REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
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Dwindling home inventory squeezes affordability BY PAUL MARYNIAK GSN Executive Editor
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s the inventory of available homes continues to shrink throughout the Valley, a new national study of rental housing indicated - finding either an affordable house or apartment is getting more difficult. The Joint Center for Housing Studies at Harvard University said the typical renter is becoming more well-to-do and the apartment construction industry is catering to this growing market sector by building more units considered “luxury” rather than affordable. “Vacancy rates are at decades-long lows, pushing up rents far faster than incomes,” the study said. “Both the number and share
Melanie Nemetz
of cost-burdened renters are again on the rise, especially among middle-income households. “These conditions reflect fundamental market changes since the recession, including an influx of higher-income households, constraints on new supply, and substantial losses of low-cost rentals.” The conclusions in the Harvard study differ from the analyses by apartmentlist.com and zumper.com, which said Phoenix is still more affordable than many cities across the country – although both list Gilbert with one of the highest average rents. The issue of rent costs is becoming more significant in the Valley housing market as the inventory of resale and new homes continue to reach what the Cromford Report recently called “shocking” levels.
A stunning TW Lewis home in the award winning community of Power Ranch Comming Soon for $660,000
“The crucial issue for the housing market in Greater Phoenix is a chronic and severe lack of inventory,” the Cromford Report declared in January. Two weeks ago, the report stated people looking for a home “unexpectedly got far fewer new listings than normal” as February began. “I am starting to run out of adjectives to adequately describe the current state of supply,” the Cromford Report continued. “It is almost (but not quite) unheard of to see supply drop between Jan. 1 and Feb. 1, but active listings without a contract are down
1.4 percent for the month. They are down a colossal 35 percent compared to a year ago.” It also had this to say on prices, calling current price trends “muted.” “You should not expect it to stay this way,” the report said. “The spring selling season has just started and by the time we get to June, a significant upward adjustment in pricing is likely.” It also said as demand for homes rise, “there is no sign of more supply coming
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Our extensive, high quality marketing of your home combined with our thorough preparation of listing the home for sale, will help your home sell faster and for more money. Here is a sample of the marketing for our listings: ◆ Home Staging Report by Interior Designer & Stager ◆ Professional video of home ◆ Professional photos of home ◆ Twilight photos ◆ Community photos ◆ Aerial drone video/photos ◆ 3D Interactive floor plan - Matterport www.fosteringre.com Each office is independently owned and operated ◆ Open house first weekend on the market
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REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
In this market, you need a Realtor more than ever BY MINDY JONES NEVAREZ GSN Guest Writer
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hings are getting interesting, so let’s just get to the point. It’s time we talk about buying and selling houses, making moves and taking advantage of a market almost too good to be true. And if building wealth through real estate has ever been a fleeting thought of yours, snag that thought right now, strap it to the table and pull up a chair because fleeting real estate thoughts have just been promoted to primetime headlines. If you are sensing a sense of urgency in my tone, you are spot on because there is a massive sense of urgency for anyone looking to take advantage of the low prices we are seeing in the market today. Low prices? I can hear you shrieking from my office on Higley and Warner. Yes, low compared to where they are headed.
Obviously, sans the crystal ball which they still have not authorized for Realtor use, clues to a fast-paced market with appreciation expected in the double digits for 2020 not hidden but blasted all over the numbers if you know how to read them in the local market trend reports. The available supply of homes for sale has dropped since the beginning of the year – opposite from our typical trend of increasing supply come the new year. This, on the heels of an exceptionally low inventory market to begin with and an increase in sales volume Valley-wide by 21 percent. With volume up and supply down, it’s no wonder Gilbert comes in as the third hottest market in the Valley with 60 percent less inventory than we had going into February 2019. In addition, 182 new multifamily units have been obtained by builders trying to catch up after a decade of under-building for our population growth and companies like Deloitte, the University of Ari-
7-figure deals
This five-bedroom, 5,028-square foot home on StuartAvenue in Gilbert (above) recently sold for $1.4 million while the 4,082-square foot, four-edroom home on East Lark Court, Gilbert, garnered a $1,1 million sale price. Both occurred within the last four weeks. (Special to GSN)
zona’s College of Nursing and Park University are expanding their footprint and choosing Gilbert as their home. According to Gilbert’s State of the Town last month, residents continue to choose Gilbert for its safe neighborhoods, high quality of life, and lots of housing options. So where are all these people going to live? Builders are fighting tooth and nail for available land to build on and features, upgrades and incentives are endless. There’s no marketing being done of these communities because they don’t need to. So, you need someone who is well versed in what’s available, has access to move-in ready options, available floorplans and the knowledge of how to choose a premium lot. Inspections, framing and electrical options, design center visits – if I sound like I’m speaking a foreign language, raise your hand. Resale properties priced to sell are here one day and gone the next with anywhere from one to 30 offers in a week-
end. Seen a line around the block in your neighborhood recently? It was probably for an open house and there probably weren’t even any freshly baked cookies. This market requires a translator, tour guide, counselor, comedian, school teacher, and the negotiation skills of a kid in a candy store on your side. How about our sellers? Have a home backing to something unsightly? Thought the road wouldn’t be quite as loud as it ended up being after it went from two lanes to four lanes and got a stoplight? Ended up being next to light commercial you didn’t think would ever go in when you first built? One of the challenges of being a pioneer in Gilbert means you might have some, well, challenges you didn’t anticipate when selling. When’s a good time to sell with challenges? When there is so little out there
along to satisfy it. In this situation, the market is likely to become both frenzied and frustrating.” Phoenix dropped by 47 percent and the decline in East Valley municipalities was equal or worse. For example, inventory in Tempe dropped 40 percent between January 2019 and last month, while the percentage decline in Mesa was 45 percent, Chandler, 57 percent and Gilbert, 60 percent. Meanwhile, somewhat similar trends are occurring among rental units nationally, according to the Harvard study. “When rentership rates hit bottom in 2004 during the homeownership boom, 18 percent of renters earned $75,000 or more and 42 percent earned less than $30,000,” the study said, adding the disparity “narrowed considerably” by 2019 with high-income households accounting for 23 percent of renters and low-income households for 38 percent. “Renting has also become much more common among the age groups and family types traditionally more likely to own
their housing,” it said, noting more people in all age groups, including seniors, had increased between 4 and 5 percent. “The increase in renting among high-income, older, and larger households reflects fundamental shifts in the composition of demand,” the Harvard study said. The study also reported median rent for unfurnished apartments was $1,620 in June 2019 – a 37 percent increase over the median in 2000. Whitney Airgood-Obrycki told Realtor. com people who rent “increasingly need to have more money to do so” because most new apartment complexes only offer pricier, luxury units because they appeal to young professionals and more affluent older tenants who are downsizing or retiring “Leases in nice buildings present an attractive alternative for white-collar professionals struggling with student debt or those living in ultrapricey cities having trouble coming up with a down payment,” Realtor.com said.
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GILBERT SUN NEWS | FEBRUARY 16, 2020
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even your challenges look like icing on the cake in a market appreciating in a town people WANT to live in. This isn’t to say buyers aren’t picky when they are paying a premium on the house they are buying. I could write a whole book on the skill it takes to help buyers and sellers to speak the same language in a low inventory market. It doesn’t have to be painful but it can take some patience, tenacity and a skilled advisor. And our investors? Are they simply priced out of the game? Absolutely not! Consider rental prices actually dropped at the turn of the century due to
an abundance of false demand. This means we were building and we were selling but it wasn’t to people planning on living in the property OR renting it. It’s why when investors put their rentals on the market, they just sat there. Rental prices are now increasing nearly 10 percent annually, depending on the neighborhood. There is a shortage of places for people to live in whether they are looking to take out a mortgage or pay someone else’s, so picking up a 3/2 you can rent for $1,600-$1,800 in Gilbert can still be very lucrative for an investor. Finding off-market properties takes a
Meanwhile, apartmentlist.com, which tracks millions of apartments across the country, had some bright news for renters in Phoenix. Despite year-over-year increases in rent of 3.7 percent – twice the national average increase – apartmentlist said, “Phoenix still
more affordable than most comparable cities across the country.” It added, “Gilbert has the most expensive rents in the Phoenix metro, with a two-bedroom median of $1,540,” adding the town saw “rent growth of 5.2% over the past year, the fastest in the metro.”
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little more leg work in a market like this one but understanding your ROI, cash on cash and cash flow potential for properties hitting the MLS can make or break your investment strategy. People need homes of all sizes and if you have some extra cash and can give this opportunity to someone while pocketing some extra cash, start looking. The bottom line is there are a ton of opportunities in a low-inventory market - not just for people looking to sell their home quickly and for a great price, but also for buyers who are looking to get into an appreciating market and investors who are looking to build a portfolio for their future.
Home sales hot in Gilbert
The Cromford Report took a closer look at Gilbert home sales in the last 90 days and here’s what it found in each ZIP code.
HASTINGS FARMS – CREEKSIDE
Queen Creek, AZ | Starting from the $280s
NOW SELLING! Hastings Farms Creekside Series (Parcel-B) is a Master Planned Community located in Queen Creek at the corner of Ellsworth Road and Chandler Heights. Hastings Farms Creekside Series features six distinctive floor plans offering 3 and 4 bedroom layouts with 2 and 3 car garages. These floor plans range from 1,638 square feet to 2,884 square feet. Come visit our new model homes at Hastings Farms; Queen Creek, AZ.
WE BUILD THE PLACES WHERE LIFE’S BEST MOMENTS CAN HAPPEN. Within each Cresleigh neighborhood, you’ll find new homes thoughtfully designed to suit the needs of any generation and any lifestyle, with energy efficiency and reliability at their core. Every Cresleigh team member is passionate about building a new home that you can rely on and a new home that helps you to focus on what truly matters: creating memories with the people you love.
Welcome to the neighborhood. 23440 S 210th Street, Queen Creek, AZ 85142 Phone: (480) 888-1025 www.cresleigh.com
It’s not the right time to make a move for everyone, but it is the right time to understand the market for everyone and to be prepared when it is time to take advantage of it. It can be confusing and intimidating and can sound like gibberish between the stats and the charts. But it doesn’t have to be overwhelming or unattainable and it is well worth your investment to understand.
- Mindy Jones Nevarez, a Gilbert Realtor and owner of the Amy Jones Group at Keller Williams Integrity First, can be reached at 480-2503857, Mindy@AmyJonesGroup.com or AmyJonesGroup.com
Avg. sale
Sold
85233
$346,061
155
38
$387,299
204
41
85234 85295 85296 85297 85298
$396,808
$381,787 $444,328 $453,868
Avg. days on mrkt. 188
204 143 163
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47 53 61
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REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
Buying a horse property requires expertise BY STACEY GRANDON GSN Guest Writer
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he 65th annual Scottsdale Arabian Horse Show is wrapping up today, Feb. 16, after bringing top owners, trainers and breeders from around the world to compete for the event’s top honors. The event fits in with Arizona’s active equestrian scene, as according to the Arizona State Horsemen’s Association, $500 million are spent annually on pleasure riding in Arizona and over $43 million is spent at Arizona horse shows every year. All the equestrian news and activity may have Valley residents interested in getting their own horse and, in turn, and equestrian property. But those new to the process should know about key qualities to look for in a horse property to ensure it’s the right fit for them.
When buying a horse property, there is so much more that goes into it than buying a regular home. Especially if you’re new to horse ownership and horse properties, it’s important to consider many different factors before signing any contract. With my experience growing up around horses and competing in international horse shows, I founded The Grandon Group at Platinum Living Realty with my brother Jason to help people find the home of their dreams with a special focus on equestrian properties.
Based on my experience, there are five specific qualities in a horse property to consider: Size. Size matters when it comes to the type of equestrian activities and how many horses you plan to have on property. It is also important to consider room for a horse trailer to be stored and maneuver on the property. Lingo. Equestrian properties come with certain lingo important to understand when reviewing listings. For example, a “barn” means a certain type of accommodations may not be the best fit for different kinds of horses. Breed. Different breeds of horses need varying accommodations. Whether you are interested in owning horses or already do so, it is important to understand the specific breed’s needs.
@AmyJonesGroup Each o ice is independently owned and operated
Trail access. Trail access from an equestrian property can be a major accommodation, making it easy for owners to take their horses off property. Prospective buyers should know what limitations or access points an equestrian property has. Zoning. Zoning differs depending on the type of horse property. Training ranches are different than a place to simply board a horse. Know what type of property and zoning requirements are needed for your desired equine activities. No matter what type of property you are looking to buy or sell, it’s always important to have an expert in your corner to advocate for your desires and needs. It’s always my goal when I help my clients navigate the complicated world of equine real estate. -Stacey Grandon leads The Grandon Group at Platinum Living Realty. Information: ArizonaEquineProperties.com or platinumlivingrealty.com.
...a Tradition of Trust
REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
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Millennials confront big challenges in market BY LINDSAY WALKER Cronkite News
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ith more than $58,000 in student loan debt from Northern Arizona University and a fulltime job barely getying her from paycheck to paycheck, Kaitlin Kump never thought she could buy a home in her 20s. Kump buckled down, working three or four jobs at a time and living in her grandfather’s spare bedroom rent-free for several months until she had finally saved enough money to buy her very own condo. But Kump, 28, is an exception among millennials, many of whom entered the job market during the 2008 economic recession. A recent report from New America showed while the millennial homeownership rate rose slightly in 2017, to 38.4 percent, it was still 8 percentage points lower than the rate of Generation X and Baby Boomers when they were at the same age. If millennials – young adults aged 25
to 34 – had the same homeownership rate their older counterparts did in 2000, there would be 1.3 million more young homeowner households, said the report, which was based on data from the Urban Institute. “Since they’re becoming homeowners later in life, this is going to have a huge impact on their wealth-building capacity in the future,” said Jung Choi, research analyst at the Urban Institute. Millennials are not staying out of the housing market by choice – they’re being kept out. A low housing supply, the growing burden of student loan debt and a lack of financial literacy are just some of the problems first-time homebuyers currently face. All those applied to Kump, who had a complicated relationship with finances. “I didn’t think of money as a tool,” the Valley resident said. “I didn’t understand investment accounts. I didn’t even understand the concept of investing.” Choi said all those obstacles combine to
force millennials to wait until later in life to become homeowners, meaning they are living with their parents for longer periods of time than previous generations did. The New America report said the share of young adults living with their parents increased from 12 percent to 22 percent between 2000 and 2017. A recent rule change by the Federal Housing Administration is designed to help ease at least one barrier to millennial homeownership. The Oct. 15 change lets FHA insure mortgages for single units in previously unapproved condominium projects, which tend to be more affordable than single-family homes. The “spot approval” process had been banned in 2010. The rule change lets homebuyers put down a down payment of just 3.5 percent instead of the typical 20 percent – a huge boon for millennials struggling with high housing prices. Mary Roberts, the president of the Arizona Realtors Association, said housing
Gilbert Real Estate Snapshot
prices are back where they were before the recession. And Roberts said while the FHA change helps first-time buyers get a foot in the door, it can end up costing them more in the long run. “It’s actually creating more cost for the homebuyer,” she said. “You could be paying up to $200 more just for private mortgage insurance every month.” “It’s helping for those who can afford it,” she said of the rule change. Roberts said cities, especially in states like Arizona where the population is booming, need to develop policy solutions to ease the problems of affordability and an increasing lack of housing supply. In Lake Havasu, where Roberts is based, the housing vacancy rate is as low as 1-2 percent, she said. “These cities need to be more proactive and figure out how to get more affordable housing so the millennials can buy at a cheaper price,” she said. For Kump, her struggle is worth it.
Provided by the Amy Jones Group Your Local Real Estate Team (480) 250-3857 | www.amyjonesgroup.com • Average Days on Market: 47 days Down from 50 Days Last Month
• Active Listings: 470 Up from 460 Listings Last Month
• Monthly Sales: 333 Down from 338 Sales Last Month
• Listings Under Contract: 482 Up from 371 Listings Under Contract Last Month
• Average Sales Price: $409,002 Up from $397,853 Last Month
• Monthly Supply of Inventory: 1.5 Up From 1.2 Monthly Supply Last Month
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REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
Ready for a Better Mortgage Experience? 4547 E CABRILLO DR 3,527 sq ft, on .39 acre w/ 3 Bedroom, Den, Pool, Spa, Courtyard, & 3 car garage. Gated, private courtyard is a greeting area for guests w/ pavers & fireplace. Gorgeous architecture w/ rounded foyer, wide hallways & open concept. East wing of home boasts Master Bedroom w/ direct access to pool & spa. Spacious Ensuite offers dual sinks, soaking tub, snail shower & walk in closet. West wing of home includes bedrooms #2 & #3, + Den with Stone Creek built ins (den can easily be converted to 4th bedroom) & hall bath. Chef’s Kitchen with built in appliances, spacious island & convenient to the family room. Breakfast Nook overlooks the tranquil backyard w/ 29k gallon pool w/ grotto style water feature. Enjoy AZ outdoor living w/ built in spa, fire pit & BBQ.
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Comming Soon for $660,000
Melanie Nemetz
480.221.3034 • www.fosteringre.com Each office is independently owned and operated
SPOTLIGHT home SPECTACULAR Better than a MODEL HOME. No detail in this single level home has been overlooked. Gorgeous wood look tile floors are complimented by the barn door off the den at the entry. Custom lighting and charming wall paper lead you into the open living space. Here you will find an open entertaining area with upgraded kitchen appliances, custom backsplash, and white kitchen cabinets. The dining room features a built in banquette of seating that looks out on the expansive glass doors that lead out to the backyard. The master bedroom is simple elegance with plush carpet and light walls. The laundry room features and large counter and stacked washer and dryer that convey with the purchase. A 3 car garage completes this perfect home. 3 Beds, 3 Baths, 1,959 Square Feet. Listed for $410,000!
2738 E Daniel Drive, Gilbert, AZ 85298
Under Contract in 5 Days
(480) 250-3857 www.AmyJonesGroup.com
FHA ■ VA ■ Conventional ■ Jumbo ■ Purchases ■ Refinance
REAL ESTATE
GILBERT SUN NEWS | FEBRUARY 16, 2020
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5 questions to answer on refinancing
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ortgage rates are resting near record lows — and it’s spurring a wave of refinancing activity. Refinance loan volume jumped to the highest level since 2013 this month, says the Mortgage Bankers Association. More than 11 million homeowners stand save to an average of $268 per month on their mortgages if they were to refinance at today’s rates, real-estate data firm Black Knight reported. “Almost anybody should be checking if there’s an opportunity to refinance,” said Tendayi Kapfidze, chief economist at LendingTree. “It doesn’t cost anything to talk to a lender and see what rate they might get you in this marketplace.” But refinancing isn’t foolproof. Taking out a new home loan can cost you thousands of dollars in fees. And making the wrong choices can significantly reduce your potential savings.
Here are five questions homeowners should ask themselves before taking the plunge with a mortgage refinance. How long will I stay in this home? One of the most significant factors in determining whether a refinance makes financial sense over time. “You want to keep the loan long enough for the monthly savings to exceed the closing costs,” said Holden Lewis, mortgage expert at personal-finance website NerdWallet. Homeowners who plan to move to a new house in the next five or so years may actually save more by sticking with their existing mortgage. People who are in their forever homes could benefit from taking out a 15-year loan rather than a 30-year loan, Lewis said. The average interest rate on the 15-year fixed-rate mortgage is typically lower than the 30-year loan — it currently stands at 2.97 percent. A 15-year loan also would allow the homeowner to build equity fast-
er, which they could then tap through a home-equity loan further down the road if unexpected expenses arise. How much will I save? To save money with a refinance, the general rule of thumb is the new interest rate needs to be 50 basis points lower than your current one, Kapfidze said. Comparison shopping is critical. Lenders don’t just compete on interest rates. They also can adjust how much you spend in closing costs. Another factor is the discount points — fees lenders collect at closing in order to reduce the long-term interest rate. Am I paying mortgage insurance? Borrowers must pay mortgage insurance if they get a Federal Housing Administration loan or get a conventional loan downpayment is less than 20 percent. “Refinancing when you’re going to have 20 percent equity or more is going to give you the best deal because you’re not going to have mortgage insurance,” Lewis said.
Getting rid of mortgage insurance will boost your overall savings and can make a refinance worth it even if you’re outside the 50-basis-point threshold. Is my financial house in order? LendingTree found one in four mortgage refinance applications is denied. The most common reasons for denial are too high a debt-to-income ratio or poor credit. Taking steps to improve both your debtto-income ratio and your credit score ahead of applying for a new home loan will increase the odds of getting improved. “ Will my existing lender cut me a deal? When pursuing a refinance, don’t forget about your existing lender. Because your existing lender already has your personal information and payment history, refinancing with them can often be an easier process. Additionally, they have a vested interest in keeping your business, which will push them to compete as much as possible with other lenders’ offers.
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Expect someone who will put you and your concerns first. Never an obligation. Experience a “Platinum Level” of service, providing you with expert guidance. Professionalism backed by years of experience as brokers, managing brokers and real estate educators.
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360-718-1680 ASL Services Realty Executives Ocotillo 2551 W. Queen Creek Rd. Suite 3 Chandler , AZ 85248 Office Phone: 480-963-6000
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GILBERT SUN NEWS | FEBRUARY 16, 2020