ARMLS RENT Check™ – Dec 17, 2012

Metro Phoenix Rental Market Snapshot

Median Lease $:  $1,095 vs $1,075 of Dec 2011
Average Lease $:  $1,237 vs $1,239 of Dec 2011
Avg. Days on Market:  44 vs 46 of Dec 2011
Rent Check Quotient™: 46% vs 40% of Dec 2011

Over the last 12 months, the rental market is very stable. However, there was some flucturation month-over-month yet the year-end numbers are lined up quite steady comparing to that of Dec 2011.

Looking forward, the rent will increase at the pace of 3-5% year-over-year depending on the area and condition of the properties.

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Pulte’s Waters @ Ocotillo Grand Opening

Pulte’s latest new home site in Chandler – Waters @ Ocotillo opened this Saturday 12/15. Although it was one of those very rare raining days here in the Sun Valley, people were all over the 4 brand new model homes.

I myself alone registered 6 clients in the first day, let alone there are many other agents who brought in their clients for this long waited community in the desired Ocotillo neighborhood. With the introduction of Waters @ Ocotillo by Pulte Homes, the Ocotillo master plan will be built out by the end of 2013.

Waters @ Ocotillo has 2 series priced from $359,990 – $510,990. These are just the base prices and Pulte is asking for $39,750 – $82,000 lot premium for those waterfront lots. These prices are for the 12 lots released this weekend. The new prices will be higher in the next release which is expected in the middle of Jan 2013.

The prices for Water @ Ocotillo are already high comparing to Maracay’s Stonefield just one mile North. Maracay just closed its sale office as I helped my client purchased the very last lot 2 months ago. With the waterfront lot and average 7,200 sf lot for the Cactus series and 10,000 sf lot for the Majesty series, these homes will for sure pump up the home prices in the Ocotillo neighborhood.

Now, a very special way Pulte has implemented to manage the high demand of this community is to award lots to the “highest and best” offer. It’s like those REO homes and Pulte will collect all offers to any released lots over the weekend and cut off at 12:00 PM Wednesday. So that’s about 4 days and half leave the lots on the market to solicitae all possible offers. Then Pulte will review all offers till Friday to inform the winners. There is no lottery nor first come first serve. All will be depended on Highest the offer and Best the terms such as full cash without contingent.

It will be very interesting to see how it plays out this “highest and best” practice. I will be monitoring this implementation very closely and so will many other builders.

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December 15, 2012

Metro Phoenix Housing¹ Market Snapshot
December 15, 2012
City Active Pending Sales DOM² Avg   $/SF
Anthem 158 61 55 69 $109.97
Chandler 731 428 326 54 $118.84
Fountain Hills 215 52 33 117 $165.71
Gilbert 825 539 393 50 $106.41
Glendale 692 481 287 49 $86.39
Laveen 163 136 79 57 $69.23
Maricopa 611 192 133 66 $63.38
Mesa 1,212 755 535 56 $99.63
Phoenix 3,522 2,005 1,345 56 $102.37
Queen Creek 967 443 284 57 $76.83
Scottsdale 1,768 438 424 79 $198.44
Tempe 254 142 110 52 $117.01
Note¹ – Housing = Single Family Homes, Note² – DOM = Days On Market
Data Source: Arizona Regional Multiple Listing Service (ARMLS)
For other cities or area, please call (480)292-8281 or email gchen@az-realty.com
Above data was compiled by Gary Chen, Associate Broker, ABR, CIAS, CNE, SFR
Original data complied by The Cromford Report
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Landlord Quick Tip – Branching Out

When was the last time you had the trees around your rental property inspected?

Do any of your trees have branches that sprout no leaves? Cracks and holes and lean to one side strangely?

It may not always be so easy to spot a sick tree. The tree may appear to be healthy but harbor an unseen danger. A large number of tree- related injuries are from dead or hanging branches that fall at random. Be particularly careful with trees that have branches overhanging heavy pedestrian areas.  If there’s damage or an injury, the law will most likely hold you accountable. If you spot a tree you find suspect, have it evaluated in light of the tenant activity nearby.

Often the tree in question is worth keeping around, but sometimes removal is a safer bet.

Arborists generally recommend having a tree inspected every 1-3 years, but more often in times of extreme weather — like major windstorms, drought, or floods. Be aware that a big storm or monsoon may have cracked or broken some branches prematurely.

The difference between a sick and healthy tree is the same as adding value to your rental or creating a hazard and a lawsuit.

Although expensive, hiring a qualified arborist to look for all those cracks and dead limbs is a good safeguard against tree disasters. Doing your own tree work, or claiming to be a tree expert will likely increase your exposure in a legal battle.

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Fed Plans to Keep Interest Rates Low

The Federal Reserve announced Wednesday that it plans to keep interest rates low as long as the unemployment rate is above 6.5 percent. This was the first time that the Fed has ever identified an exact unemployment rate to be reached before it plans to raise interest rates.

To push rates lower, the Fed will continue to buy $85 billion in Treasury securities and mortgage-backed securities each month until the unemployment rate improves.

Since December 2008, the Fed has held short-term interest rates near zero. The move has helped reduce borrowing costs and helped mortgage rates reach all-time lows.

As of October 2012, the unemployment rate for Maricopa county is only 6.8% while the nationwide unemployment is still at 7.9% level. Thank you Fed!

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Phoenix Among Top 10 Seller’s Markets

Zillow looked at three factors to come up with the list: actual sales prices compared to asking prices, the number of days listings spent on Zillow and the percentage of homes on the market with a price cut.

  1. San Jose, CA
  2. San Francisco, CA
  3. Sacramento, CA
  4. Las Vegas, NV
  5. Phoenix, AZ
  6. Riverside, CA
  7. Los Angeles, CA
  8. San Diego, CA
  9. Seattle, WA
  10. Washington, DC

To read more – http://www.zillow.com/blog/2012-12-11/west-southwest-metros-offer-sellers-strong-opportunities-buyers-best-bets-are-in-midwest-mid-atlantic/

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More Americans Believe Economy Headed in Right Direction

By Pete Bakel

Despite continued uncertainty surrounding the fiscal cliff, Americans are showing increased confidence in the housing market and the direction of the economy. According to results from Fannie Mae’s November 2012 National Housing Survey, such improvement bodes especially well for continued strengthening in the housing sector, which in turn is likely to support overall economic growth. “Consumer attitudes toward both the economy and the housing market continue to gather momentum, with many of our 11 key National Housing Survey indicators at or near …

To read more – http://www.fanniemae.com/portal/about-us/media/corporate-news/2012/5897.html

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ARMLS Subscriber Confidence Index for December 2012

Similar to the Consumer Confidence Index published by the Conference Board, the relevance of the SCI lies in being the only economic indicator derived from the firsthand, up close observations of REALTORS® who operate at the front line of real estate in the Valley.

After heading downward last month in reaction to the Presidential election and the Fiscal Cliff, all three indices righted themselves upward in December. The Subscriber Confidence Index gained 3% to land at 78.6%.  The Present Confidence Index showed a slight increase (0.8%) to 81.3%, while the Expectation Index rose 4.6% to 76.5%.  The Valley and the economy are still facing uncertainty as Congress and the President wrestle with hard issues surrounding mandatory budgetary changes, which if implemented January 1, could seriously dampen Subscriber confidence in the recovery and their individual family income. That all three indices rose in December may signal faith that Congress and the President will arrive at a workable solution.

Similar to the Consumer Confidence Index, the SCI mirrors Subscriber reaction to changing market conditions and their experience with current Buyers and Sellers. This sentiment influences Subscriber investment and strategy regarding their professional real estate activities.

Survey Questions:

  1. What is your appraisal of current real estate conditions in the Valley compared to six months ago?
  2. What is your expectation of real estate conditions in the Valley six months from now?
  3. What is your appraisal of current business conditions in the Valley compared to six months ago?
  4. What is your expectation of business conditions in the Valley six months from now?
  5. What is your appraisal of current employment conditions in the Valley now compared to six months ago?
  6. What is your expectation of employment conditions in the Valley six months from now?
  7. What is your expectation of your family income six months from now?

Results:

Each question is given an index calculated by: (# Better / # Better + # Worse) x 100

  • Current Subscriber Confidence Index is the Average of all seven indices.
  • Present Confidence Index is an Average of the indices from Questions 1,3, and 5.
  • Expectation Confidence Index is an Average of the indices of Questions 2, 4, 6 and 7.

Below is the reading of ARMLS Subscriber Confidence Index for December 2012:

  • Current Subscriber Confidence Index: 78.6% up 3.0%
  • Present Confidence Indxex81.3% up 0.8%
  • Expectation Confidence Index75.6% up 4.6%
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ARMLS RENT Check™ – Nov 19, 2012

Metro Phoenix Rental Market Snapshot

Median Lease $:  $1,100

Average Lease $:  $1,251

Avg. Days on Market:  44

Rent Check Quotient™:  43%

Elevated lease activity is stoked by high foreclosures, which turn home owners into renters, and investor sales into rentals rather than owner occupied. Low inventory also drives potential homeowners to rent rather than purchase.

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Landlord Quick Tip – Don’t Bug Me!

Over the past few years, the U.S. bed bug population has exploded. Regardless where the tenant brings them in from — a recent hotel visit, or maybe they’ve been carrying them from rental to rental, it becomes the new landlord’s responsibility to remove them.

Depending on the environment, bed bugs can live for approx 2 – 12 months without a warm blood meal. We have all heard rumors about where and with whom bed bugs decide to room up,  but the truth is bed bugs don’t know a dirty shanty from a luxury penthouse suite — they can live in either just fine if allowed to thrive.

To avoid an infestation, landlords may consider distributing a flier with the new lease package. It may warn tenants about things like leaving clutter on the floor or how storage areas become a suitable nesting ground.  Yet, a smart landlord will want more firepower for this pest situation.

The main type of pesticides used on bed bugs are “Pyrethroids.” These work in a similar way to DDT, and also similarly, bed bugs have become resistant to the poison. Fumigation and heat treatments are effective but can cost $1000′s. Products such as pyganic dust, and phantom aerosols are said to be rather effective, but usually – legally – require the consultation of an expert.

Don’t waste money on expensive pesticide applications: strong steam cleaning has been found far superior for bed bug removal and has better lasting effects. When a tenant vacates, give the unit a good vacuuming followed by a deep steam cleaning. Don’t just concentrate on the carpets. Bed bugs and their eggs lay in waiting in all sorts of little nooks and crannies.

An intensive vacuuming followed by steam cleaning the unit is a great way to ensure there are no bed bugs left behind from the time your tenant brought home that “cool” old couch from the thrift store.

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