Chandler Prices Rising!

I take a special interest in what is happening with Chandler real estate market trends because that's where I live!

A little over a year ago something happened that has resulted in a major shift in the local real estate market. People started buying houses. Particularly investors who had deep pockets full of cash.

The Chandler Arizona real estate market looks as though it has weathered the storm. While I think we can all agree that the economy has not recovered, it looks as though the local housing market is at least rebounding. In Chandler home prices are going up.

Inventory on the other hand is going down. Just take a look at the chart and you can see that the number of available homes to choose from in Chandler now pales in comparison to what it was as recently as a year ago. What was a buyer’s market is quickly turning (or actually has already turned) into a seller’s market.

Another indicator in this change from a buyer’s market to a seller’s market is evidenced in the number of days a house is on the market. Days on market numbers have dropped through the floor.

And it is not just Chandler where this is happening. This is the case throughout the east valley. Other cities like Gilbert, Mesa, Tempe and Scottsdale are seeing the same thing.

If you are in the market to buy a home, you are most likely in for tough times. Cash investors are on the prowl and inventory has dried up. It is not uncommon for sellers to get multiple offers on a property often times for more than they were asking. And while Chandler real estate stats have come full circle, I don’t think we are going to see the Bull Market that we saw several years ago.

What is Happening With Chandler Home Prices?

It’s funny. I turn on the news one day and they tell me a recent study shows that home prices are stabilizing. The next day I turn on the news and they report about a study that says they are falling and will continue to fall! Well here are my thoughts on the matter…

Why did prices fall so far so fast? I like to blame it on foreclosures resulting in short sales. The banks sell properties below market value either in a traditional real estate transaction or on the courthouse steps in a Trustee’s sale. After the sale, this becomes a comparable property or “comp” for appraisers. So because the banks sold these properties below fair market value, they have driven market value down! It also resulted in much disparity between the amount that homes have been listed for and the price which they sell for. Unfortunately we saw this snowball.

Many banks have stopped foreclosing on properties and even stopped “short selling” properties. This results in the snowball coming to a screeching halt. This can be evidenced in the fact that the list price and actual sale price for Chandler real estate were very similar for the 3^rd quarter of 2010. Take a look:

So what will happen next? There is a chance that prices could start falling again when the banks resume foreclosures and short sales. In fact, many experts say that this is what will happen. Well I too am an expert, and I don’t agree with that prognosis! Looking at the same chart, I see that prices pretty much leveled of before the banks put the skids on their foreclosures. In fact, I look at the Maricopa and Queen Creek real estate market trends and I see that the tide has already turned in the outlying communities. That’s where prices fell first, and that’s where I think we will see (or should I say we are seeing?) the first signs of recovery. It is my opinion that home prices in Chandler have stabilized.

Hey Inactive Real Estate Licensees – Is it Time to go Active Again?

I’m not going to sugar coat things. Being a full time Chandler real estate agent has been tough over the past few years. I know that I have personally found myself tightening my belt on more than one occasion. When the real estate sales numbers drop like they did, those of us making a living by selling real estate find ourselves income challenged. Ha! Income challenged – I sugar coated things after all!

Many Realtors decided to get out of the business at least for now. Let’s face it, being a Realtor can get expensive. Many brokerages charge monthly fees in order to hang your license there. If you are not selling houses, it makes no sense to pay these fees. And then there are association fees, MLS subscription fees, lockbox subscription fees, and so on… I know several people who are now inactive licensees and have found employment in other sectors because of this.

But the tide has turned. Just as an example, Chandler real estate stats show that home sales have more than doubled in the past few months. I reported on that a few weeks ago (click here). It might be a good time for inactive licensees to think about launching a comeback. And if you don’t want to pay a monthly “desk fee” or clubhouse dues as I like to call them, there are companies out there that offer commission splits instead of monthly fees.

Property Tax Letter is a Scam!

A few days ago I got a letter in the mail that was labeled as “Property Tax Information Enclosed.” When I first pulled it out of my mail box I thought it was the annual valuation letter that the county sends out to property owners. It looked official and was from the “Property Tax Review Board.”

But before I was even back inside my house from the walk to my mailbox I saw the first tell-tale sign that this was a scam. In fine print by the return address it stated that this was not from the county tax assessor’s office. When I got inside I opened up the letter and gave it a quick read.

It said that I was paying too much in Chandler Arizona real estate taxes. Well I’m not going to disagree with that, but that isn’t a soap box that I’m going to climb up on in this forum. Anyway, this company claimed that if I were to hurry (good scams always create a sense of urgency) and beat the assessor’s deadline, this company could reduce my annual property taxes by a significant amount. They went as far as to put a specific dollar amount that I could expect the reduction to be. All I had to do was send them a check.

Whoa… So I was supposed to write them a check, and then they would do their magical mojo dance and my property taxes would go down? Yea, I don’t think so. It just reeked of scam! And now the Attorney General, Terry Goddard has hopped on this by filing a law suit against this company can not do anything to lower your property taxes.

Existing Home Sales Have More Than Doubled Recently

One of the biggest indicators that we can look at to determine what is happening in any given real estate market is the number of homes that are actually selling. And as you know, these numbers have been dismal. Homes simply were not selling.

But are we seeing a change in the east valley? Since the numbers don’t lie, let’s take a look at the actual Chandler real estate stats for the number of homes sold each month over the past year based on data from the Arizona Regional Multiple Listing Service (ARMLS):




Can you believe that fewer than 200 residential properties sold in Chandler in both January and February? Those are some of the worst numbers we have seen in recent history! But in contrast to those awful numbers, look what has happened over the last three months. Sold numbers have climbed over the 400 mark for May, June and July.

So it looks like the storm clouds that have been hovering over east valley home sales are clearing. And with sales numbers on the rise we can likely expect home prices to follow suit. The housing crisis did not happen overnight; it’s not going to get fixed overnight either. It is good that the Chandler real estate market is going in the right direction now though.

A Twist of Events for Arizona’s New Anti-Deficiency Law

After realizing that the new anti-deficiency law would have unforeseen consequences, the original sponsor of SB 1271 has asked that the legislation be immediately repealed. When Senator Steve Pierce, an Arizona Republican initially sponsored SB 1271 the objective was to help small community banks in Arizona which did not receive any of the $700 billion dollars in TARP funds to help ease their foreclosure losses. But after the backlash from consumers and lobbyists he feels there would be better ways to help these local banks that would not hurt homeowners facing foreclosure.

While SB 1271 does have provisions that would have protected homeowners who occupied a home for six months it would not protect people who also owned a vacation home or rental property. This would have allowed banks to go after a homeowner’s personal residence if a vacation home or rental property was to be foreclosed upon.

This is a great example of a political leader listening to and working with the people he serves. The Arizona real estate community will continue to work with the Governor’s office and the legislature on this important issue until it is resolved. But right now, Senator Steve Pierce of Arizona deserves an “Atta-boy” for stepping up to the plate on this issue!

Truth In Lending Changes – Designed To Help Borrowers, But…?

The rules that lenders have to follow are complex. And starting July 30, 2009 those rules get even more complex. Lenders will be subject to new Truth In Lending Act (TILA) disclosure requirements. This could affect home buyers and sellers, their Realtors and people trying to refinance a home by causing delays. And while this is not as big a deal as SB 1271, it is worth taking a look at. Here are the basics:

1. Only applies to a borrower’s home. Investment properties are exempt.

2. Lender has 3 days from loan application to supply a Good Faith Estimate (GFE).

3. Lender may not charge any fees (except for credit report) prior to GFE.

4. Mandatory 7 day waiting period between GFE and closing date.

5. If Annual Percentage Rate (APR) goes up more than 0.125% lender must issue new GFE.

6. If a new GFE is issued there is another 3 day waiting period.

The borrower can have these waiting periods waived if there is a financial or personal emergency. But the borrower must receive these disclosures no later than the time of the modification or waiver.

From the perspective of someone buying or selling a home (or a Realtor), delays in closing can cause serious headaches. Yet delays in Arizona real estate closings are already more common that one might think. We don’t need more things that will cause delays. These new TILA disclosure requirements were created with the best of intentions. Hopefully they will cause more good than harm.