What value does a REALTOR have in today’s market? Why use a REALTOR?

 

When you think of a REALTOR, what do you think of? Lately We are hearing overpaid, a rip off-- this saddens us as there is a Very Big Difference from a REALTOR and anyone who is licensed to sell real estate in my eyes. There is so much talk about value and what we do or don't do for the public. It is hard to see the differences or what is the benefits of using a Full Time- Full- Service REALTOR.  WE think of negotiating and building relationship, protection for our clients, working hard, educated to what is happening around a specific area and the pitfalls to know about, helping people every way WE can. We think of helping you get to your Whooo hooo!!!! moment, quickly, efficiently and navigating all the obstacles that can be in your path!

 Yes, you can sell your home yourself, use a discount brokerage, or hire a agent/a broker not associated with NAR with the designation of a REALTOR. So why does it matter? What difference does it make? REALTORS have taken an oath and are held to the code of ethics from NAR(National Association or Realtors); they give you a Protection from what you do not know and will guide you to make educated decisions. They have tools to help you stay on track and focused on what is important. We have a Fiduciary responsibility to our clients, to act in their best interest. An I-buyer like Open Door, Zillow, etc., etc., ARE the buyer, their goal and driving force is to buy the home as cheap as possible, so they can resell it back on the open market. They have no duty to the owner of the property or the the Buyer of Open Door's home.... In a nutshell there are your differences.  Now, in the litigious world we live in- you can be sued for anything, mix in the most expensive item most people buy in their lifetime and that puts the general public at risk. As many lawyers, NAR, ADRE and AAR have all said. 

 Today I am listing the top 5 reasons why a buyer will sue a seller. 

   #1. Not disclosing important details about the property to potential buyers, in writing. What may seem a small detail to you- could be a very big thing to someone else. One of the only documents that is still valid after the closing is the Seller Disclosure Statement. so just because you closed on the home, does not mean the buyers can't come back and sue if they feel wronged.  

   #2. Not disclosing material facts on the seller disclosure paperwork, sellers are asked a myriad of questions regarding their home including items like any roof or water leaks, termites, or pest issues, plumbing or air conditioning issues, zoning ordinance violations, building code violations, and more. It is vital that a seller makes every effort to disclose past and present issues, even if they have been resolved and even if they happened before they owned the house. If it is a known defect, it needs to be disclosed. Failure to disclose a material fact can certainly lead to a lawsuit. And it can be simple for a buyer to learn a seller knew of a defect. It’s not uncommon for a neighbor to provide a statement outlining a previously known issue.  

#3. Concealing a defect Another way a seller can be sued? By concealing a defect through fraudulent misrepresentation. Or repairing an item in the home without disclosing it. An example of this would be a seller who freshly painted over a ceiling leak just in time for an inspection or who, on the extreme end of the spectrum, collaborated with a home inspector to create a fictitious report. 

#4. Making a disclosure mistake It should be mentioned that not understanding a question on the seller disclosure paperwork or making a mistake when filling out the documents does not negate a seller from their responsibility to disclose what they know. That small mistake could lead to multiple thousands of dollars in a lawsuit. 

#5. Not filling out paperwork correctly, disclosing other parties on title, having work done on the property and not paying the trades or making incorrect statements to the title company, or errors on the paperwork to the title company

As We see it that is a big value,  So if you want a great team behind you- contact us to buy or sell a home throughout the East Valley of Phoenix, including: Phoenix, Mesa, Gilbert, Chandler, Tempe, Scottsdale, Queen Creek, Apache Junction, San Tan Valley, Gold Canyon! 602-644-1416.

Mid month Market Report

 

End of January  Pricing Update and Forecast

Each month about this time we look back at the previous month, analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next month.

For the monthly period ending January 15, we are currently recording a sales $/SF of $214.92 averaged for all areas and types across the ARMLS database. This is up 3.0% from the $208.70 we now measure for December 15. Our forecast range mid-point was $212.50, with a 90% confidence range of $208.25 to $216.75. Prices rebounded sharply from the brief lull in early December and came in $2.42 higher than we forecast. However the actual result was well within the 90% confidence interval.

On January 15 the pending listings for all areas & types show an average list $/SF of $218.10, up 2.2% from the reading for December 15. Among those pending listings we have 98.8% normal, 0.5% in REOs and 0.7% in short sales and pre-foreclosures. There has been little change in these percentages compared with last month, and the number of distressed sales remains extremely low by historic standards.

Our mid-point forecast for the average monthly sales $/SF on February 15 is $220.18, which is 2.4% above the January 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $215.78 to $224.58.

Average sale $/SF has risen 15.8% in the last 6 months, equivalent to an annual appreciation rate of over 31%. If our forecast proves accurate the next month will take us to an 18.6% increase over 7 months.

Appreciation rates of over 20% are inevitable by the time we get to April 2021.

From Cromford Report-The data used to create the Cromford® Report is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used.

Everyone wants a crystal ball especially in Real Estate- but the closest thing we have is the opinions of the experts and economist.

 In the second half of this year, the housing market surged with activity. Today, real estate experts are looking ahead to the winter season and the forecast is anything but chilly. As Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), notes:“It will be one of the best winter sales years ever.”  

The typical winter slowdown in the housing market is simply not on the radar for the 4th quarter of 2020 and going into 20121. While today’s historically low mortgage rates are expected to remain low, they won’t be this low for much longer. This could be the last chance for homebuyers to secure such low rates, and they’re ready to take action. In a recent article, Bankrate explained: “If you’re looking to buy a home…expect mortgage rates to remain low into 2021. However, the possibility of rates falling to 2.5 percent or lower has faded as the U.S. economy has rebounded.”

As long as we continue to see low interest rates, we’ll see hopeful buyers on the hunt for their dream homes. Yun confirmed: “The demand for home buying remains super strong…And we’re still likely to end the year with more homes sold overall in 2020 than in 2019…With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

The challenge, however, is the lack of homes available for sale. With that in mind, all eyes are on homeowners to see if they’ll sell this winter or wait until spring. Danielle Hale, Chief Economist for realtor.com, says it’s best for sellers to capitalize on this moment sooner rather than later: “We currently see buyers sticking around in the housing market much later than we usually do this fall. If that trend continues, we will see more buyers in the market this winter, too. So, this winter is likely to be a good time to sell.” 

With buyers ready to stay active this winter, sellers who want to close a deal on the best possible terms shouldn’t wait until spring to put their homes on the market.

Bottom Line--Experts all agree the winter housing market could potentially be bigger than ever. Whether you’re ready to buy or sell, contact me to get more information on how to maximize your money!     

What to do if you are in a Forbearance and it is coming due

 Last week a client told me about an acquaintance of hers who had received their 3-month forbearance letter stating they now owed their lender $8,000. They got scared and sold their home to Opendoor. They did not know they had extension options or the ability to stay in their house. There is an extreme lack of information being shared on forbearance.

On a recent webinar, I heard a representative from Freddie Mac say the servicers and Realtors need to be the ones talking about forbearance, not the lenders or GSEs (Fannie, Freddie, Ginnie). Yikes!

Forbearance:

Disclaimer: I do not think we are going towards a foreclosure crisis, nor do I believe that the forbearance numbers will be seriously detrimental to our market.

The worst thing for the housing market is to have empty houses. We went through that 10 years ago. Forbearance is not new, but how they are structured today is. The CARES Act enabled significant changes to benefit the borrower. Forbearance is designed to keep homeowners in their homes, which keeps the housing market healthy.

One thing to note is that borrowers in forbearance are considered delinquent and they are being reported as delinquent. The delinquency is not hurting their credit score though, for now. The forbearance protections are for mortgage loans. There could be negative credit score impacts for delaying payment of credit cards or car loans. Also, at least for Freddie Mac, when a borrower leaves their forbearance plan they do have a slight hit to their credit. The extent is unknown.

For the past 17 weeks in a row, total loans in forbearance continue to drop. Last week the rate dropped to 6.81%, down from the previous week at 6.87%. This means roughly 3.4 million mortgages are in forbearance.

There are many different forbearance plans so it is important for borrowers to talk with their mortgage lender or servicer to learn the options available. Most forbearance plans are 3 or 6 months long with options to extend. Given that we are now 6 months into the pandemic about 70% of loans in forbearance are on extension.

“The significant churn in the labor market now, more than six months into the pandemic, is still causing financial distress for millions of homeowners. As a result, more than 70 percent of loans in forbearance are now in an extension.”  

MIKE FRATANTONI, MBA’S SENIOR VICE PRESIDENT AND CHIEF ECONOMIST

Of the 6.1 million homeowners who have been in pandemic-related forbearance plans, 41% or 2.4M have since exited, with the vast majority of those borrowers currently making their payments.

Record levels of equity continue to help mitigate foreclosure risk, with only 9% of homeowners in forbearance having less than 10% equity in their homes. Foreclosure filings were down over 80% in August year over year, mostly because of the foreclosure moratoriums. Once those are lifted, we will see the full extent. Ultimately, because of the record levels of equity, I do not see a huge rush of foreclosures.

The extremely low levels of available housing inventory, here and across the country will continue pushing prices higher adding to the equity available to the homeowners, giving struggling borrowers more options. In Greater Phoenix, housing has appreciated 17% in the past 12 months. (Black Knight and MBA)

Delinquencies:

• The national non-current (combination of delinquent and in foreclosure) is 7.2%
• AZ non-current rate is 5.7%. We have the 12th best rate in the country. Idaho has the lowest non-current rate at 3.8% and Mississippi has the highest non-current rate at 11.7%. (Black Knight)
• 30-day delinquencies dropped in Q2 2020 indicating new delinquencies may have peaked. (Elliot Eisenberg)
• Through September 22, 88.9% of mortgages were paid, up from 88.6% in August. (Black Knight)

Exiting Forbearance:

In order for a borrower to leave forbearance they have to make 3 consecutive payments and come up with a plan with their servicer or lender on how they will pay back the forborne amount that was deferred while they were in forbearance. One thing that is very important for everyone to know is that forborne payments will be repaid, they are not forgiven.

There are a number of ways a borrower can leave forbearance, not all of them require the owner to sell their property. Some of these options include:

• Utilizing a 401K in one of two ways.
  • Individuals are allowed to borrow from their 401K with the option of paying themselves back with interest, since it is a loan being paid back – essentially paying yourself back there are no penalties. Talk to your 401K administrator for details.
  • Through provisions of the CARES act an individual can also withdraw an amount of their 401K with no penalties. Again, talk to your 401K administrator for details.
• Permanent loan modification or refinance, after making 3 payments in a row, to something that allows borrowers to stay. Some scenarios include adding the forborne amount at the end of the loan, some pay a lump sum to get caught up, some offer payment plans to get caught back up.
• Rentals are in high demand with quickly appreciating values. What about moving out of the property and renting it out to make up the difference in payments.
• Sell and buy something more affordable, after 3 payments in a row have been made. Pay off the loan and get a new loan with more agreeable terms.
• Sell, pay off the loan and forborne amount and rent or move in with family.

Resources:

• Rental assistance is available through the Arizona Department of Housing website at https://www.saveourhomeaz.gov/self-assessment/
• The CFPB, FHFA, HUD, VA and USDA created a joint effort mortgage and rental assistance platform, for more information visit https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/

Unemployment:

September’s numbers came out last Friday showing that our economy added 661,000 jobs. This was below expectations. They did revise up the total of new jobs from August though. The unemployment rate is now 7.9% and we have made up 11.5 million of the 22 million jobs lost, which is over 50%. (US Department of Labor)

Elliott Pollack expects a full recovery of all industries in Arizona by the end of 2022. It would be great to be back at full employment in two years.

The AZ Market:

Cromford Market Index (CMI): Is the best leading indicator available (balance is 100, above 100 is a seller’s market, below 100 is a buyer’s market, prices rise at 110, and drop at 90). Yesterday it was 352.6, way above the pre-COVID peak of 241 and over 200 points above the 145.2 we hit on May 15.

Supply: New listings have increased by 11% but they were absorbed as quickly as they arrived so our total inventory remains very low. As of yesterday, our inventory is 63.6% below normal. Active listings excluding UCB  crept up slightly to about 8,300 down over 42% year over year.

Demand: Pending sales are up 25% year over year, huge despite our low inventory and time of year. Our demand is over 28% above normal. Demand rates slowed early in September and picked up speed towards the end of the month and continue into October.

Sales & Prices: In September closing were up 11% year over year. The median sales price is $329,900, up 17% year over year. Healthy appreciation is 3% annually.

Southeast Valley New Listings, Pendings, and Closings:  This week over week comparison for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek since March 15 illustrates our pandemic real estate rollercoaster. You can really see the increase in sales in September!  

- Special Thanks to Sara Perkins of Lawyer's title who originally published this :) 

****MARKET UPDATE -AUGUST 2020****

Navigating uncharted territory without a compass is challenging at best. Nothing about this year’s real estate activity fits into the usual cyclical patterns. Data companies are updating their projections seemingly daily.

Projections are based on trends and it takes at least 3 weeks to see an emerging trend. Before the trends, there is consumer sentiment. Home has never been more important. Today we live, work, play, and teach at home. This is why real estate is the shining star in the midst of so much bad news.

With a 58% increase in new starts from June to July, multi-family new builds made up the majority of the 22.6% new housing starts in July over June. The new builds are the only thing keeping prices from skyrocketing out of control. (Bisnow)

In July, single family starts were up 7.4% year over year. (Elliot Eisenberg)

New single-family sales are were up in July 36.3% year over year. (US Census Bureau & HUD)

Resale closings in July were up 24.7% from June which were up 20.7% from May. July’s closings were up 8.7% year over year. (NAR)

After 101 straight months of price increases the national median sales price is $304,100; the highest ever and an 8.5% increase over July 2019. (NAR)

The median listing price increased 10.1% year over year for week ending August 15. (Realtor.com)

People are buying larger houses. In July sales of houses with a square footage range of 3,000 – 5,000 are up 21.2%. (Redfin) Reasons for the increased space:

21% dedicated office space to work from home.

21% outdoor/recreation space.

7% home-schooling space.

During Q2 2020 San Francisco is the only city in the country without an increase in prices. (FHFA house price index)

FOOD FOR THOUGHT-- “Although housing prices have consistently moved higher when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago.” ~DR. LAWRENCE YUN, CHIEF ECONOMIST FOR NAR

Enough about National Markets-- Here is what is predicted to happen on the home front! The AZ Market:

Local economist Elliott Pollack believes that the Phoenix metro housing market will remain strong. Between the strength of our job market, affordable prices, stability, and good weather people will continue to move here from other parts of the country.

Supply: Inventory remains low but is not dropping at incredible rates. As of yesterday, our inventory is 64.4% below normal. Active listings excluding under contract accepting backups (UCB) are at 8,000 (we should have 25,000) down 40% year over year and down over 4% month over month.

Southeast Valley New Listings: This a bi-weekly comparison of new listings in 2019 and 2020 for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek. 2019 followed the typical annual cycle showing more activity in the first half of the year. 2020 is not following any typical patterns. Which makes it impossible to know what the orange line will do next.

Demand: Pending sales up 16% year over year. This is significant given the low inventory. Our demand is nearly 22% above normal. The demand continues to rise but at a slow rate.

Sales & Prices: Phoenix metro area closed sales are up 3.2% month over month and up 15% year over year. The median sales price is $320,500, up 14.5% year over year. Healthy appreciation is 3% annually.

Southeast Valley New Listings, Pendings, and Closings: This week over week comparison for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek since March 15 shows the listing progress we have made. It remains to be seen whether or not last week’s dip in new listings is a trend or an anomaly. Demand continues to increase slightly, absorbing the new listings quickly.

Economic Indicators:

Elliott Pollack estimates that as many as 30-35% of business will permanently close due to COVID.

US debt is $14.3 trillion. The total annual US GDP is about $20 trillion. (Federal Reserve Bank of New York)

70% or $9.8 trillion in mortgages

$1.54 trillion in student loans

$1.3 trillion in car loans

$820 billion in credit cards

$380 billion in revolving lines of credit

$400 billion in miscellaneous

Okay- so what does all this data mean to you? 5 notable thoughts!! 

•  Right now getting a loan is about as cheap as you will ever see it. 
•  If you are thinking the home you have right now will not meet your needs within 5 years, then NOW is the time to sell. 
•  If you are thinking of Buying a home within the next 3 years-- again NOW is the time to do it! 
•  If you own a home and want to take advantage of these AMAZING interest rates, Do a REFI-- it could lower your payment and add some cash to your pocket. 
•  Elections USUALLY have a slight effect on the real estate market-- but as you have seen 2020 has been an exceptional year, so at the end of the day Live the Best Life You Can and do what you love--

Remember 2012 is around the corner and We are going to get this this, yuck 2020 year! Please call or Text me if you want to talk about a specific situation or you need to buy or sell a home-- I am always here for you!

 Special Thanks to Sarah Perkins--  :)