At the start of June, we continue strong before summer heats up in Phoenix & Scottsdale. Here's what our friends at the Cromford Report are saying:

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• Total Monthly Sales Up 3.4%
• Monthly Median Sales Price Up 6.5% to $226,900

For Buyers
Welcome to June!  The weather is heating up and Realtors are using oven mitts on lava-hot lockboxes and keys to show property.  If you’re planning to continue your search into the summer, you may find some relief in the competition for that perfect property.  While other potential buyers are distracted by graduations, vacations and weekend getaways, that leaves a slightly longer window of opportunity for snagging up those new properties that hit the market.  Don’t expect current price trends to change anytime soon. There is still more demand than supply in many areas under $500,000 so expect sales prices to continue rising through the summer, especially for properties under $200,000.

For Sellers
This month we’ve introduced the Listing Success Rate into our graphic.  This measure counts all of the listings that closed, canceled or expired over the last month and takes a percentage of those that closed.  The current measure is 76.7%, which is very positive considering it was 66% at the end of 2014.  The price ranges with the highest success rates are $100,000-$200,000 with 85% of listings successfully closing and only 15% cancelling or expiring followed by the $200,000-$300,000 price range with an 81% success rate.  The higher price ranges over $500,000 are seeing lower success rates with those over $1M seeing more properties cancel or expire in a month than close.   This is actually typical as many sellers in these price ranges choose to cancel their listings once temperatures reach over 100 degrees and relist when things cool off in October, causing a higher than normal cancellation rate for June.

Camille's thoughts: In a nutshell, listings, pending listing & the median sale price are going up! In case you're curious, our median sale price stands today at $226,900. It peaked at $265K in June 2006 and reached a trough of $108,100 in May 2011. The trend I've been reporting for the last several months appears to be holding strong. We still have over 14% to go to reach the peak, but we've improved 110%!

To the point of competition for buyers under $500K, Marisa & I listed a gorgeous home in excellent condition near Uptown Phoenix (where all the cool new restaurants, offices & shops keep popping up) in late May for $335K. Within days, we had multiple offers and one over asking!

**Sellers over $500K**  Take note and use the next 2 months that are typically slow to prepare for renewed buyer demand when it gets cooler this fall. When you get an interested buyer, there are very few locations in town (i.e. Arcadia)where you won't necessary have to put your best foot forward and be nice, should you be lucky enough to get an offer.

**Buyers over $500K** There are still tons of locations where finding a luxury or near-luxury home at a good price is an option. Your best bet will be homes that need work, if you are brave enough to take on a challenge. If it's perfect and something you'd expect to find on a home improvement show in the "after" segment, good luck. You'll need it!

Here are a few more points from the Cromford Report that were so interesting, I had to share them:

June 12 - We already know that appreciation is strongest for the least expensive homes at the moment. Contrary to what you might expect, prices are rising the fastest in areas with the highest crime rates, worst performing schools and worst reputations. Most areas with the highest levels of desirability and either appreciating very slowly or depreciating. There are a few exceptions; Arcadia springs to mind.

In the same way the least expensive dwelling types (on a price per sq. ft. basis ) are appreciating the fastest and those with the highest price per sq. ft. are slowest to rise in price. Comparing the annual average $/SF between June 1 2015 and June 1, 2016 we see the following:

1. Twin homes - up 12% from $89 to $99 per sq. ft.
2. Mobile homes - up 11% from $68 to $76 per sq. ft.
3. Townhouses - up 9% from $123 to $134 per sq. ft.
4. Single family detached - up 5% from $131 to $138 per sq. ft.
5. Apartment-style homes - up 4% from $141 to $146 per sq. ft.
6. Patio homes - up 1% from $156 to $157 per sq. ft.

• June 11 - Fix and flips appear to be attracting attention again after a quiet period during the first half of 2015. Mind you we are nowhere near the peak that we saw in 3Q 2012 when flip sales were 12% of the total market across Maricopa and Pinal counties. In the spring of 2015 we reached a low of below 5% of the market and have since recovered to around 6%.
• June 5 - In an interesting development, the percentage of home purchases that were all-cash in Maricopa County fell to its lowest level since October 2008 in May 2016. The percentage was 19.5%, down from 20.9% in April.In May 2015 this percentage was 21.3%, so this supports the theory that some lenders are being a little less restrictive in their loan underwriting.
• June 1 - A couple of statistics that came out this morning suggest a stronger market.Only 182 homes were purchased by third parties at trustee sales in Maricopa County during May. However this represents 65% of all the auctions, so only 98 properties went back to the beneficiary (or lender). This is the lowest monthly total of REOs created since October 2006, almost 10 years ago. Also 65% is the highest percentage of properties catching a bid since April 2006, more than 10 years ago.The total dollar volume of homes closed through ARMLS during May was $2.464 billion. This is up 10% from May 2015 and the highest monthly total since June 2006

So, a few more things to consider: The least desirable areas and property types are generating the highest appreciation (Go figure!!). The lack of "turn-key" inventory is prompting flippers to jump back into the market (sellers, are you paying attention??). Cash sales are declining. The money is flowing from banks again- some buyers who could buy with cash are choosing instead to finance with rates as low as they are.

Finally, contrary to popular belief REOs or "bank-owned" properties A) are not here in any kind of abundance & B) after auctions on the county courthouse steps fell out of favor, they're gaining popularity again; they were once popular enough to spawn an HGTV show here about that business in Phoenix. Coincidentally, May 2016 was the best month I've ever had since I got into the business almost 11 years ago.

There's some food for thought. Hopefully, this info was enough to make you start asking questions...

Be sure to call/text me or email me with your questions! I'll have what you’ll need to know to be dangerous…

Related Info:

May 2016 Phoenix Metro Real Estate Snapshot

Summary of Metro Phoenix Real Estate: Jan-April 2016

April 2016 Phoenix Metro Real Estate Snapshot

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I feel like I've been living under a rock... I've worked some pretty long hours, but the year is off to a good start. Please forgive me for being a bit behind on my market updates. I created a handy infographic to sum up all the major details of real estate in the Phoenix Metro Area. Take a look:

Hope it makes it easy for you to know what's happening. If you've got any questions, please call/text or email me and I'll give you the latest!

Related Info:

Buyers: What it Really Costs to Buy a Home

April 2016 Phoenix Metro Real Estate Snapshot

Buyer Pep Talk: Don't Focus on the Wrong Things

April was a decent month. Here's what the folks at the Cromford Report had to say about real estate in Phoenix & Scottsdale:

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• Listings Under Contract Up 6.5%
• Monthly Median Sales Price Up 9.9%

For Buyers
May is often the last month of “buyer season” before the summer slowdown.  In anticipation of hotter temperatures, graduations and upcoming summer vacations, many home buyers would prefer to get their contracts into escrow and closed before the end of June.  As a result, there are many areas of the valley where there are currently more properties in escrow than active for sale.   Not surprisingly, those areas are concentrated where the average sale price is under $250,000 in parts of the Southeast Valley (such as North Tempe, West Mesa, North Chandler and North Gilbert), South Phoenix, and most of the West Valley.  This is temporary, buyers can expect relief from competing offers in the summer months if they choose to brave the higher temperatures.

For Sellers
Overall sales have been following 2015 pretty closely thus far.  April was down less than 1% from April last year, but year-to-date sales are up 2.5% as of week 19.  The main difference is in the activity by price range.  Sales under $175,000 have been declining year-over-year for the past 9 months with April 2016 down 18.4% from April 2015.  This is not due to low demand, but low supply of homes available for sale.  April sales between $175,000 and $600,000 are up 15% year-over-year and down 9.3% over $600,000.  The big difference between these price points is the level of supply.  It’s chronically low in the bottom price ranges and too high at the top, causing vastly different experiences for sellers.  Properties selling under $175,000 are experiencing annual appreciation around 10% since the beginning of 2016.  Middle range properties are seeing around 3-5% annual appreciation, and the high end properties over $500,000 are experiencing flat appreciation rates at best with some price ranges at the very top seeing negative annual appreciation.

In a nutshell, though we thought we hit the peak where demand starts to "absorb" all the new listings coming to market, it may not have been enough to fully keep the market in check. Just as it's been over the last few months, the least expensive properties listed have the highest amount of buyer demand while the most expensive ones, have the least demand.

Here are a few noteworthy Daily Observations from the Cromford Report over the last month:

• April 29 - After 4 full weeks in the second quarter we see that new listings are still arriving faster than normal. The count so far this quarter is 9.4% higher than last year and 8.7% above the 2014 level. The price ranges with the highest increase in new listings compared with last year are:
  1. $400,000 to $499,000 - up 19% from 650 to 772
  2. $225,000 to $249,999 - up 16% from 773 to 898
  3. $500,000 to $599,999 - up 14% from 348 to 395
  4. $175,000 to $199,999 - up 12% from 881 to 989
  5. $350,000 to $399,999 - up 11% from 611 to 681

  The extra supply below $200,000 will be welcomed by buyers, but it is not such a happy picture below $175,000

  1. Up to $99,999 - down 36% from 632 to 405
  2. $100,000 to $124,999 - down 34% from 465 to 306
  3. $125,000 to $149,999 - down 28% from 864 to 619
  4. $2,000,000 to $2,999,999 - down 17% from 52 to 43
  5. $1,500,000 to $1,999,999 - down 12% from 60 to 53

  The luxury market between $1.5M and $3M needs less supply, so the fall in new listings compared to last year is good news for sellers. The huge fall in supply under $175,000 is even worse than it looks for buyers in this range because we were already in a very weak supply situation last year.

• April 20 - For the Northeast Valley we see three very strong ZIP codes for single family appreciation between 1Q 2015 and 1Q 2016:
  1. Scottsdale 85251 - 19% (Old Town Scottsdale)
     
  2. Scottsdale 85257 - 17% (South Scottsdale)
     
  3. Carefree 85377 - 17%

  The following were the weakest areas by the same measurement:

  1. Scottsdale 85266 - down 9%
  2. Scottsdale 85262 - down 3%
  3. Rio Verde 85263 - down 2%
  4. Cave Creek 85331 - down 1%
  5. Paradise valley 85253 - flat
• April 16 - While the low end of the market labors under weak supply conditions and the mid range continues to look strong, the upper end of the market has got a fair assortment of trouble spots. If we segment by price among the primary luxury areas of the valley, we see the following:

  A. $500K to $1M

  Supply is up 19% compared to April 2015 while sales during the first quarter were up a strong 16%. Despite the increase in sales the additional inventory is forcing sellers to agree to weaker pricing. The average price per square foot for first quarter sales was down 2.4% from $198 to $194 per sq. ft. compared with 1Q 2015.

  B. $1M to $2M

  Supply is up 18% while sales during the first quarter were up 9%. Despite this imbalance sellers seem to have more backbone in this price range and have eked out a 2.1% gain from $283 to $288 per sq. ft. between 1Q 2015 and 1Q 2016.

  C. Over $2M

  Supply is 7% higher than last year while first quarter sales were up 15%. This is the best of the three segments for sellers and they achieved a 2.5% gain from $426 to $437 per sq. ft. between 1Q 2015 and 1Q 2016.

  Since segment A is by far the largest in terms of unit sales, the overall appreciation for homes over $500,000 was an insipid -0.5% between 1Q 2015 and 1Q 2016.

  Note that all of the above numbers are for single family homes only.

  Based on 1Q 2015 to 1Q 2016 comparisons, the weakest ZIP codes for luxury price trends are currently 85016 (Biltmore), 85048 (Ahwatukee), 85142 (Queen Creek), 85207 (far East Mesa), 85213 (Mesa), 85262 (N. Scottsdale), 85266 (far N. Scottsdale), 85286 and 85383.

  The strongest ZIP codes for luxury price trends are currently 85018 (Arcadia), 85020 (Heart of Scottsdale), 85248 (SW Chandler), 85251 (Old Town Scottsdale), 85254 (Phx Taxes, Scottsdale address), 86255  (likely this is an error and the zip is 85255- DC Ranch, Grayhawk, McDowell Mtn Ranch), 85258 (McCormick & Scottsdale Ranch), 85259 (East Shea Corridor), 85268, 85284 and 85377 (Carefree).

• April 14 - The worst areas for price appreciation at the moment are almost all at the most expensive end of the market. When we refer to the city ranking table, we see the following at the top:
  1. Paradise Valley +1.9%
  2. Carefree -0.9%
  3. Scottsdale +1.9%
  4. Fountain Hills -0.7%
  5. Cave Creek -0.3%
  6. Rio Verde +1.9%

  These locations, the six most expensive places in the Greater Phoenix area, all show lower appreciation than any of the other cities with 2 exceptions in Pinal County:

  1. Gold Canyon -3.7%
  2. Casa Grande +0.8%

  Of course, Gold Canyon is the most expensive location in Pinal County, but ranks only 9th in the overall table. It is bottom of the table for appreciation.

  This is convincing evidence of weakness in the luxury sector of the market in contrast to the entry-level and mid-range of the market which are seeing relatively strong appreciation.

  The top appreciating locations are all relatively small and inexpensive:

  1. Tonopah +27.9%
  2. Wittmann +18.0%
  3. Eloy +16.6%
  4. Youngtown +14.1%
  5. Sun City +10.4%
  6. El Mirage +10.4%
• April 8 - It looks as though the slowdown in new listings that we reported at the end of March was just a temporary lull. We are now seeing them rise again. We have seen over 10,000 new listings for every 28 day period in 2016 from January 30 onwards apart from 3 days - March 31 to April 2 - so the temporary lull coincided with the week after Easter.

  In 2015 we NEVER saw more than 10,000 new listings in any 28 day period, and the last time before that was April 17, 2014.

  Of course the supply of new listings continues to be poorly matched to the price ranges where they are most needed.

  Across Greater Phoenix, during the first quarter of 2016, we saw 7% more new listings than in the first quarter of 2015. However we also saw 7% more closed sales, so these numbers are nicely matched. They are not so nicely matched when we analyze by price segment:

  Price Range	Change in New Listings	Change in Closed Listings	Comment on Change 2015 to 2016	Ratio of New Supply to Quarterly Sales Q1 2016
  Up to $100K	-28%	-28%	balanced	1.4
  $100K-$125K	-24%	-24%	balanced	1.3
  $125K-$150K	-20%	-16%	new supply dropped relative to sales	1.2
  $150K-$175K	-1%	+14%	sales rose much faster than new supply	1.3
  $175K-$200K	+12%	+15%	sales rose slightly faster than new supply	1.5
  $200K-$225K	+19%	+22%	sales rose slightly faster than new supply	1.5
  $225K-$250K	+23%	+19%	new supply rose slightly faster than sales	1.6
  $250K-$275K	+26%	+32%	sales rose faster than new supply	1.5
  $275K-$300K	+15%	+17%	sales rose slightly faster than new supply	1.7
  $300K-$350K	+15%	+21%	sales rose faster than new supply	1.8
  $350K-$400K	+17%	+3%	new supply rose much faster than sales	2.1
  $400K-$500K	+21%	+22%	balanced	2.1
  $500K-$600K	+23%	+18%	new supply rose faster than sales	2.5
  $600K-$800K	+33%	+18%	new supply rose much faster than sales	2.8
  $800K-$1M	+10%	+12%	balanced	3.0
  $1M-$1.5M	+16%	-15%	new supply rose while sales fell	3.7
  $1.5M-$2M	+12%	+22%	sales rose faster than new supply	3.7
  $2M-$3M	+6%	+4%	balanced	3.4
  Over $3M	+27%	+37%	sales rose faster than new supply	5.5

  Supply shortages are most acute in the ranges where the ratio of new supply to closed sales is 1.6 or less. This includes all the ranges up to $275K but from $225K to $250K we did see some improvement for buyers over last year.

  Below $275K we therefore see continued strong appreciation, short times on market and low cancellation and expiry rates.

  From $275K to $350K we see very healthy market conditions with new supply and closed sales both up significantly from last year.

  From $350K-$400K the growth in supply was strong, but sales growth was much weaker than average, suggesting there may be a few problems developing for sellers. However from $400K to $500K the percentage growth in new listings was matched by the growth in closed sales. I would describe this sector of the market as normal, healthy and growing, with no major shortages of buyers or sellers.

  From $500K to $800K new supply outstripped the growth in sales, so even though there was a healthy increase in volume we see more competition building between sellers.

  From $800K to $1M the increases were balanced but we do see 3 times as many new listings as we see closed sales. This is likely to mean higher cancellation and expiry rates and long times to sell ahead. It also means minimal upward pressure on pricing.

  The issue for sellers with homes priced over a million is that the number of new listings outpaced sales by at least 3.4 to 1. This is not unusual for this segment, where new listings comfortably exceed closed sales at all times. The bad news is that sales were slightly down (-1.4%) from last year, primarily due to surprisingly poor performance by the segment from $1M to $1.5M. Yet new listings were up almost 15% for homes over $1M. This is a good situation for luxury home buyers, but it is not very good news for sellers who would like to see some appreciation. The current market environment over $1 million is consistent with a flat to slight downward trend in prices, long times on market and high rates of cancelled and expired listings. There some very fashionable locations (close to urban centers) where this does not apply, but the bulk of the luxury market has reasonably good demand but excessive supply. Because of the good demand, agents will be happy with the transaction volume, but sellers are likely to be disappointed with the sales prices that can be achieved, and how long it takes to achieve them. These sellers hear about prices rising both locally and nationally, but unfortunately it does not apply to them.

  There are currently 2,087 homes for sale priced over $1 million across Greater Phoenix. Last year's peak was 1,880 and back in 2012 we had only 1,204. The current annual sales rate for homes listed over $1 million is 1,225, slightly down from a peak of 1,253 in August 2015. So that means we have more than 20 months of supply, more than enough to give buyers an excellent selection to choose from and a solid advantage in most negotiations.

What's an entry-level buyer to do?

1. Be flexible.
2. Be prepared financially.
3. Be educated about the market.
4. In the right place at the right time & very nice to the seller.
5. Be ready to become a weekend warrior and make some home improvements.

What's a luxury home seller to do? (It's not too far off from what the entry-level buyers have to do).

1. Be flexible (with your pricing and buyer requests).
2. Be prepared financially (to get less than you want for your home or be a landlord).
3. Be educated about the market (are your area values up or down).
4. Be nice (to your buyer).
5. Be ready to become a weekend warrior to make some home improvements or willing to accept that your buyer may want you to hire someone to do work to your home.

Don't forget, you can call/text me or email me with your questions! I’ll have what you’ll need to know to be dangerous…

Related Info:

April 2016 Phoenix Metro Real Estate Snapshot

Summary of Metro Phoenix Real Estate: Jan-April 2016

March 2016 Phoenix Metro Real Estate Snapshot

You’ve decided you want to buy a house. It’s one of the largest purchases you’ll probably make. You know you have expenses but you don’t completely know what they are other then you have a down payment and the balance that’s due when you close. Many buyers have no clue what their costs are even if they’ve already purchased a home in the past. In case you’re wondering, here is how it all breaks down:

When you find it, the "perfect" house you want to buy in (North Central Phoenix, Arcadia Lite, McCormick Ranch, Desert Ridge, etc.) costs $500,000. It fits your budget and you’re ready to pull the trigger. The handy little mortgage calculator app you spend lots of time with during breaks and lunch (and when you're bored) will tell you what you can expect to pay monthly AFTER you close, but it won’t tell you what your costs are to get into the house. If you’re buying the house with cash, the costs are a little lower, but there are still costs.

When you make your purchase offer, the math on the contract looks like this:

• Purchase price: $500,000
• Earnest deposit: $7,500- the amount you deposit at escrow in good faith to the seller; usually 1-2% of the offer price; it will count toward your final balance due at close of escrow.
• Balance due: $92,500 down payment towards the purchase; $400,000 New Financing (you’re putting 20% down)
• Close of escrow is 6/2/16

The seller accepts your offer and BINGO! You've got a house! Now what??  You deposit your $7,500 with the title company 24 hours later.

And then... You need to inspect the house to know what you’re getting. Your house is about 3,000SF. You’ll want a general home inspection & a termite inspection at a minimum. The general inspection shows you may have a blockage in the plumbing line or it's old and you want to make sure that the pipes aren't shot. You schedule a plumber to check it out. You pay for your appraisal. Let's stop and tally up these costs:

You go through your inspections. Everything checks out okay and you still want to buy the house. You’re getting close to the close of escrow. At some point, your lender or agent will give you an estimate of your closing figures to know what you still owe before you can close on the purchase of this home. You have some more costs: (detailed here on an estimate from First American Title)

This totals all of your lender’s costs, fees, tax/HOA/Insurance pro-rations. Broken down, it looks like this:

• Your title/escrow/loan costs are calculated- $14,730.17
• Add your total down payment- $100,000
• Subtract your earnest deposit (money already paid)- $7,500
• Your total “Cash to Close” is $112,480.68

 If you want to know your total out of pocket cost that you'll pay with your down payment, it looks like this:

Did you wonder what in the world cost you almost $16,000?? Let's look a little closer...

Keep in mind, the fees that are "paid in advance"  are essentially costs that are paid up front. When you close on the 2nd day of the month, you're essentially paying for an entire month of mortgage interest up front. Your mortgage payment now won't be due until 8/1/16 because we pay mortgages in arrears. If you don't want to pay so many pre-paid costs at closing, close as close to you can to the last business day of the month.

The "reserves deposited with lender" are an account set up so that as your taxes and/or insurance fluctuate, there's never a risk to the bank of being short and having a lapse of coverage. If you refinance or sell your home, the bank can't keep this money. It's YOURS and they have to give back any balance that remains after the account closes. Note: these 2 sections alone add up to almost $4,300!

The most important thing to know is that you can SAVE… These are the fees to watch from the time you start the loan process, not once you find the perfect house. Many can be shopped, are negotiable or avoidable. I personally don't care to pay "loan origination" fees (almost $5,100 here!). You can drop it by paying a higher rate or by finding a better loan program all together.

You can skip all the HOA fees simply by buying a home that is not part of an association. The key is to know what your costs are up front and start to think about how you're going to pay them, or if you are uncomfortable with them (and/or like to spend wisely), you can start this process before you go on the journey... Knowledge is power!

Please call me or email me with your questions and I can help!

Related Articles:

April 2016 Phoenix Metro Real Estate Snapshot

Buyer Pep Talk: Don't Focus on the Wrong Things

March 2016 Phoenix Metro Real Estate Snapshot

The market picked up a lot over the last month and our spring season is showing strong signs of life! Here's what you need to know!

• Sales Up 7% Over 2015
• Median Sales Price Up 6.4%
• Active Listings Up 1%

For Buyers
For the first time since November 2014, supply is higher than it was the previous year.  This is generally good news for buyers, as it means there are more listings competing for their attention.  However, buyers looking for homes under $200,000 will find this is not true.  The Phoenix Metropolitan area is still nearly 19% below normal in supply, with the lower price ranges in the shortest supply.  Sales under $200,000 have made up 45.5% of all sales in the last 12 months, so this is a significant market to be in short supply.  Buyers looking over $300,000 are experiencing an 11% increase in supply valley wide.  The increased competition is resulting in a 19% increase in weekly price reductions compared to this time last year, especially among listings over $500,000.

For Sellers
The good news for sellers is that contracts in escrow are up 5% and sales are also up 7% over last year.  Demand has been rising over the past month and seasonally is close to its highest level for buyer activity.  Sellers who wish to list their home at the “peak” of buyer activity should not wait too much longer.  April and May are typically the highest months for buyer activity before slowing down in the summer months.  This is especially true in the luxury market over $500,000.  It’s not uncommon for buyer contract activity to drop anywhere from 25%-40% between May and August as seasonal buyers head towards cooler climates.

–Written by Tina Tamboer-Glatfelter, The Cromford Report

At face value, this sounds great. However, "The Core" where I spend the bulk of my time, is not quite seeing the same picture. The supply for homes over $500K is way up, which is throwing a bit of a wrench into things. This "Daily Observation" from 4/16/16 sums it up well:

April 16 - While the low end of the market labors under weak supply conditions and the mid range continues to look strong, the upper end of the market has got a fair assortment of trouble spots. If we segment by price among the primary luxury areas of the valley, we see the following:

A. $500K to $1M

Supply is up 19% compared to April 2015 while sales during the first quarter were up a strong 16%. Despite the increase in sales the additional inventory is forcing sellers to agree to weaker pricing. The average price per square foot for first quarter sales was down 2.4% from $198 to $194 per sq. ft. compared with 1Q 2015.

B. $1M to $2M

Supply is up 18% while sales during the first quarter were up 9%. Despite this imbalance sellers seem to have more backbone in this price range and have eked out a 2.1% gain from $283 to $288 per sq. ft. between 1Q 2015 and 1Q 2016.

C. Over $2M

Supply is 7% higher than last year while first quarter sales were up 15%. This is the best of the three segments for sellers and they achieved a 2.5% gain from $426 to $437 per sq. ft. between 1Q 2015 and 1Q 2016.

Since segment A is by far the largest in terms of unit sales, the overall appreciation for homes over $500,000 was an insipid -0.5% between 1Q 2015 and 1Q 2016.

Note that all of the above numbers are for single family homes only.

Based on 1Q 2015 to 1Q 2016 comparisons, the weakest ZIP codes for luxury price trends are currently 85016, 85048, 85142, 85207, 85213, 85262, 85266, 85286 and 85383.

The strongest ZIP codes for luxury price trends are currently 85018, 85020, 85248, 85251, 85254, 86255, 85258, 85259, 85268, 85284 and 85377.

Ouch! In a nutshell, oversupply still outweighs the seasonal increase in sales, especially within the $500-1M price range where appreciation is negative. Homes over $2M are performing the best of the over $500K crowd. The Biltmore, Ahwatukee and North Scottsdale (Troon North, Desert Highlands, Desert Mountain, Legend Trail, Teravita, etc.) are not looking so hot. Conversely, Arcadia, North Central Phoenix, Old Town Scottsdale, Central Scottsdale (McCormick Ranch/Scottsdale Ranch, DC Ranch/McDowell Mountain Ranch/Grayhawk, the East Shea Corridor & Carefree are looking more stable.

**Sellers over $500K**  Take note and really start making good use of the next 2 months or be prepared to settle in for the summer slow-down.

**Buyers over $500K** Do you sense any opportunities? Patience is a virtue here. Be diligent and it'll pay off.

And of course, be sure to call/text me or email me with your questions! I have what you'll need to know to be dangerous...

Happy April!!

Often when I work with buyers, I see them get hung up on details that should make no difference in the overall process of purchasing a new home. An ugly old door, the wrong paint colors, bad landscaping, horrible curb appeal, dated cabinet/door handles, (the list goes on…) can and will turn them off. That’s because they’re focused on the wrong aspects of buying a home.

I get it. Like dating, there has to be an initial attraction, but at some point, you have to know your non-negotiables and maybe even be willing to bend (or not) if you get everything else you want/need.

Buyers should ask questions like:

• How long will my commute to work be?
• Can I "age in place" here?
• Are the neighbors nosy/uninvolved/caring/party animals?!
• How hard is getting in/out of my community when I usually come and go?
• How far is the airport from here? (business travelers)
• Will this house work if we have (kids/more kids/fewer kids at home)?

Many buyers don’t ask these questions early enough. If they focused more on these aspects of a home, the buying process would be more logical and possibly take less time. They’d be less likely to be distracted by what I call “the pretty”- aesthetic things that don’t impact whether the home is a fit for them or not. Sometimes you can’t answer these questions until you go through the house, but there are clues you can gather to find the answer that will save your effort/time before you get there.

I can’t tell you how many times I’ve heard about buyers going deep into their escrow period only to find out things like: their car doesn’t fit in the garage, or the home is in an airport flight path, along a major bus route, or WORSE, that the home is just too far from the epicenter of where their life really is. It’s not convenient to where they shop, go to school, spend time on the weekends, etc. Buying a home and coming to this realization really just sucks, to be blunt because these are the things you can’t change about a home.

You can paint, improve landscaping, change cabinets, floors, appliances, etc. to enjoy a home more. You can’t change a floor plan very easily (or inexpensively). You can’t change your neighbor who likes to fire up his motorcycle every Saturday or Sunday AM when you like to go out on Saturday nights and sleep in on Sundays. These are the things I wish buyers would think more about.

If buyers also could detach themselves from the sellers lives in the home and focus on whether their own lives fit there, it would be easier to identify the right one. It doesn’t matter if the seller parks their car in the garage sideways and wastes tons of space or if instead of using the massive walk-in closet, their clothes mostly live on the floor. Also, if the sellers have the best swim up pool bar this side of the Mississippi, but you haven’t entertained at home since 2004 and your new commute from the house doubles, it’s probably irrelevant.

I also wish buyers would be more open to asking me for help if they can’t visualize a home after needed/desired improvements. I’ve sold a lot of homes, remodeled many and know personally that many repairs are easy & inexpensive to do. But many buyers automatically assume most home improvements or repairs are too expensive to take on. If you’ve worked with me, you might know that my favorite improvement is recessed lights- only $85/can! However, most other people don’t know this.

Little improvements that cost a few hundred dollars add up to thousands in the eyes of a buyer and the baby gets thrown out with the bath water. Homes that should be realistic options aren’t even considered because the buyer couldn’t see the bigger picture. Some buyers are really good at figuring this out on their own, but many aren’t. The ones who do, usually make the best purchases and have the most financial upside. We call them "flippers"… (yes, like the ones you see on HGTV, Bravo, the DIY Network, etc.) There are lots of them here in Phoenix & Scottsdale. Some are awesome. Some really are not, but still make lots of money because they have more vision than the buyers who buy their homes.

I worked with a newly married & very cute couple a few years ago. Here's what they were able to envision and accomplish in very short order after closing:

[gallery columns="2" ids="5061,5063,5060,5062"]

This is the epitome of doing it the "right" way. They removed popcorn ceilings that dated the house, added recessed lights (YES!!!), painted and changed carpeting (among other things). They LOVED their home and loved how well it suited their life transition from couple to growing family. Before they found "the one" they spent an entire weekend riding around on their bikes exploring the area. They knewI know they were sad when we sold it last year (in a few days, I might add) to move closer to family.

That being said, buyers should be looking at the bigger picture. It’s not one or 2 things that determine whether they will be satisfied with the home they purchase. It’s the sum of  all aspects- the kitchen, bedrooms, backyard, neighbors/neighborhood, grocery stores, commute, etc. Make sense?

The reality is there are very few homes on the market or that I’ve sold which were completely turn-key, even if brand new!! Most buyers will change paint, carpet or things that align the home to their lifestyle. However, many aren’t willing to invest the mental effort, let alone the physical effort to do the work. If you’re spending $500,000 to buy a home, investing mental/physical effort and a few thousand dollars more is nothing in the grand scheme of things. Well, it's 0.6%, to be exact if you're spending $3K AND you plan to live there (and want to be happy) for many years.

My advice to any buyer is to spend time up front and list exactly what you need & want in a home. Then prioritize this list- needs first, then wants. This will save you time and your effort of trekking from home to home (that won’t work) and it will make sure you’re not blinded by “the pretty” enough to make a bad choice. (Mind you, none of this is in my advice to investors- that’s a whole different blog)

Want to know more about my approach? Call or text me. I'll lay it all out there for you. Have a great week!

Related Articles:

March 2016 Phoenix Metro Real Estate Snapshot

Buying a home? Take notes. Then compare them.

Deal Breakes that Get in the Way of Buying the "Perfect" House

Change has been in the air for the last few months within our market. Here's what our local economists have to say:

• Listings Under Contract Up Nearly 9% from Last Year
• Monthly Median Sales Price Up 6% from Last Year
• 50% of Monthly Sales Over $211,900

Here's how February 2016 is shaping up:

• Residential Resale Contracts Up 8.6%
• 5% More Inventory for Sale Over $200,000

FOR BUYERS:
So far 2016 is looking very similar to 2015 in terms of buyer activity in February.  Contracts in escrow are up 8.6% over last year at this time.  That is conservative considering we started off the year with 15% more contracts in escrow.  The real struggle for buyers will be competing for properties under $150,000.  Supply in this price range is down a whopping 40% from this time last year causing frenzy activity around those properties that are in good condition.  As a result, listings in escrow under $150,000 are down 27%.  Supply for properties available for sale between $150,000 and $200,000 is down 20%,  which is still significant but not as extreme as under $150,000.

FOR SELLERS:
Sellers have both good news and bad news.  The good news is that buyer activity is still strong in 2016.  Boomerang buyers, those consumers who have waited the required 4-7 years after short sale or foreclosure to qualify for financing, are keeping demand stable in every price range thus far.  The bad news for sellers is, despite the overall 7.5% decline in supply, the number of competing listings over $200,000 has increased 5% compared to this time last year.  This added competition is keeping annual appreciation more subdued for sellers on the higher end of the spectrum.

--Written by Tina Tamboer-Glatfelter, The Cromford Report

In short, things are looking good for sellers and market appreciation in general. However, this may be a signal of things to come. Buyers and Sellers alike, look to the specifics of the price range in which you're playing and prepare accordingly (buyers under $200K, be patient and tenacious!; sellers know what is coming to market and be intimately familiar with your competition). It's early still and springs is creeping up on us now...

As always, call me with any questions you have or to gain some additional insight. I'm only a call, text or email away!

(Updated from my original post on 3/9/12)

You just decided you want to sell or lease your home, as many sellers do in the Phoenix/Scottsdale area do each spring. You, the Jones's and many other would-be sellers get ready, cross their fingers (and toes) and hope the process will be painless- that they will sell their home for top dollar quickly before spring turns to a long, hot, Arizona summer.

Some will succeed and others' homes will languish on the market well into the summer and fall.  Getting ready and making a good first impression is the best way to get off on the right foot and get your home sold.

What should you do to get your home sold? What is the best way to ensure that you impress the buyers that dare to set foot through your door. It's not rocket science and these 8 steps will get your home sold.  Better yet, I've gone a step further created 2 options for each of these steps- one for the budget-minded seller and another route for the seller with a little extra money on hand.

1. Clean, clean, clean: cleanliness is next to godliness, someone (probably my mother) once said. The easiest way to make a buyer march in your door and walk right back out is to have your home overrun with dirty dishes in the sink, last week's take out cartons on the counter, and/or a dirty bathroom.

These buyers have to envision themselves in your home and the probability of that happening if they can't imagine taking off their shoes, let alone getting comfortable is hard to do.

• Budget solution: Roll up your sleeves and make friends with Mr. Clean. Mop your floors, clean your kitchen and bathrooms. Pick up the dirty clothes and put them out of sight. I've seen even the dullest of homes get a little consideration if they are spotless because after all the mess is picked up, it's still a blank slate your buyer can use to envision their life in your home. Heck, while you're at it, clean the windows too!
• Splurge solution: Hire a cleaning service. Whether it's for the first deep clean you've had in some time or service every week or 2, cleanliness will go over big with buyers- that and it may take a little pressure off you to always have your home show ready. Hiring a window washer could be as inexpensive as hiring the kid next door looking to make a few bucks or hiring a professional who can reach the really high ones that you couldn't reach if you tried. Call me for a referral!

2. Let the light in: Ever walk into a fun house or haunted house? Notice how dark it is? You know when you walk in, there will be all kinds of surprises lurking behind every door. That's how your buyers feel walking into your dark home with every curtain drawn, blinds shut and doors closed.  They may expect the boogeyman might be waiting for them.  It's just plain creepy.

• Budget solution: Open the blinds, let the sun in- yes your pet vampires will go away, but your buyers might find a sense of safety with knowing that they can see the all details like your newer digital thermostat, your spacious master bedroom or [insert your favorite feature of your home here]. Chances are, what sold you on your home when you bought it just might sell another buyer too. Better yet, when you know a buyer is coming to your home, put the lights on for them. Go on, show them what you've got- they just might like what they see!
• Splurge solution: Swap out tired fixtures for newer, brighter ones or hire an electrician and add recessed lighting.  The last time I sold my own home, right before we listed I spent $1500 to add recessed lights (also known as "can" lights) in a hallway that was previously lit with low, pathway lights that were so dim, I could NEVER see into the nearby closets. I added some more recessed  lights in my master bedroom (just 4), master bath and a few in the kitchen.  I had a new found liking for my home after doing this because I could see how nice what I had was.  The buyer who bought my home after 3 days on the market seemed to agree. My electrician does this quickly and even cleans up behind himself. Just ask me and I'll share his name with you.

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3. Spruce up your landscaping: Many sellers are so wrapped up in attending to the inside that they completely neglect the exterior forgetting that potentially buyers have to drive up and actually look at them home as they get out of their car. I've had many an instance where we arrive at a home and the buyer says "I'm not getting out of the car to go see that..."

• Budget solution: mow your lawn, cut down or spray the weeds, trim branches that touch or will soon touch your house and rake your rocks if you have desert landscaping. Again, elbow grease goes a long way. If you can't see the front of your home because the landscaping has grown in so much that it's obscured by vegetation, that's bad.  As for tree limbs that might be touching your home, cut those back so there is about 3 feet between the limb and your home. If you don't, your buyer's general inspection may also note the same thing and your buyer may ask you to do it anyway.
• Splurge solution: add color (flowers) to your front and rear landscaping or anywhere that gets lots of visibility. Here in Phoenix/Scottsdale, geraniums, petunias & gerber daisies grow nicely in the spring and do so in pots and planter beds for not very much more than a trip to Home Depot or Lowes. **Tip: Home Depot has a 1-year guarantee policy on their flowers so if one pot goes kaput in a week and you know that you watered, fed and tended it properly, they will replace the dead one for you with another. My gardener has done this for me many times and can meet with you quickly.

4. Take the "Sniff Test": ever notice that when you walk into other people's homes, there is often an odor? This can range from light floral, to heavy candles, last night's spaghetti and meatballs or worse-yet Fluffy, the cat's one too many accidents on the hall rug. YUCK! Smells also drive buyers out in a hurry.

• Budget solution: Ask someone who you trust to be honest, who doesn't come to your house too often to walk in and take a whiff. The best answer you can get is that there is no smell at all.  This is the answer that's least likely to offend a potential buyer's nose.
• Splurge solution: Eliminate stubborn odors (i.e. pet) with a good carpet cleaning (I'm not talking the Rug Doctor with a little warm water, which can make things worse)! The worst thing is to walk in a home on a hot day and walk into a home with pet odor. The scent is enough to make someone pass out. If cleaning carpets or tile can't get the smell out, consider replacing the rugs, flooring or other source of the odor. If stains penetrate the subfloor below, some carpet cleaning companies have a special treatment for the subfloor too.  I can give you the name of the carpet cleaner who has done this for me many times before.

5. Declutter: Do you have every wedding favor you've ever received displayed somewhere in your home? Is your living room close to last night's episode of Hoarders? Even if it's not close at all, you still want to consider removing items that detract from the feeling that your home is open and spacious. The more stuff you have, the more closed in your home will feel.

• Budget solution: Want to make your closets look bigger, go ahead and clear out roughly half (yes, half- the half that you haven't touched in the last 6 mos.) of it's contents, box it up and put it away in the garage. Better yet, throw it out or donate the portion of the stuff you don't need. There's no sense in moving with stuff you don't need or want.
• Splurge solution: Hire a professional organizer. Did you know, you can pay someone to come into your home, analyze it's contents and they will help you do this? They may charge a consultation fee or charge by the hour (figure a few hundred at a minimum and more if you really have a lot to clear out), but if you can clear out your home enough for a buyer to be able to envision their stuff in there, it's mission accomplished.

6. Make minor repairs: Do your doors squeak when you open/close them? Does the slow drip at the kitchen sink appear to have become a faster trickle over night? The leak in your roof that you remember only when it rains can kill a home sale fast. All these little things can make buyers imagine that there are way bigger problems lurking behind the walls.

• Budget solution: Make a list of the offending issues, pull out your tool kit and get to work. It's amazing what you can do with a can of WD-40, a couple of screwdrivers, and a few other things can do. Have a project that intimidates you, ask a friend for help in exchange for a 6-pack and/or a nice dinner.
• Splurge solution: Hire a handyman to do the work for you if you're strapped for time. They may have everything needed to get it done fast or might be able to get to a hardware store to get it done fast. Want to go the extra mile? Get a home inspection. Your buyer will order one to see what kind of condition your home is in. By ordering the inspection up front and anticipating repair requests and or deal-breakers, you know what to expect and can be prepared. Best of all, you can share the inspection with the buyer who may opt not to have another inspection at all as long as you can prove you did the work.  I can give you the name of my handyman and general inspector if you ask me.

7. Stage your home: Staging your home means getting it ready for the main event: Buyers coming to see it! Have a dress rehearsal, clean it all up and have your best friend walk through it as though they were a potential buyer. What is left out for everyone to see that really should be behind closed doors?

• Budget solution: when you get a call from your agent or a buyer's agent that buyers are headed over, open the blinds/curtains/shades, put on all the lights, put on some soft music, spritz a little air freshener. Get your home ready for it's date with your potential buyer. You'd do it if you were entertaining guests, right? Why not for a potential buyer.
• Splurge solution: Hire a professional stager. For as little as a few hundred dollars, a professional stager will come in and arrange your own accessories and/or bring in a few of their own to get your home ready for buyers. If you have no furniture, you can hire a stager to bring in furniture- this can be very expensive and may require a long-term commitment of at least 3+ months but it may be worth it for higher end homes. I can help to assess this to see whether it's a good option for your home in and around Phoenix or Scottsdale.  My stager has worked for me on many jobs in Phoenix and Scottsdale and is really very inexpensive. I'm happy to share her name with you.

8. PRICE YOUR HOME RIGHT: Even if you do each of the 7 other items and opt to spend the extra cash on everything, pricing your home too high will make sure that buyers who come through will never make an offer, despite how much they LOVE your home.

This is the single biggest flaw a seller can make when selling their home. Pricing your home too high out of the gate will not only ensure that you won't sell your home fast, but it will also pretty much guarantee you a lower selling price down the road when you do find a buyer that will pay what you want.

• Budget solution: Your Realtor should know what comparable homes sold for and how to judge the direction the market is moving to set a realistic pricing strategy. Better yet, your Realtor should be following up with buyers' agents after showings to confirm what the consensus is with buyers. Perception is reality. If 90% of buyers think it's too high, you're probably not going to get an offer anytime soon. Here in Phoenix/Scottsdale, where our market is recovering by leaps and bounds, good homes sell fast with multiple offers. After 2-4 weeks at any price, reassess whether you're still priced in line with the market.  Call me for your free, no-obligation property evaluation.
• Splurge solution: Pay for an appraisal. Having an appraisal in hand to show buyers that the value of your home was confirmed with an appraisal may help to justify your price, providing that you used your appraisal as a guideline.

This is pretty much my checklist for every home that I list. Obviously the seller has the final say about what they will or will not do. Those who stick with the program are usually the ones who sell the quickest and for the highest price... Try it for yourself. ;)

Related Info:

Success With Staging Listings

7 Points Home Sellers Must Know About the New TRID Rule

Is Your Homeowner's Insurance Keeping Up with Your Home Renovations?

2015 was a good year for real estate in the Valley of the Sun. We went out on a high note- sales were up across the board & luxury sales picked up a bit in December. Here's how the year looks so far from a basic economics perspective of Supply. (Demand/pending sales aren't usually great during the holidays).

This chart shows active listings counts on 1/1 in 2014 & 2015 by price range:

**Clear takeaways**

For Buyers:

• Move-up and entry level buyers ($175K-$400K) are struggling with the lack of supply- DOWN! (Not so good...)
• Ultra-luxury buyers (over $1.5M) have a fair amount of homes from which to choose. UP! (Good!)

For Sellers:

• Sellers in the entry & move-up categories (again, $175K-$400K) have every reason to sing and dance- there's very little competition! Down! (Good!)
• Luxury sellers (again, over $1.5M) should start to worry a bit. There are few buyers in the category, to start, but now theres a good amount of competition. UP! (Not so good...)

Now let's look at our active listings counts on 1/2 in 2014 & 2015 by city:

**Clear takeaways**

For Buyers:

• It's hard to be a buyer in a Seller's market with not so many active listings- Particularly in the West and SE valley (West- Glendale, Avondale, Buckeye, Goodyear, Peoria; SE- Gilbert, Mesa, Queen Creek; Even Cave Creek & Carefree are looking good now (after a ho-hum 2015). DOWN! (Not so good...)
• Like solitude? Good! Florence, Sun Lakes & Tonopah are the place to be! UP! (Good!)

For Sellers:

• Sellers throughout most of the ARMLS area are in great shape- there's little competition! Down! (Good!)

To really drive the point home, here's one more chart:

Conclusion:

• Below $400K, most of the market is short on supply (our Phoenix Metro median price is in the low-$200Ks)
• Over $400K, "the luxe" has a some LOTS of homes available for buyers.

Speaking of luxury homes...

Something happened to the demand for luxury homes... Supply is up, sales are down and pricing is headed backwards...

Here's one more tidbit... from the Cromford Report:

"January 12 - December was a great month for the housing market with particularly strong closings for new homes. Overall sales were up almost 15% from the previous December, while new home closings jumped 45% year on year. So I was rather expecting January to follow through with some positive signs. January is much better than January 2015, but not so much as to generate a lot of excitement.

For the first 12 days, we have closed sales up 8% while pending listings are up by 11%, compared to a year ago. The contract ratio has reached 40.1 as opposed to the 31.2 we saw on Jan 12, 2015. The current contract ratio is as good as we saw on Feb 9, 2015. These are all good positive signs, but if anything they are slightly disappointing after such a strong December. It is possible that December's numbers were boosted by lenders and title companies doing some catching up with closing delayed by TRIS, so the comparison is probably not entirely fair.

It really looks like we may have to wait until February before we know whether 2016 is going to move well above 2015's activity levels."

Builders, post recession, have had better luck with higher-end new builds. There are plenty of resales out there (for the most part), but buyers LOVE their new homes in Phoenix. Let's think about it a little more...

Higher end new home sales, lots of high end inventory. This will definitely be something to watch over the next month or so. Last year it was obvious how much buyers LOVED the pretty new remodels that shifted from the earthy, warm tans & browns to the light, bright grays and whites. I think I might know where this is going... Stay tuned for more!

Related Info:

January 2016 Phoenix Metro Real Estate Snapshot

October/November 2015 Market Recap

Success With Staging Listings