Onwards and Upwards

Effective 1/1/2009, this blog has moved to ThePhoenixAgents.com. Please update your bookmarks and feedreaders. You can click here to see all new content.

A new year often brings reflection and resolutions. This year, for me, it brings a new direction. I’m partnering up with Chris Butterworth of the Butter Homes Blog. Going forward we’ll be known as The Phoenix Agents at Thompson’s Realty and you can find us posting on our new combined blog, ThePhoenixAgents.

Chris and I have been working closely together since about June of 2008, and have found that our work styles and personalities complement each other so well that it became time to form a partnership.  We’re both looking forward to bigger and better things for ourselves, our readers and most of all our clients.

Join us! I will be posting all new content on our new website:  http://ThePhoenixAgents.com.  Please come over for a visit, update your bookmarks and feed readers, and be sure to let us know what you think.

The Real Estate Market

Some days working as a Realtor is pretty discouraging. Buyers are scared to buy a house now, afraid it won’t be worth what they paid for it on the day they take possession. I’m not sure I can blame them.

Cash investor buyers make offer after offer at 50% of list price or less, only to be turned down or beat out by other bidders.

Too many sellers seem to still be desperately clinging to the idea that their house is the one in a million that has increased in value over the past 24 months. And they want me to spend my hard earned dollars on advertising to find “the one buyer who’ll really appreciate it.” Of course what that means is “the one idiot silly enough to overpay for it.”

It seems the topsy turvey market is bringing out the worst in people. Some days the only sane way of dealing with this craziness is to have a stiff drink at the end of the day. Cheers!

image courtesy of user cx ed over at stock exchange

Happy Christmas!

These holiday lights photos are compliments of the North Phoenix community of Moon Valley, located at the northwest corner of 7th Street and Thunderbird Road.

Moon Valley has a special Christmas Eve tradition: holiday lights and luminaria. Every year on Christmas Eve, homeowners place brown paper bags weighted with sand on the sidewalk perimeter of their home. At the appointed time, tea light candles are lit inside the bags and voila! the show is on. Valley residents come from miles around to see the luminaria display.  Most of my pics below don’t capture the luminaria themselves but you can see tons of great photos of Valley luminaria displays on Flickr.

The annual tradition is that folks drive slowly through the neighborhood (with only the car’s parking lights on) to see the holiday lights. This year I noticed a new trend – families sitting in their front yard with a brightly burning chiminea to keep them warm as they enjoy the festivities. It’s become almost a moving tailgate party!

This year I also noticed a bunch of families walking the sidewalks to catch the holiday light displays. Last night I even saw an SUV towing a little rickshaw-type wagon full of teens who were belting out holiday songs. I rolled down the car windows to catch most of these pics, and realized that lots of people were shouting “Merry Christmas” to each other through their open car windows. No wonder many of my school friends moved back to Moon Valley to raise their kids – such a special family-oriented neighborhood.

Lawn deer are a holiday favorite:

Outlining the house is also very popular (and thankfully makes a decent night time photo for my crusty old digicam, sans flash.)

And then there’s always the neighbors who go all-out.

Wishing you and yours and very happy holiday season!

Want to know more about Moon Valley? Check out the homes currently for sale here.

– North Phoenix Agent

Crime Stats Online: SpotCrime

SpotCrime is an interesting new online research tool for potential home buyers. (If you want the national version of the website, visit www.SpotCrime.com)

It’s a map based tool that allows you to see crime reports in your area. The website claims the reports are in real time, i.e. they show up online within 3 to 24 hours of the occurence of the crime.

New Light Rail Photos

Shot a few quick pics of the light rail trains running up and down Central Avenue late last week. Used my cell phone so the quality isn’t super, but thought y’all readers would enjoy these.

. . . . .

The smudges in the lower left frame of photo 2 are my dashboard. Didn’t have time to open the window, just shot right out through the glass. Me? I’m SO excited to see this project finally come to fruition. I got giddy and squealed like a school girl when I saw the train passing me. It was moving! I’d guess about 30 or 32 miles per hour. Drivers should be alert starting this Saturday.

I lived in Philadelphia for 12 years and visited Manhattan frequently while there. I missed my native Phoenix like a long lost boyfriend as I endured 2 truly horrible Northeast winters in the 90’s. I pined for good Mexican food, colorful sunsets and our oven-like heat. But one thing I always regretted is that we didn’t have public transit worthy of our stature as the country’s 5th or 6th largest city. My NYC friends never used a car, and I frequently got around Philly on public transit. It was easy, quick, and nearly everybody used it at one time or another.

For Phoenix, our upgrade to world-class public transit is finally here.  I refuse to listen to the naysayers who complain about cost, lack of appeal to the average Phoenician or anything else. I’m stoked!

The Phoenix Business Journal reports that 200,000 people are expected to take free train rides this weekend, during the Light Rail’s Grand Opening. The Grand Opening begins with a huge kickoff party, Saturday at 8:30 a.m. at the Metro Operations and Maintenance Center. That’s on 48th Street just south of Washington Street.

The Mayors of Phoenix (Phil Gordon), Mesa (Scott Smith) and Tempe (Hugh Hallman) will attend, along with outgoing US Transportation Secretary Mary Peters and Arizona’s Representatives to the US House, Ed Pastor and Harry Mitchell.

All three cities are going for the gold with their opening day celebrations. Local rock favorites Roger Clyne and the Peacemakers will play during the Saturday festivities in Tempe. Mesa is hosting the legendary Grand Funk Railroad.

Phoenix, it seems, couldn’t find or didn’t want to spring for the cost of musical entertainment and is instead combining the light rail event with the ribbon cutting ceremony at the newly renovated Convention Center. Nice job keeping an eye on our tax dollars at work, Mayor Phil!

All light rail train rides are free through December 31. What a great reason to head downtown to enjoy New Year’s celebrations!  Trains will run every 10 minutes, with additional buses on hand to move visitors from train stations back to the park and ride stations as needed.

“Several streets will be closed for the crowds, including Main Street between Sycamore and Dobson in Mesa; Third Street between Monroe and Jefferson streets; Washington Street between Second and Fifth streets; and parts of Third and Fifth streets and sections of College and Forest avenues in downtown Tempe.” (direct quote from the Biz Journal, as linked above)

Want more info? Get it straight from the source, Valley Metro Transit

Phoenix in Winter

Yes, Virginia, there is winter in Phoenix. People living in the Northeast and Midwest call it “fall.”  This is a picture of it.

I took this photo earlier this week, on Central Avenue between Bethany Home and Northern, just a few dozen feet south of Maryland Avenue.

Google Maps Street View has a nice summertime picture of the same stretch of road.

Those unfamiliar with this section of downtown Phoenix might not recognize the bit at the far left of this photo. It looks like a wide sidewalk, but it’s actually a section of the Murphy Bridle Path (variously spelled as “bridal” on some internet venues.)

Whether it was people on horseback out for a ride, or scores of young women wearing wedding dresses that gave the trail it’s name is unknown. Well at least I couldn’t find it after a lengthy Google search.

Trails.com claims the trail was founded in 1895. My colleagues Artur and Joanna at Realty Executives found some online info claiming the path was named for a man named Murphy Bridle who invented the Styrofoam cup. Hmmm.

No matter the origins of the name, Phoenicians flock to Murphy Bridle Path weekdays and weekends. You’ll see serious joggers, folks walking dogs, high school track teams and stay-at-home Moms out for a quick walk and chat with girlfriends. The shady lanes on either side of Central run for 2 miles, from Bethany Home Road to Northern Avenue. As you can see from this photo, on a rainy weekday no one flocks anywhere near the Bridle Path.

I’ve always thought of this as the “old money” section of Phoenix. The houses are set back off the road, on deep lush lots, just peeking out from behind tree branches. No two are the same and each seems to tell a little bit of a story about the  lives of the people who built them. Tudors, Colonials, sprawling ranches, and even a few that truly looked like mansions.

I remember spending a good deal of time as a child, being driven up and down Central Avenue. We were probably on the way to the Burton Barr Library (Mom was a big believer in library books  as babysitters). What I remember best about the trips though is pressing my nose to the glass as we passed one stately home after another and imagining which one I’d buy when I was all grown up. I poked around the internet before posting this and found my family aren’t the only ones who played the game of “Which house would you choose?”

You can search for homes in this area for sale here on my blog. Search for ZIP code 85021.

Fresh and Easy in Phoenix

There’s been a mini-explosion of new construction in the metro Phoenix area, in the form of about 2 dozen new Fresh and Easy food markets.

Think of them like a cross between Whole Foods and Trader Joe’s – quality food at discount prices.

There are 3 new F&E markets within a 10 minute drive of my home alone. Find a Fresh and Easy near you on this map.

With the motto “A simple shopping experience with everything you need right in the neighborhood,” F&E aims to make shopping easy and affordable again.

One of F&E’s main goals is to open food markets in neighborhoods traditionally underserved by markets selling fresh produce, specifically low income neighborhoods.

The company’s mission statement:

• We create value for our customers so they will come back again and again.
• We treat people how we like to be treated and nobody tries harder for customers.
• We think fresh, wholesome food should be accessible and affordable to everyone.
• We’re a neighborhood market, so it only makes sense that we care about our neighbors and our environment. READ MORE
• People who are valued are better able to value our customers, so creating a rewarding workplace is very important to us. READ MORE.

Personally, I like the Fresh and Easy near me and have shopped there several times. I also shop at Trader Joe’s, Whole Foods, Safeway and Fry’s. My rundown of the pro’s, con’s and personality of each:

Trader Joe’s – earthy-crunchy-granola. Offbeat items, lots of organic foods, great wine & beer selection. TJ’s caters to the hippie inside you with items from small, independent producers you can’t find elsewhere. They’re also a great source for pop in the oven quickly snacks for a party. My biggest beef? They don’t carry Helman’s (Best Foods) mayonnaise. They’ve got some wacky soy based “nayo-naise”, a sunflower mayo and so forth, but not the real deal. What I love? I feel good when I leave there, like I got some great quality food and supported the local Mom and Pop food producers too.

Whole Foods – upscale organics. Tons of organic grocery items, meat, fish and poultry that can’t be beat for quality, and they carry the largest selection of macrobiotic-friendly items I’ve ever found. My biggest beef? They’re expensive. What I love? The huge selection of oganic produce. Organic produce really does taste better. Lettuce has a taste. Believe me. Try the organic varieties and you’ll see what I mean.

Fresh and Easy – convenient quality. Many ready to heat-and-serve items, prepared lunches for busy bodies on the go, and a good variety of packaged foods and groceries in convenient small family sizes. Fresh and Easy carries a full line of products from groceries to health and beauty items. They have 2 to 5 different brands of each item they carry. My biggest beef? Their packaged salads wilt after 2 days in my fridge. What I love? Their self-checkout aisles. Scanners that read your items easily, a conveyor belt that speeds along without hurting your precious produce and friendly employees right there to help you if you need it.

Safeway and Fry’s – traditional grocery supermarkets.

Many people will say that Safeway is a ’step above’ Fry’s in quality and selection but I’m not sure I agree. Fry’s quality & selection can be spotty, depending on the location of the store. The Fry’s near me is my favorite shop spot for everyday staple items. It’s near the village of Sunnyslope, which is a heavily Latino neighborhood. Hence, they carry a lot of ethnic foods, unusual produce and packaged goods brands I’ve never heard of. A friend who lives closer to Desert Ridge says she never shops Fry’s because the produce stinks, but the veggies in my Sunnyslope Fry’s are the best around, without question. Many Fry’s locations also carry household items and furniture, much like a Target or K Mart. Fry’s also has a separate division called Fry’s Electronics, and I’m certain you can guess what they sell.

Safeway is known for their friendly customer service: employees are always standing nearby ready to help and if you ask where something is located, the employee literally takes you there and asks if you need any other help. My particular Safeway’s produce doesn’t hold a candle to Fry’s but I have friends who swear by their local Safeway. Find your local Safeway or Fry’s by clicking the links in this sentence.

Hope this is helpful to new Valley residents!

One Up-Side: More Affordable Houses

This is an interesting graph. I found it via John Wake’s Arizona Real Estate Notebook (John found it on Seeking Alpha). Click the chart to enlarge, use back button to return.

It’s an oddly upside-down chart.

On all the charts and graphs we see in the media lately, lines rocketing higher to the right mean “Bad”. This chart is different.

Stand on your head or turn your display screen upside-down.  The line marching upward to the right here means “Good”. Houses are getting more affordable. Quickly.

This October’s index number (141.8) means that “a family earning the median family income had 141.8% of the income necessary to qualify for a conventional loan covering 80% of a median-priced single-family home” (quote from Seeking Alpha, but I suspect the language is NAR’s).

In English, the average American family can now easily qualify for a mortgage large enough to cover 80% of the cost of purchasing the average American house.

One problem, of course is that pesky 20% down payment that lenders are now requiring. Bad, bad lenders! <tongue in cheek> For cash-strapped Americans who’ve become used to spending every dime we make and then some, coming up with 20% of the purchase price of the average American home is next to impossible without winning the lottery or gaining an inheritance.

In Maricopa county, the median home price is somewhere near $176,000. Twenty percent of that is over $35,000. How long would it take you to save $35,000?? The disappearance of No Money Down home loans (and 80/20’s and 125% cash-out refi’s and all the rest of those “liar’s loans”) means that fewer buyers are actually able to buy a home now, regardless of how much of a mortgage they’d qualify for.

Another problem – arguably the overriding problem for the entire world economy right now – is the confidence factor. Americans lack confidence in their own (and the country’s) near-term financial future. Most of us are afraid things will be worse in 6 months, so we’ve all stopped spending. Of course I’m generalizing but you get the point.

As one commentor on Seeking Alpha put it, “Now that almost nobody can afford a tent, castles are cheap.”

An optimist at heart, I can ususally find something to be hopeful about. So, where’s the good news in this scenario? Here:

1. No matter your feelings about NAR and their statistics, houses are getting more affordable as foreclosure sales depress pricing.
2. Today lenders are making it harder to qualify for a mortgage, as they over-react to their own boom-years greedy practice of giving a loan to anyone who could breathe in and out. But eventually that pendulum will stop swinging wildly as lenders find ways to grant home mortgages to folks with less than 20% down.

All recessions end. I don’t know when or exactly how this one will end, but it will end.

When we get there, houses will still be relatively affordable, mortgage money will be flowing again to those who can reasonably afford it, and buyers will begin buying homes again in large numbers.

We won’t all qualify to buy a castle, but neither will we all be living in tents.

Prices Falling, Sellers Denying Worldwide

One of the nicest side-effects of blogging is the people you meet. I’ve “met” a really great Realtor in New Zealand, Rodney Dunn. Somehow he found my blog, and commented here. So in return I visited his blog and found a kindred soul, business-wise. If you ever move to New Zealand, or know someone who’s going there, I’ve got a Realtor there you can trust.

On to the point.

It seems that real estate is falling on hard times worldwide, as prices fall, buyers hesitate and sellers wallow in denial about the value of their home.  Many New Zealanders want to list their home for sale and over price it, hoping the “right buyer” will stumble along and pay waaaay more than the property is worth in this market.

This won’t happen. That’s not a news flash by any stretch. I’m still amazed at the number of potential sellers I speak with who won’t believe me when I try to explain this.

Even if you happened to find the 1 buyer in the world with his (or her) head under a rock for the past 24 months…. and that buyer is willing to overpay for your property…. that buyer will have a lender and an appraiser, or at the very least a Realtor.

You don’t need to find just 1 idiot to sell your house for more than market value. You need several. A fool is born every minute, it’s true. But the chances of finding several fools all in the same place at the same time, being foolish about the exact same thing aren’t good.

You’re better off playing the lottery.

Related Posts

1. Things That Don’t Influence Your Asking Price
2. Price It So You Don’t Lose Money
3. Your Neighbors Are Wrong

Downtown Phx AZ’s 2nd Best

In a recent statewide survey of small business owners, Phoenix was ranked 2nd best downtown, behind Tempe.

I lifted this graphic from the Downtown Voices Coalition blog (original post here) which is a really great resource for local news.

Downtown living has boomed in the past few years as various revitalization plans have taken root. The Arizona Republic reported that 10,000 new residents have put down roots in the downtown area since 2000.

Surely the current economic slowdown has put a pause in that growth pace. But the December grand opening of the Metro Light Rail system should boost interest in and visits to the downtown corridor. The Grand Opening is Saturday and Sunday, December 27 and 28 and all train rides that weekend are free. Read all about Light Rail on the ValleyMetro website.

Interested in housing prices downtown? Hi-rise condos are especially popular. You can search for downtown Phoenix hi-rise condos for sale here.

Socks the Cat is back!

Socks sez

“OK all you pepuls. It’s time to buy howses now.”

Just thought I’d toss that out there. It can’t hurt.

See more LolCats at I Can Has Cheezburger

Why Phoenix is Known for Sunsets

Just stepped out on the back patio of a client’s new home and snapped this with my dinky little 4 year old digital camera. It’s December 8 and I was out there in my t-shirt and jeans.

Ahhhh. Life is good in Phoenix.

Friday Fun

Uber blogger Theresa Boardman does a Fridays are for Fun series. Since I’m totally exhausted this week, I’m shamelessly copying her style.

Henceforth (or at least until I forget I made this mini-resolution), Fridays are for Fun here at the North Phoenix Agent blog.

As a Realtor, I drive a lot. I mean A LOT. This? Warmed the cockles of my heart.

Woot Woot!

I filled the tank of my Jeep Wrangle for just over $31. I can’t remember the last time I did that. When gas prices peaked at near $4 a gallon, I was plunking down a cool $80 to fill the tank. It’s not like I could put clients into a gas-efficient subcompact either. So I grin and bear it. But when I filled up this afternoon I did a little jig of joy.

Have a great weekend y’all!

Real Estate Glossary – Earnest Money

WHAT IT IS

Earnest money is the amount of money a buyer submits with an offer to purchase a house. You actually write a check (or a copy of the check) and send it with the purchase offer.

Earnest money proves the buyer is ‘in earnest’, or serious about buying that house. If the seller accepts the offer, the earnest money is immediately deposited with the escrow/title office. It becomes part of the purchase price of the house.

A personal check is usually acceptable for earnest money.

Working with a lot of Canadian investors lately has taught me that many Canadians call it the “Deposit”.

HOW MUCH IS RIGHT?

A really common question I’m asked by buyer clients (especially first time buyers) is, “How much earnest money is the right amount?”

Technically, I’m not supposed to tell you. At least that’s what I remember from my rookie training classes. If I’m remembering correctly, I think this was a rule dreamed up by the legal eagles in our profession. They worry that if Realtors simply tell clients what to offer, how much to put down, how much earnest money to offer and so forth. . . . well, we’re essentially price fixing and could be sued later by disgruntled buyers who are having buyer’s remorse.

I used to be a paralegal and have lawyers in the family, so I’m pretty ultra-sensitive to the myriad of ways agents get themselves sued. Since I like to keep on the right side of my company’s legal department, and since I haven’t got a brass farthing worth suing me over, I won’t state a ‘proper’ earnest money amount here.

But it’s typical to put 1% to 2% of the purchase price up as earnest money.

HOW MARKET CONDITIONS CHANGE EARNEST MONEY

2005 and early 2006 were boom-boom years in the metro Phoenix real estate market. Sellers received multiple offers after only days or hours on the market. Sale prices were frequently above list price, and buyers often waived many of their usual inspections and contingencies just to secure the house. This is an extreme seller’s market.

In a seller’s market earnest money often amounts go up. Buyers are competing against each other to buy the few properties available and increase their earnest money and/or down payments to make their offer look better than others’ offers. I commonly saw earnest money amounts in the tens of thousands. It wasn’t unusual to see earnest money amounts that were 4% or 5% of the purchase price, or more.

Today we’re in an extreme buyer’s market. In many cases earnest money amounts have dropped as a result. I’ve recently seen purchase offers for average priced homes ($200,000 to $300,000-ish) with earnest money of only $1,000 (that’s less than 1%).

Properties that first time buyers typically buy (condos, any property under $125,000-ish) often bring earnest money amounts at $500 and under. Some cash-strapped first time buyers using FHA loans even ask that earnest money be refundable at close. They often apply that money to the closing costs. (see more about buying with little or no money down here.)

EARNEST MONEY EXAMPLE

For example: Buyer looks at a house with an asking price of $299,900. Buyer makes an offer of $280,000. That $280,000 is made up of – (1) $3,000 earnest money, (2) $40,000 cash down payment, and (3) a promise to get a home loan for the remaining $237,000.

RULE OF THUMB

One rule of thumb about earnest money is, “put up as much earnest money as you can afford to risk.” The risk bit is important. Earnest money is forfeitable if the buyer breaches the contract. In plain English this means that if you, the buyer, back out of the purchase after your Due Diligence period, the seller has the right to keep your earnest money as compensation for the lost time on the market.

Related Posts -

• see all FAQ file posts here
• see all Glossary posts here
• Real Estate Road Signs – “Buy With $500 Down”

The Low Ball Offer

Reposting an oldie but a goodie. And given the current market, this advice is even more topical than when I originally posted it.

You love your house. But you must sell. You primp it, paint it, stage it, hire a brilliant Realtor and list it for sale at a price you think is fair. And then IT happens.

You receive an offer that’s SO LOW that you can’t remember the last time you felt so INSULTED!   (#$&*^%#!!!

Stop. The most important thing to remember in a strong buyer’s market like the Valley’s in right now is this — you MUST counter every offer received (if you can’t accept it outright.) Do NOT reject that insultingly lowball offer out of hand.

The second most important thing to remember is that your Realtor is bound by law to present every offer s/he receives on your behalf. Even the insulting ones. Do not shoot the messenger.

Whatever you need to do to get over being insulted, hurt and angry, go do it. Please! I’m begging you! Go beat up a tree. Scream into your pillow until your throat resembles roadkill. Run a marathon. Take Michael Flatley Lord of the Dance dancing lessons until you finally lose those last pesky 10 pounds. If you must scream at your Realtor, do it.

Whatever it takes, get over your anger. Then, sleep on it, and do what one of my teachers Michael Valenti calls “the head on the pillow” moment. When you lay down that night with your head on the pillow, and it’s just you and your conscience (or possibly a spouse or beloved pet) think about what number will actually give you peace of mind. The lowest number which you could look back on and feel good about 5 or 10 years from now. Imagine the number that will allow you to move on with your life, happily decamping to your new home. Because quality of life is infinitely more important than holding out for the last few dollars on your sale. And 10 or 20 years from now, you will not remember exactly how many dollars you held out for. You’ll only remember the miserable extra months you had to stay in a home which you no longer wanted.

One more important point while your head is on the pillow. STOP thinking about what your neighbor sold for. STOP thinking about what the other neighbor is now asking. STOP thinking about the advice well meaning friends and colleagues have given. STOP thinking about anybody but you and your family and what sale price would allow you to move on with your life and future plans. What your neighbors did or might do, and what your extended family, friends and coworkers think you should do are actually quite immaterial here. This is a moment for you and you alone. Relish the you-ness of it.

The next morning, call your Realtor and apologize for those names you called him/her. Then calmly take pen to paper and write out a counteroffer with the number you imagined last night.

This won’t work every time. Investors look at houses differently than most of us. They have zero emotion tied up in a purchase. Your counter will meet the investor’s bottom line or it won’t. Best case scenario – you’ve got a deal and can go begin the serene new life you imagined last night. Worst case scenario – well, it’s still OK. You’ve imagined the worst that could happen – accepting the lowest offer you can afford, and you still emerged on the other side with a happy image of moving on.

If there’s no deal — I suggest calling your Realtor again. Ask him/her to readjust your list price to a whole lot closer to your newly imagined bottom line. You’ll be calling the movers before you can say “negotiation”.