Terravita Market Updates

The Terravita real estate market continues its march forward with another amazing sales month. Terravita had 22 homes go under contract in March. For comparison, last year was the best sales year we have seen in many years, and only 12 homes went under contract. Yikes! The sales volume and price increases feel very much like the run up back in 2004. Which brings up a topic I should touch on...

Does the market being this hot mean you don’t need a good agent?

Just because the market is hot doesn’t mean you don’t need a good agent. Your home will probably sell, but at what price and with what terms?   
                        

What we saw back when the market was superheated in late 2004 and 2005 was sellers making deals directly with buyers or maybe just using any one of the agents who live in their neighborhood. Many of these agents supplement their income with 4 or 5 transactions a year, and actually get mad when you don’t list with them.  At first glance it seems like “What could it hurt? The market is so hot, the home will definitely sell and I can help my friend out and/or save a little money at the same time.” That strategy really might make sense as long as you aren’t concerned with getting as much money possible for your home. If you really want to maximize your net though, you should really think it through.

Being a full time agent, I obviously have a bias here, but really think it through. If you aren’t in the market every day how can you know what the home is worth? If the market doesn’t get a good look at your home when it is showing at its absolute best, how can you possibly get top dollar? I saw a lot of sales in 2004 and 2005 that I thought should have sold as much as 20% higher than they did. That’s a lot money and the deals generally don’t go as smoothly, but for now lets just focus on price.  Let me give you a recent example that might be instructive:

I had a couple last month that were very concerned about listing with me because my price was so much higher than the other agents they interviewed! My suggested price was $134,000 higher than one of agents and $70,000 higher than the other. I explained to them that I just understood the intricacies of this market better than other agents and fortunately for all of us, they decided to list with me. We sold their home immediately at full price, it closed in 3 weeks, and my sellers stayed in their home for 2 weeks after closing for free, until the home they bought was ready.

What if they hadn’t interviewed me?  They could have easily listed with either agent and never have known how much money they left on the table. Marketing matters in any market, but it is actually even more important now when people are clamoring to make a deal before prices get out of sight. 

If you know of anyone considering selling their home, please encourage them to speak with me first.

Our beautiful weather has finally arrived and so has the prime real estate season! As usual, February was a good month for the number of homes going under contract and price increases.  While it isn’t evidenced well in this sample of closings, prices continue to climb due to lack of good inventory. Expect this trend to continue indefinitely, as the supply is not meeting demand valley wide, and Terravita is no exception. January marked the lowest number of new listings added since the Arizona Regional Multiple Listings (ARMLS) database was formed back in 2000. The peak buying season has begun and without an influx of inventory, housing prices are going to climb.

We consistently see buyers that do not want to go through the brain damage and/or expense of updating homes. But, I have always been a location guy, so my mantra in Terravita has always been “I don’t care about the inside of the home, I can fix that. I can’t fix what it backs up to... I want a great location. ” But lately we have seen some updated homes located on less than extraordinary lots sell for significant premiums.  We have also seen the other side of that coin too. The average price per foot this month is skewed down by the sale of a good home, with a great floor plan, on a good lot, that sold for a ridiculous $173 per foot! OMG!  I wasn't involved in this transaction but the buyer's agent said that even the buyer was surprised at the final price!

If you have friends who are buyers or SELLERS we can coach them through the process of taking huge advantage of this "updatedness" trend in market. I have been doing this a long time, and have learned that on either side of the equation, this situation can effectively be used to lever better results for my clients.

The Terravita real estate market finished off a great year with a strong December. The average price per foot edged back a bit from November’s high of $214, but having 6 sales and 11 closings is a good December.  And for the year, Terravita increased sales by 27%. I will have the actual year end statistics soon, and send them to both your inbox and your mailbox.

2013 will see some changes to the way TerravitaRealEstate.com reports monthly statistics. I have found that people focus too much on the monthly average price per foot (ppf) numbers.  Sample sizes are far too small to take any one month’s figures seriously, so I have come up with a new way to display it. Each month we will still have a chart with the Monthly Average price per foot for the homes that closed escrow in that month, but this year, the chart will also show the average price per foot of all the closings for the last 12 consecutive months.  So the Monthly Average is the average ppf in the previous 30 days, and the Annual Average is the average ppf in the previous 365 days.  The Annual Average is much less volatile and is better to determine long term trends. Together these statistics provide the most recent data and the long term trends to give my readers a much more realistic and accurate view of the market as it exists.   It will look like this: