October 2020 Report

Homes Under Contract Up 36% / Sales Up 23%
Median Sale Price Up 18%

 For Buyers:
A common complaint in the resale market is “there’s nothing for sale”.  However from July through September, the Realtor® community added 30,340 brand new listings to the Arizona Regional MLS and sold 27,746, leaving just 8,203 remaining listings for sale.  That makes this 3rd Quarter the 2nd best in Greater Phoenix history for closings, falling just 436 sales short of 2005.  If that’s not impressive enough, there are another 13,502 properties currently under contract and scheduled to close in the next 30-45 days; up 36% from this time last year.  With this information we can conclude that there is plenty for sale, but many listings are simply not in Active status longer than 24 hours in order to be counted.  Getting the supply count to rise right now is like trying to fill a bathtub when the drain is wide open.

Over half of all listings that went under contract in the 3rd Quarter were Active for only 9 days or less prior to contract.  To quote the movie “Spaceballs”, that’s ludicrous speed!  As exhausting and stressful as it is for buyers and their agents, supply and demand measures indicate prices in Greater Phoenix will continue to rise well into 2021. Hopefully the short-term pain will lead to long-term gain for those who ultimately win a successful contract.

For Sellers:
Appreciation has accelerated significantly since June of this year.  The median sale price is up 18% since last October, but the current measure of $329,900 is up 12% from where it was just 4 months ago at $295,000. While that’s exciting for sellers, the speed at which homes are selling is causing some to worry they will not find somewhere to go after their home closes.  As a result, Realtors® are dusting off rarely used seller contingency addendums stating that any accepted contract will be contingent on the seller finding a home themselves prior to close.  

Compared to last year, sellers are asking 15-20% more for their homes in all price ranges between $150K-$500K. Between $500K-$1M, list prices are up 9-13% and 3-8% for price ranges over $1M.  The highest percentage of sales over asking price in the last 30 days are occurring between $200K-$400K with a measure of 34-45%.  While that’s a high percentage, it’s not the majority of sales. Most properties are still closing at or below asking price. However for those who did go over asking price under $400K, most winning bids were within $7,000 of list.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC

How to succeed at real estate in 5 complicated steps

I figured since I made my sarcastic fail post, I should make a how to succeed posting as well. Here is how I have succeeded in real estate (as prompted by one of my lovely clients):

1. My continued education in Real Estate! I not only stay abreast of real estate with continued education and fancy real estate designations, I make sure I understand what is happening more broadly in our world. I received my Master of Public Administration from ASU and trained with the Chalmer’s Center in Faith and Finances . I gain information on local issues by volunteering with government and charities.

Volunteering on the City Planning Committee

2. I am an expert in contracts and negotiations. Type “negotiation” into Amazon and it will render more than 20,000 books! While, I have not read even close to that, the amount of books should tell you that there are different practices of negotiation. I have also seen negotiation tactics change during the time I have worked in the industry, so I am able to employ different negotiation techniques based on the person’s style with whom I am negotiating. The Arizona contract has also gone through lots of changes since I began my career. We no longer have to press hard on 5 copies of paper! Contract writing remains one of my favorite parts of my job, and it helps to truly understand it when negotiating.

3. I invest in real estate myself. I have flipped, rented, 1031’d, and Airbnb’d my way throughout my career. I know real estate by first hand, not just on paper.

4. I co-own a building and construction company with my husband. We have been flipping and remodeling in the Phoenix area (and Cottonwood) since 2005! It has helped my with both businesses to be able to keep current of trends and value.

5. Are you really still reading? ;) See previous post on How to fail at real estate in 5 easy steps. I have remained true to myself in my business, and I consider that a success.

How to fail at real estate in 5 easy steps

1. Drive a non-luxury vehicle.

2. Skip Happy Hours

3. Do not send Happy Birthday/Anniversary cards to clients when the computer alerts you to.

4. Do not spend millions of dollars on advertisements for my brand.

5. Do not buy designer brand outfits and accessories.

I joke, but as I am in my 18th year of real estate, I have had most of these things told to me over the course of my career. Maybe it’s partly the rebel in me, but I’ve never wanted to run my business like a salesman. Let me be clear- I AM a salesperson! However, the only time I am selling is when I have a listing (representing a Seller), or when I am selling my Buyer’s offer (negotiating is high in sales techniques). I might be allergic to sales otherwise. I’ve never wanted to feel like I am manipulating my clients, and I have never wanted to steer them. I know that I am a good salesperson, I have consistently been in the top sales ranking of other companies I have worked for, but I highly self-monitor and communicate to make sure I am not using my Salesy super power on my clients. A house is typically the largest investment a person will make in their life, that is not the time to be swayed.

One of my first mentors, decades ago, told me about taking his client out and pushing their daughter on a swing in the nearby park, and asking them if they could see themselves living their lives there. He bragged about increasing their purchase price by several thousand to get them into that house. I left soon after that. (Note: If a Realtor pushes your daughter on a swing, it is not an indicator of them “selling you” on the property. ;} )

With the increase in social media, and increased competition, it was advised in the industry to start making videos, advertise online with lead capture websites, etc. and I tried it. I don’t want to become a dinosaur in the industry. I am still 13 years younger than the average real estate agent, but this has been a life long career for me. I have to keep up as changes happen in the industry. What I found was that it just didn’t fit who I was or how I have always wanted to run my business.

What I have done instead:

I have prioritized education. I am constantly looking to increase my knowledge for the benefit of my clients.

I have loved on lots of people, and hosted lots of parties! It was never in my radar to meet people to increase my sphere! In fact, I helped create a social media group for parents in my neighborhood. It was great! We traded toys, met up for coffee and BBQ’s, babysat each other’s kids, and worked together to help give input to remodel the city park. I could have used social media to create a real estate group, that would have benefited me greatly, but it’s just not on my radar. Real estate is nothing without communities, and I would rather help build communities than sales. I also love parties! Let me make all the sweet tea and food and watch people enjoy themselves!

I have donated my time and money to charity. I know that I am competing with agents who rent out movie theaters for their clients. I polled a few of my repeat clients, and asked if they would like to be treated to perks like that and they told me NO. My favorite charities to donate to currently are The Homeless Prevention program at Society of St. Vincent de Paul , 1Mission Housing , and Phoenix Refugee Connections. They are doing amazing work to create dwelling places for people. :)

My main priorities are still education, community building and service. However, this IS a business, and I am still working on the best way to PROVIDE (yes, I feed, clothe and sports my kids with my income) for my family, while still maintaining true to myself. So, with that said, maybe I do have to step up my birthday card mailing list? Maybe I have to get out there and sell myself more? I have built a successful career running my business how I want to run it, but we all need some shaking up at times. I get contacted almost daily from past clients regarding real estate. I love that they do see me as that ongoing resource. What do you appreciate about how I operate my business (if you’re a client)? If you are an another agent reading this, how do you feel about the a prescribed way of running a real estate business?