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2023-06-07T10:56:05-07:00
tag:manifestdreamteam.com,2012-09-20:27725
May 2023 Cromford Report Commentary with Infographics
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Greater Phoenix Losing 246 Listings per Week in 2023<br />Prices Recovering, Median Up to $425K in May
For Buyers:
The sharp decline in supply for Greater Phoenix is a good reason for buyers to have a sense of urgency about purchasing a home. Since the beginning of 2023, supply counts have been declining at an average rate of 246 listings per week and since the peak in October, total supply is down 42%. At this rate, the effects of the massive supply surge last year will be erased and the year-over-year change will be negative within 6 weeks. In fact, the Valley could see extremely low supply similar to 2021 and 2022 within 7-8 months if a significant source of supply doesn’t emerge.
While permits for new single-family homes dropped by 74% over the last half of last year, they have doubled since December. While that sounds encouraging, the build time for a new home is estimated at about one year. So, as the builders move through their permits and inventory from the first part of last year, there are fewer permits from the latter half to significantly boost new supply for sale going forward this year.
That being said, while prices are rising and recovering from the 2022 decline, they’re not spiking right now. This is good news. The appreciation rate since December is considerably more modest than what the market saw from 2020-2022. For perspective, the first part of 2022 saw the median price in Greater Phoenix rise from $425K in December to $470K by May, an average of 2% per month. This year, after declining to $418K in December, the median sales price has risen to just $425K as of this month, which is significantly more sustainable.
Mortgage rate predictions, meanwhile, are trending down. This month, organizations such as the Mortgage Banker’s Association, Freddie Mac, Compass Bank and the National Association of Realtors all declared expectations that rates may drop into the mid– to low– 5% range by the end of the year. The last time rates were that low was August 2022, but with the dominance of seller-paid buy-downs today that drop the going rate by 1-3%, and FHA rates that typically run well below conventional rates, a decline in conventional rate to the 5% range could spur a surge in both supply and demand.
For Sellers:
Unaffected by mortgage rates, the market over $1M has seen its 2nd best year in Greater Phoenix so far. May is typically the peak of the market for buyer activity in the top tier price ranges, and after local temperatures top 100 degrees, we tend to see a noticeable slowdown as they flee to cooler climates. Expect to see a spike in luxury homes cancelling or expiring their listings temporarily in June and then re-activate them in the Fall.
If your home is under $600K, you will want to keep an open mind about FHA buyers. Effective January 2023, the loan limit for FHA was raised to $530K and effective March 2023, FHA announced they were reducing the mortgage insurance premiums on their loans from 0.85% of the loan amount to 0.55%. On a $400,000-$500,000 loan, the monthly savings is about $100 off a buyer’s payment. Combine that with a 30-year fixed rate that runs from a quarter to a half point below the conventional rate, and that can knock off another $100 from the payment. With a possible $200 savings every month, more well-qualified buyers are choosing FHA over conventional financing. Closings in March under $600K saw 21% of closings involving an FHA loan compared to only 9.5% last May, and that was just the first month the new policy was in effect. Conversely, cash sales dropped from 31% of sales last May under $600K to just 18% in March.
Meanwhile, demand picked up over the last month as supply continued to decline. This means continued upward pressure on price, but at a more moderate pace. The last big cities in Buyer’s Markets, Maricopa and Buckeye, are quickly moving towards balance. Average sales price per square foot has stabilized in these two areas and most cities have seen prices turn back up this year. While year-over-year price comparisons have been negative since December, by July or August they could turn back to positive if the current rate of appreciation is sustained.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2023 Cromford Associates LLC and Tamboer Consulting LLC
2023-05-31T09:37:00-07:00
2023-06-01T10:08:04-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:27426
Hidden Fees To Be Aware of When Purchasing a Home
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Purchasing a home is arguably one of the biggest financial decisions you will make in your lifetime. As you start your hunt, don't forget there will be other costs associated with your purchase then the price of the home. Here are 5 fees to keep in mind as you begin to budget.
Home inspection. This is a crucial step in the home buying process. The findings that come from the inspection can help you negotiate price and repairs. Generally, you can expect to pay between $300 to $500 depending on the home and the location.
Title services. Title services encompass the transfer of the title from the seller and a thorough search of the property’s records to ensure to no one will pop up with a claim to the property. Additionally, you may need to buy title insurance which will protect the lender or your investment in the home.
Appraisal fee. Before getting a loan, you will likely be required to get an appraisal of the home to determine its estimated value. This will be conducted by a third-party company and the cost can land anywhere between $300 and $1,000, depending on the size of the home.
HOA fees. Many communities have a homeowners’ association that enforces monthly fees. This money is used for general maintenance and updates to areas like pools, parks, and more. Typical HOA fees are around $200 per month.
Taxes. The taxes each buyer pays at the closing table differ, but it is not uncommon for it to be up to two months’ worth of county and city property taxes. Additionally, there may be taxes for the transfer of the home title.
2023-05-19T14:16:56-07:00
2023-05-19T14:49:04-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:27550
Metro Phoenix Mid Month of May 2023 Pricing Update and Forecast
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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 month.
For the monthly period ending May 15, we are currently recording a sales $/SF of $278.96 averaged for all areas and types across the ARMLS database. This is down 0.7% from the $281.03 we now measure for April 15. Our forecast range mid-point was $281.80, so this month we were less accurate, with prices down a little instead of up a little. However, this monthly average can easily change by 1% or so in a single day and the actual result lay well within our 90% confidence range.
On May 15 the pending listings for all areas & types show an average list $/SF of $301.40, up just 0.06% from the reading for April 15. Among those pending listings, we have 99.3% normal, 0.1% in REOs, and 0.6% in pre-foreclosures. This is similar to the last 3 months. We still have very few foreclosures appearing.
Our mid-point forecast for the average monthly sales $/SF on June 15 is $279.13, which is 0.1% above the May 15 reading. We have a 90% confidence that it will fall within ± 2% of this midpoint, i.e. in the range of $273.55 to $284.71.
Source: Cromford Associates LLC and Tamboer Consulting LLC
2023-05-15T13:54:00-07:00
2023-05-25T14:06:55-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:27308
Metro Phoenix Market Summary at the Beginning of May 2023
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A year ago the market was weakening fast, but pricing was approaching its peak of $306.46 per sq. ft. and closings were still running high, fueled by the unwise purchasing frenzy of institutional investors and iBuyers. The slump that followed in the second half of 2022 is now well behind us and the market is displaying increasing resilience despite interest rates that are far higher than during most of the last 10 years.
Closing volumes were unimpressive in April, but the growth in listings under contract makes up for that with one of the largest month to month increases (11.6%) that we have ever seen for this time of year. The net result is that demand is now growing again, while supply is falling even faster than before. This is good news for sellers, but most home owners are still uninterested in selling, deterred by the large increase in mortgage interest rate that would incur.
With only 12,500 active listings without a contract we are once again approaching a dire shortage of homes for sale. Even a modest increase in demand is likely to force prices higher and quickly recover the ground lost over the past 12 months. The median sales price is down almost 9% compared to a year ago, but has recovered nearly 4% over the last 3 months.
The new home market remains robust with most publicly listed home builders in an optimistic mood, supported by their stock prices hitting new highs in the last few days. The numbers in the ARMLS database suggest their optimism is justified, especially if the perception that the Federal Reserve has finished hiking interest rates becomes a reality.
2023-05-12T12:44:29-07:00
2023-05-12T22:12:55-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:27138
A Look Into The Markets May 2023
Home loan rates continue to stabilize ahead of next week's Fed Meeting. Let's discuss what happened this week as we await yet another Fed rate hike next Wednesday.
"Little Pink Houses for You and Me"... <a href="https://url.emailprotection.link/?bwoz_ymtEk20Z86xpda1t3JKmf1mBJUyyW9OWhSltHZhga1tXeEKsu91yBDACF0xDSfIWXn_uuxV0_zcwyA_Mq1CrLPQph2x3yc6q7Z8A5cRciv_3IdvN2KRJOM6wy3fmrZdcqmHwnLNMJJVtWGtN9LkTnIznc97SRqKte5hBTpU~" rel="noopener noreferrer" target="_blank">Little Pink Houses by John Mellencamp.</a>
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New Home Sales Soared In March
Housing continues to show some positive signs lately, thanks to the decline in mortgage rates. This week, New Home Sales for March grew by 9.6%, when the markets expected a 1.6% decline. The sales pace remains 3.4% lower than in March of 2022 but the improvement we are seeing since the beginning of the year highlights the strong demand for housing coupled with interest rate sensitivity.
The Northeast saw the largest pickup in sales. Warm weather could have helped fuel the buying activity. Builders also used incentives and buydowns to close deals.
Home Prices Rise - First Time In Eight Months
The S&P CoreLogic Case-Shiller National Home Price Index rose month over month in February, breaking a string of seven consecutive months of declines.
The Federal Housing Finance Agency also reported a price rise for February. What is sparking the increase in prices in what overall remains a slower housing market? Low housing inventory and a nice decline in home loan rates since the peak in October.
The home price gains continue to decelerate and this is good for restoring market balance as well as helping lower future inflation readings.
First Republic - The Next Bank Problem?
Weeks after the SVB collapse, First Republic Bank, despite multiple bailouts, is said to be on the brink of failure. There is some speculation that measures might need to be taken over the weekend to help the Bank survive.
This story reignites uncertainty around financial stability as we approach next week's Fed Meeting. Higher short-term rates, controlled by the Fed, only make problems worse for the banks. The Fed's comments on the banks next week will be market-moving.
Technical Barriers To Further Rate Improvement
Mortgage and housing professionals monitor both macroeconomic conditions, as well as technical factors (chart signals), to help determine rates trends and changes to them.
Currently, the 200-day Moving Average is limiting further rate improvement in the 2-year Note yield and the 10-year and mortgage-backed securities (where home loan rates are derived).
Next week's Fed Meeting, where it is widely believed the Fed will end this rate hiking cycle, could be the trigger to push bond prices above this ceiling.
One thing for sure? Rates can't improve further until prices break through this barrier. And if they do, we could very well see another leg lower in rates.
Bottom line: Home loan rates have peaked, inflation has peaked and next week the Fed rate hikes are likely finished. Couple this with the bright future in housing and it's a reason to go shopping today.
Looking Ahead
Next week is a big week for the mortgage and housing world. On Wednesday, the Fed is going to raise rates by .25%, lifting the Fed Funds Rates to a range of 5 to 5.25%. This event will garner multiple market reactions. And if that were not enough headline risk, we have the April Jobs Report out next Friday. The current tight labor market is wonderful for housing and is a reason why the economy can't endure a deep recession.
Information provided by Guy Vetrano, Bay Equity Home Loans
2023-05-03T14:43:25-07:00
2023-05-03T21:58:43-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:26750
Metro Phoenix Mid Month of April 2023 Pricing Update and Forecast
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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 month.
For the monthly period ending April 15, we are currently recording a sales $/SF of $279.64 averaged for all areas and types across the ARMLS database. This is up 2.4% from the $273.05 we now measure for March 15. Our forecast range mid-point was $279.01, so this month we were very accurate, within 0.2%. This is reassuring after the big miss last month-when we far too pessimistic.
On April 15 the pending listings for all areas & types show an average list $/SF of $301.22, up 0.3% from the reading for March 15. Among those pending listings we have 99.3% normal, 0.1% in REOs and 0.5% in pre-foreclosures. This is similar to the last 2 months. We still have very few foreclosures appearing.
Our mid-point forecast for the average monthly sales $/SF on May 15 is $281.80, which is 0.8% above the April 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $276.16 to $287.44.
2023-04-21T12:41:23-07:00
2023-04-21T15:14:16-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:26621
Metro Phoenix Market Summary at the Beginning of April 2023
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The market continues to improve.
Sales volumes remain much lower than a year ago, largely because institutional investors and iBuyers lack action on the buying front. A year ago they were competing frantically, which they probably now regret. However, sales in March are up 32% from February and only down 25% from March 2022, which compares favorably with down 29% in February and down 39% in January.
iBuyers create 2 transactions instead of one, so transaction volumes will fall when they stop (or almost stop) buying. Demand from normal buyers weakened in March, mostly due to higher interest rates. But these interest rates are lower again in early April, and the drop in demand has been overwhelmed by the sharp drop in supply. Active listings without a contract fell by 5.5% during March whereas listings under contract fell by only 1.9%.
The balance between supply and demand has been moving consistently in sellers' favor since mid-November. This confirms we are in the rebound phase of the correction that dominated the second half of last year and created an atmosphere of fear throughout the market. That fear can now be replaced with relief as one market signal after another turns positive and resumes a normal trend. Despite the doom scrollers on social media and elsewhere, today's market is healthier than it was in April 2019, which at the time we were perfectly comfortable with. Casual observers tend to worry about factors that can cause weakness in demand, then forget to balance that with factors that can cause weakness in supply. Right now, supply is weakening much faster than demand, so interest rate movements are no longer the key thing driving the market. Competition between buyers is starting to warm up because there are so few sellers. This should not surprise us. Supply is just as important as demand.
The USA is unusual in having a very large percentage of its existing mortgage loans at fixed interest rates. In most countries, the majority of mortgage loans have adjustable rates. In Central Arizona, this means loans written more than a year ago look very cheap compared with new loans. This deters homeowners from selling homes unless they don't need them. They may not need a home if they have just inherited it from a relative who died, or if it is a second home or investment. But if they have a primary residence, selling that home means killing a very cheap mortgage and giving birth to one with a more expensive new rate. Most people do not want to do that. In 2022 we saw a flood of supply from investors, speculators, panicking iBuyers, and the like, but this wave has exhausted itself. We are back to a chronic shortage of homes to buy. We have less than 14,000 available, which is about 40% below normal. Demand is indeed weak, but it is only 18% below normal. Do the math.
Prices have moved higher even earlier than we expected. The monthly median is $419,900, up from $410,000 in late February. The average closed price per square foot has reached $277.60, up from $265,20 on Feb 9. That is almost a 5% rise in just 7 weeks.
The listing success rate is back to 78% or so, having fallen to a low of 62% in November last year.
Foreclosure activity remains minuscule. There is little sign of much new supply coming from that direction antime soon.
New construction permits for single-family homes are currently low, so there will be limited new supply from builders for a while.
It is time to re-adjust buyers to expect increasing competition from each other as they chase a dwindling number of homes for sale. Sellers have recently been offering generous incentives including substantial interest rate buy-downs. Those incentives are likely to reduce in value as sellers start to realize they have the upper hand in negotiations.
A few areas on the outer fringes of Greater Phoenix still have a robust supply. These include Buckeye, Casa Grande, Coolidge, Florence, Maricopa, and San Tan Valley. However, these are counter-balanced by extremely low numbers of active listings in the more affordable central areas, such as West Phoenix, South Phoenix, Tolleson, South Glendale, and West Mesa.
Do not make the mistake of thinking the market is the same as it was in late 2022. We are in a new and very different phase.
2023-04-14T14:56:56-07:00
2023-04-14T15:00:29-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:26460
Rates, Prices, and Inventories
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What lies ahead in the housing sector insofar as rates, prices, inventories, and demand? These are the questions potential home buyers are pondering as we push further into 2023.
Rates. Home borrowing costs have eased from the highs which is a key factor for consumers especially first-time home buyers. The old phrase, "Buy now, refinance later," may come into account for some buyers but in this environment, and with inflation still sticky, that may not be the best way to go if you are looking to lower future costs.
Prices. The markets saw an explosion in prices post-pandemic with annual gains at over 20% last summer which most knew that those frothy price gains couldn't be sustained. The latest year-over-year numbers saw more historical gains in the 5% range, reports CoreLogic while Existing Home Sales saw the 12-month median price slightly decline.
Inventories. The supply of homes for sale on the market has been a thorn in the side of homebuyers for the past few years. The National Association of REALTORS® recently reported that inventories edged higher in recent months but are still well below what is seen as normal. Redfin said that total homes for sale were also up year over year.
So we have rates, prices and inventories but what is first and foremost on the minds of buyers? Do I have a job, is it secure and can I easily find a job if needed? Remember, jobs buy homes.
Bottom line: Now is always a good time to jump into the pool of homeownership.
Source: Mortgage Market Guide, Guy Vetrano
2023-04-07T11:23:51-07:00
2023-04-07T11:26:49-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:26455
4 Options for Financing Home Renovations
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Whether you're looking to update your home for the benefit of increasing your property's value or to sell it for a larger profit, a home renovation is a huge undertaking. One of the biggest questions you might encounter is how to pay for such a project. While you can save money to pay for a home upgrade, you have four solid financing options available.
Home improvement loan. This loan is an unsecured personal loan offered by banks, credit unions, and other types of online lenders. Since it's unsecured, this loan doesn't involve using your home as collateral to qualify and your interest rate is based on your credit score. It's best for small or midsize projects.
Home equity line of credit (HELOC). This is a secured loan that's backed by your home. With this option, you might qualify for a lower interest rate compared to an unsecured personal loan. Since a HELOC involves rolling credit, you can take what you need when you need it, which is perfect for a large project.
Home equity loan. Often referred to as a second mortgage, a home equity loan is a lump sum paid that you can repay over several years in fixed monthly payments. This loan is also secured and best suited for medium to large projects.
Cash-out refinance. This option involves replacing your current mortgage with a new, larger one with a different interest rate. You pocket the difference between your old mortgage and the new loan, so you can use that money for your renovation. This option is best for smaller projects and emergency repairs.
Financing a home renovation takes plenty of planning. Make sure you consider all your options and select the financial path that works best for your needs and budget. Don't be afraid to talk with your loan officer to make sure you're getting the best rates.
Sources: Washingtonpost.com, Bankrate.com, Nerdwallet.com, Guy Vetrano
2023-04-07T11:04:33-07:00
2023-04-07T11:23:30-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:25669
Metro Phoenix Mid Month of March 2023 Pricing Update and Forecast
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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 month.
For the monthly period ending March 15, we are currently recording a sales $/SF of $273.22 averaged for all areas and types across the ARMLS database. This is up 1.9% from the $268.24 we now measure for March 15. Our forecast range mid-point was $258.68, so this month we were way too pessimistic. The actual result was 5.6% above the forecast and also well above the 90% confidence range. This is the largest forecast miss we have witnessed in 20 years and I guess we should be pleased that it missed so far to the upside. Despite the advance of the CMI, we did not expect the average closed $/SF to recover so quickly and so soon.
On March 15 the pending listings for all areas & types show an average list $/SF of $300.43, up 2.5% from the reading for February 15. Among those pending listings we have 99.3% normal, 0.1% in REOs and 0.5% in pre-foreclosures. This is similar to last month.
Our mid-point forecast for the average monthly sales $/SF on April 15 is $279.01, which is 2.1% above the March 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $273.43 to $284.59. Our forecast implies that prices (average $/SF for all areas & types) will have risen by 5.6% over 3 months from Jan 15 to Apr 15.
Source: Cromford Associates LLC and Tamboer Consulting LLC
2023-03-24T13:37:23-07:00
2023-05-25T14:09:16-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:25484
A Look Into the Markets
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"Bringin' on the heartache, Can't you see?, Can't you see?" Bringin' on the Heartbreak? Def Leppard.
SVB Failure and Rates<br /><br />It's important to remember that bonds enjoy bad news, so when word broke earlier this week that SVB was shuttered by the FDIC, home loan rates improved to their best level in six weeks. At the same time, the 2-year Note yield, which tracks Fed rate hike activity, plummeted from over 5.00% to under 4.00% in just a couple of days. This was an epic decline in rates not seen even after 9/11 or the Great Recession.<br /><br />The good news (in the case of SVB and even Signature) is that bad management, failure to manage interest rate risk and a widespread desire for depositors to gain access to their funds (bank run) is what caused these banks to shutter.<br /><br />In response, the Federal Reserve immediately created a line of credit and an implicit backstop to protect any depositors from any losses. This was good news and will hopefully limit any further fallout in the banking sector.<br /><br />So, what does the Fed do with rates now that we have high uncertainty and contagion risk in the banking sector?<br /><br />Stability > Inflation<br /><br />Seeing that one reason SVB failed was in response to a rapid rise in interest rates, there is increased pressure for the Fed to limit rate hikes going forward and regain stability in the financial sector.<br /><br />Just last week there was a high probability the Fed would raise rates by .50. Now just days later, there is a 75% chance of a .25% and a 25% chance the Fed doesn't hike rates at all.<br /><br />Next week's Fed Meeting and press conference will hopefully have the markets feeling that the Fed is going to take every measure possible to ensure stability while they closely watch the pace of inflation decline.<br /><br />Housing Numbers OK<br /><br />It wasn't all bad news this week. Housing numbers for February highlighted the little rate relief we saw in January and brought some optimism into February. Both Housing Starts (which is putting the shovel in the ground), and Permits (a leading indicator of future building), came in better than expectations.<br /><br />This bodes well for housing in the months ahead, especially combined with the rate relief we are experiencing.<br /><br />Bottom line: This week's news in banking has changed everything as it relates to the Fed and rate hikes. The markets are suggesting the Fed will be cutting rates in the second half of the year which is a big change from the rate outlook just days ago.<br /><br />Looking Ahead<br /><br />Next week brings the Fed Meeting and monetary policy decision. As we shared, it appears the Fed is only going to raise rates by .25%, rather than .50% to foster stability in the financial markets and avoid contagion in the banking sector. What the Fed says will be important in bringing calm to the markets during this uncertain moment.
From one of our trusted lenders, Guy Vetrano at Bay Equity Home Loans
2023-03-21T10:37:58-07:00
2023-03-24T13:32:27-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:25372
March 2023 Cromford Report Commentary with Infographics
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After 200% Increase, Supply Still Nearly 40% Below Normal
Sale Prices Up 3.5% Since December
For Buyers:
Rates defied industry predictions once again and rose over a point from 5.99% to 7.1% between February 2nd and March 2nd. For the past 4 weeks, rates have hovered in the upper 6% range, figuratively “pinching the hose” on demand during the popular Spring season for buyers. At 9,001, contracts are at their 4th lowest count since 2005, the lowest counts were in 2006-2008 and normal range is 11,000-13,000. Buyers are not the only ones holding back due to higher mortgage rates, sellers are too. New listings added to the Arizona Regional MLS are the lowest ever recorded going back at least 23 years. This may be shocking to some as there has been a 200% increase in supply year-over-year, but last year at this time supply was merely 4,820 active listings. The reality is that ARMLS active supply spiked over 300% last year between March and October, peaking around 20,000 listings. But since then it has declined 27% to 14,772, which is the 4th lowest supply count since 2005 for this time of year. Typically, active listings should be between 20,000-24,000 to be considered normal. In a nutshell, while higher rates have stunted demand for now, they are not expected to stay high forever. If and when they come down, expect demand to increase again. Meanwhile, FHA announced a reduction in the mandatory mortgage insurance premium (MIP), effective this month. FHA mortgage rates typically run about a half-point lower than conventional rates and this further reduction in the MIP could equate to an additional $100 off the monthly payment for borrowers. Combine that with the higher FHA loan limit of $530,150 for 2023, and many first-time home buyers may still find ownership within their reach. The best advice for buyers is to become educated on all the incentives available, from seller-paid rate buy-downs to down payment assistance, while the sellers remain open-minded.<br /> <br />For Sellers:
Low-level demand combined with even lower-level supply equals a seller’s market for Greater Phoenix. Not a crazy one like the last 2 years, but since coming out of a buyer’s market last December sale price measures have stopped dropping and have risen a modest 3.5% so far. Sellers continued to pay for buyers’ closing costs on 48% of MLS closings in March, with half paying $9,000 or more. Fewer new listings hitting the market has meant less pressure on sellers to reduce their list price. As a result, weekly price reductions are actually falling instead of rising as they typically would at this time of year. Only 13-14% of inventory issued a price reduction last week compared to 25% of inventory last October. The average negotiation is 97.4% of the last list price this month, an improvement from 96.5% in January and in line with the pre-pandemic market of 2019. Current median days on market prior to an accepted contract is 32 days. Most seasonally-adjusted housing measures are reflective of a weak seller’s market similar to 2015 where properties appreciated an average of 4.6% annually. The majority of cities in Greater Phoenix are now in seller’s markets. Only 5 cities remain in buyer’s markets at this stage. They are Queen Creek, Maricopa, Buckeye, Casa Grande, and Sun City West. The outskirts of town tend to be the first to enter buyer’s markets and the last to come out. While these cities are lagging the rest of the valley, their measures have all improved 8-14% over the past month.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2023 Cromford Associates LLC and Tamboer Consulting LLC
2023-03-15T15:00:09-07:00
2023-03-21T11:31:58-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:25270
Townhouse vs. Condo: Which should you buy?
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Condominiums
Condominiums are similar to apartments in that you purchase an individual unit inside of a larger building, but not the property it sits on. This generally includes access to the building’s amenities, such as the clubhouse, pool, and gym. However, condo owners are not responsible for the upkeep and repair of these common areas. Because of the number of shared spaces, living in a condo often allows for meeting new people and building a strong sense of community. There is a fairly similar vetting process for loan approval as for a full-sized home; however, the lender will also look at the health of the condo association.
Townhouses
Those who purchase a townhome are generally purchasing the complete unit, both inside and out, including the land it sits on. This might also include the driveway, yard, or roof. Traditionally, these units are two- or three-stories tall and may also include common areas like pools and parks. Townhome owners pay a fee to a homeowners association every month and the loan process is the same as buying a full-sized home.
Which is the best choice?
Both townhomes and condos offer less maintenance than a traditional home and generally offer great shared areas. Your decision ultimately comes down to you and your family’s needs and wants. Things you’ll want to take into consideration include location, lifestyle, family growth, and price.
2023-03-10T13:59:25-07:00
2023-03-10T14:08:14-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:25068
Personal Finance Spring-Cleaning Steps
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If you're like many people, when spring arrives you find yourself taking stock of your home and realizing that you want a cleaner and healthier environment. A cluttered house can make you feel unproductive.
That type of refresh can also be applied to your finances so you can enter a new season with a better handle on your money. Use the following tips so you can spring-clean your finances.
Clean up your paperwork. Take the time to keep all your important financial documents digital to cut down on clutter. For original documents you need, keep them in a portable and fireproof safe.
Reassess your budget. Even if you already have a budget prepared, it doesn't hurt to take another look. Look over your spending, savings, and income over the past three months and determine if you need to make any adjustments.
Look for unnecessary expenses. You might be spending money on things you don't necessarily need. One key area involves subscription services, which include gym memberships, antivirus software, and streaming services.
Revisit your financial goals. If you set financial goals at the beginning of the year, now is an excellent time to see how it's going and adjust your plan. These goals might include paying off high-interest debt, saving for retirement, increasing your income, and breaking the paycheck-to-paycheck cycle.
Having a clean home and finances takes a lot of work, but it's important to take some time to get both in order. By taking these steps for financial improvement at least once a year, you can better prepare your life for any bumps that might come up throughout the year.
Sources: Experian.com, Moneycrashers.com, CNBC.com
2023-03-07T12:00:10-07:00
2023-03-07T14:21:04-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24921
Your Guide to the Home Appraisal
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You’ve found your dream home and now it’s time to cross all your T's and dot all your I's before it’s all your own. And one of the first items on your closing checklist the home appraisal. So, what exactly is that?
The home appraisal is essentially a value assessment of the home and property. It is conducted by a certified third party and is used to determine whether the home is priced appropriately.
During a home appraisal, the appraiser conducts a complete visual inspection of the interior and exterior of the home. He or she factors in a variety of things, including the home’s floor plan functionality, condition, location, school district, fixtures, lot size, and more. An upward adjustment is generally made if the home has a deck, a view, or a large yard. The appraiser will also compare the home to several similar homes that were sold within the last six months in the area.
The final report must include a street map showing the property and the ones’ compared, photographs of the interior and exterior, an explanation on how the square footage was calculated, market sales data, public land records, and more.
After it is complete, the lender uses the information found to ensure that the property is worth the amount they are investing. This is a safe-guard for the lender as the home acts as collateral for the mortgage. If the buyer defaults on the mortgage and goes into foreclosure, the lender generally sells the home to recover the money borrowed.
2023-03-03T01:00:00-07:00
2023-03-03T15:06:32-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24876
February 2023 Cromford Report Commentary with Infographics
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Accepted Contracts Up 86% in 5 Weeks
Phoenix Back to a Seller’s Market! But It’s Not 2020-2022 Again
For Buyers:
The Spring season is upon Greater Phoenix. February hosts the Waste Management Open and Super Bowl LVII this year, putting the metro area in the national spotlight more than usual during our peak season for weather, tourism, and buyer activity. This, combined with mortgage rates briefly stabilizing between 6.0-6.2% in January, contributed to an 86% increase in accepted contracts since the beginning of the year. Six major cities moved out of balanced markets into seller’s markets over the last 4 weeks: Phoenix, Avondale, Glendale, Tempe, Mesa, and Gilbert. Two cities came out of buyer’s markets into balance: Peoria and Surprise. Only Goodyear, Queen Creek, Maricopa, and Buckeye remain in buyer’s markets at this stage. Now 11 out of the 17 major cities are in seller’s markets, but much weaker ones compared to the last 2.5 years. The shift is in its early stage and fragile, however, and could fall back to balance if mortgage rates become too volatile. Rates remain unpredictable, but that doesn’t stop the industry from trying to predict them. Multiple outlets, such as the National Association of Realtors, Mortgage Bankers Association, Freddie Mac, Fannie Mae, and CoreLogic, released expectations in January that mortgage rates will either stabilize or trend down in the first quarter of 2023. Very few are predicting rates to increase this year overall, but we may see them bounce around as the bond market flinches with every report on inflation and employment. This may cause buyer demand to ebb and flow over the next few months, too. Speaking of employment, the latest report for Arizona showed an increase of 93,700 jobs for the state over the course of 2022. In Maricopa County, the unemployment rate dropped from 3.1% in January to 2.7% by the end of December, continuing to outperform national measures. Even as the labor force grew by nearly 58,000 people, even as layoffs swept the real estate and tech industries, people claiming unemployment declined by 9,500 over the course of 2022. Private sector earnings also grew by 4.1% year-over-year, a positive indicator for housing affordability to improve in Greater Phoenix.
For Sellers:
Don’t be fooled by this seller’s market, it is nothing like the seller’s market of early 2022. Sellers may notice there is less pressure for a price reduction as there are few new listings entering the market. There were only 9,664 new listings added to the Arizona Regional MLS since the beginning of 2023, the lowest number of new listings measured in at least 23 years. The median is 14,000 listings, and the highest measured was over 21,000 in 2006 over the same 5-week time frame. Less competition is good for price stability. Sellers may notice fewer days on market prior to contract. Half of owners who accepted contracts last week were on the market for 40 days or less (listed after January 4th) compared to the peak of 56 days in December. In a weak seller’s market like this, as we shift into the Spring season, days on market prior to contract may settle in at 25-30 days; a far cry from the 5-7 days in early 2022. Sellers will notice little change in negotiations or concessions at this stage. Last month, 51% of sales involved seller concessions to the buyer with a median cost of $9,700. So far in February, 47% have involved concessions at a cost of $9,800. The average negotiation is 2.8% below the last list price, down from 3.5% last month. Sales measures rolling in now are reflecting contracts written in late December and early January, which was a mixed bag of cities in balance and cities in buyer’s markets at the time. The effects of the current seller’s market will not be seen in sales price measures until March, at which point we expect to see the rate of decline in sales price measures either slow down or stabilize. Mortgage rates could change the game quickly, however. It’s not a time for buyers or sellers to take market conditions for granted.
<img src="https://assets.site-static.com/userfiles/3335/image/2023-02_Infographic.jpg" width="2400" height="3444" />
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2023 Cromford Associates LLC and Tamboer Consulting LLC
2023-02-28T12:10:42-07:00
2023-02-28T14:27:43-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24742
Mortgage News Home Buying Costs are Falling
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The big news in the mortgage market is that home borrowing costs have fallen, mortgage application volumes have surged, and these are just a few of the happenings in the sector.<br /><br />Freddie Mac recently reported that home borrowing costs fell from the multi-decade highs seen in November while the Mortgage Bankers Association (MBA) reports the same trend in rates in the same time frame. Also, the MBA reports that despite mortgage application volume being lower from a year ago, there has been an uptick in the past month.<br /><br />The MBA went on to say that if rates continue to fall and home prices cool further, it expects to see potential buyers come back into the market. Another good sign from the MBA was that the national median payment applied for by home purchase applicants fell 2.9% to $1,920 in December from $1,977 in November.<br /><br />If the market sees a more normal rate of home price gains in the future, it could be beneficial to prospective homebuyers, especially those in the market for a first home.<br /><br />And in the bigger picture, total costs to build homes have fallen. Lumber prices have plunged to the $500 level after spiking to $1,645 in 2021 when supply chains were locked up as the nation reopened after the pandemic. Lumber prices are now at levels seen in January 2020. The National Association of Home Builders recently reported that despite costs still being lofty, they have fallen for two consecutive months.<br /><br />The American Dream of owning a home is the grasp of many and with six million homes being sold each year in the U.S., now is always the time to consider a purchase.<br /><br />Source: Mortgage Market Guide/Guy Vetrano Bay Equity Home Loans
2023-02-21T14:42:37-07:00
2023-02-21T14:47:46-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24637
Long-Term Advantages of Home Ownership
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There are two big tax benefits you get when owning a home: You can deduct the mortgage interest that you pay each year and you can deduct at least a portion of your property taxes.
Mortgage interest deduction: The most valuable tax benefit is the mortgage interest deduction. This perk allows you to deduct the interest you pay each year on any mortgage that you use to buy, build or improve your primary residence or a second home.
Under federal law, you can deduct the interest you pay on up to $750,000 of combined mortgage debt if you are filing your taxes as an individual or as a married couple filing jointly. Married couples filing separately can deduct up to $375,000 in mortgage debt. (Higher limits apply if you bought your home on or before the end of 2017 — check the IRS for details.)
What's especially nice is that these deduction rules don't apply only to the mortgage you used to buy your primary residence. You can also deduct the interest you pay on a second home. Remember, though, that you can only deduct up to a combined $750,000 in interest, no matter how many mortgages you have.
You can deduct the interest — again up to the federal limits spelled out above — on home equity loans and home equity lines of credit, too. But to take the deduction, you must use the funds from these loans to make improvements to your primary or second home. If you use the dollars from these home equity loans to pay down credit card debt or cover your child's college tuition, you can't deduct the interest you paid on them.
Property tax deduction: You can also deduct the state and local property taxes that you pay each year on your home, though this deduction might not be as valuable if you live in a state in which property taxes are especially high. That’s because you can only deduct up to $10,000 for state and local taxes each year, a change that went into effect after Congress passed the Tax Cuts and Jobs Act in 2017.
If you live in a state in which property taxes routinely soar past that $10,000 limit, then you won’t be able to deduct all the money you spend each year on these taxes. That $10,000 cap is for a combination of taxes, including state and local income and sales taxes, too, which means that in high-property-tax states, you’re more likely to be paying more than the limit.
Still, you’re at least able to deduct some of the property taxes that you pay, providing a bit of relief when you file your income taxes each year.
This is just a summary; there may be other provisions that affect you. The point is that you have to look at the big picture. To understand in detail how home ownership will affect your bottom line, work with a financial professional.
2023-02-17T01:00:00-07:00
2023-06-07T10:56:05-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24499
Metro Phoenix Market Summary at the Beginning of February 2023
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Closed sales hit a very low level during January at 4,346. This is down 39% from January 2022 but January is always a very slow month for closings and it is always darkest just before dawn. Demand was very weak during the fourth quarter of 2022 but has staged a strong recovery for the start of the new year. We can see this from listings under contract, which are up 43% from a month ago, and from pending listings which are up 40%. These are the strongest month-to-month percentage gains that we have ever seen, largely because we were starting from such a low base.
Clearly, buyers now have a lot more enthusiasm than they did in December. This is bringing down the counts of active listings (excluding UCB and CCBS). This is very unusual for January, a month in which we expect to see lots of new listings. Indeed new listings are up from a weekly rate of less than 700 in late December to over 2,000 a week at the end of January. Despite the huge increase in new listings, overall supply is falling because so many are going under contract. We also have fewer new listings than we did last year when we saw over 2,250 per week.
An interest rate of around 6% would have been considered horrendous this time last year, but now it seems quite reasonable compared with rates over 7% that we witnessed in October and early November. It is also becoming commonplace for sellers to assist buyers in buying down their interest rate still further. Together with improving stability and confidence, this has helped rebuild demand which has recovered more in the last 4 weeks than we anticipated. This trend is building on the positive signs we reported during the second half of December.
Volumes are still well below normal, but they are recovering nicely and promise better times when the Spring buying season gets fully underway.
The appropriate emotional reaction to the market has now changed from despair in December to skepticism in January and relief in February. We look forward to hope building during March.
The last 10 months have seen the most rapid market cycle in history. But it is becoming clear that the worst is now several months behind us.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2023-02-09T11:43:01-07:00
2023-02-09T13:08:27-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24383
How To Increase Your Home's Value in an Instant
<img alt="" src="https://77fe644c572ff1ba8a08-aa3fcb8dba820dc6b4fabb3e45b3ad4d.ssl.cf1.rackcdn.com/images/media/15979/article_380/mansion-425272_640.jpg?1462371462" width="795" height="423" style="display: block; margin-left: auto; margin-right: auto;" />
Figuring out the right time to sell your house is an age-old dilemma, but it must work for you and your family. Prices rise and fall all the time, so do whatever you can to ensure you get the most money from your sale. Here are a few simple things you can do to increase your home's value before putting it on the market:
Update finishes
Swapping out simple things such as faucets, light fixtures, and cabinet and drawer pulls can give your home brand-new life. These things don't cost a lot but will look fresh and new when you put your home on the market.
Install energy-efficient features
Energy efficiency is a significant selling point to many buyers today. Update your appliances to more energy-efficient models. Replace windows with the newest energy-efficient glass. Consider adding smart home technology.
Freshen up your landscaping
You only get one chance to make a first impression. Updating your home's curb appeal can make all the difference when you're ready to sell. Freshen up your landscaping to match the current season with colorful flowers and easy-to-care-for plants.
Declutter your space
When you're showing your home, be sure to keep it clutter free. Remove a lot of your personal items to neutralize the space. Keep it tidy whenever someone comes for a showing. You can even remove some large furniture pieces to keep the rooms open and make them look larger.
Are you ready to sell? Contact us today to learn more.
2023-02-03T15:16:30-07:00
2023-03-01T11:31:40-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24206
January 2023 Cromford Report Commentary with Infographics
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Phoenix Buyer Market - Aaaand It’s Gone<br />Median Price Down $65,000 Since May
For Buyers:<br />Last year, traditional buyers took a back seat to an influx of cash investors and speculators who outbid them. Then mortgage rates increased and suppressed their power even more. This was especially prominent in the market under $500K where owner-occupant buyers made up just 56.8% of sales in June (normally 70-75%), and investors took 31% (normally 11-17%). As of November, traditional buyers have once again returned to 71% market share under $500K, and investors have retreated under 20%. Investors make up the majority of losses associated with recent price declines. This is great news, especially for first-time home buyers, as prices have come down significantly for starter homes. The median sales price for a 1,400-1,600 sq. ft. single-family home has declined from $435K in May to $370K so far in January; a decline of $65,000, or 15%. At today’s mortgage rate of 6%, that’s a savings of at least $352 per month in payment. This is in line with the overall median sales price, which also declined $65,000 from $475K to $410K. To sweeten the pot, both FHA and conventional loan limits increased for 2023. FHA increased from $441,600 to $530,150, and many lenders began honoring the 2023 loan limit before 2022 ended. As a result, the market share of sales with FHA financing under $500K increased from a low of 11% in March to 20% by November. Many first-time home buyers take advantage of FHA financing as they have softer requirements for approval and their rates are typically lower than conventional loans. Some buyers believe that prices will continue to drop dramatically in 2023 and continue to wait. However, after a brief 4-week Buyer Market from November to December, the ratios of supply to demand are showing Greater Phoenix moving back into a Balanced Market. This means less downward pressure on prices going forward and, if inflation and mortgage rates continue to decline, the worst may be behind us.
For Sellers:<br />A shift out of the shortest Buyer Market ever recorded by the Cromford Report is happening right now. The shift is a direct result of the fewest number of listings added to supply in the 4th quarter of the year going back to 2000. Fewer listings mean fewer competitors for sellers. Demand is still very low, but when it’s met with low supply there is less downward pressure on price. In November, every region in Greater Phoenix was in a Buyer Market except for the Northeast Valley. By mid-January, Phoenix, Glendale, Mesa, Tempe, Avondale, Gilbert, and Chandler had all come out of Buyer Markets and into Balance, except for Chandler which leaped into a Seller Market. Not far behind are Peoria and Surprise. The only large cities left in strong Buyer Markets are Goodyear, Queen Creek (including San Tan Valley), Maricopa, and Buckeye. This does not mean that sellers can expect 2021 and 2022 scenarios to come back.
Price drops, negotiations, concessions, and rate buy-downs will continue to be the key to keeping buyers in the game this quarter. Currently, 51% of all January sales have involved some form of concession from the seller, with a median cost of $9,854; in line with the cost of a temporary rate buy-down. While Avondale is in a Balanced market, 85392 over the last 30 days showed 14 out of 15 sales with concessions and a median of $12,000 to buyers. In addition to concessions, final sale prices are offering sellers getting an average of 96.7% of their last list price. This is not unusual for a Balanced Market. The luxury market over $1.5M sees fewer concessions, but more price negotiation. January sales so far show sellers closing at an average of 94.5% of their last list price in this segment. Under $500K, sellers are closing at 97.4% of the list price. All in all, the majority of sellers are coming out ahead at closing. 65% of active resale listings have been owned for at least 2 years. The long-term appreciation rates for homes in Greater Phoenix are as follows using January sales to date: 25% for 2yrs., 50% for 3yrs., 63% for 4yrs., 70% for 5yrs., and 86%+ for 6yrs or more.
The commentary was written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2023 Cromford Associates LLC and Tamboer Consulting LLC
2023-01-25T15:00:27-07:00
2023-01-25T15:19:01-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24128
Inflation and Interest Rate Update
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There are two things that the markets will be closely watching in the months ahead...if inflation continues to inch lower and what will the Federal Reserve (the Fed) do as far as interest rates in 2023.<br /> <br /> The Fed controls the short-term Fed Funds Rate which is the rate at which financial institutions lend excess funds held in reserve on an overnight basis. The rate impacts short-term rates like credit cards, cars, and bank loans. In 2022, the Fed embarked on its fastest rate hike pace in decades as it tried to ward off surging inflation that culminated in July with the highest inflation rate in 41 years. The Fed Funds Rate went from essentially zero in early March of 2022 to end the year at 4.50% and what it does is pull cash out of the system to try and battle inflation.<br /> <br /> But the Fed had to do something seeing that the price of eggs tripled, gas prices rose $2 and rents soared while borrowing costs surged. So, the Fed had/must slow the economy down and almost cause a recession to halt runaway inflation. Was the Fed too late when it began hiking rates in March? We witnessed inflation peak in July and home borrowing costs more than doubled. Should the Fed have begun tightening in late 2021? Those questions may never be answered.<br /> <br /> We do know that since mid-summer, home borrowing costs have eased a bit and if inflation continues to decline, costs could fall further with the opposite being true.<br /> <br /> Also, keep an eye on incoming economic reports, along with borrowing increases from the government through the issuance of more debt. If China eventually reopens fully from its Covid mandates, it could mean higher oil and gas prices and a boost to the stock markets.<br /> <br /> All the above points are just a handful of events that impact home borrowing costs. But all things considered, now is always a good time to purchase a home if you are secure in your job and can swing the payments.<br /> <br /> Source: Mortgage Market Guide/ Guy Vetrano Bay Equity Home Loans
2023-01-20T11:05:58-07:00
2023-01-20T11:19:20-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:24105
Metro Phoenix Mid Month of January 2023 Pricing Update and Forecast
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For the monthly period ending January 15, we are currently recording a sales $/SF of $263.84 averaged for all areas and types across the ARMLS database. This is down 2.7% from the $271.13 we now measure for December 15. Our mid-point forecast range was $266.79, so this month we were again slightly too optimistic. The actual result was roughly 1% below the forecast and in the lower half of our 90% confidence range.
Average price per sq. ft. is at the level we last saw 14 months ago during the middle of November 2021.
On January 15 the pending listings for all areas & types show an average list $/SF of $301.41, down $1 from the reading for December 15. Among those pending listings, we have 99.4% normal, 0.1% in REOs, and 0.5% in pre-foreclosures. The distressed segment of the market remains totally insignificant, and both REOs and pre-foreclosures have fallen since last month.
Our mid-point forecast for the average monthly sales $/SF on February 15 is $262.46, which is 0.5% below the January 15 reading. This is a statistically insignificant change. We have a 90% confidence that it will fall within ± 2% of this midpoint, i.e. in the range $257.21 to $267.71.
This means we are expecting only a small decline in average sales $/SF over the next month. The downward pricing trend is weakening because in many places the supply has dropped and demand improved. Asking prices are now on the rise and it does not take a big leap of imagination to see closed prices following suit during the second quarter.
Source: Cromford Associates LLC and Tamboer Consulting LLC
2023-01-19T13:18:29-07:00
2023-01-19T14:56:04-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23987
4 Growth Mindset Tips
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Studies have shown that to be successful, individuals need to have a growth mindset instead of a fixed one. A fixed mindset assumes the person achieves all abilities and talents with minimum effort and cannot improve. Those with a growth mindset are in constant flux, perpetually working to improve upon their talents and gifts.
Individuals with a growth mindset are more likely to attack challenges and use feedback from failures rather than dwell on them. They will accept challenges and help others to become more creative. If you're looking to develop a growth mindset, utilize these four tips.
Believe you can do it. It's important to have confidence in yourself, so begin the day with a mantra reminding yourself that you're capable of doing whatever you need to accomplish. Convince yourself that the payoff is more than worth it.
Let yourself fail. While this tip might seem counterintuitive, especially since the previous tip states that you should believe in yourself, it's okay to try something and fail. As uncomfortable as that may seem, failing is almost a necessity to be successful because it reminds you that you need to work at achieving your goals.
Avoid being envious. When you witness other people's success, it's easy to be jealous and compare what you're doing to what they've accomplished. Instead of doing that, use their success for what you'd like to achieve as your motivation.
Push yourself. It's easy to get complacent and remain in your comfort zone. This place is usually free of conflict, but staying in that zone prevents you from growing. Step outside of your comfort zone and challenge yourself.
The keys to developing a growth mindset involve working on your skills and intelligence to achieve success. Changing your perspective, seeing your challenges as opportunities, and identifying opportunities to celebrate success can help you become a better worker.
Source: Forbes.com, Psychologytoday.com, Betterup.com, Guy Vetrano
2023-01-13T12:24:10-07:00
2023-01-13T12:26:55-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23876
A Home Can Be of Greater Value Near Good Shopping
<img src="https://assets.site-static.com/userfiles/3335/image/BLOG_PHOTOS12313213.jpg" width="1700" height="1000" />
When you consider a neighborhood for a new house, you probably think about the schools, then transportation proximity — but nearness to a desirable shopping destination? Not high on your list? Think again.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />ATTOM Data Solutions has discovered that maybe you should reconsider because being near grocery stores like Trader Joe's, Whole Foods or Aldi isn't just convenient but can also raise home equity, with a catch — it depends on which store is in the neighborhood.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />The study, published in Real Estate News, found that the highest return on investments for flipped homes was near Aldi stores at 54%, with an average home seller ROI of 61% for all homes near an Aldi. Properties near Trader Joe's or Whole Foods came in at 58% and 51%, respectively.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />The average home value near a Trader Joe's store was nearly $988,000, while homes near Whole Foods were just over $891,000. Homes near Aldi stores had an average value of just over $321,000.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />What's the reason?<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Perhaps these findings are not surprising when you consider that Trader Joe's and Whole Foods locate their stores by targeting upscale communities, while Aldi focuses on mid-market neighborhoods where shoppers are looking for bargains.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />On the development side, securing Whole Foods or Trader Joe's as an anchor attracts other retailers who cater to affluent shoppers. The research bore out that all three stores tend to be in markets where home values improve and homeowner equity increases.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />ATTOM Data Solutions' Grocery Store Battle analysis studied 1,859 ZIP codes where at least one of the three affluent groceries is located and how that affects values.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Hard to draw a conclusion<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Not all studies of the correlation between supermarkets and neighborhoods are as conclusive, however. Some found a benefit to homes within a five-mile radius while a 2015 Duke University study said it was hard to draw conclusions, noting the impacts of individual stores on home prices can be difficult to predict though there may be beneficial trends on a larger scale through adding a new store to a neighborhood.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Having houses in communities pegged as food deserts — having no grocery stores nearby — negatively impacted home values and quality of life. In high-poverty areas, food deserts create extra, everyday hurdles that make it harder for the community to grow healthy and strong, according to a report by The Annie E. Casey Foundation.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Other studies that looked at what effect close-by retail outlets and gas stations have on house values examined whether a nearby Starbucks can have an effect, or maybe a Walmart. However, the largest impact comes from living near a grocery store.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Stores affect neighborhood dynamics as seen through numerous studies. Gentrifying markets can have an impact on low- and moderate-income neighborhoods. Yale research found that placing a supermarket at a one-mile radius raises property values within that distance by an average of $8,406, with a $1,860 standard error, while at the three-mile mark, housing values didn't rise as much but still gained a healthy $6,047 on average with a standard error of $1,010. When a market is no more than five miles in distance, values are an average of $4,145 with a standard error of $782.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />Price premiums were higher as more shops were introduced into the equation. Convenience — saving time and money by not having to travel to grocers farther away — likely is a factor. The Yale study found that the average residential property value of neighborhoods with exactly one supermarket is $183,695, but when the average number of stores is five or more, values are almost twice as great — $362,160. The rapid expansion of businesses tends to attract an influx of younger, more educated residents, which encourages prices to rise.<br style="color: #222222; font-family: arial, sans-serif; font-size: large;" /><br style="color: #222222; font-family: arial, sans-serif; font-size: large;" />The bottom line? Shopping can have an effect on the value of homes in a neighborhood, but it's just one of many factors that go into choosing a home, and the wise buyer will consider all of them.
Source: HomeActions
2023-01-06T11:49:26-07:00
2023-01-06T13:32:54-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23775
December 2022 Cromford Report Commentary with Infographics
<img src="https://assets.site-static.com/userfiles/3335/image/2022-12_Infographic.jpg" width="2400" height="3444" />
One-by-One, Most Cities in Greater Phoenix Succumb to a Buyer’s Market 44% of October Sales Involve Seller Paid Concessions to Buyer
For Buyers:
Welcome to an official Buyer Market in Greater Phoenix, albeit a weak one, for the first time since 2010. As expected, the city of Phoenix finally succumbed to a Buyer Market in mid-November, thus classifying the entire market as such. (The northeast cities of Paradise Valley, Scottsdale, Fountain Hills, and Cave Creek are all still either Balanced Markets or mild Seller Markets.) While market indicators were plummeting from an extreme Seller Market to Balance between March and June, the trip from Balance to a Buyer Market from July to December has been more like a gentle glide.de.gage rates can quickly push it back up.<br /><br />For Sellers:<br />Welcome to an official Buyer Market in Greater Phoenix, albeit a weak one, for the first time since 2010. As expected, the city of Phoenix finally succumbed to a Buyer Market in mid-November, thus classifying the entire market as such. (The northeast cities of Paradise Valley, Scottsdale, Fountain Hills, and Cave Creek are all still either Balanced Markets or mild Seller Markets.) While market indicators were plummeting from an extreme Seller Market to Balance between March and June, the trip from Balance to a Buyer Market from July to December has been more like a gentle glide.<br /><br />Source: Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-12-30T08:00:00-07:00
2022-12-30T17:01:51-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23483
Metro Phoenix Market Summary for the Beginning of December 2022
<img src="https://assets.site-static.com/userfiles/3335/image/Blog_Pictures/BLOG_PHOTOS.jpg" width="1700" height="1000" />
Demand not only remains weak, but it became even weaker during November with under-contract listings down 3% from a month earlier and sales down a massive 45% from a year ago. After so many years of strong demand, this feels very unusual and a little unnerving. This lack of demand is far worse for re-sale homes than for brand-new homes, which are experiencing relatively brisk closings and little downward pressure in gross contract prices. However, we have no doubt that seller concessions to buyers are much higher now than they were during the first quarter. For the majority of new home closings, these concessions are not visible. Re-sale concessions will often appear in the MLS listings and we know these concessions have increased dramatically.
The big news since last month is that supply has changed direction and is now declining fairly rapidly. Almost 7% fewer active listings than a month ago mean sellers have less competition.
Mortgage interest rates have stabilized and if they were to fall meaningfully, demand might recover once the new year is well underway. However, no one can really predict the next interest rate move with any confidence.
For now, we anticipate one of the quietest Decembers on record with few contract signings, few closings, and few new sellers placing their homes on the market.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-12-16T12:57:42-07:00
2022-12-16T13:16:31-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23258
Metro Phoenix Mid Month of November 2022 Pricing Update and Forecast
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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 month.
For the monthly period ending November 15, we are currently recording a sales $/SF of $275.03 averaged for all areas and types across the ARMLS database. This is down 0.1% from the $275.36 we now measure for October 15. Our forecast range midpoint was $280.16, so this month we were again a little too optimistic. The actual result was within 1.5% of the forecast but definitely towards the bottom of our 90% confidence range. We did see higher prices during early November, but these had fizzled out by mid-November.
The average price per sq. ft. is at the level we last saw at the start of February. It is still up 2.7% from the beginning of 2022, but it looks increasingly likely that by the end of the year the market will have lost all the gains it made during the first 5 months.
On November 15 the pending listings for all areas & types show an average list $/SF of $305.90, down 0.4% from the reading for October 15. Among those pending listings, we have 99.4% normal, 0.2% in REOs, and 0.4% in pre-foreclosures. The distressed segment of the market remains insignificant.
Our mid-point forecast for the average monthly sales $/SF on December 15 is $273.87, which is 0.4% below the November 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range of $268.39 to $279.35.
This means we are expecting a small decline in average sales $/SF over the next month. The downward pricing trend appears to be persistent, but not very strong.
Source: Cromford Associates LLC and Tamboer Consulting LLC
2022-12-02T13:20:16-07:00
2022-12-14T09:33:27-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23111
Housing Markets Needed Transition
<img src="https://assets.site-static.com/userfiles/3335/image/Blog_Pictures/10th.jpg" width="1700" height="1000" />
Despite higher mortgage rates and an increase in housing supply, property values have continued to rise but at a slower pace. If mortgage rates remain elevated in the months ahead we should expect home prices to decline further and it would not be a surprise to see a sizable decline in some previously overheated markets.
Leading into 2022, home prices were growing beyond 20% per year, which was unsustainable. The current slowing in housing was necessary and healthy for the longer-term market and, it would be ideal to see home prices see single-digit gains per year, which is what many housing experts forecast.
In these uncertain times, opportunities are everywhere. New home builders are now offering attractive incentives to lure prospective buyers and there are plenty of mortgage loan programs available to help people finance a new opportunity.
Please reach out to us if you need help locating a lender that can show you what your options are in the current market.
Sources: WSJ.com, Realtor.com, Tradingeconomics.com, Guy Vetrano
2022-11-22T14:55:28-07:00
2022-11-22T14:59:31-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:23064
Tax-Deductible Donations: FAQs
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When you donate to a charity, not only will you feel good about helping others but you might be able to reduce your tax burden. If you're considering making a tax-deductible donation, make sure you read through this list of commonly asked FAQs so you have all the information.
Question: Can You Deduct Charitable Donations Without Itemizing?
Answer: Typically, you can only claim a charitable donation if you itemize your deductions, but this changed with the passage of the CARES Act. Now, you can deduct up to $300 if filing as an individual or $600 if you're married and filing jointly. This applies to monetary charitable contributions but not goods.
Question: What Do You Need to Write off a Donation?
Answer: To prove how much you contributed, you will need to keep records. However, the type of records you need to keep depends upon the donation. For tax write-offs, keep a bank record for cash donations. This can include a canceled check, credit card statement, or receipt. Generally, keep records of the date of your contribution, the amount, and the name of the organization you donated to.
Question: Can You Receive Tax Donations for Volunteering?
Answer: According to the IRS, you cannot deduct the value of your time or service but you can deduct the expenses related to volunteering for qualified organizations. These expenses must be directly connected to your volunteer work and not for anything personal. The donations can include mileage driven to attend volunteer opportunities, and you can either take the standard mileage deduction or use receipts for gas.
Before you donate to a charity, make sure you do a little research to ensure the organization is trustworthy. Then, determine what you'd like to contribute. Know that certain tax-deductible donations must adhere to specific criteria to bolster your refund. If you have additional questions, make sure you direct your queries to a tax professional.
Sources: Turbotax.intuit.com, Forbes.com, Nerdwallet.com, Guy Vetrano
2022-11-18T11:20:58-07:00
2022-11-18T12:09:13-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22855
Ways to Offset Higher Mortgage Rates
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For a number of years, we've had the benefit of the lowest mortgage rates in history. But over the last year, things have changed. The reason? Inflation is at an all-time 40-year high and The Fed had to raise the Fed Funds rate several times to slow it down. Although the Fed does not directly impact mortgage rates, inflation is what negatively affects all rates. This has caused a good amount of stir in the housing industry where lenders, buyers, and sellers have had to pivot to alternative mortgage options to offset the rapid rise in rates. We are now seeing mortgage programs we haven't seen in years, but the good news is, they can provide options to get a lower mortgage rate. We've provided a few below.
Adjustable Rate: Although most borrowers prefer a fixed mortgage rate such as a 15 or 30-year, adjustable-rate mortgages also have some great advantages. Adjustable doesn't mean your rate will adjust immediately, in fact, most types are fixed for a certain number of years before they adjust. For example, a 7-year arm has a fixed rate for the first 7 years. Most borrowers will have already refinanced or even moved before this fixed period ends so they've been able to enjoy the lower rate without an adjustment.
Rate Buydown: Mortgage rate buydowns have always been available but less common with rates as low as they've been over the last several years. In a rising rate environment, they've become popular again. Rate buydowns can happen by buying the rate down with discount points or through a seller concession where the seller agrees to pay for a portion of the buyer's closing costs which can be used to buy down the rate. Gift money can also be used to buy down the rate if applicable.
Temporary Buydown: These mortgage programs have also been around for many years but have been less necessary because rates have remained relatively low for some time. A temporary buydown such as a 3-2-1 or 2-1 buydown is a mortgage that allows the borrower to pay the mortgage at a lower interest rate for the first couple of years. For example, a 2-1 buydown allows a borrower to pay a 30-year mortgage at 2% lower for the first year, then 1% lower in the second year, and the fully amortized rate for years 3 through the remaining term of the mortgage.
Bottom line: No matter how high or low mortgage rates go, homeownership has always been part of the American dream and the future wealth plan for many. There are always programs to help people achieve this opportunity. Talking to a trusted loan officer who can provide the options available to you is a great place to start.
Source: Mortgage Market Guide, Guy Vetrano
2022-11-04T11:01:47-07:00
2022-11-04T11:33:23-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22758
How Do I Price My Home Correctly Right off the Bat?
<img src="https://assets.site-static.com/userfiles/3335/image/ABC123.jpg" width="1700" height="1000" />
The market is constantly changing and pricing a home continues to be one of the biggest challenges real estate professionals face on a daily basis. It’s not uncommon for sellers to want to price their homes higher than recommended, but that may not be the correct solution to get the home sold.
Here are 3 ways to price your home right from the beginning.
1. Don’t wait for “later” and don’t leave the “negotiation” room
You’re thinking—if it doesn’t sell for this price now, I can always reduce the price at a later date. In fact, this still leaves a sour taste in the buyer’s mouth. They immediately think that something must be “wrong” with the house. Then, if they decide to make an offer, it will be a low-ball price since they believe the seller is “highly-motivated” to sell.
Don’t limit the number of potential buyers by decreasing the visibility of your listing. For example, if you’re looking to sell your home at $300,000, but increase the listing price to $325,000 to allow room for negotiation, potential buyers searching for homes at a price range of $250,000 to $300,000 won't even know that your house is available.
Pricing a home correctly from the start helps to eliminate these types of misconceptions.
2. Do some research
Take time to do some research on your local real estate market by studying past sales and statistics for homes in your area or neighborhood. Remember that these homes should be similar to your own. Additionally, take a look at current active listings. Remember that active listings should not be confused with past sales. Active listings should be seen as your competition and it’s a good idea to be aware of what your competition is doing. This will help you better understand a true market value so you can price your home accordingly.
3. Work with an Agent
Working with an experienced agent with knowledge of the local real estate market is one of the best tools you can have. Not only will they know how to price your home, but they will also be able to provide a comparative market analysis with homes that have recently sold in your area. A good real estate agent can tell you about buyer trends and what they feel is important when trying to price and sell a home.
2022-10-28T12:23:25-07:00
2022-11-11T14:28:35-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22647
October 2022 Cromford Report Commentary with Infographics
<img src="https://assets.site-static.com/userfiles/3335/image/2022-10_Infographic.jpg" width="2400" height="3444" />
More Buyers Got Help With Closing Costs in September<br />What To Expect for Housing in the 4th Quarter
For Buyers:<br />­The price reductions keep coming. Last week when mortgage rates hit 7.0%, the Greater Phoenix housing market responded with 4,427 price reductions, 24% of all active properties in the MLS. At least 50% of those dropped their price by $12,000 or more.
September saw 1,372 closings involving seller closing cost assistance to the buyer, equating to 23% of MLS sales, with a median concession of $7,000. This is a 334% increase from last June’s count of just 316 sales involving concessions. New home sales through the MLS showed 33% with concessions, and 50% at $10,000 or more. OpenDoor, as a seller, paid concessions on 355 transactions, 77% of their sales through MLS, with 50% costing $6,000 or more.
Closing cost assistance is expected to continue to rise into the 4th quarter as mortgage rates continue to stay high and stifle demand for the time being. Aside from paying the buyer’s costs for title insurance, pre-paid taxes, insurance, lending fees, and other closing costs, seller-paid concessions can also be used to buy down a buyer’s mortgage rate, if applicable, and ease the pressure on their monthly payment.
For Sellers:<br />The 4th quarter is expected to be a test for sellers as mortgage rate hikes have reduced contract activity to levels not seen since 2008. Frankly, it’s not the best time to sell if you have a choice in the matter. Unlike in 2008 however, most sellers today do have a choice and those without an immediate need to sell have chosen to wait. This is reflected in some of the lowest counts of new listings coming on the market recorded at this time of year going back to 2001.
Fewer new listings are a ray of hope for existing properties on the market. If new listings are trickling in and new buyer contracts are trickling out, then the overall supply does not spike and causes further downward pressure on price. Thus keeping the market in a delicate balance for now.
Prices hit their peak in May, shortly after mortgage rates hit 5% and before they peaked at over 6% in June. Once that happened, buyer demand dropped dramatically and the reflection in prices started to show a trend downward. Now rates are near 7% and the sale price per square foot is down 9.6% over the course of 4 months, currently measuring less than 1% higher than January 2022 and representing the elimination of appreciation achieved from January through May.
While this is disappointing to those who purchased this year, 66% of active sellers in the MLS (new homes excluded) have owned their home for 2 years or longer. This means that even with the most recent downturn in price, the 2-year appreciation rate from September 2020 to September 2022 is still 40.3% based on per-square-foot measures, and the median sale price is $112,000 higher, indicating most sellers have enough equity to shoulder the added costs to sell in this marketplace if they must.
Finally heading into the 4th quarter, expect marketing times to increase as they typically do this time of year. The median days on market prior to the contract was 31 days last week. From October through December, active days prior to the contract are known to rise anywhere from 44 to 56 days historically, with 50% of listings going longer.
The key words for sellers in this “new” market are condition, price, concessions, and patience.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-10-21T12:03:38-07:00
2022-10-21T12:19:15-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22511
Metro Phoenix Market Summary for the Beginning of October 2022
<img src="https://assets.site-static.com/userfiles/3335/image/008.jpg" width="1700" height="1000" />
After several weeks of reasonably neutral moves, the market is starting to turn unpleasant again. This is particularly true of the last week of September, and October is off to a very poor start.
Demand has been weak for many months, but a slight improvement was observable in August and the first few weeks of September. Thirty-year fixed mortgage rates were still around 6% a month ago but are now flirting with 7%, and, as expected, this appears to have turned off enough tranche of would-be buyers. Higher rates discourage sellers and make them appreciate the loans they already have. More of them are deciding to expand or improve their current home rather than take on a new loan at a much higher rate.
Listings closed in September were a shade higher than in August, but these were mostly deals done with interest rates locked at the lower levels. With these transactions completed, the listings under contract count are now unusually low at 7,358, down almost 13% from a month earlier and more than 36% lower than this time last year.
Transaction volumes have plummeted since last year, with sales down more than 32% compared to September 2021. The current trend in contract signings means this volume is not likely to recover quickly. Instead, we are more likely to see volumes head lower in the short term.
The new supply is still well below average for the time of year but is starting to edge slightly. With contract signings getting scarcer, the inventory is beginning to build again. Although it only rose 7.4% during September, we anticipate it may increase by a higher percentage during October.
Seller confidence has been crushed over the past 5 months, and the recent trends are going to do nothing to help. This means buyers will be more confident in their bargaining position, which is negative for pricing. The monthly average $/SF for closed listings is down 9.3% from the peak of $306.1 measured on June 9. The monthly median sales price is down 7.6% from the peak of $475,000 last seen on June 29.
If mortgage rates had remained between 5% and 6%, we might have seen a slow recovery by now, but the Federal Reserve kicked the market while it was down and looks ready to kick it again. We need listings under contract to move above 8,500 to be experiencing signs of recovery. The current 7,500 level is not even enough to absorb the relatively slow arrival rate of the new supply. I recommend you closely watch this key number over the next few months.
2022-10-12T12:49:00-07:00
2022-12-16T13:11:45-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22252
September 2022 Cromford Report Commentary with Infographics
<img src="https://assets.site-static.com/userfiles/3335/image/2022-09_Infographic.jpg" width="2400" height="3444" />
32% of New Home Sales Had Concessions to Buyers
Mortgage Rate Hikes Cause Drop in Contracts Again
For Buyers:<br />The percentage of closings with seller-paid closing costs continues to grow as August and September to date range between 12-13% of total sales in Greater Phoenix, inching closer to the normal range of 25-28%. Areas on the outskirts, such as Casa Grande, Maricopa, Coolidge, and San Tan Valley in Pinal County and Wittmann, Tolleson, and Buckeye in western Maricopa County all have 20-30% of sales closing with concessions. These areas have more than their fair share of new home subdivisions that contribute to this measure as 32% of new homes that closed in the MLS in the last 6 weeks involved concessions, compared to only 11% of resale homes.
As mortgage rates remain volatile and difficult to predict, it’s important for buyers to get educated on the lending tools designed to ease the impact of dramatic rate swings. Tools such as the “Lock and Shop” option, offered by some lenders to allow buyers to lock at an acceptable rate for up to 90 days, and seller-paid permanent and temporary rate buy-down incentives designed to dull the sting of payment increases.
Buyers who are less affected by mortgage rates, but are looking for the best time to pounce on a home, should know that the 4th quarter of the year tends to be the best time for buyers seasonally. There is often a boost in supply around September and October with sellers eager to close before the end of the year. Once 2023 gets started, contract activity is expected to rise sharply from January through May. The upcoming Super Bowl, Phoenix Open, and Spring Training events are expected to generate more open house traffic and exposure for active listings.
For Sellers:<br />The last 3 weeks saw more hikes in mortgage rates, rising from recent low weekly averages of 4.99%, 5.22%, and 5.13% in early August to 5.55%, 5.66%, and 5.89% in late August and early September. A similar spike happened last June when rates spiked from an average of 5.09% to 5.81%, also within 3 weeks. The result was a 28% drop in weekly accepted contracts over the course of 4 weeks and the worst July for closings since 2007. Then rates got better, dropping to an average of 4.99% by August 4th. The buyer response was near immediate with a 25% boost in accepted contracts within a 4-week period. The latest spike has unfortunately resulted in another dramatic drop in buyer contract activity, down 14% in 2 weeks.
For now, the housing market is not for the faint of heart, only serious sellers need to apply. Gone are the days of buyers waiving appraisals and inspections, Wall Street cash buyers offering more than the asking price, and multiple offers. Over the last 6 months, the housing market has shifted away from an intense seller market to a delicate balance, the predictability of which relies on the behavior of interest rates. Until rates move below 5%, demand in the coming months will most likely remain weak, thus putting more pressure on sellers to reduce their prices, offer permanent rate buy-downs, and pay for their buyer’s closing costs. Many sellers are sitting on significant equity in their homes and while the cost to sell has increased significantly, a great majority of those who have owned their property for at least 2 years can bear that extra cost without distress and still close with a significant profit.
Measure
March 2022
September To-Date
Change Since March
Seasonally Normal Range (Established 2014-2019)
Average # of Weekly Price Reductions
480
3,690
+669%
1,800-2,300
Median Price Reduction
$10,000
$10,000
-
$5,000-$6,000
Median # of Days Active Prior to Contract
7
31
+24 Days
21-42 Days
% of Sales with Seller-Paid Closing Costs
4%
13%
+9%
25-28%
% of Sales Over Asking Price
54%
17%
-37%
12-15%
Sale Price to List Price Ratio
101.5%
97.6%
-3.9%
97-98%
2022-09-28T15:08:00-07:00
2022-09-30T14:11:40-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22246
Metro Phoenix Mid Month of September 2022 Pricing Update and Forecast
<img src="https://assets.site-static.com/userfiles/3335/image/999.jpg" width="1700" height="1000" />
For the monthly period ending September 15, we are currently recording a sales $/SF of $283.63 averaged for all areas and types across the ARMLS database. This is down 1.5% from the $287.86 we now measure for August 15. Our forecast range midpoint was $281.71, so we were slightly too pessimistic this month. The actual result was $2 of the forecast.
The average price per sq. ft. is now back down to the level we last saw in late February. It is still up 5.9% from the beginning of 2022.
On September 15 the pending listings for all areas & types show an average list $/SF of $301.78, down 1.7% from the reading for August 15. Among those pending listings, we have 99.5% normal, 0.1% in REOs, and 0.4% in pre-foreclosures. The distressed segment of the market remains tiny.
Our mid-point forecast for the average monthly sales $/SF on September 15 is $279.47, which is 1.5% below the September 15 reading. We have a 90% confidence that it will fall within ± 2% of this midpoint, i.e. in the range of $273.89 to $285.06.
The downtrend in pricing is expected to continue but at a moderate pace. The recent sharp increase in interest rates undermines the stability that was beginning to build in late August and early September. We still have a low supply compared with long-term averages, but in certain important market segments, it is definitely excessive. With demand expected to weaken there is little going on right now that is expected to reverse the downward trend.
2022-09-28T14:36:00-07:00
2022-09-30T14:52:09-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22147
Staging Your Home for Sale?
<img src="https://assets.site-static.com/userfiles/3335/image/BLOG_PHOTOSasdadasda.jpg" width="1700" height="1000" />
When your home is on the market, your goal is to make it look like the perfect home — not just for you, but for anyone. Potential buyers aren't interested in seeing the clutter and chaos of your family's life. Nor do they want you to move out, strip out the carpets and paint the walls an inoffensive beige. It's hard for buyers to imagine how they'll use a space if it is too personal or too impersonal. Arranging your home that appeals to everyone leads to faster sales at higher prices.
Here are some tips for staging your space to make your home look like anyone's dream home.
Clean thoroughly. Once you've lived in a home for a while, you stop seeing the dusty corners in the closets and basements, but buyers will notice what you don't. You want your home to look well loved and cared for by scrubbing from the ceiling to the baseboards. Be prepared for buyers to ask about storage spaces, like the attic and garage, and don't neglect those often-forgotten spaces.
Declutter. Everyone has items they need only occasionally or seasonally, like holiday decorations, luggage, seasonal clothing, and bedding. If you don't need these items before you move, consider renting a storage unit and storing them offsite to make your home's storage spaces look more prominent.
Depersonalize. Family photos, your children's softball trophies, your pets' toys, and equipment from your hobbies keep buyers from thinking of the space as their own. Put them all away before potential buyers come.
Make the most of the space. Once you've decluttered, think about how else you can use spaces for storage or hobbies. Rearrange your furniture to make your home look open, airy, and walkable.
Let the light in. Adding more light fixtures and removing dark curtains can make your space look larger and cleaner.<br />Home staging doesn't have to be an elaborate operation. It doesn't take much time or money, but it can make your home sell quickly and for more money.
If you need ideas for how to stage your space, call us today; we'd be happy to help.
2022-09-23T00:00:00-07:00
2022-09-23T15:21:08-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:22034
Buying a House While Selling Another One?
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Everyone talks about the steep learning curve of buying your first home, and they're right too. But your first purchase is also the easiest home purchase you'll ever make. After that, you need to not only find a new home but also find a buyer for your current home. Most confusingly of all, if you're like many people, most of your wealth is tied up in your home. Does that mean you can't get preapproved for a mortgage until you've sold your home? Where do you live in the meantime?
Fortunately, you're not the first or last person to face the same situation. Here are a few options for people who are buying one home while selling another:
Buying with financing
If you need your home equity to purchase a home, then you'll need financing to buy before you sell. A bridge loan is a popular option. It's a high-interest loan intended to help you fund your down payment and other costs that you'll repay when you make your sale. However, because of the high-interest rate, a bridge loan is a bet on a fast sale.
The other major financing option is a home equity loan, which creates a lien on your property. In other words, the bank has the right to repossess your home if you can't pay it back. Reducing the equity in your home and simultaneously increasing your debt won't look good on a mortgage application.
Selling with a delay
The most foolproof way to get approved for a mortgage is to have a buyer lined up for your house, but that's where the timing gets tricky. Your buyer is already ready to move and won't want to wait for you to find a new place. However, you may be able to get the buyer to agree to a rent-back clause, which is a clause in the home sale contract whereby the buyer agrees to let you rent your old home from them for a short period while you look for your new place. Just beware, not all buyers will be on board.
The other option is to fudge the closing date by dragging your feet. Contract reviews and home appraisals take time anyway, so buyers may agree to a relatively long closing period. If you still don't find a new place by the deadline you've set, then you may end up storing some of your things and staying in a hotel for a little while.
The contingency clause
You may make the purchase of your new home contingent on the sale of your old one. You will then have to find a buyer within a specified time frame or the deal is moot. You'll still be responsible for the down payment, but you'll get it back if the sale falls through. Unfortunately, this isn't a very good deal for the seller, who may be trying to manage the timing of a home purchase as well. You may have to show that your home is priced competitively to persuade the seller to accept your purchase offer.
If you're trying to make a home sale and a home purchase at the same time, the best option for you will depend on your circumstances. Contact a real estate agent today to talk through your options.
2022-09-16T11:41:00-07:00
2022-09-23T15:21:38-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21875
Metro Phoenix Market Summary for the Beginning of September 2022
<img src="https://assets.site-static.com/userfiles/3335/image/BLOG_PHOTOS1111.png" width="1700" height="1000" />
August was a pleasant relief after 2 awful months in June and July. The market still moved in favor of buyers but the rate of change dropped significantly, and a few indicators managed to turn positive. We haven't been able to say that for quite a while.
The supply of active listings grew during the month but only by 4.1%, which is a lot better for sellers than the 24.6% we reported last month. By the month's end, the growth rate of active listings was almost zero. This is largely because we now see a low number of new listings. This is a significant change because June and July gave us an unusually high number of new listings.
Demand has also shown a few tentative signs of growth. This is again a significant improvement on large declines month to month. Demand is still paltry compared to a year ago, but it is slightly better now than <br />it was in the previous month. You can see this in the monthly unit sales, pending listings, and under-contract listings. All are slightly higher than a month ago.
Clearly desiring to reduce its inventory, iBuyer Opendoor has been cutting its list prices fast and furiously. This attracted buyers and the number of listings under contract with Opendoor. It has jumped from just 137 at the start of August to 477 at the beginning of September. This demonstrates that low prices are solid motivators for buyers (well, duh!). However, it puts a lot of pressure on sellers competing against Opendoor. As these contracts close escrow, it leads us to expect pretty low average sales pricing in September. The drive to sell and sell quickly is what we saw from the banks during the foreclosure wave. The bank-owned inventory is tiny now, but iBuyer inventory is very large. A strong motivation to reduce it will drive pricing lower. And lower than it would go if iBuyers were not in the market.
The second largest iBuyer OfferPad is not following the same strategy, probably because the last thing they want is to cause prices to drop even further. However, their sales pipeline is weaker as a result, with only 42 homes under contract at the beginning of September, no higher than the previous month. You can have your cake or eat it, not both.
<br />The market is still suffering the effects of unusually low affordability. Interest rates are much higher than they were at the start of the year, and even if prices drop to the level they had in January, homes will still be less affordable due to these higher rates. The future direction of interest rates is notoriously hard to predict. The last 2 months saw a decline in average 30-year fixed mortgage rates from 5.52% to 5.22% (as reported by Freddie Mac) and a clear drop in asking prices. You could argue that the slight rise in demand we have witnessed is a weak response to these factors. However, at least it did respond. The slight increase in buyer enthusiasm could soon dissipate if interest rates rise again.
Ominously we have seen a significant rise in rates over the past week. If they stay at this level, demand will likely quickly fade again.<br />Another factor in demand is that coming from investors looking to buy and rent or fix and flip.
All in all, August was not too bad, but it might be just a temporary respite due to a slight uptick in demand which could quickly fade. The lull in new supply may prove to be more long-lasting and, therefore, more significant. We will have to wait and see.
2022-09-08T10:43:00-07:00
2022-10-12T12:53:39-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:20788
Not Sure How to Jump Start the Home-Buying Process?
<img src="https://assets.site-static.com/userfiles/3335/image/BLOG_PHOTOS.jpg" width="1700" height="1000" style="display: block; margin-left: auto; margin-right: auto;" />
Here are five important questions to ask before you buy.
1. How much house do I qualify for?
Getting prequalified for a mortgage loan tells you the maximum amount you can borrow. It also shows sellers you can afford to close the deal. Don’t automatically decide you’ll borrow the maximum you’re offered. Consider your current and future budgets and then decide how much you actually want to borrow.
2. How much house do I need?
Buy only much house as you need and can afford. The larger the home, the more you will pay to insure, heat, and cool it. Don't forget to plan for the cost of repairs and maintenance, which, depending on the age and condition of the house, could be 1 percent to 3 percent of its value per year.<br />Think about the future, too. Will you need rooms for children or aging parents in the future?
3. Is the house worth the asking price?
I’ll show you data from recent sales of comparable homes. We’ll look at what people have paid for properties of similar size and amenities near the home you want to buy. That will help you figure out how much to pay without paying too much.
4. What problems does the house have that could cost me money?
Sellers are supposed to disclose any known problems. But even honest sellers may be unaware of latent flaws in their homes. I’ll help you find a home inspector to examine the home's major systems and their structure from the roof to the foundation. He’ll tell you what needs repair or replacement.<br />If the home you want to buy has a pool, septic system, or well water, we’ll have a professional look at those, too. A pest inspector will check for termites and other insects that cause costly damage.
5. Do I have enough money for closing costs?
I can explain the local closing costs so you know how much money you’ll need to close the sale of your new home. We can go over the Good Faith Estimate from your lender and look at other expenses like property taxes and community association fees.
Thinking of buying a home? Contact us and together we'll find the answers to all five of these questions.
2022-08-26T00:00:00-07:00
2022-09-02T11:51:20-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21394
Down Payment Assistance Programs
<img src="https://assets.site-static.com/userfiles/3335/image/3oi4u33oiuesd.jpg" width="1700" height="1000" style="display: block; margin-left: auto; margin-right: auto;" />Many first-time homebuyers may shy away from homeownership because of down payment concerns. However, there are ways to get the down payment needed to buy a home without coming out of pocket with the necessary funds. Many mortgage lenders offer first-time homebuyer programs that require very little money down and the rest can be obtained through down payment assistant programs. There are special requirements that borrowers will need to meet before applying.
Who can qualify:
First-time homebuyers.
Previous homeowners who haven't owned a home in more than 3 years.
Borrowers with low to moderate incomes.
Borrowers who complete a home-buyer education course.
Adhere to local purchase limits and geographic areas.
Types of down payment assistance programs:
Grants. Amounts will vary from state to state and borrower however, the money granted does not need to be paid back.
Loans. Qualified borrowers can use these loans for the down payment which is paid back monthly along with the first mortgage payment.
Forgivable Loans. These loans have a term of 5 to 20 years depending on the lender and are forgiven only if the borrower still lives in the home after the required term expires. They don't need to be paid back unless you sell, move, or refinance earlier than the agreed term.
Deferred Loans. Loans that don't need to be paid back until you sell, move or refinance.
Bottom line: The dream of homeownership is obtainable. To see about down-payment assistant programs in your area, search your county or state websites to see what types of grants they offer. Additionally, your loan officer will be able to help you with mortgage down-payment programs they may offer.
Source: Mortgage Market Guide, NerdWallet
2022-08-19T11:48:00-07:00
2022-09-02T12:00:35-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21392
How Interest Rates Affect You
<img src="https://assets.site-static.com/userfiles/3335/image/11181818181.jpg" width="1700" height="1000" style="display: block; margin-left: auto; margin-right: auto;" />
Now that the Federal Reserve has increased interest rates, you may wonder, how does this impact your finances? Interest rates affect your wallet in various ways, including repaying loans, return on your stocks or bonds, and the ability to buy or sell a house.
If you have short-term debt like credit card, auto, or home equity lines of credit, those rates have moved higher since the Fed hiked rates which means you'll pay more money towards interest on this debt. If you have an adjustable-rate mortgage, you may see an increase in your mortgage payments as well. If you are feeling a burden with the higher rates, consider speaking with a mortgage or wealth manager professional and explore options that may relieve some of that burden.
Bond markets suffered the worst first half of a year in a very long time, meaning that prices have declined, pushing rates higher. If you own bonds, consult with your investment professional to see how to position any fixed-income investments going forward.
During periods of high-interest rates and high inflation, many consumers are feeling pinched. If you find yourself as one of those individuals struggling to keep up with the cost of daily essentials and energy while paying off debt, consider seeking a professional debt advisor to explore options to lower your debt burden.
Sources: Housingwire.com, Investopedia.com, 360financialliteracy.org, Bankrate.com, Nerdwallet.com, Guy R. Vetrano
2022-08-19T00:00:00-07:00
2022-08-19T11:42:29-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21530
August 2022 Cromford Report Commentary with Infographics
<img src="https://assets.site-static.com/userfiles/3335/image/2022-08_Infographic_1.jpg" width="2400" height="3444" />
Seller-Paid Closing Cost Assistance Coming Back<br />This Price Point is Declining the Fastest in Greater Phoenix
For Buyers:<br />The good news for buyers, the number of closings with seller-paid closing costs rose 27% in July compared to June equating to 7% of all closings for the month. That may not sound like much, but that’s the highest it’s been since March 2021. Prior to 2020, the established baseline for seller-paid closing cost assistance averaged 25-28% of MLS sales and over the past 15 months, the average has been just 3-4.5%. The increase is expected to continue as large cash-based investors have pulled back their acquisitions, leaving many sellers to cater to normal buyers once again. For most of 2021 and the first part of 2022, buyers had very little time to decide on a property before it went under contract. Last May, half of all homes that went under contract were on the market for only 7 days or less. This month homes are on the market a median of 21 days prior to an accepted contract, giving buyers more breathing room for a second showing and less pressure to make a decision on the spot. More evidence of a growing buyer’s advantage, the percentage of properties closing over list price has declined from 58% in April to 24% August-to-date and continues to decline. The median amount over the list has also declined from $20,000 to $7,000. As the current balanced market continues, expect to see this measure drop to just 10%-15% closing over the list.
For Sellers:<br />The last week in July saw 4,172 price reductions on Greater Phoenix listings, equating to 26% of active supply for that week. The median price reduction was $15,000 and 78% were over $5,000. The peak of price for 2022 so far was May, since then the median sales price has declined 6.25% from $480K to $450K. That’s an average of 2% per month* thus far, however, the downward trend has not been consistent across all price ranges; a detail not reflected in the median sale price measure. To analyze the price response by sales price range, we use the sales price per square foot. In May, the peak sales price per square foot overall was $305.99, August-to-date is $289.89, a 5.3% drop averaging 1.8% per month*. This is a similar result to the change in the median sale price, but by price range, the distribution looks like this:
<br />Price Range
May 2022 Measure
August-to-Date Measure
% Total Change since May
Average % Change per Month since May*
Up to $300K
$213.89
$212.50
-0.6%
-0.2%
$300K-$500K
$261.18
$257.36
-1.5%
-0.5%
$500K-$800K
$287.30
$277.15
-3.5%
-1.2%
$800K-$1M
$333.11
$327.41
-1.7%
-0.6%
$1M-$1.5M
$384.36
$347.26
-9.7%
-3.2%
Over $1.5M
$583.57
$586.60
+0.5%
+0.2%
The table shows that properties between $1M-$1.5M have seen the strongest decline since May, with an average decline of 3.2% per month. This is the only price range above the overall average decline of 1.8%. The runner-up is the $500K-$800K with an average decline of 1.2% per month. All other price points are within 0.6% of May’s average 3 months ago as of August 9th.
*Not a calendar month
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-08-15T00:00:00-07:00
2022-08-19T10:58:39-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21376
Metro Phoenix Market Summary for the Beginning of August 2022
<img src="https://assets.site-static.com/userfiles/3335/image/BLOG_PHOTOS.png" width="1700" height="1000" style="display: block; margin-left: auto; margin-right: auto;" />
We described June as dismal but July was worse. There has been a slight let-up in the supply of new listings, but they are still arriving much faster than demand can cope with. This means an ever-increasing number of active listings - the total without a contract having grown another 25% in the last month. This is for the market as a whole, but the high-end is not seeing the same increase. Areas like Paradise Valley, Fountain Hills, far North Scottsdale, Carefree, and Cave Creek still have fairly modest numbers of active listings. Other modestly-priced areas like Buckeye, Maricopa, Florence, and Queen Creek (including San Tan Valley) already have more active listings than their long-term average.
The real downer is the demand. Closed sales dropped 24% compared with June and they are almost 33% lower than last year. This is obviously bad news for those whose incomes are derived from closings, such as real estate agents, title company staff, and mortgage brokers. Listings under contract slipped again, down more than 8% from last month, meaning that we do not expect much joy from August numbers this time next month. Even in the high-end of the market, demand is low, so the modest number of active listings is still plenty.
Prices are reacting much more quickly to the poor market conditions than we expected. In 2005 and 2006, it took a long time for prices to change direction. In 2022, the change happened almost overnight. This is probably because people are primed to believe price drops are likely whereas in 2005 most people still believed that home prices never go down. Whatever the reason, sellers in 2022 have been willing to make quick and frequent cuts in their asking prices and accept offers well below those. The average percentage of the list achieved dropped from 99.81% on July 1 to 98.74% on August 1 and the trend is strongly downward.
Further falls in price are likely until a recovery in demand takes place. There is very little distress in the market with foreclosures still extremely low. Pressures to sell at lower prices are coming from the sellers themselves. Low demand means they are competing with other sellers and a lower price is an obvious tool for them.
Demand from iBuyers has remained surprisingly strong for the last few months and they have built up large inventories. These have to be a concern to them, so we expect far fewer iBuyer purchases and much more effort focused on selling their existing stock of homes. These two factors will unfortunately compound the problem of too little demand and too much supply, driving prices lower. Many iBuyer homes are already being closed at sale prices lower than their purchase prices. This will probably become commonplace in the next few months.
Institutional investors have mostly continued their homes buying sprees, but in the July numbers, we are seeing clear signs of their enthusiasm waning. If more of them stop buying this will cause further falls in demand measures. If they also start to dispose of any of their rental properties, this might add to the supply.
The listing success rate dropped from over 91% on May 1 to under 73% on August 1. This is a crucial statistic and it is in free fall. The long-term average stands at 67.5% and it looks as though we will drop below this percentage during August. If more than 1 out of 3 listings fail to sell, it creates an atmosphere of worry that is hard to escape. We are nowhere near the dreadful 20.4% that we experienced in January 2008, but the listing success rate is a reliable and crucial indicator that is flashing red. We need this to stabilize and start increasing if we are to be optimistic in our outlook. We recommend watching this number closely.
All in all, there are few reasons to expect an improvement in market conditions just around the corner. A large drop in interest rates would almost certainly help, but this is not something that is widely expected at the moment.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-08-04T13:36:00-07:00
2022-09-08T10:52:48-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21246
Metro Phoenix Mid Month of July 2022 Pricing Update and Forecast
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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 month.
For the monthly period ending July 15, we are currently recording a sales $/SF of $291.74 averaged for all areas and types across the ARMLS database. This is down a massive 4.2% from the $304.50 we now measure for June 15. Our forecast range mid-point was $301.86, so although we predicted a fall, we were still far too optimistic. What really defeated our forecasting model is that sold prices went from 101% of list to 99.3% of list in just a single month. We have never experienced such a huge swing in such a short time before.
The average price per sq. ft. is now back down to the level we last saw in mid-April. It is still up 8.9% from the beginning of 2022.
On July 15 the pending listings for all areas & types show an average list $/SF of $313.62, up 1.4% from the reading for June 15. Among those pending listings, we have 99.5% normal, 0.04% in REOs, and 0.5% in pre-foreclosures. Although the distressed segment of the market remains tiny, the number of pre-foreclosures has been growing over the last 4 months. Very few homes are going back to the lender, as any foreclosure auctions are almost invariably successful.
Our mid-point forecast for the average monthly sales $/SF on August 15 is $295.88, which is 1.4% above the July 15 reading. We have a 90% confidence that it will fall within ± 2% of this midpoint, i.e. in the range of $289.96 to $301.80.
The model is predicting something of a bounce back from the huge fall we saw over the last 30 days. This expected rise is caused by the relatively strong pricing we see in pending listings. If we look at all listings under contract (including UCB and CCBS), then the average is currently $312.91, up from $310.83 last month. Since most closed listings will be drawn from the pool of under-contract listings, we expect some stabilization in pricing after the massive fall between June and July. However, the fact that we failed to forecast last month's massive drop undermines our confidence more than a little.
Demand continues to weaken while supply continues to grow. Despite the forecast for a bounce over the next 31 days, the underlying trend for prices is still weak and it is likely that a downward trend will reassert itself in the last 4 months of the year.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-07-26T00:00:00-07:00
2022-08-16T11:35:56-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21070
3 Ways to Boost Your Credit Scores
<img src="https://assets.site-static.com/userfiles/3335/image/21070-bp32.jpg" width="560" height="330" /><br />Although it's not necessary to have outstanding credit to get a mortgage, it does help to have your credit scores on the higher side, especially with mortgage rates on the upswing. The higher your credit score, the better your chances of getting a mortgage with a lower interest rate. If you're looking to boost your credit scores, we've provided three ways to get you started in that direction. Remember, everyone's credit history is unique so results and timeframes will vary from person to person.
Lower Utilization Ratios. Utilization ratios are calculations credit agencies use to measure your credit scores. For example, if you have a credit card with a balance of $3000 and a credit limit of $4000, the debt is .75% of the credit limit on that card. The higher the ratio, the more it will negatively affect your credit scores. It's always best to pay your credit card debt off completely every month however if you're not able to do so, you'd be better off transferring that debt to credit cards with higher credit limits or asking the creditor to raise your limit to get your utilization scores closer to .30%.
Expand Credit Variety. Many borrowers may have one or two credit cards but not enough of a mix such as credit cards, auto loans, personal loans, etc. If you need to add more variety to your credit history, there is good news. Credit agencies have the ability to report debts that would not typically show on your credit reports such as rent payments, private loans, or banking history. This can be an ideal way to broaden your credit profile and help boost your scores.
Dispute Errors. It's a good idea to check your credit yearly to be sure no errors are on your credit reports. Errors can bring down your scores significantly depending on when and how much is showing in arrears. You'll want to resolve these errors and make sure they are completely removed by the creditors. Your loan officer can help you with how to get this in motion.
Bottom line. Although we've only named three, there are several more ways to boost your credit scores. If you are looking for a mortgage and want to start improving your credit scores, start by pulling a credit report and then look for options to meet your needs. You may want to consult with your loan officer who can guide you through the process.
Source: Mortgage Market Guide, Guy Vetrano
2022-07-22T00:00:00-07:00
2022-08-16T11:46:16-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:21069
Metro Phoenix Seller Market is Officially Over! Here’s What to Expect: How Some Sellers Are Winning Against Interest Rates
<img src="https://assets.site-static.com/userfiles/3335/image/21069-blog-photos.png" width="450" height="265" />
For Buyers:
Welcome to a balanced market*, how quickly the tables have turned! While seller markets are ideal for the not-so-perfect home, balanced markets are ideal for the not-so-perfect buyer. This means that buyers who have been recently rejected due to lower down payments, non-conventional financing, or need for closing cost assistance will find sellers are now willing to work with them in this new environment. Supply across all price points is up, with 53% of active listings added by new home developers and investors. Builders especially are dropping prices and offering unique buyer incentives to compete. Experts don’t know how long this period will last as it depends on what interest rates do over the next few months, but home buying just became fun again.
*The market is considered in balance when the contract ratio is between 30-60. Calculated by dividing what’s under contract (8,680) by what’s active (15,033) and multiplying by 100, the contract ratio as of July 7th, 2022 is 58.
For Sellers:
The proverbial “Dump Your Junk” season is over, that loving phrase the industry uses when demand is significantly higher than supply and even the smelliest dilapidated property gets multiple offers over asking price. That is no longer the case as of this writing. Get ready for longer marketing times, multiple price reductions, Realtor® tours, price opinions, staging, repairs, seller-paid closing costs, and price negotiations. The extreme seller market is over.<br />It’s no surprise that the market has been shifting since February, with the primary influence being large mortgage rate increases. However, over the past 6 weeks mortgage rates have been particularly volatile, fluctuating from 5.1% to 5.8% within 3 weeks only to drop to 5.3% over the next 2 weeks, and then back up to 5.8% a week later. History tells us that buyers do not like sharp, rapid fluctuations in mortgage rates. It causes buying activity to freeze until a level of stability and certainty can be achieved. This market is no different, contract activity has dropped 28% in the last 6 weeks. The number of listings under contract at this time of year should be around 10,000, putting today’s count of 8,680 well below normal.<br />In the meantime, a 220% increase in supply over the past 15 weeks has put pressure on sellers to compete. With cash buyers offering significantly below list price recently, attention is back on traditional buyers, many of whom have been priced out of the market due to affordability. Price reductions have gone up 500% since March, but have done little to increase demand as mortgage rate increases offset their effect and continue to keep payments high.<br />But not all is lost! Cue the interest rate buy-down, a seller concession tool that has been collecting dust, unneeded, for well over a decade. The reason price reductions have had little effect on affordability is a $10,000 price reduction only saves a buyer $53 on their mortgage payment at 5.8%. However, for a similar cost a seller can buy down a buyer’s mortgage rate and save them $100’s on their monthly mortgage payment, either permanently or temporarily depending on the plan; thus putting their property at a higher competitive advantage than just a straight up price reduction.
Price reduction vs. rate buy-down options:
<br />Median Price<br />$475,000, 10% Down<br />5.8%*
Full Price<br />No Concessions
Price<br />Reduction
Permanent<br />Buy-down<br />to 4.8%*
2/1 Buy-down<br />to 3.8% for 1st year<br />then 4.8% for 2nd Year*
Estimated Cost to Seller
$0
$15,000
$12,825**
$9,405***
Estimated P&I Payment
$2,508
$2,429
$2,243
$1,992
Monthly Savings to Buyer
$0
$79
$265
$514
*Conditions apply. Talk to a lender.
**Approx. 3% of loan
***Approx. 2.2% of loan
<img src="https://assets.site-static.com/userfiles/3335/image/2022-07_Infographic.jpg" width="2400" height="3444" style="display: block; margin-left: auto; margin-right: auto;" />
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report<br />©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-07-15T00:00:00-07:00
2022-08-16T11:48:02-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:20982
How Owning a Home Can Protect You Against Inflation
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Looking back to the 1960s, inflation was a little more than 1%. However, shortly after that, inflation numbers began to creep upward with the number reaching a whopping 14% in 1980. With inflation numbers today inching forward, there's some concern among investors that the country might reach these high numbers again.
When inflation numbers rise, the cost of goods also increases. As a consumer, you're likely aware of how the increase in prices affects your daily life as you pay more for groceries and gas. These rising costs might make you re-evaluate large purchases you have planned, including buying a home.
Before you put purchasing a home on the back burner due to inflation costs, there are several benefits to buying a home that you should consider. The main one is that by purchasing a home, you stabilize your biggest monthly expense, which is your housing cost.
By securing a fixed-rate mortgage, you secure the monthly mortgage payment for the length of your loan, which can typically last between 15 to 30 years. Even though other prices might rise due to inflation, your housing payment remains consistent as long as you have a fixed-rate mortgage.
During inflationary times, it's important to invest your money in an asset that traditionally increases in value over time. The good news is that experts predict that home prices will only increase due to supply and demand, so your property should appreciate in value.
If you're ready to purchase a home, you might want to consider making the move. For more assistance in finding your dream home, reach out to a trusted real estate professional.
Sources: Reliant-mgmt.com, Forbes.com, Keepingcurrentmatters.com, Guy R. Vetrano
2022-07-08T00:00:00-07:00
2022-08-16T11:44:09-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:20937
Metro Phoenix Market Summary for the Beginning of July 2022
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The rise in supply has been faster than ever seen before. Excluding UCB and CCBS listings, we recorded active listings up 53% in a single month and up 153% compared to this time last year. It is not the absolute numbers of listings that are records, but the percentage changes are far above anything we have previously experienced.
The change in demand was equally stunning. Listings under contract dropped 16% from last month and are down 24% compared with a year ago. Monthly sales are down 21% from June 2021 and down 8% compared with May 2022. These are normally fairly stable numbers that take their time to rise or fall.
When a housing cycle changes from positive to negative, we normally go from euphoria to uneasiness for a few months, followed by several months of denial and then several more months of pessimism before we get to the panic phase. This is what played out in 2005 and 2006. But in 2022 we seem to have taken just a week or two to skip through each of these steps and gone from euphoria to panic in no more than 10 weeks. After the first round of sharp rises in mortgage rates, everyone was so willing to believe that the market was about to fall that it became a self-fulfilling prophecy. Those who owned houses that they did not occupy themselves decided that 2Q 2022 would be an excellent time to sell them, while prices were near their peak. At the same time, buyers dropped out at an unprecedented rate, unable to afford the new monthly payment or unwilling to buy a home at what looks increasingly like a top in the market. In isolation, both of these decisions look eminently sensible. In combination they caused the market to hit the brakes so hard it skidded off the road.
It is predominantly the wealthy who are involved in the market at the moment. Most ordinary buyers are priced out. Most ordinary homeowners are not selling their only residence because they would have to pay much higher interest on any new loan associated with wherever they move to. But there are many wealthy people and companies who own multiple homes and who are trying to offload them urgently to maximize their profits. Home builders have gone from rationing their product only a few months ago to needing incentives such as mortgage rate buy-downs to coax buyers to sign up or keep their existing orders. The speed of the change is gut-wrenching.
June 25 saw the highest ever weekly total of new listings being added to ARMLS (3,169). A week later things have calmed down a bit, but this may just be because of Independence Day. The week before Independence Day tends to be relatively quiet every year. We will have to wait until the week after to know if the flood of new listings has really peaked. We presume that the supply of wealthy sellers will eventually die down, which would herald a return to something that more resembles normality.
As for demand, the weakening trend seems to have longer to run. Mortgage rates could go higher still and stay high for a long time, at least until the Federal Reserve has a change of heart. iBuyers have continued to buy homes, but how long can they afford to let their inventory grow when their sales are declining sharply? iBuyers create 2 transactions when they act as an intermediary, so their presence in the market makes transaction volumes artificially high. If they slow or stop their purchases, demand measurements will take another step down.
We do not pretend to know the future and the market is moving so quickly, even a week makes for a dramatic shift. Those who measure monthly are almost flying blind. All we can do is measure daily and report to you any significant new trends in the daily observations section.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-07-06T11:29:00-07:00
2022-09-08T10:52:55-07:00
Manifest Dream Team
tag:manifestdreamteam.com,2012-09-20:20659
Metro Phoenix Mid Month of June 2022 Pricing Update and Forecast
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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 month.
For the monthly period ending June 15, we are currently recording sales $/SF of $304.77 averaged for all areas and types across the ARMLS database. This is down a statistically irrelevant 2 cents from the $304.79 we now measure for May 15. Our forecast range midpoint was $307.56, so we were too optimistic but still within the 90% confidence range. After a huge jump during the prior month, a pause is to be expected. However, the absence of any home price appreciation over the last month may turn out to be more significant than just a pause. Pricing has increased 13.6% since the start of the year, but it would not be surprising if that is all increase we are going to see.
On June 15 the pending listings for all areas & types show an average list $/SF of $309.24, down 1.0% from the reading for May 15. Among those pending listings, we have 99.3% normal, 0.1% in REOs, and 0.6% in pre-foreclosures. Although the distressed segment of the market remains tiny, the number of pre-foreclosures has been growing over the last 3 months. Very few homes are going back to the lender, as any foreclosure auctions are almost invariably successful.
Our mid-point forecast for the average monthly sales $/SF on July 15 is $301.86, which is 1.0% below the June 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $295.82 to $307.90.
Further increases in mortgage rates are kicking a big hole in demand while supply continues to grow extremely fast. It would appear that some owners who do not need their property as a home for themselves are timing the market and prefer to be in cash right now. Sales prices are finally expected to reflect the shift by stepping backward. The predicted fall is small so far and coincides with a period when prices usually drift lower each year.
Uncertainty is compounded by the unusual speed of change. The market is shifting faster than we have seen at any time in the last 22 years.
©2022 Cromford Associates LLC and Tamboer Consulting LLC
2022-06-17T10:47:00-07:00
2022-08-16T11:40:39-07:00
Manifest Dream Team