At this point, the market is once again hovering in the “balanced” area – where supply and demand come into alignment and it is neither a buyer’s nor a seller’s market. The chart below shows how in 2002 the market was in balance.

In 2003 demand became greater than supply, and prices began to inch upward. We were in a seller’s market. Although the balance began to shift back toward a balanced market late in 2004, prices continued to climb – skyrocketing in 2005 and reaching their peak in late 2007. Prices remained high even though the balance of supply and demand had shifted back into a buyer’s market by late 2005.

Then the flood of distressed properties on the market from 2008 through early 2009 drove prices ever downward.

Chart Courtesy of The Cromford Report

The market is still dominated by lender-owned and pre-foreclosure homes for sale in Phoenix, but the percentage of lender owned homes currently listed is far short of the percentage being sold. Hopefully, as the last of these are sold, the market will stabilize and prices will reflect a normal supply and demand.

Chart Courtesy of The Cromford Report

Office:  480-585-6456
Cell:  623-221-4319

This time of year we can be thankful it’s a dry heat. One thing that comes to mind when thinking about the heat, no, I don’t mean the pool or spa- but plumbing. Thought I would discuss some of the things that as home inspectors we are concerned with.

What should the water pressure be? Standard is between 45 to 65 PSI. We don’t have a concern until the water pressure exceeds 80 PSI, at that point we would recommend having a pressure reducer valve be installed above the water main. Why is too much pressure a bad thing? First of all it could affect the fixtures in the home such as the washers in the faucets, showers etc. Long term it could affect the plumbing system overall.

Who controls the water pressure? The city you live in will control the pressure- they have to keep the pressure as consistent as they can for the customer first in line and last in line- typically the closer to the source the higher the pressure will be. It is very common when inspecting homes in the same area, they will always have excessive pressure unless a pressure reducer has been installed.

What are the preferred plumbing lines? The most common is of course copper. Many new homes have a plastic type of tubing commonly referred to as “Pex” or Wirsbo. Sometimes they combine copper at stub outs and have Pex in walls and attics- sometimes the plumbing is all Pex. We do see a PVC type of product called flowguard-it looks like PVC but has a yellow stripe on side of plumbing lines. There are 2 types of plumbing that we do not feel comfortable with- the first is called Polybutelyne. It is grey in color- sometimes has Vanguard or Qest imprinted on side. There has been lots of known product defects with this style of plumbing and in most cases will need to be replaced. The problems are related to the fittings- originally they were acetate and leaked, then they changed out to copper fittings and there were also issues with that product. It came down to the way the installers crimped the fittings on the system- the crimpers had to be constantly calibrated and many times were not. Another older style plumbing that is not preferable is galvanized. This older style plumbing corrodes and rusts from inside the pipe. It can look perfect on exterior but becomes damaged from inside. I’ve seen samples where it was so rusted and corroded out that water would not flow through the plumbing lines.

Have a great summer and keep telling yourself it’s a dry heat.

Below is verbatim (and, yes it was written in all caps) what was written in the public remarks- you know, that section that normally has a description of the property to get you- the buyer- to want to see the property? It’s that paragraph you read about the home that makes you pick up the phone to call your real estate agent and request to show you the house.  So, instead of the enticing description that is what was written:

“SHORT SALE!! SUBJECT TO LIEN HOLDER’S APPROVAL  BUYER TO VERIFY ALL FACTS AND FIGURES. OWNER CANNOT MAKE ANY REPAIRS, WARRANTIES, OR DISCLOSURES. LENDER HAS NEVER OCCUPIED THE PROPERTY AND IS UNFAMILIAR WITH THE PROPERTY. PROPERTY IS BEING SOLD IN ITS ”AS-IS” ”WHERE-IS” CONDITION. BUYER IS URGED TO OBTAIN INDEPENDENT INSPECTION TO INSURE THE PROPERTY IS SUITABLE FOR BUYER’S INTENDED USE”

Wow!!! Really? A disclaimer!? What about the house? I emailed this listing to my client, and guess what, my client’s list of homes to see did not include this one, hmm- I wonder why? Not to mention, the pictures were not exactly impressive either.

Okay, let me break it up in pieces to see what I think about this “disclaimer”:

1. SHORT SALE- ok, good to know. A short sale addendum will accompany the offer.
2. SUBJECT TO LIEN HOLDER’S APPROVAL- if it is a short sale it always is subject to lender’s approval.
3. OWNER CANNOT MAKE ANY REPAIRS, WARRANTIES, OR DISCLOSURES- I understand the repairs part. The seller is in financial distress and will not make any repairs. But why not disclosures? The house was occupied by the owner. Why sellers who occupy the property refuse to provide disclosures? Do they think “no disclosure, no liability?” If so, perhaps they should read my previous post about the Seller Property Disclosure Statement.
4. LENDER HAS NEVER OCCUPIED THE PROPERTY AND IS UNFAMILIAR WITH THE PROPERTY- what? What does the lender have to do with this?? It’s a short sale. The lender is just a “contingency” in the contract. The lender approves the contract only. The house is still owned by the seller.
5. PROPERTY IS BEING SOLD IN ITS ”AS-IS” ”WHERE-IS” CONDITION- okay, I get it, we will include an “As Is” Addendum.
6. BUYER IS URGED TO OBTAIN INDEPENDENT INSPECTION TO INSURE THE PROPERTY IS SUITABLE FOR BUYER’S INTENDED USE- It’s always the buyer’s responsibility to conduct all inspections of the property, but the seller is responsible for disclosing all known defects of the property. But “to insure the property is suitable for buyer’s intended use”- huh? It’s a house, right?

This listing rubbed me the wrong way, that’s why I needed to post it. Of course, the house ended up foreclosing after being on the market over 100 days. Now, you think about it: “Would you want to see the house after reading the description?” I don’t think I would, it’s too scary!!! Wouldn’t it sound better this way (of course I haven’t seen the house so this is just an example but am familiar with the subdivision): “Stunning single level home! This home boasts vaulted ceilings throughout, upgraded maple cabinets, granite countertops and tile in all the right places. Beautifully landscaped backyard. The subdivision is one of the more popular ones in the area featuring a golf course, tennis courts and a community swimming pool.” 

Yes, it is important to qualify your agent and remember just because your brother, aunt or friend is a real estate agent, does not mean they are qualified, especially when short sales are concerned.

1. When you don’t have a Realtor to show the house, you’ll naturally have to be there when the buyers are looking – and that alone can prevent you from even  getting an offer.

Having the sellers present is so intimidating to some buyers that they’ll hurry through the house and leave without getting a good look and seeing all the home has to offer.

When you aren’t there, they’ll take their time and will do things like checking the depth of the closets, turning on faucets to check the water pressure, and looking inside kitchen cabinets. When you’re there, most won’t do those things.

2. Without the presence of agents as a buffer, sales that might have closed get no farther than an offer or a counter-offer.

Sellers are emotionally attached to their homes, and buyers naturally want to buy for the lowest possible price. Thus, a low offer that could have resulted in a sale with the aid of some skillful negotiations, ends in a rejection with no counter-offer.

Realtors are skillful in smoothing ruffled feathers and getting both buyers and sellers to set their emotions aside and continue with the negotiations.

3. When buyers and sellers are in direct contact, personality conflicts can end the negotiations.

Sometimes buyers and sellers simply rub each other the wrong way. The buyer criticizes something about the house or the way it has been maintained – or the seller criticizes the behavior of the buyers’ children. Or someone makes a political or religious remark that offends the other party.

The end result is that the transaction can fail over nothing more than a personality conflict.

When Phoenix Realtors are the go-betweens between buyers and sellers, these issues do not arise because the two parties don’t deal with each other directly.

4. Phoenix homeowners facing an impending foreclosure and trying to sell on a short sale are in even greater need of a Realtor at their side, because they don’t have much time.

Without assistance from a skilled negotiator who knows just how much to push the bank’s approval department, a short sale can be stalled so long that the buyer goes away in frustration and the house goes into foreclosure.

But losing the sale is not the worst that can happen. Unless the seller or the seller’s agent knows how to negotiate with the bank, the sale could close and leave the homeowner owing a huge sum for the portion of their mortgage loan not paid off by the sale.

5. Sometimes, after weeks of waiting, the buyer can’t get a mortgage loan. Realtors make sure their buyers are pre-approved for a loan before finding them a house, but buyers working without the aid of an agent often don’t know the difference between a pre-qualification and a pre-approval. And, unfortunately, neither do the sellers.

Realtors working with Phoenix home sellers advise them not to take the house off the market until they have 3rd party assurance that the buyer can complete the transaction.

When the buyer can’t get a loan, it leads to heartaches for both buyers and sellers. It’s especially frustrating for sellers who may have turned away other buyers, thinking that the sale was a sure thing.

And this is just the beginning…

These are all situations that can prevent the sale of your Phoenix home, but many more pitfalls lie in wait for buyers and sellers who are inexperienced in dealing with the legalities of buying or selling a home.

Professional Realtors make sure that their clients understand every section of the purchase and sale agreement and all the other forms, and they protect their clients by including contingencies, disclosures, dollar limits, and specific deadlines that must be met.

For instance, buyers and sellers who have not been involved in a Phoenix home purchase recently may not know that sellers are legally obligated to provide a property disclosure to the buyer.

When this is not provided, buyers can later find themselves faced with expensive repairs that they did not anticipate. And sellers can find themselves faced with a lawsuit for non-disclosure.

Without these safeguards, buyers and sellers can find themselves in legal entanglements, or sitting in limbo waiting – and legally unable to cancel the agreement and move on.



Office:  480-585-6456
Cell:  623-221-4319

We have certainly been lucky with the weather so far this year, so close to Memorial Day and still have not exceeded 100 degrees- wow. I’m sure it’s coming and  it would be a good time to remind everyone to get their homes ready for the summer onslaught of heat.

Here are some simple things most anyone can do to keep the heat out and the cool in. It will not only make you feel better but will save you a few dollars from the utility companies.

• Doors & windows- are the first areas you want to take a look at- simply if you can see light entering then the seal is not good enough- sometimes it just takes adjusting a dead bolt or door knob to create a tighter seal at a door. Make sure to check the bottom also- the bottom sweeps can be damaged or have open conditions present. I explain to my clients if there was a gap in the wall we would seal or fix it- no difference- same amount of air or heat flow is present either way. Of course dual pane windows are a nice plus but they need to be caulked and sealed properly from time to time. Window treatments and shutters can also help you out.

• Attics- the biggest impact you can have is insulation- if your home is more than 15 years old most likely you have between 3 to 5 inches. Today’s standard is 8 inches for R-30 rating. When it comes to insulation the more the better- R-38 would be the target. Blown in or batting? I won’t solve the debate here but after recently attending a seminar of energy ratings it appears that blown in is the best based on getting into all the nooks and crannies in the attic and does not have seams or joints as in batting insulation.

• Garages and garage doors- the cooler you can keep your garage the cooler the wall between your home and the garage will be. A good plan would be to insulate the attic area over the garage (typically garages are not insulated- it is an upgrade). I would estimate I see 1 in 18 garages that have insulation in the attic. Garage doors are notorious for heat loss- especially metal. We all know how it is to get in our metal vehicle that has the sun beating down on it- same principle applies to your garage door. They make insulation that fits between garage door panels- the thicker the better- typically ½ to 2   inches. Some even has aluminum coating to reflect the heat. Rather inexpensive and is easy to install.

• Plug any holes you see in the exterior- at plumbing penetrations, stem walls, soffits, seams and of course roofs. Expandable foam can go a long way but if you use caulking make sure to use exterior rated and a silicone base material that will expand and contract with weather conditions.

Hope this helps- have a great and cool summer.  Mike

Whether you’re buying or selling, one of the most important qualities your realtor should have is market knowledge. Choose someone who is familiar with the area and with the homes that are for sale and that have been sold.

Real estate is a local business – pricing and market trends can vary greatly even from neighborhood to neighborhood within Phoenix.

Next, do read Phoenix real estate websites. See what agents promise and what their past clients say about them. But after you’ve narrowed your choices, get acquainted before making a commitment.

Make sure you choose someone who is friendly, willing to answer your questions, and who has time to talk with you. You also want someone who will return your phone calls in a timely manner.

If you’re a buyer, look for Phoenix real estate agent who really listens when you describe the home you’re looking for – and who will keep you informed of new listings coming on the market. And of course, you want someone who is willing to show you homes – not someone who sends you out to drive around or to visit open houses on your own.

If you’re a seller, look for an agent who will prepare a market analysis to show you the proper price for your home in today’s market – and who will point out the things you need to do to present your home at its best. You also want someone with a plan for marketing your home beyond putting up a sign and entering the information into the multiple listing service.

Perhaps most important: look for an agent who will tell you the straight truth, even if it isn’t what you’d like to hear.

Whether you choose a new agent or a 20-year veteran, look for professionalism in manner, speech, and dress. But don’t confuse professionalism with stuffiness. You need someone who is enthusiastic about helping you.

Finally, trust your own instincts and feelings. You’re going to be working closely with your agent, so be sure to choose someone whose company you’ll enjoy and whose advice you’ll trust. If an agent makes you feel uncomfortable or intimidated – keep looking.

A look at the monthly average sales prices tells us that the lowest monthly average in 2002 was $154,392. And while we don’t yet have the averages for May of this year, the most recent figures available show a low average for 2010 of only $136,000.

Thus, you can buy a home in Phoenix today for nearly 12% less than you would have paid in 2002, before the prices began their meteoric rise to the peak average of $340,683 in August of 2007.

But it gets even better than that. Interest rates have also fallen by an average of 2%. And when it comes to interest rates, 2% is a huge number.

Assuming 100% financing for the sake of comparison, here’s what that means in terms of money going out of your pocket:

Had you purchased a home in 2002 at the average price of $154,392 you would have paid approximately 7% interest, bringing your payment to $1,027 per month.

Today, you can buy a comparable home for $136,000 – about 12% less. And as of this week’s rates, you’ll pay only 5% interest, for a payment of only $730 per month. So your monthly payment will be 28.9% less!

Predictions about the future abound, but most financial experts agree that interest rates will rise, and it could happen quickly. Some also say that prices may continue to tumble. But as you can see, the interest rate will have a greater impact on your financial future than saving a few thousand on the purchase price.

Even if that home priced at $136,000 dropped another 10% to $122,400, but the interest rate returned to 7%, your mortgage payment would be $814 per month – $84 more than if you purchased today.

If you plan to stay in your home for several years, and can say “yes” to these questions, now is a fantastic time to buy a home in Phoenix.

• Do I love this house?
• Can I comfortably afford the monthly payment?

What about other reasons for buying a house? I came up with 21 Reasons to Buy a House in Arizona few months ago- and those reasons were good enough for me.

Once home to orange and grapefruit groves, the large irrigated lots are still dotted with some of those original citrus trees – offering a rural feel in an area just 15 minutes from the airport and downtown Scottsdale.

The streets are wide, and the abundance of luxury homes speaks of elegance and a comfortable lifestyle. Arcadia was first developed in the 1950’s, but many of those original homes have been replaced with large homes, offering extended covered patios, 5 or more bedrooms, and the finest in interior appointments.

Families with children seek out Arcadia for more than the multi-bedroom homes, however. The schools in this part of the Scottsdale School District are known for excellence.

As with all real estate, location counts, and Arcadia’s location couldn’t be better. Whether you enjoy browsing art galleries, viewing a new release at the Harkins 7-Plex theatre, fine dining, or shopping at the mall – you’re within minutes of indulging your favorite pastime.

Luxury homes in Arcadia start at about $495,000 and go all the way up to a 7,181 s.f home offered at $10,990,000.

However, you can still enjoy the location and atmosphere without the cost of a luxury home. A few of the original 1950’s ranch houses are still available in the low 200’s.

Arcadia is located in Phoenix zip codes 85018 and partly in Scottsdale in zip code 85251.

This diversity may also account for the peaks and valleys in median home selling prices over the years. For instance, in 2005, when the medians most months ranged from $195,000 up to $310,000, December saw a spike up to $437,500.

As in most areas of Phoenix, median home prices steadily rose from the 2002 prices that ranged between $150,000 and $175,000 until they peaked in 2007. In 2007 the low median was $244,000 and the high was $458,750. Then the price decline began, and in 2009, some months showed a lower median sales price than during any month in 2002.

Lender owned homes are, of course, putting downward pressure on the entire housing market in Phoenix. Zip code 85016 is no different, with distressed homes accounting for only 34% of the listings but 53% of the sales. These lender-owned homes and short sales sold in April 2010 for under $98 per square foot, while non-distressed homes sold for an average of $155 per square foot.

On the good news side, two years ago homes were staying on the market an average of 156 days. In April 2010 that average was down to 115 days. In addition, the number of sales per month is up 25% from 2009.