Jon Griffith, Certified Short Sale Negotiator

Sampling of a North Phoenix neighborhood sales history.

It’s hard to say whether or not our market is continuing to correct. I have updated my Market Statistics page this evening and as you can see from the graph below, we are at 2004 pricing. Draw a line from 2001 to our current average sales price today and you’ll see that we’re where we should be. The unrealistic gains are still falling off in certain market areas and people who sell now are still profiting, albeit not nearly as much as they could have.

If you’ll recall, everyone kept saying, “where would you go,” when asked if they should sell back in 2005. Not many people saw that we’d fall back to where we were in 2004. My question for the masses is whether or not we’re going to see an over correction, pushing prices into the 2003 range.

For years and years the real estate market has been up and down, up and down, a cycle that repeats itself every 7 to 14 years on average.  SEVEN TO FOURTEEN YEARS!!!  That’s long enough to start a family and have kids in elementary school AND high school.  Remember how long 4 years was when you were young?

Are you renting?  Are you living at home, just out of college?  Consider your options now because time is running out.  You don’t want to be someone who’s looking back

What is the market condition?

Today, the market is in distress.  We experienced unnatural gains in 2005 and as a result, we had our second bubble of the new millennium.  The first bubble was the outlandish condition of the stock market, a market where people invested in ideas, not in solid products.  The second bubble was the same but with homes.  People investing in ideas.  The idea that you could purchase a home for $100,000 and sell it for $200,000.  Some people were lucky enough to buy at the right time and sell at the right time, but nobody knew it was going to go down the way it has.

What do I mean when I say that the market is in distress?  In 2003, people were buying homes on adjustable rate mortgages because the interest rates were so low.  In 2005 as people saw the prices of real estate skyrocket, they did one of two things.  They either sold their property, or they pulled money out on interest only loans with adjustable rates to buy cars, boats, other homes (bad timing,) you name it.  A remodeling and new builds went nuts.  Those who sold probably had a legitimate reason to sell and weren’t doing it because they were fearful of a market bubble bursting.  Most of us asked the same question: “If I sell now, where am I going to go?”

Here’s why there is so much distress.  Those adjustable rate mortgages were typically 5 years fixed, then adjustable after that.  If you purchased your home in 2003 on an adjustable rate mortgage, then you pulled money out of your house for who knows what, you are probably experiencing hard times now because your mortgage has expired and has adjusted by around 2 points, and now you can’t afford your payment.  To top it off, your home is worth less than you owe the bank and you can’t pay.  Foreclosure is imminent, you must sell short.

Think of Owning as a Long Term Proposition

Before you own, understand that you need to come to terms with the way the market swings.  If you play the stock market and you have been successful trading short term trades, then perhaps you’ll do well managing real estate the same way, but if you cannot handle the swings, don’t buy real estate.  Buying today means owning for a longer time.

Owning a home builds long term wealth.  As you pay your mortgage, every month a little more of that house becomes yours.  Every year, on average, the value of your investment increases.  History shows that the market always increases over time, barring natural disaster or other completely unexpected anomalies.  Scottsdale is quite solid in its growth history.

What Does the Future Hold?

Nobody knows.  Isn’t that comforting.  The only thing we see are patterns, and right now, the patterns of the past tell us that even though our circumstances are unique compared to other times the market has been in distress, we are not spiraling towards our doom.  In 2008, the number of homes sold has increased.  In 2008, the number of foreclosed properties has increased.  By the end of 2009, when we have a new president in office, and people have cooled down, and interest rates have begun to climb, consumers will be more confident about spending, and more money will be invested in long term real estate holdings.

If you find yourself watching this come true and you haven’t purchased your first home by then, it will be too late.

Start looking today.  Downpayment Assistance is going away.  Think about ownership rather than preference.  Buy something! Find a home that might not be ideal and start building ownership so you can look back in 10 years and say, “Thank you…I am so glad you helped me begin building my wealth when you did, because I would have missed out.”

We’ve been waiting, and now is the time. Over the next 3 days, data input functions will not work on the new ARMLS FlexMLS platform which every ARMLS user will be converted to over the weekend. I have been excited about this system since I first heard about it, and since I’ve used it, I’ve been touting it to everyone I come in contact with. It’s very quick and very easy to use, and finally, it’s an application that’s been designed and optimized for use within Firefox, not Internet Exploder. For the industry as a whole, it is a major upgrade to the ARMLS users.

With all of the training that has been offered over the past six to ten weeks, it’s still surprising to me how many real estate professionals haven’t even touched the new system. Personally, I think this is a detriment to their own business, as they will be faced with learning how to utilize the new system on the fly as you, the client, demand from them.

Since the first day of July, I have been working within the new FlexMLS system and have found it to be vastly superior to the predecessor and cannot wait to show you how nice the system is.

If you’re in the market to buy, which all of you should be considering, then let me help you find your home by creating a custom portal for you to enjoy! Simply contact me today and I’ll set your sights on your dream home!

Don’t panic.  It’s not really a blackout, but for the days July 25th, 26th, and 27th, no changes will happen in the MLS system at all.  Your Realtor will have full search capabilities and you’ll be able to see your Portal, but during that time, no changes will be able to occur.

What does this mean?  No new listings, no new photos, no price modifications, no pending changes or active with contingency changes…

…basically, the database becomes READ ONLY during this 3-day period.

Arizona Regional Multiple Listing Service is making a huge change this month from the old Tempo system to the new FlexMLS system, finally!  We have been waiting for more robust search capabilities, faster searching, and better statistics reporting for quite some time.

After evaluating the new system, even though it’s not everything I’d hoped, it is a vast improvement over what we’ve been used to.

It’s possible that your agent is not aware that during the transition to FlexMLS, the only information pertinent to you that will be transferred from the old system (Client Gateway) to the new system (Portal) is your contact data.  If you have been used to logging into your custom website to view properties that have been saved, your searches will not transfer to the new system.

This means that your agent will need to recreate those searches to get the valuable information you need back within your reach.  Of course, if that doesn’t happen quickly enough, I’d be happy to create a custom portal for you with the right criteria to get you back on track with your house hunting.