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The Greater Phoenix Real Estate Market and Canadian Buyers

 

Per the Cromford Report: January gave us 6,007 recorded deeds with Affidavits of Value for

single family and condo properties in Maricopa County. That was a healthy 13% increase over

January 2015. However this was no thanks to out of state buyers. Buyers with addresses outside

Arizona purchased 8% fewer homes than a year ago. Homes bought by local buyers grew by almost

18%.

Canadians purchased only 40 properties, the lowest monthly number since 2007 and down 64%

compared to January 2015. Meanwhile they sold 116 homes, 26% more than a year ago.

Most of the Canadian sellers in January 2016 were from Alberta (55) with British Columbia (20),

Ontario (17), Manitoba (10) and Saskatchewan (10) behind them. There were only 4 sellers from

the remaining provinces. Alberta was also top in home purchases (19), with Ontario (8) and British

Columbia (7) making up most of the rest. Only 6 came from outside these 3 provinces.

 

Maricopa_ArizonaMaricopa, AZ From the Air

Falling oil prices have negatively impacted the Canadian dollar and more Canadians are selling than

buying. While the impact is felt all over the Valley, Maricopa is particularly hard hit.

A Summary of Phoenix Metro’s Real Estate Market January 2016

 

Our best statistics provider, The Cromford Report, notes the growth in active listings across

ARMLS (excluding those under contract with contingencies) between January 1 and January 31

was 12% this year. The cities with much higher growth than this were:

  1. Sun City West (32%)
  2. Buckeye (25%)
  3. Wittmann (24%)
  4. Maricopa (23%)
  5. El Mirage (21%)
  6. Sun City (19%)
  7. Cave Creek (18%)
  8. Avondale (18%)
  9. Apache Junction (17%)
  10. Tolleson (17%)

We note that a lot of these are on the west side where supply was mostly tight last year. Buyers

are getting a little more to choose from here.

However, much of the West Valley remains a seller’s market, despite the increase in active

listings. The weakest growth in active listings was in:

  1. Youngtown (-60%)
  2. Laveen (-5%)
  3. Waddell (-3%)
  4. Litchfield Park (-2%)
  5. Wickenburg (2%)
  6. Queen Creek (3%)
  7. Fountain Hills (3%)
  8. Anthem (3%)
  9. Sun Lakes (4%)
  10. Gilbert (6%)

Buyers for those areas have fewer listings to chose from in their home search.

The Cromford® Market Index for the single family markets in the largest 17 cities moved over

the past month as follows:

 

January 2016 Cromford Report

The Cromford index favors sellers when over 100, buyers when below 100 and is evenly balanced

around 100. Of our largest 17 cities, only Maricopa offers a buyer’s market at present. Not a bad

looking chart for sellers, though it should be pointed out that most of the good news is packed

into Phoenix, Chandler, Tempe and Gilbert. Only the top 8 can be considered seller’s markets with

another 8 in a balance between buyers and sellers.

 

In a sellers market, buyers are less likely to receive seller concessions such as closing costs and

are in a weaker position with respect to negotiating price.

We endeavor to keep ourselves and our clients aware of market trends to make the best choices

when buying or selling. Call us if you need assistance with either, we are here to provide you with

the best information available!

Marge

Queen Creek’s Horseshoe Park & Equestrian Center January Calendar

 

If you haven’t visited this magnificent equestrian center, you have a treat in store!

A wonderful facility with a myriad of events, come see! Come ride! Something for everyone here.

 

Horseshoe Park

January 2016

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

27

28

29

30

31

1

TNT World Series Team Roping

2

TNT World Series Team Roping

3

TNT World Series Team Roping

6:00 p.m.Heart Cry Cowboy Church Services

4

5

10:00 a.m.QCBRA – Barrel Practice

6

Arizona Cutting Horse Association

Steve Sherwood Timed Event Rodeo

7

Arizona Cutting Horse Association

8

Arizona Cutting Horse Association

9

Arizona Cutting Horse Association

9:00 a.m.EVAHA Show – CANCELLED

10

Arizona Cutting Horse Association

6:00 p.m.Heart Cry Cowboy Church Services

11

12

10:00 a.m.QCBRA – Barrel Practice

13

6:00 p.m.Steve Sherwood Timed Event Rodeo

14

15

9:00 a.m.Charlie Hill Clinic

16

9:00 a.m.Charlie Hill Clinic

9:00 a.m.Chandler Vaqueros Saddle Club

9:00 a.m.Rudy Clark Roping

17

9:00 a.m.Charlie Hill Clinic

9:00 a.m.Queen Creek Gymkhana

6:00 p.m.Heart Cry Cowboy Church Services

18

9:00 a.m.Interscholastic Equestrian Association

19

10:00 a.m.QCBRA – Barrel Practice

20

6:00 p.m.Steve Sherwood Timed Event Rodeo

21

22

Border Wars

5:00 p.m.Quarter Midget Racing Practice

23

Border Wars

8:00 a.m.Quarter Midget Racing

24

Border Wars

8:00 a.m.Quarter Midget Racing

6:00 p.m.Heart Cry Cowboy Church Services

25

26

10:00 a.m.QCBRA – Barrel Practice

27

6:00 p.m.Steve Sherwood Timed Event Rodeo

28

29

30

8:00 a.m.Interscholastic Equestrian Association Regionals

9:00 a.m.Chandler Vaqueros Saddle Club

31

8:00 a.m.Interscholastic Equestrian Association Clinic

6:00 p.m.Heart Cry Cowboy Church Services

 

 

 

Annual Snapshot: Phoenix Metro Real Estate Market

 

 

As always, the best information about the Greater Phoenix Real Estate Market comes from the Cromford Report. The Cromford Annual Snapshot is up, we offer it here for your greater understanding of our current market.

 

The table below provides a concise annual summary of the residential resale market in the Phoenix metropolitan area.

 

The figures in the top section are for the entire Arizona Regional area as defined by ARMLS. All residential resale transactions recorded by ARMLS are included. Geographically, this includes Maricopa county, the majority of Pinal county and a small part of Yavapai county. “Out of area” listings recorded in ARMLS are not included.

 

All dwelling types are included. For-sale-by-owner, auctions and other non-MLS transactions are not included. Land, commercial units, and multiple dwelling units are also excluded.

 

The figures in the second section are for the county of Maricopa. All property types are included in the foreclosure and trustee sales, including land, commercial units and multiple dwelling units. The other sales numbers exclude trustee sales but include all sales which require an Affidavit of Value to be filed with the county recorder.

 

 

Phoenix Metro Luxury Real Estate Market

 

Interesting analysis by Michael Orr of the Cromford Report regarding our current luxury market.

 

December was a little stronger for luxury market pricing than the previous 3 months. In addition the pricing

for homes under contract over $500,000 has moved to a new high in the early part of January which augers

well for January sales pricing.

 

Sales volumes were a mixed bag. Fountain Hills had its best December since 2005 with 18 sales over

$500,000. However Paradise Valley was slightly weak at only 24 and the Biltmore District was very weak at 4,

which is 8 fewer than in December 2014. Scottsdale sales numbers were moderate and Arcadia saw 9

completed sales through ARMLS, the lowest monthly total since November 2014.

 

Apart from Fountain Hills, where sales were strong but pricing a little weak, the picture was of weak to

moderate sales but some firming in pricing after the negative price trend that started in September.

 

These numbers illustrate the difference between the luxury market at $1 million and above compared with

the market below $1 million. The change column compares 4Q 2014 with 4Q 2015:

 

Greater Phoenix – all dwelling types

Price Range

Change

Active Listings

Under $1 million

down 6%

 

$1 million and over

up 9%

Closed Sales (ARMLS)

Under $1 mill on

up 4%

 

$1 million and over

down 10%

Average Price per Sq Ft

Under $1 mill on

up 6.5%

 

$1 million and over

down 0.9%

 

 

Sellers of homes valued at $1 million or more should be careful not to heed positive headlines about the

overall market. Selling your home over $1 million has become more difficult in the last 12 months and prices

have softened a little in all but a few areas.

 

Great time for luxury buyers! Call us!

Gilbert AZ Horse Property Real Estate Market, January 8, 2016

 

 

 

Gilbert has transitioned from the “Hay Shipping Capital of the World” to a vibrant, modern city.

 

Many areas boast homes with acreage and and comprise some of the most sought-after horse

 

properties in the Valley of the Sun.

 

800px-Gilbert-Gilberts_first_Jail_House-1918Gilbert’s first jail house was built in 1918 and later used as a pump house. The structure is listed as historical by the Gilbert Heritage District.

 

Today, there are presently 57 active horse property listings. With the exception of an “as-is,

 

cash only foreclosure”, homes on horse property start in the low 400’s and three of the available

 

homes are priced in excess of a million dollars.

 

Many Gilbert properties have flood irrigation rights, enabling the homeowner to keep horses on

 

grass pasture. Flood irrigation rights comprise the greatest bargain for water in the region and

 

always adds to property value.

 

Gilbert lakeA waterfront in the Val Vista Lakes Community in Gilbert

 

Although only 65 horse properties have closed escrow in Gilbert in the last six months, there are

 

currently 21 properties under contract and pending sale. At the present rate of sales, there is

 

only a three month supply of horse property listings. The Cromford Report documents only a 2.9

 

month inventory for all single family homes in Gilbert. Annual appreciation over the past year was

 

5.8% and homes in the area continue to appreciate. Homes are selling for over 97% of list price,

 

and Gilbert’s equestrian property market continues to favor sellers.

 

Great schools and proximity to shopping and services serve to enhance property values. If you are

 

interested in moving to Gilbert, sooner is better than later, property values are likely to continue

 

appreciating and mortgage rates will likely rise in the coming year. Call me, we will find your dream

 

home!

 

New River, AZ Horse Property Market, Jan, 2016

New_River-Welcome_to_New_River_Marker“New River-Welcome to New River Marker” by Marine 69-71 – Own work.

New River is named after the seasonal wash of the same name, part of the Agua Fria River system which drains into the Salt River. It was founded by Lord Darrell Duppa in 1868 as a stagecoach stop. For many years it was the terminus of the old Black Canyon Highway (now Interstate 17). The pavement ended in New River and continued as a dirt road to the city of Prescott.

New_River-Wrangler's_Roost_Stage_Coach_Stop-Ranch_entrance-1890

Today, New River is a community comprised of predominately rural properties, home to a vibrant equestrian population in addition to those who prefer to live surrounded by native desert and mountains.

We are beginning the year with 39 active horse property listings. Prices range from a low of $149,500.00 for a manufactured home on 1.15 acres without horse facilities to $849,900.00 for a large home on five acres, equally lacking in equestrian facilities. In between those extremes are a wide range of properties, many with existing barns, arenas and/or round pens. Ready access to Interstate 17 facilitates hauling to competitions and abundant trail riding is accessible from most properties.

Eleven horse properties are presently under contract, thirty two have closed in the past six months. The present inventory represents about a six month supply. Sales in New River slowed down somewhat in the last quarter of 2015, sold homes were on the market for an average of 42 days, while active listings show an average of 144 days on the market. This often indicates the active listings with more days on the market may be a bit overpriced. Sales have been within 97% of list price, so there has been little downward pressure for the listings that have sold.

Great time to find a new home in New River, this is the best season for riding!

Phoenix Metro Real Estate Values Jan 1, 2016

 

 

The most useful statistics regarding our Phoenix Area real estate market is the Cromford

Report. The Cromford  Market Index™ is a value that provides a short term forecast for the

balance of the market. It is derived from  the trends in pending, active and sold listings compared

with historical data over the previous four years. Values below 100 indicate a buyer’s market,

while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.

Examining the seventeen largest cities in the Valley of the Sun at the close of 2015 finds the

following rankings.

 

Cromford Index Dec

 

Here we see significant improvement in the Southeast Valley, particularly the inner areas.

Chandler and Tempe have improved the most for sellers since the beginning of December, with

Gilbert and Mesa also edging higher. The Southwest Valley, as represented by Buckeye and

Goodyear, is also doing better for sellers, but the rest of the West Valley has cooled off a bit.

Avondale remains way out in front at number 1 but is now coming down from its highest levels.

The outer Southeast Valley, represented by Queen Creek, is slightly lower while Maricopa is still

deteriorating fast for sellers.

 

In the Northeast Valley, the deterioration for sellers has slowed down and Scottsdale is actually

2% up on the beginning of the month. Nevertheless, Cave Creek, Fountain Hills and Paradise Valley

have still drifted noticeably lower over the month.

 

So while most of our region continues to be a seller’s market, Paradise Valley and a few of the

outlying areas would seem to favor buyers.

 

By understanding the current market, both buyers and sellers are in a stronger position to

accurately value properties of interest.

 

We keep up on what’s happening now in the horse property market, call if you are ready to buy

or sell!

Automated Valuation Models in Real Estate

 

As a Real Estate Broker, Automated Valuation Models (AVMs) are the bane of my existence most days. The infamous Zillow “zestimate” is widely quoted by both buyers and sellers and is notorious among agents for it’s inaccuracies.

I was delighted to learn that Mike Orr of the Cromford Report evaluated several of the most common, here are his findings! The following is courtesy of The Cromford Report:

Automated Valuation Models (AVMs) for homes appear to be multiplying quickly these days. I thought that it was about time we applied some Cromford® style reality testing to these, because most members of the public seem to assume these computer-generated numbers have some resemblance to reality. Just as a stopped clock is completely accurate twice a day, every AVM is going to be right sometimes. However each one often gives estimates that are wildly different from all the others. Some are starting to make very bold claims of accuracy, but what do these claims really mean? If a home has not sold in the past few days, there is no “right answer” to compare an estimate to. Even a full appraisal is only one person’s opinion of value, and another appraiser will almost certainly disagree with the first one. Some of these estimates change dramatically from one week to the next. The real world does not behave like that.

I feel the public is being given a lot of data that in many cases will just add to the confusion and give a false sense that a correct answer actually exists.

To apply some mathematics to the problem I looked at 100 homes and examined their estimated values from 6 sources:

  • Zillow Zestimate
  • RPR RVM Value*
  • Monsoon Comp Based Valuation*
  • Monsoon FCV Ratio Valuation*
  • Redfin Estimate
  • Homesnap Estimated Value

(those marked * are intended for use by real estate professionals only)

Only Monsoon was successful in finding all 100 of the homes in the sample, while Zillow and Homesnap each failed to find 1 (not the same one). Redfin and RPR failed to find 4 homes due to incorrect address data in their master files, usually inherited from the incorrect address data at the Maricopa Assessor. In addition I found that Redfin and Homesnap both refused to give an estimate for all the homes that were currently active listings. That knocked another 6 homes out in each case. Homesnap also refused to guess on another 3 homes, meaning that (along with Redfin) it had the highest failure rate of 10%. To be fair though, Homesnap had the fastest response time, which endeared it to me while conducting the survey. Monsoon was the slowest to respond, but was by far the most flexible in allowing user adjustments to the properties used for comparison. I made no adjustments except in 1 case where there were no comparative sales within 4 miles, so I increased the range to 5 miles.

I took the average value from the 6 sources and compared each source to see if it appeared to be biased in any particular direction. One source stood out as an outlier in this test – Zillow’s Zestimates were on average far higher than all other sources, and not by a small amount. The average Zillow Zestimate was 22% above the average of the other 5 sources. Of course it is statistically possible that Zillow is right, but it is also extremely unlikely. It is more likely that Zillow has decided that it will get more traffic if it applies significant bias to the upside. Home sellers love to believe their home is worth more than it really is. Zillow is (far more often than not) telling them what they want to hear. People love to be told what they want to hear, not what they need to hear (something cable news channels discovered long ago). Still I could be wrong about this, so I will continue to test more samples.

The other 5 sources were much closer together. Homesnap tended to be 5% above average, RPR 1% above average, Redfin came in at the average, while Monsoon Comp Base Valuations were 1% below average and the FCV Base Valuation was 5% below average.

This is not to suggest any of them were consistently “accurate” if that means anything. The variation between any one estimate and the average estimate could vary wildly for all 6 sources. Here are the maximum and minimum variations within this sample of 100:

Source

Maximum Above Average Valuation

Maximum Below Average Valuation

Zillow Zestimate

54%

-9%

RPR RVM value

29%

-55%

Monsoon Comp Based Valuation

33%

-35%

Monsoon FCV Ratio Valuation

22%

-50%

Redfin Estimate

29%

-28%

Homesnap Estimated Value

30%

-43%

This means there is a reasonable chance that the specific estimate you are looking at is more than 20% above or below the average value of the other 5 models. It is very likely if your specific estimate comes from Zillow.

As a statistician, I am tempted to talk about standard deviation, but I suspect the audience for this topic among real estate professionals is rather small. So I will resist the temptation. Deviation sounds like a bad word and you want as little of it in your samples as possible. Rest assured that the standard deviation in this set of values is much higher than you would like. The conclusion is that ALL automated valuation tools are very dangerous when given too much credibility. The human touch is important is estimating the value of a home, especially useful if that human has taken a good look inside and around the house before deciding what it might be worth in today’s market.

Let me just cite one example among my 100 test cases: 6115 N 38TH PL in 85253

  • Zillow = $1,514785
  • Redfin = $968,388
  • RPR = $739,830
  • Homesnap = $725,000
  • Monsoon = $1,159,206 (comp)
  • Monsoon = $1,030,858 (fcvr)
  • Average = $1,023,011

With a standard deviation of 29% ($294,088) this is a highly inconsistent set of values.

Another problem I found is that many of the systems use incorrect addresses. For example Zillow has one entry for 3802 E BETHANY HOME RD and another for 6002 N 38TH PL. This is actually two address for the same home, which sits on the corner between Bethany Home Road and 38th Place. Only one is acceptable to the US Postal Service but many real estate databases contain the other address. Funnily enough, Zillow gives 2 different estimates for the one house, though the difference is only 2%. RPR has a habit of including homes that never existed. If there was once an MLS listing for a future home to be built, RPR acts as if that home is real, This is a bad assumption if that listing was from 2007 through 2009.

Perhaps the bottom line is that buyers and sellers are better off when the Real Estate Agent representing them is familiar with current sales, uses local, accurate sales comps to determine the value of the home one proposes to buy or sell.

As agents, we use Monsoon and RPR frequently but remove inappropriate comps they sometimes pull and we apply those numbers in view of comparable properties that have sold recently as well as the demand for specific property types and locations.

I believe that staying on top of market changes is one of the most significant values I bring to my clients.

Find a good agent and forget Zillow! Zillow exists to sell leads to agents, not to provide the consumer with accurate data!

Phoenix, AZ Horse Property Real Estate Market Report, Jan 1, 2016

Phoenix starts the new year with 94 horse properties for sale. Prices vary from $245,000.00 to
 
$3,400,000.00. There should be something for everyone in that range!
 

phx equestrianCourtesy of Hunt Real Estate ERA/ARMLS

 
The Phoenix market continues to appreciate at nearly 7% per year. With only a three month
 

supply of listed inventory, it remains a seller’s market. Sold homes were on the market for an
 
average of 69 days, active listings average 107 days on the market. Presently there are 25 horse
 
properties under contract.
 

Phx 3.4MCourtesy of GHE Realty/ARMLS

 
The average sale price is 97.58% of list price, confirming the seller’s market. Buyers are not
 
experiencing much successful price negotiation in the present market. The wide range of
 
properties and prices do allow most buyers to find something in their price range and mortgages
 
rates remain low. In view of the steady appreciation of Phoenix equestrian properties, this may be
 
a very good time to buy. The demand for horse property rentals is very high with commensurate
 
very high rentals, so buying makes better financial sense for most when seeking a new home.
 
We could help you with that!

 

Fair Housing for You!

Phoenix Az Horse Property