Metro Phoenix real estate market reaching balance

Supply and demand for residential real estate is nearly in balance in Maricopa and Pinal counties, according to new statistics recently shared earlier this month by The Cromford Report’s Senior Analyst Tina Tamboer.

This does not mean that home sellers are going to lose money, Tamboer noted during the recent online conference call. Nor should the market’s leveling off after the hot sellers’ market of just eight months ago cause concern that the housing market will tumble into anything close to 2008/recession-era territory.

“Are we in a bubble? No — banks have not issued high-risk foreclosure loans in about 10 years,” Tamboer said. “Sellers are not losing money, but are getting a lower-than-expected return.”

The Phoenix metro area is “not plummeting — we’re adjusting,” she added.

Appreciation slowing to current inflation levels, analyst says

That said, homes for sale in the local market are still unaffordable for families that earn $88,800 a year — the reported median salary for Phoenix — according to the National Association of Home Builders, Tamboer said. Only 22.3 percent of homes sold in the Valley were affordable to potential homebuyers in that salary range as of Aug. 11, she said.

Even so, Tamboer said, “we’re seeing a leveling-off, not plummeting into a buyers’ or sellers’ market,” adding 20- to 25,000 listings on the market is considered normal.” In mid-August, there were approximately 17,500 listings available in the Valley, with 7,919 under contract, she noted.

Average days on the market for a new listing is 25, Tamboer said, noting that average was between 17-38 days in 2019.

For further comparison, Tamboer said average days on the market in 2008 was 130. “Twenty-five days is not a pre-crash level, historically speaking.”

Tamboer said that for home sellers, last year’s era of no concessions, above-list-price offers and waived inspections are over. 

“Over the next month, I expect to see more concessions as we had pre-COVID,” Tamboer said.

Current homeowners worried about “losing money” should note that, as appreciation on homes is slowing to around the inflation rate of about 8.5 percent, “that still means you are gaining equity,” Tamboer concluded. She added that in the current market, sales prices on homes in the Valley are within 2 percent of their asking price, on average.

“Everything is starting to calm down,” Tamboer said. “We are not plummeting into a buyers’ market.”

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August 22, 2022 at 11:07 am Leave a comment

FTC fines Tempe-based Opendoor $62 million, alleging the iBuyer company built its business by ‘cheating consumers’ using ‘old-fashioned deception’ 

The U.S. Federal Trade Commission on Aug. 1 announced in a news release that it has taken action against Tempe-based online home buying firm Opendoor “for cheating potential home sellers by tricking them into thinking that they could make more money selling their homes to Opendoor than on the open market using the traditional sales process” using a licensed Realtor.

A settlement agreed to by Opendoor resulted in the company being fined $62 million, the FTC announced. 

“The FTC alleged that Opendoor pitched potential sellers using misleading and deceptive information,” the FTC news release said. “In reality, most people who sold to Opendoor made thousands of dollars less than they would have made selling their homes using the traditional process.”

On FTC.gov’s “Consumer Advice” webpage, FTC consumer education specialist Amy Hebert explained that “Opendoor promoted itself as a tech company that uses its pricing technology to offer more accurate offers and lower costs. Companies like Opendoor are what’s known as “iBuyers” — companies that use technology to make quick offers on homes.”

The FTC determined that while Opendoor said it would pay market value for people’s homes while saving consumers money on costs, purportedly earning the sellers more money than they’d get in a traditional sale, the actual results were that sellers “typically lost thousands of dollars compared to what they would have made if they’d sold their homes on the open market,” Hebert wrote. The FTC found the claims Opendoor made to consumers were untrue.

“The FTC says Opendoor’s offers were lower than a home’s market value, and the company asked sellers to pay for home repair costs that were higher than what people would typically spend on repairs in a market sale,” Hebert wrote.

“To settle the FTC’s charges that the company’s claims were deceptive, Opendoor has agreed to pay $62 million, which the FTC will use for refunds to people who were affected,” Hebert concluded

“Opendoor promised to revolutionize the real estate market but built its business using old-fashioned deception about how much consumers could earn from selling their homes on the platform,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection in the Aug. 1 FTC announcement. “There is nothing innovative about cheating consumers,” Levine added.

The FTC noted that Opendoor “operates an online real estate business that, among other things, buys homes directly from consumers as an alternative to consumers selling their homes on the open market. 

“Advertised as an ‘iBuyer,’ Opendoor claimed to use cutting-edge technology to save consumers money by providing ‘market-value’ offers and reducing transaction costs compared with the traditional home sales process,” the federal commission stated.

The announcement explained the FTC found “the company’s offers have been below market value on average and its costs (assessed to home sellers) have been higher than what consumers typically pay when using a traditional Realtor.”

“Opendoor’s marketing materials included charts comparing their consumers’ net proceeds from selling to Opendoor versus on the market,” the FTC release said. “Those charts almost always showed that consumers would make thousands of dollars more by selling to Opendoor.” 

In the agency’s complaint document, the FTC described the disadvantages Opendoor consumers were subject to, including: “Unlike traditional sales, Opendoor demanded that consumers make or pay for all demanded repairs, even though Opendoor’s own studies indicate that the parties to a market sale typically share these costs. The repair demands were not subject to negotiation. 

The FTC investigation found Opendoor violated the law by making the following misrepresentations:

  • Opendoor said it used projected market value prices when making offers to buy homes, when in fact those prices included downward adjustments to the market values;
  • Opendoor told customers it made money from disclosed fees, when in reality it made money by buying low and selling high;
  • Opendoor told consumers they likely would have paid the same amount in repair costs whether they sold their home through Opendoor or via traditional sales; and
  • Opendoor told consumers they were likely to pay less in costs by selling to Opendoor than they would pay in traditional sales.

The FTC said Opendoor has agreed to a proposed order that requires the company to:

  • Pay $62 million: The order requires Opendoor to pay the Commission $62 million, which is expected to be used for consumer redress.
  • Stop deceiving potential home sellers: The order prohibits Opendoor from making the deceptive, false, and unsubstantiated claims it made to consumers about how much money they will receive or the costs they will have to pay to use its service.
  • Stop making baseless claims: The order requires Opendoor to have competent and reliable evidence to support any representations made about the costs, savings, or financial benefits associated with using its service, and any claims about the costs associated with traditional home sales.

A statement issued by Opendoor after the FTC announcement said in part, “While we strongly disagree with the FTC’s allegations, our decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell and move with simplicity, certainty and speed.”

Interestingly, three days after the FTC announced its findings, Opendoor and Zillow issued a joint news release announcing a new partnership that will “allow home sellers on the Zillow platform to seamlessly request an Opendoor offer to sell their home.” The new partnership between formerly-competing iBuyer rivals comes nine months after Zillow announced it would shut down its own iBuying division after reporting massive losses in that business.

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August 12, 2022 at 3:50 pm Leave a comment

How long will prices continue to go up?

Supply continues to be insufficient for demand for housing in Metro Phoenix as population continues to boom, according to a local expert. While recent increases in mortgage interest rates may have very slightly cooled the trend, there is nowhere near the number of homes needed to satisfy demand, according to Tina Tamboer, senior residential housing analyst for The Cromford Report.

Real estate market remains strong in Metro-Phoenix despite increase in mortgage rates.

During the third week of February, Metro Phoenix had a total of 4,603 active home listings — just 3.5 percent higher than a year ago, Tamboer said during a web conference for HomeSmart this week. But that number of homes for sale is more than 75 percent lower than the same timeframe in 2018 or 2019, and about 60 percent lower than 2020.

The median price of a 1,500- to 2,000-square-foot home in Metro Phoenix is currently $435,000 — up 28 percent from a year ago, Tamboer said. She added that at that pricing, a typical mortgage payment would be about $2,232 per month. Based on estimates suggesting housing costs should not exceed 28 percent of income, she said a family would typically need to earn at least $80,000 annually to afford that monthly payment.

Tamboer said that despite record low population growth nationwide (0.12 percent), Arizona saw 1.01 percent growth in population last year. In 2021, Arizona gained 269 people per day — a population increase rate only exceeded by Texas and Florida.

New construction is not keeping up with current demand, Tamboer said, with issued permits lower in the last half of 2021 after steady increases during the prior year.

“Supply is 25 percent of normal,” Tamboer said of current conditions. “The active supply is extremely low.”

As a result, Tamboer predicted home values will continue to rise through at least June, and probably at a faster rate.

After that, Tamboer predicted further, “Property values will not start to decline — they will go up slower.” 

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February 17, 2022 at 4:42 pm Leave a comment

Local real estate expert says, “If you can afford it today, get them in today.”

Valley’s hot real estate market continues in 2022
Metro Phoenix home prices are expected to continue rising through at least June 2022, according to a senior housing analyst.
Tina Tamboer of The Cromford Report, which provides real-time analysis of the real estate market in Greater Phoenix, had advice for people in the market to purchase a home during a mid-January webinar.
“If (homebuyers) can afford it today, get them in today,” Tamboer told Realtors during the session. 
While the Valley saw a slump during the holiday season as is tradition during the winter, Tamboer said the equally traditional uptick in demand for homes is ramping up now. 
Annual home value appreciation is at 26.7 percent this month — a normal seller’s market sees 4 to 7 percent appreciation. That said, the continued demand from people moving into Arizona probably means prices will be rising even faster through at least the first half of 2022, Tamboer noted.Other highlights from Tamboer’s presentation:

  • The median sales price for a home in the Valley is $440,000 — up 29.4 percent from January 2021
  •  Nearly 43 percent of all Phoenix area home sales closed for an amount over the asking price. In a normal seller’s market, the number would be 15 to 18 percent.
  • The median amount over list price is $10,000 this month — a normal seller’s market would see amounts up to $3,000.

Despite all of this, buyers needing a home now need to be aware that prices are expected to continue rising as supply is still behind demand. In addition, while many building permits have been issued for new construction homes around the Valley, the supply chain issues for materials have caused the average new home to take 10 to 14 months to complete, Tamboer said.
Tamboer added that the unemployment and forebearance issues caused by COVID are “effectively over,” as unemployment in Arizona has recovered to pre-pandemic levels. She added job growth in the Valley is drawing people to relocate from California, Illinois and even New York.
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January 23, 2022 at 5:07 pm Leave a comment

Phoenix, still best in the West

A recent Wall Street Journal article noted something many from out-of-state clearly understand about real estate in Maricopa and Pinal counties: Homes here are still affordable.

“Even as home prices in Phoenix soar, housing in the area is still cheap compared with many other big cities in the West,” the article’s author wrote on July 25th.

“Once a poster child for the foreclosure crisis,” Nicole Friedman wrote, “Phoenix’s housing market is booming again, boosted by robust population growth and relative affordability.”

Friedman noted Phoenix “was a hot market before the pandemic,” and has since benefitted from the popularity of remote work policies, as people living in more expensive cities decided to move to cheaper locales. 

The article explained the median sales price in June for an existing Phoenix-area home was $399,900 — up 31.1 percent from a year earlier according to the Arizona Regional Multiple Listing Service. 

That price puts Phoenix homes more than $100,000 below median home prices in San Francisco, Los Angeles, Seattle, Portland, and Denver, Friedman wrote.

“When people come here from Seattle and Portland, they are thrilled at what they can buy,” Alan Jones, division president for home builder Lennar told the Journal. “And from California, they go beyond being thrilled.”

With mortgage rates still available below 3 percent, prospective home buyers will continue to view Metro Phoenix real estate as an excellent value.

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July 31, 2021 at 2:26 pm Leave a comment

ASU economists say all signs pointing upward for Phoenix real estate

Real estate and the economy in general are expected to continue to trend upward in the Phoenix metro area for the foreseeable future.

That was the consensus from three Arizona State University economics professors who provided an update on the status of Arizona’s economy during a May 6 webinar sponsored by ASU’s W.P. Carey School of Business.

Mark Stapp, professor of Real Estate and executive director of ASU W.P. Carey’s Master of Real Estate Development Degree Program, said a biannual survey of commercial real estate brokers shows virtually no concern that the Phoenix real estate market is cooling off anytime soon.

Stapp said the poll of brokers showed little to no concerns for a break in demand for housing in the Valley of the Sun.

“Is this a housing bubble? Absolutely not – it’s a supply problem,” Stapp said.

Stapp noted the supply of residential housing in the Valley was stagnant for several years after the Great Recession that began in 2007, and the housing supply stayed flat for the past decade, basically meeting demand.

“We underbuilt for the last decade,” Stapp said, adding that any prior oversupply in Phoenix was depleted by 2014.

Regarding concerns that availability of housing affordable to entry-level buyers is declining in Phoenix, Stapp added, as long as interest rates stay low and well-paying jobs are added and continue to be available, “we’ll have affordability.”

However, demand will continue to outstrip supply in the Valley because rising material costs, such as lumber prices, are having the greatest impact on stifling residential construction, Stapp noted.

In terms of economic impacts affecting the Valley, ASU Professor of Economics Dennis Hoffman said Arizona ranks first nationwide in growth of transportation and warehousing jobs. Overall, Arizona and the nation are recovering at a much faster pace than experienced following 2007’s Great Recession.

Lee McPheters, ASU Research Professor of Economics, added that he expects a full recovery from COVID’s economic effects “certainly by the first part of next year.”

“(Rising) population is the ace in the hole for Arizona’s economic development,” McPheters said.

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May 8, 2021 at 1:27 pm Leave a comment

Selling a home? Commission is not everything. Service and Competence matters!


I woke up this morning to see a “For Sale” sign in one of our neighbors’ front yard. They listed their home with Homie, one of the recent tech-based discount real estate brokerage in the Metro Phoenix market.
I was disappointed to learn their house that has the same floor plan as mine was listed for $519,000 – at least $40,000 less than its current fair market value. Apparently, the seller did not get competent pricing guidance from the Homie listing agent.
My neighbor hired Homie.com to list their home for a flat fee of $3,000 compared to $12,975 – the amount of a 2.5 percent commission at that low listing price using a traditional Realtor. 
Sure, they may save nearly $10,000 on the listing commission — but they gave away almost $40,000 by underpricing the home based on Homie’s “guidance.” 
With the market so hot right now, it is not surprising to get bids $20,000 or more above list price when using an experienced Realtor. This means the neighbor’s total loss could add up to up to $60,000 — or perhaps even more.
If you are a potential seller, please use this true story as an example that your decision to hire a Realtor should not be solely dependent on the amount of the commission. Many wholesale investors like Offerpad, Homie, Opendoor will sell you on a flat-fee commission. With a flat fee, you get less or no guidance, inferior expertise and often, inexperienced newer agents.

To make my point clearer, I called Homie group to explain their selling option to me acting as a potential Seller. The Homie agent indicated that they would sell my home for a $3,000 flat fee vs a traditional  $18,000 6 percent commission (3 percent for the listing broker and 3 percent for the buyer’s broker) for a traditional Realtor on a $300,000 home. They indicated this would “save” me $15,000 just by listing with them.
But I had to correct his calculation. First, I said, the going rate for traditional Realtor commission is now 5 percent, not 6 percent, due to home values rising. Second, the Homie agent failed to mention that I would also have to pay a 2.5 percent commission for the buyer’s broker if I listed with Homie. 

So, my total commission to list with Homie would be $10,500 (the $3,000 listing flat fee plus $7,500 buyer broker fee). The accurate comparison is below:

$300,000 home
Homie.com                                                                 Traditional Realtor
$3,000 flat fee + 2.5% (buyer broker fee)                     2.5% listing fee + $2.5 Buyer broker fee
$3,000 + $7,500 = $10,500 Total to sell home              $7,500 + $7,500 = $15,000 total to sell home

Total savings to go with Homie.com is $4,500, which is a difference of just over 1 percent. This is far less than the $15,000 the Homie agent initially mentioned as savings. “What business would give away $15,000 is too good to be true. “

At the end of my conversation with the Homie agent, he was impressed with the questions I asked and invited me to work for their company. My response was: “Thank you but because selling my home is the biggest investment in my life, I should care enough to know I am selling at the right price using the best services available.” I hope you do too.



April 9, 2021 at 6:00 am Leave a comment

What’s Driving Arizona’s Population Growth?

BLOG – April 5, 2021

As families begin taking road trips again as more people get vaccinated and normalcy slowly returns,
Arizona serves as an excellent state in which to play the license plate game (if the kids ever stop playing
with their iPhones or Nintendo Switch).
Even a short drive anywhere around Metro Phoenix – to get groceries or takeout, say – will usually offer
glimpses of cars with license plates from several other states: Minnesota, Nebraska, Michigan, of course –
but also Oregon, Washington, and of course, California.
A quick look at the drivers behind the wheel in these cars pretty convincingly proves these visitors are not
within the typical “snowbird” demographic of people we’re used seeing here temporarily at this time of
the year.

No, these folks are here because they’ve just moved to Arizona full-time – or are still looking for a home.
An outcome of the pandemic has been more acceptance and flexibility for working from home – so
Californians and others are free to uproot themselves from states with a higher cost of living to Arizona’s
healthy economy boasting thousands of new jobs in case the old job isn’t staying with work from home
positions forever.

Regarding that booming economy, local real estate analyst and economist Elliot D. Pollack noted in his
April 5th blog that the non-profit Milken Institute has ranked Metro Phoenix as the seventh-best in the
country for jobs, wages and high-tech growth. Pollack said the rankings also take housing affordability
and broadband access into account.

“Among the ranking of large metro areas, Greater Phoenix came in seventh behind communities such as
Provo-Orem, Utah (ranked first), Austin (third), and Raleigh (fifth). Nashville was ranked just behind
Greater Phoenix,” Pollack wrote.

“Phoenix’s ranking is certainly an indicator of a strong, surging economy, one that is built on a diversified
employment base rather than just population growth (which we are a leader in as well),” Pollack
continued. “But the amazing thing is that Phoenix can attain this ranking given its size. Phoenix is by far
the largest metro area on the list of top ten communities and some cities are so small they don’t even
belong on the same list.
“For Phoenix to even be on the list is testament to the efforts of our economic development organizations,
the universities, and the businesses that now are making their way here from high tax states,” Pollack
said.
All of these indicators bode well for Metro Phoenix’s continued climb

April 5, 2021 at 3:51 pm Leave a comment

Phoenix real estate market not weakening soon

Local economist expects Maricopa County’s economic boom to continue until at least 2023

For those who wonder when the Phoenix area’s increasing real estate prices might level off or decrease, most economic signs point to “not anytime soon.”

In a FOX-10 Phoenix news story earlier this month, Scottsdale economist Elliott Pollack said the local boom is likely to continue through “at least 2023.”

The report noted increased hiring among both existing and new businesses in Maricopa County is unrivaled in the nation in recent months.

Pollack said the Phoenix area was the best performing major employment market in the entire country last year. He told FOX-10 that among U.S. jobs added over the past last 10 years, 98 percent were lost nationwide in March and April 2020 as a result of the pandemic. During the same time period, Phoenix only lost 40 percent of such jobs. In the current rebound, the report added, the United States as a whole has recovered 55 percent of those jobs lost, while metro Phoenix has already recovered 75 percent.

“We’re in for an extraordinary period of growth,” predicted Pollack, thanks in part to Arizona’s business-friendly policies. “We expect Phoenix to continue to grow extremely rapidly over the next two to three years.

“Phoenix is structured right now to do better than virtually anybody else,” Pollack concluded.

How does the region’s economic performance affect its residential real estate market? With the continuing positive economic news and a growing number of jobs allowing work-from-home flexibility, Arizona’s weather and reasonable cost of living are drawing more and more people to move here from other states.

According to Pollack’s “Monday Morning Quarterback” newsletter, 1,479 new homes and 7,863 resales were sold in metro Phoenix in February. “Median resale price increased nearly 20 percent to $352,000 compared to the price of new homes at $379,900.”

Realtor.com’s most recent forecast predicts Valley home sales will increase 11.4 percent compared to last year – more than the national average.

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March 15, 2021 at 8:46 am Leave a comment

Master Bedroom or Primary Bedroom- what is fair?

Stunning Primary Bedroom!

During a recent real estate class, an examination of fair housing laws brought discussion of how crucially important these protections are for home sellers, buyers, landlords and renters.
The Fair Housing Act of 1968, expanding on previous U.S. acts, prohibits discrimination concerning the sale, rental and financing of housing based on race, religion, national origin, sex, handicap and family status, as a follow-up to the Civil Rights Act of 1964.
The act helps ensure these factors are not considered in transactions involving people seeking a place to live. A good REALTOR® will help clients selling a home to comply with all laws preventing housing discrimination, and also help ensure clients searching for a new home are not discriminated against. 
As stated on the National Association of REALTORS® (NAR) website, “fair housing is more than a list of dos and don’ts, rights and penalties, and mandatory continuing education. 
“As stewards of the right to own, use and transfer private property, fair housing protects our livelihood and business as REALTORS® and depends on a free, open market that embraces equal opportunity. REALTORS® recognize the significance of the Fair Housing Act and reconfirm their commitment to upholding fair housing law as well as their commitment to offering equal professional service to all in their search for real property,” the NAR website says.
Earlier this summer, the level of dedication to this equal service commitment is being shown by some real estate organizations recognizing sensitivity to potentially offensive language that even a few years ago might not have raised any concerns.
As reported in Newsweek magazine in June, the Houston Association of REALTORS® “decided to replace all descriptions using the terms ‘master bedroom’ and ‘master bathroom’ with ‘primary bedroom’ and ‘primary bathroom’ earlier this month on its Multiple Listing Service (MLS). The change came after several members of the association asked for the terminology to be reviewed.”

“The MLS Advisory Group regularly reviews the terms and fields used in the MLS to make sure they are consistent with the current market environment,” the HAR said in a statement sent to its members. “It was not a new suggestion to review the terminology. The overarching message was that some members were concerned about how the terms might be perceived by some other agents and consumers. The consensus was that ‘primary’ describes the rooms equally as well as ‘master’ while avoiding any possible misperceptions.”

Newsweek reported Tiffany Curry, an African-American real estate broker and former board member in the National Association of Realtors (NAR), said she supported the change because of the negative connotation from the term “master.”

“‘Master’ represents a stigma and place in time that we need to move forward from. As a progressive, diverse city, Houston should be reflective of its citizenship,” Curry was quoted as saying.

Developments like this demonstrate the care professional REALTORS® take when marketing properties and assisting their clients.

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September 10, 2020 at 1:47 pm Leave a comment

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