North Phoenix Agent Blog

This blog is focused on North Central Phoenix, where I live, work, and grew up. So the What You Get for the Money series will include only the ZIP code areas of 85020, 85022, 85024, 85028, 85032, and 85050. You can see these on a ZIP code map here http://maps.huge.info/zip.htm and here http://www.dreimaz.com/phoenix-zip-map2.pdf

Price Band $2,000,000 Plus

North Central Phoenix isn’t hoity toity. As of this writing, there are a mere 88 properties currently for sale in the entire city of Phoenix that are listed at $2M and higher. Contrast that with Scottsdale where you’ll find 632 homes to choose from in this price range or the geographically small town of Paradise Valley which boasts 292 homes above $2M.

In my ZIPs, 7 homes are listed at $2M or higher. Here, $2,000,000 buys you a big home. Of those for sale today, the average size is 5,800 square feet and most sit on about an acre of land. Pricing runs from $2.1M to $2.5M.

Four of the 7 homes on this For Sale map are located in the gated Tatum Foothills subdivision (numbers 1, 3, 4 & 6 on the map). This is a neighborhood of only 49 custom-built homes dating to the early 1990’s. They have vaulted coffered ceilings, vast kitchens with luxury finishes like cherrywood & slab granite, and often marble or travertine flooring. Backyard pool areas are large and lavish and some homes have truly beautiful mountain views. Don’t miss up the chance to click the link above to the Tatum Foothills HOA. It’s is too much fun to pass up! The HOA website shows a satellite map of the neighborhood with clickable links to multiple exterior photos of each of the 49 homes. Wow! That’s a proud HOA.

Beyond the luxury homes and beautiful views, a real drawing card of Tatum Foothills is that children here attend the “Three C’s” schools - Cherokee Elementary, Cocopah Middle, and Chaparral High - widely viewed as some of the best in the city. They’re actually in the Scottsdale School District, but these homes are situated to take advantage of the best views and the best schools, neatly wrapped up in sumptuous surroundings. You pay big bucks to live this life - between HOA dues ($3600/year, paid quarterly) and property taxes (avg $9000/yr) you’re shelling out $1,000 per month.

The other interesting home in this price band is the former home of Senator John McCain and his wife Cindy. It’s for sale (again!) for a whopping $12,000,000. Yikes! I hear Mike Myer’s Dr. Evil in my head as I type that - Twelve Meeeelllliooon Dollars!

This price seems simply silly. The curent owner bought it in Decmeber 2006 for $3,200,000. So in a 2-year stretch of time in which property values dropped about 10% Valleywide (and much much more in outlying towns like Surprise and Queen Creek), the McCain’s former home appreciated an astounding 400%!?  Hmmmmm.  Of course there’s the celebrity factor. And it is 14,000 square feet of livable space situated on just over 2 acres at Central & Glendale.

The home has obviously been  remodeled extensively since it was built in 1951. But it’s difficult to tell if the current owner did anything more than seal the patio pavers, because when Senator McCain’s Realtor had it listed, there were no interior pictures. The descriptive text used by the current Realtor is a word-for-word copy of that used in 2006 by McCain’s agent. Again, hmmmm.

Finally, it is worth noting that house #2 on this list is being sold for its land value. It’s zoned PAD11 wth a potential for 16 multifamily units, per the listing agent. This is prime infill land located just south of Central & Butler and off the Arizona Canal. Will be interesting to see what goes there when the market recovers and small developers come back to our town. Luxury townhomes, anyone?

All in all though, $2,000,000 buys you a pretty nice pad in Phoenix. And of course it goes without saying that if you need help finding your $2M baby, I’m ready to step up. Call me for references.

photo credit to MiamiAmia,  via StockExchange

A continuing weekly look at For Sale, Pending and Sold statistics by ZIP code (for the ZIPs in which I primarily work which includes 85020, 85022, 85024, 85028, 85032, and 85050). Check back on Sundays for a drill-down look into the numbers in your ZIP code. Have a North Phoenix area ZIP that doesn’t show up here? Email or call me and I’ll add it for you.

This week shows continued slow & steady improvement over last week. The PENDING numbers in every ZIP code covered are up, which is a great sign. The numbers of SOLD homes are up in all but 1 ZIP code, also a great sign.

However, we’re still nowhere near normal for most ZIPs. Most forecasters & Realtors agree that a 6 months supply of inventory is about “normal”. It’s interesting to note that 85024 is very close to that ideal. Sellers in 85024 - don’t despair! You’re near the bottom. Buyers wanting to get into 85024 - hurry up, it might not be a buyer’s market there for much longer.

This is the 1st in what I hope & plan will be an ongoing series of posts about real estate price bands around North Phoenix. Essentially, I’m trying to answer the question I get from almost every out of towner who’s considering a metro Phoenix area real estate investment - “how much does it cost?”

This blog is focused on North Central Phoenix, where I live, work, and grew up. So the What You Get for the Money series will include only the ZIP code areas of 85020, 85022, 85024, 85028, 85032, and 85050. You can see these on a ZIP code map here http://maps.huge.info/zip.htm and here http://www.dreimaz.com/phoenix-zip-map2.pdf

Price Band $75,000 to $90,000
This is a challenging price band in almost every part of the metro Phoenix area, but especially so in the North Central Phoenix area (the ZIPs noted above).  In these postal codes, your dollar buys a smallish 1 or 2 bedroom condo.

In Phoenix, “condo” typically means it looks and feels like an apartment. These are usually 2-story stucco buildings, often with tile a roof. Usually, there are ground floor units and upstairs units, and about 4 to 16 units per building.

Most buyers and sellers think there’s a value attached to being on the upper floors (”no one above you” or “no one walking on your head” is common phrasing in the online ads). But it’s not a hard and fast rule that upstairs is “better”. I’ve had young singletons tell me they feel safer being upstairs, while buyers in their 40’s, 50’s and 60’s tell me they want something on the ground floor for easy access when they’re older and the old knees might go. Generally, having an end unit is also desirable, because only end units get light from windows on 2 sides of the condo.

Parking is usually a row of covered, assigned spots and you’re usually assigned only 1 spot. If you must have a garage in these ZIP codes, you’ll need to stretch your budget to at least the $175,000 to $200,000 range. Storage space is found in closets and cupbaords under staircases (aka “Harry Potter’s bedroom”). Many condos have balconies and/or patios with closets for additional storage.

Condo owners own space, not land, although in most condo complexes the individual owners jointly own the common area. The common area is where the postal boxes, pool, and any other amenities are located, as well as the streets, sidewalks and any landscaping.

Condo conversions are common in this price range. During the real estate boom of 2005-06 a lot of developers took older apartment buildings and turned them into condos, selling individual units and often making hefty profits. I’m no expert in building codes and so I hesitate to even write this, but I believe (?) that the building process is different for condos vs. apartments, and so the noiseproofing between neighbors is better in condos than in apartments. But everyone has their own limit for tolerating noise from the next door neighbors, so condo conversions aren’t necessarily bad, just different. (Any readers with authority on condo & apartment building codes? Please comment!)

At today’s writing, there are  17 properties for sale between $75,000 and $90,000. It’s important to note that of these 17, only 5 are not lender owned or short sales. They’re on a map and in a list below.

As you can see from the chart above, the spaces are small, 600 hundred to 1,100 square feet. I would normally say this price band buys you only 600 to 900 square feet, but with foreclosures pushing down prices, buyers might get a little more space for their dollar.

Below are some interior & exterior photos of properties typical to this price band.

The most popular financing in this price band is often an FHA loan. These loans allow buyers to put as little as 3% of the purchase price down. For cash strapped buyers, and especially for first time buyers, buying a small condo on an FHA loan can be a great launching pad to building real wealth.

First time buyers often combine an FHA loan with a Down Payment Assistance program. These allow the seller to contribute to the buyer’s down payment. You can read all about options for first time and cash-poor buyers here: http://northphoenixagent.wordpress.com/category/first-time-homebuyer/ and get some up to the minute advice on FHA loan program changes at The Arizona Mortgage Guru’s blog.

Shopping in this price band and want more info? I am happy to help you out! Just call and I’ll set you up with a custom MLS search that will email you whenever new listings hit the market that suit your needs.

photo credit to MiamiAmia,  via StockExchange

This Sunday I’m beginning a new & ongoing series - weekly statistics by ZIP code (for the ZIPs in which I primarily work). Check back on Sundays for a drill-down look into the numbers of homes for sale, homes pending and homes recently sold, in your North Phoenix area ZIP code.

Click to enlarge image

Digging out of a hole is a long process isn’t it? June was the 9th month in a row that showed improving numbers for overall inventory and we’re not out of the woods yet. We are making steady progress though. It’s like dieting - a little at a time, inching towards a slimmer, trimmer, marketplace. Prices will continue to be vulnerable for some months to come since there’s still waaay too many houses for sale. However, sales volume is inching upward every month. If that continues, we should be at a blanced market sometime in the Spring.

Again, “months of inventory” is just a measure of how many months it would take to tell every home for sale, given the current pace of sales, and assuming nobody else listed for sale. It’s an artificial number in some sense, because how often does time stand still? But it’s the number we all use because it works, somehow. When you get to about 6 months of inventory on the market, you’re about balanced. See more on the absorption rate here.

(click to enlarge)

The Wall Street Journal says the US housing crisis is over. They actually say we hit the bottom in April.

Of course, all real estate is local. Your neighborhood may be doing worse or better than the national average. Outlying areas like Queen Creek, Surprise and Buckeye are still experiencing severe downward pricing pressure as the foreclosure wave continues. Established neighborhoods close to central Phoenix and central Scottsdale aren’t faring so badly.

You can check out local real estate statistics by ZIP code at Jay Thompson’s Phoenix Real Estate Home. 

The May month-end numbers look positive again, for about the fourth or fifth month in a row. We keep moving incrementally in the right direction. This seems to be the classic tale of the tape of a recovering market. “Percent Sold” increases monthly while the “Months of Inventory” number shrinks. Sales volume is back up to a respectable and normal 5,000 a month.

The number I find most compelling is overall “Months of Inventory,” a.k.a. “Absorption Rate”. This number means that if no more houses were listed for sale and we continued at current sales pace, it would take 9.99 months to sell every home on the market. In 7 months, we’ve whacked inventory in half. Very good progress. Most experts agree that 6 months of inventory is ‘normal’.

That’s not to say we’re back to the heady heyday of summer 2005. Downward pricing pressure continues, especially in neighborhoods with a large number of short sales and foreclosures. 

But see also my colleague and friend Jonathan Dalton who says that bank owned properties are flying off the shelves. Jonathan has numbers to back that up.

I don’t have numberes, but I’ve got anecdotes. I was actually presented wth a Multiple Counteroffer form last week on behalf of a buyer looking for a bank owned property. By the by, we lost out on 2 different bank owned properties because we weren’t fast enough. Home number 1 wasn’t even officially for sale yet! I spent 2 full days calling the bank’s HQ in Philadelphia and finally found the local listing agent. She told me the bank hadn’t set a price yet and weren’t even looking at offers. Seven days later I called back only to find it was sold. Apparently several buyers sent offers directly to the bank HQ in Philadelphia because they wanted the home so badly. Mind you this home needed 2 40-yard dumpsters of junk removed and toilets installed before it was even inhabitable as a flop house. My investory buyer estimated he’d spent $30,000 in rehab, bare minimum.

You can also see my friend & colleague John Wake who create awesome statistical charts - he says sales are picking up steam in outlying areas like Anthem and Queen Creek.

As always, this is data from the MLS and includes homes, condos, patio homes, townhouses and even mobile homes and land. It also includes bank owned homes, foreclosures, pre-foreclosures and short sales. It does not include properties not sold through the MLS (for sale by owner, private sales, the example above where bank sold to investor before house hit the MLS). Why only include MLS data? It’s the data I can access most easily and MLS sales represent the bulk of property transfers in the Valley.

More anecdotal evidence the market is improving. This is from a blog i read frequently, miOaklandCounty.com.

Related Posts - Phoenix Market Rebounding?  and The Butterworth Group Crunches The Numbers

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The National Association of Realtors unveiled a press release today, which said: “A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the latest forecast by the National Association of Realtors®.”

The NAR forecast went on to say that the recovery hinges in large part on mortgage affordability. NAR President Chuck Gaylord said “Our members are telling us that more buyers are looking at homes but are slow in signing contracts… In many cases buyers are waiting for greater access to affordable credit,,, but some are disappointed with what appears to be unnecessarily restrictive lending requirements.”

It’s not very often that I agree with the NAR, but here I do. As I posted yesterday, the part of the metro Phoenix market that I cover is showing definite signs of improvement. We’ve still got a long way to go, perhaps as much as another 6 to 10 months before things are “normal” again. But we’ve made a beginning. Pending sales are up.  Overall sales are increasing.  Prices aren’t dipping as hard as they had been. Of course, all of these links are to bloggers I know and love, each giving their own personal touch to the fabulous news that the metro Phoenix real estate market is improving!

The metro Phoenix real estate market continues to show signs of improvement. While it’s true that inventory of homes for sale remains high (54,000+), the number of sales each month continues to increase. We’re now sitting on just under 11 months of inventory. What that means is that if no one else listed their home for sale, and sales continued at the current pace, it would take us 11 months to sell every home for sale. Typically, a balanced market is about 6 months’ supply.

What I found most interesting is what happened in mid-April of this year. We started 2008 with 18 months of inventory. By mid-April we’d whittled that down to only 11 months supply. Whee! We knocked off 6 months of supply in just over 3 months.  See the chart below for more information, or feel free to contact me to discuss your unique buying & selling needs.

Homes and patio homes currently for sale at the Pointe Tapatio. See one that looks interesting to you? Call or email me for more information.

This chart shows the history of sold prices at the Pointe Tapatio for 1600-1700 square foot homes, from 2000 to 2008. Almost all are 3 bedroom, 2 bath, but a few have only 2 bedrooms.

Click to enlarge, but in the thumbnail size it’s easier to see the general trendline, which is UP. While we’re in the middle of the current painful market correction, it’s easy to lose sight of the fact that home prices have increased over time.

Another interesting thing the chart shows is that there’s a lot more fluctuation in sales prices in the period 2005 to 2008 than there was in 2001 to 2003. There’s more ’swing’ in the highs and lows. I think this reflects the general confusion in the marketplace today. Sellers and their Realtors spend a great deal of time and energy choosing the “right” list price. Buyers and their Realtors aren’t sure how much to offer, often because there are so few comps to check.  There’s just a ton of uncertainty in the marketplace today about what a home is really worth.

There’s a lot of noise in the media marketplace today about home values. Too many media outlets are shouting “The sky is falling!” To which I say, “Um, not so much here in North Phoenix.” Our prices are wobbling around a little bit, but the sky is definitely not falling at the Pointe Tapatio.

The sky here is as beautiful as it’s always been, filled with resort like lush palms and stunning mountain views.

The numbers continue improving a little bit each month. Sales are increasing and we’re back to nearly 5,000 sales a month. That’s a nice, healthy, “normal” pace for home sales. Inventory of homes for sale is holding steady at 56,000. The number of homes pending under contract jumped again to 8.74% (from 8.20% about 3 weeks ago and a dismal 6.06% at the beginning of this year). We’ve got an 11.44 month supply of homes for sale, which is lower than its been since I began tracking these stats last October. The number “should” be 6 to be considered normal, but we’re digging out of a pretty deep hole, so it’ll take some more time.

(Months supply means if no one else listed their home for sale, and we continued selling homes at the current pace, it would take 11 and one-half months to sell all the homes currently on the market)

Combined with anecdotal evidence from just about every Realtor and title officer I know, who all say that they’re busier than they were during the height of the boom, and I think this is encouraging news. Jonathan Dalton sports some awesome numbers over at his website, Daltons AZ Homes that show lots of our market activity is coming from people buying lender-owned and short sale homes. I’m just happy to see a continued decrease in the ‘months supply’ number.

Like most Realtors, I spend a fair amount of time in the car, driving around the Valley. Snapped this tonight up in Troon North while photographing a home for a Canadian investor. Got great video of the house to send to my client, but this sunset beauty is all for me (and you).

Must credit my buddy Chris Butterworth from over at the Butterworth Blog for this post idea. Imitation is the sincerest form of flattery, no? Chris does a really fun series on his blog called Moving Stills. And I believe Chris might have gotten the idea from uber cool blogger Theresa Boardman who owns St. Paul (Minnesota) real estate via her long running (and I believe possibly award winning?) blog.

Here’s a JPEG map of the homes currently for sale in Troon and a CMA showing addresses, prices, days on market and price per square foot.

Are you looking for a special home in the Troon area? Please call me and I’ll be happy to set up a custom search in the MLS that pushes the complete MLS listing data right to your email whenever something new hits the market.