Oct 2018 | Real Estate Market BURRITO ;)
Good October morning to ya's!
All that rain this past week sure helped kick down the temperatures... The back door and front door are open. Now I just hope our dogs can regulate themselves well enough to not bark at every fart that happens outside. ;)
Obviously being in the RES biz we need to keep up on what's happening and how things are looking... however over the last few weeks (weirdly) I've gotten a slew of market updates from other real estate agents themselves.. and this isn't directed at me as an agent... it's me as a would be buyer or seller.
I'm not sure if they're expecting other agents to fail in the future "so please send me your clients when you quit" or maybe it's a recruiting effort... I really have no clue. All I can tell you is that when I watch this shit it's like being in a chemistry class... I much more preferred physics haha.. but damn! % this, % that, huge ass numbers, numbers... zero visual of understanding.. nothing... I mean I get it, but it goes down like cereal with not enough milk..?!?! hurts and you spend more time coughing than you do enjoy the nourishment it's supposed to provide...
Maybe it's just me... but things should be different.. especially with something so complex as real estate. I hope to explain things to you in a way that you feel like you're eating a homemade green chili & egg burrito... the chili's have been baked in the oven, cleaned and cooked with pork in a crockpot days before... all with some scrambled eggs wrapped in a warm tortilla... (cause err'y-thing's better in a tortilla) tasty, delicious and savory... and as spongebob says... made with "love"... :) The Burrito :)
The market is a happening place. We Phoenicians are a fortunate few.. although our market slows down in the fall and winter, our ability to sell during the cold months allows us to come and go with our homes in a way the colder states cannot.
Traditionally, the start of October our activity slows down. During this time you are more likely to pick up a home with a pool without all the drama of buying today and swimming tomorrow like we do in the summer times. We do notice that home prices below $300k tend to move more fluidly throughout the year, whereas homes north of $350-400k, the sell-ability activity slows down.. they will sell in some areas, but the activity is light until the start of the spring time.
The number of available homes are low... still..
This is great for sellers, but the buyers need to be prepared. A balanced market of our PHX area is having approximately 30,000 homes on the market. Three - four'ish years ago we were at about 29,500... progressively over the years that number has dropped... as of this summer we were down in the low 15,000.. which is 1999 inventory levels, all compounded by huge buyer inventory like that of 2005.
This morning we're at 16,928.... which is a noticeable increase in inventory for it being just a couple months. This is an indication that our inventory is obviously increasing and probably prices are leveling out.
Something to note, the peak value - defined as the highest of record before the bubble was around 2006.... Many areas in town today are near 93-98% of their peak value back in 2006. Some areas have surpassed the 2006 number. Wonderfully so, this is something special that our market offers whereas other markets throughout the country do not have.
You may hear the talking heads on TV talk about the market and the bubble and, and, and... the best thing we can do is look at the facts, not the increase in a couple numbers and have an over reactive heart attack followed by the sleaziness of suggesting to sell now before, or buy now while you can.
The numbers below are from our MLS system.... with the exception of For Sale By Owners (FSBO's) all residential transactions are ran through the MLS.. For me, I refer to the Cromford Report... they're a team of people likely 100 times smarter than most, and they collect the MLS info and break it down into digestible bites.. (the corners of the burro are the best!.. and must be eaten by hand. :) )
Attached is the full burrito, however, I have grabbed all the corners for you ;)
Days on market for homes that are pending:
Last Yr: 67
2 Yrs Ago: 73 Commentary: These numbers would be lower if they didn't include over priced homes that eventually dropped and homes that showed poorly.
Days on market for homes that are not under contract:
Last Yr: 107
2 Yrs Ago: 113
Commentary: These homes sit waiting to be bought... I feel so bad for the houses. :(
Listing success rate ~ home that actually sell once on the market
Today: 80.9%Last Yr: 79.2%2 Yrs Ago: 76.8%
Commentary: This means 20-24% of homes listed are cancelled or expired. It's a balance between sellers being correctly educated on expectation so they have the patience to endure and succeed... AND, an agent who's worth a shit... sadly, out of almost 35,000 agents in the PHX area, the average agent sells between 0-3 a year. :( I believe this number is reflective of that lack of industry preparedness.
Average annual price at closing & annual appreciation %
Today: $255,100 / 7.9%
Last Yr: $235,000 / 6.3%
2 Yrs Ago: $221,000 / 5.1%
Commentary: There's no argument... it costs more to rent a house that it does to pay for a home.
Annual average % closed sale values to listing priceToday: 97.91%
Last Yr: 97.65%
2 Yrs Ago: 97.46%
Commentary: The experience of watching HGTV conditions you to anticipate getting a home at $10k-$20k below list price... continuing to watch will only irritate you more when that doesn't happen. :P Great news for a seller as they're poised to get their sales price or damn close... however a buyer must know that prices are pretty much what they are... and if you're a buyer needing a break on cost... go for the homes that are still on the market with long days on market to cultivate a deal. ;)
Annual average % of closed values to the peak value of 2006Today: 98.1%
Last Yr: 90.4%
2 Yrs Ago: 85.0%
Commentary: It has taken us some time to rebound since the crash... but for where we are today is considered a traditional market.. values are anticipated to level out and grow more fluidly year over year.. another great treat for us Phoneticians.
Distressed monthly sales, Lender Owned % & Pre-foreclosure %Today: 0.0% | 0.0%
Last Yr: 1.4% | 1.4%
2 Yrs Ago: 2.3% | 2.3%
Commentary: These numbers actually differ from month to month.. but yearly they happen to be on the same page. This really means that the distressed market is extremely low. If you're looking for a flip or an investment like home.. they're very hard to find. This is another indication of a great strong market for us Phoneticians.
As mentioned earlier, I have the full report attached, but these are the ones I frequently focus on. This info is for the entire PHX area. This info does differ from zip code to zip code. So if you're curious about your area, just let us know and we'll happily send this your way.
All in all I see this as still positive, regardless of what others are saying. That doesn't take away the stresses of the market or the adjustments we're dealing with. The progressively increasing interest rates do affect our sales numbers. However, we are still in record lows all things considered.
I hope the info was received with great anticipation and your appetite is nice and full. It doesn't make sense to have a green chili burro every Friday, but once every couple months, it's a nice treat... much like the effort it took to gather this here for you.
No matter what the unsolicited flyers that come in the mail say, or the crap you stumble upon FB or the TV shows..."sell, sell, sell, sold, sell me your stuff!!" ... our orange gut tells us that real estate is a service based business that needs to be taught with the heart of a teacher, not sold... it's a point in life where one needs to be pulled by a leader, not pushed by a salesman. The world and peoples lives are ever changing. We're in no position to suggest otherwise... this is a safe place to be yourself and ask questions without expectation.
Although a tasty burrito, it was big, filling, and full of flavor.. If you have any questions from this, please let us know, we'd be grateful to help. I'm not sure what's worth more in the eyes of real estate... the mountain views.. or the solitude. either way.. damn. what a nice place. <3
Have a great Friday :)