Valentine’s Day is one of those holidays that either brings hearts and flowers or frowns and loneliness. Well… today’s real estate market is bringing the latter to today’s sellers and buyers aren’t exactly falling head over heels either! There are shifts happening under sellers’ noses and buyers are finding more of a selection, but still at higher prices.
The Casa Grande real estate market has been in flux for the last few months with prices, inventory and confusion rising. In 2013 the area experienced a 20% increase in the average price per square foot, however not everyone in the market feels that jump was warranted and a lot of folks have been scared off by the sharp increases. However, that price increase leveled off in the fourth quarter of 2013 and inventory levels kept on rising. December was one of the quietest months in 2013 with only 63 of the 590 properties on the market having a contract on them, meaning a buyer and seller came to a meeting of the minds to purchase and sell a property. These numbers pushed our growing months supply of inventory to 6.6 months which is double that of the inventory levels we saw in just August. Months supply of inventory refers to the amount of time it would take for the number of homes to be sold if no new homes came on the market… So our current inventory leaves nearly 7 months of inventory for buyers to make their way through.
So what do all these numbers mean…? Well, it depends!
If you’re a seller – you’re going to have to get a bit more aggressive. This means making sure your home is in tip top shape, the pricing is right in line with market rate and you have to be willing and ready to show your home at any time. Buyers are expecting more for their dollar and they have plenty of choices available again. The marketing on your home is exceptionally important these days. That means stellar listing photos, compelling copy descriptions and accurate MLS information which makes interviewing your agent even more important. Have a list of questions ready when you’re interviewing your listing agent, it makes the process smoother. For a copy of Realtor.com’s suggested questions, click here. It is also imperative that a seller review the listing and photos before and after your agent places your home on the market – don’t be afraid to ask for corrections, everyone makes mistakes!
If you’re a buyer – your horizons may be broader than they have been in years. You’ll have more choices, more bargaining power and will still likely experience some frustrations. Although there are more homes on the market, most sellers haven’t quite grasped the shift in the market yet. There are also a lot of homes on the market where the owners don’t have to sell. They’re simply testing the waters at a price they’re willing to sell at, but it might not quite be market value. Negotiating with these types of sellers can be frustrating, especially for a serious buyer in this type of a market. Don’t be surprised if a seller isn’t willing to come down to your number right now, most are still hoping that the price increases we were experiencing in the third quarter of 2013 are on the edge of returning.
In either case, bring an extra large dose of patience and be sure you’re working with an experienced Realtor to buy or sell your home. Don’t be afraid to ask questions and be sure to do your homework!
Despite what you might think – there are some real advantages to buying a home in the summer!
- Less competition: There is less competition from other buyers! Since many don’t want to brave the 100+ degree temperatures in July & August, these are good months to search because they can translate to lower prices and better deals.
- Prices decline: Historically the summer months tend to have the lowest prices per square foot than the rest of the year.
- More time from your Realtor: Your real estate agent probably isn’t as busy during the later summer months so you may get more of their time and expertise!
- Ugly Ducklings: Some of the houses that are still on the market during this time have been on the market a long time! That could mean a better deal for you! Especially if you’re able to look past some of the bad paint, bad lighting, or maybe the home is just dirty. All of these are easy things to change once you own the property, and if you can look through these items, you may be able to get an even better deal!
Purchasing a home is one of the most important decisions in a person’s life and deciding on a particular house comes with many options. Forty-five percent of recent buyers used open houses as a way to narrow down their choices and find their dream home. Buyers in Western Pinal County will have the opportunity to do just that on April 20, 2013 as Realtors® hold open houses from 10:00 am until 2:00 pm as part of the Realtor® Nationwide Open House Weekend.
Realtors® will be available at the open houses to answer questions about the home buying process and local market conditions. Visiting open houses can be helpful when buyers are trying to decide what features and amenities they want in a home. Also, working with a Realtor® can be a real asset. Realtors® visit hundreds of homes with buyers each year, and have a unique understanding of what buyers’ value in their local markets. Their expertise and knowledge can help you achieve the dream of home ownership.
A complete list of the many homes to be open for viewing will be published in the Tri Valley Dispatch on April 17, 2013 and in the Casa Grande Dispatch on April 20, 2013 – it can also be found by clicking here.
Common mistakes made by buyers these days range from falling in love with the decor to trying to time the market. Whether you’re a first time homebuyer or a seasoned buyer – make sure that you aren’t making any of these mistakes!
- Timing the market: Many buyers were holding off until prices dropped further last year, then all of a sudden, prices started rising – and incredibly quickly! The age old question… how to time the market so you buy low and sell high? Well good luck – if you figure that out, you’ll be rich… or you will have found the world’s first working crystal ball! The truth is – analyzing the trends, digging into the statistics, and listening to the advice of your wise Realtor will help you navigate the market. While even they can’t time the market, they can help to ensure you’re finding the right home and at the right price.
- Don’t settle for the wrong area: Each area has its own personality and demographics so be sure to do your research on the items that matter to you. For example, if you’re a devout vegetarian, you may want to ensure that there are plenty of grocery stores within the area that provide really diverse and fresh produce. Since most real estate professionals recommend that when you buy a home, you should stay at least 5 years to recoup the costs of purchasing that home, its pretty important that you find the right area to call home!
- Don’t buy a fixer-upper if you don’t know how to fix it up: This is a tough lesson to learn and some of us can’t be persuaded otherwise until they experience it for ourselves! The actual costs of renovations can be overwhelming and oftentimes the true costs aren’t explained up front, once you’re knee deep in a project, you figure out all the additional items that are required – or highly recommended – and suddenly you’ve blown your budget! Before jumping into a contractor special, be sure you’ve spent some time with a local house-building group or help out a friend with a project in their home.
The market is constantly changing and navigating through a home search can be quite overwhelming. By working with a good Realtor, they can help you narrow down your search and provide you with data so that you can make an informed decision.
Buying your first home can be incredibly overwhelming – even buying your third, fourth or hundredth home can be a daunting experience! First time homebuyers and even seasoned investors can become confused by concepts and terms Realtors use everyday. For example, many clients assume a home warranty and homeowners insurance coverages are one and the same, or very similar.
There are very different purposes behind each and a definite reason to have both! A home warranty program is a service contract which is designed to help repair or replace major systems and appliances that become inoperable or need repair due to normal use. Many times a home warranty plan comes in handy! For example, I purchased a home built in the 80′s with original AC units where both units worked fine at closing, but over the years the south unit started to fail. My home warranty company replaced my air handler for the south unit for a $55 service fee out of my pocket – they took care of the rest, including removal of the old unit, installation of the new one, and all associated costs!
As for a homeowner’s insurance policy is designed to compensate or reimburse a homeowner for damages or losses covered by the policy that were incurred by an unknown event – such as a burglary or fire.
A great example of how both work together is in the case of a plumbing leak. Say a pipe is leaking under a sink and this leak is undiscovered until it causes so much damage to an adjacent room that portions of drywall must be removed and replaced. An insurance policy would most likely cover the cost of the removal, repair and replacement of the drywall and possibly belongings ruined by the leak, but the home warranty coverage would repair the actual plumbing leak under the sink.
The market is showing even more improvement in the average price per square foot – a large increase of nearly 40% from July 2011 to July 2012 in closed sales! That’s an increase of $17 per square foot on average and July 2012 marks the highest average price per square foot in over 2 years. You may not see a direct increase in your value right away since appraisals and the news tend to be 3 to 6 months behind the current trends, but we have the data and statistics to back up the trends. If you’d like more information about your specific home, just let me know – even if you’re looking to refinance or are just curious about your home’s value – I can help.
On the flip side, we are seeing a slowing in activity when it comes to purchases, however this was somewhat expected with the coming of summer – July and August have historically been slower months for housing in Casa Grande. This is largely due to the heat and the fleeing winter residents.
Something else to be aware of is that the USDA Rural Housing loan is coming to its end here in Casa Grande. For years Casa Grande and its surrounding communities have been eligible for this type of loan, however with our growing population – things aren’t looking good for another exception. You may be asking yourself why this matters to you… well if you know of someone with moderate income that would like to purchase a home with no down payment, the time is coming to an abrupt end.
Another housing related item coming to an end… the Mortgage Debt Relief Act of 2007. This bill went into effect in 2007 to help struggling homeowners who lost their primary residence either to foreclosure or short sale. If homeowners met the qualifications of the provision, they were not obligated to pay income tax on the forgiven debt. For example, if Sally sold her home in a short sale for $100,000 but still owed $250,000 to her mortgage company, the residual $150,000 would have to be claimed as income on her tax return, thus catapulting Sally into a much larger tax bracket. Under the Mortgage Debt Relief Tax Act, as long as Sally met the qualifications, the IRS would not be required to pay income tax on the $150,000 deficiency. This bill is due to expire on December 31, 2012 if another extension is not passed.
If you have any questions that are real estate or mortgage related – please don’t hesitate to ask. I am always here to help. We have a team of specialists designed to make your next real estate transaction as easy as possible. Until next month! =)
There have been many changes in the local real estate market trends including appreciation! In fact, since last June of 2011, the average price per square foot of active listing prices has increased 28.1%. This figure may be very different from what you’re hearing on the news which can be anywhere from 3 to 6 months behind and is typically based on national or metropolitan city statistics. When analyzing market trends, statistics can change dramatically when comparing areas.
Casa Grande tends to be a seasonal market due to our strong influx of winter visitors and seasonal population. Prices and activity tend to rise in the fall and winter months with a strong following in the spring and a ‘cooling off’ in the summer months. However, this year, that trend has changed. We are actually seeing a month over month increase in pricing even through June.
The number of active listings has also been on a declining trend with a 26% decrease since June 2011. Pending and closed sales have also softened a bit for the summer, but are expected to pick up pace in the fall. When listing inventory declines and buyer demand is still relatively strong, we typically see price appreciation.
Good things are happening in real estate around Casa Grande and we hope to see the trends continue!
If you have any real estate related questions please don’t hesitate to ask – I am here to help!
For a while there was a scare about lack of funding and additional reasons as to why this loan product would soon be unavailable – but it’s still here! And for how long… nobody knows. Technically, Casa Grande doesn’t qualify due to our growing population but we were kept in under an exception and will continue to utilize it as long as possible.
This loan program allows first time homebuyer, and in some cases, second home purchasers relocating, to purchase homes without a down payment. The loan provides up to 102% of appraised value in financing which means some of the closing costs and guarantee fees can be financed, depending on the appraised value. The loan also doesn’t require cash reserves and gift funds are acceptable for closing costs.
Another great feature is that sellers can contribute up to 6% towards the buyer’s closing costs – this means that a buyer could potentially purchase a property with no money down – and the mortgage payment will probably be less than rent!
Rates are comparable to FHA financing and flipped properties are allowed. The property must be owner occupied and there are some household income limits, but most first time homebuyers will fit into the program guidelines.
The selection of inventory for buyers has declined. Those of you who are actively searching for a property are experiencing this – where you used to receive multiple emails a week with properties that fit for you, that activity may have slowed to maybe one email per week or less! This is because the number of new listings has been declining over the past year and has leveled out to a lower number of active listings per month. There were only 383 active listings for single family detached homes at the end of December 2011 – down from 587 listings in December 2010!
These numbers change even more drastically in certain price brackets, for example if we look at a price range of $75,000 to $125,000 there were only 161 active listings for sale at the end of December 2011 which is down from 258 in December of 2010. There isn’t a shortage of qualified buyers either indicated by the blue and green bars on the same graph, which makes the competition for properties even stronger!