Realty Executives Phoenix

Jeff Franklin

Jeff Franklin


How Do Homeowners Accumulate Wealth? (SIMPLY)

(Published on - 9/25/2019 4:55:48 PM)

Stunning Modest Home


Please take a minute to read this great article from Forbes. It explains how home ownership automatically helps you build wealth.  Please let me know if you have any questions or if I can do anything for you.  


How Do Homeowners Accumulate Wealth?


This article is more than 2 years old.

The differences between buying and renting are massive.  According to the Federal Reserve, a typical homeowner’s net worth was $195,400, while that of renter’s was $5,400.  The data reflects 2013 and the next survey of household finances, which is conducted every three years, will be out in 2016.  Based on what has happened since 2013 and projecting a conservative assumption of what could happen next year to home prices if we see only 3% price growth, the wealth gap between homeowners and renters will widen even further. The Fed is likely to show a figure of $225,000 to $230,000 in median net worth for homeowners in 2016 and around $5,000 for renters. That is, a typical homeowner will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale.

Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth.  The simplest math shouldn’t be overlooked. A vast majority of homebuyers take out a 30-year fixed rate mortgage to make a home purchase. After 30 years, there is no mortgage payment (nor rent payment). So the home price growth over that time period would be the equity that the homebuyer would have accumulated. For example, the median home price of a single-family dwelling in the U.S. thirty years ago in 1985 was $75,500. This year, it will be at least $220,000. That figure of $220,000 is the housing component of the person’s wealth. Even had home prices not risen, the person would still have $75,500 in wealth today – on top of not paying any further monthly mortgage after 30 years.

This simple example does not play out nearly as neatly in the real world, since people do not stay in one residence over the 30 year period. Almost all homeowners trade up, change neighborhoods, or move to a better school district at some point. However, they are able to make those residential relocations due to the housing equity accumulated, even over a shorter period, and can immediately apply that equity to the next home as a downpayment. Therefore the conditions of steadily building housing wealth still hold.

We also know that not everyone can or should be homeowners. The memories of easily accessible subprime mortgages and subsequent harsh foreclosure pains are still fresh, and remind us of the devastating impact on the families involved, local communities, and to the broad economy. In addition most young adults have not developed the financial standing or have found a stable, desirable career and, therefore, choose not be homeowners until later.  The homeownership rate among households under the age of 35 is 35% currently and rarely rises above 40% historically. For those under the age of 25, the current ownership rate is 23% and rarely rises above 25%. But the time will eventually come when people want to convert to ownership. By the time people are in their prime-earning years of 45-to-55, nearly three-fourths do eventually become homeowners. By retirement, nearly 80% are homeowners.


A recent survey of consumers commissioned by my organization revealed that 80% believe that purchasing a home is a good financial decision (2015 National Housing Pulse Survey). Most consumers appear to already understand the simple math and the benefits of homeownership. So don’t overthink the matter of whether now is a good time to buy, or whether stock market returns will be better. The exact timing of a home purchase will have little financial impact in the big scheme of things. Just know that homeowners generally do come out ahead of renters in the long run.

I am Chief Economist of National Association of REALTORS(r). I regularly provide commentary and outlook about real estate market conditions to our 1.3 million members a...


Maricopa, Fastest Growing County In America!!! (2019)

(Published on - 7/30/2019 4:27:41 PM)

Well, this news should not surprise anyone.  Phoenix is almost always near the top of the fastest growing counties in America.  Recently, it also became the 4th most populated county in the United States and soon to be the 10th largest metropolitan area in America.   


This area has become a haven for Californians seeking refuge from the high cost of living as well as northerners who have grown tired of their cold winters.  In the past, Arizona's has relied mostly on the growing population to fuel the construction industries and our economy.  For years politicians and businessmen discussed diversifying our economy to alleviate the instability created by our dependence on construction. 


Well, it appears this diversification has begun as the advanced industries sectors continue to grow (Manufacturing, technology, healthcare, biosciences, financial services).  This evolution is also bringing younger, educated professionals to the Phoenix area.


According to the Arizona Journal of Real Estate and Business (June 2019), prior to the recession, most job opportunities came from real estate, retail sales and construction.  But now, financial and business services as well as healthcare and manufacturing, are meeting, if not outpacing the industries previously mentioned.  Furthermore, Phoenix, dubbed by some as "Wall street West," is ranked #3 on the list of cities with the highest number of workers in the financial services industry. 


Click here, for more information on Phoenix's growth.

5 Compromises Worth Making When Buying a Home

(Published on - 6/24/2019 4:30:18 PM)
The game of real estate

The game of real estate

Home buyers often start their search with a long list of must-haves … only to find they need to whittle it way down once they see what's within reach. Unless you're a bazillionaire, it's impossible to check all those boxes on the wish list. So, how do buyers decide what pieces of their dream (home) they're willing to hack off?

Imagine a triangle with price, location, and size/style/upgrades at each point. In most cases, you will have to be ready to give up on one of those three, says Dana Gonzalez, a Realtor in Denville, NJ. "Expect to compromise. If you get 80% of what you want, you're lucky."

We asked experts to name some common concessions and offer words of wisdom -- or warning -- on how those trade-offs can play out.

Compromise No. 1: Location

It's one of the first thing agents say their clients are willing to budge on.

"While they might want to find a home that is within walking distance to the downtown area with shops, restaurants, and public transportation, buyers do not want to compromise on their living space," says Suzy Minken, a Realtor in Short Hills, NJ. "After all, they live in the home. Sometimes these homes are too small to fit their lifestyle needs, or the larger in-town homes are simply above their price range. So the dream of a walk-to-town location very often will get removed from a buyer's must-have list."

Compromise No. 2: Square footage

But not everyone is adamant about doing everything they can to keep from downsizing. After all, if you're willing to skip that guest room, playroom, or dining room, you may be able to stay within your budget and live in a nicer neighborhood, points out Daniel Blatman, a Realtor in Manhattan, NY.

"Sometimes the reward is not paying long term for family and friends to be able to stay in your home," he says. So, if you're hoping to discourage the in-laws from spending three weeks with you each summer, this compromise could work out for the best!

But, real estate agents warn, if your space needs might grow in the near future -- say, if your family is expanding -- you might want to think twice before moving into a tight squeeze.

Compromise No. 3: Yard size

Plenty of buyers fantasize about landscaping a sweeping garden, or at least having an outdoor pool or hot tub -- until they see what they have to shell out (or give up) to get it.

"When it comes to describing their dream home, buyers frequently say they want a large backyard," Minken explains. "After seeing lots of places, however, buyers realize that the size of the backyard is not as important as the spaciousness of the interior of the home.

"When I ask my home buyers to qualify what they mean by a 'large' backyard, the answer is almost universally the same: 'large enough to fit a swingset.'" And that's not exactly football field-size. "So that means they have more homes to choose from, especially when inventory is low."

That said, house hunters are more stubborn when it comes to the terrain itself.

"They prefer a flat backyard to enjoy with their family and friends," Minken says.

Compromise No. 4: Awesome garage

"For the first-time home buyers who are moving from an urban area to the suburbs, it often comes as a surprise that not all homes have a two-car garage," Minken says. "Older homes, built in the early 1920s and 1930s frequently do not. While there are homes that do not have a garage at all -- and these homes are a much harder sell -- buyers will compromise and buy a home that has a one-car garage if the home meets the other items on their must-have list."

Buyers are often flexible on the type of garage as well. Some garages are detached, which means that buyers can't enter directly into the home from the garage -- helpful during inclement weather. And some single-car garages are attached to the house, but -- surprise -- there is no entry from the garage into the house.

Compromise No. 5: Specific architecture

So, you've always pictured yourself in a Craftsman bungalow, until you saw the asking price. If you suddenly find yourself smitten with a Cape Cod, it's OK; you're not alone.

"Whether it be the architectural style of the house or type of kitchen counters , those things are one of the first things mentioned when clients tell me what they want," notes Amber Dolle, a Realtor in Sherman Oaks, CA. "But when compromises have to be made and they've had time to look at homes for a bit and consider their budget, the home's aesthetics usually are the thing they choose to overlook."


(Published on - 7/9/2018 9:30:46 PM)


Buying a home can be a fun and exciting time but do your homework and make sure you take everything into consideration. We have put together some things you should be thinking about throughout this process.  The following thoughts are a combination of our suggestions as well as ideas from the article we have linked below from HGTV.




  • SAVE MONEY for down payment ahead of time.
  • Get PREQUALIFIED. Find a good lender to make sure they find the best program for you and who is proactive in putting out fires. It’s also better to get a local lender who knows the hurdles and hoops to jump through for your area.  WE CAN RECOMMEND SEVERAL TRUSTED LENDERS IN YOUR AREA!
  • A LARGER DOWNPAYMENT means a smaller monthly payment. 20% down eliminates the mortgage insurance, however you can get into a home with a much smaller down payment. If you are short on cash for a downpayment you can ask for the seller to contribute to your closing cost. This works well in a buyer’s market. Seller contributions can also be requested in a seller’s market but is much less likely to be accepted which makes it more difficult to buy the homes you want the most. However, if you are patient and a little more flexible you may still find a seller willing to contribute to your closing cost.
  • BUDGET REALISTICALLY! Don’t try to keep up with the Jones’s!
  • RESERVE some cash for improvements.
  • REALISTICALLY EXAMINE SACRIFICES you may have to make to buy a home. Just because a lender pre-approves you for a loan doesn’t necessarily mean you should spend all of it. (ie, cash on hand, emergency fund, job security)
  • LOCATION – Select a location or geographical area.
  • Understand SCHOOLS affect home values
  • Understand FUTURE HOME VALUES as with any investment, Real estate is not a recession-proof investment. No one can predict future value of a home.





  • FIXER UPPER could save you a bundle. Looking for the worst house in a good area can be a great strategy. However, make sure you get a professional to give you estimates for renovations. HIGHER PRICED HOMES could actually save you money since you don’t have repairs or renovations. WEIGH YOUR OPTIONS!
  • LOW-BALLING doesn’t pay off! Be fair and realistic with your offers and negotiations. Playing hardball could cost you the home you really want! Especially in a competitive (seller’s) market!


THINGS TO DO DURING YOUR 10 DAY INSPECTION PERIOD (Which begins the day after your offer is accepted)


***Evaluate everything that is a concern to you during your inspection period***


  • HOME INSPECTIONS – Get a home and termite inspection and investigate any concerns. In Arizona you have 10 days from contract acceptance to do all of your investigations. Home inspections cost $400-$500 for most houses.  WE CAN RECOMMEND SEVERAL TRUSTED HOME INSPECTORS IN YOUR AREA!
  • HOME WARRANTY – It’s a Good idea to purchase a home warranty at least for the 1st year as protection from unexpected repairs because you don’t know the condition of the home. Cost usually $400-$500.
  • NEGOTIATE FOR REPAIRS after the inspection. When you have a home inspection you will generally receive a long list of things the inspector recommends to be fixed. However, this is normal and he is just making you aware of what repairs should be made. It is a good idea to focus on just the big ticket items that are expensive and affect the safety of the home If you seem to be unreasonable with your request the seller is less likely to negotiate with you.
  • READ DOCUMENTS  (ie contract, HOA, CCR’s, loan documents, title documents and any other documents given to you)
  • BUILDING PLANS Check building plans for the neighborhood. Building plans can have a positive or negative affect on home values and satisfaction.
  • RENOVATIONS,  REPAIRS AND ESTIMATES should be done by professionals.
  • TALK TO NEIGHBORS, DRIVE THE NEIGHBORHOOD different times during the week, weekends day and night.


WE ARE HERE INSURE YOU FIND THE RIGHT HOUSE, AT THE RIGHT PRICE, IN THE RIGHT LOCATION AND MAKE THE PROCESS GO AS SMOOTHLY AS POSSIBLE!  Please don't hestitate to give us a call to find out how we make a difference when you buy or sell a home!


Here is the link for the full HGTV article with some additional tips.  (I added some other helpful information above that was not in this article.)


CLICK HERE for more helpful post and information for buying a home.


Don't Let Remodeling Hype Pull You Under

(Published on - 2/19/2018 8:49:21 PM)



It’s a no-brainer. You can fold laundry to it, play your own music in the background or walk away from it. Then you can come back 55 minutes later and see the “big reveal” of a home that was renovated on a reality real estate TV network. It’s gorgeous, of course, and people are giddy over the results. Who wouldn’t be?

The formula for each show like this is the pretty much the same every time. Find fixer-upper. Buy fixer-upper. Choose a budget with or without the buyers (if you are an investor, you do this for yourself). Show all the unexpected stuff that happens along the way as the home gets made over. Who knew there would be lead paint applied to and asbestos behind the walls of a 100-year old house? Then show the gratifying final product — one that looks NOTHING like the original on the inside (fully staged, of course) and sometimes on the outside.

But how about those budgets and timelines they present, usually listed right there on the screen? After all, what you’d pay for materials and labor in Waco, TX, does NOT equate what you’d pay in LA, New York, or Miami, so are these shows just leading us down the rosy path to dream home budget disaster? Does pricing include labor? How much of the stuff you see is furnished by sponsors, home staging professionals, or contractors hoping to get noticed and willing to give away their services? Do these 7-8 week timelines they talk about happen only when the show employs multiple crews working around the clock — something we plebes could never arrange nor afford? Since the credits at the end of the shows do not include these disclosures, we’ll never know.

Doing a bit of research, here is what we found:

Renovation costs on reality TV shows are usually unrealistically low. Contractor quotes for gutting houses on these entertaining shows coming in at around the $50,000 to $60,000 for some savings-strapped homeowner or clever house flipper would probably soak the rest of us to the tune of $100 to $200K. In neighborhoods close to major cities, renovation costs for an entire house flip would rarely be less than six figures unless the house was a tiny bungalow or a condo.

The average cost of a kitchen remodel alone (new cabinets, appliances, countertops, etc) — WITHOUT relocating appliances, plumbing, or changing the room’s footprint —is about $30,000 according to Home Advisor. So when you watch these shows and see walls coming down to make way for new kitchen islands, sinks being moved necessitating jack-hammering concrete foundations and fancy vent hoods with marble backsplashes being installed, you can bet the price would be triple for you and me, and there would be no remaining budget for that new fireplace fascia, the gorgeous new master bath or a state-of-the-art laundry room they include in the show.

So if you’re in the market for a great deal on a house to live in, remodel or flip, pay no attention to the man behind the curtain of a reality real estate TV show when it comes to pricing and timelines. Values are not what they seem (nor profits), and expectations are wildly out of line with reality. These shows (while fun to watch to gather ideas for projects you’d like to tackle in your own home) are crafted for entertainment value first and foremost. In the meantime, they do get the laundry folded.

Source: TBWS.


Starboard Financial


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