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Would someone mind explaining the wide disparity in square footage pricing? It is all over the map. For instance, some small homes in our neighborhood have sold for around $160 sq. ft, while some much larger (over 3,000 sq. ft.) homes are selling for $90 sq. ft. We paid about $72 sq. ft in 1999 and have upgraded our kitchen to granite and stainless steel, installed hardscape in our front and back yards, added an additional driveway and RV parking, have over 25 mature trees with citrus and fruit, but the market apparently doesn't want to take our upgrades into consideration (according to a fairly recent appraisal.) Our neighborhood doesn't have many houses for sale, maybe 10 out of 240 and we only had one or two foreclosures. What is the sq. footage price based on? You couldn't build our house now for less than 500K (on a 1/4 acre lot,) but the market says 400K. What gives?
Within a given market area, such as yours, there are several things that can affect value of homes. Location within the community; backs up to major street; proximity to overhead power lines; the general condition of the property, and the pressure on an owner to sell.
A fully landscaped yard like yours, today, will not add any value; however, it may make it sell faster than one without the nice yard. A 1/4 acre lot will not add any more value than a smaller lot, unless a buyer sees a particular use for that space that they can't have on a smaller lot, and are willing to pay additional.
The only upgrades in the home that will add some value are kitchens and baths. A 25k pool may add 10k value. Carpet and paint are a necessary maintenance item, so new paint and carpet won't add value. It will just help to sell the house faster.
Due to economy of scale, it is cheaper per square foot to build a 5000 sf home than a 2000sf home, so the price per square foot for the same type of construction of the larger home will be less.
There will be a driver of prices, and that will either be the Active comps, or the Sold comps. If REO's are driving the market then it may be that the Solds are the driver and homes will need to be priced in that ball park in order to sell. Once REO's take over, then sellers begin to lower prices to compete, and the Actives may then become the driver and one will have to price their homes in that ball park in order to sell.
There is also the factor of "I want X dollars for my house and I won't take less". That house will be on the higher end of the Active price range, and may soon drop off the market because the seller does not need to sell.
There is the competition factor. If I want to sell my house fast, then I must price it lower than the competition, and the more desparate I am, the lower I'll price it, if I have sufficient equity. And the lower I price it, the faster it should sell.
Not only do you look at the price and the sf prices, but how long it was on the market before it sold at the sale price.
The affordability factor that you mention is very important. The higher the price of homes, the fewer people can afford them, so those prices will either decline, or they will remain on the market for a longer time.
You can look at the pdf file that I posted yesterday that shows the supply of homes in various price ranges, and the number of homes sold in those ranges. While it may not be in your area, it does give an idea of what price ranges are selling in this general market.
So the comps within the community have to be studied and analyzed to gain more information about the houses that are Active, and the ones that are Sold. Was the house that sold for $92 per foot in bad shape? Was it an REO, or other type of distressed sale? Are there other REO's? How old are the comps? If there is only one REO sale, then the appraiser can filter than one out, provided the bank gives permission. Different banks have different requirements.
There are many different factors that go into determining a price for a home, using the price per square foot and other available information.
I must admit, there is a part of me that prob has high expectations for my "first home" but I am aware of that and will keep an open mind when we start looking next year. We currently live in Buckeye and I definitely know I do NOT want to buy a home there.
There are two main parts of the house that I have to like: the kitchen and the master bedroom. Everything else is negotiable as far as the way the house is set up. Preferably one story but I'm open. I'm actually very flexible!
We haven't really started looking seriously so perhaps I'm jumping the gun a bit but from what I've seen that I like in a house, it's usually in the high range prices (that goes back to high expectations!). I will probalby have to make concessions when we really start looking!
Once you get your budget together so you know what you can comfortably afford to pay for a home, you'll want to choose the city, then narrow it down to a couple of communities within that city, and then you get serious about looking for the right house. Until you make that final choice of communities, you should just be sampling homes to see what's available in that community.
In other words, don't go looking for the "right house" in all the wrong places, or you'll wear yourself out looking at too many houses. During the months prior to being ready to buy, you can begin to sort out the cities.
I would not recommend pursuing a property which has mulitiple offers.
There are over 56,000 homes currently listed on the Mulitple Listing Service. There is no need for you to get in to a bidding war.
Under 200,000? Not trying to be rude but at some point you have to get realistic here. I understand you want a home and are frustrated by living in an apartment but this isn't Omaha. I mean if you can't afford a home over 200K, it's time to start looking elsewhere. I don't know if you will be able to ever find a home that cheap in a safe area even with these lower prices. It kind of reminds me of people in Cali who used to complain that there wasn't homes for sale under 200 in LA. Yeah, you don't have to live in LA either!
Yeah, and like Rick Lee said, living in an apartment has it's advantages. Any time there is a leak, damage to your AC etc, they pay for it. That's a nice convenience that even I miss at times.
I am very realistic. Like many others said, you can get very nice homes for under 200k. We are looking in Gilbert, East Mesa. We don't need a ridiculously huge home.. at the moment it is just me and my guy. Hopefully many years in the future we will upgrade and get a bigger, better home... but for now, under 200k and less than 1800 sf is going to be perfect for us. (besides.. renting is almost as most as a mortgage!!)
The heck with the house flippers------prices here in the Phx area are continuing to decline and I am NOT referring to just Anthem/Queen Creek/Maricopa either.
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Quote:
Originally Posted by ArizonaBear
The heck with the house flippers------prices here in the Phx area are continuing to decline and I am NOT referring to just Anthem/Queen Creek/Maricopa either.
Absolutely right. That is the only thing that matters. The price. And the talk of the possible bailout of the GSE's is not making things any easier. Look for some more tightening by Fannie and Freddie in the months to come.
The heck with the house flippers------prices here in the Phx area are continuing to decline and I am NOT referring to just Anthem/Queen Creek/Maricopa either.
Amen. And any realtor that is encouraging you to buy is looking out for HIS commission....not your rapidly decreasing net worth.
I wish the price of land would drop along with the houses. That is selfish of me, I know, but we would love to buy a little plot and build a retirement home on it.
I would not recommend pursuing a property which has mulitiple offers.
There are over 56,000 homes currently listed on the Mulitple Listing Service. There is no need for you to get in to a bidding war.
Tammy, I agree that one should not have to get into a bidding situation. But sometimes that is unavoidable if one wants the opportunity to buy that perfect house at a bargain price.
The over priced homes and the REO's with too many repairs and too high a price are sitting for a long time. The bargains are moving, and that's what everyone is searching for. In June 2008, for the first time this year, the year over year total valley sales increased over June 2007, and the inventory in Gilbert dropped to a 6.3 month supply.
I give more weight to the current inventory trend and the Pending/Sales ratio than to the YOY.
YOY is history.
The current inventory is today,
Pending/Sales ratio is what will happen tomorrow.
But some like to see the YOY.
Something that I've said before, and have been heavily criticized by the doomers for saying it, is that the
buyers of today are buying the best properties out there.
They are looking for perfection at a bargain price.
When they find it, they buy it.
When the inventory declines and more buyers enter the market, those perfect houses will be gone.
Sure there will be others crop up, but it may be a longer wait, and again buyers will be faced with multiple bidders when those bargains surface.
So today, as I'm seeing it, when the perfect house at the right price crops up in front of a buyer they will be faced with competition for that home.
I look at it this way:
There are 42,835 single family homes on the market this morning in the entire valley.
The majority of the buyers today are in the <200k price range.
There are only 15,562 of the <200k homes available throughout the valley.
If one wants to live in Gilbert, they have only 248 homes under 200k to choose from.
They can find some in Chandler, but they are homes built in the 1970's with no upgrades.
Take a buyer who needs a 4 br 2 ba 2 car garage, and built 1990 or later for under 200k. That means about an 1800sf house. When I plug those criteria in, I get 12 homes in Gilbert.
Two are in Power Ranch area, and one is near Seville, too far for a commute to the city.
One is too close to Williams Gateway.
The others are not acceptable for various reasons which include being too close to power lines, too much repair needed, bad room layout, etc.
What does a buyer do?
There are several options which may be available, depending on their circumstances:
Wait and watch for the next "right house" to become available and make their offer quickly.
Lower the expectations. (This is the difficult decision)
Increase the price range. (Buyers typically will buy at the top of their price range in order to get the amenities in the house they need or want, so increasing the price range is usually not an option.)
I'm just using the example of the under 200k because the majority of buyers today are in that range. Also, as we read on the C-D forums, more people every day are learning about the REO's and they're all chasing them. When a bargain comes out, it's immediately getting multiple offers.
Also, the June statistics show that for Gilbert, the total single family home inventory declined to a 6.26 month supply with a 1.64 Pending to Sales ratio, which is showing market momentum.
The <200k price range for June statistics is even more surprising as it shows only a
3.72 months supply of inventory,
and a Pending to Sales ratio of 2.27.
That indicates a sellers market in that price range, which is excellerating.
However, we know it's the REO's priced right and in good condition that are the drivers of that market. But the fact is that the good homes at the right price in that price range are getting snapped up with multiple offers as soon as they hit the market.
Surprisingly, even up to the 400k price there is less than a 6 month supply in Gilbert. The 500-600k range is 23 months supply.
I want to make it very clear that I'm not advocating that people should run out and buy a house. My point is simply to show the statictics so people can see what is actually happening in the market today, and why it's happening. I don't try to talk people into buying. My job is to help people, who have made the buy decision, find the right home at the right price.
The prices are still declining because there are more foreclosures coming on the market, and we have no way of knowing when prices will increase, or how fast. Therefore, one must examine their own personal needs before making a decision to buy or to invest in the current market.
Therefore, rather than only looking at national statistics, or at total valley statistics, if you're a buyer or a seller, get your realtor to study the statistis for your city, zip code, and your community. The study can also be done by price range; number of bedrooms; one level; two level; waterfront, school district; etc. Then you will have a much better picture of your local market, and will be able to make a more educated buy/sell decision.
By studying the statics that I posted in the pdf earlier, if one is looking for a home in Gilbert in the 500-600k price range, you can generally expect that you as the buyer are in the drivers seat (with a 23 month supply) and should be able to make some offers that will get you a good price.
If one is looking in the up to 400k range, they can expect some competition for the good properties because there is less than a 6 months supply of those homes.
I wish the price of land would drop along with the houses. That is selfish of me, I know, but we would love to buy a little plot and build a retirement home on it.
Land prices are dropping as well in certain areas I strongly suspect--------the developers need to 'cut their losses' or die.
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