Home Selling in Phoenix>Question Details

hazmat9, Home Seller in Phoenix, AZ

Inventory Dropping Equals Home Values Returning....I Think Not

Asked by hazmat9, Phoenix, AZ Sat Jun 23, 2012

I'm curious since I've been hearing that the inventory has dropped when to think about listing homes that are underwater? I spoke to several people that said to get ready to sell soon since the inventory is dropping and people are bidding again on some homes. I've heard the advice to sell for "cash" if you're underwater since someone may want your house even though the appraisal comes out low. I thought about listing my horse property again but a few agents have told me that it isn't worth listing since things havent' recovered that much...plus I've heard that appraisals are running 8 mths behind on values because the banks are too scared to keep up with the trends (afraid that they are going to over-estimate appraisals as before). I'm under because all my funds went into my property, not to the fancy toys many have walked away because of. I won't walk but I'm left wondering if there is even hope?

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Answers

12
Hi Hazmat9,

I prepare a monthly market analysis of the Phoenix real estate market to help my clients make educated decisions about when to buyer or sell. You can read my report at http://www.PositionRealty.com/Blog. The information used in this analysis report is directly from the Multiple Listing Service. The inventory is dropping and values are going back up which is good news for property owners. Timing the market is a difficult thing to do and the best time to sell or buy is when you are ready to buy or sell. There is no guarantee the prices will continue to increase because of outside economic forces. European debt crisis, new elections, etc.

You are correct about the issues with appraisal reports. I am selling a home now with a purchase price of $280K but the appraisal came in at $250K. There is a resent comparable sale within walking distance from the property I am selling that sold for $280K in June. The appraiser did not use this comparable and they are using comps from 6 months or more out. The buyers agent and I both know the property is worth $280K and now the buyer is coming up with an extra $30K to purchase the property. I used to be an appraiser so I know how to value a property correctly and this is incorrect but the appraiser refuses to change their value.

My advice to you is that you should only accept a cash offer on your property since approximately 30% +/- of the market today are cash buyers. Now, if you are in the higher price ranges, then this strategy might not work to your advantage since the pool of all cash buyers is lower with higher end homes.

There is a good chance you can sell your home and I would take advantage of all the buyers in the market now before something happens in the economy that could cause the buyers to dry up. If you are ready to sell, then you should try to sell your property.

Give me a call if you would be interested in hearing about what my company can offer. I am looking forward to hearing from you soon.

Regards,


Sean Heideman, Broker
Position Realty
Office: 480-213-5251
1 vote Thank Flag Link Sun Jun 24, 2012
Inventory has dropped, that is for certain. Selling for cash makes sense - haven't really seen trade downs in this market - except it's going to be tricky as cash buyers aren't going to pay more than a home is worth just because it's underwater, at least not at high pricer points.

Not sure who is saying things haven't recovered that much - in most places they have, though the impact has been less on niche properties such as the horse properties in Desert Hills.

If someone already has comped out the house and the numbers aren't matching that $240,000 mark, best bet if you don't want to walk is to hang on for higher appreciation.
Web Reference: http://expiredtosoldaz.com
0 votes Thank Flag Link Thu Jul 5, 2012
Now is an excellent time to sell a home. Inventory levels are very low and home prices are also low. This creates a situation where many home sellers are receiving multiple offers on their homes. Property values are dramatically increasing day by day!
0 votes Thank Flag Link Mon Jun 25, 2012
In addition to cash only buyers, you can add "trade-down" buyers. You wrote that you want a bigger property. There may be an owner of a larger property who wants to downsize and would accept your property in trade for their property. They take on your lower debt, you take on their larger debt.

Another group of buyers would be financed buyers who can augment their loan and downpayment with the difference between appraisal and market value. Example such as below: Home worth $280K, appraised for $250K. Buyer puts up $80K down. $50K was for the 20% down payment, $30,000 is the difference. This can be worked out in a specially worded appraisal contingency during contract negotiations. It gives well heeled financed buyers an equal footing to cash buyers, and increases your pool of potential buyers.
0 votes Thank Flag Link Sun Jun 24, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
I am assuming you don't want to short sale and willing to ride it out. Therefore, you are basically asking if you can sell it for $240,000 plus closing costs? It all depends if there is a buyer out there willing to pay that right now. Looking at the features you mentioned and the size of home, may not be there yet. However, without doing a full market research and looking at all the features and amount of land, it might be worth what you need.

I suggest getting a market analysis done by an agent to see if it might sell for what you need. Also have a look around your area and see what others are asking or selling for in the area. Put yourself in today's buyers shoes. If you are looking to buy again, would you pay this amount for this property? You might have something unique and hard to find that a buyer would want.

It may not hurt to put it on the market and ask what you need. Might get nothing or might just get what you need. Keep in mind, many agents won't list it if you need or ask too much based on current market.
0 votes Thank Flag Link Sun Jun 24, 2012
I'm sorry and I should have given more information regarding my situation. I have a horse property in the 85027 area called "Desert Hills." The property probably would be more marketable if the size didn't kill it, 1530 sq ft. Although we dumped 30,000 or so into improvement such as a professional riding area, stalls, turnouts, tack barn, citrus (I know this doesn't get me nothing), even a new a/c. The property could easily be geared toward a trainer or a boarding business for horses....my wife had a side business here as a trainer for jumping/dressage and it had worked out great. We now foster neglected horeses (mostly from foreclosures) but we've been wanting to move on to a bigger property and I guess we dumped way too much into this place (mortgage at 240,000) the fees to list obviously drive the price up...so should I wait it out further?
0 votes Thank Flag Link Sat Jun 23, 2012
Prices have been going up due to low inventory. However, your exact circumstances should be examined to determine if your values are even close to coming back. For many that purchased at the heights of the market, recovery is definately a very long ways away. There is definately some truth to the thing of getting a cash offer that is above the apprised value. If you would like to discuss your exact circumstances outside of this forum then please contact me. You can also get some answers at http://www.PinalCountyShortSales.com.
0 votes Thank Flag Link Sat Jun 23, 2012
You have raised a lot of questions that are not easily answered without further conversation to discover the circumstances surrounding your situation.

The Phoenix market has improved in many ways and has a long way to go in others. To really understand how the market impacts you is to understand your property with some detail and then I could provide you with real answers.

Most of what I could relate on a forum like this regarding the Market would be with very broad strokes and not necessarily fit your situation.
0 votes Thank Flag Link Sat Jun 23, 2012
Hello,
You've raised a number of different topics, so it's hard to speak to it, but the market is unquestionably cyclical, as we say 'A property is only worth what a Buyer will pay for it, and what a Seller will sell it for'. I'm seeing that supported by alot of cash buyers.

That said, we continue to have an issue with appraisals since they are behind, and properties ARE indeed selling for above asking, an there are bidding wars. My last listing I received 35 offers on the property, all cash offers (except 2), and it was within 18 hours. There has definitely been a turn in the market, and there is definitely a shortage of inventory.

None of us have a crystal ball, we don't know if it will continue to go up or down... , we don't know if the banks are holding on to shadow inventory, we don't know what we don't know. But we do know what we're dealing with right now and from my perspective, it's certainly going in a positive direction.

Hopefully this info helps as you make you decision on your property. Please keep in mind that the Anti Deficiency law is still on schedule to expire at the end of this year. If I can be of assistance, please call me @ 602-284-9822. Best of Luck. Joyce
0 votes Thank Flag Link Sat Jun 23, 2012
Please note.....I believe Joyce is referring to the Mortgage Debt Relief act of 2007 which expires on January 1, 2013. The Arizona Anti-Deficiency Statute is not expected to have any changes made to it however our Arizona Legislature is working on various bills that could have an impact SHOULD one of them pass. The Mortgage Debt Relief act MAY get some relief in the lame duck Congress come November but it appears that due to the pending elections, no one wants to address the issue at this time!
Melissa Schwartz, e-PRO
Associate Broker
Realty One Group
http://www.AZFineLiving.com
Flag Sat Jun 23, 2012
This is way too much to address on here. Now is as good of time as any to sell... How much you can get depends on where the property is. Would you be short selling or breaking even? Who is your lender? There are a lot of variables in your situation. Find a good agent, if you like you can give us a call. 623-451-8494
0 votes Thank Flag Link Sat Jun 23, 2012
As Ron has said, Phoenix was one of the hardest hit areas in the housing crash. I would just try to wait it out if possible. Try to find out if your home qualifies for any type of refinancing or something like that. The market will turn around but it could take a while to do so.
0 votes Thank Flag Link Sat Jun 23, 2012
Do not be discouraged,
good things are coming.

Phoenix was one of the hardest hit,
do not expect it to turn on a dime.
0 votes Thank Flag Link Sat Jun 23, 2012
I'm sorry and I should have given more information regarding my situation. I have a horse property in the 85027 area called "Desert Hills." The property probably would be more marketable if the size didn't kill it, 1530 sq ft. Although we dumped 30,000 or so into improvement such as a professional riding area, stalls, turnouts, tack barn, citrus (I know this doesn't get me nothing), even a new a/c. The property could easily be geared toward a trainer or a boarding business for horses....my wife had a side business here as a trainer for jumping/dressage and it had worked out great. We now foster neglected horeses (mostly from foreclosures) but we've been wanting to move on to a bigger property and I guess we dumped way too much into this place (mortgage at 240,000) the fees to list obviously drive the price up...so should I wait it out further?
Flag Sat Jun 23, 2012
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