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Archives for July 2019

Real Estate Marketing Statistics July 2019

Contracts up 19% in this Price Range!
Flip Sales Rebounding Strong after Weak First Quarter

For Buyers:

New listings activated in June were down 10.0% compared to last June and overall supply has dropped 9.5% in 4 weeks, putting it below last year’s count for the first time all year.  Buyers have gotten used to very little supply under $200K but now they’re feeling it hard between $200K-$250K, where new listings were down a whopping 15.1%.  Trying to fill the gap, brand new town home/condo sales have been strongest between $200K-$250K with a median size of 1,362sf.  The top two builders that have sold the highest number of condos in this price range this year are Lennar in Gilbert and DR Horton in Mesa.  Other competing developers building multi-family between $200K-$250K include Bela Flor in Mesa and Maracay in Goodyear.  In Mesa, new condos in this price range have been extremely competitive with resale with an average price per square foot of $155.70 versus $157.47 for resale.

For Sellers:

Listings in escrow are up 7.4% and have soared nearly 19% over last year between $250K and $600K.  Homeowners with property valued under $250K are inundated with offers from investors as flip sales* have rebounded strongly over the past few months.  Making up for lost time after being down 4.2% in the first quarter, successful flip sales have now outperformed 2018 by 4.8%. The median sale price for a flipped home in May was $245K, up 8.4%, and the average size sold was 1,710sf.  The median gross gain for a traditional flip investor was $53K between their acquisition and sale price.  iBuyer companies such as OpenDoor, OfferPad and Zillow showed a median gross gain of just $9,900, however that doesn’t account for significant service charges to the sellers during escrow.

*A flip sale is defined in this case as the sale of property within 6 months of acquiring it.

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here:

Anthem, Desert Hills, New River, 

Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

The Benefits of a 20% Down Payment

If you are in the market to buy a home this year, you may be confused about how much money you need to come up with for your down payment. Many people you talk to will tell you that you need to save 20% or you won’t be able to secure a mortgage.

The truth is that there are many programs available that let you put down as little as 3%. Those who have served our country could qualify for a Veterans Affairs Home Loan (VA) without needing a down payment.

These programs have cut the savings time that many families would need to compile a large down payment from five or more years down to a year or two. This allows them to start building family wealth sooner.

So then, why do so many people believe that they need a 20% down payment to buy a home? There has to be a reason! Today, we want to talk about four reasons why putting 20% down is a good plan, if you can afford it.

1. Your interest rate will be lower.

Putting down a 20% down payment vs. a 3-5% down payment shows your lender/bank that you are more financially stable, thus a good credit risk. The more confident your bank is in your credit score and your ability to pay your loan, the lower the rate they will be willing to give you.

2. You’ll end up paying less for your home.

The bigger your down payment, the lower your loan amount will be for your mortgage. If you are able to pay 20% of the cost of your new home at the start of the transaction, you will only pay interest on the remaining 80%. If you put down a 5% down payment, the extra 15% on your loan will accrue interest and end up costing you more in the long run!

3. Your offer will stand out in a competitive market!

In a market where many buyers are competing for the same home, sellers like to see offers come in with 20% or larger down payments. The seller gains the same confidence that the bank did above. You are seen as a stronger buyer whose financing is more likely to be approved. Therefore, the deal will be more likely to go through!

4. You won’t have to pay Private Mortgage Insurance (PMI)

Simply put, PMI is “an insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.”

As we mentioned earlier, when you put down less than 20% to buy a home, your lender/bank will see your loan as having more risk. PMI helps them recover their investment in you if you are unable to pay your loan. This insurance is not required if you are able to put down 20% or more.

Many times, home sellers looking to move up to a larger or more expensive home are able to take the equity they earn from the sale of their house to put down 20% on their next home.

If you are looking to buy your first home, you will have to weigh the benefits of saving a 20% down payment vs. the time and cost of continuing to rent while you save that amount.

Bottom Line

If your plan for your future includes buying a home and you’re already saving for your down payment, let’s get together to help you decide what down payment size best fits with your long-term plan!

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.