Why 2019 Might Be a Good Year to Buy a Home

If you’ve bought or have been trying to buy a home over the last several years, you know that the market has been absolutely crazy, and that includes Prescott!

Homes would go under contract before officially being on the market. Homes would go active and within one day there would be multiple offers on the property, and people would find themselves in a bidding war. Homes were going for over asking price and more than they were actually worth. This is called a Seller’s market and it was hot, and it was not slowing down for anyone!

With all that going on, unless you were a cash buyer, could put in an offer on the property within the first day, or could make an over asking price offer, your chances of landing the contract were slim.

Because Prescott’s market is higher priced than others, the affordability that 2019 seems to be promising might not affect us greatly, but some help is better than none, right?

Here are a few key changes in the market this year:

There will be more homes available to buy. With tight inventory on homes, many buyers have decided to wait it out because by the time they call their agent, the home they were looking at has already sold. Who can compete in a market like that? How this will be changing is more new builds in our area, which brings increased inventory. The problem is that new inventory might not always be in your price range, or if it is (most in the 200-300k area), it also seems to be a lot of other people’s price range and you’ll still have some competition.

Soaring prices will slow down. Even though the inventory of homes has been tight over the last few years, the prices of those homes have done nothing but rise (like we said, it’s a seller’s market). In 2019, that looks to be slowing down slightly. Home prices will continue to rise to be sure, but they will rise at a much slower pace now. According to Realtor.com, there will be a “2.2% increase in home prices this year – compared with a nearly 5% increase last year.” Prices don’t look like they’ll stop rising completely, so it’s best to buy as soon as possible to begin building on your home equity.

Rents are rising and will not stop. Speaking of rising prices and building equity, another reason to buy is so that you can stop wasting your money on renting and start investing in your home. While buying a house is a very expensive adventure and can seem scary, keep in mind that along with home prices, rental prices are rising as well. A top dollar market means that those who are able to buy and turn those homes into rentals for extra income have to charge more for rent. Think of how much they need to make on rent just to cover the mortgage, not to mention make a profit off their investment. We know that buying is a lot of cash up front, but it is also a lot of cash saved later on by building equity in your home and not having to give your money to a landlord every month.

Mortgage rates are lowering. Mortgage rates were predicted to rise in 2019, but they have actually been dropping. Lower mortgage rates are good news for buyers because it significantly helps with home affordability. Higher rates means a higher mortgage, which means pushing a home’s price over what you’ve been pre-qualified for, where obviously, lower rates means the opposite. However, Realtor.com thinks these lower rates are only temporary because of the long-term direction of mortgage rates seems to point to them going back up because of our strong economy.

We hope these pointers give you some hope about trying to buy a home this year, or at least make you consider that perhaps you’ve waited long enough and it’s time to take the plunge. If you’re waiting for another crash, it doesn’t look like that is going to happen. The time to buy is now!

To talk about possibly buying a home, or to get a better idea of what this might look like, we would love to help! You can call us at 928-771-1111.

Most Essential Home Features for Buyers

Last week we talked about older homes and renovation loans. In conjunction with that topic, we thought it would be interesting to take a look at what home features new home buyers and future home buyers would consider the most essential in their house hunts.

When you’re looking to renovate your home, or perhaps are getting a renovation loan to remodel the new home you’re buying, it is always important to not only think of what you like and want, but what other buyers might like and want when you go to re-sell your home someday. You may not believe this is applicable to you if you plan to stay in your home for the rest of your life, but you never know what life will throw at you and it is always best to be prepared. Perhaps you will get a sudden job relocation and have to move, or decide to move to be closer to your family and grandchildren? Whatever the case, never say never.

With that in mind, here are some of the high-priority home features The National Association of Realtors (NAR) found that buyers today have on their checklists when looking for a new home:

  1. Laundry Room
  2. Energy Star Windows
  3. Patio
  4. Energy Star Appliances
  5. Ceiling Fans
  6. Garage Storage
  7. Exterior Lighting
  8. Walk-in Pantry
  9. Hardwood Flooring
  10. Double Kitchen Sink
  11. Energy-Star in the whole house

As you can see, most of the home features on this list might not be ones we would think of first. While having things such as an updated kitchen and bathrooms, new flooring, and fresh coats of paint are nice, they weren’t in the top ten high-priority features among buyers. What buyers really seem to care about are things that help them save money on utility costs, give them extra storage in the home, and help make the outdoor living of the home better.

Talking about utility costs, NAR states, “While consumers may rank certain energy-saving features highly, they may not be motivated to pay more for them. Sixty-eight percent of consumers said they are concerned about the environment and would like an environment friendly home, but they were not willing to pay extra for one. However, when asked if they would pay more for a home to save $1,000 a year in utilities, the responses changed. Forty-six percent of respondents said they’d pay an average of $1,000 to $9,999 more for a home to save $1,000 per year on their utility bills; 37 percent would pay $10,000 or more.”

This is definitely something to keep in mind if replacing your appliances is on your list of things to do or to budget for in your home renovation.

Other features that ranked high among buyers in this survey included:

  1. An open layout where kitchen and dining room are open
  2. Wash and dryer on first floor
  3. 9-foot ceilings on first floor
  4. Want 2 – 2 ½ bathrooms

In conclusion, if you are thinking about renovating your home or getting a renovation loan in your new home purchase, you might want to consider these features. These are what other buyers find desirable and would perhaps pay more money for, which would maximize on your investment when you sell one day. We aren’t saying spend all of your renovation money on these things – you have to make your home your own and do the things that you want as well – but keep them in mind when considering what’s really important and where perhaps a portion of your budget should go.

Older Homes and Renovation Loans!

If you live in Prescott, chances are you understand how even though we have a lot of new build homes, the majority of homes here are fairly old. As you can see in the graphic below, of the 601 single-family homes currently listed in Prescott, Arizona, 426 of them were built prior to 2009!

Older homes can tend to scare buyers away, but that doesn’t always need to be the case. Perhaps baring homes with larger ticket item fixes such as roofs and foundation issues, other fixer uppers you view don’t need to be so scary. Older homes can not only be an investment opportunity depending on the area they are in, but with a little TLC, they can also have potential to be the dream home you’ve always wanted.

The problem here is that most people don’t have the money to both buy a home and then invest thousands of dollars into it to make it their dream home, so what are they supposed to do then?

The same could be said for those who already own their home. Perhaps they are living in a more dated house and would love to do some of those renovations they’ve always dreamed of. Knocking down a wall, getting granite countertops, and so many other things. Where do homeowners get the money to do this if they haven’t been able to save for it over the years?

The answer to both these questions could quite possibly be a renovation loan. A renovation loan can look like a lot of different things depending on what you are qualified for. With new home buyers it can mean rolling the cost of fixing up your home into the same loan you’re using to finance your home. This means you can renovate that fixer upper right away and not “sometime in the future.” For current homeowners, a renovation loan might look like refinancing to roll the coast of upgrading your home into your loan.

Can you imagine buying a home that you plan to “one day” make your own, but instead of one day, you get to renovate it right away? Or, can you imagine being a homeowner and finally being able to get rid of that gaudy shag carpet and laminate counters?

Well, a renovation loan might be your answer and they aren’t as scary as perhaps you’ve heard. Don’t believe us? Why not talk to the experts? Tamara Jakubos with Fairway Independent Mortgage Corporation specializes in renovation loans! Having helped numerous other clients with renovation loans in the past, she could tell you more about them and possibly help you with your own renovation loan.

Give her a call today, she’d love to answer your questions and see if you qualify for one of Fairway’s multiple renovation loan programs!

Tamara Jakubos

Fairway Independent Mortgage Corporation

tamara.jakubos@fairwaymc.com, 480-467-3010

Agent Feature – Jodi Petkovich

We’d like to introduce you to our amazing agent Jodi Petkovich. Jodi and her husband John have lived in Prescott for ten years now with their three kids, and they have loved every moment.

As a former teacher, Jodi brings ‘class’ to her duties as an agent as well as a fabulous sense of humor, constantly making those around her laugh. Her kindness, generosity and professionalism are what you’ll love most about her and are what make her unforgettable. She studies the needs of her clients to help them achieve their transactional goals, always seeking her client’s best interest at heart. Her extracurricular activities include making melodies and spending time with her husband and three children and serving in intercessory ministry.

Her husband John owns his own successful plumbing business called Bar None Plumbing. They do everything from basic plumbing issues to water heaters, to flood prevention services, and seek to bring the highest quality service to their customers.

John and Jodi’s three children are Ronnie, Taylor, and Riley. Ronnie is recently married and a worship pastor at a local Church in town. Taylor is currently making his nation and family proud; serving in our country’s military, though he is missed every day by his family. Lastly, Riley is a freshman at Prescott High School and she loves soccer, playing on her schools high school team as well as on a club team.

We love Jodi and we know you will too! Here are some things that Jodi’s clients have had to say about her:

“Jodi Petkovich was a great help and went out of her way to be accommodating for us to get through our purchase. She was super quick to respond every time I contacted her.”

“We worked exclusively with Jodi Petkovich and we couldn’t be more pleased with our experience. During the entire process Jodi was, to put it into simple terms, a wonderful gift. We were looking at Prescott very seriously and clicked on a property for more information and within minutes we got a call from Jodi. Over the course of many months she went above and beyond to help us find the right property and was at our side every step of the way through a challenging buying process. You can’t find a harder working, dedicated, responsive and knowledgeable professional than Jodi. I’ve dealt with many real estate agents in the past (one was a high school friend) and while all were very good at their job, I’d put Jodi on the top of the list when it comes to my experience. My wife and I highly recommend her services and the team at the Kathleen Yamauchi Group.”

“Where to start? Jodi was amazing her professionalism and knowledge was top notch. She listened to what we wanted and found the right home for us in record time. The loan officer we had even said the closing went so well because of Jodi and her quick response and attention to detail. I highly recommend her.”

Jodi is amazing!

Why Buyers and Sellers Shouldn’t Trust Online Real Estate Price Estimates

Whether you’re looking to buy or sell a home, chances are you’ve looked at a few real estate websites to see what the market is like out there right now. A lot of these sites, while very helpful in other ways, can tend to be a bit misleading when it comes to prices.

If you’re a buyer, these sites take the price the home is listed for and then break it down to give you an estimate of what your monthly mortgage might be. While sites like Zillow and Trulia state that these numbers are just estimates, a lot of times people see them and believe that is truly what they will have to pay monthly, and have hope they would be able to afford the home they’re looking at. These mortgage estimate numbers can be wrong because it doesn’t take into account how much of a down payment you will be paying, which can vary depending on your loan and loan program you’re using, or how much you can afford. Some loan programs are as low as 0% down payment, while others require the 20% customary down payment. Another reason these numbers might not be accurate is that money such as taxes and Escrow payments that get tacked onto your monthly mortgage may vary greatly depending on when you buy.

So then, what should you do if you are a buyer trying to figure out what you can afford? We recommend first speaking to a lender and getting prequalified to buy. This will not cost you anything and it will give you an accurate dollar amount of what you can afford in a home and in a monthly mortgage payment.

If you’re a soon to be seller, you go on these sites to look at what they’re predicting your home might be worth. Sites like Trulia, Zillow, and Realtor will have an estimate of what a home is worth when you look up the address, and this may be a number you look at to help you determine what your home is worth. The problem with these numbers is often times they are derived from automated valuation models and can be very inaccurate. What your home is worth depends entirely on what kind of real estate market you are in (because it varies from town to town), what your home looks like compared to other homes, the amount of land you have, upgrades done, and so much more!

What we suggest for people looking to sell their home is calling a real estate agency. Most agencies will do a CMA for free. A CMA is a Comparative Market Analysis, which compares your home to others like it that have sold in the area with similar criteria (area, year built, number of bedrooms, upgrades, etc). This will hopefully give you a very accurate idea of what your home is worth and what you can list it for rather than just having a guesstimate.

We don’t want to shoot down the real estate sites we love, we are just saying to read what even they say on their websites… that those numbers are estimates and can be inaccurate and not precise depending on your home, your situation, and so many things. For more accurate numbers, follow our tips above about seeing a lender or contacting an agency.

If you need help with either of those things, we would love to assist! You can call our office today at 928-771-111 to speak to an agent about helping you get pre-qualified or creating a CMA for your home to find out how much it could be worth.

Listing Feature – 2827 College Heights

Check out our sensational and affordable listing in the Villas at Sunrise Terrace. This home is entirely on one level with only one step from the garage into the home, and the interior of the home has been recently painted and a new roof was installed in 2017!

Boasting three bedrooms, two full bathrooms, and a two car garage, the home also has vaulted ceilings and attractive decorative touches. The spacious master suite has a French door to the back patio, the master bathroom with dual vanities, walk-in closet & separate bath tub and shower.

In the great room, cozy up on the window seat complete with plantation shutters and serene views of Granite Mountain in one direction, and the San Francisco Peaks in the other. The gas fireplace is the focal point in the great room, cladded in reclaimed wood and featuring a gorgeous wood mantle.

The kitchen features granite countertops, a plethora of cabinets and black appliances including built-in microwave, dishwasher, smooth-top electric range and refrigerator.

The backyard is perfect, topping off this great little house! It’s very low maintenance with the concrete patio flowing out into the open paver yard that is fully fenced.

Want to see this gorgeous home? Call our office today for your showing appointment! 928-771-1111.

Prescott City Crews Repairing Roads From Storm

With all the snow we received during the “snowpocalypse,” you might have noticed the not so great condition of our roads in the aftermath. As the snow piled up and was plowed away, plus the snow melting and then refreezing overnight, there has been some damage to the cities asphalt.

This continual scraping of the roads was unavoidable and we are so grateful to the crews for keeping our streets open and safe, but what is happening now with the damaged roads? What is happening with all the potholes and uneven surfaces? Well, just like getting the snow plowed away, our city is hard at work. Focusing on large potholes first, they’ve already begun to work on repairing our roads to make sure they are as safe as possible.

Some of these repairs may be temporary so they can get to as many as they can as quickly as possible, but they are working hard to fill the holes and repair our streets.

If you’re wondering how you can help with this endeavor, you can do so by notifying the city of any potholes or damages in the road you notice. Visit the city’s website here to report a problem. You can also call the Street Maintenance Division at 928-777-1126. Drive safe out there!

Prescott’s Water Supply is Ample and Stable!

If you missed the City of Prescott’s Council study session on Tuesday, February 26 about water resources in our town, then we’ve got the details for you! And guess what? They’re good!

Chances are, if you live in Prescott, you or someone you know has been talking about how worried they are about our water supply. With all the growth Prescott has been seeing over the past few years, this seems like it would be a logical worry right? Well, in reality, Prescott is actually using less water now than it was fifteen years ago! I know that is hard to believe for many of us, but let’s look at how this study of water (prompted by Mayor Greg Mengarelli and City Manager Michael Lamar) brought this conclusion and why we should let it calm our water fears.

First, they brought in a man called Gary Woodard to do a water study on our town. Gary Woodard is Principal at Water Resources Consulting.  He has advised dozens of municipalities, private water companies, water districts, tribes, and regulatory agencies on a variety of municipal water issues, emphasizing on modeling and forecasting demand and evaluating conservation programs and measures. Prior to this work, Gary spent over 30 years at the University of Arizona.  His positions included Associate Director of the NSF-funded SAHRA Center, and Deputy and Acting Director of the Water Resources Research Center. Additionally, he founded a water conservation alliance and was president of Universities Council on Water Resources (UCOWR).

So, the city didn’t bring in just anyone, they brought in a true expert to take a comprehensive look at our city’s water supply. They did this because they wanted the truth, not just the fear-talk going the city about how we are going to run out of water with all the population growth, but the actual truth of if we should realistically be worried about this or not. The conclusion Gary came to was that no, we should not be worried about water whatsoever! In fact, he said Prescott is considered the “Gold Standard” of municipal water management, and that our recharge and conservation efforts make Prescott’s water supply look very positive for the future.

Gary Woodard began his study last year in 2018, collecting water meter and utility data from the city, country and state, and compared that information to data across the region and nation. Prescott’s downward trend of water use aligns with what’s happening across the United States. Woodard stated, “It used to be that growth and economic development were parallel to an increase in water and energy use. Today, nationally, water consumption is decoupled from growth for a variety of reasons.”

Here are the bare facts of what this study of our water found and why our water consumption is less now than it was fifteen years ago:

  • Since 2004, we’ve added 4,000 new water users, but we’re using 1,300 fewer acre-feet of water.
  • Through the assured water supply program, Prescott has the authority to use a total of 16,500 acre feet per year from all water sources, only 9,400 of which can be groundwater. In 2018, Prescott used just 6,700 acre feet total, down from the 8,000 acre feet used in 2004.
  • Changing demographics including smaller households, more seasonal residents, and fewer children and teens are part of this.
  • Also, there are active conservation efforts including popularity of drought-tolerant, low-water landscaping, use of more efficient fixtures and appliances in new homes, and the replacement of inefficient fixtures, appliances in older homes.
  • Our city’s robust recharge program including two municipal reservoirs is part of it as well.

Gary Woodard also stated, “Prescott’s water supply is derived from a diverse portfolio including groundwater, surface water, and reclaimed water which puts it in a stronger position than cities relying entirely on a single source of water that can be more vulnerable to year-to-year precipitation and long-term drought.”

In other words, when it comes to water, water conservation and if we have enough water, the City of Prescott is coming out on top! This means we don’t have to worry about running out of water any time soon and we can rest easy knowing that our city officials aren’t just taking this for granted, but are continuing to seek how Prescott can continue to decrease water usage and increase water conservation.

If you’d like to see the council study session on water yourself and get a more in depth explanation of our ample water supply, you can visit the City of Prescott’s website here and watch a video of the meeting. We hope this will help ease some of your and your friends worries about water; it certainly helped ease ours!

 

 

Frequently Asked Questions by Sellers

When it comes time to put your home on the market, there are many things sellers begin to ask themselves. We’re going to take a look at some of the most frequently asked questions by sellers and give you some advice from what we’ve found to be true in our collective years of real estate experience.

What do I need to do to my house before I list it?

The answer to this question is really on a case by case basis, but for the most part, sellers do not need to do a ton of work to their homes before they list. While many sellers can get very anxious and worried about all the things they imagine they’ll need to do to their home, most only require a good cleaning and perhaps a little staging, but that’s it. There is no need to drop a lot of money into your home in order to get it ready because that is money you may not get back when you sell. Unless otherwise advised by your real estate agent, the preparation to list is minimal.

How much is my home worth?

This is a question no good real estate agent should answer without first seeing your home and running what we call a comparative market analysis. A comparative market analysis, or “CMA” as we call it, looks at houses that have sold in your area that are similar to your own in order to generate a good price point for your home. This price will depend on many factors including the home’s size, neighborhood, location, amenities, upgrades, and so much more. Many sellers believe there home is the best home on the block, which it may very well be, but prepare yourself to be realistic about how nice your home is compared to others because you don’t want to overprice it. If you price your home too high, then it will likely sit on the market for far longer than you expected. However, if you price your home too low, then you aren’t maximizing on your investment the way you could be. Therefore, make sure you speak with an agent and listen to their advice so you can collectively land on a good price for your home.

How long will it take to sell my home?

According to Realtor.com, homes in the United States are spending an average of eighty-three days on the market. However, again, the answer to this question will vary greatly depending on the home. Some areas that are nicer sell far quicker than others, likewise, certain price points, no matter the home, will sell quicker than others. There are far too many factors here to have a cut and dry answer, so we would urge you again to speak to your real estate agent to make sure you are at the best price possible to make good on your investment, but to also sell relatively quickly.

Should I be present for showings of my home?

Most real estate agents would agree on this one when we say, “No.” When buyers go looking at homes, it can be either a very fun experience, or a very stressful one, either way, having the owner of the home at the house will only make the buyers feel uncomfortable. With the seller there, the buyers don’t feel free to be themselves, ask questions about the property to their agent, or voice any concerns they have as they view the property. The last thing you want is to scare off any potential buyers and their offers on your home with them, so it’s best to stay away.

How much do I pay my real estate agent?

This is something that can vary depending on the agency and town, but that will be something you and your agent discuss and agree upon before listing your home. A common commission is typically 6% of the home’s sales price, which is then shared with the buyer’s agent, giving each side of the transaction a 3% commission of the sale’s price. That may seem like a lot, but you have to keep in mind that agents don’t get paid by the hour, they get paid from sales. So, they don’t make money unless they sell your home. They are spending a lot of time and money networking, and advertising your home so it is seen by as many potential buyers as possible. However, not all agents are created equal, so make sure you find the right agent for you who will truly seek your best interest and do whatever they can to help you sell your home.

 

In all of your real estate adventures, remember to breath and take it easy. Find yourself a good agent who will make your transaction smooth and stress free, and not one full of fear and anxiety.

If you’re looking to list your home, you could call our office today for a free Comparative Market Analysis! Our number is 928-771-1111. We would love to help you sell your home!