The Penrose Team Blog

June 12, 2017

What Changed About Our Market This Past May?

What changed about our market this past May compared to May 2016? Let’s look at how the numbers stack up.

This year, we had 10,504 new homes come on the market, which is a 4.2% increase from the 10,074 homes that came on the market in May 2016. Inventory decreased 6% from 24,172 available homes in May 2016 to 22,704 available homes in May 2017. The number of homes sold increased 10.9% from 8,832 in May 2016 to 9,797 in May 2017. Our month’s supply of inventory went from 2.74 months in May 2016 to 2.32 months this past May, which is a 15.4% decrease. 

This 6% decrease in inventory and 10.9% increase in buyer demand means we’re in a strong seller’s market in most neighborhoods. However, this can also vary depending on your price point. Interest rates are the lowest they’ve been in 2017. The last email I saw from Freddie Mac said that the average 30-year fixed rate was 3.875%.

If you have any questions about our market or you or anyone you know is interested in buying or selling a home, don’t hesitate to give me a call. I look forward to hearing from you soon.

May 24, 2017

Real Estate Teams vs. Single Agents

There are a few reasons why you should hire a real estate team instead of an individual agent. 

The main challenge is that single agents work with both buyers and sellers, so they get pulled in two different directions. If you hire a single agent to list your home, they are not 100% dedicated to selling your home. They are driving all over town doing showings for buyers and trying to make a paycheck, which is understandable but not very good for your home sale. 

When you hire a real estate team, there will be multiple agents who can show your home so that your property is shown on the prospective buyer’s schedule, which ultimately gets you more showings and better offers.

If you hire an individual agent to help you buy a home, they will also be working with sellers. How can they service the sellers and still take you out to look at homes when you are available? If the home you want hits the market and your agent isn’t available to take you to a showing, then you risk losing that home to another buyer. When you work with a real estate team, it is much easier to look for the homes you want on your schedule.

 


A real estate team is able to create smoother transactions.


 

Finally, single agents have a hard time dealing with escrow. Escrow is when you are under contract on a home. Most individual agents work on their own escrow, which means they spend all day working with buyers and sellers before turning to escrow when they have extra time. 

If an agent waits until the end of the day to work on escrow, they might miss timelines, overlook certain details, and create unnecessary drama in the transaction. Our real estate team has a dedicated escrow manager who handles all of the details and helps the other agent to make the entire transaction go smoothly. That’s why our team is able to offer better customer service and less stressful transactions. 

If you have any other questions about working with a real estate team, just give us a call or send us an email. We would be happy to help you!

 

Posted in News
May 9, 2017

This Is One of the Best Markets We’ve Ever Seen in Phoenix

The latest numbers are in, so let’s take a closer look at the real estate market and how it compares with what we saw at this time last year. A lot of drastic changes have occurred in the last 12 months.

We had 10,303 homes come on the market in April of this year, down 7.3% from the 11,054 homes we saw the year before. Right now, we have 23,552 homes on the market, down 7.1% from this time last year. The month’s supply of inventory has also declined 11.5% from 2.99 months to 2.68 months. Finally, home sales are up by 3.8%, from 8,450 last April to 8,781 this year.

What does this all mean? Fewer homes are coming on the market, fewer homes are on the market for sale, and more homes are selling. That puts us in a strong seller’s market in most areas. It will depend on the neighborhood and price point, but the market’s inventory is extremely low overall. Homes priced under $300,000 are selling fairly well, sometimes with multiple offers.

 


We're in a strong seller’s market in most areas.


 

 

We also have seen interest rates stabilize in the low 4% range, bringing more buyers into the market while we also have the fewest number of homes on the market since 1999. It’s a great time to buy a home right now and lock in a rate while they are so low. If you’re thinking about taking the equity from your current home and using it to purchase a bigger, nicer house, this is the perfect market to do that in.

If you have any questions for me, don’t hesitate to give me a call or send me an email. I would love to hear from you soon.

April 11, 2017

How Are Falling Inventory Levels Affecting Our Market?

Inventory levels are falling in our area, but what does that mean for home prices?

The Washington Post recently published an article stating that inventory levels nationwide are at the lowest levels they’ve been since 1999, which was when the National Association Realtors first started tracking home sales in the U.S. That’s more than a 17-year low for the number of homes for sale. 

However, we see more and more buyers moving into the marketplace because interest rates have been rising since the election. You would think rising interest rates would keep buyers out of the market, but the rates are actually causing a panic. Buyers think if they don’t lock in a low rate right now, they might get priced out of the market. 

Not only do we have new buyers flooding the marketplace and a 17-year low in inventory, but we also have buyers who already own a home but are looking to trade up entering the market. This segment of buyers wants to lock in a lower rate before it gets too high and they get priced out of the home they want to trade up to.

 


It’s a perfect storm out there for sellers.


 

What does this all mean? It means it’s a perfect storm for sellers who want to get their home sold for top dollar. 

If you have any questions or you or someone you know is thinking about selling their home, please give me a call and I would love to give you a free home evaluation. I look forward to hearing from you! 

 

March 24, 2017

Does 'Leaving Room for Negotiation' Really Work?

Many home sellers go with a strategy of pricing their home high to leave room for negotiation. 

In my experience, when sellers list a house higher than what they think it should sell for, we see that buyers do one of two things. They will either refuse the property and won't even look at it, or they will look at the property and end up buying another home. This leads to the seller getting a lot of showings, but no offers. 

This leaves the seller confused and wondering why these buyers won't just make an offer. 

Buyers shop for multiple homes, so if they find a home they really like at a great price point, many times they will just make an offer on that property. They won't even bother haggling with you over your property if they feel it's overpriced. 

Think of it this way: You're driving down the road looking to fill your tank and you see two gas stations; one has gas for $2.50 a gallon and the other charges $3. Your options are to spend $2.50 a gallon or try to haggle the other guy down to $2.50. 

 


Buyers won't bother haggling if they feel a home is overpriced.


 

Which would you choose? Of course, most people will go straight for the $2.50 gas and not bother haggling with the other gas station. The same goes with real estate. Why haggle with a seller when there's another home you love that allows you to make an offer and move on?

We want to price your home as close to market value as possible so we can get the most showings in the shortest time. You want to sell quickly to get top dollar because the longer your home stays on the market, the more inclined buyers will be to submit lower offers. Likewise, the longer a home is on the market, the harder it will be to get buyers up to your price.

If you'd like any more information about negotiation tips to get you top dollar, give me a call or send me an email. I'd be happy to help!

 

Posted in News
March 8, 2017

The Phoenix Real Estate Market Is Strong for Sellers

The latest numbers are in for Phoenix real estate and I’m happy to share them with you. Here are some of the most important things that we saw in February:

1. 9,799 homes came on the market this February, down 8.7% from the 10,657 we saw in 2016.

2. Active inventory also dropped by 5.3% over the last year, down from 25,012 to 23,736

3. There were 6,512 sold homes in February, an 11.5% increase from the 5,830 we saw last year.

4. Our supply of inventory dropped an astounding 17.8%. Last year we had 4.29 months, this year it’s down to 3.64.

We’re seeing shrinking inventory, a shrinking number of homes coming on the market, and an increase in the number of sold homes.

Interest rates have gone up since the election, which has brought even more buyers into the market. Move-up buyers who want to lock in a low rate are becoming more common. Inventory is still at its lowest point in 15 years, however. 

If you or anyone you know is thinking about selling a house, this is the market do pull the trigger in. If you have any questions for me, don’t hesitate to give me a call or send me an email. I look forward to hearing from you. Make it a great day!

March 2, 2017

How Interest Rates Affect Your Bottom Line

What do interest rates have to do with your bottom line? Interest rates actually play quite an important role to both home buyers and sellers alike. 

Interest rates started to go up right after the election—they jumped almost 1%. There was a lot of fear and trepidation in the market because everyone thought the rise meant the market was going to crash. Interestingly, though, we saw real estate sales go up over 11% in the month of January. 

How did that happen?

As interest rates rise, buyers tend to get anxious. The buyers sitting on the fence thinking they can wait it out realize that as interest rates rise, home affordability drops, and if they don’t get in and buy now, they may be priced out of the market. 

 


The pressure is on to make your move now before rates rise any further.


 

There are also expectations that the Fed could raise interest rates three more times this year. Again, as interest rates go up, affordability goes down. In addition to buyers being anxious they’ll be priced out of the market, any seller who wants to sell a home and trade up might look at the payment for their next house and realize they can’t afford it. 

That’s why there’s a lot of pressure for people to make moves now and lock in interest rates as low as they are now before they rise any further.

If you have any questions about how interest rates affect your bottom line, your payment, and your ability to move, please don’t hesitate to give me a call. Make it a great day! 

Feb. 15, 2017

How Do Rising Interest Rates Affect You?

Interest rates have really changed since the election; how do rising interest rates impact you? 

On election day, the 30-year fixed interest rate was 3.47%; today, that interest rate is 4.05%, according to the national average. In other words, interest rates have gone up 16.7% since the election. 

What does that mean? If you were to get a $200,000 mortgage, put 20% down, and finance the purchase over 30 years, your mortgage payment went from $718 a month to $768 a month. Your monthly payment went up by $50, which equals $600 a year. 

Here is the good news: interest rates are still historically low and they have dropped recently. If you lock in a low rate now, you won’t run the risk of rates increasing later in the year. 

The Federal Reserve did say that they would raise rates three more times in 2017. If rates go up, it would cost you more money to finance the same house. If rates go down, you can always refinance, but when rates go up, you could get priced out of the home. You could also end up paying a lot more money for the same home that would have been less expensive if you had made the purchase earlier in the year. 

 


Although rates have gone up, they are still historically low.


 

A lot of buyers are purchasing homes now before rates go up again. Sellers are putting their homes on the market to take advantage of this high buyer demand so that they are not subject to higher interest rates on their next home purchase. 

If you have any other questions about interest rates or the real estate market in general, give me a call or send me an email. I would be happy to help you!

Feb. 8, 2017

Looking at the Phoenix Market Over the Last Year

I've got both a market update for the Phoenix area and some great news for you today.

This year, we have 10,095 homes on the market for sale compared to 10,745 last year, which marks a 6% decrease in the number of homes coming on the market. That's a great thing for home values and home sellers. There are 22,686 active listings versus 23,671 the year before, which is a 4.2% decrease in homes listed for sale.

We also saw a notable increase in the number of homes sold; 6,001 homes closed in January compared to 5,188 the year before. That's good for a 15.6% increase in homes sold, and that's a big number.

This year, we saw January have a 3.78-month supply of inventory compared to 4.56 months the year before, which is a decrease of 11%. That means that it would take less than four months to sell everything currently available on the market if no other homes came on the market. It's considered a seller's market. 

 


Homes in certain parts of the Phoenix market are really starting to appreciate in value.


 

As for mortgage interest rates, the 30-year fixed mortgage interest rate is at an average of about 4.19% as of February 2nd according to Freddie Mac, with the 15-year note rate at 3.41%. Rates are heading up steadily for the first part of February, homes are selling, there's not as much inventory as there was last year, and in some areas, you can see prices starting to appreciate. 

If you have any questions about your house's value or you're thinking about buying a home, give me a call or send me an email soon. I look forward to hearing from you.

 

Jan. 24, 2017

What Can We Expect in the 2017 Phoenix Market?

No matter where you stand politically, I'm sure we can all agree that we're glad the election is over and we can move on. So what does the election's outcome mean for real estate here in Phoenix?

I'm getting a lot of questions about what I think prices will do in 2017, and I hear them from both sides of the aisle. Having been in real estate for more than 17 years, I can tell you that we're still dealing with basic supply and demand. When supply exceeds demands, prices will flatten off or decline. Usually, in a post-election year, we see a lot of homes come onto the market for sale by sellers who deferred moving until after the election. 

 


In post-election years, many homes are listed by sellers who waited for the election to end.


 

So how many people will step up to the plate in 2017 to buy and sell a house?

If the sellers exceed the buyers, prices will go down, and if buyers exceed the sellers, prices will go up. We don't know which way it's going to go, but we know that escrow fallout rates escalated in the fourth quarter of 2016. If this continues, we could have a flat or softening market in 2017. It will also depend on if the stock market stays stable, increases, or God forbid, goes through a correction in 2017. We're also keeping an eye on interest rates.

It's all very local and depends on your neighborhood, how many homes are for sale in the neighborhood, and whether those sellers are reducing prices to get the home sold. 

If you have any questions about your neighborhood or your home's value, give me a call. I'd love to hear from you!