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Justin Baker's Blog

By Justin Baker | Agent in Phoenix, AZ
  • Phoenix Housing Market Top 10 Most Popular

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  February 22, 2012 1:22 PM  |  1,762 views  |  No comments

    The 10 Most Popular Housing Markets

    DAILY REAL ESTATE NEWS | TUESDAY, FEBRUARY 21, 2012

    Chicago continues to hold on to the top-spot in January as the most widely searched housing market at Realtor.com. The following are the top searched housing markets from last month, according toRealtor.com data of 146 metro areas.

    1. Chicago
    Median list price: $186,000 

    2. Detroit
    Median list price: $81,700

    3. Los Angeles-Long Beach, Calif.
    Median list price: $320,444

    4. Philadelphia, Pa.-N.J.
    Median list price: $221,995

    5. Phoenix-Mesa, Ariz.
    Median list price: $169,500

    6. Atlanta
    Median list price: $150,000

    7. Tampa-St. Petersburg-Clearwater, Fla.
    Median list price: $142,500

    8. Dallas
    Median list price: $189,900

    9. Orlando, Fla.
    Median list price: $155,000

    10. Las Vegas, Nev.-Ariz.
    Median list price: $121,500

     

    Mid Month Pricing Update and Forecast

    Each month about this time we look back at the previous month, analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next 30 days.

    For the monthly period ending February 15, we are currently recording a sales $/SF of $85.12 averaged for all areas and types across the ARMLS database. This is 2.2% higher than the $83.59 we now measure for January 15. Our forecast range was $82.51 to $85.87 with a mid-point of $84.19. The actual figure fell in the upper range of our forecast and within 1.1% of the midpoint of our forecast range. So we will chalk last month up as a success.

    We have been correct in our prediction that positive annual appreciation would be reported from November 29 onwards. The current price level is 5.1% higher than last year on February 15. We now forecast that positive annual appreciation will be recorded for the whole of February through April and quite probably for the rest of 2012.

    On February 15 REO sales across Greater Phoenix (all types) averaged $65.03 per sq. ft. (up 0.2% from January 14). Pre-foreclosures and short sales averaged $70.87 (up 1.5%) while normal sales averaged $105.55 (up 0.9%). Normal sales gained market share, moving from 41.3% to 43.5% of sales, while REOs faded slightly from 27.9% to 27.5%. Short sales and pre-foreclosures lost market share, moving from 30.9% to 29.0% - but note that many short sales closed on ARMLS get reversed later when it turns out they didn't close escrow as planned, so this percentage is probably somewhat over-stated and will be adjusted when we report next month, causing the normal and REO shares to rise.

    On February 15 the pending listings for all areas & types showed an average list $/SF of $85.02, 1.8% above the reading for January 15 - so pending $/SF has moved upwards again and is now at its highest level since August 29, 2010. Among those pending listings we have 38.5% normal, up dramatically from 30.9% last month, a declining 20.8% in REOs and a declining 40.7% in short sales and pre-foreclosures. The average pricing for pending listings on February 15 in each category was: $112.50 normal, $68.84 short sales & pre-foreclosures and $68.05 for REOs (up sharply from last month). Sales pricing will rise because all these pending averages are on the rise, and because of the falling share that distressed sales are taking.

    Our new mid-point forecast for the average monthly sales $/SF on March 16 is $89.35, which is 5.0% above the February 15 reading, and we have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $87.56 to $91.14. A substantial change in the mix can still have a significant effect on the average price per sq. ft. and we are seeing considerable variation from day to day. Our mid point forecast implies an annual appreciation of 8.3% (with the 90% confidence range implying from 6.1% to 10.5%).

    September 15 - now measured at $78.84 per sq. ft. - remains the $/SF pricing bottom. The lowest monthly average sales price is $151,074 and this was measured on September 5. However the record low monthly median sales price is still standing at $107,000 and this record was set eleven months ago on February 24. Our current monthly median sales price has moved up to $120,000 and it looks most unlikely that we will drop below $118,000 in the foreseeable future, unless there is a major unexpected disruption to the market.

    The severe imbalance between supply and demand is reflected in the large rise in the Cromford Market Indexâ„¢ between November 2010 and February 2012. This index tends to lead sales pricing by 12 to 18 months. The last turn round in the Cromford Market Indexâ„¢ was 15 months ago. Right on time, we are now experiencing a strong upward trend in sales pricing.

  • Phoenix Real Estate Market: Inventory DOWN, List price UP

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  February 13, 2012 8:06 PM  |  1,880 views  |  No comments

    Phoenix Real Estate Market: Inventory DOWN, List price UP

    Where to begin? As I write this, the day prior to Valentines day(Happy love day to you and yours!), our inventory of properties to sell in the ARMLS is half of what it used to be last year. All-in-all, we are seeing very POSITIVE signs in the resale market. Today we have 17,283 units on the market when last year we had 35,556. That is(-18,273) basically +3 months of inventory reduction. Naturally this will put pressure on prices to rise as we have seen in all price ranges under $200,000 and similarly, this price range has a 90 day or less supply of home which signals a sellers market. Anything property under $75k has seen a +6-14% increase in appreciation with the $100k to $150k averaging a +7% increase in appreciation. The month’s supply of homes remains in the 3 month range, yet was at 6 months one year prior. Encouraging any owner that has equity or needs to sell short, the listing success rate of homes has risen over the last year from a mere 60.6% to 75.5%. Another impressive stat is the listing price per square foot average is up from $128.36 to $149.13, a +16% margin. The lender owned supply has dropped to 7.8% from 18.7%. This drop in lender owned inventory is obviously a huge step in the right direction and continuing to defy the logic of a large shadow inventory bomb about to hit our market. 
    -Justin Baker
    www.RealEstate602.com

  • Phoenix #2 'Turn around Town'!

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  February 13, 2012 8:04 PM  |  1,790 views  |  No comments
    Happy Valentines Day ! LOOK who is #2!

    6 ‘Turnaround Towns’ in Real Estate

    DAILY REAL ESTATE NEWS | MONDAY, FEBRUARY 13, 2012

    Florida cities are expected to see some of the biggest recoveries in housing prices in the coming months, according to a new report by Realtor.com that reveals the top turnaround towns. In fact, the signs are already there with drops in inventories and distressed homes, as well as higher listing prices and increases in sales.

    The following are the top six housing markets expected to see the biggest turnaround, according to Realtor.com.

    1. Miami, Fla.
    Median home price: $185,000
    Growth: Sales volume of existing single-family homes has jumped 51 percent in the third quarter compared to 12 months prior.
    A factor in the recovery: International clients are snagging up Miami homes: In May, they purchased 60 percent of existing houses and condos and 90 percent of newly built homes.

    2. Phoenix
    Median home price: $129,000
    Growth: Homes sold 27 percent faster in the fourth quarter compared tot he same period in 2010.
    A factor in the recovery: An improving job market: Unemployment dropped to 7.7 percent in November, which beats the national average and is a 1.1 percentage point improvement over 2010‘s rate in the city.

    3. Orlando
    Median home price: $145,000
    Growth: Inventory of for-sale homes dropped 44 percent in the fourth quarter and homes that were on the market sold 37 percent faster than they did a year earlier.
    A factor in the recovery: A strong tourist destination, Orlando is attracting international buyers, such as from South America, Canada, and Europe. Also, the job market is improving there, particularly aided by the development of a major medical complex.

    4. Fort Myers, Fla.
    Median home price: $115,000
    Growth: Median listing prices here had the biggest increase in the nation last year, soaring 31 percent year-over-year.
    A factor in the recovery: This retirement hot-spot is getting more attention from Canadians, who are taking advantage of a strong Canadian dollar and the fallen home values here.

    5. Sarasota, Fla.
    Median home price: $181,000
    Growth: Sales volume here increased 17 percent during the three months ended Dec. 31 compared to year-over-year. Plus, home prices rose 2 percent in that time period.
    A factor in the recovery: A drop in bank-owned homes and distressed sales is helping the housing market to recover, as well as an improving job market.

    6. Boise, Idaho
    Median home price: $120,000
    Growth: A big drop in inventory: The number of homes for sale during the fourth quarter dropped by 40 percent compared to a year earlier.
    A factor in the recovery: The metro area is seeing a growth in the diversity of its employers and the number of jobs its attracting, particularly in the tech industry and a growth in agricultural-based companies.

    Source: “Top 10 Turnaround Towns,” CNNMoney (February 2012)
    -Justin Baker
    www.RealEstate602.com

  • Phoenix Real Estate Market Summary

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  December 14, 2011 10:46 AM  |  2,643 views  |  No comments

    December 14, 2011

    Justin Baker’s Phoenix Real Estate Market Summary:

    I will begin my summary with quotes and information from Michael Orr with the Cromford Report.  “Most of the foreclosure tsunuami is past us, perhaps 80%.  The foreclosure notices still to come will generate short sales and 3rd party purchases at the foreclosure auction, but relatively few homes will revert to the beneficiaries.  We have probably seen over 90% of the REO’s that are to be created by the 2004-2005 real estate bubble and fewer than 10% are yet to come.” (Michael Orr, the Cromford Report)  To further emphasize the above commentary, less REO’s will hit our market due to the dramatic increase in the listing success rate of short sales up to 60% from 41% one year ago.  Most importantly, “we can reasonably expect to see positive appreciation rates for the market as a whole for at least the next 4 months.” (Michael Orr, the Cromford Report) This is predicted based upon Pending sales prices up from $77 per sq. ft. last quarter to $81 per sq. ft. currently.  Active properties (inventory) is down 41% from last year, at 26,655.  If you have read my previous market updates, this number includes AWC (homes under contract like a short sale).  I would rather use a more accurate Active properties inventory excluding the AWC which is 19,386 down from 38,821 one year ago.  It is also important to look at and track our months of inventory.  This is down from 6.7 one year ago to 3.7 months supply.  Anything under 6 months is a seller’s market.  With that said, all price ranges under $400k, have a less than 6 month supply of properties.   Summary, “the supply remains low and steady and demand remains high and steady.” (Michael Orr, the Cromford Report)  If you would like to meet, please call Justin at 480-330-7426 or e-mail him at phoenixrealestate602@gmail.com

  • Phoenix Real Estate Housing Trends

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  November 7, 2011 8:25 AM  |  2,976 views  |  10 comments

    Phoenix Real Estate Housing Trends

    Hello! Today I wanted to respond to an e-mail I received....

    Thank you for sharing. Who wrote this? Unfortunately, I do not believe the last paragraph. : ) I would love for you to share with whomever wrote this some 'REAL' statistics. See my response below from current and accurate stats.

    #1) Appraisers not 'letting' prices increase, NO...FALSE. Prices always lag current market trends due to the use of comps dated in the PAST. Pricing on homes CAN NEVER...WILL NEVER be absolutely accurate due to time. AND...We have emphasized many times that changes in the balance of supply versus demand take a long time to be reflected in changes to pricing. We also will look out of the 'sling shot' rebound as this demand builds and supply reduces creating at sometime in the near future a LARGE jump in appreciation.
    #2) This paragraph assumes 'Americans' should buy a primary home as an investment. TRUE and FALSE. The primary reason for purchasing a home is to have a HOME. It is a place to raise a family in a secure environment w/o having to worry about moving or having 'rent' go up.
    #3) Loan modifiations, principle reductions, FHA refi's (short refi) and other enticing programs for primary residences will continue to reduce our inventory of foreclosures. Foreclosure sales are ONLY 10% of our current market, down from 18.9% one year ago. Likewise, the CROMFORD MARKET INDEX is up from 88.1 one year ago to 156 today (anything over 100 is a SELLERS MARKET) SALES activity was UP 16% year over year for October. Days invetory is down to 98 from 184 one year ago. We have emphasized many times that changes in the balance of supply versus demand take a long time to be reflected in changes to pricing. This is illustrated by the latest numbers. The supply increased and demand fell during October, yet pricing made the most positive move it has done for at least 15 months, driven by the large reduction in supply over the last 12 months:
    • average active listing $/SF - up 2.3% to $139.98 per sq. ft.
    • average pending listing $/SF - up 1.8% to $79.65 per sq. ft.
    • average monthly sales $/SF - up 1.1% to $80.95 per sq. ft

    Below $150,000 recent pricing trends look healthy and on a strong upward trend. Above this point the picture is rather mixed. All but 5 ranges are showing price appreciation for the last 12 months. So why does the overall market number not show price appreciation? The reason is that the sales volume has decreased in the upper ranges so the more expensive homes make less contribution to the overall mix, driving the overall average down.

    #4) Who is discussing the people who short sold 2-5 years ago and the 'new' demand this is placing on the market?

    I would only encourage people to short sale their home only if they have a hardship. UNDERWATER or UPSIDE DOWN is NOT A HARDSHIP. PERIOD. : )
  • Phoenix Real Estate Market: Confusing

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  August 29, 2011 2:54 PM  |  1,355 views  |  1 comment

    Phoenix real-estate market a confusing environment

    by Catherine Reagor - Aug. 28, 2011 12:00 AM
    The Arizona Republic

    Recent reports say foreclosures are declining in metro Phoenix and large numbers of homes are selling.

    But many homeowners feel trapped in houses they can't sell.

    Some real-estate agents can't find enough new listings to keep up with demand from buyers.

    But others say there aren't enough buyers, and homes are selling too slowly.

    The housing market in metro Phoenix may never have been as confusing as it is today.

    Nearly five years after the beginning of the housing crash, the region's market has fractured into countless different niches.

    Each niche is defined by who's selling, what kind of home is for sale and where the home is located.

    And each niche has become a market of its own.

    Some - such as the market for small central Phoenix foreclosure homes being sold at auction - are booming, with prices rising and a huge demand from buyers.

    Others - for example, traditional resales of newer large family homes in some neighborhoods in the far west or southeast Valley - have ground to a halt, where homes seemingly won't sell at any price.

    Location is one traditional factor in a home's value that still holds true. But in this market, its effect can be extreme. A seller in one neighborhood might receive 10 offers, while the owner of a similar house 5 miles away won't receive any.

    In a market this splintered, once-reliable measurements just don't provide enough information for buyers or sellers.

    One reliable measure of real-estate activity was the number of homes for sale. Traditionally, 20,000 to 25,000 homes on the market at any given time was considered normal. More than that meant an oversupply, and sellers might have trouble attracting buyers. Fewer meant a limited supply, a seller's market with rising prices.

    As the housing market crashed, too many homes had been built. The region's inventory soared to more than 60,000 homes for sale in 2007, and prices plunged.

    Today, according to the online real- estate publication the Cromford Report, listings in metro Phoenix are at 27,400 and falling - traditionally, a sure sign of rising demand and rising prices to follow.

    But agents and analysts see the same thing many homeowners feel. While some homes are selling easily, others simply won't.

    "Phoenix's housing market is a mixed bag now," said Marcus Fleming, manager with the real-estate brokerage Redfin Phoenix. "There's a new normal for the market, but it's a weird one."

    Who's selling

    One factor that has a big effect on home sales is the nature of the seller.

    To understand, consider just how much things have changed in the past decade.

    In June 2001, there were about 10,000 home sales, according to the Information Market, a Phoenix firm that analyzes real-estate data. Of that total:

    - 7,300 were regular resales between a homeowner and a buyer.

    - 2,700 were new-home purchases.

    - 82 houses sold at foreclosure auctions.

    - One home was sold by Fannie Mae, the federal mortgage giant that backs lenders and takes over those homes when borrowers default.

    Ten years later, during June 2011, there were just over 11,000 home sales in metro Phoenix. But the variety of sales was far wider:

    -  3,684 were regular resales between a homeowner and a buyer.

    - 540 were new-home purchases.

    - 1,350 homes sold at foreclosure auctions on the Maricopa County courthouse steps.

    -  1,255 houses were sold by lenders that foreclosed on them.

    -  2,183 houses were sold by Fannie Mae and Freddie Mac.

    - 1,822 homes were sold in short sales, in which lenders agree to let a homeowner sell for less than what is owed on the loan.

    -  401 homes were sold by the federal departments of Veterans Affairs and Housing and Urban Development.

    Because all of these kinds of home sales work in different ways, the market overall becomes more complicated.

    Different categories

    The different splinters in the market have each begun to work in their own ways, real-estate market watchers say. Some parts see a lot of sales but low prices; others, the opposite.

    - Traditional resales: Fewer of these happen because of competition from cheaper foreclosures and short sales. The ones that sell best are in popular neighborhoods with good schools, near freeways and shopping centers. But the percentage of foreclosure homes listed for sale in metro Phoenix has dropped by 5 percent in the past year, so regular sellers have less competition and might soon find it more easy to sell.

    - New-home sales: Homebuilding has slowed to a crawl in metro Phoenix as the market continues to sell the many houses built on speculation during the boom years. Even with low land prices, it's still hard for homebuilders to compete with the prices of foreclosure houses that were built less than five years ago.

    - Foreclosure auctions: These have become very popular, and a large volume of homes sell at metro Phoenix trustee auction each month. But homes sell at auction for lower prices, and that makes the market's overall average sales price lower.

    - Fannie Mae and Freddie Mac: Homes owned by these entities now dominate the metro area's market. But the agencies often change their policies on appraising, maintaining, renting and selling their houses, so some buyers and real-estate agents steer clear of the hassles of these deals.

    "The government's role in the housing market is making things more confusing and bringing down prices," said Mary Gomez, a real-estate agent with RE/MAX Renaissance Realty.

    - Short sales: This type of sale was rare a decade ago. Banks were reluctant to agree to them in the early part of the crash, but they have now become common. Because they're not a foreclosure sale, but also are not a traditional sale, the value of a short-sale transaction skews the overall market in ways that are hard to measure.

    The bottom line: Today's market is complicated and can't be summed up as simply as in years past.

    "Everyone is trying to figure out Phoenix's housing market now, but there's no one set of data that truly tells the story. All the regular models for tracking the market are broken now," said Tom Ruff of the Information Market. "There is not just one market in metro Phoenix anymore."

    The effects

    That confusion makes it especially hard for homeowners and homesellers to know what their houses are worth.

    Traditionally, a home's value could be estimated from its "comps," comparable sales of nearby homes. Those offered an idea of the going price in a neighborhood and the price per square foot.

    Today, a regular home sells for $112 a square foot. A house sold through short sale goes for an average of $72 a square foot. A bank-owned, Freddie Mac or Fannie Mae home sells for $61.50 a square foot. And foreclosure homes selling at auction are averaging $57 a square foot.

    "Comps for properties are inconsistent and can be confusing," said Jennifer Hillier, an agent with the Scottsdale office of West USA Realty. "People just don't know what to believe anymore."

    Measures of the overall market are harder to trust, too. Currently, metro Phoenix's overall median sales price is $124,000. But because many of the homes sold are foreclosure auctions - in which low-priced homes are common - that number could be seen as low. Other homes may be worth far more. But few of those homes are selling, so they're not represented in the median price.

    "Home sales activity is still very concentrated at the bottom end of the market," said housing analyst Mike Orr, who publishes the Cromford Report.

    What's selling now

    "Homes in central Phoenix area priced under $100,000 are moving like gangbusters with very few homes remaining on the market for long," Hillier said. "I believe this is because of the location to jobs and public transportation" and because the low prices mean investors get a reasonable return, in the form of rent, on their cash investment.

    Market watchers also say three- to four-bedroom homes in suburban neighborhoods with good schools are also selling fast to both regular homeowners and investors who want to rent them out, often to families who have lost similar homes to foreclosure.

    The region's less-expensive neighborhoods experienced the crash first, and now high-end housing areas are feeling more pain because there are fewer buyers who can afford those houses.

    Sales of homes in the million-dollar range have definitely slowed, said Walt Danley of the Phoenix office of Christies' International Real Estate. He said there are cash buyers looking for deals in Paradise Valley and north Scottsdale, but those deals bring prices down.

    Some million-dollar homes also go to foreclosure auctions. Recently, a house in Paradise Valley that sold for $3.5 million in 2005 sold at auction for about $1 million.

    But there are still homes in Paradise Valley and other high-end neighborhoods selling for prices just 20 percent lower than they sold during the market's peak. Other neighborhoods are also beginning to see homes sell for pre-boom prices from 2003-04, despite the fact the metro area's median home price is back to 1999's level.

    "The one indicator we can still count on is location," Ruff said. "Homes in the right areas will continue to sell for the highest prices."

    www.RealEstate602com

    PLEASE PLEASE consult with a PROFESSIONAL FULL-TIME REALTOR whom has sold multiple homes in the last few months prior to engaging on your home selling or buying experience. If you would like my professional guidance with a home sale or purchase, please do not hesitate to call me at 480-330-7426 or e-mail me at phoenixrealestate602@gmail.com. I am happy to sit down with you do discuss your specific situation. 

  • Phoenix Real Estate Market Update

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, Home Selling in Phoenix  |  August 10, 2011 10:01 AM  |  2,900 views  |  No comments

    Wow…another month has passed.  The Phoenix Real Estate Market has remained consistent over the previous couple months.  If you get bored with numbers and statistics, here is a quick summary:  low inventory of active listings, annual growth in sales up 28.8% and annual growth in pending homes up 19.1%.  Our active listings are DOWN from one month ago when I wrote my monthly Phoenix Real Estate Market Update.  One month ago we had over 21,000 active listings (I did not include AWC listings) and today we have 19,846 active listings (one year ago there were 36,538).  Of the total of 19,846 of listings, 15,711 are single family homes.  Total pending listings are down slightly to 11,900 from last month’s 12,061, but UP from last year’s 9,988.  If you include AWC as pending homes, the total amount of homes ‘under contract’ is 19,687. Total pending homes are almost the exact same as our inventory of active listings.  Our current month’s supply of homes is 3.1 months compared to last year’s 6.2. 

    PLEASE PLEASE consult with a PROFESSIONAL FULL-TIME REALTOR whom has sold multiple homes in the last few months prior to engaging on your home selling or buying experience.  If you would like my professional guidance with a home sale or purchase, please do not hesitate to call me at 480-330-7426 or e-mail me at phoenixrealestate602@gmail.com.  I am happy to sit down with you to discuss  your specific situation.

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