Trends

If you're in the market at all lately, you've probably noticed a lack of homes to buy and higher prices. Your notice would be correct. Inventory is painfully low.

As of now the median price, measured monthly is $140,000 compared to $119,000 in January and $114,000 last year: a jump from $114,000 to $140,000 is huge and much of it as a result of low inventory.

But, there is a but. Much of the low priced inventory has been depleated. As a result of fewer low priced sales the median price will be up, so part of that jump is due to more expensie, in general, homes selling, but only a portion of that rise - the rest is demand and low inventory and of course changing sentiment about the current financial situation and the future. 

Sales are down from both 2011 and 2010. Only 8,480 properties sold compared to 9,452 for the same period last year and 9,129 two years ago. The same thing for pending properties: 11,996 currently while last year it was 13,326 and 14,406 two years ago. 

If you only looked at those numbers the trend would look depressing and dismal, but the reality is so much different, it's almost as extreme and surreal as it was in 2005 and 2008.

All those numbers are down from the previous periods only and only because there is a lack of inventory, or demand has driven down inventory to levels that have forced a significant change in the market trend. Lack of inventory, lots of cash out there, a volatile stock market, low interest payments in the banks and low

Investors are a huge segment of the current buying group gobbling up inventory as if their hunger were insatiable. Every few months I post a graph showing what percentage of the market is investor buyers.  Last time this information was posted it was high: near 22%. Since then that number has increased to as high as 29% as it's at 265 at last count, earlier this month. 

Also over 40% of sales are cash and i'm sure investors make up a greater than 50% of cash sales. Most of our investor clients are cash or combination of cash and loans when they are purchasing multiple homes.

The buyers who are not investors have some resentment toward investors when they learn about these numbers, often comparing this trend to the trend that brought down the

Bike Month continues.

I've always had a soft spot for the Penny Farthing bike, but never though to it as a race bike, until I saw this rather exciting video of such a race. The race starts at about 1:15.

The news is all over now: prices for real estate are up and often significantly up over last year. The lack of supply and a healthy demand has forced prices to increase: simple economics. Demand is high from regular home owners to investors, all trying to take advantage of still low prices and even lower interest rates, though - 40% of sales are cash.

There's a lot of talk about missing the boat on this recovery. Not so fast. Even though prices have increased, they are still at long time lows. With the price of building materials on the rise and really with no reason for a slow down in demand for the materials due to global demand, it is unlikely you will be able to build homes at the price you can buy them now. Replacement cost is a huge factor and

I've been a real estate investor for a while, over a decade now, that's how I got into the real estate industry then into being Realtor full time. Going in I knew it could be a rocky industry and it has been. I also knew there were many ways to generate income as an investor: both passive and active. I'll skip the active here because what that really is is a job in itself, not investing and I want to concentrate on investing and one particular example of how well it can work, especially now.  

The example below is based on an actual property that I personally purchased in the last 6 months. I'm using it because I know all the numbers, inside and out, but I won't disclose the property address and I don't keep real estate in my name either. 

The

Surprise like many suburbs were hit hard, but these are also the areas in the midst of a hot real estate grab. Inventory is at a long time low of 800 homes and months of inventory is down to 2.7 months, which is very low even compared to a low 3.9 months last year.

It means increasing prices. The average price is up to $153,271 from $143,926 last year and the more meaningful Median price up to $135,000 which is a significant rise in one year from $123,550 last year. 

 (Graph - Cromford Report)

It's nice to have a balanced market, but in real estate it's rare to have one; though the imbalance is not, usually, skewed too much: that's an okay situation, but are we getting too much of a good thing now? Too fast of an improvement, is it really an improvement when it's skewed so much? The market is not balanced.

Personally I don't like it, this imbalance it makes everyone's job more difficult and there is alot of aggrevation, animosity and bad feelings out there. Even something simple as working in your client's best interest can earn you new nick names or have someone question your integrity. There can be only one buyer for any particular home and when many people want it - and there are few other choices - the results are not always good. 

Murals On McDowell

A few weeks ago I wrote about the progress of a remodel we're doing on Central Phoenix mid-century modern. Check out the before picture.

That remodel has been completed except for a few items. Below are three photos of the kitchen and living space. This is a one bedroom apartment so there is a limit of how many relevent photos I can take, but these will give you a good idea of what is there.

The change is rather dramatic. I like the skylight: I'm big on natural light and the expense and effort were worth it to me, despite what my handy man said.

The kitchen cabinets and fixtures are from Ikea. The stove is one thing we splurged on. A 5 burner gas stove which is awesome and visually striking.

The floor is a laminate from Ikea which I've