I am simply trying to gather opinions and strategies from professional real estate investors and agents who represent them. I am trying to gather information from a variety of sources for an artilce on real estate investing. Some of the questions I am trying to collect opinion on are:
Do you believe the rental market is too saturated?
Are vacancy rates affecting your business plan?
Are flips off the table at this time?
Where do you see potential for the investor in 2010?
Will the lending rules on Condos make them a poor investment?
Are you making offers on short sales or focusing on FSBO's and bank-owned?
Have you found auctions an effective place to buy?
These questions are simply to get the ball rolling. If you have other thoughts and opinions, they are most welcome.
Thanks for the input and I'll compile the results and post them in early November. If you want to email me directly with your response, here is the address: geneurban@cox.net or simply post your comment here.
I am simply trying to gather a variety of opinions and strategies from professional real estate investors and agents who represent them. I am trying to gather information from a variety of sources for an artilce on real estate investing. Some of the questions I am trying to collect opinion on are:
Do you believe the rental market is too saturated?
Are vacancy rates affecting your business plan?
Are flips off the table at this time?
Where do you see potential for the investor in 2010?
Will the lending rules on Condos make them a poor investment?
Are you making offers on short sales or focusing on FSBO's and bank-owned?
Have you found auctions an effective place to buy?
These questions are simply to get the ball rolling. If you have other thoughts and opinions, they are most welcome.
Thanks for the input and I'll compile the results and post them in early November. If you want to email me directly with your response, here is the address: geneurban@cox.net or simply post your comment here.
Homeowners and real estate agents unite! Many neighborhoods are suffering from the gutting of vacant homes. AS agents, we have seen homes stripped of cabinets, lighting, doors, pool equipment, AC systems and more. Sometimes this is done by frustrated/mad homeowners losing their house. It is also being done by opportunistic thieves.
As homeowners and agents we need to try and put a stop to this activity. Gutted homes destroy property values in the entire neighborhood, creates blight and hightens criminal activity.
It is high time we, as homeowners and real estate agents, get involved in creating a solution. I would ask that all agents inform the surrounding homes if you have a vacant listing. Advise these people to be on the alert for suspicious behavior. Some of these crooks pose as bank representatives contracted by the bank to clear out the home. Banks do not do this, thieves do. Advise the neighbors to call the police immediately if they see trucks, cranes (the use cranes to remove AC units) and strangers removing items from a vacant home. Please advise them not to intervene directly, leave that to law enforcement.
If the neighborhood has a WATCH program, put together a special meeting to advise the homeowners of the problem. I am sure many real estate agents would be happy to provide a list of vacant listed properties and update that list as new homes come on the market
The future of our neighborhood and our personal home values are at risk. Together we can make a difference!
CNN Money had an interesting piece on how to spot a rebound in the housing market. Click here to read. Amanda Gengler, the writer, suggests we watch a number of factors to determine market viability of a region. She also reminds us that not all cities, towns and areas are being effected equally. Certainly we are seeing this in the Greater Phoenix market.
The factors she suggests we watch include:
Local Job Market: The more jobs created, the higher the demand for homes and faster recovery.
Housing Inventory Rates: This is a basic supply & demand stat shows us the months of inventory on the market based on active listings, new listing numbers and sales figures. Traditionally, we like to see inventory numbers in the 6 month range.
Home Price Stability: Are prices falling, stable or rising.
Cost to Own verses Rent: Some buyers look at the cost of ownership verses rent and wait to buy until it is more optimal.
So what do our numbers tell us?
Let's start with the local job market. A recent article in the Business Journal tells us that our job growth rate is falling. In 2006 we were ranked near or at the top for job growth. By March of this year we had tumbled down to 46th place among American cities. Much of this is believed due to the slump in the housing market. However, we still have strong job growth relative to the Nation and job growth is a regional issue. Certainly, Scottsdale does not have the same job issues as many west valley cities. It will be important to look at job figures over the Summer to see where the trend is moving and what areas are being most effected.
ARMLS stats on months of inventory are declining. During the months of October-February, we saw inventories in the 16 month range. In June the numbers dropped to 10 months. This is a valley wide statistic and can be a bit deceiving. Some areas are seeing the rates drop into the ideal range, 6 months, while other areas such as Paradise Valley are seeing over three years of inventory mounting. The general statistic does, however, indicate an overall drop... a good thing!
Home prices are still falling in general. The graph below shows the average home price figures across the Valley. They are dropping and please remember this picture is drawn with a wide brush. The same graph for parts of Phoenix and Scottsdale show price stability and even growth in some cases. However, the numbers for the region are still falling.
The last figure they advise watching is the cost to own verses rent. If we look at the stats provided by the National Association of Realtors we'll see Phoenix has an affordability ratio of 19.0%. The ideal number is 16% or below. Ron and I believe this number is likely wrong as the radical increase in bank owned cheap homes has likely not been factored. The one area the real estate market has been excelling in is the under $200,000 price point. Many of these buyers are former renters who are seizing the opportunity.
Conclusions: Based on the above criteria we can see that the Greater Phoenix market is not out of the woods. However, I must emphasize that this is broad brush analysis. A strong, knowledgeable Realtor can help inform you about areas that are performing well. This is a market where savvy buyers will make fortunes. We saw it during the S&L crisis of the 80's and we will look back and see it in this market.
We seldom write about areas outside of Central Phoenix, Paradise Valley and Scottsdale, but sometimes news from other areas helps all the Valley.
The Cincinnati Red's have inked out a deal to start spring training in Goodyear, AZ. joining the Cleveland Indians in Cactus League play.
This is exciting for our area. Spring league baseball brings many pluses to Greater Phoenix including economic growth, future residents, and just plain fun.
Cactus League baseball has become an important part of our heritage and brand. It all began in 1951 when Yankee co-owner Del Webb orchestrated a deal to have his team play in his backyard while overseeing his growing real estate empire. The Chicago Cubs came to town and played two games against the Yankees. While here, the Cubs struck a deal with Dwight Patterson, a Mesa rancher, to play their spring ball in Mesa.
Our region is greatly benefited by Cactus League play. In 2007 an estimated 1.31 million fans enjoyed the festivities and spent a whopping $300 million. When we consider the revenues from hotel bed taxes, airport fees, gas taxes, general spending and fees paid by the teams, we are talking real money.
In addition, our State is seen by fans across American who are attracted by the great weather and the general fun of baseball. Not a bad image to put out there, especially when times are tough.
Thanks to all who have and do make Cactus League Baseball a reality in our towns.
Since I live in the 85028 zip code I have a personal stake is the performance of that market. As agents we know each subdivision and certainly every zip code in Maricopa county has its own sales characteristics.
With that in mind, I offer a little of my insight into the 85028 zip code. The graph below shows units sold and average sales price for the past 1 year. As you can see, the average sales price dropped after the gloomy mortgage news last Summer... where didn't prices fall? Since then the variations in average sales price have remained fairly sane with a bit of a burst in March, traditionally a strong sales month, yet pretty solid over time.
The number of units sold rose in March & April as well. This is normal as these are among the best months to sell a home in our beautiful Valley. I didn't graph the average sold to asked ratio but these numbers have been holding very solid in the 94% range. Sold to Ask Ratio (S/A) is the percentage difference between what a homeowner is asking for the home and the actual sales price.
My take on this data is that the 85028 zip code has not felt the crunch many other parts of the valley have. Why is this so? The answer may lie in the foreclosure numbers. During the months of March, April, May there were just a couple of foreclosures noted in this zip code (foreclosure data provided by First American Title.) Even in Mid-June when zip codes like 85031 had 24 foreclosures or 85339 had 31 we saw only 1 foreclosure in 85028.
My personal feeling is that the 85028 zip will probably outperform the market this coming year. Like all areas the area saw some ugly price drops this past year, yet I believe the worst has been seen and a pretty bright light is burning at the end of the tunnel.
Numbers and statistics are an important part of understanding the Phoenix, Arizona real estate market. We spend a lot of time crunching the digits to gain some sense of understanding.
Some of the areas we study are days on market, asking verses actual sales price, average price and more. The relationship between these different market stats can tell much.
The graph below looks at all of Phoenix and plots the days on market (DOM) against the sales price verses asking price ratio (S/A Ratio). What we see in this analysis is quite telling.
A year ago, just before the sub-prime news hit big time, homes were selling for near asking price and the days on market were pretty low. As we moved into autumn, buyers were hesitant to make a purchase (noted by the rise in DOM) and home sellers were settling for less than their asking price. This trend continued into 2008 and reached a critical point in January. (Note the wide difference between DOM and the S/A ratios.) The numbers in April and May start to paint a more optimistic picture. DOM fell and the S/A ratio rose. This tells us that the market found some equilibrium. Home sellers reduced their prices to a level that made buyers more comfortable.
However, the sharp fall in the S/A ratio in April/May could be a sign that prices will continue to drop. If this occurs, we feel it will be largely due to the influence of bank owned properties as these are often priced well below the market. These REO homes will likely influence pricing until such inventory is assimilated.
One question is whether appraisers will take into account the often horrific condition of these foreclosed homes. We saw a number of them this weekend that will require several ten's of thousands just to bring them to livable condition. Our advice to clients is this can be an outstanding buying opportunity. However, buying right is of the highest importance. Get your loan ducks in a row, thoroughly research the conditions of the subdivision and nearby areas to understand trends, negotiate to your advantage and be willing to walk away if needed.
I have a couple of pets. They teach me a lot... especially Rosie the Cat. What she believes to be true is true for her and she is incredibly reluctant to change. 5:30 PM is her night-time feeding time. Not 5:40 or 6:00... 5:30!! I think people can be like that.
During the real estate frenzies of 2004-mid 2005 we sat awestruck at how the value of our homes increased. We thought people were nuts. Homes that sold for $400,000 in 2003 were fetching over $700,000 in May of 2005. Then the cat thing happened. We believed our homes were really worth that much and no one was going to tell us different.
2006 and 2007 came as affront to our senses. People (prospective home buyers and appraisers) were telling us our homes were not worth what we thought. Our mean, unthinking Realtor told us we needed to lower our expectations and our listing price. Some of us did, some bared teeth, meowed loudly and didn't.
Late 2007 and early 2008 the pressure built. Home buyers refused to buy high priced homes. They became cat-like in their stubborn price positions and found a new source of food... the foreclosure market. It was 5:30 PM and the home buying cats were happy.
I like it when the media puts out good, constructive information. Luke Mullins with US News & World Report had a nice piece yesterday providing a number of tips for the person trying to sell a home in a slow market. Click here to see the article.
Essentially, Mullins advises home seller to do the following:
1) Make the necessary repairs. There is so much competition out there that buyers are choosing well maintained homes over ones with lots of repair needs.
2) Price your home right. This is a tough one for a lot of home sellers at this time. There are many bank owned properties and short sale homes with very low prices on the market. Some of these are real beaters but other are not. The thing to understand is that they are now your competition.
3) Know your agent. Luke advises you hire an experienced agent with a provable track record. I posted a comment to this point you can read if you want. Basically, I said that your agent needs strong Internet marketing skills as well.
4) Be flexible. Here he talks about making your home easy to see. Easy access is important, especially in this market. We often have 15-20 properties to show our clients. If we can't get into yours during the time our clients have to look, your home may be passed up. I had one this past weekend where they had left a growling dog in the house. Guess what, we didn't go in.
5) Bite your tongue. I'm sure he meant this figuratively. Bottom line... seriously work with every offer that comes your way and don't get all prissy because someone low balls you. I'd read the article just for this piece of advice.
I truly believe the information in this article is valuable. People are buying homes in the Phoenix area at a rate not seen is many months... these tips may make yours one of them.
The sales numbers for November are in and we, The Urban Team, are feeling optimistic. Of course, optimism is our brand. How could we not be optimistic, we live and work in one of the most vibrant cities in America?
The sales stats (residential real estate) for November are encouraging. First, understand that sales stats actually reflect the market activity from 4-6 weeks prior. The ARMLS sales stats for November largely reflect the homes that went under contract from mid September to mid-to-late October.
With that bit of housekeeping in mind, let’s look at the possible good news here. We started to see the sales decline of 2007 stumble in June, fall down in July and seizure in September. Click here to go to the ARMLS stat site.
The October numbers were virtually the same as September 3,457 (Oct.) verses 3,435 (Sept.). That indicates the tailspin of the summer leveled off.
The latest stats for November sales showed a similar leveling… the final number being 3280. The fall in sales from October to November, however, is normal as historically we see a drop in the 5-6% range based on publishes ARMLS stats.
We see this information as positive. The numbers have remained steady for 3 months now… even in the midst of all the fear the press could muster. We look for 2008 to bring some good news to both home sellers and buyers.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
It is high time we, as homeowners and real estate agents, get involved in creating a solution. I would ask that all agents inform the surrounding homes if you have a vacant listing. Advise these people to be on the alert for suspicious behavior. Some of these crooks pose as bank representatives contracted by the bank to clear out the home. Banks do not do this, thieves do. Advise the neighbors to call the police immediately if they see trucks, cranes (the use cranes to remove AC units) and strangers removing items from a vacant home. Please advise them not to intervene directly, leave that to law enforcement.
Cactus League baseball has become an important part of our heritage and brand. It all began in 1951 when Yankee co-owner Del Webb orchestrated a deal to have his team play in his backyard while overseeing his growing real estate empire. The Chicago Cubs came to town and played two games against the Yankees. While here, the Cubs struck a deal with Dwight Patterson, a Mesa rancher, to play their spring ball in Mesa.
;)
;)
