Phoenix Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Feb. 1, 2023

Projects That Will Give You the Biggest ROI

 

Three home upgrades that will fetch you a high return on your investment.

 

When preparing your house for sale, you may be led to believe that the more upgrades you make, the higher the price you can list for. However, not all home upgrades are created equal; some will have you pouring money down the drain, while others will get you immediate resale value. Understanding which projects to take on can help you make thousands of dollars more. So, what home improvements should you do if you want to get a fantastic return on your investment?

To answer this question, we have to take into consideration the changes that happened in the past few years. Our homes were recently put through a massive re-evaluation. In response to the pandemic, there are now certain features in a home that have become much more attractive to buyers. If you can include them in your upgrades, you can increase the value of your house and turn it into a coveted property in the market. In particular, there are three projects you’ll want to take on:

1. Add more usable square footage. According to a 2020 survey by HomeLight, the need for more space was among the top reasons why people move. Projects such as creating a home office space, building an open floor plan, and finishing your basement can give you that additional space that buyers want nowadays. 

The National Association of Home Builders (NAHB) identifies home offices as one of the new design trend interests in 2022. In addition, the NAHB found that 85% of buyers want an open layout between the kitchen area and the dining room. Lastly, finishing your basement can increase your ROI by 70%. 

 

 

"Understanding which projects to take on can help you make thousands of dollars more."

 


2. Improve your curb appeal. One of the best ways to improve your home’s curb appeal is by focusing on your landscaping. Make your home look more enticing by adding healthy plants and blooming flowers to your yard. To make even more of a statement, slap a fresh coat of paint on your house’s exterior. However, not all changes have to be big and grand. Sometimes small details like updating your mailbox and house number will catch the attention of buyers.

3. Upgrade your outdoor space. Functional outdoor spaces such as a deck, a fireplace, or an outdoor kitchen are now more valued due to the pandemic. If your home has a nice exterior living area, buyers can imagine themselves enjoying the fresh air as they indulge in outdoor activities. If you already have an outdoor oasis, pressure wash or make repairs if necessary for a low-cost way to improve your home’s value.

Home improvements can be expensive, so you want to make sure you’re investing in the right projects. If you’re not sure whether your renovation plans are worth pursuing, feel free to call or email us. We're happy to give you real estate advice and help you get the best value for your home.

Posted in Selling
Oct. 28, 2022

Why We Aren’t Headed for a Market Crash

 

Looking at the data proves that the housing market isn’t crashing.

 

Today's housing inventory proves the market isn't headed for a crash. Whether or not you owned a home in 2008, you likely remember the housing crash that took place back then, and news about an economic slowdown happening today may bring back those concerns and bring everything back to the surface. Now, while those feelings are understandable, data can help reassure you that the situation today is nothing like it was in 2008.

 

One of the key reasons why the market won't crash this time is the current undersupply of inventory. Housing supply comes from three key places: one, current homeowners putting their homes on the market up for sale. Two, newly-built homes coming onto the market. Three, distressed properties, which consist of short sales and foreclosures. For the market to crash, you'd have to make a case for an oversupply of inventory headed to the market, and the numbers just don't support that.

 

So let's take a deeper look at where inventory is coming from today. This will help prove why the housing market isn't headed for a crash. The first one is current homeowners putting their homes up for sale. Even though the housing supply is increasing this year, there's still a limited number of existing homes available. Look at the graph at 1:21 in the video, and it'll help illustrate the point. Based on the latest weekly data, inventory is up 27.8% nationally compared to the same week last year, which is shown in blue. Compared to the same week in 2019, which is in red, it's still down by 42.6%. So what does this mean? Inventory is still historically low. There are still more buyers and sellers, and there simply aren't enough homes on the market to cause prices to crash. There would need to be a flood of people getting ready to sell their houses in order to tip the scales toward a buyer's market, and that level of activity simply isn't there.

 

The second factor is newly-built homes. There's also a lot of talk about what's happening with newly-built homes on the market, and that may make you wonder if we're overbuilding. Still, the fact is we're noticing that homebuilders are slowing down their production rate now. They're being very intentional about not overbuilding homes as they did during the 2008 bubble.

 

"The factual data can help reassure you that the situation today is nothing like it was in 2008."

 

The third place inventory comes from is distressed properties—short sales or foreclosures. We do not have very many foreclosures and I don’t see that happening any time soon. Most homeowners in Arizona have a lot of equity. This allows them to sell traditionally and still come out ahead if they get into financial trouble. If they were upside down in equity they would have to participate in a short sale or the mortgage company would foreclose. Back in the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to secure a home loan they couldn't truly afford. Today, lending standards are much tighter, and this results in more qualified buyers and far fewer foreclosures—certainly very few in the Phoenix market. The graph at 2:51 in the video uses data from Adam Data Solutions on properties with foreclosure filings. This should help paint a picture of how things have changed since the crash. The graph shows how, in the time around the housing crash, there were over one million foreclosure filings per year. As the lenders and the lending standards tightened since then, you'll see the activity starting to decline. 

 

The 2020 and 2021 forbearance programs—those helped to prevent a repeat of the wave of foreclosures that we saw in 2008. The forbearance program was a game changer because it gave homeowners options they never had before; they can defer their loans or modify loans, which appears to have been successful. It shows that four out of every five homeowners come out of forbearance; either they were paid in full or they worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won't be a wave of foreclosures coming to the market. 

 

The bottom line is this: Although housing supply is growing this year, the market certainly isn't anywhere near the inventory levels that would cause prices to drop significantly or crash. That's why inventory tells us the housing market won’t crash. I've been in this business for 33 years now. I've been through three cycle changes. I've been through the foreclosures of 2007 and 2008. I can tell you that we are nowhere near a crash, and I don't see it happening. There just aren't enough houses on the market.

 

I know that there's a lot of data here. If you have any questions about the market or real estate in general, don’t hesitate to reach out by phone, email, or click this link to submit a contact request. We look forward to hearing from you soon.

Posted in Market Updates
Sept. 9, 2022

Why 2-1 Buydowns Are Perfect for This Market

Here’s what homebuyers need to know about interest rate buydowns.

 

What is a 2-1 mortgage rate buydown? Also known as an interest rate buydown, this is a financing option that gives a borrower a discounted rate on their mortgage either for the life of the loan or a shorter period. 

 

There are two common types of mortgage rate buydowns. The first is a standard rate buydown, where you pay a fee upfront to lower your rate for the entire length of the loan. The cost depends on the state of the current mortgage market. 

 

"2-1 buydowns have no risk, unlike adjustable-rate mortgages."

 

The other common type is a 2-1 buydown. With this option, your rate is discounted for the first two years. Then it rises to a regular, permanent rate. Typically, your rate is 2% lower in the first year, 1% lower in the second, and undiscounted for the rest of the loan. The cost of this option also depends on the current mortgage market. 

 

2-1 buydowns have many benefits. They’ll help you qualify for a loan and let you ease into homeownership. Unlike an adjustable-rate mortgage, your rate is fixed after two years, so you don’t have to worry about it increasing beyond what you can afford. 

 

This can be a complicated topic, so reach out if you have any questions. Also, if you have any questions about the market or real estate in general, don’t hesitate to reach out by phone, email, or click this link to submit a contact request. We look forward to hearing from you soon.

Posted in Buying
Aug. 11, 2022

How to Sell Safely in a Changing Market

              

The best decisions in a changing market start with accurate data.

 

Are you interested in finding out how to sell in a changing market? Today, we’ll walk you through what we do to help our clients determine the right time to sell and how to stay safe in a changing market. 

 

It has been a while since we experienced a shift like this. The market is moving from a strong seller’s market to a balanced one. A balanced market is when the buyer demand is equal to the available supply of homes for sale, and that happens at around six months’ worth of housing inventory.

 

What does it take to sell safely in a changing market? It all starts with accurate, relevant data, and there’s much more information needed during a market shift than in a hot seller’s market. We have to gather data and make decisions based on it and our clients’ needs. 

 

"The proper data drives safe decision-making."

 

Make no mistake, marketing, negotiation, and the right closing team still come into play, but it all starts with data. Although data can be boring for some people, it’s also the best tool to help you make fact-based decisions and ensure your judgment isn’t clouded by emotion.

 

What data do we keep a close watch on? Hyperlocal market trends, absorption rate, marketing trend response, showing activity, buyer feedback, mortgage rates, inflation, economic impacts, changing buyer demographics, and much more. 

 

If you’re interested in learning more, reach out to us by phone, email, or click this link to submit a contact request. We look forward to hearing from you soon.

 

Posted in Selling
June 28, 2022

Urgent News in the Market You Have To Know

The majority of homeowners will still have a great equity position.

 

Today we’ll be sharing some urgent news every buyer and seller should know in this quickly changing market:

 

1. Sales. Sales are down 5.1% month over month and down 9.3% compared to last year. 

 

2. Inventory levels. New listings added have a month-over-month increase of 13.4%, while the year-over-year comparison has increased by more than 21%. Total inventory has a month-over-month increase of 37.5%, while the year-over-year difference reflects a significant increase of 44.4%.

3. Active listings. The active listings are double what they were last year and up 100% year over year, and almost 40% of that is in the past 30 days. The increase in supply is due to the drop in demand. Listings under contract are down 15.6% year over year.

4. Pricing. Average new listing prices are up 24.3% year-over-year but are expected to change, and average sales price is up 16.7% year-over-year, while the year-over-year median sales price is also up 21.8%. 

“The majority of homeowners will still have a great equity position.”

 

Now buyers have more active listings to choose from every week. If this pace continues, a market balance, where there is an equal balance between buyers and sellers and neither have a clear advantage, is possible as soon as mid-August. There will also be more price reductions and an increase on days on market. 

 

We’ve shared with our clients that an adjustment is likely but we did not anticipate such a fast and dramatic change. The last time we saw a similar market cooldown was in 2005, but 2022 seems like a more striking reversal than we experienced back then. At 2:27 in the video, the chart illustrates this phenomenon.

 

Fortunately for sellers, even if we experience a normalization in values, the majority of homeowners will still have a great equity position due to the increase in home values over the past few years. If you plan on selling, the safest advice we can give you is to sell as soon as possible because we consider it an urgent real estate decision in this market. 


If you have more questions about the market or real estate in general, don’t hesitate to reach out at (602) 352-3600 or click this link to submit a contact request. We look forward to hearing from you soon.

Posted in Market Updates
May 27, 2022

How Does a Recession Affect Your Home Value?

Here’s why an economic recession isn’t all bad news for homeowners.

 

The one thing that every homeowner needs to understand about a recession is that it does not equal a housing crisis. Everywhere you look, experts are warning us of a recession and potential crash. Even if the market corrects, an economic slowdown doesn't mean homes will lose value. 

 

Take a look at the graph at 0:40. There have been six recessions in this country since 1980. However, home prices actually appreciated during four of those recessions. When the economy slows down, it doesn’t mean home values will depreciate. The only times they have depreciated were during the savings and loan crisis of 1991 and the housing crash of 2008.

“History has proven that a recession doesn't equal a housing crisis.”

 

Most people just remember the 2008 crash and think we’ll go through something similar if we have another recession. That's just not true. Today’s fundamentals are very different from what they were in 2008. Mortgage lending and banking practices are much more stable than they have been in the past.

 

History has proven that a recession doesn't equal a housing crisis, and even if one comes, we won’t necessarily see homes drop in value due to our current market conditions. If you have any questions about the market or real estate in general, don’t hesitate to reach out by phone, email, or click this link to submit a contact request. We look forward to hearing from you soon.

Posted in Homeowner Tips
May 19, 2022

What's on the Horizon for the Housing Market in the Second Half of 2022?

May 11, 2022

Is Now the Right Time To Make a Move?

 

Two market changes that could impact your decision to make a move.

 

Looking to buy a Phoenix home? Click here to see our featured listings. 
Looking to sell your home? Click here to get an INSTANT property valuation now!

 

 

Today we’ll answer your questions about the changing market and whether you should make a move right now. Here are the two main changes happening in our market that will impact your decision:

 

1. Interest rates are rising but are still low. If you're obtaining a loan, it will cost more than in recent years for the same mortgage. However, interest rates are still very low right now. Comparatively, they're half of what they were when I bought my first home. These are cheap rates even though they're not what you're used to.

 

2. Inventory has increased slightly. This has caused some slight price reductions and increased days on market. Buyer interest has subsided a bit but demand is still outpacing supply and we still see strong buyer competition and multiple offers on homes.

“We recommend making a move sooner rather than later.”

 

How does this affect your buying or selling decisions? If you're buying, there may be less competition. However, if the property is popular, you'll still see buyers compete and offer top dollar. If you're selling, there may be less buyer competition, but it's still a seller's market. We’ll pay careful attention to reading the market for your specific property.


If you're considering making a move in the next 12 months, we recommend doing it sooner rather than later. Rates are expected to rise and appreciation is expected to slow. Hopefully, this helps you decide whether it's a good time for you to make a move or not. If you have any questions about your specific scenario, reach out to us by phone or email. We're here to help.

Posted in Market Updates
April 28, 2022

Things To Consider When Moving This Spring


Here’s my advice for home sellers who are on the fence about list
ing.

 

Looking to buy a Phoenix home? Click here to see our featured listings. 
Looking to sell your home? Click here to get an INSTANT property valuation now!

 

Today we’re going to discuss things to consider if you’re on the fence about making a move this spring. If you’re thinking of selling this spring, it may be because you’ve heard that prices are rising, listings are going fast, and sellers are getting multiple offers on their homes. All of this is true. Why are conditions so good for sellers today, and what can you expect when you move? To help answer those questions, let’s turn to the data.

 

 


Today there are far more buyers looking for homes than sellers listing their houses. Look at the maps at 0:47 in the video above of the latest buyer and seller traffic from the National Association of Realtors. This should help paint the picture of what this looks like for you. Notice how much darker the blue colors are on the left. This shows buyer traffic is strong today. In contrast, the much lighter blues on the right indicate a weak or very weak seller traffic. In a nutshell, the demand for homes is significantly greater than what’s available to purchase.

 

 

"We know buyers will be competing for your home."

 

 

What does this mean for you? You have an incredible advantage when you sell your house under these conditions. Since buyer demand is so high at a time when seller traffic is so low, there’s a good chance that buyers will be competing for your house. In fact, we know that’s the case.

 

 

The NAR statistics show that the average sold home got 4.8 offers. Selling when demand is high and supply is low sets you up for the big win.

 

 

So what’s the bottom line? If you're ready to move, you have an incredible opportunity in front of you. Let’s connect. You can rely on our expertise, and we can help you win when you’re selling as well as when you’re buying.

 

 

If you have any questions, don’t hesitate to reach out via phone or email today. I look forward to hearing from you.

Posted in Selling
March 7, 2022

Why Real Estate Is Such a Secure Investment


Here is why real estate is a secure hedge against inflation.

Looking to buy a Phoenix home? Click here to see our featured listings. 
Looking to sell your home? Click here to get an INSTANT property valuation now!

 

If you’ve been following the news lately, you know that inflation is on the rise. Fortunately, there’s a great way to hedge against it: investing in real estate! Today I want to talk about why investing in real estate is such a great hedge against inflation and how you can take advantage. 



If we look at the last eight years, real estate has appreciated more than stocks, savings, gold, and just about everything else, For example, stocks have only increased by 21% over the last eight years. During that same time, the average property appreciated by 41%.

 

"Even when the market crashes, home values come back stronger than before."

 

The truth is that real estate is an incredibly secure investment. Any home purchased 10 years ago is probably worth much more now. Even when the market crashes, it comes back stronger than it was before. 

 

 

The average sales price in our area is in the $450,000 to $500,000 range, but you don’t have to go that high to protect yourself against inflation. We’d love to help you find an investment that works for you. Once you finally win a house, you can start building equity and securing your finances against whatever comes next. 

 

If you want to discuss inflation, investment properties, or a personal residence, please reach out to us. We’d love to help! 

Posted in Investing