March Market Stats

Here is an update on Single Family Homes in Arcadia Proper...

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Where are the opportunities for Buyers? 

With only 4 homes sold so far this year priced between $2 and $3 million, this price range is experiencing a lot of competition with 20 homes available for sale. In last six months, 7 homes have sold in this range. If no new homes were to come on the market, it would take 17 months (over 510 days) to sell through all of the inventory. This favors buyers, a balanced market is 6 months worth of inventory.

As always, the real opportunity for buyers remains the same...homes that have a functional floor plan and just need a little bit of updating. After a little bit of remodeling, you get to experience the gain in equity for yourself. 

Where is the opportunity for Sellers?

Many new construction homes are in this $2M to $3M price range. If you are a builder, this type of product seems to be the most desirable to Arcadia buyers, so the outlook might not be so bad. A well thought-out new home will typically sell  more quickly than homes that need work. Also, Valley-wide, there is 21 months of inventory in that price range, so Arcadia's 17 months doesn't look so bad.

General Arcadia Snapshot 

You can tell we are the the midst of our strong Spring selling season. Prices and volume are up, but homes are taking a little bit longer to sell than last year at this time.

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Test Your Phoenix Area Real Estate Knowledge

So you think you know what is going on in Phoenix Real Estate? How many questions can you get right?

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1. In what month do we see the most new listings come to the market in Phoenix?

March is the month in Phoenix that the most new listings come to the market!  The time is now! With Spring Training in full force and the height of our tourism season, give your home the opportunity to shine!  March too soon? April is still a strong month, you missed January...but you could shoot for October which is a strong month for new listings. Little fact: we had more new listings in January 2018 than we have had since 2012. 

And the other side of the coin? When you come on the market in March, you are facing the most competition from other listings. You better look the prettiest and be priced competitively to get invited to the ball!

2. In what month do we see the most closed sales?

This is a little bit of a softball...a typical escrow is about 30 to 45 days, so that means that a buyer has made a decision to purchase 30 to 45 days before the sale gets recorded. So if the most new listings come to market in March, you can estimate that the most closed sales occur in May, June is a really close second.  

3. Which zip code saw the greatest median sale price increase in 2017?

If question 2 was a softball, number 3 is a bit of a trick.  In 2017, the zip code that saw the greatest increase in median sales price was (drumroll...please) 85007 with an increase of 103%!! Where is 85007? It is on the either side on I-10 through downtown and just over the I-17 and includes the historic districts of Encanto, Palmcroft and FQ Story.  

The next highest increase in median sale price 85377, which is Cave Creek and the next highest is 85361 which is in Wittman, Arizona, half way between Sun City West and Wickenburg. 

How did you do?

 

 

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Open Floor Plan Homes: You Really Want One? The Pros and Cons

Open floor plan homes—those with no walls separating the kitchen, dining and/or living area—are all the rage today. According to the National Association of Home Builders, 84% of new single-family homes have fully or partially open layouts.

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But whether you're thinking of buying an open floor plan home or renovating your way to one by knocking down a wall, you should know both the pros and cons of this setup (because it's not all good news).

A history of open floor plans

Early American homes were "open" by necessity: one or two rooms built around a central hearth. During the Victorian era, however, it became popular for homeowners who could afford it to build many smaller, specialized rooms, from parlors to maid's quarters. Yet as society changed, so did our floor plans. As full-time help became less common and home life became more casual, there was no need for cooks to hide out in the kitchen.

At the same time, new construction materials such as steel beams and advances in heating and cooling technology made big, open rooms more feasible to build, heat, and cool. As Jay Kallos, vice president of architecture for Ashton Woods in Atlanta, points out, "Prewar, before air conditioning, the kitchen was a very hot place, so it was closed off to keep heat from spreading around the house."

Architect Henry Hobson Richardson is credited with first introducing a living-dining room combo in his Paine estate, built in Waltham, MA, in 1886. But Frank Lloyd Wright pushed the open floor plan idea to a whole new level, with homes like the one he built in Hyde Park, Chicago, for Frederick C. Robie in 1909, with a combined living and dining area in one minimalist, free-form space.

Benefits of open floor plans

Open floor plans are popular for good reason.

  • Maximizes square footageOpen floor plan homes feel bigger, since the square footage isn't cut up into small, cramped quarters. Plus, "With a living room and dining room, you're allocating 300 square feet of space to rooms that are only used a few times a year," explains Kallos. "An open floor plan home will feel bigger because you don't have all this unused space."
  • Better natural light. Removing walls lets the light that comes in through your windows spread throughout the home, eliminating dark interior rooms that have to have artificial lights on even during the day.
  • Social cohesiveness. Open floor plans make socializing easier, even when people are doing different things—say, Dad's cooking dinner while the kids are playing in the living room while Mom pays bills at the dining room table. Entertaining guests is easier, too; you can catch up with guests in the dining area while preparing dessert.
  • Flexibility. "Open floor plans create a usable space that's flexible, based on your needs," says real estate agent Jimmy Branham of the Keyes Company in Fort Lauderdale, FL. Want a giant TV to be the center of your living space for sports games? No problem. Long for a farmhouse table for dinner parties? A dance floor for all your friends? Go for it. However homeowners choose to define their space, it works without making major architectural changes.

Downsides of open floor plans

Open floor plans may be popular, but they're certainly not for everyone. Here are a few of their challenges.

  • Cooking heat and smells travel everywhere. Don't want your couch to smell like fried fish? Unless you've got a heavy-duty vent hood, you might just have to go to the chip shop with an open floor plan. There's no way to keep the smoke, food smells, and oven heat contained.
  • Less formal living. Some people want to be able to sauté while chatting with guests sipping wine at the kitchen island. Other people want to be able to get some cooking done without anybody sticking a finger in the sauce. If your hosting style is more formal—or if you employ professional cooking help, and you don't want guests to bother them—an enclosed kitchen and more formal living/dining space might be better for your needs.
  • Less privacy. Sometimes, hanging out with your whole family is a downside. Parents like to be able to escape from kids for a little while. Or maybe you just want to read a book while someone else is cheering for their basketball team.
  • It's noisier. Kid noise, cooking noise, TV noise, the dishwasher running, someone else's music on the stereo: There's no hiding from everybody's noise in an open floor plan, and a lack of walls makes the space echo more and is less sound-absorbent.
  • You can't hide the mess. It's nice to have guests come over and only have to clean one room. In a home with a dedicated office, a separate playroom, and closed kitchen, you can just shut the doors and deal with the mess later. With an open floor plan, everything is visible, including your clutter.
  • It could date your home. Open floor plan living is a trend that's been building for years. It shows no sign of slowing, but everything goes in and out of fashion. With a completely, radically, loftlike open floor plan, you might be setting yourself up to look "so late 20-teens" in 10 or 20 years' time.

Audrey Ference has written for The Billfold, The Hairpin, The Toast, Slate, Salon, and others. She lives in Austin, TX. Follow @audreyference

 

 

Arcadia Area Market Stats for December and 2017

The holidays did not slow down the sales numbers for the general Arcadia area. In fact, it was almost identical to the previous month, with the same number of home sales and only a slight decrease in sales price. Home prices were up about 6% over last year at this time.

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Below is a breakdown of total single family home sales for the year in Arcadia Proper. The number of homes sold was down only slightly. The average sale price in 2017 decreased about 8% as compared to 2016. 

There were two remarkable sales in 2016, one over $6 Million and one over $7 Million. 2017 did not have any of those extreme sales, which had an effect on the numbers.  If we remove those two sales, the decrease in average sales price is only 3%. 

Something interesting to note, the average sold home size in 2016 was 4,199 square feet, while 2017 saw an average sold home of 3,803 square feet, a decrease of about 9%. Could this just be the sign of what was available to purchase in Arcadia or a sign that people are wanting smaller homes? We will have to see what 2018 holds!

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What about off-market listings? There was actually a decrease in the number of off-market transactions in 2017 as compared to 2016. Most of the vacant land and hidden gems in Arcadia have been gobbled up.

These numbers are generated from ARMLS.

Highlights of the Tax Bill that Relate to Real Estate

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The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members, not only in the last three months, but over several years.

    Exclusion of Gain on Sale of a Principal Residence

    • The final bill retains current law. A significant victory in the final bill that NAR achieved.
    • The Senate-passed bill would have changed the amount of time a homeowner must live in their home to qualify for the capital gains exclusion from 2 out of the past 5 years to 5 out of the past 8 years. The House bill would have made this same change as well as phased out the exclusion for taxpayers with incomes above $250,000 single/$500,000 married.

    Mortgage Interest Deduction

    • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
    • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
    • The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
    • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
    • The House-passed bill would have capped the mortgage interest limit at $500,000 and eliminated the deduction for second homes.

    Deduction for State and Local Taxes

    • The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
    • The final bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.
    • When House and Senate bills were first introduced, the deduction for state and local taxes would have been completely eliminated. The House and Senate passed bills would have allowed property taxes to be deducted up to $10,000. The final bill, while less beneficial than current law, represents a significant improvement over the original proposals.

    November Arcadia Sales

    Here is a summary of what happened in November in the general Arcadia area. Sales prices were down 6% as compared to last November, but up 4% as compared to last month. The length of time a home took to sell also increased by 3% last month as compared to October.  Accurate pricing and quick adjustments are necessary to put your home in the best possible position with buyers. I can explain why pricing accurately out the gate leads to a shorter marketing time and greater returns.

    Market Snap Shot NOV 17 General.jpg

    Below is a look at just Arcadia Proper.  We are slightly ahead of last year, but the real strength in the market this year has been in the lower end, 61 homes priced under $1 million have been gobbled up this year and the number available homes in that price range, 13, is only 2.3 months of inventory. Meaning that if no more homes were to come on the market in that price range, Arcadia would be out of homes in that price range in 2.3 months, very seller-favorable. But, that doesn't mean you can demand a higher price. The only properties that sell are accurately priced properties. 

    The price range between $2 and $3 million is exciting...more than one a month is selling.  The homes priced over $3 million have a bit more competition for buyers and are selling a bit more slowly than last year, but still at a swift pace, given the limited number of buyers in that price range.

    Chart 12.01.17 Arcadia Proper.jpg

    Average New Home Price Tops $400k for First Time Ever

    And new single-family home sales are up 6.2 percent month-over-month, according to just-released Census figures

    The U.S. Census Bureau today released its October 2017 new residential sales report, which boasted an average home sales price of $400,200 — the highest since March 2007’s average of $329,400.

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    The sales of new single-family houses in October 2017 were at a seasonally adjusted annual rate of 685,000. This is 6.2 percent (+/- 18.0%)* above the revised September 2017 estimate of 645,000, and 18.7 percent (+/- 23.5%)* above the October 2016 estimate of 577,000.

    The estimate of new homes for sale at the end of October was 282,000, which represents a 4.9-month supply at the current sales rate.

    Realtor.com Chief Economist Danielle Hale says although the number of new homes for sale has moderately increased (+3,000), buyers won’t receive a break from excessive home prices in the immediate future. But she says the uptick in demand should rouse builders to construct more homes, leading to increased affordability down the line.

    “The pick-up in new home sales should improve builder confidence and lead to more home construction, offering home buyers additional options and creating opportunities for current owners to trade into new homes, potentially unleashing existing home inventory,” said Hale in an emailed statement.

    “The number of existing homes for sale according to realtor.com data are down 8 percent from a year ago in October and increasing availability of homes for sale would be welcomed by home shoppers.”

    Other data from the Census Bureau and HUD:

    • The average sales price was $312,800.
    • The Northeast led the way in new residential home sales, with a 30.2 (+/- 89.3)* percent month-over-month increase. The Midwest experienced the second highest rate of month-over-month growth at 17.9 (+/- 41.5)* percent.
    • The West and South shored up the end of the pack with 6.4 percent (+/- 38.6)*and 1.4 percent
      (+/- 18.3)* growth month-over-month, respectively.

    The Census Bureau and HUD use sample surveys to collect data for their home sales, which means this data is subject to sampling variability as well as the typical statistical variance. * The survey is based on a sample of houses pulled from building permits. “Sales” are defined as deposits taken or sales agreements signed, not necessarily closings.

    Article source: inman.com

    Spend the Night in a Lego House

    About three years ago, this would have been an incredible dream for my kids!

    LEGO and Airbnb have teamed up to offer some lucky winners a night in an architect’s dream house filled with 25,000 LEGO bricks. READ MORE HERE

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    Perhaps the most impressive angle to examine the new structure is from above; BIG conceived of the project as 21 brightly colored, large-scale LEGO bricks that overlap to frame a publicly-accessible central plaza. Above the square, a cluster of galleries overlap to create a continuous sequence of exhibitions, and children’s play zones are located on the first and second floors. 

    Those Who Live in Glass Houses...Literally

    This spectacular home with giant glass walls is currently for sale in Carmel, California for $11,900,00.

     3 bedrooms | 3.5 baths | 2,667 square feet |  .65 acre | $11,900,000

    3 bedrooms | 3.5 baths | 2,667 square feet |  .65 acre | $11,900,000

    Architecturally shaped like a butterfly, the ocean dances below the home, rainbows of light twirl through the glass walls, and the majesty of nature embraces your soul upon arrival. The home is alive with ocean drama, swaying cypress trees, quiet sunrises, and flamboyant sunsets. Estate evokes spirituality with the movement of nature all around, creating an ambiance of tranquility. The home is a rare architectural masterpiece, sure to be coveted by global estate collectors worldwide. A labor of love, ten years in making, showcasing enfilade design, connecting each space to the next, to infinity. The style mimics exuberance of Italian Baroque and simplicity of Japanese minimalism. Joan Murray the creator, enjoyed poetry, music, meditation, and nature. Architecture by Wallace E. Cunningham, Inc., Wallace Cunningham, Principal Designer named one of top 100 designers by Architectural Digest, and recognized as one of the top 30 designers by Robb Report.

    Take 5: What Affects Property Values?

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    Some the features that increase property values are obvious—like a remodeled bathroom, a modern kitchen, or a sought-after neighborhood. But here are a few features and circumstances you have not have realized can affect property values.

     1. The neighbors: Not every neighborhood or community has an HOA that can keep the neighbors from going overboard with decorations or neglecting to care for their home. Homes adjacent to crazy neighbors can potentially be undervalued.

     2. Trendy groceries and coffee: Recent statistics suggest that if your home is a short walk from popular grocery stores like Whole Foods or coffee chains like Starbucks, it can actually appreciate faster than the national average.

     3. Mature trees: A big beautiful tree in the front yard is enviable, and it’s not something that can be easily added to any home. Homes with mature trees tend to get a little boost in value.

     4. Parking: This isn’t too much of an issue if you live in the suburbs or in a rural area, but residents in dense cities can have real problems with parking, and homeowners might need to rent a spot just to guarantee a place to park each night. That’s why having guaranteed parking in urban areas will raise property values.

     5. The front entrance: First impressions matter to buyers—many will cross a home off their list within 10 seconds of stepping through the front door. An appealing front door, a friendly entryway, and a functioning doorbell are all necessities for getting top dollar.

    October Arcadia and Paradise Valley Sales Stats

    Greater Arcadia experienced an uptick in sales volume over last month.  This is typical with the seasonality of our market. When the homes that closed in October went under contract, summer was winding down. People were back from vacation and ready to take looking for a home seriously.  The sold prices were down from last year, but so was the size of the home sold.  If you look at price per square foot, the prices were still down from last year, $297 per foot this October compared to $301 in October in 2016. Could this be an indicator of a softening market?

    Market Snap Shot Oct 17 General copy.jpg

    The chart above only includes single-family homes, but it is interesting to note that condos in the area made of 30% of the total sales, up from 24% a year ago. Condos continue to be a more affordable option in the Arcadia area.

    If we look specifically at Arcadia Proper, we are ahead year over year with most activity occurring at the lower end of the price range. With prices still on the rise, most speculative builders are starting to feel a bit priced out of the market. As it has been for the last year or so the best opportunity is for the home buyer who is willing to take on a remodel, the buyer can tailor the home to their needs and spread the potential gains over a number of years.

    It is a seller's market for the people trying to sell homes under $1.5 million, but your price has to be spot on. Buyers are not willing to pay top dollar for an older remodel. Sellers need to be realistic about their homes value.

    Chart 11.01.17 Arcadia Proper.jpg

    Paradise Valley is continuing its hot streak!  Six months inventory of homes is considered a balanced market, favoring neither buyers nor sellers. In the luxury market, the months inventory figure is often higher given the smaller pool of available buyers.  But, PV is bucking the trend. Under $1.5M in PV, there is only a 4.6 month supply of homes. This means if no new homes were to come to the market, in a short 4 and half months, there would be no homes under $1.5 million in PV! Also notable are the 8.4 months supply of homes priced between $1.5M and $2M and 14 months supply of homes between $2M and $3M.  Sales of homes between $2M and $3M are up 39% year over year. The softest part of the PV market is the ultra high-end with 27 homes priced over $6M, only two have sold in 2017.

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