Gilbert Sun News Real Estate - 9.19.2021

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REAL ESTATE

GILBERT SUN NEWS | SEPTEMBER 19, 2021

Market ‘precarious’ for buyers and sellers, expert says

BY PAUL MARYNIAK GSN Executive Editor

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riven by iBuyers and investors that are gobbling up substantial numbers of houses, Valley home buyers and sellers may be entering a disquieting and even “precarious” period while renters are facing a continuing rise in rents, judging by the latest observations by a leading analyst of the Phoenix Metro market.

The Cromford Report outlined a series of trends from August sales and listings that likely won’t bring many smiles to anyone but landlords.

“Many surprising changes have occurred in the market over the past month,” Cromford said as it reported

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that the average sale price per square foot soared by 27.9 percent between August 2019 and last month, up from $194.97 to $249.31.

That pushed up the monthly median sales price in the same time period by 23.4 percent, from $325 to $401,000.

Several developments in August caught the Cromford Report’s eye, particularly a decline in new listings that appears to have been driven by a spending spree by large investors and iBuyers.

“Ordinary home buyers are losing some of their motivation, thanks to prices that are vastly higher than last year,” Cromford said. “Despite low interest rates, affordability has slipped below the normal range for Greater Phoenix.”

The report stated, “If it were not for the activity of investors and iBuyers – and particularly the latter – the market would have cooled during August. This would have been following the trend established since April.

“However, iBuyers have purchased so many homes over the last month that they are significantly distorting the market dynamics. These homes are mostly going to be re-marketed shortly, so they will almost certainly increase supply over the coming weeks.” Cromford not-

ed, “iBuyers have made offers well in excess of the pricing that we saw from them” in the first half of 2021.

He said it is unclear how iBuyers will price their homes once they return them to the market because “normal buyers no longer have the appetite” they showed through June 2021.

“Achieving sale prices well over cost could prove quite tricky” for the iBuyers, it suggested.

Cromford noted that iBuyers pur-

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REAL ESTATE

GILBERT SUN NEWS | SEPTEMBER 19, 2021

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Home market frenzy calms a bit, but that won’t last

BY MINDY JONES GSN Columnist

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arket stabilization is an interesting term that is causing quite a bit of confusion in the marketplace as it relates to the available supply of residential properties and the subsequent demand for those properties in Gilbert and across the Valley.

After more than a decade of under-building fueled by the fear of a market crash combined with the continued influx of residents and companies from higher price-point cities, we’ve been challenged with a deficit in inventory that will take months if not years to recover from.

We’ve watched appreciation rates in Gilbert go from just 6 percent annually two years ago to 24 percent over the last 12 months – meaning a house you bought for $450,000 before last Halloween would

likely list for over $100,000 more now or be prime for a refinance that would allow you to remove your mortgage insurance years before your lender originally estimated.

Sellers have enjoyed just 2.5 weeks of inventory to compete with as compared to a balanced market which would have nearly five times the inventory. Buyers can’t help but to be thrilled with interest rates +/-3 percent making even the most expensive purchases seem more affordable than ever.

Listings under contract are up, days on market is down, average sales to list prices are still trending about 2 percent over list price. While demand is slightly lower than average, supply is just a quarter of what we need.

While inventory has nearly tripled since spring, we have seen decreasing volatility in our market over the last month.

Demand was falling as many buyers became discouraged with the pace of the market and others felt priced out of op-

tions especially here in Gilbert.

For now, those trends seem to have slowed if not stopped completely, leaving the balance of supply and demand in Gilbert at a standstill month over month.

As rental prices have soared 36 percent valley-wide in the last two years, paling in comparison to the 55 percent increase in housing prices over the same time period, this potential calming of the waters might be the best time to rev up your home buying engines.

The expectation of increasing prices and interest rates continues to drive buyer demand while sellers can read be-

tween the lines of the 32 percent increase in new home permits from the first half of the year.

As seasonality returns to the landscape, we’ll likely continue to see a market very similar to the one we were in before COVID came on the scene.

January will likely bring another increase in homes available after a strong new construction quarter rounds out 2021 and then spring will return a lighter version of the frenzy seen earlier this year.

Staying out of the prediction game and knowing that institutional buyers are currently playing a larger role in the current market than expected, this market stabilization period seems like a good time to try to settle into that new home for the holidays.

Mindy Jones, a Gilbert Realtor and owner of the Amy Jones Group at Keller Williams Integrity First, can be reached at 480-250-3857. Mindy@AmyJonesGroup. com or AmyJonesGroup.com.

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REAL ESTATE

GILBERT SUN NEWS | SEPTEMBER 19, 2021

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chased about 2,869 homes over the last three months, which “represents almost 9 percent of resale purchases.”

They also have not sold as many as they have bought, though they are selling more to institutional investors, the Cromford Report stated.

Moreover, it noted, the prices paid by iBuyers for homes are 53-75 percent higher than they were paying a year ago, even though the median price of homes sold in the Phoenix Metro region has increased 26 percent.

The iBuyer and investor buying spree has sharply impacted the availability of resale homes, it said.

“We can see that the iBuyers (particularly Opendoor and Zillow) have increased their inventory massively,” the Cromford Report said. “If iBuyers had not done this, we estimate that supply would already be higher by some 1,800 listings…We conclude that pricing would also be weaker without their intervention. This begs the question: what happens if they stop buying on this massive scale?”

This 5,249-square-foot house on East Robin Court in Gilbert frequently sold for $1.6 million, one of at least five seven-figure properties in the town that closed in recent weeks.

The five-bedroom, six-bath single-story house, built in 2014, boasted numerous amenities, including a guest casita. (Special to GSN) “Investors, too, can decide to stop their buying spree at a moment’s notice. The market is therefore more precarious than if demand were primarily growing through owner-occupiers,” it added.

The news is a lot happier for investors that rent – and not so hot for their tenants, judging by the Cromford Report’s findings.

“Investors intending to rent out their properties are a different matter and the rapid rise in rents over the past year has justified them splashing out,” it said.

“Indeed, far more homes are going from iBuyers straight to the rental operators than we saw prior to July 2021. This takes homes off the re-sale market for a long time and reduces supply.”

It also noted “large scale investors with deep pockets are crowding out smaller investors.”

“We have seen larger buying sprees from investors before, notably between 2011 and 2013,” it continued. “However we have never seen iBuyers so determined to increase their top line.”

The average rental price per square foot has increased from $1 per square foot to $1.36 in the past two years, Cromford said.

“That is a 36 percent increase in just two years and must be a budget problem for tens of thousands of tenants,” it said, noting rents increased by 28 percent in the previous 18-year period.

“The cost of renting has escalated over a very short period,” Cromford said. “The housing bubble of 2004-2008 saw little to no rise in rents and in fact the low point was 64 cents in February 2005, just as the for-sale market was reaching its highest frenzy. This time is very different, showing that the rapid appreciation in home values is due to real shortage of housing rather than speculative activity based on easy money.”

However, Cromford also noted that all housing costs are soaring in the Valley.

“Although the cost of renting has jumped 36 percent over two years, the average home price per square foot has increased by far more – from $169.26 to $262.21, a jump of 55 percent,” it said.

REAL ESTATE

GILBERT SUN NEWS | SEPTEMBER 19, 2021

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Realtor emphasizes need for safe practices GSN NEWS STAFF

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eptember is REALTOR Safety Month and there’s a good reason why.

Every year, Realtors are injured and even slain as they go about their job, particularly showing houses.

To keep them safe, some realty firms like the Amy Jones Group in Gilbert has compiled tips for the men and women who work in what can be a high-risk profession.

“We hope that these tips help real estate professionals everywhere continue put their whole selves and hearts out into the communities they serve every day safely,” Mindy Jones said.

While working with strangers is a necessary part of the job, Jones suggests they meet for the first time at the Realtor’s office.

“We have an information sheet we ask clients to fill out with basic contact information and identification and we have a communication system on our team

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so that we know where our agents are,” Jones said.

She suggested solo agents meet clients in a public place before showing a property and that they use the National Association of Realtors’ client contact form and tracking feature through Showing Time or other safety apps.

Both help provide a record of the Realtor’s whereabouts and the client’s identity and contact information.

Jones also suggests that Realtors be careful about the personal information they post on social media sites.

“Think about what you post and who can see it,” she said. “You can customize your audiences, delay your posts so you are no longer at the location you are referencing, and avoid identifying details about your vacations or travels that might leave you more vulnerable. “ Be sure to stay in charge of who can tag you and when and always remember to safe guard your online information with passwords that are difficult to break

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395 Down from 407 Sales Last Month $598,316 Up from $582,193 Sales Last Month

into and changed often.”

Realtors might also want to consider taking a self-defense course, carry personal protection items – and learn to be aware of their surroundings while walking.

“When showing property or hosting an open house, always be prepared with an exit strategy and having your car parked in an easy to exit manner is key,” Jones advised.

Sellers also should be mindful of a few guidelines, she added.

“We ask them to put away valuable items, medication, bills with personal or identifying information, and, of course, guns for their own and other’s safety,” Jones said.

She added that buyers should “follow the 10 second rule, which includes paying attention to your surroundings throughout the day in 10 second increments, especially if you are in new or unfamiliar areas.

“And everyone should check their

smoke detectors, keep inventory of who has your extra house keys, ensure your car maintenance is done routinely and you’ve got an extra gallon of water in the back.”

The Amy Jones Group and Keller Williams Integrity First is offering the National Association of Realtors class, “Putting REALTOR Safety First: Safety Strategies for the Modern REALTOR.” The free class for all real estate agents will be held at Jones’ Gilbert office at Higley and Warner 11 a.m.-2 p.m. Sept. 28.

Information /registration: 480-2503857 or email mindy@amyjonesgroup. com.

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REAL ESTATE

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GILBERT SUN NEWS | SEPTEMBER 19, 2021

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2SOLD affiliate Hague Partners has acquired of The Real Estate Firm, a real estate brokerage in Gilbert.

Founded in 2014 by Malani Tillotson, The Real Estate Firm adds 30 Realtors to the 72SOLD system in Arizona, bringing its agent count to 270.

Arizona attorney, real estate authority and TV spokesperson Greg Hague said 72SOLD now operates in 38 states.

It boasts a program to sellers that avoids daily showings, a sale in 72 hours, a choice of closing date and the possibility of staying in their home for up to six months after closing.

A recent study by a local title company found that home sellers netted 8.4 percent higher prices using the 72SOLD program, Hague said.

“After my first meeting with Greg Hague, I knew I had met a visionary man who is passionate about his agents and the industry as a whole,” said Tillotson. “I knew that this was the brokerage I wanted to align myself and my agents with.

She said that since joining Hague Partners and utilizing 72SOLD, “we have been able to help more families buy and sell their home than we were the traditional way.”

The acquisition adds another brickand- mortar location for 72SOLD and Hague Partners for more personalized serviced, Hague said, adding, “Malani brings more than two decades of success in the industry and a similar vision for improving the process for buying and selling homes to give sellers a better experience and better result.”

Information: 72sold.com.

REAL ESTATE

GILBERT SUN NEWS | SEPTEMBER 19, 2021

Fulton Homes marks 45 years of building GSN NEWS STAFF

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ulton Homes is marking its 45th anniversary.

The Tempe company said in a release it prides itself on “quality single-family homes with high-grade amenities and plentiful greenspaces in communities across the Valley.”

“Forty-five years of building residences in which families grow and raise children in is an amazing achievement,” said CEO Doug Fulton. “We are proud to share this success with our current and future homeowners. We look forward to many more years.”

Fulton Homes was founded in 1975 by Ira Fulton after successfully buying and turning around a clothing business that was closed to bankruptcy.

The company grew from building several homes a year to completing more than 1,200 single family units in 2020.

“Quantity is not Fulton Homes’ motivating factor; the company’s overarching goal is to fulfill the needs of the ever-changing American family as best as possible,” the company release said.

“It is important that homeowners know they’re moving into a home that is not

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only built with care, but with unmatched quality.”

Fulton Homes said its key to its business has been a variety of charitable endeavors, including large donations to educational institutions, water safety awareness campaigns, musical educational promotions and giveaways benefiting family pets and children literacy.

Recently, the Tempe-based homebuilder announced details on more than 5,200 secured lots the company currently has in different stages of development in the local market.

“As a company, we know exactly who we are and what we do best: Build single-family homes and large-scale master-planned communities featuring the highest grade of amenities and shared gathering spaces, all within our local market,” said Fulton. “Our pipeline is proof of that and our commitment to the community.”

Fulton Vice President Norm Nicholls added, “For a local homebuilder that

operates in-market, we believe we are in an extremely good position to compete with national builders in an active and healthy residential real estate market.

“The lots are in front of us, and once the trades and supply chain catches up to the demand – a challenge all builders face right now – we can start announcing sales and pre-sales.”

Its major Southeast Valley development currently is Barney Farms in Queen Creek, a master-planned community that will total more than 1,700 homes on 550 acres, including 114 acres of open space anchored by a 22 acre lake.

With established master-planned communities underway and nearing close-out, and newer projects in different stages of development, Fulton Homes expects to build approximately 3,500 homes on secured lots in the West Valley in the coming years.

Currently in development, Escalante has more than 1,000 lots near US 60 and the Loop 303 freeway in a burgeon-

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ing part of the Northwest Valley.

In Goodyear, Fulton Homes closed on land at Yuma Road and Estrella Parkway surrounding the Goodyear Ballpark Village that will eventually be home to more than 790 homes. The project will feature higher-density designs in a gated setting. This project is not expected to go into development for at least a year.

Additionally, the company recently secured a parcel totaling 187 acres at the northwest corner of Perryville and Indian School Roads in the West Valley.

The recently approved master-planned community will have 675 homes.

Surprise will also feature a Fulton Homes master-planned community of 550 homes on 110 acres of land.

“The approved projects remain in the early stages of raw land in predevelopment, and the company will look to break ground on homes in the summer of 2022,” the company said.

Information: fultonhomes.com.

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