Scott and Sandy Krestan discuss the rate drop and the impact to you. What does it mean to the real estate world and the mortgage rates? Watch to find out!
There’s no doubt that today’s housing market is changing, and everything we see right now indicates it is time to sell. Here’s a look at why selling now is likely to drive the greatest return on your largest investment.
Home values have been appreciating for several years now, growing at a strong, steady, and impressive pace. In fact, the average annual appreciation rate since 2012 has nearly doubled the average rate from the more normal market of the 1990s (think: pre-bubble).Appreciation, however, is projected to shift back toward normal, meaning home prices will likely keep climbing over the next few years, but they are not projected to continue to increase at such a high rate.
Here’s What That Means for Homeowners:
As noted in the latest Home Price Expectation Survey (HPES) powered by Pulsenomics, experts forecast an average annual appreciation rate closer to 3.2% over the next five years, which is more in line with a historically normal market (3.6%). The good news is, there’s still time to take advantage of the current strength of home prices by selling your house now.Looking at the projections as they stand today, 2019 is slated to drive the strongest appreciation as compared to the upcoming few years. With average home prices still on the rise, the pace at which they are predicted to continue increasing will likely soften by 2020.
If you’re thinking about selling your house, now is a great time to make your move. Don’t get stuck waiting until projected home price appreciation rates potentially re-accelerate again in 2023. You’ll likely earn the greatest return on your investment by selling now before the prices start to normalize next year.
2019 Scottsdale North Mid Year Real Estate Market Update
A Teachable Moment
Wow. The results for this quarter provide a great opportunity to better understand the Scottsdale North market dynamics. Below I will show you how critical patience is to the real estate selling process.
My last two quarterly updates in this paper detailed an unprecedented decline in housing demand in the Valley. I described the dramatic affect it had on sales. To illustrate the trend, I showed the graph below displaying the last three years sales numbers in Scottsdale North. It is easy to see the plunge in sales numbers starting last fall, and the lingering effects of low demand through 2019.
In each of the quarterly updates, I stressed that while these while these changes appeared to be dramatic, the fluctuations were really normal and consistent. I tried to make clear that there was no reason for panic or even alarm. Markets continually struggle to achieve balance and can change very quickly. I ended my Q1 Market Update in April by predicting you should, “watch for a flurry of sales to happen in the next quarter…” Below is a graph of what actually happened:
As you can see, the shift in the market was quick and dramatic. We went from an unprecedented decline in sales for two quarters, to seeing the largest unit sales count ever measured for a calendar month in the Greater Phoenix market in May. June had the highest dollar volume total for any June in history.
What does this mean for Scottsdale North?
We don’t have the space here to explain the specific reasons for that shift. The larger point is that the Scottsdale North Market is healthy and thriving. The only obstacle keeping sales down is the chronic lack of inventory. Even when seasonally adjusted, there are just not enough homes available to meet the demand. When you compare 2019 to the last two years, you see a 38% decrease in inventory:
We need more homes to sell to meet demand. Economic theory tells us that when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price.
Here is my advice about the market moving forward:
For Buyers: If you are price conscious, you might relax your standards. Try to find a home that is close to fitting your needs now, because it looks like waiting could be expensive;
For Sellers: You are in good shape and patience can be a virtue. I have two tips:
- If you need to sell, pricing in a market with low inventory is difficult. Make sure the market gets complete exposure to your home. We had one recent sale that sold at $26,000 and another at $37,000 above the listed price, because we allowed the market the chance to speak and set the right price.
- If you have a home with a wart – something that makes it less desirable to the market like a dysfunctional floor plan, lack of updating, or proximity to a major road – this is your market. Low inventory means fewer choices. This helps buyers to get past their unreasonable pickiness.
I don’t think I have ever written about this subject before, but we had two fantastic examples in November so the timing this month is perfect.
Does it even matter what real estate agent you choose? This is a question I don’t get asked enough. Many sellers just assume it really doesn’t matter which agent you choose because even the newest agent has access to the Multiple Listing Service. Folks with this “All Agents are the same” mindset logically just shop for the agent with the lowest commission rate. Would they feel like they have done their due diligence if they knew that it could cost them over $50,000? We see so many buyers and sellers needlessly exasperated by events and mistakes that should have been handled up front and/or behind the scenes. In fact, I will tell you about a couple of examples I think you will find interesting in a minute. But to begin, let’s start by taking a look at whether the agent you choose matters from a simple dollar and cents point of view.
BY THE NUMBERS
The Scott Gaertner Group sells the most listings in the Scottsdale North area. If all “agents are the same” when you compare the average sales of our listings to the average of all the other listings the results should be pretty similar right? The chart below shows that over the last 5 years our listings have averaged $19 more per square foot more than the 85266 average, and they sold nearly 3 times as fast. That is not very similar, and if you consider that in the last 12 months results we averaged $32 per square foot more the difference is trending to matter more.
85266 Sales From 11/20/13 to 11/20/18
(*All information is provided by the Arizona Regional MLS and is deemed reliable, but not guaranteed. Data for Price Per foot and Average Days on Market is from 11/20/13-11/20/18. Scott’s sales are removed from the group average.)
The average home in 85266 is just over 3,000 square feet, so doesn’t it make sense that the average homeowner could have made over $50,000 more just by hiring a different agent? ($3,000 X $19 per foot = $57,000 )
APPLES TO APPLES
Some people don’t like statistics so, let’s try a more “Apples to Apples” comparison to show that the agent you choose really matters.
Below is a chart of 9 listings that our group took over after they had been listed with another company for at least 180 days. In each case we relisted the home at exactly the same price – or we raised the price – and the only thing that changed was the way the home was marketed. As you can see from the chart below, in each case the home sold within 30 days.
DOES MARKETING MATTER?
To me these are the perfect Apples to Apples comparisons. The same homes, listed at the same price or higher, WAY DIFFERENT RESULTS. (By the way – we do not ever solicit expired listings. These sellers all called us for help)
Still not convinced? You are a tough crowd! Ok. How about these two examples from last month that I promised you earlier:
November Marketing Matters Example 1
Last month we sold 6583 E Brilliant Sky in Terravita that had been on the market with another company for 182 days. We relisted at the same list price and sold the home for $5,000 above the list price in just 3 days.
- STILL NOT CONVINCED!? CHECK THIS ONE OUT.
November Marketing Matters Example 2
Also last month, we sold 7787 E Soaring Eagle in Winfield that had been listed 7 times, with 7 different very experienced agents for a total of 1953 days on the market.
As you might guess the homeowner was more than a little frustrated. He called us because we had just sold his neighbors home very quickly, and for more than he was asking for his home. After a quick conversation with us the homeowner had his agent release him from his current listing and take it off the market, and then he hired us to sell his home. Our team went in and made a few very important changes to the way the home was marketed – raised the price just a tad to $1.4 million – and sold the home for full price in just 10 days.
Same home listed by 7 different agents, slightly higher price, WAY DIFFERENT RESULTS.
C’mon. That should at least get a “Hmmmm…” out of even the most skeptical of you.
I hope that convinces some of you to at least consider that who you hire to sell your home matters. I think it was Red Adair that said, “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” Scottsdale North home values have finally come back up. Don’t throw away your hard earned equity needlessly. If you are thinking of selling your home or buying another consider our tag line and give us a call. “ In Scottsdale North Real Estate, experience isn’t expensive – its priceless.”
1993 was an ugly time in the world of real estate. Arizona was still in the grip of last national financial crisis before our 2008 meltdown, commonly called “The S & L Crisis.” There was little good news, as shortly before that time the country had been in a recession, new homes construction had dropped to its lowest levels since world war II, and 5 senators (2 from Arizona) were being very publicly investigated by an ethics panel for their involvement with the Lincoln Savings and Loan collapse and it’s Chairman Charles H. Keating.
Terravita was a child of that S & L crisis and became a shining light for Scottsdale North and signaled the way forward.
In 1991 Terravita was just an exceptionally beautiful piece of High Sonoran Desert at the foot of Black Mountain, with no real purpose . . . and in foreclosure. The Del Webb Corporation purchased the property from the Resolution Trust Corporation (RTC) even though it didn’t fit their normal business model. At the time they were famous for converting large tracts of agricultural land to into huge age restricted “retirement” communities like Sun City. They instead chose to build the smallest and the first non-age restricted community that Del Webb had ever built, and call it Terravita..
The name Terravita (Latin for Living Earth) signaled another dramatic departure from the company’s normal mode of operation. Rather than bringing in all the huge Caterpillar tractors to scrape the surface off of every inch of the land, they instead preserved the natural beauty and disturbed as little as possible. They relocated thousands of cacti and trees to embrace what became the communities motto and passion: Terravita – The Harmony of Land and Life.
The first home sales were the last week of November in 1993, and Terravita immediately became the fastest selling community in the United States. Six separate times, lifestyle seeking buyers camped out in the Terravita parking lot at the opening of new phases, to ensure they could get a homesite that they wanted. The longest campout lasted 10 days! In the end, what was planned to have been a 6 to 8 year sell out was gone in just 3.5 years. The community won tons of national industry awards, and spawned many copycat communities both inside the U.S. and out.
25 years later Terravita continues to be an incredible value for lifestyle seeking homeowners. The community will be celebrating its first quarter of a century this month with the grand opening of a completely renovated new clubhouse. I was proud to be a part of the Del Webb team that built Terravita back then, and even prouder to be helping folks discover the lifestyle Terravita and Scottsdale North represent today.
For those unfamiliar, you should know that Elliott Pollack is by far the leading economist in Arizona. Over the last thirty some years through the ups and downs I have gone to his presentations, studied his reports, stolen his power points, and marveled at the insight in his predictions. He puts out a weekly message and while this isn’t specifically about the Terravita real estate market, I thought you might find this week’s enlightening:
ELLIOTT D. POLLACK
FOR IMMEDIATE RELEASE
May 21st, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
The good economic news continues to abound in what was a busy week for data. Leading indicators were up as was industrial production, manufacturing and trade sales. Retail and food sales were also up as was single family building permits. The supply/demand imbalance for single family homes continues to push housing prices up both nationally and in Arizona. While the extent of the increase varies depending on the index used, home prices seem to be increasing at two to three times the level of wage gains. This can’t continue indefinitely. But, in the near term, it will create a great deal of home equity for those who own and will create affordability issues for those who don’t.
In Arizona, employment continues to grow. For the state as a whole, employment was up 2.3%. That’s enough to make Arizona the 7th most rapidly growing state in the U.S. for the first four months of 2018. Greater Phoenix grew, as has been the pattern in this cycle, much more rapidly than the rest of the state, while Tucson lagged. Yet, two new jobs announcements in the Greater Tucson area gave hope that Southern Arizona will do better than it has since the recovery began nine years ago.
Housing permits continue to be up at a double digit rate in the state’s two major metro areas. No end to the rapid growth in housing is in sight. The shortage of existing homes for sale continues. The increase in demand given the strong economy and the return of millennials to the housing market as well as the apparent lack of sufficient low priced new home deliveries seems to assure that.
Despite the age of the cycle, the outlook remains bright.
To read the article in its entirety click the link: Monday Morning Quarterback
November 1, 2017 Terravita Market Update
HAPPY HOLLOWEEN FROM THE GAERTNER TWINS!
I just finished a 3 day real estate conference and was trick or treating last night so I will keep this short. Terravita had a good month for homes under contract and the Gaertner twins had a good night of Holloweening! Here is a video those of you looking for space might enjoy:Click Here> Bunkbed Couch
Here are the October 2017 Terravita Real Estate Market Statistics: