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Phoenix real estate market early July

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Market summary courtesy Michael Orr of The Cromford Report early July 16, with a few points highlighted in blue:

“The market conditions improved a little for sellers during June, with the Cromford® Market Index breaking through the 140 level as we enter July. However there is no dramatic new trend, just a continuation of what we have been seeing for several months now. Sales volume was strong during June but it is clear that July will be much quieter for closings since the number of homes under contract has fallen quite a bit. This is quite normal for the season.

The ranges from $200,000 to $350,000 saw strong growth in closed sales over June last year – up almost 19%. Between $350,000 and $400,000 we saw a little weakness, down 2%, but sales from $400,000 all the way up to $1.5 million were strong – up an impressive 21%. Sales over $1.5 million were very much weaker than last year – down 44%. Sales below $175,000 were also well down, but this was caused by a lack of supply. The segment over $1.5 million cannot use that excuse. There are plenty of homes available, even though a large number have been removed from the market for the summer. Many of these are likely to be relisted at the end of September.

At first sight it looks as though pricing was strong during June, with the median sales price up 2.2% from last month. However this is deceiving because the average home price only rose 0.3% and the average home size jumped 1.3% from 1,978 in May to 2,004 in June. The average price per square foot retreated 1.0% over the month, and we see this as more accurate measure than the median sales price.

We expect overall prices to be flat to slightly lower over the next 3 months as luxury homes make a smaller contribution when the temperatures exceed 100 degrees. Prices are still rising below $200,000 and falling for most homes over $1 million.

Dollar volume in June was a healthy $2.529 billion, up 7% from June 2015, with about half of that coming from higher sales volume and the rest from higher pricing.

The main difference we saw between May and June was an improvement in demand for homes in the lower ranges of the luxury market, between $500,000 and $1.5 million. In particular:

  • $500K-$600K saw an increase of 30% in dollars spent (compared with June 2015)
  • $600K-$800K saw an increase of 20% in dollars spent
  • $800K -$1M saw an increase of 24% in dollars spent
  • $1M-$1.5M saw an increase of 27% in dollars spent

There is a big contrast above $1.5M:

  • $1.5M-$2M saw an increase of 2%
  • $2M-$3M saw a decrease of 41%
  • $3M and over saw a decrease of 61%

Mind you, June 2015 was a very good month for the super-luxury market so the comparison is quite tough for June 2016.”

Please call or email if you want to know how your house or potential purchase fits in with the current market.  Happy 4th!

Experience has shown me over and over throughout the years that the vast majority of potential buyers viewing a home will not able to see past clutter, old/worn or dirty carpeting and worn looking walls, or even a slight “neglected” appearance.  While specifics will vary for each property, here is my quick hit-list to be ready for photos and showings:

  1. Make sure front yard is mowed and/or trimmed for a neat looking street view.
  2. This one is big, and too many sellers neglect this small but important focal point:  The front door and hard ware.  If your door is looking faded, or even worse, has a peeling surface, paint it or have it refinished.  Replace the door knob if it’s looking bad.  And make sure the key easily opens the front door.   Add  a cheery wreath or potted plant beside the door.
  3. Remove all, and I mean all, clutter.  Few among us keep clutter effectively at bay.  But when you are readying to sell, this is paramount.  Start tossing, good willing, yard selling, or packing away.   If in doubt – remove it.
  4. My mother always taught me that when I’m dressing for an occasion, remove one piece of  jewelry to ensure against being over-dressed.   In my opinion, this holds true for the furniture in each room (when selling).  To showcase the space as spacious – edit the furniture. Go for a nearly spare look. Less is more.  Again – give away, goodwill it, or store it if you can’t turn it loose.
  5. Stow away most of the knick knacks and photos.  Less is more.  You want an almost bare or lightly “staged” look.
  6. Clean, Clean, and clean some more.  Base boards, mirrors, windows, baths, kitchen, closets.  Sparkle is the key word.
  7. If you note something in disrepair – get it fixed.  You want to market a well cared for home.
  8. Make the most of the rear yard, patio, pool area.   Trim land scaping, repair bedraggled parts, plump up the cushions and make the most of the seating area.  Stage here too.
  9. Coming back through the house after the cleanse and declutter storm:  Add  a pop of color here and there with a few of your pretty things:  A couple handsome items on kitchen counter tops, fresh towels and a pretty something in each bath.
  10. I offer each of my selling clients a staging consultation with my stager.  She walks through the house and yards and makes a detailed list of recommendations.  Your list could be much longer than the above (but if you thoroughly accomplish steps 1-9, you are well on your way), but taking the time and care to carefully primp and preen and (even lightly) “stage”  your property will mean a faster sale and more $$$ to take with you.

Before I leave, a caveat: Steps 1 through 9 are key and critical.  But if it’s been a while since the exterior or  interior has been painted, or your carpet is several years old and showing it’s age, these home improvements are so very important that I will call them the very basics of home selling.

Here is a great article on the topic Get a home ready to sell .



Differing Conditions within the Market

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The performance in the Greater Phoenix real estate market varies significantly across the pricing spectrum.

If you are listing a nice 3 bed 2 bath home, priced reasonably well, within the $250,000 range, you can expect to sell quickly, with possibly being able to choose among several offers.   This is because there isn’t enough inventory to satisfy the high demand from the  first time buyers, budget buyers, and investors.  The low end of the market ($250,000 and lower) is very much a seller’s market.

If you have a home in the mid ranges ($250 to $500k) demand (buyers wanting to buy) is much higher than this time last year, but supply is also up.  This is the most “balanced” range within the market – lots of choices for buyers, but selling at reasonable rate if you are a seller.

While there are segments within this range (a $2.5m property has significantly different market conditions than a $700k home), the market for properties priced above $500,000 is swimming in vastly different waters than the low end market.  Supply is high, and higher than a year ago. Sales have climbed, but not enough to soak up the increased inventory.  Price reductions are common, and conditions are tipped toward strength in buyer negotiations.  In fact, appreciation in the highest ranges is in negative territory compared to this time last year.  In simple terms:  for most areas,  the upper range is a buyer’s market.

How does your home stack up in light of this market backdrop?  How can you make the most of these conditions? Call or email and we can discuss!



To Sell or Not to Sell?

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Looking at The Cromford dashboard on my homepage, you see 4 key measures pointing up.  Monthly average square price is up, annual average square foot price is up, measured across the Metro area annual appreciation is 6.8%, and so far this year – up 4% is sale prices.

Is anything down?  Yes, inventory is down.  The number of homes available for sale in our MLS (multiple listing service) is at the moment riding just over 20,000 properties (20,179 at the moment) .   At this point last year, that number was 20% higher, at just over 25,000 properties.

What does this mean for buyers?   Lower inventory- or the number of potential homes in your price range and area is likely going to affect your experience compared to a year ago.  The lower the price range, the more buyers seeking to purchase, the more competitive experience, and the higher likelihood you will encounter losing the house to another buyer. Real estate is local! So, depending on where your price range falls, your experience may not be as extreme.   Homes in higher price ranges (let’s say $300,000 and up for this discussion) tend to move a little more slowly than those sub-$300k or even more so, sub-$200k.

And…. what if you want to sell?  If you are a seller contemplating selling your home, what does this mean to you?   First and foremost, Real Estate is Local!  So,  you need a good update on recent sales and the number of active listings your home may compete with; homes similar to yours in size, levels,  amenities, and area/community.  With this information, you are armed to deal with what may be a multi -offer market reception, or whether your home exists in a price range or area/community that means you need to be well prepared and well priced to effect a reasonably fast sale.

And what if your particular home or neighborhood presents a unique challenge to aggressive pricing and fast sale? Despite challenges your home or location present to the sale, overall, we have a seller’s market.  That means the trade winds are blowing your way, and with wise and prudent market preparation of the home and realistic pricing, you are probably better situated to sale your home in the current market than you will be when the demand/supply ratio reverses to a buyer’s market.

Call or email with questions =-]

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