Realty Executives Phoenix

Shelly S. Smith

Shelly S. Smith

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New 2023 Conforming Loan Limits

(Published on - 12/2/2022 10:31:45 PM)

It has been announced that the new conforming loan limit for 2023 for a one-unit property will be $726,200.  These limits are increased based on home prices and conforming loans have less stringent guidelines compared to Jumbo loan products which are typically harder for which to qualify!


Shelly's Market Update January 2021

(Published on - 1/29/2021 9:31:37 PM)

I had the distinct privilege of attending a Zoom meeting with Tina Tamboer, Senior Housing Analyst at the Cromford Report, providing real estate statistics, trends, and data services for the Phoenix Metropolitan Area.  Some highlights:

 

The employment outlook for the valley illustrates the following industries to be dominant:  1) Manufacturing 2) Healthcare 3) Bioscience 4) Construction

 

Corporate profits rose 27.5% in the 3rd Quarter of 2020 and it could account for the healthier luxury home market we are experiencing.  63% of inbound home buyers earn in excess of $100,000 annually.  $1 Million dollar plus listings under contract are up 69.7% over last year just in the first 27 days of January 2021.

 

We are underbuilding for our population growth.  Our housing demand is 28% above normal, but our housing supply is 73 1/2% below normal.  Demand may ease up gradually due to an affordability issue as buyers compete for the slim supply of available homes on the market.  Supply needs to come up for affordability to be affected.  Favorable interest rates give buyers more buying power and interest rates may be low throughout 2021.

 

When we look at listing inventory in January from another typical year, we should be in the neighborhood of 24,000 listings.  We currently have in the neighborhood of 5,150 total listings available in the Arizona Regional Multiple Listing Service.  Our new listings are about 15% down from this same month in 2020.  The median agent days on market at time of contract is seven (7) days!  Buyers agents have to jump quick to show a property and write that contract quickly to compete--don't ask for anything.

 

In one southeast valley zip code (85295), there were 8 properties on the market on January 25th and 87 properties under contract!  Also known as INSANITY!!!

 

In the northeast valley in areas such as Scottsdale and Carefree, new homes are going for more per square foot than resale.  Contrary to that, new homes are a better deal in the southeast valley as resale homes are going up at a sharper trajectory than new homes.  For now considering southeast valley zip codes are among some of the most 'frenzied' in sales.

 

Buyers - be on the ready with financing, if any, lined up so as to make any escrow go seamlessly.  Sellers - know where you are moving considering you will likely experience several offers right out of the gate.

 

California buyers?  Call me.  I love the valley of the sun and was born here.  Safe showings.

 

Are you ready to sell?  Please call me.  This information illustrates the dire need for homes to sell.  


National Landscape of the Low Inventory Situation & Local Stats

(Published on - 12/2/2020 8:59:03 PM)

 

Nationally, for the first time in a very long time, there fewer than 500,000 homes on the market.  Think about that...an average of 10,000 homes on the market in each state across the nation!  It's absolutely insane.  I often find myself thinking about how grateful I am our younger son found a home mid-summer 2020.  It was the third home on which we wrote an offer and there were multiple offers, of course.  Negotiating for any credit from the seller?  Well, that was almost non-existent; the listing agent and seller were of the mindset to move on to the next buyer in line if we couldn't come to an agreement.  

 

Our son and his wife were first time home buyers and that segment of the market made up only about 30% of all buyers in 2020.  This year has resulted in the highest amount of sales dollar volume of any year since 2001!  That's saying something considering the run up in prices of 2005.  Bank-owned homes (REO's), government-owned homes, and short sales are nearly non-existent right now.  The annual average sales price has steadily risen since 2011.  I can think of one client who bought at what was later decided the bottom of the market (fall of 2011).  They still own the home but would be able to sell it at a premium now....if there was somewhere to go.

 

Interest rates remain so favorable but it remains to be seen what will happen as 2021 unfolds considering the pandemic, vaccine, interest rates, migration and employment security.  Will affordability be at risk as the shortage of homes pushes prices higher?

 

Not only are home sales outpacing other years, the rental market is at a peak as well.  The current rental price per foot in the valley right now is $1.18 and tenants are hard pressed to find a rental.  Never mind the eviction moratorium keeping many tenants in place.

 

The home building industry has also not kept pace with sales demand and Arizona continues to see an influx of buyers from other states (23% of new residents are from California).  There are a number of things that have fueled the low inventory fire....

 

 


The Double Edged Housing Boom Lawrence Yun, NAR Chief Economist

(Published on - 11/17/2020 4:33:11 PM)

Taken from the November - December 2020 REALTOR Magazine (not in its entirety):

 

The housing market is in a clear V-shaped recovery.  Sales for both existing and new homes in August hit their highest mark since 2006.  Buyer activity this winter is unlikely to chill:  Mortgage applications for home purchases are up about 30% compared to a year ago.  Due to the extraordinary demand, home prices have reached an all-time high.

 

Such a frenzy, reminiscent of 2006, raises questions about a bubble and the potential for a painful crash, but there is no comparison.  Adjustable rate mortgages and the lack of documentation required by some loans were the norm back then.  Today, buyers are taking out 30-year fixed rate mortgages and are actually living in the homes; during the crash there were many vacant homes purchased by speculators who never occupied them.  

 

Fourteen years ago, there were 3.8 Million homes listed for sale, and home builders were putting up about 2 Million new units.  Now, inventory is only about 1.5 Million homes and home builders are underproducing relative to historic averages.

 

Escalating home prices could soon cause another kind of damage:  shutting out first-time home buyers.  That is why more supply is very critical.  Only when home prices rise roughly in line with income growth can we say a market is in equilibrium.  Even in the outer-skirts of our local Phoenix metropolitan area sales are brisk and competition is fierce.  There are wait lists for new build product, too.  Something we hadn't seen in a long time! 

 

 

 

 


It's Great to Be A Buyer or Seller...Sizzling Hot Market 2020

(Published on - 10/8/2020 2:34:20 PM)

 

If you have a home with some issues, it is a great time to sell it!  There is so little inventory right now in Maricopa County that there are bidding wars in many price ranges.  Under a list price of $2,000,000 it is a sellers' market!  Who would have thought this would be true after the nightmare foreclosure market in the mid-2000's?

 

If you are a buyer the interest rates could not be much better.  Full disclosure--I just closed a fixed-rate, 30-year refinance on my own home for 2.75% interest.  Folks, I don't know if you could have better interest rate conditions.  You simply have to be on the ready as soon as a home comes on the market and have a winning strategy to get the seller to take your offer.

 

I just closed on a home in August and there were, at least, four offers on this property.  Communication with the agent's team, coupled with the good fortune of my own clients' extended face time with the seller, resulted in the winning bid and we weren't even the highest offer.

 

Don't think it will turn around either.  With record numbers of people moving to Arizona and the new-home market way behind in keeping up with demand, we expect to continue to see low inventory challenges.  Call me today if you want to buy or sell.


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