Phoenix North East Valley Real Estate

Arizona Regional Multiple Listings Service (ARMLS) August reports are now available. These reports contain the numbers thru the PREVIOUS month.

The 1st report is the STAT report. It provides the most current market statistics.  It is published monthly.

The 2nd report is the ARMLS Pending Price Index™ (ARMLS PPI). It predicts the direction of the market 3 months into the future based on pendings sales in flexmls.  This month ARMLS is introducing the PPI Supplement which analyses pending properties added to the system in the current month only, focusing on average and median prices, total units, and % of total units for that month in specific price ranges. It then compares the current month pendings with pendings from the preceding 3 months.  

The STAT and the ARMLS PPI reports are in a PDF format.

Click the following link to access the August issue of  STATS

Click the following link to access the August issue of ARMLS PPI

Current and back issues of STAT and ARMLS PPI™ are available on the ARMLS website at: http://www.armls.com/Statistics/STATLibrary.aspx

I have worked almost exclusively with buyer clients since I began my career in real estate. Since I started in real estate 6 years ago, I tend to be *really* busy or listening to the quail chirp without much in between. In November 2010 everything changed. I got busy and stayed busy. In order to keep up with my buyers and not miss “the one”, I have been working 12+ hrs a day, everyday, weekends included, for several months.

This post isn’t to whine, although I love doing that, but to illustration what is going on in the market NOW, not 6 months ago or last year, or during the 2005 boom, but what the realities are in today’s market.

I am going to outline the scenarios of a few of my buyer clients and what they have been experiencing in our current market while trying to purchase a home:

Buyer #1: Well qualified, 20% down payment with conventional financing, looking for a home on a big lot, 3/4 acre or more, in Glendale/Peoria up to $250k. We have written 3 offers in the past month. Offer #1 was for a short sale property. Seller accepted an offer and sent it to their bank for review before we were able to get his offer to them in writing. He is currently in back-up position in the event that the current buyer drops out prior to the seller’s bank approving their offer. Offer #2 was with a traditional or equity seller. We looked at the home within 4 hrs of it being listed. We were 1 of 3 showings that evening. We submitted an offer $11k over the asking price that night. By 11am the next morning the seller has 10 offers and accepted an offer at my buyer’s offer price but for cash instead of with financing. Offer #3 was for a bank owned property. There were multiple offers and we were told to offer “highest and best”.  His highest & best was $19k over the list price. His offer was accepted and inspections were done. Based on inspection findings and HOA disclosures, he decided to cancel and wait for something else to come along.

Buyer #2: Canadian investor buying with cash as an investment to use as a rental property in Gilbert up to $165k. He wants to purchase 2-3 homes. We communicated via e-mail and phone from February until April. He came out in April and we looked at 12-15 homes a day, every day for 7 days straight, including Easter! There are very few traditional sellers or equity sellers in Gilbert in this price range so we were focusing on bank owned/REO’s. The problem with a lot of the bank owned homes is that most banks are putting a “hold” on investor offers for 15 days offering owner/occupants the “first look”. Although there have been several bank owned homes he is interested in, by the time the “hold” period is over they already have multiple offers, typically at highest and best, and the bank has already accepted an offer, therefore, the property is no longer available. Due to this fact, we have shifted the focus to include short sales. Late last Wednesday evening he inquired about a short sale property that just hit the market. On Thursday morning I spoke with the listing agent and got more details. I sent him the information and he instructed me to write an offer late Thursday afternoon. I was out with clients and did not get home until late in the evening so on Friday morning I called the listing agent to let her know our offer was coming over and was told, “sorry, after we spoke yesterday I received an offer that the seller accepted and it has already been sent to the seller’s bank. You are welcome to write a back-up offer but I already have several of those too”.   He has been diligently looking since April, scanning the MLS listings I send him several times daily. As of this writing I have written over a dozen offers for him, most of them well above the asking price.  To date he has successfully closed escrow on 1 property.  

Buyer #3: Well qualified, 10% down payment with conventional financing, looking for a single family home with a pool in South Scottsdale in the $225-$300k range. He was referred to me thru a previous buyer client of mine. He initially contacted me in May 2010 but he did not get in the car and being searching for homes until January 2011. The first time we went out to see homes he liked one property that was purchased as a “fix and flip”. The home was beautifully renovated with the best finishing’s. It was listed both for sale at $299,900 and as a rental for $2,250/mo. While he pondered making an offer for a week or so, the home was rented at the full rental listing price for 1 year.  A few months later it went back on the market for $280,000 with the stipulation that the buyer would have to honor the current lease thru 2/12.  He contacted me again and stated he would be willing to buy now and wait for the tenants lease to expire. He suggested making an offer at $245k. The comparable sales for homes that have had the extensive amount of upgrading and renovation supported the list price of $280k but I do as instructed so I contacted the listing agent with this offer. I was told there was an investor that was making an offer on this home as well as another home the owner had listed. That buyer would be paying cash for both so unless my client was willing to make a full price offer, the seller was not interested. The buyer declined to offer the list price amount. We looked at more homes.  In late March he found another renovated “fix and flip” of interest that was listed for $319,900. While he considered making an offer the price was reduced to $300,000. There were some concerns about a major concrete crack that extended through the entire garage and driveway so we had estimates done so he could determine the cost to repair in the event the seller was not willing to make the repair. I verbally negotiated back and forth with the listing agent the purchase price and repairs. It was verbally agreed that he would offer $280,000 with the seller making the repairs prior to close of escrow. Before we could get it in writing another offer came in on the property closer to the list price with no repair stipulations and the seller accepted. About a month and a ½ later the house fell out of escrow and the buyer contacted me again about making an offer but now he wanted to offer $220k. I contacted the listing agent again. He told me that the last offer was at $275k and that the home had appraised while it was in escrow for close to the list price of $300k, so unless the buyer was willing to make an offer at $275k or more don’t bother. The buyer again declined to make an offer. Almost immediately after his 2^nd attempt to purchase this home, the seller received another offer. This home recently closed for $281,000 ($1,000 over the list price). The buyer called me last week about another home we had seen in March that was listed for $296,000 at that time. The home did not have the extensive amount of renovations the 2 previous homes he was interested in previously had, so at that time he decided the home was overpriced and he was not interested. Fast forward a few months…the home has been on the market with no offers and several price reductions to it’s newly reduced list price of $255k. This is a list price my buyer felt was more realistic in terms of current market value. He decided he wanted to offer $230k. Due to the low amount being offered and the fact that this was a corporate relocation and special Addendums applied, I contacted the listing agent. The listing agent explained that home had been reduced to the current price to help generate an offer. She also said the relocation company had approved the sale price at $250k. After speaking with the listing agent I talked to the buyer and he still wanted to offer $230k as a “starting point”. I warned him that the market was heating up; there are not a lot of decent options for buyers in his price range, and that with the recent price reductions the showing activity had increased for this home. He instructed me to submit the offer at $230k. The seller countered immediately at $250k. The buyer countered back with a purchase price of $235k. On Friday we were told by the seller’s agent that she was not able to reach all parties on the seller side but she thought she could get them to accept $245k and she asked if the buyer would be willing to agree to this price.  While my buyer pondered the seller’s counter offer over the weekend, another offer came in to purchase this home. On Monday evening we submitted his counter at $245k with the seller contributing 2% towards buyers closing costs. We were informed that the other offer was higher with better terms and the seller accepted it instead.

What do these profiles illustrate? He who hesitates is lost. There is no time to ponder your decisions in most cases. If you don’t act quickly the homes in good condition that are priced according to current market value will be gone. The days of offering 10% off the purchase price to see if the seller will “bite” are gone for the most part. If the home is priced according to market value, be prepared to offer very close to the list price, the actual list price or in the event of multiple offers over full price. 

Need help navigating the crazy market we are currently in? Feel free to call me. I am happy to help!