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Phoenix Real Estate Market Report ~ October 2018

The number of new listing in the month October 2018 is 9,873 listings (up 650 from last month) which is slightly lower than last year at 9,974 listing in October 2017. The overall number of active listings is 19,230 which is 1,204 less listings than in October 2017. The whole year of 2018 there have been less listing on the market than in 2017. As for the number of sold transactions, we had fewer transactions in October 2018 of 7,358 transactions (down 66 from last year) but for most of the year of 2018 we’ve had more transaction than in 2017. This lower supply of listing and higher amount of transaction is causing real estate prices to continue to appreciate.

The Phoenix Housing Market ended 2017 with an overall annual appreciation rate of approximately +9.0%. As of January 2018 the Phoenix market has only appreciated 3.6% where this lack luster appreciated rate was hindered by a sharp drop in price from $333,392 in June 2018 to $320,710 in July 2018. Since July 2018 there has been a second uptick in the average sold price from $320,710 in July to $326,390 in October which is an increase of only +1.8%. We experienced a similar uptick in price in 2017 but this uptick did not begin until October 2017 to finish off the year at a +9.0% appreciation rate. Since November 2017 (12 months ago), the average days on market has decreased approximately -11.4% (down from last month) and the number of sold transaction has increased approximately +1.9% (up from last month).

Since January 2018 we have seen four sharp trends: The average days on market have decreased -20.0%, the number of sold transactions has increased +18.4%, months of inventory have decreased -33.1% and number of new listing has decreased -6.7%. These are all strong trends but the sold average price has not appreciated as much as last year which could be caused by the rise in interest rates. Historically, 19,230 homes for sale represent the lowest number of homes this market has seen for over a decade. This low number of homes for sale indicates we are in a seller’s market (low supply and increased demand). Property owners are not putting their homes on the market because they are holding off to accumulate additional equity from the market. Hopefully, this roller coaster will come to a slow end instead of everyone wanting to put their homes on the market at the same time like in 2008.

Real estate prices will continue to increase and interest rates are planned to increase in 2018 so if you are thinking about buying a home this year will be the time to buy before you get priced out of the market. Give us a call to discuss your best buying or selling strategy, TODAY!!

Credit Inquiries: Why Lenders Care

FICO scores are calculated using an algorithm originally developed by The FICO Company. This algorithm considers five different characteristics of a credit file. Of course, payment history carries the most weight, contributing 35% to the total, three-digit score. The second most important relates to current account balances and credit limits. Scores need consumers to use credit before scores can be properly calculated so having a balance is important. 30% is attributed to this category and the ideal balance appears to be around one-third of credit lines. Keeping balances around this one-third target causes scores to improve.

How long someone has used credit is also a factor, making up 15% of the score and the final two of the five both contribute 10%. Types of credit used and credit inquiries. Types of credit boosts scores when consumers responsibly use different types of credit and credit inquiries logs in the number of times someone has requested credit. But about that 10% for a credit inquiry, if it makes up such a small part of the total score, why do lenders care about this category?

For one, requests for credit over the past year or so won’t hurt scores but making several requests for different credit accounts in a relatively short period of time can indicate the consumer is going through some sort of financial difficulty, perhaps being laid off or otherwise a loss of regular income. Such requests for credit can cause scores to drop, but still, it’s just 10% of the total score.

Each time a consumer makes a request for credit, that request is recorded in the credit file. Again, an occasional request is fine. What can cause a loan application to stop dead in its tracks is to see a recent credit inquiry on a credit report but no indication any account has been opened. It usually takes about 30 days. That can mean someone opened up a credit account or maybe bought a car and financed it but the amount borrowed and the terms haven’t yet made it to the credit bureaus. When a lender looks at a credit report with recent inquiries, there is no way the lender can properly determine a consumer’s new monthly payments. Someone with relatively high debt ratios could take out a new car loan which could push ratios so high they can no longer qualify.

When this happens, the lender will request the borrower to explain the inquiry and verify that no account was opened and if an account was opened, to send in documentation regarding the terms of the new account. That’s why loan officers tell you that once you apply for a mortgage, just sit tight with any other credit requests until and after your loan is ultimately funded and closed.

Position Realty
Office: 480-213-5251

Why Price Shouldn’t Be the Only Driver in the Search for Your First Home

Buying your first house? You’re likely driven mainly by budget, but there are some other important considerations you may not have thought of that can help you find the perfect place. Not only can these tips help you find a home that really suits your lifestyle, but also helps you afford to live there comfortably.

Can you afford to heat and cool it?
You may only be thinking of home size in terms of the number of rooms or square footage you want. But, in many cases, a larger home costs more to maintain. More space means more space to heat and cool. Although, a home that’s newer or that has updated systems can help defray costs because it’s more efficient. Your real estate agent may be able to get an idea of the monthly utility costs so you can have this information up front.

Who’s going to mow the lawn?
If you’ve never had your own lawn or garden, you may not know if you have a green thumb or if you’ll regard the time it takes to care for it as a pleasure or a bummer. Then again, if you’re already dreading the idea of having to spend a couple hours out there each week, perhaps a single-family home isn’t for you. Yeah, you could pay someone else to do it, but you’re already stretching to buy your own place, right? Perhaps the lower-maintenance lifestyle offered by a condo or townhome is the best option for you.

What’s good for resale?
Are you thinking about how easy it will be to sell your home when you’re just about to buy it? Maybe not, but, the truth it it’s always a good idea to think like a seller when buying. Chances are, this starter home won’t be your forever home, and the same questions you have about the floorplan or location are likely the questions would-be buyers will be asking when you go to sell.

As it relates to the floorplan, it’s a good idea to think beyond what you think you might want and consider what’s popular in the area. If homes with downstairs master suites sell especially well and you haven’t considered that plan, this info may make you rethink your strategy.

How close are the schools?
Dying to walk your kids to and from school every day? That’s the dream for many a parent. But what you might not be envisioning is being able to watch—and hear—every kid in the school walk by twice a day, every day. What seems like a super-convenient location right on the walking path to the elementary school may just turn out to be too much of a good thing if it impacts your privacy and peace of mind.

Did anything weird happen there?
Yes, the seller will be required to disclose physical defects and also defects that create the potential for stigmatization. “What you’re talking about is the issue of ‘psychological damage’ to a property, to be distinguished from ‘physical damage,’” said NOLO. “In some cases, the psychological damage is so great—such as after a violent or highly publicized murder or suicide, or widespread reports of haunting—that the house is considered ‘stigmatized’ and therefore less valuable. In most states, the owner would indeed be expected to disclose a defect causing the house to be stigmatized, so that buyers could adjust their expectations and purchase price accordingly.”

A natural death in the home, however, is not generally something that needs to be disclosed. If that’s the type of thing that could keep you from wanting to live there you, just ask. “If a prospective home buyer asks you outright about whether anyone has died in the home, you cannot lie (unless you want to risk being later sued for fraud),” they said. “Also, be prepared for any buyer who is interested in this issue (or shall we say obsessed by it?) to find out the information online, at a site like DiedinHouse.com.”

Position Realty
Office: 480-213-5251

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