The 2020 Housing Market by ARMLS

As we kick off the 2020 Real Estate season, we love to look at what some trusted sources around our state have to say about it. What are their predictions? Will the market keep booming, or take a dip?

That being said, here is what Scottsdale’s multiple listing service (aka ARMLS) has to say about what the housing market might look like in the year 2020:

2020 Housing Market: Gen X, Boomers, and Millennials

As we head into 2020, many in the Real Estate industry, or those who are looking to buy or sell this year, may be wondering what the market will look like in the months to come and overall this year.

According to Realtor.com, one factor playing a major roll in the housing market this year is age groups. Gen Xers, Baby Boomers, and Millennials will all have an effect on the year 2020, just as they started to in 2019.

With Gen Xers and Baby Boomers:

Though many are beginning to retire and seek places that are sunnier, warmer, have lower taxes, and have lower costs of living, many are also opting to hang onto their homes a little longer than they did in the past. This is causing a diminish in home supply – even more of a diminish than there was before – and a diminish that new home builds cannot keep up with in order to keep inventory steady.

When it comes to mortgages, around 32% of home purchases this year are projected to be from Gen Xers, while around 17% of home purchases are projected to be from the Baby Boomer generation, a smaller percentage than in previous years.

About Millennials:

As for millennials, they are projected to make up a whopping 50% of all home purchases this year! That means they’ll take out more mortgages than the Gen Xers and Baby Boomers combined.

While some may think that Millennials are just looking for hip apartments in the city within walking distance to everything (or are drowning in too much student debt to hold their own in the Real Estate market), that isn’t the case. Not only are Millennials looking for other types of homes – such as an 1,800 square foot house in the suburbs – but they also have peak savings for down payments. The median age for millennials is 30 years old, which is also the age of the average home buyer now. These 30-somethings are starting families and seeking homes in good neighborhoods closer to good schools.

The only problem millennials will face, as will every other home buyer this year, is the inventory shortage, making it harder for them to find the right home.

 

This is just one factor looking to affect the 2020 market this year, but there are many more, which we’ll continue to write about in blogs to come. If you’re looking to possibly buy or sell a home this year, we’d love to help you in any way we can! You can call us at 928-771-1111.

Which to Buy: Townhome or Condo?

Whether it’s your first time buying or you just want to purchase something smaller, townhouses and condos are both great options. Check out the differences between the two to help aid you in your search!

Condominiums

Condominiums are similar to apartments in that you purchase an individual unit inside of a larger building, but not the property it sits on. This generally includes access to the building’s amenities, such as the clubhouse, pool, and gym. However, condo owners are not responsible for the upkeep and repair of these common areas. Because of the number of shared spaces, living in a condo often allows for meeting new people and building a strong sense of community. There is a fairly similar vetting process for loan approval as for a full-sized home; however, the lender will also look at the health of the condo association.

Townhouses

Those who purchase a townhome are generally purchasing the complete unit, both inside and out, including the land it sits on. This might also include the driveway, yard, or roof. Traditionally, these units are two- or three-stories tall and may also include common areas like pools and parks. Townhome owners pay a fee to a homeowners association every month and the loan process is the same as buying a full-sized home.

Which is the best choice?

Both townhomes and condos offer less maintenance than a traditional home and generally offer great shared areas. Your decision ultimately comes down to you and your family’s needs and wants seeing as townhomes generally tend to be larger. Things you’ll want to take into consideration include location, lifestyle, family growth, and price. Another thing to consider is investment. Later on down the road once your family grows out of the condo or townhome, these properties can make great rentals. Checking on the HOA’s rules with renting is a good idea if this is something you’re interested in when buying.

How to Cut Costs When Moving

As we get ready for the Holidays, cutting costs wherever we can is probably something that is on all of our minds. This is especially true if you’re in the middle of a move, or about to move.

If you’ve ever moved before in your adult life, you know that it can get really expensive really fast. So, in a time when you’re trying to save money for Thanksgiving and Christmas,  and all the gifts and travel costs that come with it, how can you minimize your moving costs?

Well, we’ve got some tips to help you do just that! Brought to you by our friends over at A & C Brothers Moving and Storage, here is some of their expert advice on how to best cut costs during your next move.

Here’s How You Can Cut Costs When Moving

Regardless of whether you’re just moving to the next town or all the way across the country, moving between homes can be a pretty expensive process. Despite the unavoidable expenses, though, it’s not impossible to move on a budget. From collecting boxes to hiring moving services, there are smart ways to keep your costs down when moving.

These tips will require plenty of extra work from you, but they’ll help you relocate successfully without breaking the bank.

Get rid of stuff you don’t need.

Most people are guilty of wanting to keep stuff they hardly use or probably won’t use anymore. Unless the items hold great sentimental value for you, now should be the perfect time to get rid of them.

When we say rid, we don’t mean throwing them in the trash. You can either arrange a garage sale, give them away, or donate them to charity. Surely, you can find a good use for the extra money you’ll earn at the garage sale. The possible tax deduction from donating your stuff isn’t so bad either.

By purging your stuff, you’ll have lesser things to pack and worry about. More importantly, you’ll end up with lower mover’s fees because there’s fewer stuff to move on the big day.

Use Improvised moving supplies.

You may not notice it, but moving supplies can eat up a good chunk of your moving budget. The great news is, it’s relatively easy to cut costs on moving supplies if you plan things ahead of time.

For starters, you can collect boxes from friends and family instead of buying them. If you can’t have them for free, try purchasing some from your neighborhood grocery stores. Don’t get brand new moving boxes, if possible. They’re quite expensive for something that you might end up using just the one time.

If you need packing supplies to protect your fragile belongings, make use of common household materials like blankets, towels, clothes, and newspapers as alternatives. They’re just as effective, but they won’t cost you a single penny!

Hunt for reliable moving companies with great deals.

If you want to score a good deal, ask for quotes, and get as much information from different movers before making a decision. However, never hire a moving company just because they’re offering you the lowest price. You’ll want reliable movers who can move your belongings from your old house to the new one without even a scratch.

When looking for the right movers to hire, always check online reviews – both on their website and social media platforms. These sources should provide you valuable insight into their quality of moving services.

Avoid moving on busier days and months.

As with most things, timing is everything. The schedule of your move has a significant impact on how cheap or expensive your relocation could be. Moving on weekdays is generally cheaper than moving on weekends, while the spring and summer are the busiest and most expensive seasons to relocate.

Most moving companies offer discounts for moves scheduled during the slower months of the year. If saving money is what you’re really after, you might want to move during the fall season or early winter.

While it’s so much easier to pay and have other people take care of the entire moving process for you, this will cost you a fortune. Like we said, moving on a budget is possible, but it will require a lot of effort and planning on your part. Anything that you can do on your own saves you from paying other people to do it.

Good luck!

Things to Never do to Your Home

Whether you are going to be in your home for 10 years or for the rest of your life, you always need to be considering resale when deciding which home projects to tackle next. That being said, here are some things you should never do to your house, both to save yourself money while you live there, and also to make your house more appealing when it comes time to resell.

Get Rid of Your Only Tub: No matter how much you want a super dreamy walk-in shower, if it requires getting rid of your only bathtub, don’t do it. A home without a bathtub can be a huge turn-off for many buyers who like having that option or who have kids and need a bathtub for this purpose.

Leave Your Cabinet Doors on While Painting them: Painting cabinets has become very popular in recent years because it is a cheap way to update your kitchen/bathroom look without the huge price tag of replacing the cabinets. It’s something that isn’t that hard to do yet makes a big difference in appearance. However, if this is your next project, make sure you remove the cabinet doors and drawers when you do so. Take the doors off and paint them separately, don’t leave them on while you do this. It makes for a much cleaner look in the end.

Plant a Tree Close to the House: This seems like it would be a no-brainer, but you’d be surprised. If you’re wanting to plant a new little sapling in your yard, make sure you do so with ample space away from the home. Otherwise, in years to come, that tree will grow large and could cause issues from falling branches and roots that grow underneath the home, going into foundation and piping. If that’s the case, it could cost you big bucks to remedy if you’re still living in the home, or even be something buyers ask you to remedy before buying your home.

Cover Wallpaper with Water-based Paint: Wanting to get rid of that tacky 70s wallpaper to have a fresh and updated look? Well, in case you didn’t know, depending on the condition of the wallpaper, you can actually paint right over it instead of going through the agonizing trouble of removing it. However, don’t use water-based paint when you do this. Water-based paint can actually re-activate the wallpaper glue and cause it to peel. We’re thinking peeling painted wallpaper wasn’t the updated look you were going for? Instead, make sure you use oil-based primer, let it dry, and then you can apply a normal latex paint over that.

Paint Exterior Brick: Now, this one might have some mixed reviews as to whether or not this is okay to do, but if you’re planning on being in your home for a long time, painting the brick on the outside of your home might not be such a good idea. Painting brick can destroy the brick and mortar, which could go so far as to cause a crumbling foundation. When comparing those costs, it’s just not worth it. If you’re looking to up your curb appeal, perhaps paint the door or add some shutters instead.

Tear Out Character: While your home might have some little corky features you aren’t thrilled about such as custom millwork, tin ceiling tiles, stained glass windows, etc., don’t be too quick to rip these things out (unless of course they are beyond saving and in disrepair). These classic details give your home character that buyers love and appeal that is hard to come by these days.

These are just a few things you should probably re-consider doing to your home or look further into to make sure you do them properly, if they are things you’ve been considering doing.

There are so many cheap and fun ways to update your home these days. Things that make it homier for you, but also things that can add great re-sale value to your home in the long run. But, make sure you do your homework on these house projects first! Not all of them are created equal.

Listing Feature – 1637 Constable Street

It’s no secret how beautiful and spacious this Prescott Lakes home is! Set on a cul-de-sac with views of the golf course, mountains, and the Dells, this live on one level home is truly welcoming with its split bedroom concept and open floor plan. The main level comprises of the fenced courtyard entry into the dramatic foyer, kitchen, dining, great room, master bedroom, 2 guest bedrooms, full bath, office alcove, deck and the two garages currently set-up for 3-cars but can be converted for an additional garage space.

The immaculate kitchen is complete with a large fridge, gas stove top, built in ovens, spacious island with bar seating, granite counter tops, hickory cabinets, plenty of overhead lighting, and a walk-in pantry.

With an open concept, you can move easily from the kitchen to the great room as well as be a part of any entertaining you’re doing while preparing food and beverage. Natural and overhead lighting also help the space feel open, making it an area you can truly kick up your feet and relax.

A large open room with access to the deck and a spacious bathroom complete with walk-in closets, separate toilet room, dual vanity, and large walk-in closet, the master suite is everything you need!

The lower level walk-out has the same high-amenity status as the main level and offers a family room, 2 more guest rooms, a full bath, and storage.

One highlight of this property is the incredible views and the wraparound deck with 3 access points on the main level including a 4-panel multi-slide door from the great room. The lower level has access to the backyard covered and open paver patios complete with mature trees and wrought-iron fence.

The features of this home are way too numerous! More highlights include  luxury wood-look laminate floors, stone fireplace, hickory cabinets and granite counters throughout, paver driveway, cement tile roof and 3-zoned heating and cooling. Enjoy the Prescott Lakes lifestyle in this attractive home with relaxed floor plan and grand views! This is the one for you! The attached garage from the laundry room is currently set-up as an oversized 2-car garage with a separate storage room. The walls for the storage room can be removed to turn it into a 3-car tandem garage which allows for a total of a 3-car garage and a separate 1-car garage with its own outside entrance.

Interested in this gorgeous home? Call for your showing appointment today! 928-771-1111.

iBuyer Companies: Are They Really Cheaper Than a Real Estate Agent?

Odds are, if you’ve been thinking of listing or buying a home these days, you’ve heard of iBuyer real estate companies. These are companies such as opendoor.com that promise to sell your home for significantly cheaper than your average Real Estate company. However, are these companies actually all they’re cracked up to be, or do their costs end up being just as much as a real estate agent, if not more, when it’s all said and done?

Check out this article we found by Teke Wiggin with inman.com titled “iBuyers Cost Sellers Up to 15% of a Home’s Value, Study Finds,” which takes a hard look at the actual costs of using these “cheaper” options when selling your home:

Market analytics firm Collateral Analytics puts hard numbers on the much-debated costs of using iBuyers.

Offering ammunition to agents who argue that iBuyers are often deceptively expensive, a new study by real estate data analyst Collateral Analytics has determined that the typical cost of using an iBuyer ranges between 13 and 15 percent.

Entitled “iBuyers: A new choice for home sellers but at what cost?” the study conflicts with claims made by some iBuyers on just how expensive such services wind up costing homeowners. Opendoor, for example, represents its service as more affordable than a real estate agent. But if the new research is correct, using an iBuyer would generally cost consumers two to three times more money than if they simply used a traditional agent.

“In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor,” write the authors of the report, Collateral CEO Dr. Michael Sklarz and Dr. Norman Miller, senior vice president of research and development with the firm. “For some sellers, needing to move or requiring quick extraction of equity, this is certainly worthwhile, but what percentage of the market will want this service remains to be seen. ”

The analysis adds to a growing debate over the value of iBuyers. Some agents argue these startups often bilk homeowners while others contend iBuyers are a reasonable option for their clients.

The divergent views came into sharp relief during two Inman Connect panels last month in which agents shared their experiences with iBuyers.

The report was not framed as an indictment of iBuyers. It describes the service as “a welcome alternative to traditional brokerage” for a portion of motivated homesellers. However, its most notable contribution to a nascent body of research on iBuyers involves its cost estimate of the service.

The report noted iBuyers charge sellers a convenience fee ranging from 6 percent to 9.5 percent, with some also docking the seller “for fees typically paid by buyers at closing, adding another 1 percent or more.” IBuyers tend to ask for “generous” repairs based on the results of a home inspection while some, such as Offerpad, pay for moving costs, write the authors of the study.

This all means that the total direct cost of an iBuyer “ignoring repair credits” is between 7 and 10 percent, versus the “typical 5 to 9 percent combined seller and buyer costs with a traditional broker,” according to the study. “Yet, that is not the end of the story or the comparison,” the authors write.

Due to costs and risks of holding and reselling their acquisitions, iBuyers must make “conservative” offers, according to the report.

“The more unique the home, the worse the season for selling, or the more competing inventory is present in the local market, the more conservative will be the offer price,” the study asserts.

To pinpoint the typical discount that iBuyers pay for homes, the report’s authors compared purchase prices of two unidentified iBuyers with home value estimates generated by Collateral Analytics’ automated valuation model (AVM) — a model that report claims “correlates very well with actual market values.”

The analysis used a sample of 6,000 transactions that took place across four markets — Phoenix, Atlanta, Charlotte, and Las Vegas — from January 2016 to February 2019. The report did not identify the two iBuyers, but a source familiar with the study confirmed they were Opendoor and Offerpad.

Offerpad spokeswoman Cortney Read said Offerpad’s average service fee is 7 percent and that some homes require only minor repair costs. She also added that Offerpad believes the report “does not accurately compare the mentioned fees,” focusing only on commission for real estate agents, while including other costs for iBuyers that “should be also reflected in the traditional real estate agent percentage amount.”

Opendoor didn’t immediately respond to a request for comment.

According to the study, one iBuyer bought homes at a median discount (the median discount off market value that the iBuyer purchased homes at) of 4.5 to 6.9 percent. The other iBuyer paid a median discount of 2 to 3.3 percent.

These discounts reportedly have declined modestly over the years. In 2016, for example, one iBuyer’s discount was about 7 percent, while the other’s was around 3.5 percent. By 2019, those numbers stood closer to 2 and 4.5 percent, respectively.

The authors theorized that “pressure to deploy capital” may have “reduced the spread [between how much iBuyers pay for homes and how much they’re worth] as the iBuyer market matures.” Some of that pressure has likely come from Zillow Offers and other ventures that are trying to take a bite out of the growing iBuyer market.

“Ultimately, the spread [the discount paid by iBuyers] will be at an appropriate level to compensate the iBuyers for liquidity risks and capital costs,” they said.

Thus, the study’s “preliminary empirical results” suggest that sellers are paying “not just the difference in fees of 2 to 5 percent more than with traditional” agents, and a generous repair allowance, but also an additional 3 to 5 percent more to “compensate the iBuyer for liquidity risks and carrying costs.”

Taking all of this into account, the authors conclude the typical cost of using an iBuyer ranges from 13 to 15 percent depending on the company.

This cost estimate is in line with estimates from some agents that spoke about iBuyers at Inman Connect Las Vegas, but a bit higher than an estimate published by Market Watch: 11 percent.

The cost makes sense from a business perspective, the report notes. IBuyers must cover carrying expenses and deal with a number of risks including home burglaries, price declines and “adverse selection.”

The last risk refers to the risk that sellers who know about hard-to-discover negative characteristics of their home will be more likely to sell their homes to iBuyers at prices that iBuyers would not pay were they aware of those flaws.

“Not all sellers are better informed than the iBuyers,” they write. “Still, there is some risk of informed sellers taking advantage of relatively high offers.”

Arizona’s Real Estate Market Statistics

In case you are curious how the current real estate market is doing in Arizona, check out these charts published by ARMLS (Arizona Regional Multiple Listing Service) in May. ARMLS is the home listing service that services the Phoenix Metro area, so these numbers may vary from Prescott’s own statistics, but our market is doing just as well as theirs, if not better.

Tom Ruff from ARMLS, whom posted the article, stated, ” After a close fact-check of homes reported sold by ARMLS, May was a record-setting month. New all-time records were established  for both sales volume and total dollar volumes, as well as the most homes sold and for the most money. Total dollar volume was $3,593,145,906. The monthly median sales price also set a record high reaching $278,000. After a slow start, 2019 is purring.”

Ruff goes on to say that with statistics like these that have continued to rise over the last several years, people inevitably begin to talk of another real estate “bubble.” However, Ruff, along with many others in the real estate industry, aren’t very worried about that. Current underwriting standards and the elimination of crazy money are two of the main reasons for this.

People aren’t worried because the differences from then to now in these two things are significant. Standards for lending are much more strict and the dollar amount on homes still has yet to reach what it was back before the burst. Due to better lending protocol alone, a huge bubble pop like last time is fairly unlikely.

Hopefully knowing that makes us all rest a little more easily and not fear that a few years after purchasing a home we’ll be looking at catastrophic amounts of foreclosures, short sales, and bankruptcies.

 

Listing Feature – 1579 Eagle Mountain Drive

Curious about what makes this home so special? Everything!

Upon the tile entry, you will be drawn into the great room featuring a high vaulted ceiling and gas fireplace with stacked-stone surround. This is the perfect space for sitting and relaxing with your family around the fireplace or as you watch TV.

The spacious kitchen features plenty of cabinet and storage space and is open to both the formal and informal dining areas. This way whomever is cooking can still be involved in the parties going on around them.

Relax in the master suite that offers a spacious room, vaulted ceiling, a separate French door exit out onto the deck, a walk-in closet, and master bath with double vanities and dressing table.

Two more large bedrooms, a full bathroom with dual sinks and linen closet, a powder room, and the laundry room are also on the main level.

The lower level has a game/family room with a wet bar, which could be perfect for multi-generational living. It also has a lot of storage space, a full bathroom, and the 4th bedroom with walls lined with windows.

The deck comes out from the living room and overlooks the lush green view of the back yard.

An oasis in itself, the yard features a pond and water feature, mature trees, turf grass areas, and paver patios that are also accessible from the lower level living.

If that weren’t enough, the home also includes a three-car garage, plus separate side parking for a small RV.

This is a house you are going to want to see in person! For a showing appointment, call our office today at 928-771-1111.

Is it Time to Upsize Your Home?

As we and our families grow throughout the years, unfortunately, our homes don’t tend to grow with us. A house that may have initially worked fine for a single person, a young couple’s starter home, or perhaps even a family with a newborn, can quickly become too small as your family grows. Add in pets, more children, multiple generations living under roof, and before you know it, you are all on top of one another with no space to breath.

BUYING A NEW HOME VS. ADDING ON TO YOUR HOME

For those who really love their homes (the style, the location, the layout, etc), simply remodeling and adding to their home is the best option. That way they get to remain in their beloved home while making it even more their own and making it something that suites all their needs. However, not everyone can afford this option as it can be costly, and there may also be things about your property that would prohibit such a project such as the size of your land or any HOA’s that may be in place. This is when moving to a bigger home becomes the best solution, and really only, solution.

WHERE DO YOU NEED MORE SPACE?

The first and most practical thought when considering upsizing your home is to simply consider square footage, bedrooms, and bathrooms. This seems logical right? Well, maybe it is when considering your immediate needs, but it may not be the best approach in the long run. It’s important to take a more critical approach when looking at new homes and to consider how each space will actually be used. If you have younger children (or possibly more on the way), then focusing on bedrooms and bathrooms makes sense. But if your children are closer to heading off to college or starting their own families, it may be better to prioritize group spaces like the kitchen, dining room, living room, and outdoor space. This will pay off during times when you are having big group gatherings, parties, and things of the like. It might also be a good idea to consider holidays or summer vacations, when everyone is coming to visit. If this will happen often or your family is close and you will be having to accommodate a lot of people, you may need more rooms AND bigger group spaces.

MOVING OUTWARD

If you need more space but can’t necessarily afford a more expensive home – or maybe you just don’t want one (an affordable mortgage is so nice!) – something to consider might be moving out of town. Depending on where you live, you can probably get a lot more house for your money if you move a little further from a city center. This might be hard to think about – leaving the walkability and short commutes of a dense neighborhood or condo, and the “city life” you love – but this is where knowing what you truly need comes in again. What is more important to you: living in the city with walking distance to stores and short commutes, or having a bigger home that can accommodate your family, allow you to host Holidays, and give you space to throw barbecues and birthday parties? Neither answer is wrong, it all just depends on what is most important to you and your living needs. If the latter situation has become priority, sacrificing city life and getting a more spacious home in the suburbs makes the most sense.

Whether you’re looking to possibly sell your home and move on to something bigger, want some referrals of good contractors, or just need some advice on what the best option for your family might be, give us a call at 928-771-1111. We would love to connect with you and help in any way we can!