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October 2017 Phoenix Market Update: High End Sales Over $600k Up 27%

Phoenix Real Estate Market October 2017

3rd Quarter MLS Sales Up Only 2% Over 2016
High End MLS Sales Over $600K Up 27%

For Buyers:
The median home size sold through the MLS this year is 1,774 square feet. Interestingly, this measure has not fluctuated more than a couple square feet up or down since 2015. Considering the increasing cost per square foot, the fact that the median sized home sold has not fluctuated much means that buyers are willing to pay more for the right sized home if they have the choice. For buyers with less flexibility on price, the cost of waiting comes in the form of sacrificing extra closet space, work space, or even a bedroom. Last year, the median home size for buyers in the $150K-$175K price range was 1,470sf. This year it’s only 1,380sf, a difference of 90 square feet.

For Sellers:
The first half of 2017 was more exciting than the second half is turning out to be so far for MLS sales. 1st Quarter 2017 MLS sales outperformed 2016 by 14% and 2nd Quarter sales were up 7%, so a 2% growth rate for the 3rd Quarter puts a damper on our excitement. Low supply in the lower price ranges is mostly to blame as it’s difficult to have record sales growth if there are fewer people willing to sell their home. There are more people willing to put their home on the market in the higher price ranges however. New listings over $600K were up nearly 10% in the 3rd Quarter and sales were up an impressive 27%.

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

Posted in Buying, How's The Market?, Selling | Leave a comment

September 2017 Market Update: Has the Phoenix Real Estate Market Recovered?

Phoenix Real Estate Market Housing Update September 2017

Active Listings Between $150K-$175K rise 17% since June
Has the Phoenix Real Estate Market Recovered?

For Buyers:
Supply between $150K-$200k continued rising in August.  However the $150K-$175K range had a more dramatic rise.  While still 26% below last year, it rose 17% since the beginning of June, a strong departure from the weekly decline this market experienced in the first half of 2017.  For buyers in the rest of the market over $200K, nearly all price ranges are running lower than last year with the exception of the top tiers.  For those buyers who have seen every listing available and still haven’t found a match, late September usually sees an increase in new listings across the board.  This makes the 4th quarter a good time to be a buyer.

For Sellers:

When do we know the Phoenix residential real estate market has “recovered”?  Many people assume when prices have returned to 2006 peak levels then the market has recovered.  However understandable, especially for those who purchased during that time frame, that’s not necessarily the case.  Average sale prices per square foot are still 27% away from the peak of 2006.  However, the market could arguably be considered recovered once prices reach the range that corresponds to the long term average rate of inflation, which from 2000-2016 in the United States is 2%.  In 2000, the average sales price per square foot for MLS resales was $96. Had the bubble and crash never happened, and annual appreciation stayed between 2-3% per year as normal, then prices would land between $134-$158 per square foot today.  Currently they’re running at $149, which equates to averaging nearly 2.6% annually and a 55% total gain since the year 2000. .

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

As a home seller, do you need to know when is the right time to sell your house?  
We can go over how the market affects you
and when the right time to sell would be for you.  

Reach out, I’m happy to help.

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7 Smart Strategies for Kitchen Remodeling

kitchen remodel

By: John Riha

Follow these seven strategies to get the most financial gain on your kitchen remodel.

Homeowners spend more money on kitchen remodeling than on any other home improvement project. And with good reason: Kitchens are the hub of home life and a source of pride.

A significant portion of kitchen remodeling costs may be recovered by the value the project brings to your home. A complete kitchen renovation with a national median cost of $60,000 recovers about 67% of the initial project cost at the home’s resale, according to the “2015 Remodeling Impact Report” from the NATIONAL ASSOCIATION OF REALTORS®.  (Updated data inserted below.  Feel free to contact me for additional details and information regarding remodeling, buyer trends, etc.)

The Remodeling 2017 Cost vs. Value Report
for the Phoenix area reports that for

a Mid-range Major Kitchen Remodel will recoup
about 70.6% of the cost when sold,
costing on average $60,388.

The project gets a big thumbs-up from homeowners, too. Those polled in the “Report” gave their new kitchen a Joy Score of 9.8 — a rating based on those who said they were happy or satisfied with their remodeling, with 10 being the highest rating and 1 the lowest.

To maximize your return on investment, follow these seven strategies to keep you on budget and help you make smart choices.

1. Plan, Plan, Plan

Planning your kitchen remodel should take more time than the actual construction. If you plan well, the amount of time you’re inconvenienced by construction mayhem will be minimized. Plus, you’re more likely to stay on budget.

How much time should you spend planning? The National Kitchen and Bath Association recommends at least six months. That way, you won’t be tempted to change your mind during construction and create change orders, which will inflate construction costs and hurt your return on investment.

Some tips on planning:

Study your existing kitchen: How wide is the doorway into your kitchen? It’s a common mistake many homeowners make: Buying the extra-large fridge only to find they can’t get it in the doorway. To avoid mistakes like this, create a drawing of your kitchen with measurements for doorways, walkways, counters, etc. And don’t forget height, too.

Think about traffic patterns: Work aisles should be a minimum of 42 inches wide and at least 48 inches wide for households with multiple cooks.

Design with ergonomics in mind: Drawers or pull-out shelves in base cabinets; counter heights that can adjust up or down; a wall oven instead of a range: These are all features that make a kitchen accessible to everyone — and a pleasure to work in.

Plan for the unforeseeable: Even if you’ve planned down to the number of nails you’ll need in your remodel, expect the unexpected. Build in a little leeway for completing the remodel. Want it done by Thanksgiving? Then plan to be done before Halloween.

Choose all your fixtures and materials before starting: Contractors will be able to make more accurate bids, and you’ll lessen the risk of delays because of back orders.

Don’t be afraid to seek help: A professional designer can simplify your kitchen remodel. Pros help make style decisions, foresee potential problems, and schedule contractors. Expect fees around $50 to $150 per hour, or 5% to 15% of the total cost of the project.

2. Keep the Same Footprint

Nothing will drive up the cost of a remodel faster than changing the location of plumbing pipes and electrical outlets, and knocking down walls. This is usually where unforeseen problems occur.

So if possible, keep appliances, water fixtures, and walls in the same location. Not only will you save on demolition and reconstruction costs, you’ll cut the amount of dust and debris your project generates.

3. Get Real About Appliances

It’s easy to get carried away when planning your new kitchen. A six-burner commercial-grade range and luxury-brand refrigerator may make eye-catching centerpieces, but they may not fit your cooking needs or lifestyle.

Appliances are essentially tools used to cook and store food. Your kitchen remodel shouldn’t be about the tools, but the design and functionality of the entire kitchen.

So unless you’re an exceptional cook who cooks a lot, concentrate your dollars on long-term features that add value, such as cabinets and flooring.

Then choose appliances made by trusted brands that have high marks in online reviews and Consumer Reports.

4. Don’t Underestimate the Power of Lighting

Lighting can make a world of difference in a kitchen. It can make it look larger and brighter. And it will help you work safely and efficiently. You should have two different types of lighting in your kitchen:

Task Lighting: Under-cabinet lighting should be on your must-do list, since cabinets create such dark work areas. And since you’re remodeling, there won’t be a better time to hard-wire your lights. (Here’s more about under-cabinet lights.) Plan for at least two fixtures per task area to eliminate shadows. Pendant lights are good for islands and other counters without low cabinets. Recessed lights and track lights work well over sinks and general prep areas with no cabinets overhead.

Ambient lighting: Flush-mounted ceiling fixtures, wall sconces, and track lights create overall lighting in your kitchen. Include dimmer switches to control intensity and mood.

5. Be Quality-Conscious

Functionality and durability should be top priorities during kitchen remodeling. Resist low-quality bargains, and choose products that combine low maintenance with long warranty periods. Solid-surface countertops, for instance, may cost a little more, but with the proper care, they’ll look great for a long time.

And if you’re planning on moving soon, products with substantial warranties are a selling advantage.

6. Add Storage, Not Space

Storage will never go out of style, but if you’re sticking with the same footprint, here are a couple of ideas to add more:

Install cabinets that reach the ceiling: They may cost more — and you might need a stepladder — but you’ll gain valuable storage space for Christmas platters and other once-a-year items. In addition, you won’t have to dust cabinet tops.

Hang it up: Mount small shelving units on unused wall areas and inside cabinet doors; hang stock pots and large skillets on a ceiling-mounted rack; and add hooks to the backs of closet doors for aprons, brooms, and mops.

7. Communicate Clearly With Your Remodelers

Establishing a good rapport with your project manager or construction team is essential for staying on budget. To keep the sweetness in your project:

Drop by the project during work hours: Your presence broadcasts your commitment to quality.

Establish a communication routine: Hang a message board on site where you and the project manager can leave daily communiqués. Give your email address and cell phone number to subs and team leaders.

Set house rules: Be clear about smoking, boom box noise levels, available bathrooms, and appropriate parking.

Be kind: Offer refreshments (a little hospitality can go a long way), give praise when warranted, and resist pestering them with conversation, jokes, and questions when they are working. They’ll work better when refreshed and allowed to concentrate on work.

Visit HouseLogic.com for more articles like this.
Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Here are some of my favorite places to get design ideas and inspiration:

hgtv.com
houzz.com
Pinterest

Want to know what buyers would expect to see in your home?
Questions about the materials or types of remodels that would get the
best return on investment for your home?  Call me and we’ll chat!

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August 2017 Phoenix Market Update: First-Time Home Buyers Get a Boost

Phoenix Housing Market August 2017

Active Listings Between $150K -$200K Rise 10% in 4 Weeks
First-Time Home Buyers Get a Boost

For Buyers:
We have good news for first-time homebuyers!  A 10% rise in active single family homes between $150K-$200K over the last 4 weeks caught our eye.  Seasonally we expect supply to begin rising in late September, so a turn this early in the year is unusual. This price point has been decreasing nearly every week since November 2016 and is highly competitive amongst buyers and investors alike.  Listings appear to be growing the strongest in Pinal County and the West Valley, particularly noted within the freeway loop of I-17, I-10 and the 101.  This provides some slight relief for buyers, but put it in perspective.  Today we counted 1,361 single family homes listed for sale between $150K-$200K and there were 1,311 sold last July.  Listings under $200K make up 17% of inventory and 35% of sales so far this year.  The market is still very tight.

For Sellers:
The 10% rise in competition for the single family market between $150K-$200K equates to an extra 137 listings for buyers to view. Glendale, Peoria, Avondale and West Phoenix accounted for 60% of the increase while the City of Maricopa and San Tan Valley accounted for another 38%.  Weekly price reductions in this price range have risen 60% in the month of July and 40% of the sales over the last 4 weeks have involved seller-assisted closing costs.  Supply in this segment is still 23% below where it was last year, providing sellers a large negotiating advantage.  However, the gap between 2016 and 2017 supply has closed 8% in 4 weeks, indicating a slight softening.

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

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July 2017 Phoenix Market Update: Supply Stops Declining Between $150-300k

Phoenix Housing Market July 2017

Metro Phoenix Lease Rates Decline 11% For Certain Types of Rentals
Supply Stops Declining Between $150K-$300K

For Buyers:
Good news for buyers, listings for sale between $150K and $300K stopped declining over the past 4 weeks.  This is good news because as the summer progresses, there are fewer buyers to compete with in the marketplace which offers a seasonal relief for those still willing to brave high temperatures and scalding door knobs to view homes.  Supply is still extremely low, but this slight improvement gives as much relief as a hot breeze on a July afternoon.  It’s not much, but it’s something.  Meanwhile, luxury buyers may notice fewer properties to look at this summer as demand was higher during the Spring season and overall inventory has been dropping due to a higher number of closings and seasonal cancellations/expirations.  Expect inventory in price ranges above $500K to continue declining seasonally until settling into a stagnant level in August and early-September.

For Sellers:
There has been a lot of talk about the increased production of luxury apartments and what impact they will have on the residential real estate market.  One segment that is starting to see their influence is apartment-style condominium rentals leased through the Arizona Regional MLS.  While rents on single family homes and townhouses continue to rise, successful leases of apartment-style condominiums have dropped 11% in average rates from a high of $1.26/sf in January 2017 to $1.12/sf by June. The drop is consistent across all lease price ranges for this type of rental and is not seasonal.  Areas that have been particularly affected are Tempe, Old Town Scottsdale and the Central Corridor including Downtown Phoenix.  Considering the lack of supply for sale in affordable price ranges and the added competition from brand new apartment complexes, this may be a good time for landlords of apartment-style rentals to consider selling if they’re unwilling or unable to reduce their rental rate.

Questions about what the market means to you?
Let’s talk about it!  Call or text me at 480-269-2260

Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report
©2017 Cromford Associates LLC and Tamboer Consulting LLC

Posted in Buying, How's The Market?, Renting, Selling | Leave a comment