NextHome Valleywide News

Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

July 28, 2021

Bridging The Appraisal Gap

If you’re searching for drama, don’t limit yourself to Netflix. Instead, tune in to the real estate market, where the competition among buyers has never been fiercer. And with homes selling for record highs,1 the appraisal process—historically a standard part of a home purchase—is receiving more attention than ever. 

 

That’s because some sellers are finding out the hard way that a strong offer can fizzle quickly when an appraisal comes in below the contract price. Traditionally, the sale of a home is contingent on a satisfactory valuation. But in a rapidly appreciating market, it can be difficult for appraisals to keep pace with rising prices.

 

Thus, many sellers in today’s market favor buyers who are willing to guarantee their full offer price—even if the property appraises for less. For the buyer, that could require a financial leap of faith that the home is a solid investment. It also means they may need to come up with additional cash at closing to cover the gap.

 

Whether you’re a buyer or a seller, it’s never been more important to understand the appraisal process and how it can be impacted by a quickly appreciating and highly competitive housing market. It’s also crucial to work with a skilled real estate agent who can guide you to a successful closing without overpaying (if you’re a buyer) or overcompensating (if you’re a seller). Find out how appraisals work—and in some cases, don’t work—in today’s unique real estate environment.

 

APPRAISAL REQUIREMENTS

 

An appraisal is an objective assessment of a property’s market value performed by an independent authorized appraiser. Mortgage lenders require an appraisal to lower their risk of loss in the event a buyer defaults on their loan. It provides assurance that the home’s value meets or exceeds the amount being lent for its purchase.

 

In most cases, a licensed appraiser will analyze the property’s condition and review the value of comparable properties that have recently sold. Mortgage borrowers are usually expected to pay the cost of an appraisal. These fees are often due upfront and non-refundable.2 

 

Appraisal requirements can vary by lender and loan type, and in today’s market in-person appraisal waivers have become much more common. Analysis of the property, the local market, and the buyer’s qualifications will determine whether the appraisal will be waived. Not all properties or buyers will qualify, and not all mortgage lenders will utilize this system.3 If you’re applying for a mortgage, be sure to ask your lender about their specific terms.   

 

If you’re a cash buyer, you may choose—but are not obligated—to order an appraisal.

 

APPRAISALS IN A RAPIDLY SHIFTING MARKET

 

An appraisal contingency is a standard inclusion in a home purchase offer. It enables the buyer to make the closing of the transaction dependent on a satisfactory appraisal wherein the value of the property is at or near the purchase price. This helps to reassure the buyer (and their lender) that they are paying fair market value for the home and allows them to cancel the contract if the appraisal is lower than expected.

 

Low appraisals are not common, but they are more likely to happen in a rapidly appreciating market, like the one we’re experiencing now.4 That’s because appraisers must use comparable sales (commonly referred to as comps) to determine a property’s value. These could include homes that went under contract weeks or even months ago. With home prices rising so quickly,5 today’s comps may be lagging behind the market’s current reality. Thus, the appraiser could be basing their assessment on stale data, resulting in a low valuation.

 

HOW ARE BUYERS AND SELLERS IMPACTED BY A LOW APPRAISAL?

 

When a property appraises for less than the contract price, you end up with an appraisal gap. In a more balanced market, that could be cause for a renegotiation. In today’s market, however, sellers often hold the upper hand. 

 

That’s why some buyers are using the potential for an appraisal gap as a way to strengthen their bids. They’re proposing to take on some or all of the risk of a low appraisal by adding gap coverage or a contingency waiver to their offer.

 

Appraisal Gap Coverage


Buyers with some extra cash on hand may opt to add an appraisal gap coverage clause to their offer. It provides an added level of reassurance to the sellers that, in the event of a low appraisal, the buyer is willing and able to cover the gap up to a certain amount.6 

For example, let’s say a home is listed for $200,000 and the buyers offer $220,000 with $10,000 in appraisal gap coverage. Now, let’s say the property appraises for $205,000. The new purchase price would be $215,000. The buyers would be responsible for paying $10,000 of that in cash directly to the seller because, in most cases, mortgage companies won’t include appraisal gap coverage in a home loan.6

 

Waiving The Appraisal Contingency

 

Some buyers with a higher risk tolerance—and the financial means—may be willing to waive the appraisal contingency altogether. However, this strategy isn’t for everyone and must be considered on a case-by-case basis.

 

It’s important to remember that waiving an appraisal contingency can leave a buyer vulnerable if the appraisal comes back much lower than the contract price. Without an appraisal contingency, a buyer will be obligated to cover the difference or be forced to walk away from the transaction and relinquish their earnest money deposit to the sellers.

 

It’s vital that both buyers and sellers understand the benefits and risks involved with these and other competitive tactics that are becoming more commonplace in today’s market. We can help you chart the best course of action given your individual circumstances.

 

DON’T WAIVE YOUR RIGHT TO THE BEST REPRESENTATION

 

There’s never been a market quite like this one before. That’s why you need a master negotiator on your side who has the skills, instincts, and experience to get the deal done...no matter what surprises may pop up along the way. If you’re a buyer, we can help you compete in this unprecedented market—without getting steamrolled. And if you’re a seller, we know how to get top dollar for your home while minimizing hassle and stress. Contact us today to schedule a complimentary consultation.

 

Sources:

  1. Wall Street Journal - https://www.wsj.com/articles/u-s-home-prices-push-to-record-high-slowing-pace-of-purchases-11621605953

  2. US News & World Report - https://realestate.usnews.com/real-estate/articles/what-is-a-home-appraisal-and-who-pays-for-it

  3. Rocket Mortgage – https://www.rocketmortgage.com/learn/appraisal-waiver  

  4. Money - https://money.com/coronavirus-low-home-appraisal/

  5. S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index - https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-20-city-composite-home-price-nsa-index/#overview

  6. Bigger Pockets - https://www.biggerpockets.com/blog/appraisal-gap-coverage

  7. Washington Post - https://www.washingtonpost.com/realestate/competitive-buyers-waive-contingencies-to-score-homes-in-tight-market/2021/06/02/d335b050-af2c-11eb-b476-c3b287e52a01_story.html

Posted in Real Estate Trends
July 19, 2021

July 2021 Market Update

What's Ahead as Demand Weakens

Median Sale Price Up 29%

For Buyers:

Buyers with budgets over $300,000 may be noticing that they have more listings to choose from compared to a few months ago. This is especially true in the price points between $400,000 and $800,000 where inventory has grown 92% since February. When a buyer has, for example, 4 or 5 homes available that meet their criteria instead of just one, they are less inclined to throw all of their ammunition into one home in order to win it.

 

They may still offer full price or more, but may not be under as much pressure to waive contingencies and shorten inspection periods. As this subtle change proliferates with more inventory, the buyer experience will become less stressful. As the median sale price continues to rise, affordability is something to pay attention to. Not what’s affordable to you necessarily, especially if you’re out of state, but what percentage of the local population can afford your home if you need to sell right away or sometime in the future. A family making the median income in Greater Phoenix could afford 63% of what sold in the 1st quarter of 2021. That was within the normal range of 60-75%, indicating a good time to buy or sell. While we wait until August for the 2nd quarter measures to be released, we expect the new measure to land around 57%, slightly below normal.

 

This does not indicate that the market will plunge into a buyer market causing prices to decline, but it does indicate a reason to expect prices to rise much slower going forward.

 

For Sellers:

The Greater Phoenix housing market continues to shift from an extreme seller market into a less extreme seller market. As prices continue to rise, more new sellers are motivated to put their home on the market and fewer buyers are able or willing to pay the higher price.

 

Over the next 5 months, give or take, the market is expected to move into a weaker seller market, driven in part by dwindling affordability and buyer fatigue. The first half of 2021 has been so insane with contingency waivers and exorbitant offers over asking price that many sellers may not know what a normal seller market looks like. Here are a few things to expect:

 

Sales price appreciation will not average 3.1% per month. April 2021 saw prices appreciate 5.1% within 4 weeks. May was 2.3%. June was 1.1%. From 2015-2019, a long-term seller market but much weaker than today, prices appreciated at an average of 0.5% per month with a range between 0.3% and 0.8%.

There will be more list price reductions. It’s important to remember that the sales price is the LAST thing to respond in a shifting market. One of the first things to respond is a list price, in the form of a price reduction. When a seller overshoots what the market can bear, they will get the silent treatment in the form of zero offers. That triggers a price reduction by the seller. Weekly price reductions have risen 112% since mid-February from 317 in a week to 672. In a weaker seller market, expect between 1,500-2,000 price reductions every week.

Sellers will get their price, but pay more in concessions. If a seller prices their home high in anticipation of excess demand but only gets one offer instead of multiple offers, they are more likely to accept home warranties, do repairs and offer concessions. Currently the percentage of sales involving concessions is very low at 4%, up from 2.7% the week prior. In 2019, a good seller market, 25% of closed sales involved seller concessions.

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Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

  • Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more.
  • Visit our blog at NextHome Valleywide News for a monthly Phoenix Market Update.
Posted in Market Updates
June 28, 2021

Could Rising Prices Impact Your Net Worth?

Impact Your Net Worth?

Among its many impacts, COVID-19 has had a pronounced effect on the housing market. Low home inventory and high buyer demand have driven home prices to an all-time high.1 This has given an unexpected financial boost to many homeowners during a challenging time. However, for some renters, rising home prices are making dreams of homeownership feel further out of reach.

If you’re a homeowner, it’s important for you to understand how your home’s value contributes to your overall net worth. If you’re a renter, now is the time for you to figure out how homeownership fits into your short-term goals and your long-term financial future. An investment in real estate can help you grow your net worth, build wealth over time, and gain a foothold in the housing market to keep pace with rising prices.

What is net worth?

Net worth is the net balance of your total assets minus your total liabilities. Or, basically, it is what you own minus what you owe.2

Assets include the cash you have on hand in your checking and savings accounts, investment account balances, salable items like jewelry or a car and, of course, your home and any other real estate you own. 

Liabilities include your total debt obligations like car loans, credit card debt, the amount you owe on your mortgage, and student loans. In addition, liabilities would include any other payment obligations you have, like outstanding bills and taxes.

How do I calculate my net worth?

To calculate your net worth, you’ll want to add up all of your assets and all of your liabilities. Then subtract your total liabilities from your total assets. The balance represents your current net worth. 

Total Assets – Total Liabilities = Net Worth

Ready to calculate your net worth? Contact us to request an easy-to-use worksheet and a free assessment of your home’s current market value!

Keep in mind that your net worth is a snapshot of your financial position at a single point in time. Your assets and liabilities will fluctuate over both the short term and long term. For example, if you take out a loan to buy a car, you decrease your liability with each payment. Of course, the value of your asset (the car) will depreciate over time, as well. An asset that is invested in stocks or bonds can be even less predictable, as it’s subject to daily fluctuations in the market.

As a homeowner, you enjoy significant stability through your monthly real estate investment, also known as your home mortgage payment. While the actual value of your home can fluctuate depending on market conditions, your mortgage payment will decrease your liability each month. And unlike a vehicle purchase, the value of your home is likely to appreciate over time, which can help to grow your net worth. Right now, your asset may be worth significantly more than it was this time last year.3

If you’re a homeowner, contact us for an estimate of your home’s market value so that you can factor it into your net worth calculation. If you’re not a current homeowner, let’s talk about how homes in our area have appreciated over the last several years. That way, you can get an idea of how a home purchase could positively affect your net worth.

How can real estate increase my net worth?

When you put your real estate dollars to work, it’s possible to grow your net worth, generate cash flow, and even fund your retirement. We can help you realize the possibilities and maximize the return on your investment.

Property Appreciation

Generally, property appreciates in one of two ways: either through changes to the overall market or through value-added modifications to the property itself.

Rising prices

This type of property appreciation is the one that many homeowners are enjoying right now. Buyer demand is at an all-time high due to a combination of record-low interest rates and limited housing inventory.4 At other times, rising home prices have been attributed to different factors. Certain local conditions—like a new commercial development, influx of jobs, or infrastructure project—can encourage rapid growth in a community or region and a corresponding rise in home values. Historically, home prices have been shown to experience an upward trend punctuated by intermittent booms and corrections.5

Strategic home improvements

Well-planned and executed home improvements can also impact a home’s value and increase homeowner equity at the same time. The type of home improvement should be appropriate for the home and in tune with the desires of local buyers.

For example, a tasteful exterior remodel that is in keeping with the preferences of local home buyers is likely to add significant value to a home, while remodeling the home to look like the Taj Mahal or a favorite theme park attraction will not. A modern kitchen remodel tends to add value, while a kitchen remodel that is overly expensive or personalized may not provide an adequate return on investment.

Investment Property

You may be used to thinking of investments primarily in terms of stocks and bonds. However, the purchase of a real estate investment property offers the opportunity to increase your net worth both upon purchase and year after year through appreciation. In addition, rental payments can have a positive impact on your monthly income and cash flow. If you currently have significant equity in your home, let's talk about how you could put that equity to work by funding the purchase of an investment property.

Long-term or traditional rental

A long-term rental property is one that is leased for an extended period and typically used as a primary residence by the renter. This type of real estate investment offers you the opportunity to generate consistent cash flow while building equity and appreciation.6 

As an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.

Short-term or vacation rental 

Short-term rentals are often referred to as vacation rentals because they are primarily geared towards recreational travelers. And as more people start to feel comfortable traveling again, the short-term rental market is poised to become a more popular option than ever. In 2020 alone, in the thick of widespread travel bans, the short-term rental platform Airbnb’s market share of the hospitality industry reached as high as 41 percent.6

Investing in a short-term rental offers many benefits. If you purchase an investment property in a top tourist destination, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. You can also adjust your rental price around peak demand to maximize your cash flow while building equity and long-term appreciation. 

To reap these benefits, however, you’ll need to understand the local laws and regulations on short-term rentals. We can help you identify suitable markets with investment potential.

WE’RE HERE TO HELP

Ready to calculate your personal net worth? Contact us for an easy-to-use worksheet and to find out your home’s current value. And if you want to learn more about growing your net worth through real estate, we can schedule a free consultation to answer your questions and explore your options. Whether you’re hoping to maximize the value of your current home or invest in a new property, we’re here to help you achieve your real estate goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources: 

  1. National Association of Realtors - https://www.nar.realtor/newsroom/housing-market-reaches-record-high-home-price-and-gains-in-march
  2. Forbes - https://www.forbes.com/advisor/investing/what-is-net-worth/
  3. The Washington Post - https://www.washingtonpost.com/business/on-small-business/your-net-worth-is-americas-secret-economic-weapon/2020/08/20/70df5b92-e2d4-11ea-82d8-5e55d47e90ca_story.html
  4. Bloomberg - https://www.bloomberg.com/news/articles/2021-04-09/home-prices-soar-in-frenzied-u-s-market-drained-of-supply
  5. Federal Reserve Economic Data - https://fred.stlouisfed.org/series/MSPUS
  6. Propmodo - https://www.propmodo.com/what-the-growing-short-term-rental-market-means-for-multifamily-real-estate/

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Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

  • Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more.
  • Visit our blog at NextHome Valleywide News for a monthly Phoenix Market Update.
Posted in Real Estate Trends
June 17, 2021

June 2021 Market Update

Should Buyers Wait?

Median Sale Price Up 32% From 2020

June 2021 Market Report

For Buyers:

There’s a lot of conflicting advice for buyers online these days, and there’s no shortage of headlines advising them to wait. Many authors cite the unpleasantness of multiple competing offers and rising prices as the reason to wait out the market. This is despite their acknowledgment that home values are not expected to stop rising in the near future and that interest rates are expected to eventually rise.

It’s undeniably more pleasant to purchase a home when there’s a plethora to choose from and you’re the only game in town, however there’s a reason you may be the only buyer in that scenario. That’s the end of a Seller Market, and signifies the top of price. The top of price is either the beginning of a Balanced Market or a Buyer Market, which either way means the end of exciting annual appreciation rates. There’s a misconception that waiting for a Buyer Market to buy a home is a good idea. This is not true. Home values decline in Buyer Markets because, by definition, there are more homes than buyers to buy them. While that sounds like a magical dream land these days, the reality is that no one likes to purchase a home and watch its value decline or go flat. Ironically, if you want your home to appreciate right after you buy it, then you want to buy in a Seller Market. Perhaps we should rename Seller Markets “Winner Markets”, because both buyers and sellers win in a sense.

Admittedly, the extreme Seller Market Greater Phoenix is experiencing doesn’t feel like “winning”, but there is some relief on the horizon. The market has been losing strength since mid-March, but it’s not plummeting. At it’s current rate of decline, the Greater Phoenix market is still projected to remain in a Seller Market for 16 months. That’s a target of October 2022 before prices stop rising. As the Seller Market weakens, appreciation rates will still be positive moving forward but there will be a little more supply to accommodate demand.

My advice to buyers frustrated with the market, don’t wait for the market to balance out. Take a breath, take a vacation, but don’t give up. Change is subtle.

For Sellers:

Typically this time of year we start talking about the imminent “Summer Slowdown” in contract activity as kids are out of school and people take vacations to escape the heat. Last year, the Greater Phoenix market didn’t experience this typical seasonal trend. As trips were cancelled and people stayed home, there was a large surge in purchase contract activity that continued through the end of the year. This year, as people are getting back to some form of normalcy, it looks like we will see a seasonal slowdown in buyer activity once again. If the trend continues and the market follows previous years, we should expect contract activity to slowly decline through the end of the year. The seasonal slowdown is typically nothing to be concerned about, mainly because there tends to be a dip in

new listings as well. However this year there’s an event coming up that could alter that scenario, that is the end of forbearance for many homeowners. While the vast majority of forbearances have ended with homeowners staying in their home, anywhere from 16%-20% have resorted to selling their home one way or another according to the Mortgage Bankers Association. This could result in an increase in supply over the next few months, adding extra days of marketing time to your listing and possibly a few price reductions. Stay tuned.

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Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

  • Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more.
  • Visit our blog at NextHome Valleywide News for a monthly Phoenix Market Update.
Posted in Market Updates
May 18, 2021

May 2021 Market Update

62.8% of Homes Sold Considered Affordable

Median Sales Price Up 27%; Incomes Up 26%

May Cromford

For Buyers:

Despite all the incredible news about rising real estate prices, a family making the median income of $79,000 in Greater Phoenix could still afford 62.8% of what sold in the first quarter of 2021. The National Association of Home Builders (NAHB.org) assumes that “a family can afford to spend 28% of its gross income on housing.” That means 62.8% of homes sold cost their new owners $1,843 per month or less assuming a 10% down-payment and including principal, interest, taxes and insurance.

According to HUD, $79,000 represents a 26% increase in the local median annual income over the past 5 years; up $16,500 from $62,500 in 2016.

While reassuring, it doesn’t remove the frustrations of competing for homes in this marketplace. Last month, 56% of all sales closed over asking price and half of them went $15,000 over or more to win. For the last 7 weeks, half of all listings that went under contract in the MLS were active for just 6 days or less.

However, the last few months have shown a glimmer of relief for buyers as supply counts actually stopped declining; and in price ranges between $500K-$800K they have noticeably increased 40% since February. Supply is still 69% lower than last year at this time so there’s a long way to go before it’s considered normal, but it’s something.

For Sellers:

You’re not going to notice this, but the housing market has begun to cool down. It’s still hot however, like 400 degrees is still hot despite being cooler than 500 degrees. Sellers can still expect multiple offers and closings over asking price; however it’s important to note that supply has stopped dropping and has been rising in certain price points over $500K. Seasonally speaking, Greater Phoenix supply should be dropping at this time of year, not going flat or rising. When measures go against the season, it can be the beginning of a shift.  The reason this shift will not be noticed is because supply is still much lower than demand, so any slight increase in competition is inconsequential to a seller’s ability to secure a buyer, even one willing to pay over asking price.

One of the early indicators that a market is shifting, however, is the number of list price reductions. For example, supply between $600K-$800K has risen 45% since late February; in the same time frame, the number of weekly price reductions increased 223% and hit the highest count taken in nearly 6 months.  That’s notable. However in other price points where supply has flattened out, price reductions have remained low and stable.

The advantage in any market, not just housing, is being one of the first to know when things are shifting. Especially today, it’s a good idea to consult a Realtor® who can analyze your price point and area so you can make an informed decision regarding the sale of your home.

DOWNLOAD YOUR COPY

Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

  • Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more.
  • Visit our blog at NextHome Valleywide News for a monthly Phoenix Market Update.

 

Posted in Market Updates
May 18, 2021

Do I Really Need an Agent?

Need an Agent?

Today’s real estate market is one of the fastest-moving in recent memory. With record-low inventory in many market segments, we’re seeing multiple offers—and sometimes even bidding wars—for homes in the most sought-after neighborhoods. This has led some sellers to question the need for an agent. After all, why spend money on a listing agent when it seems that you can stick a For Sale sign in the yard then watch a line form around the block?

Some buyers may also believe they’d be better off purchasing a property without an agent. For those seeking a competitive edge, proceeding without a buyer’s agent may seem like a good way to stand out from the competition—and maybe even score a discount. Since the seller pays the buyer agent’s commission, wouldn’t a do-it-yourself purchase sweeten the offer?

We all like to save money. However, when it comes to your largest financial asset, forgoing professional representation may not always be in your best interest. Find out whether the benefits outweigh the risks (and considerable time and effort) of selling or buying a home on your own—so you can head to the closing table with confidence.

SELLING YOUR HOME WITHOUT AN AGENT

Most homeowners who choose to sell their home without professional assistance opt for a traditional “For Sale By Owner” (FSBO) or a direct sale to an investor, such as an iBuyer. In an active, low inventory real estate market, it may seem like a no-brainer to sell your home yourself and save money on the listing agent’s commission. However, you’ll need to weigh your potential savings against the significant effort and risk involved.

One of the biggest problems FSBOs run into is pricing the home appropriately. Even during last year’s strong seller’s market, the median sales price for FSBOs was 10% less than those sold by an agent.This suggests that, while you may think you’ll price and market your home more effectively yourself, in fact you may lose far more than you would pay for an agent’s assistance.

Homeowners who choose to sell to an iBuyer may walk away with less money, too. Also known as Direct Buyers, these companies use computer algorithms to provide sellers with a quick cash offer to buy their home.

However, sellers will pay for that convenience with, generally, a far lower sale price than the market will provide—as well as fees that can add up to as much or more than a real estate agent’s commission. According to a study conducted by MarketWatch, iBuyers netted, on average, 11% less than a conventional sale when both the lower price and fees are considered.

BUYING YOUR HOME WITHOUT AN AGENT

You may be considering negotiating your home purchase directly with the seller or listing agent, especially if you are accustomed to deal-making as part of your job and if you are familiar with the neighborhood where you are searching. However, putting together a winning offer package can be challenging, especially in a multiple-offer situation. And a trusted agent can help you avoid overpaying for a property or glossing over “red flags” in your inspection.

As a buyer, your real estate agent’s commission is paid by the seller and costs you nothing out of pocket. In exchange, you’ll obtain fiduciary-level guidance on one of the most important financial transactions of your life. From finding the perfect home to submitting a winning offer to navigating the inspection and closing processes, most homebuyers find their expertise and guidance invaluable.

IS A REAL ESTATE AGENT RIGHT FOR YOU?

Understand your options when considering whether or not to work with a real estate professional. If you are experienced in real estate transactions and legal contracts, comfortable negotiating for high stakes, and have plenty of extra time on your hands, you may find that a do-it-yourself sale or purchase works. However, if, like most people, you value expert guidance, experience, and professionalism, you will probably enjoy far more peace of mind and security in working with a real estate agent or broker.

A real estate agent’s comprehensive suite of services and expert negotiation skills can benefit both buyers and sellers financially. On average, sellers who utilize an agent walk away with more money than those who choose the FSBO or iBuyer route. And buyers pay nothing out of pocket for expert representation that can help them avoid expensive mistakes all along the way from contract to closing.

STILL HAVE QUESTIONS? WE HAVE ANSWERS!

The best way to find out whether you need a real estate agent or broker is to speak with one. We’re here to help and to offer the insights you need to make better-informed decisions. Let’s talk about the value-added services we provide when we help you buy or sell in today’s competitive real estate landscape.

DOWNLOAD YOUR COPY

Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

  • Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more.
  • Visit our blog at NextHome Valleywide News for a monthly Phoenix Market Update.

 

Posted in Real Estate Trends
May 18, 2021

Is the Real Estate Market Going to Crash?

Real ?Estate Market Crash?

When COVID-related shutdowns began in March, real estate brokers scrambled to respond to the shift and homeowners debated whether or not to put their houses on the market. What followed was a period of unprecedented demand in the U.S. real estate market, which ended the year with increasing average home prices and shrinking days on market. You may be wondering whether the good times can continue to roll on. If you’re a homeowner, should you take advantage of this opportunity? If you’re a buyer, should you jump in and risk paying too much? Below we answer some of your most pressing questions.

How is today’s market different from the one that caused the 2008 meltdown?

The conditions that led to 2008’s recession differed from those that triggered the current downturn—and this time, the housing market is the source of much of the good news. This is in line with historical patterns, as housing prices traditionally hold steady in the face of recession. This time banks are better funded, homeowners hold more equity, and economic activity is focused on financial factors outside the housing market. As industries pivoted to work-from-home, early fears of widespread job loss-related foreclosures have failed to materialize. Federal stimulus and the Paycheck Protection Program also helped to offset some of the worst early effects of the shutdown.

Are we facing a real estate bubble?

A real estate bubble can occur when there is a rapid and unjustified increase in housing prices, often triggered by speculation from investors. Because the bubble is (in a sense) filled with “hot air,” it pops—and a swift drop in value occurs. By contrast, the current rise in home prices is based on the predictable results of historically low interest rates and widespread low inventory. Freddie Mac projects continuing low interest rates throughout 2021, aiding in economic recovery and increasing affordability. This helps offset the effects of high home costs even in markets where real estate might otherwise be considered overpriced. Continuing low inventory should gradually ease as an aggressive vaccination rollout and continuing buyer demand drive more homeowners to move forward with long-delayed sales plans and as new home construction ramps up to meet demand.

Aren’t some markets and sectors looking particularly weak?

One of the big stories of 2020 was the exodus of young professionals and families to the larger square footage and wide-open spaces of suburban and rural markets. However, it appears that speculation about the demise of cities and the condo market was greatly exaggerated. With the first vaccine rollouts, renters have begun returning to major urban centers, attracted by the sudden rise in available inventory and newly discounted rental rates. And buyers who were previously laser-focused on a single-family home are responding to tight inventory by taking a second look at condos

How will a Biden administration affect the real estate market?

Projected policy around housing promises to boost the real estate market. A proposed $15,000 first-time homebuyer tax credit and investments in construction and refurbishment should help to increase affordability and bring eager new home buyers into the market. Overall, according to most indicators, the real estate news looks overwhelmingly positive throughout the rest of 2021 and possibly beyond. Pent-up demand and consumer-driven policies, along with a continued low-interest-rate environment and rising inventory, should help homeowners hold on to their increased equity without throwing the market out of balance. In addition, the increase in long-term work-from-home policies promises to give a boost to a wide variety of markets, both now and in the years to come

STILL HAVE QUESTIONS? WE HAVE ANSWERS!

While economic indicators and trends are national, real estate is local. We’re here to answer your questions and help you understand what’s happening in your neighborhood. Reach out to learn how these larger movements affect our local market and your home’s value.

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Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information.  If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area, and are not sure where to turn . . . we can help!

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Posted in Real Estate Trends
May 18, 2021

Home Design Trends for Seniors

If you’re thinking about modifying your home to create a multigenerational household or make it easier to age in place, look at a recent survey by the American Institute of Architects. 

The AIA’s Home Design Trends Survey (https://bit.ly/37Z0EXs) for Q3 2020 provides a snapshot of residential trends that architects are seeing. It looked at special home features, some of which focus on accommodations for aging.  Some findings are summarized below:

AIA Design Trends

 

Posted in Senior Moments
May 18, 2021

Prep Your Property for Months Away

If you’re a snowbird heading home from a warm spot, Kiplinger https://bit.ly/3laQ6uu   has some advice about preparing your seasonal property for the months it will be empty. 

Here are four basics: 

  1. Have a caretaker.  Find someone to pop in to check on your house or condo every couple of weeks. 
  2. Keep your property is safe. Install an alarm system monitored by actual humans so someone can call the fire department when there’s an emergency. 
  3. Track water. Use free apps like Dropcountr to keep an eye on your property’s water usage while you’re away. A spike in water consumption is a sure sign of a burst pipe. 
  4. Foil burglars. Make your house a tough target for burglars. Don’t leave a car parked outside in the same spot for months, have your mail forwarded, and install motion detector lights. 
Posted in Senior Moments
May 18, 2021

Be Prepared for Caregiving

Until they’re thrust into the role of caregiver, few are really prepared for the job. 

Many more people have suddenly become caregivers during the pandemic because they’ve opted to bring a parent or loved one into their home and create a multigenerational household. Others have pulled loved ones out of long-term care settings permanently.

Maybe you’re now sharing a roof with a senior relative or are responsible for caring for one. 

Though such work can be rewarding, it also entails a considerable amount of emotional, physical, and financial strain. You’re likely to need resources and advice to get you through the tough days and plan for the obstacles that may come. 

How to Be a Caregiver from the New York Times (https://nyti.ms/3gR3mSR) can help. It provides an overview of preparing for caregiving and need-to-know information in five categories—"six things to know,” “prepare and organize,” “finding help,” “self-care,” and “care during the pandemic.” 

Among the “things to know” are: 

  • Respect the autonomy of the person you’re caring for and include them in decisions about their care. 
  • Incorporate moments of joy—music, games, and outings—with your loved one. 
  • Care for yourself by taking short breaks during the day. Meditating and getting exercise can help, and so can saying “yes” when others offer to help. 
  • Find a caregiver support group. 

If you have the luxury of not facing an emergency and you have time to plan for future caregiving responsibilities, do it. 

According to the guide, that advanced planning includes talking with parents and siblings about what to do if something happens—who can provide care, what kind of care your parent wants, and information on finances, doctors, and so forth. For help on getting touchy conversations started, see the Conversation Project (https://bit.ly/2LEX25C).

Ask loved ones to get their paperwork in order well before a crisis. That includes advance health care directives, wills, and information about their finances. 

Also, consider how well suited a loved one’s home is for aging in place and what modifications you make to improve safety. 

After all, the vast majority of those over age 65 say they want to age in place. Yet just 10% of U.S. homes have key features to accommodate older residents, according to Old Housing, New Needs: Are U.S. Homes Ready for an Aging Population? (https://bit.ly/3ah8y1c)   

In addition, research other housing options, even if you plan to care for someone at home. Things change, and if your parent suddenly needs nursing care, you won’t be forced to make housing and long-term care choices amid a crisis. 

Other valuable insights from the guide include self-care for caregivers, watching out for caregiver burnout, and finding respite care. It also features a timely section about caring for a COVID-19 patient.

Posted in Senior Moments