July 2019 Market Update

Contracts Up 19% between $250-600K
Rehab Sales Rebound

2019-07 Infographic

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For Buyers:

New listings activated in June were down 10.0% compared to last June and overall supply has  dropped 9.5% in 4 weeks, putting it below last year’s count for the first time all year. Buyers have gotten used to very little supply under $200K but now they’re feeling it hard between $200K-$250K, where new listings were down a whopping 15.1%. Trying to fill the gap, brand new townhome/condo sales have been strongest between $200K-$250K with a median size of  1,362sf. The top two builders that have sold the highest number of condos in this price range  this year are Lennar in Gilbert and DR Horton in Mesa. Other competing developers building condos between $200K-$250K include Bela Flor in Mesa and Maracay in Goodyear. In Mesa, new condos in this price range have been extremely competitive with resale with an average price per square foot of $155.70 versus $157.47 for resale.

For Sellers:

Listings in escrow are up 7.4% and have soared nearly 19% over last year between $250K and  $600K. Homeowners with property valued under $250K are inundated with offers from investors as rehab sales have rebounded strongly over the past few months. Making up for lost time  after being down 4.2% in the first quarter, successful flip sales have now outperformed 2018 by 4.8%. The median sale price for a flipped home in May was $245K, up 8.4%, and the average size sold was 1,710sf.  The median gross gain for a traditional flip investor was $53K between their acquisition and sale price.  iBuyer companies such as OpenDoor, OfferPad and Zillow showed a median gross gain of just $9,900, however that doesn’t account for significant service charges to the sellers during escrow.  What does this mean to you?

  • The data above reveals the fallacy of the iBuyer proposition:  iBuyer’s make very little on the difference between what they pay and what they sell for.  They make their money on the “significant service charges” they tack on to the sale once in escrow.  These charges typically represent anywhere from 20-30% and basically amount to equity stripping from the Seller.
  • Rehab/Flip projects are back in a big way!  This is good news for us and you.  As many of you know we partner with many clients on investment projects, and the above data correlates with what we are seeing on the ground.  If you have an interest in doing a rehab project with us you can learn more here.
  • Are you what we call an “Accidental Landlord?”  Turn that rental you really don’t want into a rehab project and put cash in your pocket.  Call us today and we can handle everything from rehab to sale!
  • Buyer’s at price points above >$250K are very active in the market.  If you have a home in this price range this is great news!  Give us a call today to learn more about leveraging this market dynamic.

Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area and are not sure where to turn we can help! Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more. Visit our blog at NextHome Valleywide for a monthly Phoenix Market Update.

Serious About Selling?

Serious About Selling?

We all want to be good neighbors. But when it comes to selling your home, it’s not just about “keeping up with the Joneses.” It’s about outshining them at every opportunity!

If you’re looking to sell your home fast and for the most money possible, you’ll need a strategy to set it apart from all the other listings competing for buyers in your area. That’s why we’ve outlined our proven, five-step plan for serious sellers. 

Use these five tactics to help your listing get noticed, win over buyers, and net a higher sales price than your neighbors!

STEP 1: Stage Your Home to Show Its Full Potential

The average seller will do the minimum to prepare their home for market: clean and declutter, fix anything that’s broken, mow the lawn. And while those tasks are essential, today’s buyers want more than just a clean house and tidy yard. When they dream of buying a new home, they envision a designer house with modern finishes. Help them see your property’s full potential by staging it.

Home staging is one of the hottest trends in real estate—because it works! According to the Real Estate Staging Association, homes that are staged spend 73% less time on the market.

So what exactly is staging? In a broad sense, staging is the act of preparing your home for market. The goal is to highlight your home’s strengths, minimize any deficiencies, and help buyers envision themselves living in the space. When staging a home, you might rearrange the furniture to make a room feel larger or remove heavy curtains to make it appear brighter.

Some sellers choose to hire a professional home stager, who has specialized training and experience, to maximize the appeal of their home to the largest number of potential buyers. Others may opt to do it themselves with guidance from their agent.  Whichever route you choose, the key is to focus on those items that will bring the biggest return on investment.

We can help you determine the appropriate budget and effort required to push your home ahead of the competition in your neighborhood. The good news is, an investment in staging pays off. A 2018 survey found that 85% of staged homes sold for 6-25% more than their non-staged neighbors homes.2

STEP 2: Draw Buyers in with High-Quality Listing Photos

You only have one chance to make a first impression with potential buyers. And many buyers will view photos of a listing before they decide whether or not to visit it in person. In fact, 87% of buyers find photos “very useful” in their home search.3 Poor-quality or amateur-looking listing photos could keep buyers from ever stepping through your door. 

Since good photography plays such an important role in getting your property noticed, we only work with the top local professionals to photograph our listings. But we don’t just rely on their photography skills when it comes to showcasing your home.

We go the extra mile to ensure your listing photos showcase the true essence of your home. We always help the photographer capture the best angles and lighting, and to let them know about unique or compelling selling features that they should photograph. The extra effort pays off in the end. In fact, listings with high-quality photography sell 32% faster than the competition … and often for more money!4

STEP 3: Price It Properly From the Start

Even in a strong real estate market, there are homes that will sit unsold for months on end. This can be the “kiss of death” in real estate, as buyers tend to imagine that there must be something wrong with the property, even if it’s not the case.  In fact, even in our strong market almost 30% of homes leave the market unsold!

But why are those houses still on the market in the first place? It is often because they are priced too high, or often, they are priced too high after skipping or ignoring Step 1!

Every buyer has a budget. And most will be viewing listings within a particular price range. If your property is overpriced, it can’t properly compete with the other houses they’re viewing that are priced correctly. Which means it’ll sit on the market until you’re eventually forced to drop the price.

Alternatively, if you price your home aggressively, it can be among the nicest homes that buyers have seen within their budget. This can lead to emotionally-attached buyers, who are often willing to pay a premium or settle for fewer seller concessions. And in certain markets, it can lead to a multiple-offer situation, or bidding war. The end result? More money in your pocket.

We can help you determine the ideal listing price for your home in the current market. Pricing it properly in the beginning is the best way to ensure a fast and profitable sale.

STEP 4: Put on a Good Show at Each Showing

Once buyers are interested enough to schedule a visit, it’s crucial that you put on a good show at each showing. 

The first step is to make your home readily available—and often on short notice—for buyers to see it. A missed showing is a missed opportunity to sell your home. If you set too many restrictions on when it’s available to view, busy buyers will simply skip over your listing and move on to the next one.

Part of making your home available means keeping it relatively show-ready as long as it’s on the market. Most of us don’t live picture-perfect lives, and our homes reflect the day-to-day reality of our busy (and sometimes messy) families. But a little extra effort spent keeping your home clean, fresh-smelling, and ready for buyers will help it sell faster … which means you can get back to your regular routine as quickly as possible!

STEP 5: Use a Proven Promotion Plan

Most agents are still marketing their listings like they did 20 years ago  … 1. Put a sign in the yard, 2. Put the listing in the MLS, and 3. Pray that it sells. We call that The Old 3 P’s of home sales.  Yet, we know that 93% of buyers search for real estate listings online and utilizing their smartphones and digital devices.3 

That’s why we have developed our Digital Marketing Plan—to ensure your listing appears in the places where buyers are most likely to look. Our dual-level promotion strategy includes both pre-launch activities designed to seed the marketplace and post-listing activities to ensure your home stays top-of-mind with potential buyers. 

By utilizing online and social marketing platforms to connect directly with buyers, and offline channels to connect with local real estate agents, your property gets maximum exposure to the targeted prospective buyer pool.

LET’S GET MOVING

Are you thinking about listing your home? Get a head start on your competition! Contact us for a copy of your customized Seller Solution Book, which offers a complete guide to the NextHome Valleywide Selling Process. Or call us to schedule a free no-commitment consultation. We’d love to put together a custom plan to maximize the sales potential of your property!

Sources:

  1. Real Estate Staging Association – https://www.realestatestagingassociation.com/content.aspx?page_id=22&club_id=304550&module_id=164548
  2. Home Staging Resources – https://www.homestagingresources.com/2018-home-staging-statistics/
  3. National Association of Realtors – https://www.nar.realtor/sites/default/files/documents/2018-real-estate-in-a-digital-world-12-12-2018.pdf
  4. RIS Media – https://rismedia.com/2018/12/12/shocking-stats-importance-photography-real-estate/

June 2019 Market Update

Monthly Sales Up 7.1% in Greater Phoenix
Higher Incomes Fuel More Contracts & Rising Prices

June 2019 Market Update

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For Buyers:

Re-sale prices are not predicted to come down this year. Between August 2018 and January 2019 it looked like the market was going to balance out and cause prices to stabilize around the 2nd half of 2019. However two things happened to change that prediction. First, average 30-year mortgage rates dropped from a high of 4.94% in November 2018 to 3.82% as of June  2019. That alone has saved buyers around $177/month on a median-priced $279,000 home  with 4% down. Second, private sector annual earnings in Greater Phoenix rose 1.8% in April after an 8-month period of stagnation. In the last decade home prices have gone flat just twice, in 2011 and 2014. Both times there was a corresponding decline in annual earnings. If annual earnings continue to grow and interest rates remain low, the Greater Phoenix seller market will continue to push home prices up this year.

For Sellers:

The May peak buyer season is over. From this point through the end of the year it’s not uncommon to see contract activity gradually decline 30-40%. The good news is that despite the predictable decline, listings under contract are coming in 3.7% higher than this time last year.  It’s not evenly distributed along all price points however. Contracts on listings over $600K are up 3.4% while the $500K-$600K range is up an impressive 33.5%!! Contracts between $250K$500K are up 16.1% and the low $200K’s are up 8.1%.  Lack of inventory under $200K means that contracts in this range are down 20.6%. Expect your highest annual appreciation rates to be between 6-10% in the $150K-$225K range as this is where the majority of investor flip activity lies. $225K-$500K appreciation is between 3-5% and over $500K is between 1-3%.

Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area and are not sure where to turn we can help! Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more. Visit our blog at NextHome Valleywide for a monthly Phoenix Market Update.

Top 6 Home Organization Upgrades

Top 6 Home Organization Upgrades

Thanks to Marie Kondo and her hit Netflix series “Tidying Up,” home organization is a hot topic right now. Marie encourages her viewers to minimize their possessions and keep only those items that “spark joy.”

With spring in full bloom, now is the perfect time to do some spring cleaning and add organizational systems to your own home. Not only will you clear out clutter, your efforts can actually increase the value of your home.

Ready to give it a try? Here are six home organization ideas that will “spark joy” for you and your property value.

Boost Bathroom Storage Capacity

When was the last time you cleaned out your bathroom cupboards? If it’s been awhile, remove everything and take a look at each item. Toss any old or expired products—keep only what you actually use.

If your vanity has drawers, add drawer organizers, so you have a dedicated space for smaller items, like makeup and jewelry. For deep cabinets, install roll-out shelves or baskets to maximize the use of space.

And don’t forget about the walls! Mount open shelves to store towels. If you’re short on storage space, a cabinet over the toilet can offer additional room for supplies. These inexpensive additions can make your morning routine a little easier while giving your bathroom a more custom feel. And on average, minor bathroom remodeling projects like these see a 102% return at resale.1

Upgrade Your Laundry Room

Sort through the items in your laundry room and throw away or donate anything you no longer need or use. If you’ve been holding onto a collection of old washcloths and single socks, it’s time to say goodbye. Then give your laundry room an upgrade with some customized organizational features.

A mix of open cubbies and cabinets with doors will give you plenty of options for storing detergents and supplies. If you have space, a divided hamper or set of laundry baskets can provide a place to sort your clothes before washing. Install a hanging rod or drying rack for delicates and a flat work surface for ironing and folding clothes. With a few simple tweaks, you can turn this chore into a score!

Fully Utilize Your Basement or Attic

Basements and attics can easily become a dumping ground for clutter. If that’s the case in your home, you know what to do!

Once you’ve conducted a thorough clean out, think about how you can better utilize the space to meet your family’s needs. Install cabinets and a table so you can use the area as a craft room. Or you could turn it into a game room with a media center and ping-pong table. Investing in your basement will not only add function for your family, but also the average basement remodel can see up to a 70% return on investment when it’s time to sell.2

If you have an attic, consider adding a cedar closet to store your off-season clothing. The cedar lining will keep your clothes free from moths and smelling fresh year round.3 Turning your attic into a more usable space will pay off down the road, too. A finished attic sees an estimated 60% return on investment.2   

Customize Your Closets

Cleaning out the closet is a chore most of us dread, but by now, you’re a pro! Get rid the clothes and shoes that don’t fit you, are uncomfortable to wear, or that no longer “spark joy.”

Then it’s organizing time. So where do you start? You’ll want to create a designated space for each type of clothing: high hanging rods for dresses and long jackets, lower rods for skirts and shirts, and shelves for folded items like jeans. And accessories need a place to go, too. Add racks for your shoes, drawers for jewelry, hooks for hats, and shelves or racks for handbags.

A well-equipped closet can be a major draw for buyers—the average return on a closet remodel is 57%.4 But more importantly, it’ll improve your day-to-day life. Surveyed homeowners gave their closet remodel a “Joy Score” of 10 out of 10, higher than kitchen or bath upgrades.5

Install Built-in Bookcases and Cabinets

Built-in furniture adds functionality and storage to a room while giving your home a high-end look. Built-in bookcases can turn an empty room into an office. Custom cabinets can be used in a living room to display media equipment while providing hidden storage for DVDs, board games, and family albums.

When designing any built-in feature, remember not to go too custom. A design that only fits your tastes or belongings could turn off future buyers. Instead, select standard sizes and classic finishes to appeal to a broad range of buyers when it comes time to sell.

Equip Your Garage

If you can no longer fit your car in your garage, it may be time for a clean out. Similar to an attic or basement, the garage can quickly become overrun with clutter. A thorough cleaning will help you assess which items are worth keeping.

When adding organizational systems your garage, start with a small rack to store yard tools and larger racks for bikes and sports equipment. Overhead racks are a great place to put seasonal items and bulky luggage. A workbench against a wall lined with pegboard and hooks creates a dedicated space to use and store tools. If you have children or pets, add a cabinet with a lock. This will give you a place to securely store harsh chemicals and sharp tools. With a little effort, you’ll be pulling in your car (and buyers) in no time!

SPRING INTO ACTION

If you’re searching for service providers to help with your spring cleaning or home organization efforts, let us know! We can connect you with our trusted network of local home improvement professionals. We can also help you determine which organizational upgrades will add the most value to your home. Call us today, and let us know how we can help!

Sources:

  1. HGTV – https://www.hgtv.com/design/real-estate/top-home-updates-that-pay-off-pictures
  2. Nationwide – https://blog.nationwide.com/valuable-home-improvements/
  3. HGTV – https://www.hgtv.com/remodel/interior-remodel/maximum-home-value-storage-projects–attic
  4. The Closet Doctor – https://www.closet-doctor.com/news/what-is-the-return-on-investment-on-closet-organizers
  5. NAR Remodeling Impact Survey –https://www.nar.realtor/sites/default/files/documents/2017-remodeling-impact-09-28-2017.pdf

May 2019 Market Update

Median Sales Price up 5.9% to $270,000 in Greater Phoenix
Sales Rebound, Up 3.7% Over Last Year

May 019 Market Update

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For Buyers:

The median rent paid on single family rentals through the Arizona Regional MLS is currently $1,625 per month, which is comparable to what the mortgage payment would be on a median-priced $270,000 home with 4% down at today’s interest rate (including approximate taxes, homeowners insurance and mortgage insurance).  If a buyer were to purchase that home today, within 5 years they would have nearly $35,000 in equity just from making their mortgage payment, not including any appreciation in value. If prices were to rise at a modest 2.1% per  year (the average long term rate of inflation) within that same 5 years, then they would have an additional $43,000 in equity just from appreciation. This scenario would result in $78,000 in total equity within 5 years and by year 3 they would be able to remove any mortgage insurance from their payment, which would save another $200 per month approximately.

For Sellers:

Low interest rates are continuing to fuel buyer demand and there are now 2.5% more listings  under contract today than there were last year at this time and 3.7% more sales. All in all an impressive rebound as interest rates have remained below 4.2%, keeping affordability stable  for the time being. Increased demand in the 2nd quarter has resulted in strengthening the weakening seller market after a full 7 months of decline. May is typically the highest month for listings under contract and buyer activity is expected to decline from here through December as it typically does every year.  Don’t think you’ve missed the boat if you need to list however.  On average since 2001, about 52% of all sales happen in the first half of the year and 48% in the second.

Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area and are not sure where to turn we can help! Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more. Visit our blog at NextHome Valleywide for a monthly Phoenix Market Update.