John Karadsheh, ABR, CRS ~ REALTOR® Mesa, Arizona - Las Sendas Real Estate

The outside temperatures have finally cooled down but our local real estate market seems to be heating up. Unlike the uptick that we saw last spring when the First-Time Homebuyer Tax Credit creative a false sense of growth, the data now shows real positive changes. Since January of this year, the volume of active listings has consistently declined while the number of sales has increased. Sales peaked in May and June of this year and they have remained strong going into the fall. In August, 46% of single family homes on the market sold within 30 days of being listed, compared to January of this year when only 32% of homes sold within that same time frame.

I am consistently seeing multiple offers on properties listed below $250,000 and that remains where the bulk of the activity exists. It is true that many of these sales are going to investors. In the past, investors were part of the problem as so many people jumped into real estate with little money down and had no incentive to keep the properties when the market declined. Now investors are paying cash for properties - in fact 40% of all sales recorded by the Arizona Regional Multiple Listing Serivce in August were all cash transactions. Investors and individuals are moving their investments out of the volatile stock market and seeking refuge in something safer and more tangible. After long five years it seems that our Cinderella market may finally be headed for the ball!

John Karadsheh is a licensed REALTOR® with Coldwell Banker Trails And Paths Premier Properties. He is also an Associate Broker, Accredited Buyers Representative and a Certified Residential Specialist. You can contact John with any of your real estate questions. Call him at (602) 615-0843, or go to his Web site at www.BuyAndSellAZ.com .

Final Walk-Through

Several weeks or even months can pass between the day you put an offer on a house and the day that you close escrow and take possession of it. In between a lot can happen that can affect the condition of the property, such as a leaky roof, a dripping faucet or stains on the carpet.

The AAR Residential Resale Real Estate Purchase Contract states that “Seller warrants and shall maintain and repair the Premisis so that at the earlier of possession or COE: (i) all heating, cooling, mechanical, plumbing and electrical systems (including swimming pool and/or spa, motors, filer systems, cleaning systems and heaters, if any), free standing range/oven, and built-in appliances will be in working condition”.

It is imperative that you and your REALTOR® do a final walkthrough prior to closing to assess the condition of the property to ensure that it is in relatively the same condition as the day that you signed the contract. As you walk through the home with your agent, use a checklist as a guide to help you make sure everything is working properly and note any questions that you might have. Below are just a few items in a typical checklist.

Plumbing: Flush all toilets and check for leaks. Do they keep running after they flush? Run the sink and shower faucets and check for proper drainage. Also run the water long enough to ensure that the water heater is functioning.

Electrical: Make sure the utilities are on, especially if the home has been vacant for a long time. Operate all of the lights, switches and ceiling fans. Verify that the oven, microwave and dishwasher all turn on and function properly.

Heating and Air Conditioning: Use the thermostat to operate the heating and cooling systems and check all of the registers.

Outside: Walk around the property and verify that all of the landscaping is in similar condition as the day you wrote the contract. Also look for broken windows or damaged stucco. If there is a pool, check the motor and other related equipment for leaks.

General: Open and close all windows & doors to verify that they operate properly. Look for stains on the ceilings, as this might indicate a leaking roof.

The final walkthrough is also the time to verify that any repairs that the seller agreed to do as part of your inspection period were completed. As per the AAR Residential Resale Real Estate Purchase Contract “If Seller agrees in writing to correct item disapproved, Seller shall correct the items, complete any repairs in a workmanlike manner and deliver any paid receipts evidencing the corrections and repairs to Buyer three (3) days prior to COE Date”. If you hired a home inspector, they will typically do a re-inspection for a small fee. Depending on the agreed upon repairs this may be a wise option to take advantage of.

Verifying the condition of probably one of the largest investments you will ever make, prior to signing those final closing documents is one of the most important actions you will take in the entire home buying process.

John Karadsheh is a licensed REALTOR® with Coldwell Banker Trails And Paths Premier Properties. He is also an Associate Broker, Accredited Buyers Representative and a Certified Residential Specialist. You can contact John with any of your real estate questions. Call him at (602) 615-0843, or go to his Web site at www.BuyAndSellAZ.com.

Market Summary for the Beginning of June

It feels almost like the inverse of 2005.

In the second half of 2005, supply rose dramatically but no-one seemed to take any notice. There was a widely believed myth that prices could never go down. Between March 31, 2005 and June 30, 2006, active listings rose from 8,394 to 45,729 (up 445%) creating a huge glut of homes for sale. Yet average sales prices continued to rise throughout this period, up 28.6% from $146.98 to $189.05 per sq. ft. Meanwhile demand fell 16.5%, with sales per month dropping from 8,490 to 7,093. It was as if everyone believed the laws of supply and demand no longer applied. Of course we found out by 2007 that supply and demand really did matter and the bubble burst explosively in 2008 causing untold damage to the economy and family finances.

It's a question of timing. Supply and demand do control pricing, but in real estate there is a very long time delay between cause and effect. That timing can be extended even further by sentiment. In 2005 sentiment was off-the-charts positive - "irrational exuberance" ruled the roost and caused people to make decisions that in hindsight look crazy. Not just homeowners and developers, but especially lenders and the investors who fueled the credit surplus. Those few of us who tried to warn people in early 2006 that prices would fall dramatically were treated a bit like Harold Camping predicting the end times.

The opposite seems to be happening now. Sentiment is very negative. Everyone seems convinced that prices can only fall further, yet demand is rising and supply has been falling like a rock dropped off a cliff for 6 months now. It comes down to one simple fact: people believe what they want to believe. The facts do not exert a significant influence.

Here at the Cromford Report, we only deal with facts and figures, not beliefs, so here is the market update.

Sales - We are currently recording 9,814 sales in May. This is up 3.5% over April and up 10% over May 2010. This is a very strong sales total because in May 2011 sales are not being boosted by the government bribe (sorry, tax credit) that applied in 2010 for buyers of owner-occupied homes.

Pending Sales - At 13,268 on June 1, pending sales are down 0.4% compared with May 1 but up 6.7% compared with June 1, 2010. Again an extremely strong indicator of demand. In 2010 demand fell sharply during the summer after the tax credit expired, but there is no sign so far that the same will happen in 2011.

Active Listings - At 31,346 on June 1, active listings are 9.4% below May 1 and 23.3% below June 1, 2010. Supply is clearly falling fast. However this understates the situation because a large proportion of the active listings already have a contract against them. In fact there were 7,737 AWC (active with contingent contract) listings as of June 1, 2.6% higher than the very high level we saw on June 1, 2010. If we exclude these AWC listings, we have only 23,609 active listings, down 12.7% in a month and down 28.8% compared with last year. This is almost 60% down from the peak of October 2007.

Supply Versus Demand - The average months supply (active listings divided by monthly sales rate) for the period Jan 1, 2001 to June 1, 2011 is 5.9 months. Right now we have a 3.2 month supply. Yet we read everywhere that there is a "glut of foreclosed home on the market". What we are reading may have been true in November last year. It is not true now. In fact available supply is really even tighter than this. If we only count active listings that don't have a contract the months supply number drops to just 2.4 months. Anyone who thinks this is a "glut" is not living in the real world. They should just ask anyone who is actually trying to buy a home right now. Competition is intense, and not just for bank-owned homes and trustee sales. It is also heating up for short sales and normal listings. If you are trying to buy a home that is at all desirable and is priced at market or below, expect multiple bids. If you are a seller, then you only need to price realistically and your home well sell quickly.

(All the above numeric information is for "all areas & types" within ARMLS.)

Records Being Set

In Maricopa County, May saw the largest ever number of distressed homes disappear from inventory. Pending foreclosures fell by 3,394 homes while REO inventory fell by 971 residential properties.

For Maricopa County, May gave us the highest ever percentage of out-of-state buyers. 29.9% of sales went to non-Arizona residents. The average between January 1999 and May 2011 was 11.9%. The absolute count was also a record - 2,648 homes sold to out-of-state buyers. The average since Jan 1999 is 1,446.

For Maricopa County, May saw the highest ever number of foreclosures selling direct to third parties at the courthouse steps. The record set was 1,476, 33% of all the trustee sales.

Paradise Valley

Exceptionally strong market activity is occurring in Paradise Valley where sales are now averaging 52 per month compared with 31 last year at this time. Inventory is down to 319 from a peak of 581 in April 2009 when sales were averaging only 9 per month.

Prices

After a bump upwards between mid April and mid May, average sales price per sq. ft. is back down a little at the beginning of June. Although we are still some 2% to 3% above the market bottom in January and February this year, in most places prices have not yet responded to the huge changes in supply and demand. Why not? Please refer to what happened in 2005, but with everything upside down. The rules of supply and demand have not been lifted. Of course, you don't have to believe me, but please don't say I didn't warn you.

This article is courtesy of the Cromford Report

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Gently Used Beds (twin/queen) · Dressers · Kitchen Tables

Chairs · Sofas · Small Desks · End Tables · Lamps

Donations can be delivered to Save the Family's Donation Center at 456 N. Vineyard in Mesa (one street west of Country Club and north of University) Monday-Thursday from 7:30am-5:30pm. To schedule a large furniture pick-up, please call Denise at 480-898-0228 ext. 200.

For 23 years, Save the Family has been empowering families to conquer homelessness and achieve life-long independence. Save the Family is helping clients succeed by providing stable housing and a full array of supportive services including: career coaching, domestic violence support, parenting classes, financial literacy training, and youth enrichment programs.

For more information, visit www.savethefamily.org.