When is a good time to sell my house? I want to upgrade to a bigger house, but don't want to lose money on my current house.
It sounds like it should be a buyer's market. But since incomes have not kept pace with housing prices, many families are still unable to afford to buy. Even condos are expensive for workers in the service industries. Not all Valley cities are doing their fair share to ensure adequate quality housing for their workforce. With excess inventories of unsold housing stock, will developers look to partner with non-profits and employers to create opportunities for working families to own their own homes?
Just as the fall temperatures in Arizona are cooling off from the summer heat, the real estate market is cooling off from the sizzling
sales of the past two years. Our seasonal dip in degrees is not a case for global warming. And, a real estate correction, or transition is not a bubble bursting as this headline suggests.The second sentance says there are half as many homes for sale.This ia also innacurate. The slowdown in sales is in part due to the investor inactivity this year.Mark Twain said it best,"Buy real estate,they ain't makin' any more of it".
Given the tax advantage of selling a home after two years is there an expected increase in homes for sale since there appeared to be a spike in construction during 2005?
Can you listen this online live?
I live in the Anthem area. With the price of gasoline what it is, what effort is the state making to attract professional businesses along the I-17 corridor that will sustain property values in this area? The businesses we have this far up are parasitic in that they take money out of the area. We need technology or biotech businesses that pay the type of wages that will support the housing costs we have here. For growth to be viable, there must be an infrustructure to support it.
This is obvious a market correction. Interest rates have no doubt been a major factor in both the buying phase that occurred in 2005 and what’s happening in 2006. Home Builders have also contributed. As a result of the buying craze of 2005 Home Builders increased their plans and inventory along with their prices and are now having to offer major incentives that make it difficult for resale homes to compete. Those who are buying new build homes do not necessary need to sell an existing home and are perhaps willing to drive from the far east, west, north or south of the valley. With the cost of everything (food, gas, materials, goods and services) going up, along with the lack of higher paying jobs and the number of large and small investor groups buying low and now selling high, it's no wonder that many individuals and families are not able to afford the cost of buying and maintaining a home. Even condos starting prices and their HOA fees are out of reach for many. I wonder how much the fears that come from our world crisis contribute to emotional uncertainties and economic stagnation of our real estate market nation wide.
Al Rivera
What effect have the investors had on our market by pulling out and selling at below market prices?
I would like the panel to speak on how Arizona is doing as a relocation destination. I had heard that at one time there was an average of 280 people moving to Maricopa County per month. Is this still the case?
Greetings! I've been asked to be a "guest blogger" for the Here and Now segment on the Phoenix real estate market that airs at 11:00 today.
We've got some great questions and comments already, please keep them coming!
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
I'm interested in finding out about the effect of investment buying has on the local housing prices. Are there sources of data that show the percentage of second/investment homes purchased in 2005?
While Phoenix metro has excellent job growth, the increase in cost of living due in housing price increases compared to other sun belt cities like Austin or Atlanta now has Phoenix exceeding them in average cost of living. How will this impact job growth, relocation business and population growth in the valley? If the higher cost of living were to slow growth, would this be a good thing (ie help the valley catch up with its growing pains with transport, water issues etc?)
Paul commented:
"The second sentance says there are half as many homes for sale.This is also innacurate."
And he is correct. The sentence in the introduction that Paul refers to states:
"Compared to last year, there are about half as many houses for sale in the valley."
At this moment in time, there are 39,817 single-family homes active listings for sale in the MLS (Multiple Listing Service). In comparison, there were approximately 4,000 MLS listings in Feb 2005.
Jay
Thanks for the catch on the numbers. The numbers were jumbled when edited. Here is what I had originally written that contains the real numbers.
"Home sales in Arizona lag far behind last year, with 5,685 homes sold in August 2006 compared to 10,700 in August 2005. Last year, home prices in Arizona increased 36-percent due in part to low interest rates and by investors looking to make a quick buck. Some say the bubble has burst on the local real estate market, while others prefer to call it a “correction” to last year’s record home sales. Regardless, The Arizona Real Estate Center at ASU reports the median home price in the Phoenix area actually declined in July to $262,500 in July from a price of $264,900 in June."
JB asked: "Are there sources of data that show the percentage of second/investment homes purchased in 2005?"
Home purchaes are public record, but extracting specific data for the type of purchaser is *extremely* difficult, in my opinion. The data is confounded by many things, not the least of which is the fact that many investors do not disclose that their purchased home will not be owner occupied.
Data on the number of investor purchases is often quoted, but I have yet to get a response from someone when I ask them for their specific source(s).
Jay
http://www.PhoenixRealEstateGuy.com
DO YOU THINK THAT PEOPLE'S EXPECTATIONS ARE TOO HIGH?
Greg's making a great point right now comparing the current market to the more "normal" market of 2003. Comparing now to the insane market of last year simply isn't fair.
Jay
THE BIGGEST CHALLENGE I AM FINDING IS SELLERS WHO REFUSE TO UPGRADE THEIR "VANILLA" HOMES TO REFLECT THE NEW HIGHER PRICES. THE PLAIN VANILLA HOMES CONTINUE TO SIT, WHILE HOME WITH UPGRADES (GRANITE COUNTERS, NEW PAIN, ETC) ARE SELLING FAIRLY QUICKLY. DO YOU SEE THIS AS ONE OF THE ISSUES WITH GROWING INVENTORY?
How does the Flagstaff market compare to rest of the state and the nation?
It seems to be that right now is a great time to buy investment properties...I have a contract in on a house for $350K that just appraised for $410K. Is this a bad idea?
Flat prices have hurt flippers that bought within the last 12 months. They won't even be able to cover their selling costs, real estate agent, escrow, title insurance, etc. unless they bought well and made smart improvements.
In normal times you need to own a home for a couple of years before you can sell it and even breakeven. We're back to that.
Investors should have at least a 5 year investment horizon now.
John L. Wake, M.S. ABR
Realtor
HomeSmart Real Estate
http://www.ArizonaRealEstateNotebook.com
If someone was unable to forsee the future (!!) early this year and put a contract on a condo that was to be completed next Spring, are renegotiations an option??
Thanks for your response, Mr. Thompson. Are you seeing any trend in investor buying/selling this year and, if so, how does that compare to the trend(s) in 2005. What kind of impact do you think the investor buying/selling will (or already has) on the local housing market and the local economy.
what do you feel about people being priced out of the market (especially 1st time home buyers)?
I was overseas for 3 years and saved substantially for a downpayment..came home to AZ in 2005 have a decent job.......and there is no way to afford a house at the prices today.
On top of that, people are wanting to sell old homes at outrageous prices without doing anything to improve/upgrade conditions of the home.
What is going on in the Condo/Townhome market? I'm planning on selling my townhouse in 4 years, once I pay it off and I'm wondering if I should wait longer or sell sooner.
"It seems to be that right now is a great time to buy investment properties...I have a contract in on a house for $350K that just appraised for $410K. Is this a bad idea?"
Of course that is a phenomenally good investment, assuming the appraisal is good.
Rents are very low in the Valley but have been increasing strongly. The conventional wisdom is that rents will continue to increase well because many people can not afford to buy a home at these prices so they will have to rent.
John L. Wake
http://www.ArizonaRealEstateNotebook.com
When do economists or other experts predict any significant real estate improvement?
What do experts predict will happen to median house prices over the next twelve months?
As a recent buyer in this market, I can tell you that people were asking prices for their homes that have never been paid. Houses that are priced at last year's prices and have upgrades are selling. People asking for 20-30% from last year are sitting on the market for months. Buyer should bargain and not fall in love. We drove the price down 20% from asking and ending up paying a price level to last year.
It seems everyone looks negatively on the investor activity in the market.
As an investor myself, I feel that we (investors) generally are providing needed services.
To the comment the earlier lady had about, "Why don't investors stop dumping their properties..."
True investors don't dump their properties... speculators dump properties.
JB - We've had several investors list homes they bought in the last 12 - 18 months. I haven't had an investor buyer recently, but that does NOT mean now is a bad time for investors to buy. It depends on your goals. As Greg is mentioning now. And be sure to see John Wake's comments above on investment horizon. A "quick flip" isn't going to work right now. But and hold is a different story.
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
Its just not about the Sellers - since it is the Buyers that make the actual decision to buy and greatly affect the prices.
Has anyone noticed how Buyer's are taking more time to decide and have less of an urgency?
Thanks! Yalda @ myREALpro.com
The "American Dream" used to be to own a home to raise a family in. Now it seems that too many people are buying houses as just an investment to make a proffit on. Lower income people are being priced out of the "American Dream" because of this. What will happen in the future as only richer and richer people can afford to buy real estate and want to make more money from it?
I just tuned in to the program, so I may have missed an earlier answer, but how is market in North Scottsdale from perspective of the seller? Thanks, great show.
What about the sale of houses in the range between $ 900,000 to 110,000?
The residential market demand has been fueled by realtors themselves. I cant tell you how many clients have been told by their realtors that there is no way they can lose money on residential real estate.
The bottom line is that residential rental property rarely cash flows or comes close to breaking even. Most people expect to make money at the time of sale. This is a dangerous and unsound approach to real estate investment.
Cooling in Tucson??? More like frozen over!
My home has been on the market for >180 days
and at 222K for a home >2250sqft I'm not being unrealistic
For Trey - there are several programs for first-time buyers in several communities. Call the local HUD office or the housing office in your community. I work with several non-profits which have subsidy funds and education and counseling for first-time buyers.
Teresa Brice
LISC Phoenix
I have been looking at condo conversions in the area and i wanted to know wha the groups feelins are in this market segment
Will the slow down in the market have a major effect accross the entire valley market or primarily those homes on the outskirts of the metro area?
As well how much are the conversions of apartments to condominums affecting the single family home market?
Arizona's competitive advantage has always been low-cost of living, primarily, inexpensive housing. By allowing the influence of the California market to affect Arizona's affordability, what impact will this have in Arizona's ability to attract new employers and employees who can are willing to accept a lower wages in exchage for lower cost of living?
"What do experts predict will happen to median house prices over the next twelve months?"
I my opinion, the median home price for the Valley as a whole should likely be weaker through December which happens most years as sales decline seasonally August through December. They should generally strengthen January through July which is typical.
Unless the economy tanks in 2007, which few economists expect, the median home price for the Valley as a whole should not be lower next year.
John L. Wake
http://www.ArizonaRealEstateNotebook.com
George the CPA writes:
The residential market demand has been fueled by realtors themselves. I cant tell you how many clients have been told by their realtors that there is no way they can lose money on residential real estate.
George, I don't doubt that you've seen this. But any Realtor that says that to a client is doing their client a true disservice. NO investment is 100% safe.
Jay
I am a in real estate on a small scale, I buy an empty lot and build a new home. The home is set up as a starter home for the lower income people (priced around 175k-200k) and I have not had a problem getting the homes and land sold. Most of the homes and lots have sold before they are even finished. So my outlook is that the market for the small scale person has not really changed, the big builders just over built.
Great call from Chris the appraiser. There is a difference between "inverstors" and "speculators". And there is nothing "wrong" with either, it's just different methods and goals....
Jay
You could do buyers and sellers a real service by talking about how to calculate a "comp". Many people despite having a so-called real estate professional at their side price their homes by looking at the asking prices of the people around them. Asking prices are just that they are not market value.
Chris the appraiser mentioned by phone that speculators would be hurt.
Another group that would be hurt are those who bought a home within the last 12 months and unexpectedly had to sell due to divorce, job loss, death of a spouse or perhaps job relocation.
They had planned to live there many years but... bad things happen. Unfortunately, their homes haven't appreciated enough yet to cover their selling expenses. That's a tough deal.
John L. Wake
http://www.ArizonaRealEstateNotebook.com
For - Teresa Brice, LISC Phoenix
I am interested to know what non-profits can assist with home buying and what types of subsidies are out there.
Nancy wrote: If someone was unable to forsee the future (!!) early this year and put a contract on a condo that was to be completed next Spring, are renegotiations an option??
Nancy - it's difficult (OK, impossible) to answer a contract question without knowing the specifics of the contract. You probably will not be able to renegotiate, as you have a signed contract at the conditions stated in it. However, sales of condo conversions are slowing similar to how home sales are slowing. If you worked with an agent to write up your contract, I'd suggest contating them. If you worked directly with the converter you may not get very far. It couldn't hurt to ask, but I wouldn't get my expectations up.
Jay
What is considered "affordable housing". My husband and I both work and make a decent salary. With homes being 230+K how can someone afford this type of a home, pay a mortgage of 1200+, pay utilities and have any quality of life? Adujustable rate mortgages and interest only loans only help for a while not for the long haul. The average salary in AZ does not make it affordable to buy a home with the cost being the way they are. The investors are wonderful for some areas, but what about those of us that have to live here?
What is considered "affordable housing". My husband and I both work and make a decent salary. With homes being 230+K how can someone afford this type of a home, pay a mortgage of 1200+, pay utilities and have any quality of life? Adujustable rate mortgages and interest only loans only help for a while not for the long haul. The average salary in AZ does not make it affordable to buy a home with the cost being the way they are. The investors are wonderful for some areas, but what about those of us that have to live here?
I know people here in the valley that, had they not purchased their home before the expansion in prices, they could not afford the home they are currently in. Have you seen wages here in the valley keeping up with the increase in home prices?
Markets will still clear and real estate markets can clear relatively fast but in this market we have a lot of sellers with a weak need to sell and with sellers with irrational expectations about the value of their homes.
I recently put 3K down as earnest money on a new home in the south west valley by a popular builder, the home will not be ready until April 2007. The purchase price was $235K, will I be able to barging with the builder; lower price or perhaps discount my incentive upgrades? If so, when and how should I go about this?
Incidentally, new homes are just cheaper than resale homes in this market.
Thanks-Ruben
Greg Swann refers to homes "ready to sell".. to me, that means clean, well maintained, and presentable to potential buyers. Properly priced is also part of that equation. And the seller needs to be truly motivated to sell, not just someone "fishing" for a sale.
Jay
is their price correction happening in scottsdale,az. I read/hear where the prices vary from listing to selling price, if LP is 839K , it is sold for 795K , so on. Is it a beginning or stabilising in home prices
"I know people here in the valley that, had they not purchased their home before the expansion in prices, they could not afford the home they are currently in. Have you seen wages here in the valley keeping up with the increase in home prices?"
No way have wages kept up with home price. Not even close.
ASU's Jay Butler is an expert on this. See his latest press release here http://www.poly.asu.edu/news/2006/09/11/ and be sure and look his past press releases that cover the issue in depth.
John L. Wake
http://www.ArizonaRealEstateNotebook.com
I can give you an eastern Mesa example of an asking price of $725k and a sell price of $600k. This kind of thing is likely to continue. There is too much rah-rah in this set of talks.
GM wrote:
You could do buyers and sellers a real service by talking about how to calculate a "comp". Many people despite having a so-called real estate professional at their side price their homes by looking at the asking prices of the people around them. Asking prices are just that they are not market value.
A good "comp" (comparable) is a home that's recently SOLD, in that neighborhood (or a very close simliar neighborhood) of a home similar in size/shape/construction.
Asking prices aren't good comparables in any market, be it declining or increasing prices.
Multiple comparable homes needs to be used, to help determine an asking price.
Appraisers and lenders won't/can't use asking prices for comparables, real estate agents shouldn't either.
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
Wow ... great show. I'm a friend of PhoenixRealEstateGuy Jay Thompson, and am listening online with great interest. The Calgary market has seen SF values increase a staggering 50% over the past year (see stats @ http://www.jimsparrow.com/market-stats.php ).
We've now seen prices top out, but it remains to be seen whether we'll see a price reversal (I think this unlikely in our market). Calgary is all about OIL ... and I had to sound snide, but we have it, and you (the USA) need it.
Still lots of investment opportunities here - check out Calgary Real Estate @ http://www.jimsparrow.com
For Trey and anyone else interested in non-profits and subsidies for first-time buyers: there are income limits on these programs and perhaps other eligibility requirements, but there are down-payment assistance and other grant funds that can help. You can call Community Housing Resources of Arizona (CHRA) (check the phone book), Neighborhood Housing Services in Phoenix, Chicanos Por La Causa, ACORN Housing or Housing For Mesa, just to name a few.
to George the CPA, you're right about that as anybody in the texas market can attest. A house is worth $0 unless somebody is willing to pay it.
To Chris the appraiser
what about the near term and longer term forcast of the $800,000 - $900,000 price range?
Thanks to all who particpated! I enjoyed my little part in the virtual show and hope I was able to help. Over the next day or so, I'll try to go back through all these comments and answer what I can for those that weren't addressed.
Anyone is also more than welome to contact me through my blog/website as well.
Regards,
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
"I can give you an eastern Mesa example of an asking price of $725k and a sell price of $600k. This kind of thing is likely to continue. There is too much rah-rah in this set of talks."
gm,
My first thought, "Was the home really worth $725,000 or was it way overpriced from the beginning."
My second thought, "Did the seller overprice it at the beginning and then when he ran out of time and had to sell, did he underprice it, so to speak."
It would take hours of research to know for sure the relationship between the market value of the home and the seller's motivation, the two biggest factors that detemine selling price.
By the way, my second thought explains why it's as big a mistake to overprice your home as to underprice it.
John L. Wake
http://www.ArizonaRealEstateNotebook.com
Great point John. It may not be "safe" to compare asking vs. selling prices. There are MANY homes listed too high. Sometimes it's hopeful sellers, sometimes it's ignorant agents setting prices too high.
Setting an unrealistic price, even with the "we can always reduce the price later" mentality, isn't the best approach.
Jay
blog: http://www.PhoenixRealEstateGuy.com
I wonder how we expect Maricopa County's 4 plus million people with a median household income of less than 60k/year to afford 400K+ homes. For that matter, 300k+ homes. This is not Flagstaff and it is not San Diego or L.A.. It's Phoenix....
My second comment is this: Investors are trying to get out for the most part. This is because they realize that there is a very limited few willing and able to purchase homes in average neighborhoods with average families for 400-500k. There are so many basic economic indicators showing a slam dunk of this market, I have to think that someone will admit that we're in for a rough ride.
For those still out there:
the question for me still remains:
what is the state doing to attract big buisness (professional and high tech) to the I-17 corridor heading north. It would seem that the proper infrastructure would sustain not irrational speculative growth but growth based on long term stewardship. Or is this just theory with no basis in reality?
We are in a very oportunistic market right now, for both Buyers and Sellers. Interest rates are stable. We are still consistantly selling as many homes as we have over the past five years. We have twice as many homes on the market and there is more for the buyer to choose from. On the average, we are selling about 12% of our inventory each month.
This means that Sellers have to be realistic and price their homes competitely. They need an expert to help them accomplish that. They also need a REALTOR who knows how to market their home. This is crucial. Marketing creates competition and enables them to get the best price for their home.
For buyers, it is an opportune time since they have a lot to select from. When they engage the services of a REALTOR, they have someone that can provide them the information they need to make a good decision. This person will also negotiate on their behalf. I have been in the industry for 28 years and even though their are peaks and valleys, real estate always comes up the winner in the long run.
Teresa - thanks for the comments about down payment assistence/help/grants.
For more info, Google "Down payment assistance". Or copy paste this link into your browser:
http://www.google.com/search?hl=en&q=down+payment+assistance&btnG=Google+Search
Pay particular attention to the first two results, Ameridream and Nehemiah programs. A good loan officer should be able to help explain these. There are some conditions/restrictions, but these programs (and others) have helped MANY people get into a home.
Jay
blog: http://www.PhoenixRealEstateGuy.com
Ruben wrote:
"I recently put 3K down as earnest money on a new home in the south west valley by a popular builder, the home will not be ready until April 2007. The purchase price was $235K, will I be able to barging with the builder; lower price or perhaps discount my incentive upgrades? If so, when and how should I go about this?"
Ruben - see the comment I left for Nancy at 11:47. She's in a similar situation.
The bottom line is you are under contract at agreed upon terms. You are legally bound to execute that contract (or potentially suffer damages if you default). That is, after all, the purpose of a contract.
That said, I am aware of some builders "renegotiating" after the fact. If you are willing to walk away, risking your deposit, and can convince a builder that you will indeed walk if you don't get some concession/incentive then they MAY be willing to budge. But you really have little to no bargaining power as you are already committed to purchase. The only negotiating "chip" you have is the fact that the builder doesn't want to have another spec home to sell, which is what they'll have if you indeed walk.
Did you work with a real estate agent who is not associated with the builder? If so call them and see if they can help you.
I wish more new home buyers would work with non-builder agents. There's no reason not to (the builder pays buyer agent commissions) and every reason to. The builder's agent works for the builder, not the buyer.
The question of renegotiating contracts came up twice here, and I got one email off line about it. Given the interest, I'll try to get something up on my blog that has more detail.
Jay
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
Hi Jay,
Thanks for taking the time to answer all our questions. You've been incredibly helpful with your assesments. I have a few questions for you.. and would like to pick your brains and find out what you think:
I may be moving out of state to California (taking up a new job).
1) My options are (a) Rent my home (b) Sell my home. I did a quick 'back of the envelope' NPV calculation for renting Vs selling, and in this market, selling seems to be the better option (especially if I am not looking to rent my home for 4 or more years, or not looking to eventualy move back to AZ). What's your take on it??
2) The options I have if I want to sell are (a) Sale by Owner (b) Use HelpUSell or one of those agencies (c) Use a real-estate agent. From a financial viewpoint, it's in the ascending order, but from an individual-effort viewpoint, it's in an descending order. I don't know what the exact option for me is. I know it's hard for anyone to advice me on it. But can you tell me what factors make each option better? And what your take on this market is?
3) Zillow.com seems to have an inaccuracy which is "+" or "-" in a few cases of homes that I have seen. It's hard to get a "real estimate" for the reason that everyone has a vested interest (if I ask a realtor.. he may have a vested interest in setting a price target, etc). Are there tools (maybe, comps is an example) which give you a good idea of the price target?
4) From one of the posters who mentioned earlier, it seems like Aug-Dec is traditionally a slow market, and Jan-July is a more brisk. Considering my timing, would I be better off waiting until then (instead of listing it in October?)
Thanks in advance!!
Potential Seller
Potential Seller -
Congrats on the new job!
Deciding whether to rent out or sell your existing home is difficult. You've obviously put a lot of thought into it. I'll do my best to offer some opinions to your questions...
1) Knowing nothing about the house, it's difficult for me to say one way or the other on rent vs. sell. Factors such as home size/condition, location, your loan terms, what you owe, your personal situation and finances, etc all factor in. It is not easy to rent out a house and be cash flow positive. But that may not be all you need to consider. Tax implications of leasing your home vs. selling it should be considered. How you'd select and manage tenants from California is important to think about. "Long distance" property management is probably best left to a property management company, which means more expense.
If you've owned your home for very long, there's a lot to be said for selling it, capturing the equity and being able to move to CA without having to worry about maintaining and managing it.
2) This is a tough question to answer. As a Realtor, my answer is going to sound biased no matter what evidence I provide. Of course I'm going to say use a real estate agent. But why?
(a) FSBO: Selling a house is a *lot* of work, as you mention. In today's market, there just aren't a lot of successful FSBOs. 12 - 18 months ago you could plant a sign in a yard and sell a cardboard box. Not today. You've got 40,000 other homes to compete with.
One thing many people who attempt to go FSBO don't realize is they are almost going to have to pay a commission to a buyer's agent (also called a co-broke). Commissions are of course negotiable. But without a co-broke going to a buyers agent, you will be *greatly* reducing your potential buyer pool. Commissions on the typical home sale using a realtor is split 50/50 between the listing agent and the buyers agent (and paid by the seller). Some people believe they will save 6% in commission if they FSBO, but in reality, you need to pay half of that (whatever "that" is) even as a FSBO.
Then, a FSBO needs to understand the thought process of most FSBO buyers. To keep it brief, lets just say the majority of people that look to buy FSBO homes think, "If the seller is saving a bunch on commissions, I'm going to get a piece of that too".
There are many studies that show FSBOs sell their homes at lower prices, with far more personal effort than if they use a realtor. Some studies show that many FSBOs net less in a transaction than if they use a full service realtor.
(b) HelpUSell, Assist2Sell or other "discount" brokerage vs. full service brokerage. Similar to above. At least a discount broker will get your home into the MLS. But don't expect any marketing of your home. You're on your own for that. And they too will recommend you pay a buyer co-broke. Some will help you with all of the legal paperwork if your home goes under contract, some will leave that, and the liability that goes with it, up to you.
In a market like we are in, it's more important than ever to use a full service real estate agent. Marketing is critical. If someone wants to put all the effort into marketing their own home, more power to them. Many try. Some succeed, most fail. Entrusting what's probably your most significant asset to nothing less than a professional is the only option in my opinion. Others opinions will differ.
3) Zillow.com: Zillow's "Zestimates" are pulled from public record (and starting *today*, owners edits/inputs to Zillow data). There are too many factors that go into the valuation of a home for an automated system to give 100% accurate results. It's difficult for a human to give 100% results in pricing a home. The true market value of a home is what a ready, willing and able buyer will pay. A good real estate agent can get very very close looking at the right comparable sales and factoring in other things. One option is to get an appraisal of the home. This will cost $300 - $400. Be aware though that just because an appraiser says your home is worth $X, that doesn't mean there is a buyer out there willing to pay $X for it.
4) Timing: really tough question. Personally, I wouldn't base when to list my house on the calendar (with the possible exception of not listing between Thanksgiving and New Years). If the house is in selling condition, and priced correctly, then I don't think it makes that big a difference whether you list in a historically slower part of the year or not.
I think I touched on everything you asked. I could add more! And I may have missed something. If anything needs clarification, feel free to contact me through the info below, or post here.
Hope this helps!
Jay
Jay Thompson
REALTOR
Century 21 Aware
email: jay@thompsonsrealty.com
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
I just moved here from Orange County, CA, and would like to purchase a home given the current market surplus. But I am wondering is it better to purchase a new home or a resale home? which one will appreciate more over time?
Hi Jay,
Thanks you so much for your detailed analysis and patiently spending the time to explain my questions.
Your analysis has been very detailed and very informative. I am sure a lot of people (besides me) are benefiting from your inputs. Really appreciate it.
Thanks again!!
Regards,
Potential Seller
PS: I may have a couple of follow up questions, but I'll send you a direct email (which might be better) instead of taking up space here!! Thanks for the time.
Question for appraisers:
When doing an appraisal on a SF purchase, how does the appraiser know about any incentives (like a Hummer 3/Hawaiian vacation?) that the seller/builder threw in to make the sale?
As a former real estate agent, I remember appraisers asking for copies of the sales contract. At the time I suspected that they just wanted the selling price so they could "back out the numbers" to do their work for them--but these days I wonder if appraisers are really factoring incentives into the appraisal. If not, then the comps are skewed to the upside.
Future appraisals using the previous sale as a comp are also going to be skewed to the high side unless the seller concession is displayed and factored into the appraisal.
"I just moved here from Orange County, CA, and would like to purchase a home given the current market surplus. But I am wondering is it better to purchase a new home or a resale home? which one will appreciate more over time?"
As a former Flagstaff realtor who "bailed" in 2003 (I saw the writing on the wall and didn't want to be left standing when the music stopped), I'd have to sincerely suggest you follow the new dictum: "If it floats, flies -- or forecloses -- RENT, don't buy"!
Despite all the Chamber of Commerce-types with their happy talk about the real estate and job markets, I predict a serious downturn that will last for years. Rather than "coming back" in 2007, I believe the market will be in the midst of a deep and prolonged CRASH. Not a "correction". No "soft landing". It will be ugly and many, many people will get burned--badly.
Just like the mining towns throughout Alaska and Canada that boomed when gold fever was high and were then left abandoned, virtually overnight, such may be the case in many Arizona locales.
Future ghost town prediction? Here's an easy one for you: Cave Creek. "Ground zero" for the coming RE crash.
But I could be wrong . . . .
> I just moved here from Orange County, CA, and would like to purchase a home given the current market surplus. But I am wondering is it better to purchase a new home or a resale home? which one will appreciate more over time?
Hi, Liz,
At this immediate moment, the best bargains to be
had are spec homes from new builders. They are
anxious to clear as much inventory as possible by
September 30th, and by December 31st after that,
so if you're willing to buy a home specced out by
someone else, they will give you huge price breaks.
Fell free to phone me or email if you have any
questions. The buyer's agents commissions on
spec homes are huge right now, too, and you
should share in that largesse as well.
Best,
Greg Swann, ABR, CBR, CRS, E-Pro, GRI
Realtor, Designated Broker
BloodhoundRealty.com
http://www.BloodhoundRealty.com/
Vox: 602-740-7531 | Fax: 602-504-1353
For a more up-to-the-minute take on
real estate news, visit our weblog:
http://www.BloodhoundRealty.com/BloodhoundBlog/
"I just moved here from Orange County, CA, and would like to purchase a home given the current market surplus. But I am wondering is it better to purchase a new home or a resale home? which one will appreciate more over time?"
Liz, do not listen to the so called expert ie "Realtors". they are just like used car sales man that are out there to sell and make comission. they will not give you an unbiased opinion about the market. the NAR's Chief economist David Leahrear recently changed his tune about this housing bubble, he said the people who bought last year will suffer the most. if you buy now, your house will loose value, is that what you really want? i am not saying this defintely will happen, but do your research and you'll see how ugly this market will get.
"the best bargains to be
had are spec homes from new builders. They are
anxious to clear as much inventory"
Greg
why are they so anxious to sell if so many people are moving to and buying RE in AZ? does this seem ironic? if by your reasoning that everyoen want to live in AZ why are they lowering prices instead of increasing them like they did last year? because the bubble has popped!! Listen to Gilbert the realtor who saw the bubble coming and left AZ, he's right and he's not trying to sell you anything.
Liz, save your hard earned money and rent, don't listen to this guy who has no other reason than to make a comission off of any sucker, i mean buyer at this time. builder are slashing prices everywhere, the ones who bought earlier have already lost value in their houses and it's not stopping any time soon.
When the Phoenix MLS was in the 30K range, there was an article that estimated that 12K of those houses were EMPTY.
Now the MSL is creeping towards 60K, imagine how many are empty now; with new appliances, granite countertops, & pergo floors.
Apartment rents might be rising, due to condo conversions... but why rent an apartment when you can rent a house for $100 more?
I'm waiting till prices revert to 2001 levels, until then, I'm going to RENT some flipper's nightmare FOR CHEAP w/o the hassle of an IO ARM and rising property taxes.
I CALL FOR AN IMMEDIATE BUYING BOYCOTT!!!
DON'T OVERPAY FOR SOCIETY'S SO-CALLED "AMERICAN DREAM".
Paying 50% of your monthly income for the privilege of "owning" should be called the "American Nightmare."
Some people prefer to buy their home rather than pay for their landlord's investment.
Some people prefer the tax benefits of owning a home as opposed to just pissing away rent money month after month--worrying about the next rent increase or if the investor owner is going to sell the home and the new investor owner won't renew their lease.
Some people prefer to live in a neighborhood where proud owners take care of their property as opposed to a neighborhood where renters don't give a damn about the home or yard because it's not theirs.
Some people own homes to live in, improve, raise families and make memories. They are happy with appreciation that outpaces inflation (as home ownerships has on average for decades).
Some people chose to own and not rent because they want to own a place they can call home. They aren't interested in flipping it in 6 months or 6 years, only to have to pull up and move again.
Some people can see that people who rent out homes for all or part of their living saying "RENT! RENT! RENT! DON'T BE STUPID, RENT!!!" are really rather self-serving.
I recently put 3K down as earnest money on a new home in the south west valley by a popular builder, (Richmond American Homes) and the home will
not be ready until April 2007. The purchase price was $235K, will I be able to barging with the builder; lower price or perhaps discount my incentive upgrades? If so, when and how should I go about this?
Indecently, new homes are just cheaper than resale homes in this market.
Thanks-Ruben
Ruben - I answered this in the comment I left on September 20,2006 at 18:18. Scroll up to see it.
Jay
Jay Thompson
REALTOR®
Century 21 Aware Realty
web: http://www.ThompsonsRealty.com
blog: http://www.PhoenixRealEstateGuy.com
