Market News

Desert Mountain High School Ranked in Top 500 Schools

Arizona’s reputation for education may not be great, but the state had six high schools land in the top 500 in a new study developed by Newsweek.  One of these high schools was Desert Mountain, located in the highly sought after zip code area 85259.  The report cites, “No. 409: Desert Mountain High School, Scottsdale, which has a 95 percent graduation rate and a 92 percent. It has a college readiness score of 77.4.”

As an experienced and knowledgeable Realtor, I understand the importance of living in an area that has great schools — in fact, it’s why we chose our home, also in the 85259 district, many years ago!  I look forward to showing you homes in this area.  Call me today to schedule an appointment.

To read the full article and learn more about the other top ranking Arizona high schools, please click here.

 

Increases in Home Sales Expected in 2015

Stronger Economic Fundamentals Expected to Drive Increases in Home Sales, Housing Starts in 2015

Improvements in economic fundamentals, notably employment growth among millennials, will fuel significant increases in home sales and housing starts and a modest rise in home prices in 2015, according to CoreLogic‘s 2015 Housing Outlook released earlier this week.

Sam Khater, deputy chief economist for CoreLogic, predicted an increase of 9 percent in home sales and a 14 percent spike in housing starts for the coming year in the report.

“In 2014, the post-crisis economic expansion celebrated its fifth birthday and the main economic drivers of demand, such as consumption and capital investments, experienced steady improvement,” Khater said in the report. “Employment grew at an average of 2.0 percent on a year-over-year basis for the three months ending in November 2014, the strongest rate since the three months ending in March 2006, which was the peak employment growth of the last economic expansion.”

Employment grew at a rate higher than the national average (3 percent, as opposed to 2 percent) for the 25 to 29 age group, which is good news for housing, because this age group is the key first-time homebuyer segment. Steadily falling oil prices, which are down 45 percent since June, provide more economic growth tailwind going into next year. The drop in oil prices reduces energy-related expenses not just for driving, but for residential real estate also, according to Khater.

The stronger economic fundamentals are expected to drive an increase in demand for housing in 2015; sales are expected to jump by 9 percent, up to 5.8 million from the 5.3 million reported for 2014. Housing starts are expected to increase by 14 percent next year, up to 1.1 million. While the upturn in housing starts is healthy, it is still 23 percent below the average of 1.45 million for the last 50 years, Khater said.

Mortgage rates fell below 3.9 percent in December for the first time since May 2013 when a spike in rates caused a slowdown in home sales. The falling rates have not translated to lower prices, however, as price-to-income and price-to-rent ratios remain high. This means home price growth will be muted during the coming year, according to Khater. Mortgage rates are not expected to increase much in 2015 due to low inflation.

Khater said in the report that an analysis of the three main drivers of underwriting (debt-to-income ratios, loan-to-value ratios, and credit scores) revealed that purchase underwriting remains tight despite all the discussion in the last year around loosening the credit box.

“While there has been clarification on GSE loan put-backs and new low down payment products, the impact of both will be fairly modest because the weak originations market reflects not just a modestly tight supply of credit, but very weak demand,” Khater said.

Overall, the lower oil prices could play a key role in the recovery of the housing market and the economy overall. Lower oil prices have led to lower transportation and home energy costs, which not only save consumers money but increase consumer confidence, increasing the likelihood that they will spend money on big ticket items.

FHA Reduces Annual Mortgage Insurance Premium

home-buyer-fhaPresident Barack Obama announced a plan to make home ownership more affordable and accessible for creditworthy individuals and families by lowering the charges associated with annual mortgage insurance premiums. This plan will particularly benefit first-time home buyers and home buyers with lower household incomes.

In response, the Federal Housing Administration (FHA) has reduced its annual mortgage insurance premium (MIP) by 0.5 percentage point, from 1.35% to 0.85%. According to the White House Fact Sheet on this announcement, this reduction will translate into an average savings of $900 annually on their mortgage payment. Existing homeowners who refinance into an FHA mortgage will see similar reductions to their mortgage payments as well.

What does this mean for you? This reduction in annual MIP on FHA loans presents an opportunity for those who may not have qualified at the higher annual MIP amount—aspiring homeowners like  you who have been waiting on the sidelines to buy a new home. In addition, the White House Fact Sheet noted:

  • More than 800,000 FHA borrowers are projected to take advantage of these lower rates in the first year, saving millions of dollars in total.
  • Lowered premiums will create opportunities for 250,000 new homeowners to purchase a home over the next three years.
  • The new home buying activity and benefits of the cost savings to borrowers will help further strengthen the housing market.

Please call me if you have any questions!

Seven New Year’s Pledges for Home Sellers

The New Year is a time for resolutions. If you’re thinking about selling your home in 2015, here are some resolutions that could help boost your chances of a quick sale.

Repeat to yourself: “I pledge to…”

1. “Avoid drastic design changes” – Unless you plan to turn your bold color palette into a more neutral one, then it’s best not to try and anticipate what buyers want in design and décor. The best approach to freshening up your home for sale is to simplify and depersonalize the look and feel so that potential buyers can picture building their own lives there. If you think repainting a bright purple wall, replacing an old toilet or buffing and restaining kitchen cabinets would help the home sell, by all means make these types of updates. Just be sure to keep your personal preferences in check. Your real estate agent can help you prioritize and remain objective.

2. “Stop neglecting the drippy faucet” – This applies to any repairs you might view as minor but actually could be a symptom of a larger system problem. Addressing things like plumbing leaks, poor ventilation and cracks in walls helps everyone avoid surprises from the inspection report and avoid the delay or even cancellation of a sale. When you have the information, you can either make the fixes or work with your agent to adjust pricing during negotiations with the buyer.

3. “Price my home reasonably” – It’s understandable to think your home is the best on the block and worth more than all the others – especially if you’ve invested in key upgrades and remodels. And, frankly, you might be right. But the only way to truly know is to consider recent sales of comparable homes in your area. Your real estate agent can provide you with the latest information and help you list at a competitive price that’s appropriate for your area and the local real estate climate.

4. “Make my home inviting” – This starts with creating curb appeal. The condition of your home’s exterior is a big part of getting buyers in the door. Maintaining the yard, sweeping the porch and driveway, replacing the tattered welcome mat, replacing missing house numbers, and removing clutter all are things that can help improve curb appeal.

5. “Thin out the clutter” – The best time for making tough decisions about what stays and what goes is BEFORE you put your home on the market. By the time the for-sale sign goes up, the home should be clutter free. You can either toss things you don’t want, sell these items, or move the more personal ones to storage. The types of items to remove include your prized knick-knack collection, clothes overflowing from the closets, and family photos. You want all closets and cupboards to appear as spacious as possible. When they’re jam-packed, it gives the impression that storage is limited even if that’s not the case.

6. “Clean like I’ve never cleaned before” – Think about under, behind, around and between. It’s easy to focus on cleaning the major surfaces, high-traffic areas, and areas that are visible. But what about the dust on top of the refrigerator? How about the slats in the window blinds? Have you cleaned the cabinets under the kitchen or bathroom sink recently? Did you notice the cobwebs behind the guest-room door? Look high and low for the dirt.

7. “Nail down my next step” – Don’t let your new plans and new place get lost in the shuffle of selling your old place. Determine where you’ll go next before your home goes up for sale. Are you prepared to move if your home sells quickly? Although it might not be typical, a quick sale is certainly possible. On the other hand, are you prepared if your home doesn’t sell quite so quickly? Be sure to talk with your real estate agent about your relocation needs and timeline.

If you’re planning on selling your home, please contact me.

Biggest Year Ever for Rentals

The rental housing market is dominating the regions housing sector. The housing crash is fueling a lot of the demand from tenants and younger, more mobile workers who have little interest in owning a home. 2013 had the most residential rentals closed through the MLS ever. Over 43,000 rentals closed, up 13.6% from 2012. Currently the percentage of closed sales to closed rentals is 49% and this does not include vacation rentals.

Jay Butler, Director of Realty Studies at Arizona State University thinks this a long term shift. Many people have lost their faith in the economy and their desire to own a home.

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