all the things to worry about, sellers should not be losing sleep over whether we can find a buyer for their home – the answer is yes. For those who enjoy more details, read on. Currently the average price in the Greater Phoenix area is up to $85.04 a square foot (remember before you grab your calculator, this is an average of all homes at all levels of pricing and not how we price a home). So builders are only starting to trickle back as they can charge more than a resale home – just not unreasonable amounts more.What about the “shadow inventory” that the banks are supposedly hanging on to waiting to release? We don’t have exact numbers nationally (neither does anyone else, even when they pretend to) but in Maricopa County there is no “shadow inventory”. Period. Trustee sales (foreclosures) are down 40.8% from a year ago and new notices of Trustee sales (a pre-foreclosure) are also down 48.7%. This does not mean the distress market is gone, as we won’t really eliminate the distress market until values rise along with the job market, but it does mean the pipeline of foreclosures is happily and dramatically declining.
need us!
Milestones Charter School Craft Fair & Bazaar
February 5, 2012 by admin · Leave a Comment
Craft Fair & Bazaar
Saturday, March 10, 2012 9:00am to 3:00pm
from handbags to wearable art and every imaginable craft in between–
Art from the Heart, B’s Bling Embellished, Designs by Dena & Dara, Earth Stone Jewelry, Essential Body Pleasures, Girl Power, Izzy Bella Designs, Lillie of the Valley, Lily Pad Bows, North Valley Carpentry, LLC, Origami Owls, Party Lite, Pootsie’s Place, Scentsy, Sheridan’s Stuffed Stuff, Tastefully Simple, Thirty One Gifts, Usborne Books, Wood Wrought plus MANY MORE!
Chicago’s Best and the Girl Scouts will be selling food & COOKIES!
Milestones Charter School
4707 E Robert E Lee Rd.
Phoenix, AZ 85032
(off Tatum between Bell & Union Hills)
Trend Alert
February 3, 2012 by admin · Leave a Comment
Last month we examined the overall improving market in some detail as we believe a primary function of our “job” is to keep both ourselves and our clients informed on market trends and shifts. Trends are rarely formed in a month and so monthly news can often be repetitive more than informative. With that risk acknowledged, we still feel duty bound to report the latest in the market. Here are the latest trends:
Normal sales gained market share in January, moving from 40.9% to 41.40% of sales, while REOs were the big losers moving from 30.3% to 26.8%. Short sales and pre-foreclosures advanced once again moving from 28.9% to 31.8%. Any improving growth in normal sales is a positive recovery sign – although a cautiously optimistic one as a significant portion of these normal sales are investors doing flips.
Despite a severe imbalance between supply and demand, current pricing is fairly stable and slightly trending upward. However, a more significant upward price movement seems likely in 2012 or early 2013.
September 15, 2011 marked the bottom of price per square foot (the most reliable indicator of short term price movement) – coming in at an average of $78.81. The average price per square foot for all pending listings currently has moved to above $83 for the first time in over 11 months signaling stronger sales pricing for February.
Re-sale listings are coming on to the market at a very low rate. In the last month, 8,269 have come on the market which is 22% below the same period for 2011. This supports the tightening supply of homes for sale, which is the force behind the upward pressure on pricing. In fact, there are fewer single family homes listed for sale in Phoenix than in any year except 2006. However, in Anthem there are fewer single family homes listed for sale than in any time in the last 10 years!
HUD foreclosures are down 91% from this time last year. Trustee notices of foreclosures are down 61% from this time last year.
In short, all news continues to support the early stage of recovery is continuing.
Which brings us to another subject, if short sales now compose 31.8% of the sales and “normal” sales are up to 41.40% – the home seller (rather than the institutions) is once again the majority and retains control of the agent selection process handling their home sale. With that in mind, we believe it is time to revisit issues surrounding that important selection.
An alarming fact of any distressed market is that opportunists arise who seek to exploit the homeseller. One of the most obvious examples of this is “up-front fees”. We have seen numerous agents and attorneys alike charge large, non-refundable up-front fees for loan modifications, short sales, and consultations. In one case, a client of ours explained that a company charged $1,500 for a modification while stating to the client “this is illegal for me to charge this”. Then this” consultant” sued the owner for the balance of the payment due and won a judgment in small claims court, despite the illegality. Go figure! So, with that in mind, run, don’t walk from any agent or firm demanding up-front (or back end for that matter) fees to process a modification or short sale. Modifications belong in the realm of a free HUD counselor, and any legitimate short sale agent won’t require fees from the homeowner but will accept payment from the short sale bank. In our entire career, distressed market or otherwise, we have never charged sellers up-front fees. We don’t believe others should either.
Additionally, as foreclosed home sales continue to drop, another trend is emerging – the former REO agent now trying to become a short sale specialist. Of all the sales we handle yearly, the short sale is the most difficult and demanding of our skills. The mass migration of REO agents over to the short sale causes us much concern. We have been handling short sales since 2007 (well to completely date ourselves, we first handled them in the late ‘80s). Frankly, it has taken us years of developing systems to handle the complexities associated with these files and to make sure that our clients are protected from pursuit by their lenders. The sale of a foreclosed home is so vastly different from handling a short sale that we worry about the service and protection level that the average homeowner is receiving from these newly minted short sale agents.
In short, if you are facing tough choices about the sale of your home – whether “normal” or a short sale, we stand ready to serve you. In the meanwhile we will continue to report on the trends that cheer us as well as any that we believe should concern you.
Russell & Wendy
Welcome to 2012
February 3, 2012 by admin · Leave a Comment
There is a lot of talk in the national and local press about “when the recovery will happen”. Seldom is “the recovery” ever defined. The word is tossed about as though the person saying it and the listener both know what it means. But what does it mean? And just what is “recovered”?
The signs of recovery typically come in a few forms: Supply drops, demand increases or exceeds supply, distressed sales drop (especially foreclosures) and are replaced with traditional sales, and finally pricing stabilizes and begins to edge up. In the final stages of recovery, builders re-enter the market.
Now that 2011 has come to a close and 2012 is in its infancy, it would seem appropriate to look at where the valley residential real estate market stands having slogged through one more year. When this debacle began in earnest back in 2007, we speculated on what the recovery might look like. Prior to this market decline, recoveries tended to come in the shape of a “V” – meaning one leg down and one recovery leg up. This market was unique. This market formed a “W” shape – dropping, then a “recovery” leg up (thanks to the artificial “recovery” prompted by the tax credit), followed by another drop once the stimulus was removed, and now what we believe is the final leg up. It has taken 4 rather brutal years but we believe we are now in the early stages of our actual real estate recovery. Of course factors like the economy, jobs, and interest rates all have the ability to affect the speed and trajectory of the recovery – but we do see the recovery underway.
Let us share some of the positive statistics comparing where we were only a year ago (as usual, thanks to Mike Orr of the Cromford Report for his impeccable research):
Sales per month are up 8% from this time last year.
Active listings were 19, 377 on December 1st 2011 – down 50% (that’s right, 50%) from the same time last year.
The day’s inventory (the number of days to sell all the listings if no new listings were added) is down dramatically to 96 from 184 a year ago.
The price per square foot is up 3.1% in one month – and up 6.5% from the extreme low point measured in September 2011 (price per square foot most accurately reflects short term price movement). In fact in every price range, sales prices by square foot are higher than a year ago.
New notices of foreclosure have continued to be filed at similar levels for the last six months of 2011 (about 4500 a month) however increasing amounts are resulting in short sales, loan adjustments, or a purchase by a third party at the trustee sale. Add in the banks selling assets to hedge funds and non-profits and foreclosed homes are becoming a smaller and smaller portion of the market than we have seen in the last 3 years. To put this in perspective, foreclosed homes for sale under $100,000 are down 81% from this time last year (72% in the 100K-200K range). Those are staggering numbers.
There is really no negative news to counter the positive. In fact about the only slight damper occurs in the 800K and up category which is showing growing supply with demand below par. Interestingly enough the pricing is remaining stable in this range despite the doldrums that appear to be in effect.
So as we begin the year 2012 it would appear we have much to be thankful and hopeful for. It appears the real challenge lies primarily in the mindset of the public and real estate professionals. The primary battle appears largely in the mind, as the facts need to replace the emotion of the market. This will take some time. Our hopes are that these facts will help assist that battle.
Russell & Wendy
