Your Weekly Pulse on Valley Real Estate

May 21, 2020

Market Update - May 2020

I hope this market update finds each of you staying safe and well. I'm honored to share a bit of positive news with you as we have all been adjusting to this "new normal."

Buyers: 

Greater Phoenix contract activity dropped 39% over the course of 6 weeks between March and mid-April. The effects of those declines are now being reported over a month later as a 31% decline in closed sales. This is not surprising, you can't close what was never opened. But that's already old news, what is not getting reported yet us the 40% increase in accepted contracts over the past 4 weeks. This is key information for buyers right now, especially if they're on the fence waiting for the market to "crash." This 4-week increase in buyer demand will not be widely reported for 6 more weeks because these contracts still need to close. 

One mistake approved buyers make is waiting for closing reports before acting. By the time a property closes escrow and a sales price is publicly recorded, the condition that transaction was created under may have passed. The opportunity for buyer lies in knowing how many contracts are being accepted right now in their price point and area. They also need to know the average list price at contract to gauge where they are this week compared to 10 weeks ago. This information can only be obtained through a REALTOR®.

They will discover a significant increase in contract activity across all price points in Greater Phoenix, but the average list price per square foot is only down on contracts written over $500K. All other price points below $500K are seeing the average list price per square foot either higher than or equivalent to where it was 10 weeks ago in February. This does not indicate an impending doom for home values.

Buyers hoping for cheap homes should not retreat in despair, however. Mortgage rates have declined to an average of 3.26% according to Freddie Mac; last year at this time mortgage rates were 4.1%. So while the median sales price rose 8.9% over the last year, the principal and interest payment on a $300K, 30-year, fixed-rate mortgage went from $1,450/month to $1,307/month. That's down $143, a 10% decline over the course of a year. The biggest mistake buyers can make is sitting around waiting for sale prices to decline while their potential mortgage payment plummets. Low mortgage rates are not something to ignore or take for granted as they can change quickly for better or worse.

Sellers:

The increase in contract activity is great news for sellers. However, there are fewer cash buyers offering top dollar for homes in "as-is condition" compared to 10 weeks ago; meaning increased pressure on sellers to do repairs and offer concessions to normal buyers in order to sell their home for their desired price. This is reflected in the percentage of homes closing with seller-assisted closing costs, which increased from 18% to 25% over the past 4 weeks.

The market over $500K is recovering slower than the other price ranges after dropping 58% in weekly contractsdue to travel restrictions and the stock market crash from late February through March. While contract activity rose 65% over the past 4 weeks, it's still down 30% from its peak 10 weeks ago. The irony is that one would expect a massive number of price reductions after such a dramatic drop in demand, but that was not the case. Instead, sellers over $500K simply picked up their ball and left the field. The highest percentage of cancelled listings were seen in the luxury market, which reduced supplly and mitoigates the loss in demand. As a result, sales prices over $500K have remained stable thus far and are up just 0.9% from this time last year.

~Data and infographic courtesy of Cromford Associates LLC & Tamboer Consulting LLC

 

May 15, 2020

Just Listed - 18293 W Tecoma Road

This well appointed home constructed in 2017 with over $66,000 in designer upgrades was JUST LISTED! You don't want to miss an opportunity to view this beauty nestled on an oversized lot in the lovely Estrella Mountain Ranch community before it's UNDER CONTRACT!

If your inner chef has been dreaming of a spacious kitchen to cook and entertain, you'll appreciate this gas kitchen featuring stainless steel appliances, back splash, a granite island, large dining area and an enormous walk-in pantry!

After a long day, can you imagine unwinding in this master retreat offering a soaker tub, glass encased shower and walk-in closet?

The beauty of this home is not limited to the interior as soaring ceilings, modern details and 12 foot sliding glass doors allow you to overlook this HEATED pool and magnificent mountain views.

Estrella Mountain Ranch is a resort style, one of a kind community that is an oasis in the desert! If you'd like to continue your home search, click here . Call or text 602-518-5232 or email tonia.vickery@gmail.com to learn more about this listing!

Posted in My Listing Updates
March 22, 2020

How Is COVID-19 Affecting The Arizona Real Estate Market?

Unless you've avoided all news and media outlets over the past few weeks, you have undoubtedly heard of COVID-19, the novel coronavirus by now. The impacts of this global pandemic are very evident in certain sectors but not so clear in others. Below are a few subtle changes real estate experts have noticed in the Central Arizona real estate market over the past week and a couple of assumptions for the 2020 housing industry.

Most economists anticipate most of the world will experience a recession during the second and third quarters of 2020. We are also likely to see a temporary fall in population due to increased mortality rates. Some of the effects we can likely expect for the housing market include:

  •  Buyers cancelling or deferring buying decisions out of fear of job loss
  •  Sellers taking home off the market and being less willing to allow strangers to view their home in person
  •  New home builders noticing a shortage of building supplies
  •  Self-quarantining decreasing the number of individuals house hunting or listing their home for sale
  •  Lower sales volume resulting in a decreased need for agents, title and escrow staff and lenders

Currently, all indicators for the Central Arizona market remain healthy. At the present time, there is little cause for panic, so if you are delaying a home purchase because you think the price will decrease, you are likely not making a wise decision. 

On a positive note, current and future home owners can take advantage of extremely low mortgage rates! Since supply is currently at a low level and most homeowners have a large amount of equity in their home, even if a homeowner lost their income and could no longer pay their mortgage, they could likely find a buyer quickly to release that equity. Home builders can also take comfort that migration trends still show families and individuals are likely to continue moving to Arizona.

As the world continues to navigate these unchartered waters, continue to stay informed by trusted professionals. If you have any questions or concerns regarding real estate during this time, please do not hesitate to contact me by phone or email. 

Until next time, stay healthy and informed!

~ Information source: Cromford Report, Michael Orr, 2020

March 13, 2020

Real Estate Snapshot - Phoenix Metro

How's the market you ask?

Check out these numbers and tell me!

For Buyers: 

Not even the COVID-19 coronavirus can slow down the Greater Phoenix housing market. For every 100 active listings in the Arizona Regional MLS there are 111 that are already under contract. Greater Phoenix is officially a frenzy and it's only March. We can expect to see this continue at least through May without relief as buyer demand is typically highest in the Spring.

It's even more dramatic in the Southeast Valley, West Valley and North Phoenix and all areas where prices land between $175K-$300K. For a stark example, on March 7th in Glendale there were 3 properties for sale between $175K-$200K and 25 under contract. In Chandler there were 3 properties active between $200K-$250K and 37 under contract. In the North Phoenix Moon Valley area there were 8 properties for sale between $250K-$300K and 30 under contract.

There is a reason why people continue to pounce on what's available for sale. The average price for a 1,500-2,000 sf home is now $331K and continues to rise. That may seem alarming considering it was $324K at the peak in 2006, but contrary to popular belief it's more affordable today because of the interest rates. In April 2006, with an average of 6.51% the monthly principle and interest payment on a 30-year fixed loan with 10% down was $1,854. Today at an average of 3.45% the same home is $1,331, a savings of $523. More recently, over the last 16 months despite prices having risen 9.4% for median-sized homes the monthly payment dropped by approximately $112/month.

For Sellers:

There's not much more to say to sellers under $500K, frankly their homes may be sold before we're done saying it. The stark gap between supply and demand doesn't ease up until budgets go over $600K. Sellers in areas such as North Scottsdale, Paradise Valley, the Camelback Corridor and Downtown Phoenix still have plenty of competition to contend with, but well-priced, updated, move-in ready homes will still see heightened buyer interest.

The luxury market is doing exceptionally well, however sellers should not expect the stampedes seen in the rest of the market. There are 522 properties under contract over $1M, up a whopping 60% over last year at this time. However there are still 1,657 competing properties for sale in this price range and those that sold in February averaged 5-6 months in the market.

Commentary written by Tina Tamboer, The Cromford Report

Nov. 16, 2019

Coming Soon - 6442 W Cavedale Dr

This immaculate North Phoenix home will hit the market VERY SOON! A recently updated 3 bedroom PLUS den home of this magnitude is a rare find!

Mature low maintenance landscaping provides the perfect amount of privacy if you'd like to enjoy some front porch sitting.

Designer touches created this kitchen masterpiece featuring granite countertops, white cabinets, backsplash, breakfast bar, and stainless steel appliances.

This Master bath with separate tub and shower and tile surround should truly be called a private spa.

Professional landscaping with artificial turf in this spacious backyard will allow you to truly enjoy the gorgeous views and sunsets of this incredible community. If you'd like to continue your home search, click here. Call or text 602-518-5232 or email tonia.vickery@gmail.com to learn more about this listing!

Posted in My Listing Updates
Oct. 5, 2019

What Homeowners Should Know About The R22 (Freon) Phase Out

For over 50 years, the common refrigerant R22, better known as Freon has played a vital role in ensuring our air conditioners produce air that is cool and refreshing. This refrigerant use gases to produce the cool air you and I enjoy by compressing warm air sources into liquid through HVAC coils. Freon was chosen as the industry standard for refrigerants in the 1950s due to its efficiency, but we later discovered this popular coolant was causing damage to our environment.

As scientific advancements occurred, scientists discovered a link between hydro-chlorofluorocarbons (HCFCs) and depletion of the Earth's ozone layer. As a result, a gradual phase out of R22, an HCFC product began in 1990. The Clean Air Act stated the US would begin a 20 year phase out of the use of R22. Effective January 1, 2020. there will be a ban on production and import of Freon and service of the product will rely on recycled or stockpiled inventory. On January 1, 2030, there will be a ban on all remaining stockpile and import of all HCFCs. 

So what does this mean for you as a homeowner with a cooling system that currently uses R22 (Freon)?

If your current cooling system uses R22 (Freon), DON'T PANIC! Production of R22 will not end until January 1, 2020 and there are ample supplies available for HVAC repairs until at least 2025. The biggest inconvenience homeowners will face as a result of this change will be an INCREASE IN PRICE of this refrigerant.  Expect to pay $125 or more per pound for Freon if an HVAC repair is needed. 

If you'd like to get a jumpstart on helping the environment, you can convert your R22 system to an R410A system (Puron) which is nonflammable, noncorrosive, neutral to the environment and proven to be MORE ENERGY EFFICIENT than R22! Many home warranty plans cover the conversion of a Freon system to a Puron system when deemed necessary during a repair. 

If you have an older system or you're looking at homes with an older system, this is something to keep in mind. As always, I'm here to answer any questions you may have.

Aug. 28, 2019

More Bang For Your Buck - Fixer-Upper or Move-In Ready?

When helping individuals find a home, most specifically ask for a home that is either move-in ready OR they want a true fixer-upper they can customize to their liking. Perhaps those desiring a fixer-upper also believe they are being more budget conscience, but a recent survey from porch.com revealed that even when fixer-upper homeowners stay within budget, they usually end up spending nearly as much as homeowners who purchase a move-in ready home.

The average purchase price of a fixer-upper is currently $199,819 with renovations averaging between a conservative $47,072 and a budget busting $75,922. Despite the fact that these numbers don't add up to considerable savings compared to a move-in ready home purchase, fixer-upper homebuyers state their top reason for purchasing a home needing repairs was for the savings. Sadly, only 5% of fixer-upper projects finish under budget. The most common expenses that truly "break the bank" include: new HVAC, plumbing projects, basements, bathrooms and new appliances.

On the other end of the home buying spectrum, those buying move-in ready homes find renovations and repairs inconvenient, time consuming and costly. Move-in ready homes currently average around $250,496 which is less than $5,000 more than a fixer-upper with a conservative renovation budget.

I'm curious to know which part of the home buying spectrum you fall on? Have Joanna and Chip Gaines inspired you to transform an "oldie but a goodie" or do you like the peace of mind that comes with a home needing little to no work?

Aug. 26, 2019

New Listing - 11010 W Mountain View Drive

Don't miss your chance to view and potentially own this beautiful 3 bedroom PLUS den/bonus room MOVE IN READY home with NEW AC in amazing Avondale!

Vaulted ceilings and lovely archways welcome you into a spacious family room that flows effortlessly into a kitchen with abundant seating, black on black appliances and a new gas stove.

The large Master bedroom boasts a lovely bay window perfect for a reading area or much more.

The versatile den makes a great home office space directly off the family room.

To see more of this listing Click Here. Or continue your Home Search. Call or text me at 602-518-5232 or email me at tonia.vickery@gmail.com to learn more about this incredible Avondale property!

Posted in My Listing Updates
Aug. 22, 2019

New Listing - 26111 N 67th Drive

I'm beyond thrilled to give you a glimpse of this beautiful four bedroom PLUS den home with a split floor plan in the highly desirable Terramar that you absolutely must come see in person!

Upon entering this gorgeous home, you are immediately welcomed into a spacious formal living & dining room with a den/office off the formal room.

Most individuals travel to have a room with a view, but here, you have MAGNIFICENT MOUNTAIN VIEWS right outside your master bedroom and living room windows.

If the interior of this home hasn't won you over yet, the meticulously kept private oasis in the backyard certainly will! The well maintained pool and landscaping along with the high back wall that backs up to an open space/trail allows you to truly relax and unwind in the comfort of your own home.

If you would like to see more of this listing Click Here. Or continue your Home Search . Call or text me at 602-518-5232 or email at tonia.vickery@gmail.com to learn more about this rare find in terrific Terramar!

Posted in My Listing Updates
Aug. 19, 2019

ibuyers: Convenience or Costly?

First of all, what is an ibuyer? There has been a lot of hype and changes in the real estate industry with the emergence of ibuyers which is fancy for INVESTORS. Investing Buyer = ibuyer. Large brokerages and companies have entered into the ibuyer scene such as Zillow, Redfin, Opendoor, Offerpad and others. They tout convenience to the consumer (seller) in exchange for cost to the consumer (seller). They make offers to buy your property within minutes or days, sight unseen, based on internal valuation models. If you choose to accept their offer, they then proceed to the physical inspection where in many cases they will want concessions in lieu of repairs, and these concessions can be very costly. They also hit you for cosmetic repairs and in many instances they don't even make those repairs before re-selling the property. This is just another way of getting more of your equity in their pocket. This is a true case of the "devil's in the details."

The convenient part of this is you get to pick your moving day, you don't have to show your home and you don't have to make any repairs. This sounds awesome, so what is the catch? Investors like to make MONEY! The money they are making is YOUR equity...YOUR MONEY! The ibuyer doesn't come cheap. Not only do they typically offer you less than market value, they will build in the full commission fees PLUS additional percentage fees to compensate them for their risk and holding time to sell the property. These fees generally run 8% to 12% and this does not include the repair concessions you will make upon the physical inspection.

An ibuyer model is not all bad. There is room for this type of transaction such as a distressed seller who is behind in payments, a home that has lots of repairs needed or layout/design is unfavorable, you are relocating and have to make a rushed close, etc. It is noted that 9 out of 10 people who get Instant Offers from ibuyers decline and list with a traditional agent. If 90% are passing on this model, the pricing can't be compelling. Having choices on how to sell your home is always good but your home is typically your largest asset, so seek professional help PRIOR to engaging with these types of companies. Know what your home is worth and how much fees are for a normal sale. And compare apples to apples. BEWARE of the "investor" making an offer on your home telling you what your home is worth. I mean seriously, you cannot buy into that because these people DO NOT represent you or your best interests. They represent their investors and stockholders.

How can all this help you? Here at the Tonia Vickery Team we do things a little bit differently. Convenience is a BIG DEAL and we want to make selling your home smooth and convenient. First of all, we have FREE staging. You don't need to get your home show ready, we do that for you! We have resources for you for landscaping, housecleaning and maintenance to make your life easier. Those services are one call away from being done! Secondly, we can also offer you the ibuyer model for a fraction of what you will pay above. That's right, if you want to see what an ibuyer will charge you we have an investor list and we don't allow our investors to tack on fees in their offer to you. We also help you procure offers from the big investment companies on your behalf and can help you compare all your numbers and know your bottom line.

ibuyer is a new term, however, investor buyers have been around since the start of real estate. So when you work with an "ibuyer" you are most likely working with someone way more experienced in real estate. If you want to sell to investors for convenience, you can do that without these companies and you can keep more of YOUR equity. Ask me how!

Want more information? Call me at 602-518-5232 and let's discuss! Don't give rich investors YOUR money before you explore listing with a professional agent. A little patience can save you tens of thousands of dollars. You EARNED your equity...don't give it away.