Sharp Declines In Home Bidding Wars

If you have been looking to buy a home in the past few years and perhaps even put in a few offers on homes, then you know it has been a buyer eat buyer real estate world out there!

Homes would hit the market and instantly have multiple offers on them (if they didn’t already have offers on them before technically even being on the market). There were so many people looking to buy that the market had become incredibly competitive for buyers, yet also incredibly good for sellers who had their choice of highest and best offers to pick from.

You can imagine how these situations would be extremely frustrating for buyers who would be constantly outbid or their highest and best wasn’t as good as someone else’s highest and best.

Well, according to the National Association of Realtors, the amount of competition in Real Estate as we come into these Spring and Summer seasons will mostly likely be seeing a decline.  “There will likely be less competition for home buyers this spring—a widely reported index from Redfin shows a significant decrease among real estate professionals reporting bidding wars this month, compared to a year ago. Only 16 percent of offers written by Redfin agents on behalf of their customers in the first three weeks of March faced a bidding war, down from 61 percent a year ago, according to the brokerage’s index.”

This is good news for buyers because your chances of getting into a bidding war when making an offer on a home have sharply declined. This means you don’t have to come in at the very tip top of your home buying budget just to have a hope and a prayer of getting the home you have your eye on – you could possibly make a more reasonable bid and have it accepted because there isn’t another buyer breathing down your neck.

In Phoenix, the amount of offers that faced competition was at 41% in March of 2018. That number has gone down to just 14% calculated in March of 2019. Prescott is a lot different than Phoenix market wise, but agents here have noticed a decline in bidding wars as well, which means if you have been wanting to buy in Prescott, Arizona, now might be the time!

If you are looking to buy a home, or even sell a home in Prescott, you should give us a call! Working Real Estate in the community for the last fifteen years, we have a lot of experience and would love to help you in your next Real Estate transaction. 928-771-1111.

 

Wage Growth Vs. Home Price Growth

Living in Prescott, or perhaps anywhere in the United States, something you may have noticed is the difference in wage growth verses the difference in home price growth.

Being a Real Estate Agency in Prescott, this is something we have definitely noticed as our market has continued to grow healthily over the last few years. With such quick growth in the housing market, it would really be hard for wage growth to keep up.

Home prices can grow at any time they want. From one month to the next, the market can change and prices can go up. Even though the difference might not be substantial, or perhaps even noticeable, there is steady growth in home prices throughout the year (depending on the housing market at that time).

Wage growth, however, tends to be much slower. If you think about it, growth in wages happens maybe once or twice a year, if that. Being an employee, you may get a raise at the end of the year, or a raise when you are promoted to a higher position, but that’s not nearly enough to keep up with the rate of growth of the current housing market.

On top of that, Prescott has been known to be a very competitive job market, meaning employers can start a position off at a lower salary knowing that someone will be eager to fill the position with hopeful raises and bonuses later on down the line. Speaking of bonuses, many companies often don’t raise your salary at all, rather you get a “Christmas bonus” at the end of the year, meaning home price growth has gone up all year round, yet salary growth has remained stagnant. It all depends on the company you work for and the industry you work in.

To further show this fact, check out this quote from the National Association of Realtors (NAR), “Based on the headlines, home prices outpace wage growth. Indeed, in the last six years home prices increased 47 percent while wages rose 16 percent.”

After reading all of that, it may feel discouraging or make one think it would be impossible to afford a home when the rise of wages isn’t keeping up with the rise of home prices. However, what NAR found is that doesn’t appear to be the case.

“Nationwide, the monthly earnings of a typical employee rose by $530 to $3,784 in the fourth quarter of 2018 from $3,256 six years earlier. In the meantime, the monthly payment increased by $354 to $1,114 in 2018 from $760 in 2012. Thus, although home prices increased nearly three times more than wages (in percentage points), homebuyers needed to spend less than their salary increase for the higher mortgage payment. Noticeably, homebuyers needed to spend nearly two thirds of their salary increase (above the 30% rule) for the higher mortgage payment.” – NAR Economist’s Outlook Blog.

This is good news! It means that even though housing prices have grown far more than wages, wages have still grown enough to keep up with the price of these higher mortgages, only costing consumers two thirds of their salary increase towards their house payments. That may still seem like a lot, but at least it isn’t equal to or more than, which means housing based on current salaries is still somewhat affordable.

The best thing to do when thinking of buying a home, and wondering what you’d be able to afford on your salary, is to connect with a local lender. This is the very first thing you should do before even beginning to look at homes. That way you don’t’ set your eyes on something you can’t afford and have your hopes dashed. They will help you determine what your price range is based on your income and get you moving towards your ultimate goal: becoming a homeowner.

Need help finding a lender? Call us today and we can help! Working in the Prescott area for over a decade, we have a lot of experience with all the local companies and can help you find the right fit for you. 928-771-1111.

Listing Feature – 3555 Friendly Meadow Road

This is our amazing listing on 3555 Friendly Meadow Road in Williamson Valley Ranch. Right away, you are taken aback by the breathtaking views of Granite Mountain and ”The Indian,” which are captured from this rambling main level living family home.

Rural living offers a sense of space around you with only a 20-30 minute drive from downtown, giving you the feeling of being away from it all, while still being close enough to downtown to enjoy all of Prescott’s festivities. A large and fabulous deck with spa gives you a glorious outdoor living space you can enjoy all year long, taking in the views and the big night sky.

Approximately 3,557 square feet, the home includes five bedrooms and four bathrooms. The master bedroom is complete with a separate exit onto the expansive deck and plenty of windows to help you take in all of your wonderful views. The master bathroom includes dual sinks, a separate shower and jetted tub, and a walk in closet.

A spacious eat-in kitchen features granite counters, an island with breakfast bar, a gas range, plenty of pantry storage space, and an adjacent seating area with Kiva fireplace. Next to the kitchen is a cozy sunken living room that offers a more intimate gathering space when entertaining guests, or a little privacy to sit aside and read a book, or whatever you like.

The lower level living is a walk-out basement complete with its own family room and a full second kitchen for multi-generational living. It includes plenty of storage space to put all of your treasured items, a separate exit to outside, three bedrooms, and a large bathroom with three sinks to accommodate all those in this living space.

Not only does this home have all the living space you need, but it also sits on three acres to accommodate any growing your family will do, including horses and farm animals! The home has a brand new well plus storage tank. The well and the storage tank holds 3,400 gallons at a time and pumps 725 gallons per day. A typical family of 4 only uses 350 gallons per day.

Interested in this home? Call our office today for a showing appointment! 928-771-1111. Interested in homes similar to this one? Still call! We’d love to help you find the right home for you!

How AZ Realtor Association Advocates For You!

Below is a video posted recently by the Arizona Realtor Association. A little cheesy and full of realtor humor, but also full of information on just how Realtors have fought for the people over the years.

“The Arizona REALTOR® Party saves you $1000’s every year by advocating for you and our 50,000 REALTORS®, your clients, and property owners.”

Enjoy!

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.

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

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’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!

 

 

Prescott Pronghorn Relocation

This week on Arizona Game and Fish Department’s Facebook page, they posted a video about the capturing and relocating of some of the Pronghorn that roam the grasslands around the Prescott, Prescott Valley, and Chino Valley areas.

The Arizona Game and Fish Department partnered with the Arizona Antelope Foundation and local private landowners,  creating a structure in which to heard and trap the Pronghorn in, using the help from a helicopter in order to do this.

They reduced the size of a herd of Pronghorn by about forty-five, relocating them to a habitat in Southern Arizona near Wilcox, where they’ve built corridors and water areas for the Pronghorn to thrive. If they did not do this, the Pronghorn would be in danger of becoming non-existent in our area due to their habitat growing smaller.

The main reason these groups partnered together in order to do this was the ever growing development of homes, which have been encroaching onto the Pronghorn’s habitat for many years, and is only getting worse. Their hopes in relocating some of the Pronghorn is that it “will increase their long-term chances of survival while boosting and adding genetic diversity to existing populations in the southeast portion of the state.”

This will be a controversial issue in the Prescott area considering the Pronghorn have been around here for a very long time. Many people do not like the growing suburban areas, while others welcome the growth of the town.  It is issues like these – building on the habitat of beloved animals in the area and then having to relocate those animals – that were bound to come up with SO MUCH growth in our town.

For Prescottonians who have been here for a very long time, this may be a sad sight to see, the Pronghorns feeling like a little piece of our town. Others will be happy they have come up with a solution to help preserve the Pronghorns and give them a better place to live where their home isn’t being slowly eaten away by encroaching development.

To see the full video, you can visit the Arizona Game and Fish Department’s Facebook page here, or visit their website at www.azgfd.com.

What are your thoughts on the topic?

Today’s Smart Home

In conjunction with the blog we posted earlier this week titled “Senior Smart Homes,” we wanted to take a look at smart homes in general and what that means for homeowners today.

In years passed, technology in our homes has advanced far more than we think to give it credit for. Garage doors used to have to be opened manually, now we press a button and it opens electronically for us. Homes went from using open windows and fireplaces for heating and cooling, to having central systems that do that for you. Even windows advanced from single pane to dual panes that help keep in your hot or cold air.

Fast forward to today, and those technological improvements seem very basic compared to what we have now.

In a blog post by Michelle Lind of Arizona REALTORS, she wrote, “In the past five years, we’ve seen a surge in home tech, with builders starting to integrate technology like smart thermostats and doorbells into new home construction. Devices such as Alexa and Google Home are becoming commonplace, and even appliances are getting connected through mobile apps and voice controls. In the near future, these home systems and entertainment devices will be fully integrated through a single control panel or app.”

These smart home technologies include things like being able to open your garage door from your phone… while you aren’t even home! Nest thermostats, which can be adjusted from your Smartphone as well, turning off when you aren’t home and turning back on when you return. That means, for example, you could be at work when it starts snowing and go on your phone to turn the heat up in your home so it’s warm when you arrive.

There are also smart home locks, with key code entry and motion detecting cameras. These locks allow you to see who is at your front door whether you are home or not, open you door by mobile device to let the UPS guy in to drop off packages so they don’t get stolen, or allow you into your home should you accidentally lock yourself out. The possibilities with these locks are endless.

These few things mentioned are possibly the most popular in today’s homes, but are just the tip of the iceberg when it comes to how vastly our technology within the home is expanding.

Smart refrigerators with touch screens. Lights that turn on and off as you enter and leave rooms. Smart shower heads that allow you to manage pressure, play music, and answer phone calls.

According to Statista.com, in 2019, 33.2% of households will be using some sort of smart home technology. That number is expected to hit 53.9% by 2023!

Our world and our homes are changing! What are some smart home technologies you use in your home? We would love to hear about them in the comment section below!