February 23, 2013

Metro Phoenix Housing¹ Market Snapshot
February 23, 2013
City Active Pending Sales DOM² Avg   $/SF
Anthem 152 82 43 72 $114.09
Chandler 694 497 272 62 $113.47
Fountain Hills 244 53 49 96 $183.28
Gilbert 752 565 327 63 $108.60
Glendale 559 494 295 59 $89.15
Laveen 158 141 66 78 $66.03
Maricopa 565 263 160 92 $64.48
Mesa 1,184 853 471 65 $101.69
Peoria 530 399 223 66 $103.66
Phoenix 3,101 2,116 1,243 61 $103.91
Queen Creek 870 524 254 74 $76.68
Scottsdale 1,850 546 353 105 $197.44
Tempe 204 148 86 61 $116.26
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 – Common Landlord Tenant Dispute

The definition of normal wear and tear and damage is often a sticking point between landlords and tenants. Here are some tips to help defuse those tense discussions:

Normal Wear and Tear vs Damage

As a landlord state law allows you to collect a security deposit, but the deposit must be refundable if the property is in the same condition as move in, minus normal wear and tear. This means landlords may only charge tenants for damage done to the property.

Here are a few examples of Normal Wear and Tear:

  • Worn carpet and linoleum
  • Cracks in walls caused by settling
  • Faded or blistered paint

Here are examples of Damage:

  • Stained carpet and linoleum
  • Holes and dents in walls caused by accidents or carelessness
  • Drawings on walls or unapproved painting by tenant

Although normal wear and tear vs. damage can be hard to define, there are a few things you can do to protect yourself from any confusion.

As with most things, communication is the key: if both you and your tenants are clear about the condition of the unit at move-in, the importance of promptly reporting needed repairs, and expectations at move-out, the tenancy and the end of the tenancy will be smoother.

Insist on a walk-through with new tenants. At the walk-through the tenants will have an opportunity to note in writing existing damage and wear and tear in the rental. Also, take dated photographs to keep on file. This way both the landlord and tenant are protected. The tenant can’t be charged for damage that was not documented in the walk through, and the landlord has picture proof of the unit’s condition at move in.

Have your lease outline the requirements for taking care of the property and promptly calling for any repairs needed. Make the tenants aware if they do not not notify the landlord in a timely manner of any issues, they can be charged for any damage that occurred from their negligence.

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More Home Owners Have Equity Again

With home prices inching up, more Americans are emerging from being underwater — owing more on their mortgage than their home is currently worth.

Several reports have tried to estimate how many home owners came out from being underwater last year. CoreLogic reported that for the first nine months of 2012, about 1.4 million borrowers moved above water. Zillow recently estimated that 2 million home owners last year emerged from being underwater. And J.P. Morgan Securities reported that the number of underwater home owners fell from 11 million to 7 million last year.

However, estimates can vary for a number of reasons. Underwater borrowers can move back to positive equity by paying down their loan principal or by seeing prices rise. Properties can also ‘exit’ negative equity when they go through foreclosure or when the bank approves a short sale. In those cases, borrowers aren’t being returned to positive equity — instead, they simply cease to be borrowers.

Having that said, many of our clients sticking to their homes and mortgages since the housing market crash are now getting out of water. First is that they paid down 20% or more in the beginning, so they were not under water that much, maybe 20% or so. Secondly, the market has come back up 20% or more since it touched the bottom in September 2011. So, either they have come out of water or they will pretty soon.

The next thing is to get refinanced as soon as possible to take the advantage of the still low rates. Do your reality check and give us a call if you need any help.

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Half of all Renters Spend 30% or More Income on Housing

Freddie Mac reports that residents of apartment communities that include five or more rental units currently make up 15 million U.S. households — a figure that is expected to climb with shifting demographics and housing preferences.

Such factors as demographic trends, household formations, and higher credit standards for home loans are driving the increase in rental housing.  At the same time, though, affordable rental housing is becoming more elusive in certain parts of the country because of gross rent, or rent plus resident-paid utilities.

More than half of all people who rent spend more than 30 percent of their income on housing — an increase from 40 percent in 2000.  Low-income households tend to spend even larger portions of their incomes on rent, based on the U.S. Census Bureau’s American Community Survey 2000-2011.

Based on the stats, we are watching closely the rent/income ratio in all of our rental applications.

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Metro Phoenix Among 5 Best Markets for Home Sellers

Spring buying season is just around the corner, and sellers have gained an advantage in more markets across the country this year. With less competition from falling inventories, list prices have risen in many areas. Realtor.com recently identified the five best places to sell in 2013:

  1. Sacramento, Calif.: Inventories have declined here by 67.20 percent in January year-over-year while median prices have increased 40.2 percent.
  2. San Jose, Calif.: Median prices have risen nearly 25 percent year-over-year, and it ranks fourth in the inventory for tightest inventory. A strong economy is giving a boost to rents and home prices.
  3. San Francisco: Inventory shortages have created a seller’s market here with list prices rising more than 20 percent in the last year.
  4. Phoenix-Mesa, Ariz.: List prices have risen 23.59 percent year-over-year, while inventories have fallen nearly 16 percent.
  5. Washington, D.C.: List prices have increased about 16 percent in the past year, while inventories have fallen 30.77 percent. Washington, D.C. is one of the country’s priciest markets with a median price of $429,000.
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More Jobs Coming to Sun Valley

In addition to the 800 new jobs created by the new Chandler Premium Outlets, 900 jobs offered by Well Fargo Mortgage division earlier this year, there are more jobs coming to the Sun Valley —

State Farm to Bring Thousands of New Jobs to Tempe

State Farm Insurance is planning to build a massive regional headquarters, about four or five office buildings, plus parking accommodations, along Tempe Town Lake that is slated to bring thousands of new jobs to Arizona. It will be roughly 1 million-square-foot campus on an approximately 18-acre site that would eventually house about 5,000 to 7,000 employees.

Stealth Software bringing 200 jobs to Phoenix area 

Stealth Software BV, a Netherlands software company, is locating its U.S. headquarters in the Phoenix area. This move will bring as many as 200 jobs and a $2 million capital investment to the Phoenix area. Stealth Software currently has temporary offices in Scottsdale located at Bell Road at the Loop 101. The company is considering other Valley locations for its permanent U.S. base.

Dignity Health building $44 million hospital in Glendale

The new hospital will be called St. Joseph’s Westgate Medical Center. It will be built on a 35-acre campus near Loop 101 and Glendale Avenue, and is scheduled to open in early 2014. The hospital will initially employ 200 staff and will have the capacity to expand to 200 inpatient beds as demand grows.


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Landlord Quick Tip – Don’t Take Any Chance!

Restoring a rental unit after a tenant leaves, and getting a new tenant in is a very busy time. But combining routine maintenance with property tours can quickly lead to disaster for a landlord.

When giving tours to prospective renters while the property is being worked on, pay extra attention to keeping everyone safe. Arrive ahead of the scheduled time and walk through the property, outside and in, to look for hazards — like tools, chemicals, or other dangerous conditions. Have workers take a break for a few minutes, or take other necessary steps to make the tour safe.

Check closets, kitchen cabinets and other concealed areas to make certain nothing will fall out and injure a would-be tenant.

Follow the same advice when showing a property while the current tenant is still there. Arrive early and make sure there are no hazards like slippery floors, fumes or wet paint, and ask tenants to confine or temporarily remove pets.

Make sure smoke and carbon monoxide detectors are still functioning during this period.

Don’t overlook hazards outdoors, like slippery steps or falling debris.

Also, make sure the property insurance remains in effect, and that any contractors working on the property are insured.

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ARMLS RENT Check™ – Feb 19, 2013

Metro Phoenix Rental Market Snapshot

Median Lease $:  $1,075 vs $1,095 of Jan 2013, -1.8%

Average Lease $:  $1,237 vs $1,237 of Jan 2013, flat

Avg. Days on Market:  55 vs 47 of Jan 2013, +17%

Rent Check Quotient™: 49% vs 41% of Jan 2013, +19.5%

Rent Check Quotient™ (RCQ™) is derived by dividing the # of leases by the # of closed sales

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

All above stats are for single family homes rentals. Condominium and apartment rentals are not included.

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February 16, 2013

Metro Phoenix Housing¹ Market Snapshot
February 16, 2013
City Active Pending Sales DOM² Avg $/SF
Anthem 157 79 42 65 $117.40
Chandler 699 489 251 67 $112.60
Fountain Hills 246 45 50 85 $182.22
Gilbert 736 573 332 63 $108.77
Glendale 581 491 278 61 $89.04
Laveen 160 135 65 86 $66.45
Maricopa 566 261 142 80 $64.72
Mesa 1,188 829 450 62 $102.49
Peoria 539 389 215 64 $103.99
Phoenix 3,101 2,122 1,222 58 $107.50
Queen Creek 897 494 235 73 $75.58
Scottsdale 1,860 514 332 98 $194.88
Tempe 211 140 89 66 $117.24
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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Mortgage Rates Hold Steady This Week

Fixed-rate mortgages stayed mostly flat last week (2/11 – 2/15), remaining near their record lows and continuing to support housing demand and translating into a pick-up in home prices in most markets, according to Freddie Mac.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 14:

  • 30-year fixed-rate mortgages: averaged 3.53 percent, with an average 0.8 point, holding the same average as last week. A year ago, 30-year rates averaged 3.87 percent.
  • 15-year fixed-rate mortgages: averaged 2.77 percent, with an average 0.8 point, also holding the same as last week. Last year at this time, the 15-year fixed-rate mortgage averaged 3.16 percent.
  • 5-year adjustable-rate mortgage: averaged 2.64 percent, with an average 0.6 point, rising slightly from last week’s 2.63 percent average. Last year at this time, 5-year ARMs averaged 2.82 percent.
  • 1-year ARMs: averaged 2.61 percent, with an average 0.3 point, rising from last week’s 2.53 percent average. A year ago at this time, 1-year ARMs averaged 2.84 percent.
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