Phoenix Real Estate Market Keeps Tanking (to sell, program, banks)

[MN-Born-n-Raised]

I love Val Vista Lakes area. Especially if it is on the water. There is a premium for that neighborhood and I understand why.

[john3232]

Originally Posted by Captain Bill

...
Many buyers will probably miss the boat on some of these homes that may be priced higher than the comps. Many tend to want to wait until they see price reductions before making an offer. If there are several people waiting and watching, and a reduction is made, then there will most likely be multiple offers, and only one will win the bid...

Yeah, waiting for a property which is priced to move immediately will only bring out multiply offers and good luck with that.

Best to find the home you really like and make a solid offer.

[john3232]

Originally Posted by MN-Born-n-Raised

I love Val Vista Lakes area. Especially if it is on the water. There is a premium for that neighborhood and I understand why.

Yep, the homes by the lake certainly are beautiful

[Captain Bill]

Originally Posted by john3232

Yeah, waiting for a property which is priced to move immediately will only bring out multiply offers and good luck with that.

Best to find the home you really like and make a solid offer.

It's unfortunate that so many agents do not give that advice to their buyers. For one thing it means more work for the agent because they must gather really good comps and make sure those comps are very close in distance, size, location, condition and amenities.

They must be able to conduct a fact finding discussion with the other agent to find out what the seller really needs. Then using what their buyer needs, together with the sellers needs, the current market trends, and the comps, s/he must be able to structure and present a good offer without offending the seller or the listing agent; and then be able to negotiate a mutually agreeable contract.

That takes learned skills and a willingness to do the work. If they don't want to do the work, or don't have the skills, then they will not offer that advice. It's too easy to say "that house is overpriced, you don't want to deal with that seller".

I'm not in the camp that believes buyers control the market. If buyers controlled the market then all they would have to do is name their price and they could have any house. We know that doesn't work.

Overall, it's Supply and Demand that control the market. We've seen excellent examples of that during the cycles since 2005.

Between a buyer and a seller for a particular house, it is both buyer and seller that control the price. It takes a willing buyer and a willing seller to arrive at a price.

• There is a high point where a buyer won't buy, and
• there is a low point where a seller won't sell.
• There is usually a range of price where a buyer will buy, and
• a range of price where a seller will sell.

Two skilled agents will be able to negotiate to bring those ranges to where they overlap, and at that point there will be an acceptance by buyer and seller, as long as both parties other needs are satisfied.

Since Supply and Demand control the market, a seller needs to know what the market is doing within his/her state, metropolitan area, city, zip code, community, and her type, size and price range home.

Then the seller can position his house within that market so that it will sell within a given range of days. If it's priced higher than the market, it will take more days to sell. If it's priced lower than market, it will obviously take fewer days to sell, and may sell with multiple offers.

As we said before, to avoid the competition in homes priced lower than the market, the astute agent will advise their client to find their dream home and make a reasonable offer.

Several months ago I was working with a client who was losing offer after offer. Finally we found a home that was priced about 20% above market. We made an offer at market value and it was accepted. No competition.

If one does not make an offer, they cannot buy the house.

[Guitarmaan]

Originally Posted by Captain Bill

Several months ago I was working with a client who was losing offer after offer. Finally we found a home that was priced about 20% above market. We made an offer at market value and it was accepted. No competition.

That's actually very clever. I've just learnt something

[whodiman]

Originally Posted by Guitarmaan

That's actually very clever. I've just learnt something

This is very interesting cause while most people know that house is way overpriced nobody wants to even bother trying to offer a bid 30% below ask no matter how far over the asking is so they just move on.

[Junes_reston]

My friend has lived in Surprise for 15 years and finally convinced me to give serious consideration to buy a winter home in the area - preferrably hers, a 3Br on N Cimarron. This is a lovely community and I especially like Surprise because it is in the large Community Center District, which is an absolute must have. Her house is nice, but small and not really anything special ... She has a $150,000 mortage and trying to break even.

For people who live in this area is this a reasonable price?

[LBTRS]

Originally Posted by Junes_reston

My friend has lived in Surprise for 15 years and finally convinced me to give serious consideration to buy a winter home in the area - preferrably hers, a 3Br on N Cimarron. This is a lovely community and I especially like Surprise because it is in the large Community Center District, which is an absolute must have. Her house is nice, but small and not really anything special ... She has a $150,000 mortage and trying to break even.

For people who live in this area is this a reasonable price?

Without all the specifics and comps for the area it is hard to tell but just based off of what you described it doesn't sound like a "reasonable price" for a smaller home that is "not really anything special".

There are many larger homes that are somewhat special in that price range in Surprise. My buddy bought a home in Surprise recently that is 3000 sq ft single level with a beautiful yard and pool for $160,000.

[MN-Born-n-Raised]

Originally Posted by Junes_reston

My friend has lived in Surprise for 15 years and finally convinced me to give serious consideration to buy a winter home in the area - preferrably hers, a 3Br on N Cimarron. This is a lovely community and I especially like Surprise because it is in the large Community Center District, which is an absolute must have. Her house is nice, but small and not really anything special ... She has a $150,000 mortage and trying to break even.

For people who live in this area is this a reasonable price?

I'd shop with an agent and see what $150K buys you. If you decide that "hers is the one" AFTER you look at the competition then you will know for sure. Statistically, you will probably prefer something else. I'd never just blindly buy hers unless I knew the market.

[Captain Bill]

Originally Posted by whodiman

This is very interesting cause while most people know that house is way overpriced nobody wants to even bother trying to offer a bid 30% below ask no matter how far over the asking is so they just move on.

And, sometimes a house that appears to be way overpriced may not be overpriced at all.
If the agent does not compare and consider all the amenties in the house with the comps, then s/he won't know if it's really overpriced. There may be two similar homes, same square footage, with one priced at $115/sf and the other at 135/sf. The higher priced home may have many more expensive amenities than the other. One may not be updated at all. One may have elaborate updates that are in line with some of the other homes being updated, but not for sale.

One of my clients bought a home in Chandler for $115/sf when there were some similar selling for $100/sf. But the owners had taken immaculate care of the home, and had put about $100k in upgrades. My client got those upgrades in the purchase for only around $45k (difference in price per square foot.)

Had he bought one of the other similar homes for $100/sf, it would have cost him $100k to make the same upgrades, which would have meant his total price for the home would be around $135/sf, plus the inconvenience of doing the contracting.

My client was very astute and was able to look beyond the bare price per square foot comparison of the homes.

Buyers need to be educated. That is the agents job.