Local Real Estate Before COVID-19, and Now
By Scott Gaertner
A Case-Shiller report released April 28 showed that Phoenix topped the nation in home price growth immediately before the COVID-19 crisis hit. According to the report, Phoenix’s 7.5% year over year growth beat out Seattle and Tampa for the top spot in the nation. While the report was released at the end of April, the data used was through the end of February. (Note: February 27 was the night of our 2020 market forecast event discussing the unprecedentedly good real estate market.) That honestly seems like a lifetime ago now.
Early-Pandemic Panic
The COVID-19 pandemic hit fast and hard, catching real estate buyers, sellers, and certainly this real estate broker, flatfooted. We are blessed to be selling in Scottsdale North with communities so many people want to be a part of, but March and April were brutal months. Buying or selling homes with no clue where the national economy is headed, to buyers who often can not even physically enter the home, is challenging. Everyone was on edge and cancellations were higher than I can ever remember with terrible reasons for canceling. Due to the prolonged seller’s market, buyers saw the pandemic as an opportunity to have the upper hand in negotiations for the first time in months. But for many, that same uncertainty that created the opportunity proved too large of an obstacle and they backed out of the purchases.
Another reason for higher cancelations is that out-of-state buyers are making offers without actually visiting the properties. Often the buyer’s agent does not share the fact that the buyers have not visited the property with the seller’s agent. This is important information to know when evaluating the strength of the offer, particularly if you have multiple offers.
Pro tip: If the buyer’s agent only communicates via text and e-mails, and never speaks to your agent, there is a good chance this is the reason. They are afraid a conversation will reveal the weakness in the offer. We are having every agent attest by e-mail whether the buyer has been in the home or not.
Speaking of this early pandemic phase, Tina Tamboer, senior housing analyst for The Cromford Report, says home sales in the existing resale market were sharply lower in April, reflective of the six-week decline in accepted contracts following the stock market crash at the end of February. Tamboer says, “Travel restrictions caused by stay-at-home orders and struggling investment portfolios put a damper on the luxury market and retirement communities, which were benefiting the most from inbound migration.”
Things Are Beginning to Turn
I write these articles almost three weeks before the newspaper hits your mailboxes, but as of this writing, things have begun to turn. The country’s economic future is still unclear, but the road ahead for real estate is looking good.
The state dropped the stay-at-home directive and mortgage applications are up significantly, which means buyers are gearing up. The listings under contract statistics have stopped their free fall and also begun to go up. The Cromford Chart below shows that they reached the bottom on April 15 and began moving up.
What Comes Next?
Even though housing supply is 28% higher than it was seven weeks ago, metro Phoenix is still in short supply of resale homes, with under 13,000 active listings. At this time of year, anywhere between 25,000 and 30,000 listings would be what we consider a “normal” market. Clearly there is more demand than what we have for sale right now.
As Michael Orr from Cromford says it: “A clear case can be made that the housing market will not be dramatically affected by the pandemic over the long term, no matter how severe the jolt may be in the short term…Even with the gloomiest of forecasts, Central Arizona has more demand for homes to live in than it has homes available. This is not 2006.”
So if you are looking to buy, the pandemic has created a window of opportunity. If you are looking to sell, now is a great time while the world economy sorts out the real-world effects of all these unprecedented job losses and the acquisition of unheard of governmental debt. Either way, we are here for you.
For more updated information or suggestions on how to succeed in the market as it exists today, give us a call at 480-634-5000. Now more than ever, nobody sells more homes in Scottsdale North than the Scott Gaertner Group.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
Find Confidence in Real Estate Experts in These Unprecedented Times
By Scott Gaertner
Thirty days ago, I wrote my article for the April edition of this paper on the topic of how to evaluate multiple offers on your Scottsdale North home. I wrote it because, at the time, we were in the best real estate market I had seen in my 30+ year real estate career, and multiple offers were reasonably common. I thought it would be helpful for you to have some tips on best practices. As of this writing – just 30 days later – not only are we no longer seeing multiple offers on homes, sellers are lucky to get multiple people to tour their homes! Incredible.
Above is the “Cromford Supply v Demand Index” for Valley real estate. This snapshot was taken roughly two weeks after Governor Ducey issued a statewide Stay At Home order through the end of April. At the time of this writing, demand is slightly below normal and supply significantly below normal, but the lines are moving toward each other.
The lines at this point are still pretty far apart, but if they continue to come together or actually cross, prices will be affected. What the supply and demand chart above will look like in the coming months is anyone’s guess. Many believe that the unprecedented national business shut down due to COVID-19 will drive our economy into a recession, or even a depression, later this year. If that is true, how long it will last, and how much that would affect the housing market, is open to debate. But I think we can all agree that our world is changing.
That statement couldn’t be more relevant than it is right at this moment, especially when it comes to buying and selling a home. Amid all this uncertainty, some home buyers and sellers still find themselves needing to buy or sell right now. What do they do? We believe it has never been more critical to work with a professional than it is at this very moment.
The Future of Real Estate is Now
At the Scott Gaertner Group, innovation is our niche. It is who we are. Our entire team of professionals focuses on being better every day by continuously seeking the newest and best practices. For the past 15 years, we have traveled to quarterly conferences around North America to meet and collaborate with the best brokers. We are capitalizing on the relationships we have created by talking with those brokers via teleconferences. We have been, and continue to be, coached by one of the largest coaching firms in North America on current trends and newest technologies. Our company, Keller Williams, is the number one real estate franchise in agent count, closed units, and closed sales volume in the United States. Company collaboration is key. The Scott Gaertner Group has always been industry leaders, and these technologies are nothing new to us.
We have implemented the ability to have a 100 percent paperless experience, from when a home is listed, to when the buyer signs his final John Hancock. Removing the need for paper means you don’t have to physically meet a single person to sell your home. You can do it all; the listing, the showings, and even the signing of the contracts, from the comfort of your couch because we can handle everything online. The only visitor you will have from us is our professional videographer or photographer. And you don’t even need to be there for that.
Despite the uncertainty and the stay at home orders, we are still selling homes. Some of our recent sales are to buyers who have never physically been in the property. Having buyers commit to a sale sight unseen speaks volumes about the clarity and quality of our visual marketing.
Virtual tour usage is up over 495 percent, and when it comes to photo and video marketing, we have always been at the forefront. We offer our services with state of the art equipment and can perform it all; professional twilight photos, videography, drone footage, and even 3D and 360-degree tours. We can’t tell you what is going to happen to our economy or our real estate market in the coming months. But what we can say to you is, “We got this.”
Contact us today to schedule a no-obligation virtual consultation to see when the best time will be for you to get the process started.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
How to Evaluate Multiple Purchase Offers when Selling a Home in Scottsdale North
By Scott Gaertner
When selling your home, receiving multiple offers is the ideal situation. With fewer homes available in Scottsdale North, multiple offers are more likely than you might think. There are a few things to keep in mind when reviewing the offers.
The following tips will help you to evaluate the best offers and decide without emotion which offer is best for you.
Ideal Buyer
Don’t get distracted by dollar signs. Often the highest offer isn’t coming from the best buyer. The ideal buyer has friends who live in the neighborhood or perhaps has secured a new job nearby. This buyer is likely pre-qualified by a great mortgage company, already working with a smart agent, and has been searching for the perfect home for some time. In Scottsdale North, many buyers have real cash to purchase and can provide proof of funds. These are preferred because we avoid the financing and appraisal contingencies. In a market as dynamic as ours, homes frequently will not appraise for the sales price. We have ways to mitigate these contingencies in financed offers too, but cash is still king.
Is Your Agent A Good Communicator?
Your agent should be communicating with all potential buyer’s agents. Their job is to inform them that there are multiple offers on the table and request that they provide their “best” offer. It seems like a no-brainer, but your agent needs to let them know what is most important to your specific needs. I am consistently shocked by how many agents write offers without even talking to the listing agent. This is not a good strategy for anyone. By contacting all offers, your agent can then coach the other agent on how to shape their offer to give their buyer the best chance of success. This also gives you the best chance for success.
Keep an Eye Out for Red Flags
Again, it isn’t always about the highest offer. It is important to know that the standard ARMLS purchase agreement has a 10-day inspection period which many buyers interpret as a “Free Look.” This makes offers where the buyers haven’t seen the home risk-free for them. Your agent should be able to ferret these issues out by talking to the offering agents.
The Contingencies (Buyer Beware)
There are several types of contingencies that sellers need to consider when selling their home.
Home Inspection: The most important contingency could easily be the home inspection. The buyer has a right to have the home inspected by a professional and do any amount of inspections within the designated time frame. If they find any needed repairs or replacements during the inspection, the buyer can request that it is fixed or that you cover the cost of said repair upon closing. These are becoming more contentious as buyers often feel they are overpaying for the home due to market conditions.
Appraisal: As I mentioned earlier with the quickly changing market in Scottsdale North, this can be a tricky piece of the home sale. If the appraised value of the home is less than the sale price, the buyer can back out of the deal or request that you lower the price of the house to meet the appraisal. A good local agent can give you a leg up when working with the appraiser, and with how to powerfully negotiate with the buyers.
Financing: As mentioned above, you don’t want to sell your home to someone who can’t pay for it. Your agent should be in contact with the loan officer to make sure the buyer is qualified and that the chances of any surprises are at a minimum. An experienced agent will know how to ask the lender the right questions to get as much information on the buyer as possible. They can also negotiate out much of the risk upfront and this is particularly true in the Scottsdale North market.
Have a Great Relationship With Your Realtor
When you work with our team, we will treat all other agents/buyers in the process with the utmost respect. We will be readily available for questions during the offer process, promptly returning calls and emails, and will be professional and courteous when notifying the parties whose offers were not accepted. Our team has established deep and strong ties to other agents in the markets we serve; we know that when ‘second opportunity’ scenarios arise, it can often hinge on how the losing buyer and buyer’s agent were treated when trying to put a second offer in place without having to relist.
Nobody sells as many Scottsdale North homes as we do. If you are ready to get started, call us at 480-634-5000.
Scottsdale North Property Taxes
By Scott Gaertner
We are in that visitor time of year in Scottsdale North and many of you will have friends visiting. Some of those friends will be coming from higher-tax states and they may be curious about how your property taxes compare to their s…and you are going to have a tough time answering them.
Oh, it will be easy enough to tell them what you pay – but beyond that, it will get complicated. If you don’t know it, you can certainly lookup the effective tax rate formula. Google has plenty of information for you. But that is based on the assessed valuation of the home and that is a whole other formula you will need to find. And you have to know what the values are in your neighborhood.
Not to worry. As always, we are here for you. We’ve got this.
Rather than bore you with formulas and guesses, I just went right to the source: the county assessor. (Actually, my administrative assistant Ashley did. She smarter and much more detail-oriented.) She tallied all of the closed escrows over the last six months in the heart of Scottsdale North and used the sales prices, as well as the taxes for each property to give us some real-world averages.
Over 182 sales (over one sale a day!), the average sales price was $890,823 and the average tax for that home was $3,724 for the year. For you formula lovers, that would come out to .0042 of the home’s actual value. (We assume here that the home sold for its actual value.) So, if your rich friend wants to buy a million-dollar home in Scottsdale North, he should expect to pay about $4,200 in taxes. If he wants to downsize financially and choose a $500,000 home, he could expect to pay about $2,100. To give an even more real-world feeling, we pulled out two examples of each:
If this tickles your friend and they seem to have an interest in the area, you might also tell them about Connecting Scottsdale North. Either the Facebook group or the website ConnectingScottsdaleNorth.com can help them get a better feel for what we all fell in love with, besides just the great weather. The dark sky nights and the rich Sonoran Desert, the lessor congestion, the mountain views, the amazing hiking and golf opportunities. Those are some of the things that make Scottsdale North stand a bit above the rest.
So now you have a good answer for your friends if they ask you about taxes. You also have a good answer if they ask where they can go to learn more about what makes Scottsdale North so great. And finally, you have a good answer if they have an interest in buying a home – The Scott Gaertner Group. Nobody understands the Scottsdale North way of life better or helps more people to discover their new lifestyle in Scottsdale North than we do. Please call us and let us show them why this might be the next best place for them to live. They will thank you, and so will we.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
Real Estate Report: “The Lack of Supply Can Only Be Described as Shocking”
By Scott Gaertner
This month we are having a guest speaker! Each month you hear my opinion on the market and
I thought it might be good to give you another view.
The thoughts below are that of the man I think of as the “Master of Math” here in the valley, and whom I am pleased to consider a good friend. Mike Orr holds a master’s degree in Mathematics from the University of Oxford and is the founder, chief analyst, and editor of the Cromford Report. It is one of my favorite sources of real estate data.
Below are Mike’s thoughts on the greater Phoenix real estate market:
“The lack of supply can only be described as shocking. A 30% decline since this time last year to reach the lowest level since August 2005. This to satisfy a population that has grown more than 20% since 2005. Anyone who thinks this severe shortage will not result in a significant rise in prices is going to have another thought coming pretty soon. The median sales price is already up 11% over the last 12 months and the average price per square foot is up almost 9% and probably heading for a double-figure appreciation rate.
We note that December 2019 contained 21 working days and December 2018 contained 20, giving 2019 a 5% advantage. However, unit sales were up more than 20% so making an allowance for the advantage still gives 2019 a win by 15%. The listings under contract count is less impressive. While it is almost 20% up from last year, it had been almost 24% up at the start of December, so gave back a little of its lead. Only a little mind you. We are clutching at straws here to find something indicating a little cooling in the market.
Demand remains higher than normal but the Cromford® Demand Index has eased from around 107 to around 103 over the past four weeks. This will not make much of a difference while supply remains under half of what is needed for a balanced market.
The big hope for buyers must be for a surge in new listings arriving over the next 12 weeks. Perhaps sellers will be tempted by the higher pricing they can achieve. However, if they are staying around Phoenix, they will have to pay more for their new home too. Phoenix is currently the strongest large-city housing market in the USA, and this is fueled by inter-state population movements. Retirees are a big part of that, but so are people moving here from California and other Western states for work and the lower cost of living. Demand is likely to remain healthy despite the rising prices.
The primary question is whether we will see any change in the meager supply of homes for sale. If this is to take place, it is likely to be visible over the next few weeks. There has been no sign of an improvement in new listing flows in the last several weeks of 2019. But 2020 is a new year, so we will be watching closely for signs of change.”
Cromford measures dollar volume on a weekly basis for all areas and types, shown in this latest weekly chart below.
On this chart, the lonely dark brown dot at the left represents the first week of 2020 and has a value of $2,742,696,250. This is the highest dollar volume we have ever measured for the beginning of the year, and it is up a massive 26% from this time last year. Coming second and third are 2018 and 2019 with 2006 in fourth place.
The 2020 real estate market shift is important enough that we have decided to have a Housing Forecast event with the top statistics person in the valley on February 27 in Scottsdale North. For details, see our ad below or give us a call at 480-634-5000.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
Let’s Connect Scottsdale North!
By Scott Gaertner
Last month’s cover story “Scottsdale North: Connecting Forgotten Territory” described how the very best part of Scottsdale has been ignored and neglected (check out ScottsdaleNorthNews.com if you missed it). That story was really just a description of something I perceive as an injustice. The purpose of this article is to try and do something about it.
This is an appeal for your help to create an identity for the furthest most beautiful section of North Scottsdale – Scottsdale North.
Consider the comparison to Arcadia in Phoenix. Those who know the valley hear the name Arcadia, and it immediately calls to mind gorgeous, mid-century homes built on grassy lawns with mature landscaping and lots of foliage set in the middle of the city. Arcadia was built on citrus groves and low scrub desert that was scraped and bladed 100 years ago. If you were magically transported into Arcadia, you would have no idea where you were – it could be anywhere in the Midwest or even California.
Scottsdale North is not that.
Scottsdale North is the thickest of High Sonoran Desert that has been carefully preserved in a rural setting, with lighting restrictions to protect the starry dark sky nights.
Apart from the city, Scottsdale North is a place of majestic beauty, quiet solitude, abundant wildlife, ancient artifacts, exhilarating exercise and, most of all, community pride. Transporting you here would leave no doubt where you landed.
If you love SN and believe that it hasn’t gotten a fair shake – or maybe you just want people to know that you don’t mean McCormick Ranch when you tell them that you live in North Scottsdale – please, join our cause. Help the rest of the world to recognize the unique and extraordinary qualities that we all love and cherish about this area. This is a call to Connect Scottsdale North to the rest of the city by creating a new, distinct identity – let’s become Scottsdale North!
While we love that Scottsdale North News has been generous in sharing our plight, we need a bigger platform than our beloved community newspaper. We have started contacting the media, requesting to get this story told and begin the word of mouth we need – but it will be much more powerful coming from you! If this issue resonates with you and you would like to see a change, ask the media outlets that you enjoy to help. You could say something like, “We are here too! Despite what the mapping programs show, we are here. We are Scottsdale North.”
GET A FREE CONNECTING SCOTTSDALE NORTH T-SHIRT!
Let the media and the world know that Scottsdale North is here and then tell us who you notified. The first ten people to notify us will get their own Connecting Scottsdale North t-shirt.
Some Media Resources to reach out to:
KPHO-TV CBS 5 And KTVK 3TV
Kevin James General Manager
kevin.james@azfamily.com
Facebook.com/arizonasfamily
KSAZ – FOX 10
Steve Levi Assistant News Director
steve.levi@foxtv.com
Facebook.com/fox10phoenix
KPNX 12 News
George Davilas News Director
gdavilas@12news.com
Facebook/12news
ABC15, KNXV-TV
Patrick Costello – News Director
patrick.costello@abc15.com
Facebook.com/ABC15
Arizona Republic, azcentral, USA Today
Greg Burton Executive Editor
greg.burton@azcentral.com
Facebook.com/grburton
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.
