Prescott Area Stats from 2015 and What Can They Predict for 2016

One of our favorite questions to be asked is "how is the market?"  And the answer is always-  "it depends!"  

In gearing up for 2016, I find it beneficial to look at our market statistics in review.  Our associations posts statistics monthly on several trends in our local market.  The local market includes all real estate listed on the MLS in Yavapai County.  The statistics include number of listings, listing price (list price and sold price), absorption rate, sold to list ratio, days on market.  These stats are broken down further and compared over the course of the year to show percentage changes.  If you would like a copy of the complete analysis I can send it to you just email me at teammaneely@gmail.com.

I personally like the reader's digest version of information.  2016 looks like it will be increasingly be turning tides in the favor of the home seller.

First let's look at absorption rate (the number of months it would take to sell all currently listed homes on the market).  This stat had the most significant change from 2014.  Currently our absorption rate is around 4 months.  Last year is was around five months.  This is a 25% change in speed of absorption.  And why does that matter?  First it matters to sellers.  Typically an agent will give you a price range where they think you can sell your home successfully.  With an absorption rate decreasing, you may be able to sell your home at the upper end of your range.  Home buyers, this matters to you as well, prices may be on the rise, you may wish to place your offer accordingly.

Another statistic that I found promising for home sellers was the average list price has increased about 10 percent from last year.  That coupled with the fact that on average home's are commanding about 94% of their asking price is a great sign that we are seeing a steady increase in prices.  (Around 4.6%)
Considering a move?  When should you list your home?  Again, you need to evaluate the goals for your home sale.  If you want to sell your home quickly, the best months last year based on lowest days on market occurred in February followed by June, July and August.  (There was a sharp increase in September)  Now if your goal is to get the most money for your home, based on sold to list price ratio, selling from April-August (high point in June) would be a good target.

Based on market competition, the earlier in the spring, the fewer homes on the market.  We saw a fairly steady climb from Feb to June.  June being the peak of number of homes on the market.
Listing and sold prices steadily increased from February through May and tapered through the summer months.  For those looking to sell your best bets are a spring sale.  If you are a buyer and are budget minded, you may want to consider a fall or winter sale.  However, if you are very selective, the spring market will have more homes to chose from.

In summation, I would recommend that you consider listing your home in either February or April to have the best shot at the market.  February if you want to avoid the steep competition of the spring or summer months or April if you are bringing your "A" game. Buyers keep in mind that what is positive for a seller, will mean more sacrifices on your end- either financially or competitively.

Considering making a move or just curious if your home value has increased?  I would be happy to provide you with a an analysis of your homes current value.  Call or text 928 830 8282,  email us at teammaneely@gmail.com.  We would be happy to help!

7892 Crooked Creek Trail Prescott Valley AZ 86314

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Plan on Buying, Selling or Working in Real Estate: A must read on the changes from TRID as of OCT 3

This post is for anyone who plans to buy, sell, or work in Real Estate for the state of AZ as of Oct 3rd 2015.  It is based on new national legislation.  It effects everyone!  TRID (Truth in Lending, Real Estate Settlement and Procedures Intergrated Disclosure) has made changes to lending practices and thus AZ Real Estate Contract and forms have changed.

In this article you will quickly learn how the changes effect buyers, sellers, agents and brokers for the foreseeable future.

Buyers, great news for you!  These changes are aimed at protecting you and giving you better information.  With that, however, you have a couple additional requirements, and some things to make sure you do to avoid breech of contract situations.

First let's take a look at the sample form posted below of the AZ Prequalification (PQ) Form.   Any agent worth their time will tell you that you need a pre-qualification prior to showing you properties. Lenders in AZ will be well versed in this form, and will have it on file for you when you schedule a visit with them.  If your lender is out of state, ask them if they have the form, or would be willing to use it.  If so, make sure to get them a copy.  (hint, most agents will do this for you, just send them your lender's contact info- they will need it!)  Second hint for buyers, make sure to research your lender. Consider checking to see if they have had disciplinary actions filed against them.  The CFPB publishes articles and a simple google search will yield this information.

Now, for the changes.
Lines 3-5  This is all new.  If you do not have a PQ you will fill this section out.  To submit an offer on a property you will have to have this completed document with-in 3 days of your offer.  As a real estate agent, I would advise my client to refrain from accepting any offer without this form completed, unless it was a cash sale.
Line 6, refers to lines 36-37 of the lender information section.
Lines 36-37 have changed in that they now include the license numbers of your lender.  I speculate that this is to help CFPB (Consumer Finance Protection Bureau) investigate any lenders for misconduct.
Line 23 has changed in that is specifies the loan features.
Line 31, informs the buyer and lender of their new responsibilities.  For a buyer, you will have 10 days to shop, select and instruct your lender that they have been chosen.  The buyer will need to provide their lender with the necessary documents to proceed with the loan they have chosen,  and make sure their lender sends their real estate agent a Loan Status Update(LSU) form.  Agents, both buyer and seller agents, need to make sure they are receiving the updated LSU forms from the lender involved.  Seller agents, if you haven't seen a form, I would be contacting the buyers agent!

The Residential Purchase contract has changed as well.  For the purpose of time, I have only included the related changes and not the entire Residential Purchase Contract.  The first change occurs on page 2.

Line 2a, specifies that the contract is submitted with the AAR Pre-Qualification Form.  There is no longer a check box.   It is a requirement. 

Line 2b, specifies changes in closing documentation time frames.  3 days (days are defined as "substantial work days") buyers will need to sign all loan documents, and sign that they received closing disclosures. Real estate agents and brokers, a working relationship with the lender for your buyer will need to be established in order to make sure a.) the lender has the appropriate AZ contract forms b.) you know their work schedule to determine substantial work days c.) you can keep them abreast and vice versa for the new timelines and document delivery.   In the event that the loan was not successfully obtained, the buyer will need to deliver to seller or escrow company notice that the loan was not obtained.  If there are issues with closing documents or loan documents and corrections need to be made, then the three day time period will need to be restarted.  Please note that the time frame of three days starts at delivery of the documents.  Some lenders may chose e-mail, but if the buyer does not review and acknowledge those documents within 24 hours, they may choose to send the documents via the mail.  If documents are sent via the mail, it will add to the time frame, an additional 3 days.  These time frames are a portion of what will be extending Close of Escrow time frames, hopefully temporarily until the new system runs smoothly.  

Line 2 c, the LSU must be delivered by the buyer with in 10 days of contract acceptance.  In this case 10 days are calendar days since we are referencing the AZ contract.  Just a side note, buyers must also instruct their lender to provide loan status updates to broker and seller upon request.

Line 2 f, outlines a change in lending as well.  Buyers will need to provide their lender, with in 3 days of contract acceptance ("substantial work days"), 6 pieces of information as included in the lines referenced.  

Line 2 g, informs the buyer that with in 10 days receiving the Loan Estimate the buyer will inform the lender they intend to proceed with the loan, provide the lender all requested documents, and will work to obtaining the loan promptly.  This 10 day window ("substantial work day") is to allow buyers to compare loan estimated from different lenders, allowing them to shop the best rates or packages that work for them.  Since the loan estimate forms have changes this process will be much easier for the buyer.  

Line 2 l, specifies that if the buyer should chose to use a different lender, during the escrow process, they must first provide prior written approval from the seller.  If this consent is not granted the buyer proceeds to change the loan, this would be cause for breech of contract.  

Sellers, why should you care?  Well mainly because these changes effect your timeline for closing. The Arizona Association of Realtors is recommending agents create contracts with a 45 day Close of Escrow until the "kinks" are worked out and the timeline can be reduced.  

The last page of the Residential purchase contract has been changed as well

This page is a change that effects real estate agents and brokers.  The most noticeable change to the form is the inclusion of license numbers.  Again, I speculate this will help the CFPB keep track of any investigations they may wish to pursue against agents who fail to follow TILA and RESPA disclosure practices.  

The last two documents I am including below are really the prize for consumers.  Buyers will now be able to easily compare Loan Estimates from a variety of lenders, and will be able to easily compare their Closing Disclosure to make sure that the numbers match up.  These new forms are easy to read, and should help buyers know exactly what they have "signed their life away" for.  Please see sample copies below.  I personally think that these documents are awesome and look forward to being able to use them in my personal real estate purchases.  

In summation, these are important changes in real estate and especially will be helpful for the buyer, but effect everyone in the process.  Of course if you have any questions please call!  We'd be happy to help.

Three Ways to start buying Real Estate like an Investor

This is the first in a three part series on real estate investment

Part One: 

See Potential in Properties

Finding the Deal

                Finding distressed properties is an important part of finding a priced below market value.  Many of you may remember the abundant foreclosure and short sale market from a couple of years ago.  While there are still some of these properties that exist, the numbers are much lower than they were, and banks have started to do some basic fixes that they were not previously doing, making these properties more marketable and therefore the profit potential much slimmer.  Instead of finding a deal in the foreclosure market, look for properties with the 3 D’s.  Death, divorce, and disease are three types of situations that may force the hand of a seller to take a reduced price on a property with the hope of a quick sale.  This can be a major factor helping you to negotiate and score a great price on a property.  Another great strategy would be to find a property in distress may be searching tax records on properties.  Finding properties that have tax liens through the county assessor’s office due to delinquent taxes is potentially a longer term procedure, but could yield high profit margins. 

Location, Location, Location

                The old real estate adage still rings true.  Property located in desirable markets is worth more than less desirable areas.  Make sure that the location fits the intended purpose of the property.  If purchasing a property for a business, how much foot/car traffic passes by the property on a daily basis?  When purchasing a residential investment, find out the neighborhood market values.  It is best to purchase the least expensive home in the best neighborhood versus the most expensive home in the neighborhood.   Have your real estate agent run a CMA (comparable market analysis) to determine market values for the property.  If the property is selling for below market value, you MAY have a good investment. 

Is the property worth the risk?

                Determining the risk factors of your investment will mean doing some more research on the property.  There is most likely a reason the property is priced below market value.  If the property will need remodeling, it is best to contact a contractor to have them walk the property with you.  They can help you determine what the costs associated with improving the property would be.  Make sure to have all permits and license labor costs upfront.  Unless you have a cash project, you may need to look at your carrying costs while remodeling as well.  Having a timeline and deadlines will help keep your project and budget on track.   Many savvy investors like to earn their profits with a little “sweat equity”.  Our next topic in this series will be focusing on the changes you can actively take a part in and when it might be best to hire some help.  

Falling in Love- Online: Beware!

It's true, just like a bad match from E-Harmony,  a property posted online that looks "too good to be true," may be just that.

As a real estate agent when I list a home, I like to hire a professional photographer.  Why?  I know that most home buyers start their searches online.  Pictures are a great way to visualize what a home has to offer.  A professional photographer uses their skills and knowledge to highlight the homes the best way possible.  They take pictures at the right time of day for the best lighting, they use wide angle lenses making rooms appear larger, they Photoshop or other editing software.  The results are amazing and often a home can look even better than it does in person.  So while it is fine to start your search online, make sure that you actually have an agent preview the home with you before "moving in" mentally.

Looking online provides aspects of the home that the listing agent or homeowner want you to know about.  It does not give you a sense of how the home flows from room to room, or how it might fit your lifestyle.

In short, once you have identified a home that you think may have potential, it is best to give us a call and take a quick tour.  It may reveal that the home really is your dream home, or that it was just smoke and mirrors!

Thanks Great Colorado Homes for the wonderful info-graphic.

We DOUBLE DOG DARE YOU- Join our Prescott Fun Challenge

There are so many amazing things to see and do in the little town on Prescott and summer is the perfect time to get out with friends and loved ones and experience what our town has to offer.  With the recent completion of the Prescott Circle Trail, Amy and I would like to challenge all of you to get out of the house and hike, run, or bike a section or the whole ginormous trail!  It is 68 miles from start to finish!
The section we are highlighting today is from the Peavine Trailhead at the intersection of Sundog Ranch Rd over to the Turley Trail Head.  It offers lots of fun climbs, breathtaking views, for you bikers, wicked fast descents(be careful for other trail users).  From Sundog to Turley, it 8.3 miles and a little over 1200 feet of climbing and it took me about an hour to ride with another 10 minutes back to the trail head via Yavpe Connector.  I've done the trail as an out and back, and it took me about 2 hrs.
Hope you enjoy this trail as much as I did!!

The line in the map indicates the Turley Trail Head.  Also, the elevation gradients are 5000 - 6200 feet
at 200' each.

Not into biking- try hiking a section.  A group of our friends recently hiked the entire trail and backpacked along the way!  Way to go Carlisi's!!
Take a quick Selfie- or Groupie and post it to our FB page or Instagram with the #PrescottFun

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