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April 30, 2019

Mortgage Payments Drop $50 per Month on a Median Priced Home

Listings Under Contract Up 19% in 5 Weeks!

For Buyers:
Buyers got a break last month as 30-year mortgage rates dropped significantly from an average of 4.41% to 4.08%, which is the lowest they have been since January 2018.  On a $267,000 home (the median sales price in Greater Phoenix) the drop equated to nearly $50 per month in savings on principal and interest, which was enough to get many buyers off the couch and looking for homes.  This rate drop combined with an increased conventional loan limit up to $484K and a 32% increase in weekly seller price reductions meant that price ranges between $200K all the way up to $800K saw a combined 19% increase in contracts written over the last 5 weeks.  Contract activity is expected to increase at this time of year anyway due to seasonality, but last year over the same 5 weeks it only increased 8.6%.  For buyers who are still waiting for prices to begin declining, their wait just got longer. 

For Sellers:
The drop in mortgage rates could not have come at a better time for sellers.  Up until 6 weeks ago the negotiating advantage sellers have been enjoying for years in Greater Phoenix had weakened to the point where the market was on track to enter balance within a matter of months and price appreciation would have begun to slow even more.  However by April 4th the average 30-year mortgage rate (as reported by Freddie Mac) had dropped to a 15-month low.  This spurred buyer activity and resulted in Listings Under Contract, which were 10.2% below 2018 last month, to sharply increase and surpass 2018’s April count by 0.8%.  Currently sales volume is down 9.6% from last April, however when these contracts close escrow over the next 4-6 weeks May and June should fare much better.  Don’t get too excited though, the seller market is still much weaker than last year.  Affordability and demand were helped by this interest rate drop but could quickly be negated as prices continue to rise.  Sellers still need to be mindful of their asking price to get under contract before buyer activity seasonally begins to decline between May and the end of the year.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2019 Cromford Associates LLC and Tamboer Consulting LLC

Posted in Real Estate News
Oct. 9, 2018

Avondale makes list of Top 100 cities for rentrepreneurs

Rent estate has gained a lot of traction over the years because it makes a great investment with high-profit potential. Many consumers are simply more interested in renting than buying these days.

“Even setting aside big upfront expenses like a down payment, rising month-by-month costs are likely keeping many people from purchasing,” says Danielle Hale, an economist for the National Association of Realtors. “Today only 41 percent of people live in a county where the median-income family can afford to buy a home at the median list price, and affordability declined significantly over the past year.”

This has increased the demand for rental properties significantly, but not all markets are designed for rentrepreneurs, or those investing in rental properties. There are many cities better suited for the prospect than others, and one Arizona city made the list.

Avondale makes iPropertyManagement’s Top 100 cities for rentrepreneurs

Most of the top cities on iPropertyManagement’s list were located in the Midwest, Deep South, and in California, but Arizona was not forgotten. Number 84 on the list was Avondale, Arizona, which is projected to have a return on investment of 14.86 percent for rental property investments, a percentage significantly higher than the rest of the nation.

iProperty Management is an organization designed to help real estate investors get the information and resources they need to succeed. To help their clientele, they published a study on the top 100 cities they recommend for purchasing rental properties.

“Buying a vacation rental can be a great investment in today’s market,” the report stated. “…Because of this, many people are taking advantage and investing in real estate. The growing industry has incentivized property owners to enter the vacation rental industry, making it more difficult to keep units occupied. Choosing the right location will give you an advantage on untapped markets that generate a higher return on investment.”

The top 100 properties on the list were chosen based on high return on investment, ease of filling the rental unit, and great property prices. The top 10 properties on the list were as follows:

1. South Bend, Indiana, 86.25 percent ROI

2. Detroit, Michigan, 72.45 percent ROI

3. Green Bay, Wisconsin, 67.96 percent ROI

4. Birmingham, Alabama, 43.33 percent ROI

5. Cleveland, Ohio, 42.73 percent ROI

6. Biloxi, Mississippi, 38.92 percent ROI

7. Kalamazoo, Michigan, 37.6 percent ROI

8. Dayton, Ohio, 35.06 percent ROI

9. Gulfport, Mississippi, 34.55 percent ROI

10. Erie, Pennsylvania, 33.24 percent ROI

Purchasing successful property in Avondale

Avondale is a suburb of Phoenix, which has an extremely high proportion of renters when compared with the rest of the state. Almost 40 percent of the population choose to rent single-family units rather than buying, according to a Mashvisor report, which makes it an excellent prospect for rentrepreneurs.

What’s more, real estate prices in the area are holding steady, minimizing the buyer’s risk. Phoenix is a booming city with significant job and population growth rates. Rent estate investors will experience a high return on investment when purchasing properties in suburbs like Avondale.

“Phoenix is actually a booming, modern city with real estate investments ready to be seized,” the Mashvisor report states. “The Phoenix real estate market is no longer focused only on retirement homes and condos. Leave this idea behind or else you’ll miss out on some great real estate investing opportunities in Phoenix investment properties!”

Instead, economists recommend looking into single-family homes. The strong Phoenix economy has brought an influx of families in need of rental properties. The real estate inventory for single-family units in this area will be in short supply in 2018 and beyond, so now is a good time to pounce.

“There is a predicted 15% increase in the construction of single-family rental properties for 2018 (about 32,580 new residential real estate properties),” the Mashvisor report continues. “This is good news for Phoenix investors of single-family rental properties. Contrary to this, the Phoenix housing market will see a decrease in the construction of multifamily homes (about 32%). This means more competition for Phoenix investors of commercial real estate property.”

Savvy investors will jump on this opportunity to fill an investment gap with single-family units in Avondale. Be on the lookout for great deals in the area to ensure a high ROI.

Oct. 3, 2018

New Phoenix apartments open for adults with autism

Another new apartment complex recently opened up in central Phoenix. But this project,  called First Place-Phoenix, is unlike any other rental development.

The 81,000-square-foot, $15.4 million project was designed to support adults with autism in living more independently.

It combines 55 apartments, a residential training program and a leadership institute for medical professionals and researchers.

Residents ranging from their early 20s to mid 40s began moving into the four-story property at Third Street and Catalina Drive in July.

“It’s the best place,” resident Lauren Harper said. “I love waking up in my new apartment, going downstairs to get my coffee and heading out to work.”

More than half a million children and teens with autism in this country will become adults over the next decade.

First home away 

For more than 20 years, Denise Resnik dreamed of a place her son Matt and others with autism could live as adults.

“We traveled everywhere looking for a model, but we were looking for something that didn’t exist,” Resnik, First Place AZ founder and CEO, said. “We realized it wouldn’t exist until we created it.”

First Place includes special security features, a 24/7 staff, sound barriers blocking out street sounds, nontoxic materials and special lighting to mitigate sensory issues.

The stylish, modern apartments also include convenient “grab and go” stations where residents can charge their phones and store keys in an easy-to-remember spot.

The game room with the Arizona Cardinals theme is popular with new residents. The apartments come with their own kitchens with high-end appliances, but the decked-out  kitchen on the first floor is another spot many residents hang out.

Matt Resnik, baker and founder of SMILE Biscotti, knows his way around a kitchen. He will move in to First Place next month — his first home away from home.

Sept. 24, 2018

Homes to replace golf course next to Phoenix's South Mountain

South Mountain Park in Phoenix is the largest municipal park in the United States at nearly 17,000 acres. Zahira Ortega and Daniel Garcia, of Avondale, enjoy the view of the Valley from Dobbins Lookout.

A prime piece of Phoenix land, home to a golf course for decades and next to the biggest city park in the U.S., will soon sprout new houses.

The infill site is 10 to 15 minutes from downtown Phoenix and Tempe, and prices for the homes won’t stretch into the millions.

The new community, called Avance, is going up in south Phoenix, an area finally drawing the homebuyers and builders expected to flock there 20 years ago.

Other new communities in the area are already selling a near-record number of homes as people opt to live closer in and pay less.

Homes instead of links

Maracay Homes is planning 394 homes on the 83-acre former site of the Thunderbird Golf Club that borders South Mountain Park. That's about 250 fewer homes than it originally planned.

The golf course, open since the 1960s, closed a few years ago.

The builder competed with several other buyers to purchase the former links site north of Dobbins Road and east of Seventh Street for $10.5 million last year.

“There’s a need for more housing options closer in, closer to jobs and other cool things you can’t find on the Valley’s suburban edges," said Andy Warren, president of Scottsdale-based Maracay.

“This land nestled next to the largest urban park gives us a chance to create a community focused on an outdoor lifestyle and much shorter commutes for most people."

South Phoenix rising

The last housing boom of 2004-06 passed south Phoenix by as new homebuyers opted to go to Valley suburbs farther out. But during the recovery, more buyers are opting to live closer in.

“South Phoenix is undergoing the most significant transformation it has undergone since the early 2000s,” said Arizona housing analyst Jim Belfiore.

New-home sales in south Phoenix this summer are up 47 percent from the spring.

Belfiore said there are now 13 new-home communities in south Phoenix open for sales, and several more, including Avance, are expected to open up during the next year.

It’s not just about being closer in. More affordable home prices are also drawing more buyers to the area between downtown Phoenix and Ahwatukee Foothills.

The median price for new homes in south Phoenix is $285,500.

That’s about $35,000 less the Valley’s overall new home median, according to RL Brown’s Phoenix Housing Market Letter.

Avance advances

Prices in Avance will likely range from above $300,000 to more than $500,000.

Maracay plans to open home sales next spring, after the fitness center and Olympic-size swimming pool are completed.

“We can’t talk about exact prices yet,” said Warren. “But look at other communities up against big swaths of mountain preserves in the Valley. Homes prices in those coveted spots will cost a digit more than in Avance.”

The builder wanted to tap into metro Phoenix’s Midcentury architectural heritage for its houses. It’s marketing the style as new Midcentury.

 

The Phoenix City Council approved a zoning change for the golf course to residential before it sold last year.

Challenges in south Phoenix

The city of Phoenix has been working on promoting growth in its southern neighborhoods since the 1990s, while also helping existing neighborhoods.

A few new big retailers have opened in south Phoenix during the past decade, but many of the area’s newer residents still drive to downtown Phoenix or Tempe to shop or go out to eat.

Construction of a new light-rail line in south Phoenix is expected to start in 2019 and draw more development in the area. But earlier this summer, the plan drew backlash from residents of the area who felt they had been left out of planning process and said they were not aware they would lose lanes on Central Avenue.

In late June, the council voted to go back and study whether some areas of Central Avenue could maintain four lanes. But the light-rail plan is still expected to move forward on schedule so that it meets federal funding deadlines.

Warren said it would be great for light rail to go forward, but the Avance development isn’t contingent on it.

Sept. 10, 2018

Is Phoenix the next 'millennial magnet?' Report predicts more tech job growth

 

A London-based real estate investment company has named Phoenix a city to watch as one of the fastest growing markets in the nation.

“TH Real Estate believes that Phoenix is well-positioned to capitalize on its favorable growth prospects,” said Dan Manware, a researcher with the U.S. division of TH Real Estate, which issued the report. “We expect this metro to have continued momentum as its growth metrics such as population, employment, and share of millennials screen high among others in the nation. Phoenix’s robust growth has impacted every real estate property sector, resulting in compelling investment opportunities across the metro.”

The firm describes Phoenix as the “next millennial magnet.”

The city benefits from “tech spillover” from more expensive states like California and has established itself as a “major market for back-office positions, especially in finance, business services and technology due to its low cost of doing business,” analysts wrote in the report.

The region is home to operations for several Silicon Valley heavyweights including PayPal and Yelp as well as startups including San Francisco-based fintech firm Upgrade, which recently announced new hiring for its downtown Phoenix offices.

The city’s proximity to California, New Mexico, Colorado, Utah and Nevada positions it well for distribution companies, especially those in e-commerce. The Business Journal has reported previously on how the region, especially the West Valley, has become a distribution hub for the Southwest. Goodyear, west of Phoenix, in particular is home to several warehouse and distribution facilities along Interstate 10 and Loop 303 frontage in the city.

Analysts in the report project hiring will accelerate in tech-related jobs as more companies from Silicon Valley open sales and support offices in Phoenix. 

Sept. 7, 2018

What is a Final Walk Through?

This is part 3 of 3 of our videos regarding the inspection process when purchasing a home.   This last video briefly explains the verification of repairs and the final closing process.  

Sept. 6, 2018

What is a "BINSR"?

Here is part 2 of our inspection process video series.   This video discusses the completion of the inspection period and how the BINSR is submitted.  

Sept. 6, 2018

John McCain's real-estate legacy in metro Phoenix and beyond

Sen. John McCain was a trailblazer in many ways, including where he lived in metro Phoenix and his vision for the Valley’s growth.

The six-term U.S. senator and longtime Arizona leader moved from the suburbs to central Phoenix in the 1980s, opposite what most other Valley residents were doing then.

Then, during the housing boom, he and wife Cindy downsized to a new condominium in a tower near the Arizona Biltmore before that trend for empty nesters took off in Phoenix.

And right after he was diagnosed with brain cancer last summer, McCain put his efforts into an ambitious plan to turn the dry Salt River bed that crisscrosses the Valley into something like San Antonio’s Riverwalk.

From Tempe to Phoenix

In the early 1980s, McCain needed an East Valley address to run for a seat in the U.S. House of Representatives being vacated by Rep. John Rhodes. The couple bought a home in south Tempe’s Lakes community, a development built around a man-made lake in the 1970s.

When McCain ran for the Senate, he no longer needed to be in the Tempe district. Instead of moving to Paradise Valley or Scottsdale, the McCains opted to move into Cindy’s family home in north-central Phoenix.

As urban flight to the suburbs was well underway in the Valley, the McCains made central Phoenix their home. Their house, situated right on Central Avenue, didn’t have high fences and was easily visible and inviting from the street.

The McCains raised their family in the heart of Phoenix, and the couple opened their north-central Phoenix home to many for charity and community events.

“The McCains definitely drew people to north-central Phoenix and helped the area during a time when many folks were moving away from it,” said Bobby Lieb, a veteran real-estate agent with HomeSmart Elite and longtime resident of north-central Phoenix. “They held many fundraisers for groups there, too.”

Downsizing

In 2007, right before McCain made his second presidential run, the couple listed their north-central home for sale and moved into a new condo at 24th Street and Camelback Road.

The couple downsized while many others were still opting for bigger homes. The McCains’ 14,500-square-foot north-central Phoenix home drew a lot of attention, not surprisingly. As the economy was crashing, it sold for $3.2 million.

The home has been expanded, renovated and resold a couple of times since then.

The McCains were also a draw for other homebuyers in their Biltmore-area condo tower, said real-estate agents.

Besides the McCains’ Creekside ranch in Cornville, Arizona, the couple had condos in La Jolla, California, Coronado, California and Arlington, Virginia, according to his campaign disclosures during the 2008 presidential race. 

Real-estate legacy

One of McCain’s most lasting mark on the Valley’s growth will be his efforts to develop the Rio Salado.

After decades of efforts to transform 45 miles of the riverbed from Mesa to Buckeye, McCain ramped up the movement last year.

"Frankly, after a while, you start thinking about your legacy. It (the Rio Salado) may not be completed in my time, but I believe that someday it will be," McCain told Arizona State University students in August 2017, shortly after he was diagnosed with brain cancer.

He said the Rio Salado development could rival or even surpass the famous San Antonio Riverwalk and could be one of the most significant environmental and economic additions in Phoenix history.

It may take decades, but if the project comes to fruition, McCain's impact on Arizona real estate could continue for generations to come. 

Sept. 5, 2018

What is a home inspection?

This brief video explains what the home inspection is, how it's conducted and when its completed when purchasing a home.   

May 30, 2018

Cameron Diaz's House from The Holiday Just Hit the Market for Nearly $12 Million: See Inside

Turn The Holiday into your permanent home — no online swap or bad breakups required.

The house that served as the exterior of Cameron Diaz’s California mansion in the popular film can be yours: It’s now on the market for $11.8 million with realtors Brent Change and Linda Change of Compass.

Alamy

Although it was technically home to Diaz’s high-powered character, Amanda, it was Kate Winslet’s Iris who spent the most on-screen time at the 7-bed, 6-bath estate. The exterior and backyard were the only two spaces to be featured in the movie (the stunning interiors were likely sets crafted by design queen Nancy Meyers), but there are plenty of camera-ready features this “landmark two story” has to offer.

Don Lewis
Don Lewis

Potential buyers enter the property, which was designed by architect Wallace Neff, through a set of gates that open into the façade’s court. The centerpiece of the striking welcome is a center fountain, surrounded by plants. The rest of the grounds are no less extravagant, and include a formal rose garden, an inner courtyard, a spa, a pool, a tennis court and a BBQ area.

Don Lewis
Don Lewis

In the living room, original details like coved ceilings, iron sconces and an oversize fireplace welcome guests. A stunning library with a carved wood ceiling is another standout, but a second family room that opens out to the pool is equally impressive.

Don Lewis
Don Lewis

The kitchen boasts hand-painted tile, a generous sized island and an adjacent breakfast area. A basement media room and formal dining room also come with the San Marino property.

Though the star-studded cast — which extends to the main ladies’ love interests, played by Jack Black and Jude Law — won’t likely be hanging around, the new owners will feel almost as famous after scooping up this Hollywood retreat.