Gilbert and East Valley Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Nov. 17, 2022

Here's what's happening in Mesa, AZ real estate for the week of Nov 17th, 2022

Mesa, AZ

Thu Nov 17 2022
This week the median list price for Mesa, AZ, is $489,999, with the market action index hovering around 39. This is less than last month's market action index of 40. Inventory has increased to 1,187.

 

 

Questions on the market or curious about the value of your home? Feel free to message Brad or call direct at (602) 679-1025

Nov. 11, 2022

Happy Veterans Day!

                The History of Veterans Day

World War I – known at the time as “The Great War” - officially ended when the Treaty of Versailles was signed on June 28, 1919, in the Palace of Versailles outside the town of Versailles, France. However, fighting ceased seven months earlier when an armistice or temporary cessation of hostilities, between the Allied nations and Germany went into effect on the eleventh hour of the eleventh day of the eleventh month. For that reason, November 11, 1918, is generally regarded as the end of “the war to end all wars.”

In November 1919, President Wilson proclaimed November 11 as the first commemoration of Armistice Day with the following words: "To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations…"

The idea of the celebration was for a day observed with parades and public meetings and a brief suspension of business beginning at 11:00 a.m.

An Act (52 Stat. 351; 5 U. S. Code, Sec. 87a) approved May 13, 1938, made the 11th of November in each year a legal holiday—a day to be dedicated to the cause of world peace and to be after that celebrated and known as "Armistice Day." Armistice Day was primarily a day set aside to honor veterans of World War I, but in 1954, after World War II had required the greatest mobilization of soldiers, sailors, Marines, and airmen in the Nation’s history; after American forces had fought aggression in Korea, the 83rd Congress, at the urging of the veterans' service organizations, amended the Act of 1938 by striking out the word "Armistice" and inserting in its place the word "Veterans." With the approval of this legislation (Public Law 380) on June 1, 1954, November 11th became a day to honor American veterans of all wars.

Later that same year, on October 8th, President Dwight D. Eisenhower issued the first "Veterans Day Proclamation," which stated: "To ensure proper and widespread observance of this anniversary, all veterans, all veterans' organizations, and the entire citizenry will wish to join hands in the common purpose. Toward this end, I am designating the Administrator of Veterans Affairs as Chairman of a Veterans Day National Committee, which shall include such other persons as the Chairman may select, and which will coordinate at the national level necessary planning for the observance. I am also requesting the heads of all departments and agencies of the Executive branch of the Government to assist the National Committee in every way possible."

On that same day, President Eisenhower sent a letter to the Honorable Harvey V. Higley, Administrator of Veterans Affairs (VA), designating him as Chairman of the Veterans Day National Committee.

In 1958, the White House advised VA's General Counsel that the 1954 designation of the VA Administrator as Chairman of the Veterans Day National Committee applied to all subsequent VA Administrators. Since March 1989, when VA was elevated to a cabinet-level department, the Secretary of Veterans Affairs has served as the committee's chairman.

Veterans Day continues to be observed on November 11. The restoration of the observance of Veterans Day to November 11 not only preserves the historical significance of the date but helps focus attention on the important purpose of Veterans Day: A celebration to honor America's veterans for their patriotism, love of country, and willingness to serve and sacrifice for the common good.

 

 
Nov. 2, 2022

Here's what's happening in Mesa, AZ, real estate for the 1st Week of Nov, 2022

Mesa, AZ

Wed Nov 02 2022
This week the median list price for Mesa, AZ, is $497,000, with the market action index hovering around 40. This is less than last month's market action index of 41. Inventory has increased to 1,199.

 

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Selling your home before the holidays? Don't miss my article here! 

 

Oct. 27, 2022

Here's what's happening in Mesa, AZ real estate for this week Oct 27th 2022

Mesa, AZ

Thu Oct 27 2022
This week the median list price for Mesa, AZ, is $498,600, with the market action index hovering around 40. This is less than last month's market action index of 42. Inventory has increased to 1,191.

Market Action Index

This answers “How’s the Market?” by comparing sales rate versus inventory.

The market has been cooling over time, and prices have recently flattened. Despite the consistent decrease in Market Action Index (MAI), we’re in a Seller’s Market (where significant demand leaves little inventory available). If the MAI begins to climb, prices will likely follow suit. If the MAI drops consistently or falls into the Buyer’s zone, watch for downward pressure on prices.

Lending Note

The market seems to have paused around this plateau. The Market Action Index is a good leading indicator for the durability of this trend.

Oct. 19, 2022

Here's what's happening in Mesa, AZ real estate for this week Oct 19th 2022

Mesa, AZ

Wed Oct 19 2022
This week the median list price for Mesa, AZ, is $498,000, with the market action index hovering around 41. This is less than last month's market action index of 42. Inventory has increased to 1,141.

Market Action Index

This answers “How’s the Market?” by comparing the rate of sales versus inventory.

The market has been cooling over time, and prices have recently flattened. Despite the consistent decrease in Market Action Index (MAI), we’re in a Seller’s Market (where significant demand leaves little inventory available). If the MAI begins to climb, prices will likely follow suit. If the MAI drops consistently or falls into the Buyer’s zone, watch for downward pressure on prices.

 

 

 

 

 

 

 

 

 

 

Oct. 19, 2022

The City Of Mesa has approved an ordinance regulating short-term or vacation rentals

Senate Bill 1168 allows Arizona cities and towns to set regulations on short-term rentals. Everything from requiring permits and licenses, to having the ability to issue fines

Senate Bill 1168 allows Arizona cities and towns to set regulations on short-term rentals. Everything from requiring permits and licenses to having the ability to issue fines. Photo: Brad Daniels

Mesa is the latest city to crack down on its short-term rental market after a push by the Arizona Legislature and rental companies to stop the rentals from being public nuisances in local communities.

"[The new ordinance] gives specific requirements for property owners and spells out the penalties for those who allow parties, parking issues, and other code violations that get out of hand,” Mayor John Giles said.

 

The ordinance, set to take effect on Feb. 1, outlines numerous new requirements for short-term rental owners, including:

  • Short-term rental owners must acquire a new Mesa license
  • Contact information of the local person responsible for responding to emergencies and complaints
  • Notifying neighbors that the property will be used for short-term rentals
  • Obtaining minimum liability insurance
  • Numerous prohibitions on how owners can use the property, including housing sex offenders, selling liquor or illegal drugs, and other special events
  • Creates new possible civil penalties against offending owners

Mesa joins other Valley cities, including Glendale, Scottsdale, and Paradise Valley, in issuing short-term rental ordinances after Gov. Doug Ducey signed a new state law in July giving cities the power to do so.

Rental companies have also instituted new policies to discourage parties from happening at their properties. Airbnb, for instance, banned 6,000 people last year for breaking the new rules. However, that didn't seem to slow bookings in the Valley.

 

 12News

Oct. 13, 2022

What To Expect for Arizona Housing in the 4th Quarter of 2022

For Buyers: The price reductions keep coming. Last week when mortgage rates hit 7.0%, the Greater Phoenix housing market responded with 4,427 price reductions, 24% of all active properties in the MLS. At least 50% of those dropped their price by $12,000 or more.

September saw 1,372 closings involving seller closing cost assistance to the buyer, equating to 23% of MLS sales, with a median concession of $7,000. This is a 334% increase from last June’s count of just 316 sales involving concessions. New home sales through the MLS showed 33% with concessions and 50% at $10,000 or more. OpenDoor, as a seller, paid concessions on 355 transactions, 77% of their sales through MLS, with 50% costing $6,000 or more.
Closing cost assistance is expected to continue to rise into the 4th quarter as mortgage rates continue to stay high and stifle demand for the time being. Aside from paying the buyer’s costs for title insurance, pre-paid taxes, insurance, lending fees, and other closing costs, seller-paid concessions can also be used to buy down a buyer’s mortgage rate, if applicable, and ease the pressure on their monthly payment.
 

For Sellers: The 4th quarter is expected to be a test for sellers as mortgage rate hikes have reduced contract activity to levels not seen since 2008. Frankly, it’s not the best time to sell if you have a choice in the matter. Unlike in 2008, however, most sellers today do have a choice, and those without an immediate need to sell have chosen to wait. This is reflected in some of the lowest counts of new listings coming on the market recorded at this time of year going back to 2001.

Fewer new listings are a ray of hope for existing properties on the market. If new listings are trickling in and new buyer contracts are trickling out, then the overall supply does not spike and causes further downward pressure on price. Thus keeping the market in a delicate balance for now.
Prices hit their peak in May, shortly after mortgage rates hit 5% and before they peaked at over 6% in June. Once that happened, buyer demand dropped dramatically, and the price reflection showed a downward trend. Now rates are near 7%, and the sale price per square foot is down 9.6% over four months, currently measuring less than 1% higher than January 2022 and representing the elimination of appreciation achieved from January through May.
While this is disappointing to those who purchased this year, 66% of active sellers in the MLS (new homes excluded) have owned their homes for two years or longer. This means that even with the most recent downturn in price, the 2-year appreciation rate from September 2020 to September 2022 is still 40.3% based on per-square-foot measures, and the median sale price is $112,000 higher, indicating most sellers have enough equity to shoulder the added costs to sell in this marketplace if they must.

Finally, heading into the 4th quarter, expect marketing times to increase as they typically do this time of year. The median days on market before the contract was 31 days last week. From October through December, active days before the contract is known to rise anywhere from 44 to 56 days historically, with 50% of listings going longer.

 

The keywords for sellers in this “new” market are condition, price, concessions, and patience.

 

If you are interested in buying or selling, reach out to me. I would love to discuss this further with you and help guide you through the process of determining when might be a good time for you to buy and/or sell. We can also connect you with great lenders who can discuss various financing options like the 2-1 buydown.
The commentary was written by Tina Tamboer, Senior Housing Analyst with The Cromford Report ©2022 Cromford Associates LLC and Tamboer Consulting.

 

Sept. 21, 2022

September Market Update...Mortgage Rate Hikes Cause Drop in Contracts Again!

For Buyers: The percentage of closings with seller-paid closing costs continues to grow as August and September to date range between 12-13% of total sales in Greater Phoenix, inching closer to the normal range of 25-28%. Areas on the outskirts, such as Casa Grande, Maricopa, Coolidge and San Tan Valley in Pinal County and Wittmann, Tolleson, and Buckeye in western Maricopa County all have 20-30% of sales closing with concessions. These areas have more than their fair share of new home subdivisions that contribute to this measure as 32% of new homes that closed in the MLS in the last 6 weeks involved concessions, compared to only 11% of resale homes.

 

As mortgage rates remain volatile and difficult to predict, it’s important for buyers to get educated on the lending tools designed to ease the impact of dramatic rate swings. Tools such as the “Lock and Shop” option, offered by some lenders to allow buyers to lock at an acceptable rate for up to 90 days, and seller-paid permanent and temporary rate buy-down incentives designed to dull the sting of payment increases.

 

Buyers who are less affected by mortgage rates, but are looking for the best time to pounce on a home, should know that the 4th quarter of the year tends to be the best time for buyers seasonally. There is often a boost in supply around September and October with sellers eager to close before the end of the year. Once 2023 gets started, contract activity is expected to rise sharply from January through May. The upcoming Super Bowl, Phoenix Open and Spring Training events are expected to generate more open house traffic and exposure for active listings.

 

For Sellers: The last 3 weeks saw more hikes in mortgage rates, rising from recent low weekly averages of 4.99%, 5.22% and 5.13% in early August to 5.55%, 5.66% and 5.89% in late August and early September. A similar spike happened last June when rates spiked from an average of 5.09% to 5.81%, also within 3 weeks. The result was a 28% drop in weekly accepted contracts over the course of 4 weeks and the worst July for closings since 2007. Then rates got better, dropping to an average of 4.99% by August 4th. The buyer response was near immediate with a 25% boost in accepted contracts within a 4 week period. The latest spike has unfortunately resulted in another dramatic drop in buyer contract activity, down 14% in 2 weeks.

 

For now, the housing market is not for the faint of heart, only serious sellers need apply. Gone are the days of buyers waiving appraisals and inspections, Wall Street cash buyers offering more than asking price, and multiple offers. Over the last 6 months, the housing market has shifted away from an intense seller market to a delicate balance, the predictability of which relies on the behavior of interest rates. Until rates move below 5%, demand in the coming months will most likely remain weak, thus putting more pressure on sellers to reduce their price, offer permanent rate buy-downs, and pay for their buyer’s closing costs. Many sellers are sitting on significant equity in their homes and while the cost to sell has increased significantly, a great majority of those who have owned their property for at least 2 years can bear that extra cost without distress and still close with a significant profit.

 

The commentary was written by Tina Tamboer, Senior Housing Analyst with The Cromford Report©2022 Cromford Associates LLC and Tamboer Consulting LLC
Aug. 24, 2022

Seller-Paid Closing Cost Assistance Coming Back

For Buyers:

The good news for buyers, the number of closings with seller-paid closing costs rose 27% in July compared to June, equating to 7% of all closings for the month. That may not sound like much, but that’s the highest it’s been since March 2021. Before 2020, the established baseline for seller-paid closing cost assistance averaged 25-28% of MLS sales, and over the past 15 months, the average has been just 3-4.5%. The increase is expected to continue as large cash-based investors have pulled back their acquisitions, leaving many sellers to cater to normal buyers once again.

For most of 2021 and the first part of 2022, buyers had very little time to decide on a property before it went under contract. Last May, half of all homes that went under contract were on the market for only 7 days or less. This month homes are on the market a median of 21 days before an accepted contract, giving buyers more breathing room for a second showing and less pressure to decide on the spot.

More evidence of a growing buyer’s advantage, the percentage of properties closing over list price has declined from 58% in April to 24% August-to-date and continues to decline. The median amount over list has also declined from $20,000 to $7,000. As the current balanced market continues, expect to see this measure drop to just 10%-15%, closing over list.

For Sellers:

The last week in July saw 4,172 price reductions on Greater Phoenix listings, equating to 26% of active supply for that week. The median price reduction was $15,000, and 78% were over $5,000.


The peak of price for 2022 so far was May; since then, the median sales price has declined 6.25% from $480K to $450K. That’s an average of 2% per month* thus far; however, the downward trend has not been consistent across all price ranges, a detail not reflected in the median sale price measure. To analyze the price response by sales price range, we use the sales price per square foot. In May, the peak sales price per square foot overall was $305.99, August-to-date is $289.89, a 5.3% drop averaging 1.8% per month*. This is a similar result to the change in the median sale price, but by price range, the distribution looks like this:

 

The table shows that properties between $1M-$1.5M have seen the most substantial decline than any other price point since May, with an average decline of 3.2% per month. This is the only price range above the overall average decline of 1.8%. The runner-up is the $500K-$800K, with an average decline of 1.2% per month. All other price points are within 0.6% of May’s average 3 months ago as of August 9th.

 

The commentary was written by Tina Tamboer, Senior Housing Analyst with The Cromford Report ©2022 Cromford Associates LLC and Tamboer Consulting LLC

 

 

Be sure to call if you have any questions about this report or about how the market is performing.

Would you like to know what is happening in your neighborhood? 

Would you like to know the value of your home?

Do you need help deciding whether to sell or not, or would you like to know if now is the right time to buy?


I would be very happy to get you that information.

July 26, 2022

How to Get Into a Home with $0 Down

I have a bunch of economic news on the docket this week.
 
Case Shiller and FHFA’s announcements on home appreciation both come out on Tuesday, 7/26. The Case Shiller data was released as I was writing this update.

In May, Homes appreciated 19.7% Year Over Year compared to 20.6% for April.
 
On Wednesday, we will have the FED policy announcement. The markets usually know what is going to happen before the announcement, and it’s been leaked that the FED will raise the Federal Funds rate by .75%. I don’t expect this to have major movement on the market outside of the FED commentary, as this is the number most were expecting.
 
On Thursday, Quarter 2 GDP will be released, and experts are predicting Gross Domestic Product shrinking 1.6%. This will be two quarters in a row of negative GDP.  While not technically the definition of a Recession, there have never been two quarters in a row with negative GDP that hasn’t eventually been ruled a Recession. I expect the National Bureau of Economics to designate the U.S. in a Recession by the end of 2022.

Featured listing in Queen Creek backing the golf course. Call Brad for information!

HOW TO GET INTO A HOME WITH $0 DOWN

For 1.5 years, buyers that wanted to finance with a Down Payment Assistance Loan, FHA Loan, or VA Loan were almost always passed by for cash or conventional financing.
 
These are the buyers that should look to take advantage of the current housing market. 

Let’s discuss Down Payment Assistance for a moment.  Number one, it’s a common misconception that you have to be a first-time homebuyer to qualify.  This is not true for most programs nationally.
 
Down Payment Assistance is typically structured as a first mortgage at 95 to 97% of the home purchase price. We then bridge the 3 to 5% down payment gap with a silent or payback 2nd mortgage.
 
If a customer used a 5% down payment assistance 2nd – they would still have to come to the table with funds of around $3,000 to $4,000 to account for closing costs and prepaids 
 
With Seller Concessions common right now, we can structure the concessions to pay for all costs and prepaids getting the client into a home for $0 down.  This means that a client can often get their earnest money back at closing, and the only costs they pay for are inspections.
 
These are the clients that should take advantage of the current market.
 
There are a lot of buyers that qualify with credit/income but don’t have the down payment. Please reach out if we can help you or your clients get into a home with $0 down.

I realize that not all my readers are in Maricopa County, but we like to share this as Maricopa County, AZ, has historically led housing trends that eventually moved across the U.S.

 

The I-Buyer statistics are quite eye-popping at the moment.

Currently, Open Door has 1,682 active listings and 9.6% of the whole market’s supply.

The under-contract stats are only 1.7%.

The Cromford Report estimates that Open Door still has over 400 homes not yet listed. 

The expectation is that I-buyers will likely slow their buying to avoid adding more homes to

their large inventory.

In Maricopa County, there are currently 13,674 homes available for sale. Of the 13,674, approximately 51% of those homes are currently vacant. 

Brad Daniels, REALTOR®. Hague Partners / 72SOLD. Get 12% more for your home.