November Sales Data Preview

This time of year is always slow for selling a home.

I always suggest to my clients that they should wait until

February of the following year to list their house if at all possible.

As anticipated, sales are down in November.  We can also
anticipate slower sales in December.  It is possible to sell during
December.  If you must sell make sure to price your home reasonably.

October Stats

The stats for October are out and things are looking good.
The total number of sales for October are 5,599 which is
only 9 less sales than September.
The average drop in sales from September to October is 6%.
Last year the drop was over 14%.
Yes the number of sales in October are off from the prior
two years, but the prior two years were out of the norm.
The 5 year average for the number of sales in October is
6474.67.

The average sales price for October was $330,200
This is an increase of 1.76% from September 2006 and a
decrease of 1.99% since January 2006.
October 2006 average sales price is 2.74% higher than
October 2005.

I believe it is more meaningful to take a 6 month rolling
average instead of a month by month average
because individual month sales prices can be influenced by a
few very high priced home sales.
It also gives a better feel for the overall trend.

The 6 month rolling sales price average for October is
$335,267.
Year to date the rolling average has increased 3.58% and is
an 8.45% increase from October 2005.

The above stats were taken from the from the Arizona
Regional MLS Statistics website.
Links are provided below:

http://www.armls.com/pdfs/SoldChartOct06.pdf
http://www.armls.com/pdfs/ListChartOct06.pdf

Builder Financing

The use of builder financing may not be your best option.

When buying a new home, most people use the preferred lender of the builder. Builder’s often offer incentives to get you to use their preferred lender. The article below points out that buyers should shop around. It might make more sense to use an outside lender.

“To make sure you're getting a good deal, ask the builder not only for the mortgage rate, but also for details on closing costs, points, any fees that will be paid to the lender or third parties, and the terms of the loan. Prof. Guttentag advises comparing that offer to a quote for the same mortgage obtained on the same day from an online lender. He also suggests shopping for financing at the same time you look at houses.”

Read the whole article here.

Platinum Realty Network
www.jimgruler.com

October Data is looking good

October is now over and it looks like there were at least as many sales in October as there were in September.

Usually there is a decline in sales for October as we get deeper into fall.  This increase in sales combined with
the fact that we are now below 47,000 active listings for the first time in a while indicates to me that some sellers
are finally getting the picture and allowing their listings to expire or are taking their houses off the market.  I hope
that this trend continues throughout November and December so 2007 starts off with a more reasonable inventory.

With still just over 46% of all listings being on the market for more than 90 days, something has to give.

September Stats

September stats are in and there really isn’t much of a surprise. Existing home sales are down from August, which is normal. The drop was about 9.9% from August sales. That is a little higher than the average drop in September. The average drop from August to September is 8.93%. The average sale price for September was 324,500. That is a price dropped 2.05% from August. However, that is still 2.75% over the same month last year. Right now I am taking a wait and see approach to the direction of the market. October through January are normally much slower than the rest of the year.

If you would like to see more stats use the links below:

http://www.armls.com/pdfs/ListChartSept06.pdf

http://www.armls.com/pdfs/SoldStatsSept06.pdf

South Scottsdale - Place to be

If you have any doubts that the next area in which to invest is South Scottsdale, read this:

http://www.azcentral.com/community/scottsdale/articles/1006sr-losarcos1006Z8.html

I have been saying it for almost a year, buy NOW!

Include Real Estate in your Retirement Portfolio

Here is a good article that talks about adding real estate to your retirement portfolio.

I couldn't agree more. Everyone always talks about diversifying, why not include rental properties or second homes in your plans?

http://www.realestatejournal.com/indinvestor/20061003-hube.html

BTW, did you know that you can use funds from a qualified IRA or 401k to invest in real estate?
This can be done without fees and with the same tax shelters given to securities investments.

September Data

Now that September is over we can begin to take a look at some sales data.  The slowdown of existing home sales continues and the prices decline slightly.

In September there were 5554 homes sold which is a decline of almost 11% from August.  The average purchase price was 325,806 which is a 1.66% drop from August. There are over 20,000 homes that have been on the market more that 90 days!!!  This means that there are at least 20,000 homes that are over priced and I am sure there are even more than that.  I believe the number of homes on the market will decrease significantly over the next couple of months.   Those sellers who don’t need to sell will start cancelling their contracts or will start letting their contracts expire as the holidays get closer.  The sellers who really need to sell will have to start lowering their asking price.  We are coming into what is typically the worst time of year to sell your home.  If at all possible, get it on the market now or wait until next year.

Preparing to sell

I am often asked what can be done to sell a home faster?

There are a number of things that can be done to help move a house.
I am assuming the property is priced properly for the current market conditions.

It is important to make a good first impression. That is why curb appeal is at the top if my list. If potential buyers are not invited into the home from their vehicle, many will never stop and check out what’s behind the front door. The goal for any seller should be to get as many potential buyers into the house.

Remove any clutter and excess furniture. A home can feel much smaller when rooms have too many pieces of furniture or a bunch of stuff in the rooms. It is always a good idea to see if you can store some excess furniture at a family member’s home and clean up the clutter.

Painting and cleaning are also very important. Do not turn off possible buyers because you don’t want to clean the house. Hire someone to do it if you don’t want to do it yourself. Would you rather spend $200 on a thorough house cleaning or have your house on the market for 3 months? Just because your house is on the market doesn’t mean that you are finished taking care of it. Buyers have to be able to see themselves in the home and if there are dishes in the sink, garbage on the coffee table and the rooms are just generally dirty, the buyers will want to leave the house as soon as possible. Not the impression you want to make.

So, if you want to increase your home’s salability spend a little time and possibly money to get the home in a clean and presentable state. Your efforts will be rewarded.

2007 Economic Outlook

Yesterday I attended the 2007 Economic Outlook put on by the Greater Phoenix Chamber of Commerce. It was very informative and worthwhile. Presenting information on the real estate market was R.L. Brown. I was very happy to find out that I am on the same page as him. The real estate market will be fine once all those “fishers” realize that they are not going to get any bites and either lower their prices to within the realm of reality or they get their homes off the market.

There are currently 47858 properties on the MLS with 20816 of those properties having been on the market for over 90 days. Don’t these sellers realize that their house is not selling because they are priced too high?
Craziness, just craziness.

Visit the Phoenix Business Journal or azcentral.com to find out more about the 2007 Economic Outlook.

House Showing

This weekend while I was showing some houses to a client I was reminded just how much help the average homeowner needs in selling their home. I walked through a house that overall was very nice. It was priced a little high but on the immediate surface it appeared as though it could demand the price. After about 10 minutes in the home and viewing the rooms from different angles it became apparent that the seller just gave up and stopped working. There was an end panel on the kitchen island that was missing, outlets without any covers, baseboards that were about 1 inch short in a couple of places. The backyard was basically barren. It looked like it hadn’t been watered in a couple of months. And the A/C condensation line was dripping 2 feet outside a back door onto concrete.

If you are really interested in selling your home, try to walk through your home with an unbiased point of view and make a list of things that you would want finished if you were the buyer. Even though the above mentioned issues were minor and very inexpensive to rectify, buyers will be put off by them. It can also result in a lowball offer because the buyer will think, if these little things are not finished what big things that I don’t see could be wrong.

This house has been on the market for quite some time and it is a shame that the owners just seem to have given up on it. All agents should tell their clients to fix those items which are immediately apparent to a prospective buyer. And all sellers should heed their agent’s words.

August Statistics

August statistics are in:

Average Sale Price:             $330,900 down .63% from $333,000 in July

Average Days on Market: 77 up from 73 in July

Number of houses Sold:          6163 up .99% from 6102 in July

The number of home sales increased slightly in August.  Ignoring last year’s craziness, this is an unusual occurrence.  August sales typically decline with a further fall off in September.  It will be interesting to see what the September numbers show.  So far in September it looks like we will have a decline in sales, but that can change.  If the typical trend holds (4% decline) we should have roughly 5900 sales in September.

Home Prices

What has caused the current real estate market slowdown?

PRICING!!!!

Real estate is the ultimate supply/demand scenario. As prices go up, demand goes down.

Why so many people are still listing their house at some unreasonable price is beyond me. The market is such that if you price your house reasonably it will sell. The prices of homes are stable and still increasing slightly in the areas where new building is minimal. Your home is only worth what someone else is willing to pay.

Overpricing will cause you more stress that is necessary. If your house is listed for a couple of weeks and you have received no offers, reduce the price.

Once sellers start getting more in line with what buyers are willing to spend, the market will shake
its current funk. And believe me, there are buyers out there, they are just waiting for you to price
your home within reason.

The Beginning

I am a real estate agent in the great city of Phoenix. As most people know, Phoenix has been growing very fast over the past few years. The economy is booming here and the real estate market is in a perfect position for investing. Prices have stabilized throughout most of the valley. Unfortunately, those who purchased properties in the outlying areas are in for a hurt if they want to sell within the next year or two. Homes more toward the center of Phoenix are still looking pretty good. Year over year gains for August are nearly 4%. Not bad for a "bursting bubble". Most of that appreciation took place since January. There are 47192 properties on the market, that would be over 7.5 months of inventory. What a difference a year makes! And what better time to be a buyer?