Buying Arizona Real Estate » home prices

Sales Trends 2010 thru February

Tony Pomykala — Wed, 10 Mar 2010 00:46:17 +0000

Information provided via email from WWW.ACTIVEFUNDINGGROUP.COM


Jan-10	Total Closings	5575

Sales price	No. sales	% of total
0-100,000	2219	39.8027%
101-200,000	2154	38.6368%
201-400,000	998	17.9013%
401-750,000	253	4.5381%
751-1,001,000	47	0.8430%
1,001-2,000,000	56	1.0045%
2,001-5,000,000	21	0.3767%
5,001-10,000,000	1	0.0179%



Feb-10	Total Closings	6635

Sales price	No. sales	% of total
0-100,000	2482	37.4077%
101-200,000	2557	38.5381%
201-400,000	1157	17.4378%
401-750,000	300	4.5215%
751-1,001,000	62	0.9344%
1,001-2,000,000	48	0.7234%
2,001-5,000,000	20	0.3014%
5,001-10,000,000	2	0.0301%

Supply as of 3-4-2010

Total no. actives 35110

List price	No. Active listings	Supply (in months)
0-100,000	8034	3.42
101-200,000	12064	5.47
201-400,000	8321	7.64
401-750,000	3493	12.63
751-1,001,000	3253	59.69
1,001-2,000,000	2133	41.02
2,001-5,000,000	763	37.22
5,001-10,000,000	82	27.67
Over 10,000,000	25

List price	Av. Days on market
0-100,000	85
101-200,000	107
201-400,000	135
401-750,000	188
751-1,001,000	234
1,001-2,000,000	258
2,001-5,000,000	361
5,001-10,000,000	369
Over 10,000,000	377

Summary

Over 78% of sales occur in the $200k and under category

Over 90% of sales occur in the $400k and under category

In summary, the numbers don’t lie and market trending is abundantly clear. Two core elements drove the market into the sewer beginning in the 2nd quarter of 2006, which were rapid price deflation of residential assets coupled with a simultaneous dramatic lack of available take out financing.

There is still an oversupply of active properties for sale (we believe the oversupply is approximately 40%) but that needs to be carefully analyzed in specific pricing segments as opposed to a “bulk number”. The majority of oversupply exists in properties that retail for a price that exceeds the FHA upper end lending limit. We are seeing predictable and relatively short resale marketing timeframes for properties that retail for $250K and under.

Price deflation has largely occurred at this point and we are seeing modest price inflation in the $250K (retail) and under category and properties that retail for any price that is underneath the FHA upper end lending limit.

Market speed and velocity for properties that retail for a price that exceeds the FHA upper end lending limit is lethargic and will continue to be that way until there is a more competitive take out market for loan amounts over the FHA lending limit as there are only so many 800 FICO score buyers with 30% (or more) in cash for a down payment.

Prices being paid at Trustee sales recently are downright stupid if your business model is based upon an near term exit strategy, but the Bidders/Buyers attending the sale typically have little to no risk in the purchase, or the result reinforcing the largely accepted thought that it’s easy to spend someone else’s money. We believe the successful investor will “shoot with an arrow, not a shotgun” in this very competitive environment.

We are seeing some good values in the purchase of bank recovered assets from local or regional lenders, and short sale purchases.

There are still some “home runs” in the market – we see them daily but they are few in number and we see a lot more “singles and doubles”. Care and caution are the order of the day as we see it.

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Q&A with an appraiser

Tony Pomykala — Sat, 07 Nov 2009 18:15:50 +0000

Another great email from Dan W. Eason and EnergizedSeller.comQ&A With Appraiser

6 Questions for an appraiser

In an effort to understand the home appraisal process we interviewed San Antonio appraiser, John Wade. Below are four of the six questions we asked and a short answer summary.

Q. What can home sellers do if they don’t agree with an appraisal. A. Call the lending institution and express their concerns.
Q. Is there any reason why a seller should hire an appraiser before listing a home for sale with a REALTOR®? A. A good comparative market analysis (CMA) prepared by a REALTOR® should suffice. However, some sellers of out-of-the-ordinary properties could benefit from a pre-listing appraisal.
Q. How do you choose the comparable properties that you use to value a home?A. Homes that have been sold and are most comparable in terms of location, size, number of rooms, number of bathrooms, age, quality and condition are chosen.
Q. How do renovations such as an updated kitchen, swimming pool or hardwood floors affect the value of a home? A. Renovations that meet market expectations typically pay for themselves in a higher valuation.

To read his full answers and the other two questions go here.

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The Phoenix Real Estate Weekly 8/14/09

Barb Savoy — Sat, 15 Aug 2009 01:52:43 +0000

Courtesy of Barb Savoy-Pacella, ABR, CNRS, CHMS
Coldwell Banker Residential Brokerage

Visit our web site at www.PacellaGroup.com to view listings or for more information.

The Phoenix, Arizona market certainly isn’t dull these days. Reviewing year over year data for the same time period last year, we can see that pending sales are up 58% and closed transactions, or sold properties have increased 63%.

The Cromford Report has pointed out some interesting trends in the market over the past several weeks. Foreclosed properties, being sold by the lender, are decreasing their percentage of market share in transactions closing each month, but their average price per square foot is beginning to increase. Short sales are grabbing an increased market share, but their average price per square foot is remaining flat. Seller owned properties are seeing sales remain flat, and the average price per square foot is decreasing.

CURRENT CONDITIONS IN THE PHOENIX MARKET:

There are 24,209 single family detached listings actively on the market today. That is an increase of 34 listings for the week.

Total listings, including condos, patio homes and town homes active in MLS today are 31,473.

We are still seeing the driving force of the market listed under $400,000 and are still seeing investors coming into the market place.

The absorption rate and months of supply are still varying vastly throughout the Valley. Please contact us at www.PacellaGroup.com for information regarding specific locations.

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More and more homes are seeing prices RISE in Arizona!

Tony Pomykala — Thu, 06 Aug 2009 19:35:05 +0000

by Tony Pomykala, REALTOR, ePro
Sunrise Investments, www.HomeListingsArizona.com

Yesterday I went out on a limb and yelled to the world that the bottom has already occurred in some segments of the Arizona real estate market. I pointed out an example in El Mirage, and sure enough prices have indeed begun rising there.

As I explained, I’ve seen examples of that throughout the valley. So today, when I was asked about a property in the 85032 zip code, I had to grin when I saw that here, too, prices have begun rising again! Ok, so it’s only a slight gain, but the fact is that it is still a gain nonetheless.

The home I compared in 85032 is located mid-way between Thunderbird Rd and Cactus Rd, just east of Highway 51. It’s in the Paradise Oasis subdivision. This home isn’t on the market yet, but will be in a couple of weeks as it is a recently foreclosed REO property. Its Bank is still prepping it for sale and has not decided it’s selling price yet.

If I take comparables of this home over the last 6 months, the market value places the average price to be $117,100. However, if I take the comparables from only the last three months instead, the market value rises to an average price of $122,500, a 4.5% increase!

To be honest, I didn’t expect that to occur in the heart of north Phoenix. BUT IT DID!

Fellow Realtors, please check out your neighborhoods and post your findings in the remarks by Commenting to this article. I am very curious to see how much more widespread this is. If the facts bear this out, hopefully the media will realize the truth in that the market already bottomed out and we are finally on the road to recovery!

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Buying Foreclosures from Banks

Tony Pomykala — Thu, 06 Aug 2009 19:02:06 +0000

by Tony Pomykala, REALTOR, ePro
Sunrise Investments, www.HomeListingsArizona.com

Many people still don’t get it, so I’m going to try to explain it a little better here.

The housing market evolves. When the market evolves, the buyers and sellers must adapt or be rendered ineffective. That’s natural. That’s survival.

If you are trying to sell a house and no one is buying it, you must upkeep and maintain that house. You need to clean it, to watch over it, to repair it if something happens to it. You need to maintain some utilities to it. All that is expensive. Is there a better way?

When the housing bubble crashed and banks found themselves with a lot of inventory to sell, they dutifully handed them over to their real estate agents who placed the houses on the market at perceived market value. Many homes would eventually sell, but like the rest of the glut of inventory out there, most took time to sell unless something about that property really stood out over its peers (Even today, many people don’t realize that in a buyer’s market you can’t add price to extra valued items in the home, but it’s the extra valued items that does get you sold when the price is comparable to the other similar, but less featured, homes). Many foreclosure homes are rather plain, if not distressed properties. The only thing in their bag of tools that could set them apart from the pack turned out to be pricing.

Today, many Banks have figured out that if they want to move their inventory faster (so that they don’t have to waste more money on foreclosures than they already have), they will start out by listing their homes for sale for a lot under market value.

Why? Well, for months Buyers have been low-balling offers in to them anyway. So the banks have evolved. They learned that if you throw bloodied meat on the ground you attract more vultures. When vultures start fighting over the meat, they’re willing to do more to win that prize. The low ball offers rise back up in the bidding war and before you know it, banks are getting respectable purchase offers for the homes anyway. This all happens now within the first week on the market (usually the first weekend), the house gets Sold, and the bank avoids having to pay prolonged retention costs. From a business standpoint, this is truly ingenious and it usually works!

Although the winning offer is often less than actual market value still, it’s usually only slightly less. So when you figure in retention costs saved, the bank has made out quite well. The only downside is that a home sold for less than market value drives down comparable property values, so the pricing slide continues.

But as far as the Bank (seller) and Buyer of that home are considered, they both win.

And that is why it has evolved this way.

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Property Values on the RISE in Arizona?! Yes!!

Tony Pomykala — Wed, 05 Aug 2009 17:57:04 +0000

by Tony Pomykala, REALTOR, ePro
Sunrise Investments www.HomeListingsArizona.com

This is beginning to happen more and more, so I think it’s about time we stood up and started shouting this.

“Buyers!! The market has already hit bottom and is turning around in many parts of Arizona.” If you are still waiting for the bottom, you may have missed the boat. Get with your agents and grab that house you want, because prices are actually RISING in some neighborhoods now.

Yes, let me say it again: Prices are RISING in some neighborhoods.

I’ve seen examples of it on occassion while doing Comparables for people who ask, but now it’s happening more and more. So specifically I want to show you today’s latest example of this that I came across.

The neighborhood is Sundial in El Mirage. The target property is south of Waddell Rd about a half a mile, and about 128th Avenue. It’s a 3 bedroom with just under 1400 square feet. Built in 2000, a relatively new home. It’s a short sale, listed for just $55,000.

Well, taking 6 months of Sold history within a mile of this home, the average price of 27 similar homes comes in at $61,300. Refining this list down to the most recent 3 months of Solds, and the average price actually DOES increase to $69,900, a 14% increase!

Now to be fair, you must understand that because of the price points of the West Valley, areas like this in El Mirage are among the hottest markets now in all of Arizona. I think it is safe to say that they hit bottom quite a few months ago. Average prices in many parts of the far west valley are certainly increasing now. This is due to affordability, demand, and shrinking inventory of the “affordable” houses. In case you weren’t paying attention, investors are swooping up the “bargain basement” foreclosure homes the moment they come on the market there. Come on, seriously, these are great deals!! I can’t help but laugh when I get a buyer who STILL tries to low ball those listings. Don’t waste your paper, pal. You’re going to need to offer OVER list price to have a chance of getting any of the “nearly move-in ready” homes.

Can the same be said for Scottsdale? No way. Expect prices there to continue to fall through next summer (2010), when I believe the market there will finally begin heating up again. Of course, that’s assuming incentives and interest rates remain attractive enough. If the First Time Home Buyer Tax Credit goes away as scheduled and doesn’t get extended……. all bets are off. And prices then will likely continue to slide.

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