The Penrose Team Blog

Aug. 8, 2018

What Phoenix Area Buyers, Sellers, and Homeowners Should Know About Recent Market Changes

Right now, a lot of changes are taking place in our market on a local, national, and even global level. 

According to the National Association of Realtors, home sales in the United States are currently down for the third straight month, while sales for single-family homes have dropped 5.3% year over year. On top of that, the national median home price is down 4.2%. 

Meanwhile, inventory, which rose 5.7%, has reached its highest level in recent times. In California, the impact of such developments is especially obvious. There, new and existing home sales are down 11.8% year over year. 

So between the national trend of higher interest rates and lower affordability, and the international news that China is pulling out of commercial real estate, it’s clear why so many are approaching our market with a sense of uncertainty.

If you’d like to learn more about the information I’ve shared today, please check out these great articles: 

And, as always, if you have any other questions, would like more information, or are curious about the impact these factors may have on your area, feel free to give us a call or send us an email. We look forward to hearing from you soon.

 

    

July 11, 2018

Your Latest Market Update: June 2018 vs. June 2017

How did our June 2018 market compare with June 2017? Here’s how the latest year-over-year statistics stack up:

  • The number of new listings dropped 1% from 10,234 to 10,139.
  • The number of active listings dropped 6.2% from 20,536 to 19,282.
  • The number of sold listings dropped 3.9% from 9,608 to 9,234.
  • The month’s supply of inventory dropped 2.4% from 2.14 months to 2.09 months.

As you can see, we had slightly fewer homes come on the market and fewer homes actively listed for sale, which led to fewer homes being sold. This makes sense because when there are fewer homes for sale, fewer buyers find what they’re looking for and fewer homes sell.

We still have a shortage of inventory, interest rates are starting to creep up, and buyers want to buy now and lock in a low rate while they can but they aren’t all finding the home they want.

If you have a home you’re thinking about selling, I encourage you to put it on the market now. Not only is buyer demand strong because we’re in a seller’s market, but it would be prudent to lock in a low interest rate now to finance your next home purchase.

As I said, interest rates are creeping up, and the higher the rate, the higher the mortgage payment. For every 1% mortgage rates increase, buyers’ buying power decreases by 10%. At what point do rates go so high that buyers start pulling out of the market or looking at lower-priced properties that they can afford, thereby causing a deflationary pressure on home prices?

Consider these factors before deciding your next move. If you have any more questions about our market or you’d like to talk about your home buying or selling strategy, don’t hesitate to reach out to me. I’d love to help you.

 

 

July 3, 2018

Why This Summer Is the Hottest Market We Have Seen in 10 Years


We are positioned to have the hottest real estate market in a decade here in Phoenix. How do I know that?

For one, we have almost a record low number of homes on the market for sale. Buyer demand is also picking up because interest rates are going up and buyers want to lock the rate in now. There are not enough homes on the market for sale, so prices are moving upward and there is pressure for buyers to buy now.


Buyer demand will remain strong as more homes come on the market.

Sellers are starting to put their homes on the market for sale in the summer because it is easier for most people to move in the summertime. You will start seeing more homes come on the market right now, but buyer demand will remain really strong. This means we should have a really great summer here in 2018.

If you or anyone you know is looking to buy or sell a home in this hot market, please feel free to reach out and give me a call or send me an email. I look forward to hearing from you soon.

June 25, 2018

Your Latest Statistical Outlook From the Greater Phoenix Marketr

What do the latest numbers say about our greater Phoenix market?

Between last May and May of 2017, there have been some big changes. Here’s what the year-over-year statistics tell us.

The number of new listings entering the market decreased just 1.2%, dropping from 10,672 in May 2017 to 10,554 in May 2018. The really dramatic differences occurred with the number of active listings, the number of sold listings, and inventory. The number of active listings decreased 8.1% from 21,214 to 19,507. The number of sold listings increased 2.4% from 9,858 to 10,094. And the supply of homes on our market dropped 11.3% from 2.15 months to 1.93 months.

What we have here is a tightening market. There are fewer homes for sale, but we’re still seeing strong buyer demand because interest rates are still in the low 4% range and many buyers are anxious about buying now before getting priced out of the market.

In short, it’s a great time to buy or sell.

As always, if you have any other questions about our market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d be glad to help you.

 

June 11, 2018

Think Twice Before Accepting an All-Cash Offer From an Investment Company

Today I want to talk about something that’s coming back into our market, and that’s companies that pay cash for real estate.

I won’t list the names of all the companies out there that are making cash offers on properties, but I will mention some of the techniques and strategies they use that you need to be aware of.

Many times, I’ll be on a listing appointment with a seller and I’ll give them a suggested list price based on what other similar homes are selling for in the neighborhood. That seller will then tell me that an investment company offered them an all-cash offer for the exact same price. Why, then, should they list the home for, say, $300,000 when they already have a $300,000 cash offer?

Here’s why: a lot of these companies will take a commission off of the price they offer. In addition, they’ll charge a convenience fee. They’ll also then do a full-blown home inspection on your property and ask you for a credit in lieu of all repairs for the home.

At the end of the day, sellers who sell to these companies end up getting an average of 10% to 15% less for their homes at closing than what they were promised up front.

The only time it would make sense for a seller to sell to one of these companies is if the home needed a lot of work and they don’t have the funds to fix it up or they need to sell the home now because they’re in a bad financial situation and need cash immediately.

I can understand in that scenario why someone would entertain an offer from an investor or an investment company. In today’s hot seller’s market, though, it doesn’t make sense for a seller to not put their home on the market and get full retail value for it. Why give your hard-earned money to an investment company when you can put it in your own pocket for your financial future?

If you have any questions about selling your home now or selling to an investment company and you want to have a more detailed conversation, don’t hesitate to call me. If you have any other questions or real estate needs, feel free to reach out to me as well. I’d love to speak with you.

 

 

Posted in News
May 17, 2018

Why You Shouldn’t Wait to Buy—Proof in April’s Numbers

How was the April 2018 real estate market? Let’s take a look at the numbers, compare them to 2017’s numbers, and discuss why right now is a great time to buy and sell.

In April 2018, we had 10,674 homes come on the market compared to 10,518 last year. That is a 1.4% increase. Active inventory was 20,218 homes this year. Meanwhile, last year there were 21,678. This is a 6.8% decrease in the number of active listings.

There were more total sales this year than last. The total sales numbered 9,162 compared to last year’s 8,828. That is a 3.7% increase in the number of homes sold.

The month’s supply of inventory has dropped again. We were looking at 2.46 last year while this year it is only 2.21. What do all these numbers mean? Well, basically, we are looking at fewer homes on the market for sale, but more homes are selling.

Interest rates have been going up. The National average is currently at about a 4.5% on a 30-year fixed mortgage. For a 15-year mortgage, the rate is at about 4%.


We are looking at fewer homes on the market for sale, but more homes are selling.

Buyers are purchasing now because they have been watching rates go up over the last six to nine months. They realize that as prices continue to rise because we have limited inventory and rates continue to rise, payments are rising. They must make the decision whether they get involved not or wait, and risk being priced out of the market.

If you have never bought a home and are looking to buy now, lock the rate now. If rates should drop in the future, you can always refinance. If rates continue to escalate, you will have your rate locked in so that your payment is set.

If you are in a home now and you are considering trading up or down, I would suggest doing it now while we are in a seller’s market. You want to lock in your interest rate, because it determines how much you pay for the home over the next 30 years.

If you have any questions or concerns or want to talk with me about real estate in your area, please call me or send me an email. I look forward to speaking with you soon.

 

 

May 9, 2018

How to Make Money in Real Estate

If you’ve watched this channel in the past, you know I’ve talked about investing in real estate. I wanted to cover that topic today in a bit more detail.

I’m sure you’ve seen books, YouTube videos, and commercials about how you can get rich in real estate. I’ve been investing in real estate since 2003 and it’s been a great investment for me, personally. I’m not going to give you any investment advice, however. You’ll need to seek a financial advisor for that.

There are four legs of real estate:

1. Appreciation. Historically real estate has gone up in price over the long term.

2. Depreciation. Owner’s depreciate the property on their taxes (check with your CPA).

3. Principal Pay Down. The tenants pay of your mortgage.

4. Cash flow. Money left over after debt service and operating expenses.

Many Americans have built their wealth through real estate. If you’re interested in getting involved with real estate investing, I have some great books to share with you that you should check out before you get started.


Many Americans have built their wealth through real estate.

“The Millionaire Next Door” talks about the millionaires in America and how they’ve built their wealth. I learned in this book that a majority of millionaires in America made a majority of their money in real estate.

If you love numbers and crunching them, check out “What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures.” I’d be happy to talk about you with this book even if you want to skip reading it.

The simplest but most profound book I’ve read about real estate investing is “The Automatic Millionaire Homeowner: A Powerful Plan to Finish Rich in Real Estate” by David Bach. There are a lot of powerful examples in here about building long-term wealth.

If you have any questions for us about real estate investing or real estate in general, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Posted in News
April 10, 2018

A Year-Over-Year Recap of Our March 2018 Market

Here’s how the latest year-over-year statistics from our Phoenix market compare between March 2017 and March 2018:

-The number of new listings dropped from 12,200 to 11,402.

-The number of active listings dropped from 22,100 to 20,356.

-The number of sold listings rose from 9,357 to 9,612.

-The month’s supply of inventory dropped from 2.36 months to 2.12 months.

As you can see, sales are up, inventory is down, and there aren’t as many new listings coming onto the market. What’s interesting is interest rates have escalated since last year, but at the same time, home values and sales are both rising as well. This is because buyers want to lock in a rate now before they get even higher. If rates rise too high, these buyers will get priced out of the market and not be able to afford what they really want to purchase.


If you’re looking to trade up or buy your first home in our market, now is a great time to do so.

There’s a scramble among these buyers to buy now, so if you’re looking to trade up, now is a great time to do it. If you’re looking to buy your first home, now’s a great time to lock in a low rate before they increase even further.

If you have any questions about our Phoenix market or you’re thinking of buying or selling a home soon, don’t hesitate to reach out to me. I’d love to help you.

 

 

March 22, 2018

Watch Out for These Red Flags When Hiring a Realtor

 

Whether you are hiring a Realtor to help you buy or sell a home, there are a few red flags and pitfalls to look out for.

 

The most common thing I see when people have tried to sell a home and it didn’t work is that they hired a friend or family member to sell their home. While hiring a friend or family member isn’t always a bad idea, you need to make sure that the person you are hiring is full-time and has a lot of experience.

 

It’s important to keep in mind that 87% of Realtors in Maricopa County are either new, part-time, or have been in the business for less than five years. When you hire a real estate agent, you need to make sure that they are selling at least 100 homes a year before you hire them to work for you.

 

You should also find out if your agent has training and certification in contract negotiation. I am a certified negotiation expert. Less than 1% of agents in the U.S. have that certification. In fact, real estate school doesn’t teach agents anything about negotiation. They teach you how to fill out a contract and a counteroffer but not how to negotiate and defend your seller’s equity. That’s extremely important.

 

In fact, our clients are getting an average of 2% more for their homes than the average Realtor in the MLS because all of our contractors are negotiated by certified negotiation experts.


87% of Realtors in Maricopa County are either new, part-time, or have been in the business for less than five years. 

Finally, make sure that the agent you hire charges at least 6% commission. Why? There are a number of agents who charge less than 6%, but those agents are doing what I call a “list and leave.” They put the home on the MLS, stick a sign in the front yard, and wait for a buyer to show up.

 

The problem is that it takes a lot longer to sell their home because no marketing is being done. The longer the house sits on the market, the lower the offers will be. The seller might have saved 1% or 2% on commission, only to lose 3% to 5% on the sale price because the home took too long to sell and there was no marketing being done, causing the seller to leave a lot of equity on the table.

 

If you are looking to buy or sell out of state, let me know. I am part of a network of the top 1% of agents in the United States. I can find you a great Realtor through the RE/MAX referral network.

 

I would love to talk to you more about what you need to look for when hiring a real estate agent. If you have any questions, just give me a call or send me an email.

Posted in News
March 8, 2018

February 2017 vs. February 2018: How Has Our Market Changed?

Now that February is behind us, it’s time to take a look back at the latest market statistics from that month.

In February of 2018, we saw 9,721 new listings come on the market. This is a 3% decrease from what we saw in February of last year, when the number of new listings was 10,016.

As for the total number of active listings, we had 20,711 on the market this February compared to 22,305 in February 2017.


There’s no way to be sure what the market will do, so don’t put off your real estate plans any longer.

 

There has been a 7% increase in the number of homes sold, with 7,019 listings having sold in February of 2018 and 6,529 having sold in February of last year.

Also, inventory has dropped. This February we had 2.95 months’ worth compared to last year’s 3.42 months. This is a 16% decrease in supply.

Due to our low supply and high buyer demand, most of our local markets currently favor sellers. Buyers are still highly motivated, despite the fact that rates have gone up, rising from about 3.5% last year to 4.25% this year. Buyers are concerned that if they don’t buy a home now, they’ll be subject to even higher rates later on in 2018.

In fact, the Fed has hinted that they may be raising rates as many as four times this year.

Whether your real estate plans are to buy or to sell, I recommend making your move as soon as possible. There’s no way to be sure what the market will do, so don’t put off your real estate plans any longer.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.