Metro Phoenix Real Estate & Community News

April 19, 2022

Market Signaling a Shift

Market signaling a shift

The early warning signs of a shifting market continue to appear. But, as we try to remind both buyers and sellers, the real estate is not the stock market. Housing moves slowly. Shifts in demand are quicker than shifts in housing supply. So while the scarcity in supply has been the controlling factor in the housing market for a number of years, demand is the impedance behind the shift. Not surprisingly this drop in demand is being driven by affordability. The combination of rising pricing and rising interest rates is doing exactly what it is supposed to do, reduce demand. With rentals becoming more plentiful and rental rates declining, and investors with a rent and hold business model will at some point also begin to leave the market – weakening demand further. Does this mean prices are posed to plunge? In the short term, no. Here are some supporting comments from Tina Tamboer of the Cromford Report.

The market continues to heavily favor sellers. Supply is still 76% below normal for this time of year and demand is 6% above normal. However, demand is declining in response to recent increases in interest rates. Just 30 days ago, demand was 12% above normal, and 30 days prior to that it was 21% above normal… However, in just a few short months, the average interest rate increased from 3.1% in December to 4.7% by April. This resulted in a $500 increase in the estimated payment on a 1,500-2,000 sq. ft. home, pushing the cost to buy significantly higher than the cost to rent in Greater Phoenix.

This does not mean the market is at its peak, or at the precipice of a price decline. The only response we are seeing at this time is a sharp increase in supply between $500K-$1M over the past 2 weeks, a price range that happens to have less interest from investors and 2nd home owners and a higher market share of owner-occupants…While it’s reasonable to expect price appreciation to slow down at some point, there is little evidence at this stage to show prices declining in the near future.

Call us for advice on your particular home sale or purchase.  We are here to inform.

Posted in Buying a Home
April 14, 2022

Demand decrease?

The market is made up of supply and demand. When supply is low and demand is high, prices increase. When supply is high and demand is low prices decrease. Then there is everything in between.As of today, supply in the Phoenix Metro Area is struggling to stay afloat. Economists disagree on the reasons why but this is my opinion:
Supply is remaining low because there's tons of money in the market right now. Investors are flocking to real estate as a safe bet because of the 20+% appreciation we have had the last couple of years.
Demand has decreased 5% in the last 30 days and 14% since January. This will show up in the late summer/fall timeframes.
We expect to see demand to continue to decrease because not only is appreciation currently raising home values by an average of $11,000 PER MONTH but the average mortgage interest rate has increased by 1.75% in just 3 months with the Federal Reserve indicating that they will most likely continue to raise the baseline interest rate through the rest of this year in response to rising inflation.As demand decreases due to buyers not able to qualify, supply will start to increase and prices will slow. How fast this all happens is a guess in anyones book. My guess is it will take over a year before prices stop increasing. Do they decrease? That's an unknown as of now.
In summary:
Demand is decreasing, supply is starting to increase. If you are thinking of selling, this may be the best market to do it in. If you are buying, be aware that this will most likely be a longer term hold...AND...
...We still encourage anyone that is renting, to buy. Even in this market. Why? Because you take control of your future instead of at the whim of increases in rent, or a landlord deciding to sell the home that you are in and reacting to someone else's decision on your life vs being proactive financially in your life. You can do it and our team can help!
Posted in Real Estate News
Sept. 2, 2021

August 2021 Market Update

 

 

 

We have been reporting for a while now, supply is increasing as the market continues to shift towards a welcome rebalance.  The number of homes for sale is up 42 % since May, and up 24.7 % in just the last month.  The new supply of homes for sale is showing up most prominently in the price range from $400,000 – 1 million.  This increasing supply is good news.  Bubbles do not recover this way, normal markets do. Sellers, who have waited on the sidelines to capture the rapidly increasing values the first half of the year provided, are finally easing back into the market as appreciation rates have started to abate. 

 

Demand remains in a normal range, but seasonal patterns have returned to the market.  The seasonal pattern for buyers accelerates at the first of the year hitting its peak March thru May and then gradually declining each month through the end of the year.  As demand begins to decline seasonally and the supply continues to slowly build, eventually you end up with a balanced market.

 

Are we headed towards plummeting prices?  No.  Balanced markets tend to appreciate in keeping with inflation rates.  But it does mean that the days of 50+ offers on homes are likely over.  Price reductions have already crept back into the market – they are up 131% since May with a median drop of $14,000.  A sure sign of a market that no longer will bear pricing that is too exuberant.  In short, a sense of normalcy is on its way.  If you have been waiting to sell, these signals may be a sign that you need not wait anymore.

Posted in Real Estate News
Aug. 30, 2021

A Welcome Rebalance

A Welcome Rebalance

We have been reporting for a while now, supply is increasing as the market continues to shift towards a welcome rebalance.  The number of homes for sale is up 42 % since May, and up 24.7 % in just the last month.  The new supply of homes for sale is showing up most prominently in the price range from $400,000 – 1 million.  This increasing supply is good news.  Bubbles do not recover this way, normal markets do. Sellers, who have waited on the sidelines to capture the rapidly increasing values the first half of the year provided, are finally easing back into the market as appreciation rates have started to abate. 

 

Demand remains in a normal range, but seasonal patterns have returned to the market.  The seasonal pattern for buyers accelerates at the first of the year hitting its peak March thru May and then gradually declining each month through the end of the year.  As demand begins to decline seasonally and the supply continues to slowly build, eventually you end up with a balanced market.

 

Are we headed towards plummeting prices?  No.  Balanced markets tend to

appreciate in keeping with inflation rates.  But it does mean that the days of 50+ offers

on homes are likely over.  Price reductions have already crept back into the market –

they are up 131% since May with a median drop of $14,000.  A sure sign of a market

that no longer will bear pricing that is too exuberant.  In short, a sense of normalcy is

on its way.  If you have been waiting to sell, these signals may be a sign that you

need not wait anymore.

Posted in Real Estate News
Aug. 24, 2021

What Exactly does a Calming Market look like?

There's no question we've been in an extreme market-⁠⁠
The good news is we are seeing a TREND change. Before you get too excited, we aren't seeing prices dropping or foreclosures etc. ~ however, the rate of appreciation is starting to fall. When there is low inventory like we have been experiencing and higher demand it drives house prices up. Economics 101.⁠⁠
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This month alone we saw an INCREASE of 25% more homes on the market. Our buyers are starting to see competition with 3-5 buyers instead of 30-40. We are still 75% below normal. It's a slow change, but we study the market closely and it's evident. ⁠⁠In fact, the Valley has 140% more available homes for sale in August than it did just last quarter which might feel like a proverbial flood of supply to our landlocked little town but it is still just a sprinkle in the bucket as we’re only sitting at about a 2 week supply for a healthy number of folks trying to make the Valley their home.  

Similar to the majority of cities across the Valley, we’ve seen a steady increase in homes coming to the Valley market since mid-March with a fast tracked plan to replenish our deficient supply over the last quarter. With days on market still declining and prices up another 7% since May, now might be the best opportunity that there has been all year to sell your home for top dollar and actually have somewhere to go. While the feeding frenzy of the earlier parts of 2021 is likely over, homes are still selling for 102.87% of asking price meaning that your average home in the Valley is still receiving multiple offers, seeing full or partial appraisal waivers, and some are still including lease backs for the seller although those are becoming slightly more rare and more reasonable in length. 
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If you have been on the fence to buy or sell, we are here to help you make the most educated and responsible decision for you during this change.

Posted in Real Estate News
July 30, 2021

Buyers gain a little respect

 

 

The market has been in such an overheated condition this year that any headline of a “market slowdown” is almost inherently misleading.  Yes, the market is slowing.  But it is a good sign, not a bad one. The market shift actually began in March, and now is confirmed.  In addition to the shift, the market is following our typical seasonal pattern; slowing in the back half of the year once the spring buying season is over.  Last year the pandemic extended the buying season as people could not flee the valley for vacations.  This year we expect, as in years past, activity to gradually slow through the end of the year.

It is important to understand that the market balance in favor of sellers has been and continues to be driven by the levels of supply.  Yes as prices rise, demand drops.  But it is the increased supply – both in unsold properties and in the form of new listings that is driving this rebalancing market.  We are in the early stages of the rebalance.

Sellers are going to need to adapt to a market that is shifting.   You likely will not see the carloads of showings, multiple offers and spiraling pricing as desperate buyers fight to outbid each other.  You will see more properties not selling if improperly priced for their condition. That does not mean homes are no longer selling or that prices are plunging.  But seller expectations do need to adapt. Michael Orr of the Cromford Report comments on this issue: “The number of active listings is increasing by roughly 300 per week. The number of showings is in decline and the number of contracts getting signed is getting smaller as each week goes by.

All this makes sense. When prices leap by over 35%, demand is suppressed and supply stimulated.

 

The obvious question is how far this trend will go before it levels out. The honest answer is that no-one knows. Buyers are more cautious now than they were in 2005. Sellers’ normal first reaction will be denial. Some will blame their agent. These sellers will probably be complaining that they are not getting the viewings and offers their house deserves. This is because they have so quickly become accustomed to a frenzied market. They will now need to get re-adjusted. The market still favors sellers, but buyers will start to gain a little more respect.”

Posted in Buying a Home
June 28, 2021

How do I market my short term rental?

 

 

You had me at marketing 🤩
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First impressions form in a matter of seconds, especially nowadays, and emotional marketing helps people decide with their hearts.  ⁠
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My best advice? Make sure that your photos are instagrammable.  Brand your property with a name and logo, and remember, photos can inspire trust by creating transparency.⁠ Instagram is a great place to market your property, have people tag you, and share content daily to create a lure for your space.
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Remember you are selling an experience for your guests, and pictures tell a thousand words! Tell the story of how your guest can enjoy the space.  For example, show the beach cruisers, the farmers market down the street, and the VIEWS! 😍
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If you're thinking about short term rental investing and don't know where to start, give us a shout. We can walk you through the process from A-Z 🙌🏻

Posted in Real Estate News
June 24, 2021

Tempe 3 bed | 2bath | Near ASU

Updated patio home w/a charming courtyard entry!. Near ASU and major freeways. No expense spared in this 3 bed, 2 bath single level home. Bright open floor plan with vaulted ceiling in the main living area. Stainless steel appliances including an electric smooth top range oven and built in microwave. Upgraded baseboards throughout the home. Tiled shower in the master bathroom and a walk in closet. Enjoy quiet evenings on the private patio after relaxing in the community pool. The unit comes with 2 assigned carport spaces.

 

Posted in Buying a Home
June 13, 2021

What is my Short Term Rental Potential?

 

 

money~⁠take the risk or lose the chance. ⁠

Location, property type, season, amenities + proximity to tourist locations all come into play when determining your income.⁠ Short term rentals earn up to three times more than the traditional long-term rentals.  ⁠

There are basically three groups of numbers you need to think about when calculating for a short-term investment:⁠

1. Rent collected⁠

2. Upfront costs⁠

3. Monthly costs⁠

You also need to consider vacancy rates and seasonal variance in your calculations.  ⁠If you want some of our free tools we use, drop us a DM.⁠

 

 

 

Posted in Real Estate News
June 9, 2021

How do I buy my first Airbnb

If you have a home and an Internet connection, you may very well be sitting on a goldmine. 

You could be making hundreds of dollars a night. Even just renting out a spare room could bring in well over $1000 a month!⁠

Process-wise, buying property for Airbnb is pretty simple. You find a home, you make an offer, and you close on the property. The hard part? That's in finding the right property, to begin with. ⁠

Before you can even begin your search, you need to determine what type of property you're going for. Is it a house, condo, or apartment? What size is it? A six-bedroom estate would probably command a  high rate, but will it get rented often? It will also mean more upkeep. ⁠

To determine the best type of property for your investment, put yourself in the shoes of an out-of-town visitor. What are they likely coming in for? Are they single, couples, or families with kids? Get into their mindset, and let that guide your property search.⁠

Location is the next step in your Airbnb property search! Is it within driving distance of major cities? Is it a place people like to visit or have a reason to visit often? Does the area have plenty of events, amenities, and culture?⁠

⁠As an Airbnb Superhost, I would love to answer questions and be your GO-TO person to help you find a killer Airbnb , we also are taking it one step further and helping our clients with the design/setup as well!  I’ve learned a lot along the way of what to do and what not to do. 

 

 

Posted in Real Estate News