ALL PHOENIX REAL ESTATE

Posted on March 5th, 2010 by Jonathan Dalton

Truth be told, there are some moments when it feels everything’s been said. And sometimes when that happens, it’s best to go back to the beginning and start the story anew. Chazak chazak v’nitchazeik.

More often that not I find prospective buyers in the Phoenix real estate market are looking less for information than affirmation. The wide world of the Internet has provides a wealth of information for those looking to buy a home and some of it even turns out to be useful now and again, assuming you can sift through conflicting data.

For those wanting affirmation of what they’re reading online, seeing on the national news or hearing at a cocktail party, this isn’t the place to be. Because it’s just as likely that what you believe to be the state of the Phoenix market isn’t really the market.

THE PHOENIX REAL ESTATE MARKET IS NOT STAGNANT

Over the past 30 days, nearly 5,000 homes have closed escrow - that’s just under 170 homes a day changing hands. Inventory of single-family detached homes remains around the 23,000 mark, which means there’s less than five months of inventory of homes for sale here in Phoenix.

Well-priced homes, whether bank owned or traditional sales, are selling every day here. Last week I sent to one buyer a list of homes under $175,000 that should pull at least $1,000 in rent. Several of these homes were under $150,000 and all of these have gone under contract since the e-mail was sent.

THE PHOENIX REAL ESTATE MARKET IS BOTTOMING

This has been the case for nearly a year now … there’s no definitive bottom with a sharp uptick, rather there’s this consistent churning and activity at current levels. Some areas have continued down, others are rising slightly. It all depends on the price range and area in which you happen to be looking.

Homes are not available for pennies on the dollar, unless you’re looking at a dollar in 2006 before the bottom fell out of the market. Low priced homes continue to sell quickly at list price or above. That’s the simple reality.

LOWBALL OFFERS ARE A DIME A DOZEN

It’s quite possible you can find a seller willing to sell for 70 cents on the dollar. It’s also quite possible a meteor might fall on your head and you can end up on Meteorite Men.

The statistics show homes are selling at 90 to 95 percent of list price. Forget the original list price you may see, as all that tells you is the owner’s gotten serious along the way.

Odds are you’re not the only one looking at a given home at any time. And in many cases, investors who spend their days sending letters of intent with stupid-low offer prices (in the 60 to 70 percent range) already have tried to purchase the house. You’re not going to be the first to try and you likely won’t be the last.

THE DEALS ARE IN FRONT OF YOU

In some areas, homes are selling for prices from the early 2000’s. Sometimes there’s even more room the prices can be pushed down for those who are somewhat reasonable in their approach. The so-called smoking deals, homes priced well below list, either sell quickly for list price or more or are the ultimate bait-and-switch, short sales without bank approval.

Want a deal? Roll up your sleeves, get some help and create your own. The base already is there in the decline, the rest is up to you.

THERE’S A REASON THE MEDIAN IN THE MEDIAN

If the median price for a property is $100,000, what do you really think a $40,000 home might look like? I assure you, it’s not going to be a $150,000 home at a near 75 percent markdown. It’s going to be a home that either needs work, is in the outskirts, or both. In short, that home is selling for $40,000 because that’s what it’s worth.

If you’re shopping below the median price point, you need to realize you’re going to be getting below-average quality as well. The price is the price for a reason.

These are just the basics of what’s happening here more. Market stats and more to follow as I get those going again.

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Posted on March 2nd, 2010 by Jonathan Dalton

One of the most common things I hear when discussing the pros and cons and cons and cons of purchasing short sales is the idea that “we’re in no hurry, we have time to wait.”

Which is absolutely fine as long as you’re prepared for the bank to say “no” at the end of the weeks and months you wait, or to give no answer at all.

Except that’s not the only risk that comes with waiting because, much as we might prefer otherwise, the world keeps on turning and the real estate business keeps changing while you’re in limbo. To whit:

1) The interest rate you were quoted by your lender when you wrote the offer may not still be the rate when the approval comes. Yes, you can try to lock the rate but it gets expensive when you’re trying to lock for more than a month … and keep in mind, you don’t really know when your closing date will be

2) For those north of the border, exchange rates continue to change. There’s a decided difference between 97 and 93 cents when you’re looking to exchange more than $100,000.

3) Home values continue to change. Will the home still be worth what it was when you made the offer a couple of months down the line? If you’re expecting the bank to move to your appraisal value down the line, you’re likely in for a shock.

4) Other offers might be submitted to the bank. There are ways to avoid this but not all agents use them all the time (and not always by their choice … exclusivity sometimes comes with a price.)

So many unknowns yet so many continue to chase these “bargains” … list prices based in mythology, logistics planted in purgatory …

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Posted on February 26th, 2010 by Jonathan Dalton

Suddenly, it all makes sense … the emphasis on protecting the relationship, being supportive of the program no matter what, the ever-present big picture.

Once upon a time, back during my time at Century 21 I was a member of USAA’s Movers Advantage program. It was something I couldn’t mention unless someone told me they were a USAA client and proceeded to engage in the super-secret 14-stage handshake known only to USAA members and Movers Advantage agents.

Why? Because those were USAA’s rules. God forbid an agent in some way manage to profit from paid membership in Movers Advantage. Wait, did I just mention we paid?

Similarly, I couldn’t tell one of these folks using USAA for their mortgage when USAA had screwed the pooch on a transaction lest I damage the relationship - whether it was my company’s relationship with USAA or the clients’ with USAA wasn’t quite clear, but that’s another story for another day.

So when I would run across a situation like the one I’m dealing with today, when USAA has managed to bungle a closing by making the unique decision to require a termite inspection on a spec home, and by not mentioning this fact until 1 p.m. on the closing date I couldn’t tell the client “USAA screwed the pooch.”

Luckily, I’m under no such distasteful dictate at the moment.

Spec homes and new homes come with soil reports that verify that the soil has been treated for critters. This usually is sufficient, unless of course you’re USAA, the same company that has spent three days trying to figure out the math of the 10% tolerance on page 3 of the new HUD-1 statement.

(Hint: when the Good Faith Estimate shows an appraisal is $305 and the actual bill is for $450 - a roughly 50% increase - you’re not going to make the 10 percent tolerance.)

Here’s the dilemma, at least in my mind … USAA’s base clientele is the military and, at least in theory, USAA bends over backwards to serve that clientele knowing the sacrifices made by their members on behalf of the rest of us.

But when the company can’t seem to get out of its own way to handle a simple VA loan, doesn’t it make it really, really difficult to recommend them in the future?

Maybe it doesn’t matter. After all, there always are Movers Advantage agents mindful of the big picture who’ll do what they’re told to get a green light on their scoresheet at the corporate office, logical or not.

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Posted on February 24th, 2010 by Jonathan Dalton

As I sit here, the clock atop the scoreboard at Surprise Stadium is in its own little world. One minute ago it was 1:35. Now it’s 1:50. All the while, it’s 11:44 a.m.

Though something in the machine clearly is screwed up the overall theme isn’t … the clock is ticking.

If you’re looking to take advantage of the Homebuyers Tax Credit, either the $8,000 or $6,500 version, you have ten weeks left to be under contract - it’s April 30th or bust (unless NAR and others are successful in their push to continue the program another several months - let’s hope they aren’t.)

If you’re looking to take advantage of very low mortgage interest rates, the clock is ticking. Uncle Ben Bernanke is on record as saying the Fed will stop purchasing mortgage backed securities at the end of March. Which means rates should start creeping up in advance of that date since mortgage rates float based on supply, demand and market conditions. Expectations of higher rates can cause those higher rates to occur, in other words.

For those waiting for prices to drop, if you’re also financing, your purchase may end up being more expensive in the near future even if prices decline slightly simply because of the change of interest rates. It’s just that simple.

The clock is ticking … it’s now 2:25 according to Surprise Stadium and 11:47 elsewhere in the Valley … will time run out on you?

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Posted on February 22nd, 2010 by Jonathan Dalton

One of the things I’ve made relatively routine is reaching out to talk to my past, current and prospective clients. There doesn’t necessarily have to be an underlying purpose for the call (though I always let them know that, by the way, as good as business is I’m never too busy for any of their referrals), and sometimes the calls without a point are the most enjoyable.

Today was dedicated to calling as many Canadians as I could and there absolutely was a point, even if it had nothing to do with real estate. After all, when you have the chance to revel in a once-in-half-century event, you do it.

photo courtesy of Getty Images

Sure it’s blatant jingoism but what the hell. Your dollar’s almost as strong as ours and you fill the upper bowl of our hockey arena whenever one of your teams come to town. And don’t even get me started on what you’ll do to our bartenders curling team when that match comes up.

So hey, let us enjoy the moment, okay?

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