April 2009

Arizona’s Median Home Sales Price Drops Again

According the Arizona Multiple Listing Service (ARMLS), Arizona’s median home sales price dropped to $119,900 in March. Only 1 year ago the median sales price was $210,000. So over the past year Arizona has experienced a net drop in median price by $90,100. That’s staggering to say the least. That said, I believe their are factors that are skewing this number.

As an example, I was in the cell phone store getting my now destroyed Palm Treo replaced and overheard someone talking about flipping properties. Turns out they were flipping a house in buckeye for $70,000. In my reality I can’t really imagine a home selling for $70,000, let alone dirt. However, in this market certain “super inflated” markets have dropped significantly. I believe this may have led to such a drastic drop of nearly 50%. Of course the valley as a whole is suffering a severe decline, some areas are holding up better then others. Areas such as Tempe and Scottsdale that have little to no room to build have fared somewhat better.

Another interesting factor is that the number of Arizona homes sold per month has increased with 7,636 selling in March. That in connection with a slower rate of decline in the median sales price points to a bottom. It will become much clearer after another quarter of data. Q3 will surely be an interesting time for the Arizona Real Estate market. I’ll report back soon on any updates that I find.

To view the entire Arizona home sales median price report go to http://www.armls.com/pdfs/SoldChartMar09.pdf

Green Apartments?

So I was doing a little bit of research and came across what I thought was an interesting marketing idea. Archstone Apartments which has several apartment buildings in Arizona is doing a promotion connected with Earth day.

“The four-day event being held between 9 a.m. and 6 p.m. from April 23 to 26 at Archstone communities in the West Region will offer prospects a ‘Go Green and Get Green’ savings offer of up to $500 in rent with the signing of a new lease and a chance to win a $1,000 cash prize.”

Has our society become so green conscious that a Green friendly apartment building is now a selling point? Based on this I would have to say “yes.”

Arizona Red Rock Picture

Here’s is picture that captures how beatiful Arizona red rock is. Just another reason to live in this great state.

Renting an Arizona Home

Many people are turning to either rent their home or rent a home while the dust settles in the Arizona Real Estate market. There are some things one should know when doing this, whether your planning on being a landlord or a tenant.

The Arizona Residential Landlord and Tenant Act(ARLTA) lays out some important guidelines and primarily is in place to protect the tenant. It focuses mainly on residential real estate rather than commercial tenancy.

The ARLTA states that a landlord…

• … cannot charge a security deposit of more than 1.5 times the monthly rent.
• … has to clarify what refundable and non-refundable amounts are included in the cleaning deposit
• … is not obligated to place the security deposit in an interest bearing account. This differs from earnest money in a real estate purchase, where a request to place the money in an interest bearing account can be made.
• … is obligated to provide “fit and safe premises”. This is to some degree relative, so should be discussed during the rental process.
• … must provide a tenant 48 hours notice to perform any improvements or construction on the property. Any major improvements should be made during vacancy.
• … must provided a signed copy of the lease to the tenant.
• … must provide a move-in form. This form is used to specify any existing damage. I would recommend scheduling a walk through to thoroughly review the home when both the landlord and tenant are present.
• … must provide written notice that the tenant may procure a free copy of the ARLTA from the Secretary of State’s Office. Click here to view it.

The ARLTA states that a tenant…

• … must use the unit as clarified in the lease agreement.
• … must follow the property rules and regulations.
• … must grant access to the landlord if the landlord has provided 2 days advance notice and the time is acceptable to the tenant.
• … must pay the rent when specified or the tenant can be charged a late fee. Typically, there is a 2 day grace period so that on the 4th day of the month the rent actually becomes past due and fees are assessed

These are just the basic important aspects of renting an Arizona home. You should always consutlt an Arizona Real Estate professional before entering into a rental agreement. Some important aspects I have not addressed include if the agreement is broken. I will follow up on this at a later time. If you have any questions about this or any other real estate related questions, please feel free to email me at lhasson@realestatearizona.com

Buying an Arizona Home

Buying a home in Arizona is actually not as difficult as it can be in many other states. Some states, such as New York, require intervention from a Real Estate Attorney. We are fortunate that in most cases a Real Estate Attorney is not needed. This of courses varies based on the type of real estate purchase, but a typical Arizona home buyer will not need one.

I thought it might be useful to breakdown the steps. Like any new process, understanding the home buying process before starting it, should be useful.

1. Find yourself an experienced agent. The more experience a real estate agent has the more “weird situations” they’ve dealt with. The last thing you want your agent to say is “I’ve never seen this before.”

2. Have an idea of what you want in your new home. Most people really don’t put enough thought into what their looking for. Not only will you frustrate your agent, but you will become fatigued and possibly give up. Sit down, with your spouse/partner if you have one, and establish the required items, preferred items, and the “ain’t no way we’re buying that house” items.

3. Here comes the best part of them all, budgeting and financing. This is the most difficult part most have when buying a home. The consumer in all of us, want the biggest, baddest house you can get. Well guess what, the biggest, baddest house also has the biggest cost to maintaining it. Not only that, do you really need 5,000 square feet. Save the money and go buy that new beamer you’ve always wanted. Better yet, save it Ok, well once you figure out how much you can afford to put down. Talk to your lender and find out what you can afford to buy. You’ll end of with a lender approval form. All this form does is give confidence to the home seller’s you can actually afford to buy their home.

4. Your experienced Arizona Real Estate agent can now go and find you some properties to look at. Depending on your home price and the quality of Realtor you use, they will either send you a list of properties to review. Once you determine a few to go out to, they may go preview the house for you. This is not common in lower end transactions; however, high-end real estate agents will typically go to the house firs, before you even see it.

5. You found it, your new dream home. I’m sure your excited, aren’t you? I hope so, because it get’s so much more fun. Based on the listing price you submit an offer on the home. Maybe a counter or 2 and you finally agree on a price and terms. WooHoo. We’re not done though

6. Based on the purchase contract, you will be given some time to do an inspection. You will do a comprehensive home inspection. Additionally, a termite inspection, environmental inspection, lead based paint inspection, asbestos inspection etc… are available. What additional inspections you do will depend on the area, age and other home factors. Consult with your agent on what is necessary. Keep in mind whatever issues exist presently that are not addressed prior to close will be inherited by you.

7. The house has a few problems, but the sellers are willing to address them. Great! So now title does its magic. They will research the title and find out if it is “cloudy.” A cloudy title is a one that has outstanding liens. Some liens are OK and some aren’t. If it’s the current owners liens, no biggie, they’ll be settling when you close. If their the homeowner’s from 15 years ago, you got a problem. Why? Because, you’re title company will not insure the title, which means you get to assume a whole lotta liability.

8. With luck you get approval on the title and you’re mostly “home free” at this point. It’s time to close. You go in, give them a cashiers check for the downpayment, break your wrist from signing about 10k documents, and voilà you own a home!




Congratulations if you made it this far. I wish you the best of luck in your new Arizona Home.

The Little Known Real Estate Recovery Fund

I was thinking today about all the “small” things that people don’t know when it come’s to Arizona Real Estate. While glancing through some real estate reference material I recalled that Arizona has a Real Estate Recovery Fund. Most people don’t even know this fund exists. The fund’s purpose is to recover money or value lost in a real estate transaction as a result of misrepresentation or fraud by the real estate agent.

To be eligible to recover from the fund a person has to gain civil judgment against the agent or real estate broker. They also must be unable to recover the money directly from the agent or broker. The maximum amount that can be recovered is $30k per transaction and $90k based on one real estate agent license.

There are several steps you would need to go through in order to eventually take money from the fund, so it is typically only used as a last resort.

Also, it should be noted the Real Estate Recovery Fund is funded by fees paid by licensed agents and brokers. Agents must pay $10 and brokers must pay $20.

Phoenix Area Median Home Price $139,000

It’s astonishing to believe that the median price a person could expect to pay for a home in the Phoenix metro area is $139k. Just a few years ago you couldn’t buy an Arizona home for less then 200k. Not only that people received dozens of contracts on their home only moments after listing it. The biggest challenge real estate agents had was getting a contract in quick enough for fear of another home buyer.

What a change since then. Homes are now on the market for 30 days or more on a consistent basis. Arizona home buyers now have the leverage to get fees and repairs paid for with ease.

As a true Phonecian I have seen the Phoenix valley go through a lot of growing pains, but this by far is the “worst.” I remember when Gilbert Arizona was just a city with cow farmers. Now it’s a relatively large city with about 207k residents. Even more surprising is Anthem. Who would have thought that someone would Master Plan a home community in what I and many others would have considered “the middle of the desert.” But then hey, isn’t the whole valley in the desert. Oh yeah, not looking forward to 115 degree Arizona heat in the next 3 months.

That said, I am very optimistic that a bottom will occur in the Arizona home market and we will see growth again. Arizona is not done growing yet, that I’m sure of.

Phoenix Home Sales Up 62.4%

According to RE/MAX International home sales in the Phoenix area are up an astonishing 62.4% from last year.

There are many reason that the Arizona real estate market is coming back online, but one of the biggest is the large number of foreclosure that have and are hitting the market. Since Arizona experienced such a huge boom in home pricing and construction we also have experienced a huge downturn as well. Homes that were once $300,000 are now selling at trustee sales for $150,000. Its incredible, but a necessary evil to realign the Arizona home market.

Another big factor in the increase in home sales are the tax incentives by the new administration.

From the IRS.gov website
“First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.

Available for a limited time only, the credit:

• Applies to home purchases after April 8, 2008, and before July 1, 2009.
• Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

Eligible taxpayers will claim the credit on new IRS Form 5405. This form, along with further instructions on claiming the first-time homebuyer credit, will be included in 2008 tax forms and instructions and be available later this year on IRS.gov, the IRS Web site.

If you bought a home recently, or are considering buying one, the following questions and answers may help you determine whether you qualify for the credit.”

Well whatever the reason, light is starting to shine on the AZ home market

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