Abundant Housing Supply Makes Phoenix AZ Top Ten Boom Town

July 11, 2011 By Leave a Comment

Finally something good in the news about Phoenix. In a recent article by Forbes Magazine author Joel Kotkin suggests that Phoenix AZ is poised to make a comeback over the next ten years when it comes to being a “Boom Town.”

Some of the factors that lead to Phoenix ranking 9th in the Forbes study are: immigrants moving to the area, retired parents means following families from other areas, warm weather, and pro-business environments. Last but not least Kotkin lists a large supply of affordable housing as a major contributing factor to allow Phoenix to grow.

Affordable housing opportunities are certainly abundant in the Phoenix area. From my experience as a real estate agent in the Phoenix area, I have never seen such an inventory of really great homes for sale at such cheap pricing. I have also never seen such good mortgage financing opportunities for families with the extended period of time where we have had low VA rates, low FHA rates, and low conventional mortgage rates making homes even more affordable.

Even still, with affordable housing so abundant, what is still missing from our recession turnaround here in the Phoenix area to make things really turnaround?

I think it is jobs.

We can have a lot of homes, but without jobs for people to work, what is the point of moving here from other areas? I have heard from the grapevine that solar industry jobs are going to bring a huge influx of jobs to the Phoenix area, but most of these jobs are a few years away. So in the meantime, I think we will remain somewhat steady in our economic recovery. Given this if you are interested in selling your home, please get in touch with me. If you are looking to buy a home, let’s get together and talk about what you need.

Filed Under: Consumer Confidence Tagged With: , ,

What Does Behavioral Economics Theory of Myopic Loss Aversion Have To Do With Selling Your Home?

November 1, 2010 By Leave a Comment

First we’ll start with what the heck “Behavioral Economics Theory of Myopic Loss Aversion” means.

According to a recent blog post on Trulia, Behavioral Economics Theory of Myopic Loss Aversion is one reason why home buyers are not jumping into the home buying market in droves with all the deals on the market. The post suggests that home buyers are humans (which they are) and that humans are prone to behaving a particular way: humans wait to long to take advantage of a deal because we wait for the “best” or bottom price of the deal, meanwhile missing the bottom and then we either scramble to buy the item as the prices starts to go up, or we don’t do anything and say to ourselves – “I wish I had.” We may even add something like: “I never get a good deal.” But here I’ll stop with the human nature analogy.

Back to the Trulia post…home buyers are not buying homes as much as maybe they ought to because they are afraid of losing money or value in a home because of the common belief that home values have not hit bottom yet.

Well from what I can tell, there are a lot of indications out there (Case-Shiller Index) that we have hit bottom in many markets and we’re actually seeing increasing values. However, arguing with a home buyer that we haven’t hit bottom isn’t going to work. You’re going to be dealing with psychology here with the home buyer – if they think that home values aren’t bottomed out yet, trying to convince them otherwise won’t be much of a conversation for you. What may work better for you is presenting your home’s value and charm and curb appeal stronger than ever – oh and some nice seller assistance wouldn’t hurt either.

Consider that overcoming fear of losing value could be countered with a well staged home, and a well manicured landscaped curb appeal. You may also consider some seller assistance of between 3-6% that a potential home buyer could use for their down payment and/or closing costs. You could also advertise that you will allow government home loans like VA loans or FHA loans. Or you could consider picking up their cable/phone/internet bill for a year.

If you work with me to list your home we’ll do some of things to help set your home apart from your neighbors. We may or may may not get a flood of interested home buyers wanting to pull the trigger on your home, but we may make the difference with someone that might not have otherwise decided to buy if they hadn’t seen your effort to ease their myopic loss aversion.

Filed Under: Consumer Confidence

Arizona Mortgage Interest Rates Reacting To US Consumer Confidence

August 12, 2010 By Leave a Comment

Consumer Confidence Index July 2008-July 2010U.S. consumer confidence is plunging which tends to hurt the US stock market. However, falling confidence numbers while presumed to mean something poor for the economy, they can create opportunities for homeowners and homebuyers in my neck of the woods (no pun intended) in Mesa, Gilbert, Apache Junction, and Chandler.

Low confidence can influence the mortgage market in a positive manner, driving mortgage rates down.

Mortgage rates are already at their lowest levels of all-time.

The link between consumer confidence and everyday mortgage rates roots in consumer spending.

Consumer spending accounts for close to 70% of the overall U.S. economy so, the thought goes that, a less confident consumer is less likely to spend money, thereby retarding economic growth. This harms the stock markets and drives cash to bonds, including mortgage-backed bonds.

More bond demand leads bond prices to rise which, in turn, pushes mortgage rates lower.

The other side of lagging confidence is that Americans may be less likely to take new financial risks when they’re feeling unsure, including buying a new home. This can then drag on the housing market, negatively impacting home prices across Arizona.

Falling home values can help buyers, harm sellers, and stymie would-be refinancers.

It’s tough to predict how consumer confidence data will work its way through the economy, but in the near-term, it appears to be helping mortgage rates stay low. If you’re floating a mortgage rate with your lender, or contemplating a refinance, the time may be right to lock in a rate.

Low rates can’t last forever.

Filed Under: Consumer Confidence Tagged With: , ,

Common First-Time Home Buyer Mistakes

July 15, 2010 By Leave a Comment
  1. They don’t ask enough questions of their lender and end up missing out on the best deal.
  2. They don’t act quickly enough to make a decision and someone else buys the house.
  3. They don’t find the right agent who’s willing to help them through the homebuying process.
  4. They don’t do enough to make their offer look appealing to the seller.
  5. They don’t think about resale before they buy.  The average first-time buyer only stays in a home for four years.  *Source:  Real Estate Checklists and Systems www.realestatechecklists.com
Filed Under: Consumer Confidence, Real Estate Investing Tagged With: , , , , , , ,