North Phoenix Agent Blog

Valley developer John F. Long died this morning at age 87. He’s best known for building Maryvale, the west side master planned community he began in 1954. The Arizona Republic posted an excellent biography this morning on its website. John Long built over 35,000 homes in the Valley and in his later years donated his time and busloads of money to causes he believed improved the livability factor of his hometown.

I’ve always had a special affection for John F. Long homes. They seem to be everywhere even though most biographers only mention “west side” and “Maryvale”.  The distinctive long, narrow, low-ceilinged hallway with bedrooms sprouting on either side like mushrooms is a staple of my nostalgic trips down memory lane. I grew up in homes either built by, or influenced by John F. Long. Hallcraft built the same type of floorplans. My first listing in my real estate career was a beautiful little red brick home built by Hallcraft. It looked exactly like most of the Long homes I’ve toured in the years since. Even in the mid-80’s in Moon Valley, where I spent my high school years in a home built by Sandahl, there were echoes of Mr. Long’s building plans.

There are currently 107 John F. Long homes for sale in the Valley, and you can view most of them via the preceeding link. (There are probably way more than 107, but there are at least 107 homeowners currently for sale who know for certain their home is a John F. Long design, and whose Realtors listed that in the proper data field on the MLS.)

I found this funky kitchen picture on the MLS this morning (click to enlarge). I’m pretty certain this is an original John F. Long kitchen, with a couple of coats of white paint over the original cabinetry. That’s almost certainly the original oven. I work out of a Coldwell Banker office in Gainey Ranch. For most of my 150 Realtor colleagues, this isn’t a kitchen fit for even a rental property. Those Gainey types demand new, new, new and shiny, shiny, shiny. But this warms my heart. I’ve always had a soft spot for the quaint and the charming (two words you don’t ever want to use to describe a home in the MLS if you hope to sell it!).

A fond “Adios” Mr Long. The Valley’s a better place because you were here.

PS - John F. Long homes (and others like his, and from the same post-WWII era) make fabulous first time buyer homes. With sellers anxious to sell, and Zero Down financing still avaialble through AmeriDream, Nehemiah and Maricopa County Bond programs, these homes might be a great deal for your first home. Wishing you could buy but worried you won’t qualify for a loan? Call and find out. One of my preferred lenders only needs about 15 minutes of your time and give you a YES or NO almost right away. You never get anything if you don’t ask, right?

I had to pick up some paint today for a client at a Dunn Edwards retail store. The very nice manager, Larry, asked me if I lived in an HOA. I thought that was odd, and wondered if DE kept a file of each HOA’s approved paint colors. Wouldn’t that be cool?!

Instead, Larry explained that Dunn Edwards gives discounts to HOA members. Now that is really cool!  Manager Larry says every Dunn Edwards store gives HOA members a discount and you have to volunteer the information that you’re living in an HOA to get the discount. He wasn’t supposed to ask, it seems.

So if you’re painting your house, go get the quality stuff the contractors use and a get a discount on it to boot!  Dunn Edwards store locator.

Rates have bounced back up again. It could be that lenders are trying to get ready for the increased loan limits by getting rates up a bit to reflect the increased risk of bigger loans. Of course, it could be gremlins or sun spots too. Who knows? Remember, 17% and 10 points used to be common; it could be worse.

6.400% — 30 Year Conforming
6.000% — 5/1 ARM, Conforming
7.125% — 30 Year Jumbo
6.250% — 5/1 ARM Jumbo

You can reach Kristi by cell phone at 602-750-8594 or by email at Kristi.Collins@mortgagefamily.com

I’m going out on a limb and predicting that granite kitchen counters are dead. Trend over, move on. Why would I say something this crazy? Granite counters are the gold standard for kitchen remodels in this town.

Well, I read articles written by Alison Rogers who’s a licensed agent in New York. She wrote a book called Diary of a Real Estate Rookie, available at Amazon. This morning I read an article she wrote for Inman News which mentioned granite counters. She says: “The kitchen countertop trend is for ‘anything but granite.’ Anything that can be labeled ‘green’ or environmentally friendly is big…”

My logic here is admittedly flawed and based on anecdotes alone. If granite counters are dead in New York, I bet they’re going to be “out” here in the Valley of the Sun in a few years. Although we’re the nation’s 5th largest city, Phoenix is dismally slow at picking up pop culture trends. Trends out of Los Angeles hit us quicker, but it seems to me that trends out of New York take 2 to 4 years to get here. I’m just supposing it’s the same with trends in the home remodeling world.

I remember watching Carrie on Sex in the City drink cosmos for at least a year before they became the drink of choice in Philadelphia where I lived in the late 90’s. I was drinking Philly cosmos for at least a year or two before I moved back to Phoenix in 2001. Couldn’t get a cosmo here to save me back then.

Course, I could be utterly wrong. Disagree with me about granite counters being over? Let me know, leave a comment.

Cover my behind legal mumbo jumbo: Today’s image provided by www.hilolani.com/granite.htm. I’m not affiliated with them or with Alison Rogers, or with Amazon.com

Well first up, an open house isn’t going to do diddly-squat if your house looks as bad as the one in this photo. In today’s Valley real estate market, nothing will help a house that looks like this except being 50% (or more) below the last sold comparable property.

But if you’ve got a nice normal house that’s in pretty good shape….. to Open House or not to Open House is a good question. Most sellers want them. Many sellers ask right up front how many open houses I plan to hold. Too often, an open house is the only tangible proof a seller has that their Realtor is working to sell the home at all. That’s a shame.

There are several agents in my office of about 150 who swear by open houses. There’s even a veteran agent who gives classes in how to effectively hold an open house. She swears that even after all these years, most of her business comes from open houses. But I suspect that’s a personality issue and not so much about the open house.

She’s a wonderful, old-time, small-town Arizona type. She reminds me a little of Flo from the old TV show Alice. She’s got a little less attitude than Flo and doesn’t crack her gum at all, but she’s just as Aw Shucks down homey as you can get. Frosted white hair in a cotton candy beehive and all. I think people just respond to her personality and choose her as their agent, regardless of which house they buy.

Just for my two cents worth, I don’t think Open Houses are a great idea and I don’t do them except under very limited circumstances. I worry about the security of it all. Mine and the homeowner’s. When you think about it, an open house is really just a big advertisement that says, “I’m in the house alone with lots of expensive/nice stuff, and I’ll be here for hours.”  Not the signal I want to be sending. Again, just my two cents. I’m kinda smallish and a woman, and so I worry about my safety more than your average 6 foot tall male might.

I also worry about the safety of my seller clients. Do you really want strangers walking in off the street to know what your kids look like (because you’re not taking down those family photos just for an open house, are ya?). Plus there’s the theft angle: I have actually had pharmaceuticals go missing at an open house. Finally, there’s that little subclass of folks who just like nosing around your stuff to see what you did with the house. We call them “Your Neighbors”.

Virtual tours and multiple photos can’t replace the experience of actually walking through a home, but they can come pretty close. I figure that if a buyer liked the online virtual tour enough and is pretty close to being ready to buy, they’ll go to the trouble of calling the listing Realtor and making an appointment.

Not to say I refuse to hold open houses. I’m doing one this afternoon as a markting blitz for a seller who emotionally must sell and fast. We priced it ridiculously low ($159,000 when the same type of home in the same condition sold in Nov 2007 for $215,000). I sent out a blitz of e-marketing about the property, emailed a reporter friend at the AZ Republic, called a bunch of Realtor colleagues, and will hold the home open this Sunday and next. We’re hoping to create a little sense of urgency in the potential buyers. I’ve done it before and been rewarded with multiple offers. I’ll let y’all know what happens this time!

There’s probably as many opinions about open houses as there are Realtors. I’m pretty interested to hear what my readers have to say on the subject. To Open House or not to Open House?

Fueled primarily by inflation concerns, interest on long-term mortgage rates moved higher for the week. Freddie Mac reported a rise to 6.04 percent from 5.72 percent last week on 30-year fixed loans, which broke the 6-percent threshold for the first time in seven weeks.

Rates on 15-year loans, which are popular in refinance deals, bumped up to 5.64 percent from 5.25 percent; while five-year adjustable-rate mortgages settled at 5.37 percent, up from 5.19 percent.

One-year ARMs, however, resisted the downward trend and slipped to 4.98 percent from 5.03 percent in the week-to-week survey.

Source: Baltimore Sun (02/22/0

Just fun tonight, because my writing muse deserted me.

If lawyers are disbarred and clergymen defrocked, doesn’t it  follow that electricians can be delighted, musicians denoted, cowboys  deranged,  models deposed, tree surgeons debarked, and dry cleaners  depressed?

It’s Ansel Adams‘ birthday. This has only a slight bearing on real estate, but I’m posting one of his quotes anyway. “A good photograph is knowing where to stand.” See Athol Kay’s very funny blog full of Bad MLS Photos here.

From Heloise.com:

Hang a plastic shoe organizer on the inside of your pantry door. You can store boxes of aluminum foil, plastic wrap, self-sealing plastic bags, plus larger containers of spices, powdered mixes, etc. This will free up some valuable space in the cabinets.

This week’s rate report brought to you, as usual, by Kristi Collins of Coldwell Banker Home Loans. You can reach Kristi at 602-750-8594.

This isn’t to say I don’t use and love other lenders. Shailesh Ghimire, Larry Cappalletti, Joey Fenwick of Indymac Bank (602-863-0067) and Jeannie Bolger of Wells Fargo (602-550-8674)are all lenders I recommend highly.

6.30% - Conforming 30 year fixed
5.40% - Conforming 5/1 ARM
6.75% - Jumbo 30 year fixed
5.80% - Jumbo 5/1 ARM

“CUTS LIKE A KNIFE, BUT IT FEELS SO RIGHT” - Bryan Adams and financial pros will tell you it’s wise to never try and catch a falling knife. Seems like decent advice in general - but in the financial world, it means that when the price of a Stock or Bond is in the midst of a severe decline, be very cautious about stepping in to buy…even if it feels so right because the price starts to look cheap.

That’s because when prices declines sharply, it often gets even worse, making it hard to call the bottom. That’s why many investors, who attempt to buy on the way down, say the feeling cuts like a knife. And over the past week - Bonds have been dropping much like a knife, and home loan rates have risen by about .25% across the board.

Don’t try to time the market or catch the knife of falling home prices. Nobody rings a bell when we get to the bottom! If you’re emotionally ready to be a homeowner, have good credit, and plan to stay 5 years or more, buy now.

I was watching one of those HGTV shows yesterday. Flip That House, or Sell This House or one of those. A novice investor rehabbed a 1970’s tract home. She did a great job too. She managed an amazing transformation of the entire house. The kitchen was opened up, done in granite, new cabinets and stainless appliances. The baths were both redone with beautiful materials. She really did a great job and added some real value to the home. BUT she went 2 weeks over schedule, about $20,000 over budget and nearly tore her hair out at the end.

Just before the home was staged, the show’s producers sent in 3 real world Realtors to give price opinions. The first one says $519,000; the second says $510,000; the third says $499,000. Presumably they gave this information to the investor seller. In a camera confession, the investor says she’s stretched to her financial limits, she needs to get that money back pronto, and she’ll raise the asking price on the house to recoup her unbudgeted losses. She lists it for $539,000.

Big mistake. Sellers, believe me when I tell you that there is a long list of things that do NOT impact how much you can ask for your home for sale. Here’s a short list:

1. How much you paid for the home
2. How much your remodeling or improvements cost
3. How much you “need” to get out of the sale
4. How much your next house is going to cost
5. How much your neighbor sold for last year

Things that impact how much you can ask for your home:

1. How much buyers are willing to pay for it

Period. It’s really that simple. Buyers are savvy these days, and act very conservatively when it’s their half-million dollars being spent. They will only pay what they’ll pay and not a penny more. If they don’t see your home as a good value at the listing price, they’ll pass you by.

Of course parsing out what the buyers are willing to pay for your home is the tricky bit. It’s an art, not a science. If it were a science, they’d have computer programs that picked listing prices. We Realtors would all be out of a job because the computers would be 100% correct, 100% of the time, on 100% of the homes for sale. Houses would sell in a few days and nobody would negotiate over price because the computer generated price would be right every time.

That’s fantasy land. Picking the right list price is an art. It involves lots of data analysis, a history of indepth knowledge of the neighborhood, and a little bit of gut checking. But it should never involve calculating what the seller “needs” to recoup on their investment. The buyers don’t care about your needs; they care about theirs.

PS-The investor on the TV show sold after about 3 weeks on the market. She took $511,000.

Related Posts

1. Price It So You Don’t Lose Money
2. The HouseChick’s take on this point (the HouseChick is Kelley Koehler in Tucson)

Sometimes when your house is for sale, it seems like there’s a lot of what what my Dad the Army Staff Sergeant calls “hurry up and wait, son!”. He’s a character, my Dad.

You’ve spent (hopefully) a lot of time and elbow grease getting the house ready to sell - fix up projects, tackling the Honey Do list, primping, staging, rearranging, pre-packing, painting and so forth. Then your agent lists the home in the MLS and ….. nothing happens. You’re left to hurry up and wait.

It seems like you’re just left hanging there, with no idea what’s going on. Some days strangers (Realtors) have been in your house and (presumably) shown it to buyers who are (hopefully) anxious to buy it. But the only sign you have that someone was there at all is a little 2″ business card on the kitchen counter, and a light switch or ceiling fan left on. Or off.  You’re left to measure out your life in coffee spoons, as T.S. Eliot famously wrote, and wonder just exactly what’s going on. Does anybody like your house? Anybody? Bueller? Bueller?

The truth is there’s a lot going on behind the scenes. If you’ve hired a professional Realtor, they’re busy. Calling & emailing folks about your home, touting its features at sales meetings, arranging Realtor Tours to come through and give feedback, designing and ordering (or making) flyers and other print ads.

If you’re not hearing from your Realtor as often as you’d like, call him or her and tell them you want more info. A good Realtor will ask you up-front how often you want updates and in what form. But we’re all just human and sometimes that info slips past us.

Ask! Ask for updates, ask for info, ask for samples of the advertising your Realtor is doing on your behalf. A professional Realtor will provide it, happily. If s/he doesn’t give this info or gives it grudgingly, you’ll know you hired the wrong person. You need to start figuring out how to get out of your contract with that Realtor and find another.

Are you a first time home buyer shopping in Arizona? If so, you’d better double time your shopping trip. Starting next month it’s going to get more expensive to buy a home in Arizona.  Why?  The rules for PMI are changing.

PMI is Private Mortgage Insurance. It’s required on any home loan made without at least 20% down payment. It protects the lender against the risk that you, the less-than-20%-down buyer, will default on your loan.  Your monthly mortgage payment is higher, but that increase is way less painful than saving 20% which could take years and years for most of us.

Starting in March 2008, the nation’s 2 biggest PMI issuers are restricting who gets a PMI policy. Industry leader MGIC Investment Corp’s limit is a minimum of 5% cash down; it’s 3% for competitor PMI Group. The change applies in areas the companies consider “restricted markets”.  These markets include the entire states of Arizona, Florida, and Nevada, as well as the metropolitan areas of Washington, D.C., Detroit, Chicago, Boston and Atlanta.

This change will hit first timer buyers hard, since they’re rarely rolling around in spare cash.  Less than 3% to 5% cash down = no PMI policy = no home loan = no new home smell in your future.  What’s a cash-strapped buyer to do?

1. Hurry. If you’re buying to live in it and plan to stay 5+ years, don’t worry about whether home prices will fall a little bit more in the rest of 2008 and 2009. There are 55,000 Valley homes to choose from, Sellers are being exceptionally accommodating, and interest rates remain relatively low. It’s a buyer’s market like we haven’t seen in decades. Bold buyers can make a killing, long-term.
2. Hope that your lender can get you a PMI policy from somebody other than the 2 big boys in the game, MGIC & PMI Group.
3. Use a Down Payment Assistance program like AmeriDream and Nehemiah Corp. But note that these have time limits too. They won’t be around forever.
4. Calculate how long it would take you to save 20% on your expected home purchase. Then evaluate whether buying now and risking a little price deflation in 2008/09 is better or worse than waiting X years till you have 20% down saved. For most buyers, buying sooner makes more sense than waiting & saving.
5. As long as you’re calculating your savings rate in #4 above, be realistic. On paper I can save tens of thousands per year. In reality, my savings account needs a few human growth hormone injections to beef it up. There’s always a movie to see, a new gadget to buy, or a round of drinks to spring for. Most of us don’t save as much as we think.
6. Don’t forget that regular mortgage interest is tax deductible, and so are PMI payments. You’ll have a fat deduction on your federal income tax statement that might offset some of the temporary pain of budgeting to pay a mortgage every month.

 New PMI policies are just another brick in the wall of reasons to buy an Arizona home now if you’ve been fence sitting for a while.

Private Mortgage Insurance is just what it sounds like – insurance. It’s required on home loans where the buyer puts less than 20% cash down. Statistically, buyers with less than 20% cash down payment are more likely to default on their home loans than those who have ready cash.  Issued by private companies like MGCI Investment Corp and PMI Group, these policies paid off the mortgage lender if the buyer defaulted.

PMI fell out of favor in the boom-boom years of the late 90’s and early 2000’s (see entry for 80/20 Loans). But with the credit crunch roiling the markets since early 2007, it’s back in a big way. PMI will add $50 or $100 (or more) to your monthly mortgage payment. But for most buyers, it’s cheaper to pay a little every month than scrape for years (decades?) to save 20% of the purchase price of their new home.

Real Estate Glossary - 80/20 and 80/15/5 Loans

These were home loans that were essentially creative ways to get around the rule that you must pay Private Mortgage Insurance if you put less than 20% cash down on a home purchase. They were the darlings of the market in the late 90’s and early 2000’s.

Lenders issued the buyer two loans. Loan #1 was for 80% of the purchase price; Loan #2 was for the remaining 20% of the price. For buyers with 5% cash down, the lender issued an 80% loan and another 15% loan. Voila! No PMI payment required. This also made the monthly payment more affordable, since PMI payments can add $50 or $100 (or more) to the monthly payment.

80/20’s and 80/15/5’s are totally gone since the credit crunch of early 2007 changed the lending landscape. See my friend Shailesh Ghimire, The AZ Mortgage Guru for more on how these loans are totally unavailable.

Related Posts: Real Estate Glossary - PMI