That is, after you reach an agreement with the home seller (perhaps after a few counter offers back and forth along the way), I will take the signed contract including all counter offers, addendums, and your earnest money check to the escrow company named in the contract. I do this the next business day after an purchase agreement is reached.
The escrow company will cash your check that day or the next day. The funds will be deposited into your escrow account at the escrow company.
Liz and I and Chris are in Des Moines, Iowa visiting Liz’s family.
Liz’s sister has this large set of windows in the dining room overlooking a couple of bird feeders in a pretty little landscaped area. It’s a delightful little spot.
The red flash of a cardinal first drew my eye to the area. Then I was captured by all the activity in the scene, the chipmunks and sparrows.
And then the best… a goldfinch. I don’t know if I’ve ever seen one before.
A goldfinch is to yellow what a cardinal is to red. No wonder it’s the state bird of Iowa.
And then at dusk for the first time in at least 10 years, I saw fireflies. I felt like a kid.
I’m a simple guy. I love this stuff.
And Iowans may think it’s hot but I think 85 degrees is sweet.
Phoenix homes have depreciated 27% from their peak value in June 2006 according to my analysis of the Case-Shiller data.
Let’s say that another way that might paint a better picture for you; Phoenix homes were 36% more expensive in June 2006.
From the August 2007 mortgage meltdown to this latest data for March 2008, prices have fallen 20%, or almost 3% per month.
20% in 7 months. Wow!
The fall in prices lost a little steam in March according to the latest Case-Shiller numbers. From February to March, prices fell 3.44%, a bit less than the decline the previous month, 4.25%.
As always, the Case-Shiller index obscures the large differences within metro Phoenix sub-markets. This website, ArizonaRealEstateNotebook.com, is the best I’ve seen for allowing you to look at real estate trends by zip code and to tease out trends within the metro Phoenix area.
This is a personal record. I’ve had two buyer home inspections find “Visible evidence of wood-destroying insects were observed” in less than a week.
This one was clearly legit.
Newish home. No “visible evidence of previous treatment was observed.”
I found the mud tube where the inspector said it would be. It looked intact, not at all like the falling apart mud tube I saw a few years ago and that I mentioned in the previous post.
Later the inspector called again.
He said he had just faxed me the report and would I like him to send a proposal for treatment.
An inspection report came back Saturday with “Visible evidence of wood-destroying insects were observed.”
The visible evidence was, “subterranean termite shelter tube stains.”
Stains! They didn’t even see any of those dried mud shelter tubes? Just stains?
As is very often the case when evidence of termites is found, the inspection also said that, “Visible evidence of previous treatment was observed.”
That means the inspector could see where holes were drilled into the foundation to pump insecticide under the slab during the previous treatment.
There is no way of knowing how old the shelter tube “stains” are. I’m guessing they are pretty dang old if there were no visible shelter tubes, just “stains.” I’m guessing there is a dang good possibility that those “stains” were there BEFORE the previous treatment and there are no active termites currently.
I don’t really mind. I represent the buyers and we’ve requested that the seller treat for termites. I’m not a termite expert. We have to go with the opinion of the experts.
Termites are common in Arizona. They say if you don’t have termites, you will. Fortunately, they are not very aggressive.
Unnecessary use of insecticides
Nevertheless, I think there are way too many homes being treated for termites that don’t have a termite problem. They HAD a termite problem. It was treated. The problem was solved.
But now every time those homes are inspected the old “visible evidence” from years ago triggers the termite inspector to check “Yes” to “Visible evidence of wood-destroying insects were observed.”
Termite Scam?
I first got hip to this scam a few years ago when a termite inspector showed me the termite mud shelter tube on an exterior block wall. That home too had been previously treated only 2 years earlier.
I asked that termite inspector how he knew that tube was not already there before the termite treatment 2 years earlier. He didn’t know. He couldn’t know. He thought the tube looked like it could be old but he didn’t know. Since he saw it, he had to mark it down as “Visible evidence.”
Fine. Be on the safe side.
So I asked the termite guy if he would remove that single shelter tube after the home was treated. That way the old tube wouldn’t cause a termite inspector in the future to mistakenly believe the tube was caused by currently active termites.
He said, “No.” He would not remove the termite shelter tube after treatment.
Here are two zip codes where the median home sold home price per square foot is similar to 2004 or earlier.
ADDED: I’m learning to use the latest version of Camtasia software and used it to create this video. I messed up and put the same video up twice as you’ll see when you run the video. So, just watch the first half. The second half is the same video.
Butler said he agrees that trustee sales should not be lumped in with routine resales and would be reported separately from now on.
The market has changed so rapidly, he said, that the methodology he once relied on for accurate sales data suddenly has become obsolete.
That’s embarrassing for an economist! That cuts into your economisthood.
I have never included foreclosures (trustee deeds) in my data at Arizona Home Sale News or in the 124 zip code Real Estate Notebooks that you see in the right hand column.
Foreclosures aren’t open market transactions so I exclude them from my data. However, when a bank sells a previously foreclosed home, I include those transactions.
I never would have dreamed that Butler included bank foreclosures in his data. It was obviously an oversight.
However, home sales are not higher in all areas. You can study this press release from ASU Realty Studies to figure out where sales are still slower than last year.
Home sales in Scottsdale, for example, where lower in April 2008 compared to April 2007 while home sales in Avondale more than doubled.
Listings (red line)
The uptick in home sales drew down the inventory of homes for sale. We are probably also seeing the lower median home price discourage some homeowners from trying to sell their homes.
The correction continues. The number of listings available for sale fell 2.3% from mid-April to mid-May. Last year, listings increased nearly 2.8% over the same month.
Conclusion
Clearly, we are seeing the beginning of the end of falling median home prices, although it could be many months before we see the end of the beginning.
“MLS Listings” are measured at one point in time, usually the 15th day of the current month. “Median Price” of homes sold and the total number of home “MLS Sales” are for the entire preceding month.
“For the first time since July 2005, the local resale housing market has posted year-over-year improvement. April had 5,585 recorded sales in contrast to 4,855 sales for a year ago”
The median home price however continued to fall from $220,000 in March to $210,000 in April. That is the lowest median home price since February 2005 which was $200,000. A year ago in April 2007 the Greater Phoenix median home price was $265,000.
Click below to read full press release from ASU. [Read more →]
I’ve been showing homes for 6 days straight with 4 different clients. The results were one contract, one likely contract, and two will wait until next fall before pulling the trigger. It feels like 2005.
I’m starting to see some homes that really surprise me with how inexpensive they are. I haven’t seen many homes like that since 2004.
But that’s not the point of this post.
How not to sell your home
Make it hard to find the home.
When writing a description in the MLS first give the two major cross streets. Great. Standard. So far so good.
Then say something like “take first right onto…” Well, do I drive north, south, east or west from the intersection to find the street?
I ended up trying all four directions and eventually found the home on the last direction I tried.
I bet many Realtors gave up and didn’t find or show the home.
Oh yeah, list the home as being in the wrong subdivision just so it’s not too easy for Realtors to find and show the home.
That bank owned home hasn’t sold. Surprise, surprise.
Canadians planning to buy an Arizona home might want to consider getting their ducks in a row (that is getting their (Canadian) home equity line of credit completed) and putting some of the money they plan to use to buy an Arizona home into a U.S. dollar denominated account at their local Canadian bank to help hedge their exchange rate risk. [add your own punctuation]
Phoenix homes have depreciated 24% from their peak value in June 2006 according to my analysis of the Case-Shiller data.
From the August 2007 mortgage meltdown to this latest data for February 2008, prices fell 17%, or almost 3% per month.
And the fall continues to accelerate but at a decreasing rate according to the latest Case-Shiller numbers. From January to February prices fell 4.25%, slightly higher than the previous month which was 4.23%.
Last month I said, “Clearly, we’ll start to see the decline begin to decelerate in February or March.” Well, I was wrong about February. Let’s see about March.
As always, the Case-Shiller index obscures the large differences within metro Phoenix sub-markets. This website, ArizonaRealEstateNotebook.com, is the best I’ve seen for allowing you to look at real estate trends by zip code and to tease out trends within the metro Phoenix area.
ADDED: Forget everything I ever said about a soft landing.
I’ve had this graph for a while and was planning to do something fancy with it with video but I’ve been too busy with clients. My schedule is super charged the next week so I’m just going to do it the old fashioned way.
Price (green line)
The median home price fell to $210,000 in March from $213,400 February. This during a time of year when prices often strengthen so draw your own conclusion.
It is certainly looking like the median home price may make most if not the entire correction by the end of 2008.
Sales (blue line)
March sales were blah which foreshadows blah sales for all of 2008. It looks, however, like April will be relatively strong which is a silver lining.
Listings (red line)
The lower median home price has not yet affected sales as buyers’ expectations are that prices will decline further.
On the other hand, the lower median home price is starting to have an effect on the inventory of homes for sale as potential home sellers are a lot less enthusiastic about selling their homes when the median home price is $210,000 rather than when the median home price is $250,000.
The number of listings available for sale fell 0.5% from mid-March to mid-April. Last year listings increased 7% over the same month.
And so the supply correction begins.
Conclusion
The lower median home price is not increasing the number of homes sold yet but it is decreasing the number of homes for sale.
“MLS Listings” are measured at one point in time, usually the 15th day of the current month. “Median Price” of homes sold and the total number of home “MLS Sales” are for the entire preceding month.
In San Diego County, California, “Single-family houses in foreclosure sold for a median price of $365,000, compared with a median of $500,000 for nonforeclosures. The 2005 peak in that category was $565,000.”
Throw in a study from a university professor.
In areas with no foreclosure sales, the median house price dropped 5.3 percent on average in the past year, as measured by price per square foot, Gin said. But for every 10 percent increase in the percentage of transactions that were foreclosures, the median price per square foot dropped an additional 3.6 percent.
For example, in La Jolla, which had no foreclosure sales in the first quarter, the median price per square foot on 42 sales was $698, a figure 5.7 percent lower than a year ago. In National City, where nearly half of the 30 houses sold in the first three months of 2008 were foreclosures, the $268-per-square-foot price was down 32.7 percent over the past year.
