If you read the newspaper or watch the news, it seems pretty scary out there right now in real estate. The reality in the Phoenix Metropolitan area is that homes are still selling. Just last month (October 2007) over 9000 new and resale homes were sold.
However, things have changed from where they were back in 2005 where we had 5000 resale homes on the market and a 2-week market time. Today, here in late 2007, there are more than 50,000 homes on the market and there is a 12-month marketing time. But does this mean you have to give up all hopes of a sale if you choose to put your home on the market? Hardly, just like you cannot apply what is going on today with the weather in Minneapolis to Scottsdale, neither can one do that with various real estate markets. Each market is unique and EVERY neighborhood is a micro market unique unto itself. So if your home is on the market or you are thinking of selling – do not despair!
One area in the Phoenix area that is still very active is Scottsdale Mountain. If you are fortunate to live in this area then you already know that you live in a very desirable area and as a result homes are still selling quite regularly. The key to selling your home in Scottsdale Mountain and in similar “hot” markets is to properly present, price and market your property.
What Happens in 2008 in the Scottsdale, Arizona Real Estate Market?
In Scottsdale, I think we will see higher volumes of sales and see less price erosion. We took quite a hit here – a $850,000 house in late 2005, can now be bought for $700,000. I do not see how home prices can go down much more than this. Maybe they can go down a little more, but any more than just a “touch” is only possible if the doomsayers are correct and every other house sold in 2005 goes into foreclosure. This I am sure is not going to happen.
What I see happening is 2008 is prices going up from today’s prices and everyone settling into our current real estate reality – longer marketing times and fewer creative financing deals. For this to happen buyers who are sitting on the sidelines will need to jump in, because the water is fine!
A Suggestion About Selling Your Home in a Slower Real Estate Market
Another technique that might lend a hand in selling your home is the “reverse” sales offer. What is this reverse sales offer? Let us say a buyer has been in and out of your home at least twice and the buyer agent says – “they really like it, but they want to look some more” and they leave with no hint of an offer. Give them a “reverse offer.” Nowhere is it written in stone that sales offers have to come from a buyer and go to a seller. If you are selling your home, get creative and make an “interested” buyer an offer – a reverse offer. Give them a price range showing that you are willing to work with them. Always remember – price IS the number one objection when it comes to selling your home.
Let us look at an example of a reverse offer. Say your home is priced at $275,000 – offer them a purchase price of $257,000 and that you will pay for the home warranty and throw in the washer, dryer and refrigerator. Perhaps, the price range is up to $262,000 if they do not need the appliances. This kind of an offer might get things rolling and the buyer will most likely get the idea that you are serious about selling. Perhaps this sounds a bit desperate. Well, maybe it is, but what if they sign the contract you offered or counter with something that is agreeable to both of you? Guess what, desperate so what – sold home good for you! Another benefit to this concept is that you find out how serious the buyer is and you do not waste time pursing a dead end.
If Not Investors and Speculators, Who Is Going To Be Buying Homes Now?
Well, with the market cooled off, who is going to be buying real estate? With home prices coming down, there will be more affordable homes to a wider array of people living in the area. What this brings to the forefront is the importance of who can get financed and with what type of financing. This also changes the type of buyer. The new buyer is what I call the “early-adapter-new-era-real-estate-buyers.” These folks recognize that the bottom is here - or it is real close - and now is the time to start looking.
The likes of these new buyers has not been seen or dealt with in a long time, probably something like 20-years. These buyers are more conservative and again looking at 30 year fixed rate mortgages. They are looking at affordability and not necessarily the super upgrades that have been prevalent for quite a few years like the stainless steel appliances, pool, and spa.
This is important to you as a home seller in that the “old” strategy of adding amenities to sell a home right before it is put on the market could back fire. Buyers today will bend on amenities if it means that they can get the house they want and forego the ginger bread which could save you a lot of time and money getting your home ready to sell.
No matter whether you are buying or selling a home in today’s real estate market, it is important to use an experienced and professional Realtor. I believe the Realtor you pick should be good at buyer and seller market analyses and counseling, networking, merchandising and professional transaction management.
For more information about the Scottsdale and Phoenix Real Estate Markets, please contact Mark Tait at MarkTait.com.
This Article is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
