Posts filed under ‘Arizona Real Estate’
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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Legal advice offered on fix-and-flip properties
If you plan to sell a home after renovating or remodeling it — commonly known as a “fix-and-flip” property — a Valley lawyer recently offered a few tips on ensuring you don’t entice a lawsuit from the buyer after the sales contract is signed.
Attorney Patrick MacQueen, a 16 year veteran real estate lawyer of Macqueen and Gottlieb, PLC told a webinar audience this week that he has handled about 235 cases involving fix-and-flips in the past four years, accounting for approximately 40 percent of his client caseload.
There are five major allegations a buyer can accuse the parties involved with the sale, MacQueen said. The first is “common law fraud,” meaning an “outward statement” about the property’s condition that is “an out-and-out lie.”
The second is fraudulent misrepresentation is “fraud by omission,” MacQueen said, such as when a question about the property comes up, but the seller or seller’s agent “fails to say anything” despite a known problem with the home with respect to the question. Such can be the case of non-disclosure of mold in the property.
Third is “Consumer fraud” typically has to do with statements or representations made in advertising materials, MacQueen said. “For example, if the MLS listing says the home was a ‘complete remodel’ but not everything was redone,” he explained.
The fourth is “Negligent representation” which involves a statement made to the buyers about the subject property that you didn’t know was false, and the buyers relied on that information. For example, if the seller tells the buyer all needed permits were obtained in the construction of a major addition but one necessary permit was never granted, that would be negligent representation, MacQueen said.
MacQueen said he also sometimes sees breach of contract claims filed against sellers if a claim made by the seller in the signed contract is found to be untrue.
MacQueen said the best practice in selling a fix-and-flip property is to avoid adding superfluous “as-is” statements in the sales contract, because standard Arizona real estate contracts already include a standard as-is language.
Further, MacQueen urged that sellers “disclose what you know” in the Seller Property Disclosure Statement (SPDS) that is typically included in a sales contract, rather than try to avoid using the SPDS when they are selling a property they never occupied.
“Disclose everything,” when selling a fix-and-flip property, MacQueen concluded.
For a Buyer purchasing a fix-and-flip property, MacQueen offers advice. Conduct a third party inspection, request contractor information, warranty, receipts and confirm verbal representation via email through your Realtor. So, when the Seller claims that the contactor who completed electrical repair is licensed, have this confirmation in the form of an email.
Following these tips could reduce the risk of facing a potential and costly law suit.
What does Woodside Homes LLC offer that other builders don’t?
The answer: A frame walk through. The frame walk through is an added value that buyers get if they purchase a home from Woodside Homes LLC at Heritage Crossing in Mesa, AZ. It is conducted by the field supervisor with the buyer, and agent if applicable. The supervisor goes over every aspect of building the electrical, mechanical, plumbing, cooling and heating, sewer, foundation, grading, etc. of the interior and exterior of the home prior to installing drywall.
I recently had an opportunity to witness this walk through with a client, which so many builders do not provide. It gave my client and myself an idea of what is hidden behind the walls and gives us a good feeling that the builder is being transparent about how they construct your house.
Angela, the field supervisor, walked us through the entire house and found a few items that needed to be fixed. She immediately contacted her workers and the job was completed even before we finished the walk through. That is great service!
A frame walk through is similar to what a third-party inspection does. With Angela’s competent guidance, it gave my client the assurance that Woodside Homes LLC strives to do their best to build a great house for their client.
My client will be closing on the home in a few weeks and so far Woodside has been communicative and coordinated in providing my client the information they need to close on the new home. Builder representative Susan Collins kept us informed and delivers high quality customer service.
In addition, unlike many builders with one lender, Woodside Homes LLC partners with four different lenders, which allows the buyer to shop around for the lender that best fits their needs.
Currently, homes are going fast at Heritage Crossing by Woodside Homes LLC. Their Landmark development can sell only four lots a month and their Village development can only sell nine lots a month. Both developments have waitlists, since they both exceeded their lot quotas because of early demand. Insane!
Valley real estate demand as hot as ever following COVID19 pause
Residential real estate in Metro Phoenix continues to be in an affordable range, and prices are likely to appreciate over the next five years given the current economy and demand, according to recent remarks by a local real estate analyst.
During a June 25 ZOOM webinar, Tina Tamboer, senior analyst from local real estate statistical analysis publication The Cromford Report, reported that historic low mortgage interest rates are helping Valley homes continue to be affordable for buyers, even though the supply is low and prices are up.
For example, she said, the selling price of a 1,500- to 2,000-square-foot home in the Valley is up an average of $50,000 compared to last year – but mortgage payments are roughly the same for buyers because of the low interest rates.
Tamboer said the Phoenix area market is still affordable for homebuyers with an average income ($72,000); the normal range of affordability is between 60 and 75 percent, and Phoenix is currently at 63 percent. (Nationwide, affordability is at 61.3 percent, she noted.)
However, affordability is declining, Tamboer said. “If incomes do not rise with pricing, we may become below normal in affordability.”
Therefore, she added, “buyers need to buy now. No price declines are coming.”
Supply of homes for sale in the Valley are down 11 percent since the start of the Coronavirus shutdowns, and also 13 percent lower than June 2019, Tamboer added.
“Demand is shooting up, but there is no surge in new listings,” she said, adding that the supply of homes in the $200,000 to $250,000 range is down 61 percent from a year ago.
Ibuyers offer “Convenience”, but at what cost?
2019 Arizona Real Estate Market Update and predictions
I attended a class on real estate recently and listened to Bill Grey, ASU professor on real estate and very well informed on past and current issues. He mentioned many interesting views about varied subjects that affects the future of Arizona which I will share with you. Many of which we take for granted.
- Arizona private land ownership is rare: 43% of AZ land is owned by the Federal Government, 26% is owned by Indian reservation, 12% is owned by State of AZ Trust to build schools. So, only 19% is owned by private citizens like us.
- Arizona home ownership: Sixty five percent can afford to own a home. This is a drop from 75 percent from years ago because mortgage loans are tougher to get.
- Arizona home sales: Looking bright. Many people are moving to AZ from California, Utah, Colorado, Washington because of low cost of living, jobs, weather and quality of life.
- Rental Market in Arizona: Booming and rent is increasing. A legislation to cap rental increase would help.
- Arizona median Age: 35.5 years old
- Arizona unemployment rate: 4.3 percent
- Arizona median income: $56,000
- US median home income: $60,000
- US median home prices – $250,000
- AZ population: 1.7 million , growth rate is 1 million per 10 years
- AZ largest employer: Banner Health Care
- Retail market prediction: Malls without experience will close and convert to medical offices, restaurants. Dollar store, 99 cent store, Goodwill are gaining demand. Middle American stores like Macy’s, Penny’s are struggling. Luxury stores are doing well.
- Industrial Market: Many distribution hubs are staying or moving to AZ because it is cheaper – Dicks, Ace etc…
- Entertainment centers are gaining success. Customers are looking for fun experience such as top golf. Golf courses are on a decline.
- Challenges facing Arizona: Lack of water, huge national debt, available land, education.
*Information and figures provided were based on March 18, 2019 and are subject to change.
What would you do if the house you made an offer on was used to shoot porno films?
A couple rescinded their offer on a Paradise Valley home after they found out that the house was used for pornographic films.
What are the porn laws in Arizona? When selling real estate, the Seller is not obligated to disclose the type of business the house was used for. Other items that are not required to be disclosed in Arizona when selling a home are as follows:
The home being the site of a natural death, suicide or homicide or any other crime classified as a felony.
The home being owned or occupied by a person exposed to HIV or AIDS.
The home being located in the vicinity of a sex offender.
The Buyer has the right to cancel within allowable time frame due to their inspection or morale standard but Arizona law doesn’t prohibit the sale of the house regardless of its past. It will just have to wait for the right Buyer.
Is Selling a home through Offerpad or Opendoor better than hiring a Realtor?
For many months in the Phoenix metro area, alternative services to real estate agencies and Realtors like OfferPad and Opendoor have been aggressively advertising and promoting their alleged advantages to selling a home “a different way.”
I recently visited one of these websites to find out how much they would offer to purchase my own house. As a Realtor, I have a strong sense of where my house should be priced at to sell. The resulting offer was a price about $10,000 lower than what I would sell my house for in today’s market.
However, that wasn’t the end of the story. On top of the $10,000-below-market-value offer, the service deducted 9 percent from its offer price to be applied towards their holding costs (utilities, HOA fees, and maintenance) until they sold the house to another buyer, and also covering their sales commission to sell the house, plus other miscellaneous administrative costs.
Finally, in addition to the holding costs, the service noted that it would deduct repairs or replacement costs after an inspection. These items included, but were not limited to, the air conditioning unit, roof, water heater, appliances or structural flaws.
Will customers receive more money for the sale of their house if they go with one of these services instead of selling the home the traditional way by hiring a Realtor? Below is an example that shows the comparisons:
Alternative Home Buying Service Realtor
Sale Price $360 ,000 $370,000
Commission/holding cost/ -$32,400 (9%) -$25,900 (7%)*
Closing cost deductions
Repair/Replacement cost -$2,000 (estimate) -$1,000 (estimate)
Net Profit $325,600 $343,100
Difference in Gain – $17,500 +$17,500
In summary, hiring a Realtor to sell a home in my area would result with the homeowner pocketing well over $15,000 more than using the alternative service.
However, for some sellers, the convenience of selling their house “as-is,” not having to show the house to buyers or waiting for a buyer to make an offer, plus the sometimes lengthy closing process may be enough reasons to justify the a more than $15,000 reduction in profit.
Like any investor, OfferPad or Opendoor will give you less money in exchange for convenience. The choice is yours.
How Accurate is Zillow.com?
by: Maria Hass
By now most people have heard of Zillow.com – a website where home buyers or home sellers can go to find out the worth of a property. But is it really accurate? My answer is a resounding NO! In fact, there is usually a huge difference between the home value calculated on Zillow.com versus the true market value of the home.
Why is Zillow.com not accurate?
1. Zillow.com determines a home’s value based on tax records, which are hardly accurate nor updated. I tried experimenting on my old home to see what the site has to say. Zillow.com estimated my home at $223,000. I was able to sell it for $250,000. Zillow’s estimate showed that my home was only a three-bedroom without a pool when in reality it was a three-bedroom plus a den with a Pebble-tec pool and built-in barbecue. Home buyers visiting my home without the help of a Realtor would argue that the home is only worth what Zillow says it is. Well, in the real estate industry, Realtors don’t give Zillow’s estimates any respect.
2. Zillow.com provides a comparative market analysis of your home based on what sold in the last year. Real estate agents typically pull up homes that sold within the last three months because the market is constantly changing. We also look at what is pending and active to get an idea of what the future sales look like. Zillow does not do that.
3. Zillow.com does not have specific search criteria. The website does not take into consideration the condition of the home, any upgrades to the home, the number of levels of the home (single-level, two-story, with or without a basement), the direct and indirect competition of the property for sale and any additions to the home. Zillow does not distinguish whether the home that sold backs out to a main street or to a lake. This property description alone can add $20,000 more value to a home on a lake and a lot less to a home that backs to a busy street. It does not know if the home that sold has an extremely big lot or extremely small lot. Again, this can add a greater value to a home with a huge lot. Zillow does not identify whether a home that just closed is bank-owned or a regular sale. The type of sale matters to real estate agents because distressed sales normally sell for a lot less than regular sales. So, your four-bedroom home will be compared to all the four-bedroom homes close by, regardless of valuable property features, condition, upgrades, etc.
4. Zillow’s estimate is computer-generated. There is no human intervention to identify the changing market conditions. It does not have the eye to see the condition and competition of the home for sale. Zillow.com is one big misleading home search website. It is a quick and easy way to find a home’s value, but is far from being 100 percent accurate. If you are serious about finding the value of a home, take time to call a trusted and knowledgeable real estate agent. Realtors have the tools and expertise at their disposal to find out what your home’s value really is. If you need help with determining the value of your home, feel free to contact me for assistance.