Sales Are Up

It appears to me by the activity in our office, that the 2011 Winter Season of homes buyers is off to a great start. About the Middle of January, it was as if someone flipped a switch and our activity picked up dramatically.

We have seen many Canadian buyers this year in the Gold Canyon market. It’s really not too surprising when you look at our depressed prices and how strong thier dollar is against the US dollar. We are also seeing buyers from the many of the colder parts of the US taking advantange of our market as well.

According to the 2011 Cromford Report, which tracks sales in the Phoenix Valley, we are seeing about 40 home sales per month in Gold Canyon. Since January, the average monthly sales price has increased from about $230,000 to about $270,000. Not bad considering we are still battling short sale and lender owned properties.

Too early to tell how this winter buying season will hold up, but from the looks of things, people have finally recognized that now is the time to buy and they are out looking now before they lose out.

Superstition Foothills Baptist Church

Our Savior's Lutheran Church

With the real estate market in Gold Canyon still trying to find its bottom, two churches are raising out of the Arizona Desert. Superstition Foothills Baptist Church is in the process of adding a new sanctuary to their property to existing campus to accommodate additional parishioners. Our Savior’s Lutheran Church is a new addition to the line-up of churches in the area with a brand new building and bell tower. In this community of approximately 6,000 people, there is now a total of 5 churches to serve the area with a permanent building.

Being involved in church most of my life I truly understand that these churches are not building buildings because they have a lot of money and don’t know what to do with it. But I am excited that during these hard economic times that people are returning to church and finding those things that are truly important in life.

Lastly, I believe that the sight of new churches being built in a community is a great sign that the area is alive and growing and filled with people who want to put down permanent roots. Gold Canyon is definitely that kind of place and I am certainly blessed to be able to both live and work in this community.

I have spent a good deal of time lately reading news articles and looking at market data getting ready to plan for 2010. Out of this research one thing has become painfully clear to me; now  is the best window of opportunity I believe I have seen in my 30 years as a REALTOR to buy a home. My concern is that I see this window slowly closing with each passing day.  So why do I believe there is a window and it’s beginning to close?

If you take a step back and look at the market, all you have to do is ask yourself 3 simple questions: 1) Do you believe prices will drop much further over the next 6 months (personally I don’t believe so)? 2) Do you believe interest rates (now right at or just below 5 percent) will go lower than they are right now (personally I don’t believe so). 3) Do you believe that there will be more or less inventory of homes to look at over the next six months (personally I believe there will be less)?

Add to this the following reasons: 1) The tax credit that is available to first time homebuyers and now even to people selling their existing homes and buying another one. 2) There is talk about raising the FHA minimum down payment from 3.5% to somewhere in the neighborhood of 5 to 10%. 3) There is also talk about raising the minimum credit score needed to obtain financing.

When you add all of this up, the window begins to look like a huge green light telling buyers to RUN not walk to your nearest REALTOR and get in on this once in a lifetime buying opportunity. It won’t be long before the light begins to turn RED and the window begins to close and an opportunity will be missed.

How have home sales and prices done in the Gold Canyon Arizona market in 2009 verses 2008. I recently did a search in our local Multiple Listing Service to find out for myself  how we compared so far to last year. The numbers above are from January 1st through August 28th of each year. As you can see, the number of sales in 2009 are up 34% over the sales in 2008. The other good news is it it taking less time to sell the homes that are on the market by 23 days. The problem is that the average sales price is down  about 23% and as can also see, the average sales price per square foot dropped by 24%.

Part of the reason for these statistics is the fact that Gold Canyon has not escaped lender owned and short sale properties that continue to come on the market. According to RealtyTrac.com who tracks foreclosures throughout the country, Gold Canyon currently has an inventory of 187 properties that are lender owned.  There are also 67 properties that are currently in some state of foreclosure.  Many of these foreclosure or pre-foreclosure properties will end up on the market as short sales. We are very fortunate that even with these forclosures, the values in Gold Canyon have not dropped near as much as other parts of the valley. Gold Canyon continues to be a very desirable place to live.

The chart above is from a local Arizona analyst and is called the Cromford Report. This chart does a great job in visually showing sales from 2001 through July of 2009.  You can see the peak years of 2004 through 2006 and can also see that it appears that we have hit a bottom and are gradually seeing an increase in property values. Although it will take some time to see if the bottoming is sustained, I don’t see any reason at this point to expect anything other than a firming up of sales prices in the Gold Canyon area and prices to increase once we see the inventory of homes come down further.

I am asked almost on a daily basis how the market is and if we are selling homes? People are surprised to hear that we are selling houses everyday and the market is getting better all the time. Concerned about the value of your home or the market in your area? Give me a call and let’s talk about it. There is never a cost or obligation for me to take a look at your home and your situation and give you my opinion. At least it will give you the information you need to be able to make an intelligent decision on what to do next. There may be a few more bumps in the road ahead, but we will make it through and one day this will all nothing but a memory.

In a recent article I was reading, I came across this map showing state by state when they were predicted to see a housing recovery ( http://tinyurl.com/d6durw ). As you can see, Arizona is actually one of the first states predicted to see a recovery in 2009. Although this map was published in April of this year, in my view, I have not seen anything that has fundamentally changed in our market since that time. We continue to see strengthening in the market and inventories continue to decline. There is still a mad rush of people trying to scoop up the bargains in the outlying areas of the Valley while they last. The $8,000 tax credit is slated to end on November 30th and I believe we will see continued pressure from first time home buyers taking advantage of this credit and this market.

The only way to really know when we have seen a recovery and what states were affected first, will only come with hindsight.  I would tell you that there are probably as many predictions out there are there are people who predict. I am not one of those people. I do try to watch the market and stay abreast of what others are saying about the market. I would also tell you that I tend to rely more heavily on local statistics and not as much on the National ones. Things can vary greatly from state to state and region to region and generalizing can be dangerous. The other problem I see with National statistics is they are typically behind. Often what you read about or hear on the news is data that is months old. In this changing economy, a lot can happen in a few months.

Here is what I do feel comfortable telling you. We are at historically low interest rates. We are at historically low housing prices. If you take out your own crystal ball and try to predict where you think housing prices and interest rates will go from here, I think there is only one direction you will see and that is UP.Yes,we will continue to see short sales over the next couple of years. Yes, we will continue to see foreclosures and lenders trying to sell off the foreclosed homes they have in inventory. But I believe at this point it will be at a manageable pace and the market will continue to absorb them as they come on. Whether you are looking for your first home, for a bargain on a second home or just looking for a good real estate investment, don’t kick yourself later by letting this opportunity pass you buy. I don’t want to have to look any of you in the eye one day and say, “I told you so.”

The V Tool

If a real estate opportunity was knocking, would you know it and would you open the door? In real estate, everyone is always trying to time their purchase to what they feel is the “Bottom of the market.” The problem with this theory is you don’t know you have hit the bottom till you are already on your way up. In a recent seminar I attended, the gentleman who was speaking is involved in doing real estate statistical analysis in Arizona. One of the points he made that really made sense to me is that prices going back up is the last sign we see that we have hit the bottom. There are many other market indicators that show we have hit a bottom before we begin to see house values raise.

In my 30 years of real estate experience, I have to tell you that I have never seen a better opportunity to buy real estate than right now. I really don’t expect you to take my word for it, though. Jim Weichert, owner and founder of WEICHERT, REALTORS® came up with a tool called the “V TOOL.” As you can see from the graphic, the V Tool has two lines, one indicating home prices and one indicating interest rates. To help put things into perspective, place a dot on the Price line where you think home prices were in 2005. Now put a dot on the Rate line also indicating where you think interest rates were in 2005. You will more than likely have a dot in the “High” area along the Price line and maybe Mid-Range or a little under on the “Rate” line. Now do the same things for prices and rates today. I believe you will end up with both dots pretty close to where the “V” comes together at the bottom. If you draw a circle around this area, we call this the “BUYING ZONE.”

Now take a minute and think into the future and put dots where you think prices and interest rates will be a year from now, maybe even 5 years from now. Is there any reason to believe that there will ever be a better buying opportunity than now?

In Arizona, we are currently seeing the inventory of available homes coming down. We are also seeing multiple offers on homes that are extremely well priced. Some of the outlying areas like Queen Creek, Florence, Maricopa, and cities on the west side of Phoenix are seeing the most activity and the best prices. Other areas of the Phoenix valley are seeing prices we have not seen in years. Homes are affordable again and prices are also right for investors to buy these homes and watch them appreciate.

So I ask the question again, do you hear opportunity knocking and are you ready to answer the knock? Wheather you are a first time homebuyer, a move up buyer or an investor, I hope you will take advantage of this market and buy IN THE ZONE.

THE ABC’S OF REAL ESTATE – For years real estate trainers have taught agents to put buyers into 3 categories depending on their urgency. An “A” buyer was one who was ready, willing and able and wanted to buy right now. A “B” buyer was one who would be ready in the next 30 to 90 days. A “C” buyer was typically one who is 6 months to a year away from being able to purchase a home. All three are good leads, they just have to be treated differently. The key with all of these types of buyers is doing the activities to stay in touch with them so you will be their REALTOR® of choice when they are ready to buy.

There is also another rating system for REALTORS® that deals with the daily activities of an agent. Remember, activity begets activity, therefore if you are not out there doing activities everyday, you will see no activity come your way. Hey that rhymes!

Anyway, for agents there are 4 primary “A” activities that will actually make you money.

1. Working with a Buyer
2. Working with a Seller
3. Negotiating a contract
4. Prospecting and lead generation

In the “B” category you have some of the following activities:

1. Working on your systems
2. Marketing yourself and your listings
3. Tracking the timelines on your listings, contracts and escrows
4. Tracking your sales, expenses and market trends

Finally you have “C” activities that would include some of the following:

1. Learning to use the software and programs you need to use on a daily basis
2. Learn to use new software’s and programs that can increase your prospecting and sales activities
3. Work to obtain professional designations
4. Attend state, national and franchise conventions
5. Attend seminars and training classes on a regular basis

So there you have it, the ABC’s of real estate. I hope you will take these to heart and as you look at your calendar each week, make sure you have activities in all of the categories penciled in. Concentrate on the “A” activities because they are the ones that will make you money. By staying focused on these primary activities you will be making the best use of your time and your resources.