The Buzz: Scottsdale Real Estate

Phoenix Will Rise Again!

Came into the office today and Eric Chambers, one of my top real estate agents told me that the offer he placed for a buyer had not only been declined but that the Seller had accepted another offer that was over list price!  Wow - wish I knew the details.  Did they ask for closing costs?  The home had been on the market 4 days. 

There are definitely smart people out there buying. 

Last night my husband and I watched a PBS short documentary from our Tivo cache titled: “Making Sense of Place: Phoenix, the Urban Desert.” It was fascinating and ensightful about the history of growth in Phoenix and of the future growth as well.  One of the ending comments was: 

I’m getting all sorts of requests for information about the ever changing real estate market in Scottsdale and the Greater Phoenix Metro Area.

It is easy to find statistics and opinions everywhere.  In general, here are the issues and forecasts as presented by some reliable economists (see below).  Although the real estate market in Scottsdale and Phoenix is sluggish, the long term forecast for Phoenix area is good.  In the meantime, the recovery is still at bay, for possibly 3 to 5 years. 

Today’s Local Market Facts

• Existing inventory of resale homes about 25,000 too many
• Excess builders inventory
• Foreclosures growing
• Median sales price for single family homes (Phoenix Metro) have declined 7.8% since the 4th quarter of 2006
• Lenders have much stricter requirements
• Many would be buyers need to sell a home first
• Economy is still stable  
• Economic Stimulus Package will make home loans more affordable

Predictions for 2008

• Prices will decline by another 10 – 15% ( this varies throughout the valley)
• More homes will sell towards the end of 2008
• Home building will decline

Indicators of a Recovery

• Inventory falls below a six month supply
• Most homes in foreclosure are resold
• Days on the market falls below 180 days
• Prices begin to climb

What Should You Do Now?

In a commentary dated February 14, 2008, NAR economist, Lawrence Yun references Warren Buffet’s investment philosophy that states “when everyone is greedy, be scared and when everyone is scared, be brave”.   Yun goes on to say: “Now, I am not an investment counselor and I do not encourage people to buy simply based on this logic. Rather, if people have the financial capacity and are looking for a home for the long haul, the fear factor should be put aside. Current situations in many local markets present a golden opportunity in attaining the American Dream with historically low interest rates.”  Personally, I think there is a great amount of truth in what he says.  I believe that the increased ceiling for Freddie Mac and Fannie Mae backed loans is good news for current homebuyers and that there are some great homes to buy in this market.

These observations are based on the following reliable economists comments. 

• Lawrence Yun, Chief Economist for NAR (National Association of Realtors)  is generally optimistic saying that “we will skirt a recession” due to job gains and housing affordability. Mr. Yun writes commentaries several times a week that you can check out here
• Dr. Jay Butler, a highly respected economist with Realty Studies at ASU gives very sound advice backed by local numbers.
• Elliot Pollack, a Phoenix economist,  spoke on the Phoenix Real Estate market at the Urban land Institute conference in January 2008.

I know that there are lots of real estate videos on You Tube but it’s Saturday morning and time for a diversion. 

I have a friend who always sends me the funniest photos and videos.  II don’t have time to read them as I can get as many as 8 per week so I set up a rule and they get filed automatically into my “Funny” folder.    This morning is one of those mornings I needed a diversion from all things real estate so into the Funny folder I went and have been laughing ever since.  

Here are the top two of the day:  Enjoy.

Frozen in Central Station

The Kissing Test

Technorati Tags: you tube,central station,kissing test

Temporary Conventional Loan Limit Increase for Fannie Mae and Freddie Mac

HR 5140, the Economic Stimulus Act of 2008, has passed through the House and the Senate and is awaiting the President’s approval.  This bill could have some very positive effects for home buyers and sellers.

What does this mean to the home buyer?  Loans that conform to Fannie Mae and Freddie Mac loan limits have significantly better interest rates.  The increased loan limit could definitely inspire more home buyers to take action as it will make home ownership in the higher price ranges more affordable. Let’s hope it works.

I’ve heard the phrase "getting the market unstuck" and that seems appropriate.  Policy makers believe that the increase in the conforming loan limit will open up the market to more homebuyers and I certainly hope they are right as the average home price in Scottsdale is significantly higher than the current limit of $417,000. (See table below for current home prices in Scottsdale) 

HR 5140 itself doesn’t determine the new limits however it does state that these limits are temporary.  The window of opportunity will end December 31, 2008 according to this bill.  I believe the new limits will be set by the Secretary of Housing and Urban Development and I have heard that the limits will be as high as $635,000 to $730,000.

This is a huge increase by normal standards.  The annual increases are historically minimal.  In 2002, the limit was $300,700, and the increases through 2005 were between $10,000 and $25,000 annually.  The last increase in 2006 of $57,350 brings us to the current limit of $417,000.  An increased limit of $730,000 is $313,000 or 75% higher than the current limit. 

Prices of Scottsdale Single Family Homes for Sale

Just getting ready to go to a Super Bowl party (like probably 80% of the adults in the U.S.) but decided to first get this new blog up and active.  I’ve had a blog with Myst for the last year but had not been utilizing it fully so I cancelled it.  This is simple so we’ll see how it goes. 

One year, I actually did an Open House on Superbowl Sunday.  Wow! Was that a boring afternoon.  So today, I join the rest of the population for the great American tradition.  Go Patriots!  Anyone who has an unbeatable season deserves to win.

Technorati Tags: Scottsdale Homeowner,Lockbox for Seniors,Scottsdale Area Association of Raltors,Disabled Residents of Scottsdale,emergency lockbox

Do you have a parent or a friend who could benefit from this unique program for Scottsdale homeowners?The Lockbox for Seniors Program was created by the Housing Opportunities Committee at the Scottsdale Area Association of REALTORS and is designed to give the Scottsdale Police Department and Scottsdale Fire Department access to the homes of Seniors or Disabled Residents of Scottsdale and Fountain Hills in case of emergency. Computers in police and fire vehicles will display information about the location of the lockbox and the code so that emergency responders can use a key to enter the premises instead of breaking down the door. The program also allows Police to perform wellness checks upon proper authorization.

The lockbox is provided at a minimal charge of $25 and is installed by a Scottsdale Police Officer. During the months of May and June Unique Scottsdale Homes is going to sponsor 10 lockboxes.  This is just one way we can give back to this wonderful community of Scottsdale.  Just contact Melissa O’Connell to make arrangements for you, your friend or parent to get a lockbox installed in your Scottsdale or Fountain Hills home.

 I just read the latest statistical report from OFHEO (Office of Federal Housing Enterprise Oversight) and it’s always nice to read good news about Arizona real estate. Now, granted, the news isn’t as good as it is for Utah, Idaho or Washington - but we had our day.  If you have held property for the last five years, you experienced 93.76% appreciation and if you are an oldtimer (since 1980), then you have seen 332.35% increase.  Let’s keep things in perspective - not bad!  Arizona currently ranks as number 25 with  a .13 % appreciation for the first quarter of 2007 and an annual appreciation (2nd Q 2006 - 1st Q 2007) of 5.22%.

The housing market is never static in the United States and this report just shows how varied it can be.  Seven states show double digit appreciation while seven other states had less than 2% appreciation and even some depreciation.  

First all the good news:

• Nationally, home prices grew faster over the past year than did prices of non-housing goods and services reflected in the Consumer Price Index.  House prices rose 4.3 percent, while prices of other goods and services, excluding shelter, rose 1.6 percent.
• The states with the greatest rates of appreciation between the first quarter of 2006 and the first quarter of 2007 were: Utah (17.0%), Idaho (12.3%), Montana (11.7%), Wyoming (11.7%), and Washington (11.6%).
• The Metropolitan Statistical Areas (MSAs) with the greatest rates of appreciation between the first quarter of 2006 and the first quarter of 2007 were: Wenatchee, Washington (25.6%), Provo-Orem, Utah (19.7%), and Salt Lake City, Utah (19.1%).
• Of the 20 cities with the greatest four-quarter appreciation, five are in Washington state.
• Utah’s three largest metropolitan areas (Salt Lake City, Provo-Orem, and Ogden-Clearfield) were among the five fastest appreciating cities in the U.S.

Now - the bad news:

• The states with the lowest rates of appreciation for the same period were: Michigan (-0.7%), Massachusetts (-0.6%), Nevada (0.6%), Ohio (0.8%), and New Hampshire (1.1%).
• The MSAs with the lowest rates of appreciation for
  the same period were: Punta Gorda, Florida (-4.6%), Sacramento-Arden-Arcade-Roseville, California (-4.4%), and Modesto, California (-4.4%).

One sure thing is that for most homeowners in the United States, the historic trend of housing, just like the stock market, goes up.

For more details about the OFHEO report, click here.   For maps and the full ranking of U.S. cities, and states, click here. 

Why Scottsdale is One of The Greatest Places to Live.

Have you ever heard of an Arizona snowbird?   The wikipedia describes the snowbird as people from Canada and the Northeastern or Midwestern United States who spend a large portion of the winter months in Arizona, Florida or other regions of the Sunbelt.   Snowbirds typically come just for a few weeks or a month and before they realize what has happened, they become addicted.   Addiction to Scottsdale results in spending their leisure days searching for the perfect winter home which is usually defined as a luxury home whether it is a condo or a single family residence.  Snowbirds and winter visitors have been buying second homes in Scottsdale since before Scottsdale became a city in 1897 and I don’t see any change in this trend.After living in Arizona for 14 years, I can easily understand why Scottsdale is inundated with snowbirds every winter.  Scottsdale is a wonderful place to live for many reasons.  Apparently the majority consensus agrees with me as Scottsdale was just ranked 7th in the Money magazines list of top 100 places to live.  Money magazine’s reasons are based on statistics but there are other reasons that are more subjective but just as true.  Here are my reasons and those expressed by my clients over the years why Scottsdale is a great place to live.

1. The weather is fantastic 75% of the year - Imagine eating outside in balmy dry weather with no bugs or an early morning bike ride along Scottsdale’s green belt bike path with breakfast along the way. 
2. The color of the sky is incredibly blue.
3. The horizon stretches forever.
4. Sunsets are spectacular.
5. Desert plants and animals are unique and lush in their own way
6. Outdoor activities in abundance include golf, hiking, jeep rides, bicycling, hot air balloons, etc.
7. Some of the best golfing in the world.
8. An art mecca with more than 125 art galleries in Scottsdale alone.
9. Numerous choices for fine dining  - I guarantee you won’t get bored.
10. Scottsdale real estate is still affordable.  California hosts 23 of the top 25 places with the priciest homes, with median home sales prices ranging from $678,500 to $1,362,500.  Scottsdale’s median home price is only $370,000 and you can still buy a 3 bedroom 2 bath home for $325,000.  In fact some of these older areas will be not always be so affordable because of all the redevelopment happening in downtown Scottsdale.
11. Good public schools and superb private schools.
12. Fantastic shopping. 

If you like living in Scottsdale, I’m sure you could add to my list.  Email me with your suggestions and I’ll include them.  Don’t forget to let me know if I can use your name.If you visited the Money magazine website you may have noted that several of the blog comments were negative.  Let me state for the record that as a real estate consultant specializing in Scottsdale, I have met mostly wonderful people who I would love to have as my neighbors.  In any city, especially one that offers a high standard of living, there will always be those people who are too materialistic and too full of themselves that no one wants living next door.   But as one blogger said, “we need to make our own reality”.   My reality says:  People are people and every city has all kinds.  Scottsdale is a wonderful place to call home and I think Scottsdale is fortunate to have a diverse population of very friendly and authentic individuals from all over the country and world.   Life is what we make it, right?

 For more Money magazine statistics click here