"Everyone loves to remodel..." "Moving is FUN!" I can't imagine anyone agreed with either of those statements... but, we all love to see other people do both. In fact, I'm sure this is what keeps the entire HGTV Network, among others, thriving.

My client wants to sell her home in Scottsdale 85254.  Before she does, she will upgrade her kitchen and do a few other things to feel more consistent with the other work she's already done there. We all know everyone has an opinion- and she wants yours!

Tell my seller which of these Dunn Edwards colors would sell her kitchen:

1- Wooden Peg, 2- Pigeon Gray, 3- Fine Grain, or 4- Crisp Muslin?

Email, text or reply on my Facebook Page!

The goal: a fresh, modern & neutral space with broad appeal to buyers. Let us know by 3P on 3/18/15 tomorrow so we can give the painters enough time to get going!!

The cabinets will be paired with this granite slab:

For the full project rundown, check out my original blog post!

The End Result:

One. Happy. Seller. The paint was barely dry and the photos barely processed when we listed this house for sale at $490K on 5/22/15- Memorial Day weekend. We had showings immediately an open house with 40+ groups of visitors through and were able to pick up 2 cash offers by 5/26. We closed the sale on 6/29/15 for $480K cash.  The house actually closed before her bill was due and payable... not bad.

Several others got the same treatment. If you'd like to know you can have similar success, call/text/email me and we can work up a customized plan just for you and your homes!

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Camille's Monthly Market Updates

Have you ever walked into a house that you thought you wanted to buy and wondered, "What in the world? Why did the sellers do THAT?!"

I've been a REALTOR® for almost a decade in Phoenix & Scottsdale. I think I hear that at least once from every buyer who buys a home from me. Sometimes it's because of a bad paint or flooring choice. Sometimes, it's a component of the house where the plan was to do one thing, but the execution didn't quite turn out right. Other times, the buyers and I just scratch our heads and say "It's not even worth the effort to ponder it. Let's just move on."

In July of 2011, I listed a bank-owned home, which I regularly did.  The house had some great features- large, 14,000SF lot, custom or semi-custom construction, coveted 85254 zip code with a Scottsdale address & Phoenix taxes, diving pool, 3-car garage, RV gate & parking and a great location that fed into Horizon High School. However, it was almost completely original & desperately needed TLC. Constructed in 1985, it felt every bit of its age:

Ironically, the home had belonged to a contractor/builder who invested heavily in building spec homes, which ultimately cost him his own home. So I did what I usually did, a value analysis to determine whether the home was better "as-is" or "repaired", determined what repair costs were and set out to make the case for one or the other. Side note: home sales fell off a cliff in July right as I took the listing and stayed that way until the end of Q1 2011.

I recommended that the seller refloor most of the home, repaint the interior, make some drywall repairs, treat for termites & repair a roof leak in a bedroom- to the tune of about $11,000. We completed the repairs and put the home on the market. Initially, after some dismal showing feedback including many comments about the swampy pool, the seller opted to replaster it- another $3,800 cost. After the pool repairs, showing activity got slightly better:

Finally, in December I got an offer. After the buyer completed all his inspections, he buyer backed out in January. About 10 days later, he changed his mind and wanted to buy it after all. But, before he could resubmit his offer, a very brave woman made her offer on the house and the bank accepted it. She saw the potential I did when I first laid eyes on it. After a lengthy purchase process which included a low appraisal, and some repairs that the lender-required repairs, she became the owner of the home in early April 2011. Please note: I was not the buyer's agent. I represented the seller ONLY.

Nearly a year after the buyer bought the house, she contacted me and we exchanged some emails about contractor referrals and remodeling woes- I was in the midst of my own major home renovations. In June of 2014, she asked if I would be willing to come take a look at her progress and give some insight on a few more decisions so she could decide to sell or lease her house. When I got there, I was pleasantly surprised. She had done so much to the house that I barely recognized it!

The flooring that was installed just prior to her purchase had been torn out and replaced- large tile in the living areas & baths & gorgeous tiger's wood in the bedrooms. The fireplace surrounds in the great room & master bedroom were refaced with  floor-to-ceiling stone. The master bath had a new, full-length vanity cabinets, granite counters, new oversized tub, shower surround & glass enclosure. Both the master & Jack-and-Jill bath baths were completely redone with granite counters, new faucet & light fixtures.

As we headed toward to the kitchen, I gleefully imagined what I would see when she said, "I haven't done anything to the kitchen..." and I thought to myself "she's so modest!!" When I got there, she wasn't kidding... the kitchen was almost exactly the same as when I sold it years before. After putting so much effort into the rest of the house, she just hadn't gotten around to it. I could empathize- she had a very hectic career which also included a heavy travel schedule. Living through renovations is hard enough, but not being around to see what's happening day-to-day, makes it risky. We concluded my visit by discussed the pros and cons of leasing vs selling.

I went home and prepared both sets of comps. For a sale, I did the same analysis I had done 4 years before for "as-is" vs "repaired". My recommendations were not to fix much, other than the cooktop, if she wanted to lease it. At the time she had only 2 working burners, which isn't an issue for road warriors, but is usually a deal-breaker for tenants. That would be a relatively small cost though. Overall, the house was quite nice and I worried whether the gorgeous wood floors would be easily scratched or any of the other upgrades she did would be damaged by a tenant, who might not take the same care of a home the way most owners would.

Even despite a weakening market, there was a lot of opportunity in the market to sell it. But the completely original kitchen, down to the older electric coil cooktop & trash compactor, would make it a tough sell. Repairing the kitchen to make it comparable to the rest of the home, would be the best option to maximize sale profits.

After leaning toward leasing her home, she purchased a home warranty in place to help with any potential repairs a tenant might need. Then once more, she weighed the opportunity vs cost of fixing the kitchen. Two months later in August, we met a general contractor at the house to discuss what renovations she was considering and estimate the repair costs. I hoped we could renovate for under $10K, but the bid came back at a little over $14K. Despite the higher price tag, the difference in value between "as-is" & "repaired" was substantial- a $25K-40K return, depending on the overall quality at completion.

After putting the decision off for a few more months, the market around her house started to show signs of life in the fall. A few homes in her neighborhood sold for substantially more than I had originally estimated the value of her home to be. After more consideration and several more revised bids for the renovations, she opted to renovate her kitchen to modernize it for a sale. The estimated cost is about $15K.

The reno plans are to:

• Raise the kitchen ceiling
• Replace the old window
• Replace the remaining, original appliances & install a beverage fridge
• Add new granite counters to the kitchen, laundry room & wet bar
• Install a decorative backsplash
• Refinish the kitchen, laundry & wet bar cabinets & the butcher block island top
• Replace the kitchen & laundry room flooring
• Add recessed lights to the kitchen & wet bar
• Install pendants over the kitchen island
• Replace, the sinks & faucets in the kitchen, laundry room & bar
• Replace the hinges & add new cabinet hardware

Additionally, she will:

• Install additional recessed lights in the great room
• Refinish the hall cabinets & add new cabinet hardware
• Refinish the front door & replace it's hardware
• Replace the light switches & add a few strategically placed dimmers
• Clean up the front & rear landscaping
• Repair an unfinished rear patio area with saltillo tile
• Replace the skylight in the master bathroom
• Clean up a few other odds & ends

This is what the kitchen looked like the morning that demo officially started:

This project is the definition of the concept of "designing to sell". We will tear this kitchen apart and put it back together to make it a great space, for someone else to buy the home and enjoy. In about 2 weeks, lots of exciting things will happen here. I won't give away all the details, but our goal is to list it by the end of March 2015 (this month). Stick around and see just how much can be done to make this kitchen match the luster of the rest of the house and make it a home that someone will want to live in.

Along the way, we may look for some input to make decisions about materials to bring the broadest level of appeal to potential buyers. Please look out for updates and requests for feedback on my Facebook Page & on my Pinterest Board.

Follow Camille Swanson, PC, REALTOR®'s board Drab to Fab: The Evolution of a Home in Scottsdale, 85254 on Pinterest.

When the work is complete, I hope you will enjoy having seen the process from start to finish to see just how the right changes can make a dramatic impact on the sale of a home.

The end result:

One. Happy. Seller. The paint was barely dry and the photos barely processed when we listed this house for sale at $490K on 5/22/15- Memorial Day weekend. We had showings immediately, an open house with 40+ groups of visitors through and were able to pick up 2 cash offers by 5/26. We closed the sale on 6/29/15 for $480K cash.  The house actually closed before her bill was due and payable... not bad.

Several others got the same treatment. If you'd like to know you can have similar success, call/text/email me and we can work up a customized plan just for you and your homes!

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5442 E Acoma Dr, Scottsdale AZ 85254

The Downside of Making a Lowball Offer in a Seller's Market

Small Improvements= Big Impact on Your Bottom Line

Camille's Monthly Market Updates

Real Estate in spring 2015 is off to a great start! Home sales in the Phoenix & Scottsdale Metro Area continue to increase & listing volume is trending lower than recent years: (3/11/15 Cromford Report)

March 11 - The number of active listings for Greater Phoenix (excluding UCB) is 21,829 which seems quite reasonable, if a bit on the low side. However the picture looks rather different when we break it down into price ranges.

Below $150,000 we have only 3,708 listings and the trend is sharply down. There were 5,754 on the same date last year and 4,372 as recently as January 20. Anyone wanting to buy a home is this price range is going to have an increasingly hard time. There have been 1,660 closed sales in the last 4 weeks in this price range, so today's supply represents only 2.2 months of supply.

Between $150,000 and $250,000 we have 5,711 listings and the trend is sharply down. There were 7,500 on the same date last year and 6,428 as recently as February 7. There have been 2,345 closed sales in the last 4 weeks and the current supply represents just 2.4 months of supply. This is simply not enough to sustain a balanced market.

Between $250,000 and $500,000 we have 7,447 listings and the trend is fairly stable. There were 1,704 closed sales in the last 4 weeks, so we have 4.4 months of supply, adequate for the current demand but just a little below normal.

From $500,000 upwards we have 4,963 listings and the trend is for this total to move steadily higher. The closed sales total over the last 28 days was only 389. We have almost 13 months of supply for homes at or above $500,000. This is too many to allow sellers to feel comfortable. The number of active listings over $2,000,000 has started to climb down for its peak, but between $500,000 and $2,000,000 the count is still growing.

Some good news for higher-end sellers is that a recovery in the low and mid ranges tends to be a long term positive for the high end. In housing, the trickle concept works up rather than down.

For the visually minded, this is what it looks like in chart form:

Note: >3 mos supply is considered a "Seller's Market", 3-6 mos supply is considered a "Balanced" & 6mos+ is considered a "Buyer's Market".

Which sellers should be really optimistic and which ones should exercise some caution?? As of 3/11/15, our median sale price in Maricopa County is $207,750, and likely represents a big chunk of the sales for our market. Sellers up to about $500K are looking really good. Those from $500K-$800K have also been looking good, but if you have a home listed at over $800K, don't turn up your nose at the offers you're getting. You're halfway there, even standing out from the crowd amongst the competition!

If the "trickle up" theory is correct and "Millennials" (born 1980-1995) & "Boomerang Buyers" who previously owned homes but lost them to short sales or foreclosures during the housing bust) buyers are in fact driving sales, hopefully the trickle up will start showing at the luxury of the market before very long.

Stay with me and see whether the landscape will change again soon!

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Market Updates

Phoenix Pending Sales Still Rising in Early 2015

Phoenix Pending Sales UP Since the Superbowl

A Little Real Estate Stat with Big Impact that the Media Hasn’t Noticed

If you are still looking for a sign that Phoenix real estate is making forward progress, following an initial spike in pending sales after Super Bowl XLIX, check out the latest numbers:

While the news outlets, like the AZ Republic and Phoenix Business Journal, continue to report that the market is gaining steam, this chart shows precisely how. The Cromford Report's Contract Ratio,  indicates how "hot" a market is. This stat is obtained by dividing the number of pending listings (Pending and UCB- accepting back-up offers)/the number of active listings. Multiply that number by 100.

Normal is considered a range of 30-60. Over 60 is considered a "seller's market" and below 20, a "buyer's market". Over 100 is considered a "buying frenzy". The ultra luxury market typically rests within a range of 15-25. The higher this number moves, the better the market.

Every list price range below $499,000 is above 30 within the normal range of 30-60. However, things are improving substantially all the way up to $800K! If you are a seller planning to sell a home under $500K, the market is in your favor right now. If you have a home to sell below $250K, the market is really hot!

If you're selling a home above $800K, it may take you a little longer than it has been. This area of the market has slowed down substantially since December when luxury closings spiked. Note that homes under $50K are also weakening- this is likely because this inventory is drying up and usually tends to represent the worst options available. We're looking at a huge supply of homes coming on the market.

Takeaways:

Buyers aren't going to have all the options they had a few months back if they are buying in the majority of the areas in Phoenix & Scottsdale. So, if you're buying a home this spring, buck up, make sure your financing is solid and really start paying close attention to the areas that interest you. There are already parts of the Valley that are just "seller's markets". Be prepared to compete against multiple offers in these areas.

Sellers, if you've been waiting to sell, now may just be that time to move on. Figure out what the competition looks like and be prepared to find a way to stand out from the crowd. Smart improvements go a long way. You'll need specifics for the area right around you. Call me for those numbers and I'll be happy to share them with you!

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Jan. 2015: Phoenix & Scottsdale Real Estate Update

The headlines over the last few days have been quite loud about the rent increases we've seen here in the valley. Yesterday, the Cromford Report's Daily Observation read:

"February 23 - The single family rental situation on ARMLS is getting silly. There are now only 2,196 single family active listings where we normally see 4,000 to 5,000. the average rent is $1,922, up from $1,773 last month and $1,598 last year.

It is not much saner with condo rentals. We have 974 active condo rental listings compared with 1,331 last year and the average rent is $1,575 compared with $1,429 last year.

I have never seen so few active rental listings or rental rates this high since we started measuring in 2004."

Even the Arizona Republic got in on the action yesterday also with the article "Phoenix rents rise 5.6 percent in year, top U.S. average". They state, this "was higher than the 3.3-percent average hike in the 35 larger cities studied." The article even went on to say that "rent increases also are exceeding U.S. inflation, which rose 0.8 in 2014".

What's a renter to do? Make sure you explore ALL of your options. What's interesting to note is that the Cromford Report refers to the single family rental market and the Arizona Republic is referring to all rentals. Period. Now what's interesting to me, is that I just got off the phone with a client who has been in search of a rental here since December. She's relocating to the area from just south of the Silicon Valley and is looking for a newer & higher-end condo community in a central location that will be easily accessible to the best amenities in town.

Since we've been working together, we've seen a 20-25% decline in the price of rents at a condo community where she will ultimately lease her home from the when we first considered it last December. Even more interesting is that there are quite a few listings that we saw then still on the market, including the one she originally considered leasing in December. What gives? It's hard to see the whole picture in ARMLS, but I suspect that all of the brand new, luxury apartment communities that developers scrambled to build after first realizing there was a shortage in rental inventory, just all came to market at the same time...

So now, the developers who couldn't all sell their condos are still leasing their unsold inventory and they are competing with the luxury rentals units including those from Optima Sonoran Village (Near Fashion Square in Scottsdale- Camelback & 68th St), the Broadstone communities (Camelback Corridor & Lincoln/Scottsdale Rd.) and even the pretty lofts up on High Street in the Desert Ridge/City North area. What's really interesting to me is that whereas many of these communities choose not to list their units in the MLS, even that is changing and they are now willing to cooperate with other brokers.

This trend I'm seeing is just limited to luxury condos, but I wonder if tenants who have flexibility in their lifestyle start choosing a more urban lifestyle (with the significantly lower price tag) when this eventually start to trickle down to the single-family market too? Food for thought... only time will tell.

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It's been a little quieter on the roads since all the Super Bowl visitors left on 2/3, but traffic to listings is up! In the last 2 weeks, pending sales increased by 10% compared to the same date last year. That number is good, but when you split out the data, which the Cromford Report did, certain segments stand out like a shorts-wearing snowbird next to a bunch of sweater-bundled locals on a 60-degree day in Old Town Scottsdale.

Take a look at this chart and see if they jump out at you:

The clear winners:

• $175,000-200,000- up 38%!
• $200,000-250,000- up 51%!!
• $300,000-400,000- up 47%!

After spending the last 2 weeks with one particular buyer searching for homes priced around the $300,00 mark in Scottsdale's 85254 zip code, I can certainly attest to a jump in pending sales there. After our 1st visit out, I realized that 2 of the 4 homes I showed that day went under contract. The one my buyer liked the most, was under contract before he decided he could like it. Another home we saw 1 hour after the lockbox was installed had 3 cards in it. We wrote an offer for the property, which got 4 offers total and the seller took the one that was over asking!

Do note, all segments from $150,000 to 600,000 are doing well, with pending sales up at least 30%. With a median sale price in the low-$200,000s for the entire metro area, this broad range covers most of the "affordable" housing that buyers can actually afford.

After the wild swings we've come accustomed to, these numbers may appear to be small- and that's OK! Exciting real estate is not for the faint of heart. After a wild roller coaster ride for the last decade, slow and steady is a nice change of pace. Let's see what the next few weeks bring and what that could mean for our continued recovery here in the Valley of the Sun. Stay tuned for more to come!

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Jan. 2015: Phoenix & Scottsdale Real Estate Update

Phoenix or Scottsdale Seller? How Demand Affects Your Sale.

I don't usually blog about nationwide economic events because real estate is hyper-local, but this latest post from the Cromford Report was interesting enough for some deep consideration:

"January 31 - The local housing market might be pretty quiet right now, but we are seeing dramatic action in the numbers just released by the Census Bureau. Household formation shot through the roof during the fourth quarter. THIS IS BIG NEWS, despite there being little reporting of it in the media at large.

The annual household formation numbers for the fourth quarter were as follows:

• October 2014 = 1,435,000
• November 2014 = 1,618,000
• December 2014 = 2,001,000

These are colossal numbers, especially compared with 12 months ago:

• October 2013 = -110,000
• November 2013 = 103,000
• December 2013 = -205,000

The December number of just over 2 million is the highest we have seen since June 2005, almost 10 years ago and at the height of the housing bubble.

At the moment this household formation rate is translating into demand for rentals, but in every up cycle this is the first stage and it is usually followed by an upturn in demand for homes to buy. Household formation is usually a leading indicator of both upturns and downturns in the housing market, especially when examined as a 12-month rolling average.

The current chart looks like this:"

While this chart is for the US, not specifically for AZ, here's how this info could impact us here in Phoenix & Scottsdale:

Renters- Start asking yourself questions like: Is my rent increasing regularly and if so, how does that impact me financially? Am I often moving at the hand of my landlord(s)? Are my plans to stay in Maricopa for at least the next 3-5 years? If you answer "yes" to any of those, you probably want to talk to an accountant, me (REALTOR®) and a loan officer, in that order. There may be more sound financial options for you than you are aware of...

Buyers- the influx of residents moving into our state that has been a trend over the last several years continues. The number of renters coming out of the "penalty box" from "derogatory credit events" (short sales, foreclosures, bankruptcies) is increasing by the thousands and this year will mark a particularly large spike. These newly eligible borrowers are now your competition. Interest rates are still flirting with record low numbers- now nearing a low-point last seen in 2013. If the interest rate goes up .25-5%, how does this impact how much home you can buy? Increased competition will make it even harder to find a home at lower prices... maybe you might want to put some urgency into your search.

Landlords- rents have been good for a really long time... have we maybe seen the peak of this wave of low, low, low vacancies and rising rents? Start paying attention to what's going on around you. See how long it takes other landlords to rent their units, that are similar to yours. Find out what those homes are renting for. Pay attention to your costs- maintenance, carrying, etc and know where your break-even points are so you make wise decisions.

Sellers- Are better times ahead? Will renters fresh out the "penalty box" exercise their right to have another piece of the "American Dream"? Will tenants who relocated years ago, finally decide to lay down roots and buy? Will all the people who previously had no interest in owning, for whatever reason, finally realize that it makes more financial sense for them individually to buy over rent? We're already seeing improvements at certain price points. Stay tuned for more...

In the meantime, call me with any questions about any of this info or to zone in on the details more applicable to you!

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Jan. 2015: Phoenix & Scottsdale Real Estate Update

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Phoenix or Scottsdale Seller? How Demand Affects Your Sale.

2015 is here!!

As predicted, our market is slowly starting to shift back in favor of Sellers. Considering that the Cromford Market Index today stands at 99.9 for the entire area (100 is balanced; below 90 is a Buyer's Market; above 110, it's a Seller's Market!), things are definitely looking up!

Here's why- There is still a relatively low supply of homes.  According to the Cromford Report:

"January 15 - After 2 full weeks it is now possible to analyze the rate of new listings coming on to the market without distortions due to the highly weighted distribution by day of the week.

There have been a total of 4,353 new listings added since the start of the year (across all areas & types) which is 9.1% below 2014 and 1.3% below 2013. This is a low number and suggests that supply trends are weak despite the seasonal increase in active listings that we see in January every year. In fact it is a new record low for the 15 year period 2001-2015.

New supply is particularly weak at the bottom of the market under $200,000 while it is quite strong over $800,000.

Sellers of entry level homes are going to have less competition while sellers at the top end are going to have more competition compared with last year.

The new supply of short sales and REOs across greater Phoenix is much lower than in any of the years since 2008, but is higher than 2007 and all previous years since 2001. HUD homes are down to insignificant levels, lower than all years since 2001 except 2005 through 2007."

Look at supply trailing off...

And demand is picking up too. After the usual seasonal dip, demand is creeping back up.

So, back to the laws of supply and demand, if demand goes up and supply goes down... eventually we'll start to see upward pressure on home prices. That's probably several months out until there are are comps to substantiate the higher prices for new sales, but that's the direction most sellers are hoping the market will go.

Where are things looking the best?

Well, at this point, for BUYERS, it will be homes priced above $600K, though, you may have heard about the resurgence of the luxury market...

For SELLERS, guess what? It's a "Seller's Market" for homes priced between $50-300K. The median sales price for our area stands at $195,000.  That means that a good portion of The Valley falls into that range, so now may be the time to look at your options if you want to make a move.

Remember though, real estate is a hyper local animal. If you want to know exactly how YOUR neighborhood is shaping up, contact me and I can give you the run down of what's happening in your neighborhood.

We've got a lot of winter visitors and celebrities in the Valley of the Sun for the Barrett Jackson Auto Auction (WestWorld- North Scottsdale), Waste Management's Phoenix Open, (TPC- North Scottsdale) the Super Bowl XLIX & Pro Bowl, (Downtown & Glendale) Arabian Horse Show (WestWorld- North Scottsdale), MLB's Cactus League Spring Training (Valleywide) and many more events. A lot of these folks are coming from really cold places and may just want to have their own place to escape and enjoy our warm, sunny winters.

Buyers, if you need good representation to find your next home, call me to learn about what you might encounter in your price range and target area.There are some great options out there, but depending on your what and where, you may need to act fast. Have you heard about how low rates are now?? A client was recently quoted 3.75% for a 30-year fixed conventional loan!! Run that through a mortgage calculator to see what your monthly payment might look like!!

If you plan to sell, now may be the time. Let's talk about whether it is your time to sell, and what you can do to maximize your sales. If you're ready to pull the trigger, let's get a customized marketing plan set for you! Have I told you about my one-stop-shop to get your home market ready without all the hassle of chasing down 5 contractors to get everything done?

Enjoy your weekend!!

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Just check out this recent post from the Cromford Report speaking directly about the state of the luxury market in the Valley of the Sun:

January 13 - December was a huge month for luxury homes sales - the best December since 2006 with 109 closed transactions across Greater Phoenix for homes priced at $1 million and above. This was an increase of 10% over December 2013. Only 2 of the closed sales were distressed and these were short sales.

By price range, comparing December sales for single family homes across Greater Phoenix:

• $500,000 to $600,000 - highest number of units sold through ARMLS since 2006
• $600,000 to $800,000 - highest since 2006
• $800,000 to $1,000,000 - highest since 2006
• $1 to $1.5 million - same as 2012
• $1.5 to $2 million - equaled the previous record set in 2006
• $2 to $3 million - highest since 2007
• Over $3 million - 1 fewer than last year

The ultra-high end was not quite as impressive as recently, but 2014 was the best full year since 2008 with 84 closings for homes priced over $3 million.

News outlets like the Arizona Republic and Phoenix Business Journal have been good about documenting what's going on. I'm sure the influx of winter visitors and the continued strength of the stock market and economy are contributing to the strengthening in the luxury market. Will it eventually flow down to the lower segments? Only time will tell. Stay tuned for more...

Check out luxury homes in the area here: Find a Home

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A Few Reasons 2015 Will Be a Good Year for Phoenix Real Estate

If you need someplace to live in Phoenix or Scottsdale, AZ, you might want to consider buying a home over renting. Last Friday, the Arizona Republic reported  "It's much tougher to find an affordable rental in Phoenix now than a year ago," said Mike Orr, director of the Center for Real Estate Theory at W. P. Carey School.

"Most of the rentals available now are priced above what the typical household can afford." They went on to report, "The average rent for a Phoenix-area house or condo is up 5.7 percent from a year ago, according to Arizona State University's W.P. Carey School of Business. The typical apartment rent is up more than 5 percent, research from RealFacts shows."

For the past few years, would-be renters considering all factors when deciding to rent or buy, have seen that buying has been the more economical choice given the fact that it's usually about the same or in some cases, less expensive to pay a mortgage with today's interest rates. Owning a home, if you can come up with the down payment, which many banks have lowered to as little as 3% of the purchase price, depending on your FICO scores, income and outstanding debt.

In my last blog, Buy vs. Rent- MATH Still Makes a Case to BUY, I discussed the Cromford Report's (also headed by Mike Orr, quoted above) argument that after 5 years, even at only 4% annual appreciation, most buyers would be up nearly $60K in equity by choosing to buy over renting.

How do you know if you're a good candidate to buy? Here are a few indications:

1. You have money for a down payment. A minimum of 3% of the price of the home you want to buy is a good place to start, depending on what you want to buy. Some banks have programs that might require counseling to get this rate, but it's incredibly low. 3.5% is the minimum for an FHA loan, in which homes have to meet a certain criteria to be eligible to qualify. 5% is typically the minimum for a conventional loan (below $417K).
2. You have a FICO score at or above 600. I'm not talking about your credit score from freecreditkarma.com, I said your FICO score, the one that a lender or some other institution that issues loans sees. If anyone pulls your credit, you're owed a copy of it, particularly if they deny you for what you applied for! Some lenders will work with borrowers who have lower FICO scores but you may pay a higher interest rate.
3. You can commit to living in the home or are comfortable with the option of renting out your home if you are unable to  for at least 5 years.
4. You have a regular income that is documented with paystubs, W2s and tax returns that are all current.
5. You aren't saddled with more debt than you can manage to repay in this lifetime. Don't get me wrong, most people have debt, but I'm talking about lots of maxed out credit cards and an endless loop of collections who call you daily.

If most of these apply to you, call/text or email me for the name of a few good lenders to talk to immediately. I know several great lenders who are patient and will see if you might qualify for a home loan.

If you are a little concerned that you might not quite meet all of these, call me. I'm not qualified to say whether you are, but since I work with buyers AND lenders regularly, I know what it takes to be a good borrower and have helped several buyers make the leap from renting to buying!

TGIF!

Related:

Buy vs. Rent- MATH Still Makes a Case to BUY

A Few Reasons 2015 Will Be a Good Year for Phoenix Real Estate

2003-2014: Is the Average Phoenix Mortgage Payment Up Or Down?