Chandler

Like much of the rest of the southeast Phoenix Valley, Chandler saw a decline in September 2008 in the single-family real estate market.  Great news for buyers and investors but just the opposite for those trying to sell their home or those who have overextended themselves and find their home worth less than when they purchased it two or three years ago.

All of the raw statistical data mentioned in this post can be found here.

From August 2008 to September 2008, selling prices in Chandler dropped from $293,636 to $257,606:

In the graph above:

• the blue line indicates the average price of single-family homes currently listed in Chandler.
• the green line indicates the list price for single-family homes before being sold. In other words, this is the average price for all listings that went under contract before the final sales price was agreed upon by the buyer and seller through contract negotiations.
• the yellow line indicates what the average sales price was for single-family homes in Chandler.

As we saw in Tempe from July to August 2008, prices in Chandler caught up with Tempe’s nosedive from August to September.  Many factors, including tightening and freezing of the credit markets as well as more investors in the area buying up low-priced foreclosures, short sales and bank-owned properties helped to contribute to the falling average sales price in Chandler.

As a result, average selling prices in Chandler’s single-family real estate market were down 31% from a year ago:

Can we see the light at the end of this dark tunnel yet?  Perhaps.  But, with the recent crash of Wall Street, it’s not likely to happen as quickly as we might like.  The silver lining continues to be the months of inventory and the average selling time for single-family real estate in Chandler.

From August 2008 to September 2008, the average days on market (ADOM) decreased from 102 days to 92 days:

It should be noted that 92 days is the lowest ADOM has been since October 2006! This is good news for sellers but also helps to indicate we may be ‘bottoming out’ in Chandler over the next three to six months.  Only time will tell, however.

Another good sign is the months of inventory available in Chandler:

As a reminder:

• Less than six months of inventory indicates a “seller’s market.” In a seller’s market there are more buyers than there are homes to purchase. As a result, real estate prices may increase during a seller’s market because there is less inventory than there are buyers. This is what happened during the 2004 - 2006 real estate boom in Phoenix.
• More than six months of inventory indicates a “buyer’s market.”In a buyer’s market, real estate will often sell below the listing price because there are more buyers than inventory. Much of the country has experienced an extreme buyer’s market over the past year or two.
• Six months of inventory indicates a “balanced market.” This is the most desirable market for buyers and sellers alike. Homes will typically sell near listing price because there is a balanced amount of inventory when compared to buyers. Sellers who market their property correctly and at the current market price will often receive an offer near that list price. Buyers are more confident in purchasing because prices are stable or appreciating.

Since June 2008, the inventory levels in Chandler have stayed below seven months.  In fact, September’s inventory level as 5.87 months.  Better yet, 31 more properties sold in September than August while the total number of homes on the market dropped by 105 in that same timeframe.

It should be noted that September also signals a traditional slower period for real estate sales that continues through much of the rest of the year.  During this time, buyers are more interested in football, school and the holiday season than dealing with the stresses of buying and moving into a new home.  Many sellers are much the same way and would rather wait until the coming new year to deal with the stresses of selling a home.  It will be interesting to see what happens over the last three months of 2008 in terms of inventory and selling prices.

Are you ready to purchase real estate in the Phoenix Valley? Relocating and need to buy now? You can search our home search website - buyyourphoenixhome.com - casually or set up a fusionpower search - giving you a powerful personal and secure webpage with homes that meet your search criteria!

Like the rest of the Southeast Phoenix Valley, August 2008 brought continued price declines for the single-family real estate market.  However, those lower prices also spurred a slight increase in sales and a decrease in inventory - most likely due to sellers with unrealistic expectations who decided to take their property off the market.  The end result is a Chandler real estate market with less than six months of inventory and an average selling price of $257,543 (a 41% drop from the average selling price a year prior).

Pricing trends for single-family homes in Chandler, Arizona. Click to enlarge. See the raw data here.

Similar to Tempe and Gilbert, selling prices took a dive from July 2008 to August 2008.  With an influx of foreclosures, bank-owned properties and other distressed properties, prices will most likely continue to drop.

In the graph above:

• the blue line indicates the average price of single-family homes currently listed in Gilbert.
• the green line indicates the list price for single-family homes before being sold. In other words, this is the average price for all listings that went under contract before the final sales price was agreed upon by the buyer and seller through contract negotiations.
• the yellow line indicates what the average sales price was for single-family homes in Gilbert.

Average Days On Market in Chandler, Arizona. Click to enlarge.

Months of Inventory in Chandler, Arizona

As a reminder:

• Less than six months of inventory indicates a “seller’s market.” In a seller’s market there are more buyers than there are homes to purchase. As a result, real estate prices may increase during a seller’s market because there is less inventory than there are buyers. This is what happened during the 2004 - 2006 real estate boom in Phoenix.
• More than six months of inventory indicates a “buyer’s market.”In a buyer’s market, real estate will often sell below the listing price because there are more buyers than inventory. Much of the country has experienced an extreme buyer’s market over the past year or two.
• Six months of inventory indicates a “balanced market.” This is the most desirable market for buyers and sellers alike. Homes will typically sell near listing price because there is a balanced amount of inventory when compared to buyers. Sellers who market their property correctly and at the current market price will often receive an offer near that list price. Buyers are more confident in purchasing because prices are stable or appreciating.

Party time.

With Labor Day here it means that Phoenix valley residents can take solace in the idea that over the next month we’ll start to see temperatures routinely top out at less than 100 degrees.  Sure, it may be 99 or 98 but there’s something magical to a Phoenician when the high is “only 98″ and doesn’t venture into the triple digits.  I type this as I see this Friday’s high is 110.  Spicy.  September starts out very humid but as the month wanes on the dry air eventually returns and the high-90’s aren’t that bad in the shade or next to a pool.  Or in a beer tent.

Unlike much of the country, Phoenix and its suburbs throw numerous festivals throughout the fall, winter and spring.  We take the summer off because it’s too hot to party unless you’re tubing in a cold river or up north in the cool mountains.  Although September is not nearly as full of festivals as October will be - here are some ideas of what to do during September:

Chandler, AZ

• Downtown Art Walk | Wednesday, September 3 | 5 - 9 PM | What started out less than a year ago as a simple art walk to encourage residents to spend evenings in Historic Downtown Chandler has grown into a very respectable event featuring artists and crafts and even street performances.  Check out Historic Downtown Chandler’s website for more information.  The Art Walk occurs on the first Wednesday of every month.
• GetOut Performing Arts Expo | Saturday, September 6 | 10 AM - 3 PM | Formerly at the Scottsdale Center for the Arts, this FREE morning and afternoon features mini-performances from groups all over the Phoenix valley to give residents a “taste” of what’s to come this performance season.  Afterward, there will be ‘pedal cabs’ whisking you away to Historic Downtown Chandler for lunch and shopping.  Go here for more info.
• Starlight Concert Series | Every Tuesday :: September 9 - October 28 | 7 - 8:30 PM | Every Spring and Fall the City of Chandler has free concerts at Tumbleweed Park on the corner of McQueen and Germann Roads.  For the lineup of what bands will be playing, go here.
• Meadowlark at the Chandler Center For The Arts | Friday, September 19 | 7:30 PM | Not really a festival but I thought I’d mention it because it’s part of the Chandler Center for the Arts‘ FREE summer concert series.  For more information, go here.

Gilbert, Arizona

• 17th Annual So Long To Summer Fest | Saturday, September 27 | Phoenicians like the end of the brutal heat so much that we throw a party to commemorate it.  Have you ever seen a “So Long To Winter Fest” in the Midwest or East Coast?  I didn’t think so.  This fair-like event is centered around families and kids but also includes a food and beverage area and a concert stage.  For more information, surf on over here.

Tempe, Arizona

• ASU Football | Not officially a festival but definitely much fun!  ASU fans and students know how to have a good time.  The party usually starts in the fields and parking lots surrounding Sundevil Stadium and then pours into the bars and restaurants on Mill Avenue after the game.  Arizona State has home games on:
  - Saturday, September 6 | Stanford at ASU | 7 PM | Buy tickets
  - Saturday, September 13 | UNLV at ASU | 7 PM | Buy tickets
• YFest | Saturday, September 6 | 11 AM - 2 PM | YFest at Tempe Marketplace “celebrates and raises awareness of the power of youth to change the world.”  What may be just as interesting are the youth performers  - bands, dancers, singers, etc. - that will fill Tempe Marketplace, an outdoor mall at the corner of Loops 101 and 202.  More information can be found here.
• Way Out West Oktoberfest | October 3, 4 and 5 | Okay, it’s not in September but you should pre-plan now.  There’s a kid-friendly “festival within a festival” at Kinderfest while those who like to indulge in a beer or two can enjoy the many beer tents and concerts at Tempe Beach Park.  Get more info here.

And if you just can’t take this last month of heat, check out the Arizona Republic’s “Fall Festival Guide” for informatin on festivals throughout Arizona, many in cooler locales like Flagstaff.

Hot on the heels of the inaugural episode of ‘Fusion Vision’ is the second episode featuring Arizona Monsoon Storms.  This year we switched from designating the Monsoon Season’s beginning as “three consecutive days of 55+ degree dew points” to “June 15 - September 30.”  The monsoon season brings with it amazing (and dangerous) lightening storms to the Phoenix valley.  Sometimes torrential downpours can occur - in fact, last night’s monsoon storms that are making national news actually brought just under an inch of rain in less than an hour to Phoenix Sky Harbor Airport and winds of 86 miles per hour!

I also heard on the news today that this was the most dangerous monsoon storms since 1996 to hit the Phoenix area - and we loved every minute of it!

Although most of the year Phoenix enjoys a dry heat it’s quite humid this time of the year with dew points sometimes reaching well into the 70’s making it quite miserable!

Here is the second episode of Fusion Vision featuring Arizona’s Monsoon Storms:

[If you are reading via a Feed Reader you'll need to click through to view and to comment]

Here are some additional facts on the monsoon.

USAToday website on August 26, 2008

There you have it!  USAToday shows the first “glimmer of hope” article I’ve seen in the mainstream media since the housing market began to tank.

There’s no need to repeat the article, you can read it here.  In general, the report from USAToday aligns with the year-over-year price drops that we recently posted for Tempe, Chandler and Gilbert.  USAToday reported a 27.9% drop in the Phoenix market over the past year.

The media plays an important role in creating the public’s mood for many things, including the real estate market.  So it’s nice to see a non-doom-and-gloom story.  As always, buyers and sellers should look at the actual and most recent data from a real estate professional and decide for themselves if now is a good time to buy or sell real estate.

The Chandler real estate market is not unlike most in the Phoenix valley.  It’s gone through some tough times with homes lingering on the market and prices dropping at a concerning rate for homeowners.

The question on everybody’s mind is “have we hit bottom yet?”

Taking a look at the past two years of pricing trends, inventory levels and days on market can give real estate buyers and sellers a good idea of where we stand.

First, let’s look at the two-year trend for homes listed and sold in the Arizona Regional Multiple Listing Service:

Pricing trends for the past two years for single-family homes in Chandler. Click to enlarge.

You can view the raw data for this article here.

In the graph above:

• the blue line indicates the average price of single-family homes currently listed in Chandler.
• the green line indicates the list price for single-family homes before being sold.  In other words, this is the average price for all listings that went under contract before the final sales price was agreed upon by the buyer and seller through contract negotiations.
• the yellow line indicates what the average sales price was for single-family homes in Chandler.

As in yesterday’s Tempe Market Snapshot, it should come to no surprise to anyone who’s not been living under a rock for the past two years that prices have dropped pretty dramatically.  With the exception of May 2007, which saw some pricey homes sell in Chandler that pushed up the average selling price, prices were highest two years ago with an average selling price of $388,049 in August 2006.  As of July 2008, the average selling price of homes in Chandler had fallen to $287,474, or a nearly 35% drop in prices:

The percent change in sales prices for single-family homes in Chandler. Click to enlarge.

Is there any silver lining in all of this?  To homeowners, a 35% drop has created a bad situation for many who purchased during the middle or end of the real estate boom.  For example, take the average price of $388,049 in August 2006 as a purchase price for a family who put 20% down, or $77,610.  Keep in mind, most home buyers during August of 2006 were not putting down 20%, 15%, 10% or even 5% for a home.  But, for the sake of our ideal situation, we’ll use a traditional conventional mortgage of 20% down.

That same family, who took out a 30-year mortgage for $310,439 in August of 2006 for a $388,049 home now may have a home that is only valued at $287,474 - they have a negative equity of nearly $23,000!

Now, imagine those who purchased a home with a “Zero-Down Mortgage” or only put 3% - 10% down.  It’s no wonder that even those home buyers who had a decent down payment and good credit are considering walking away from their home and going into foreclosure.

Back to the question - is there a silver lining in all of this?  Maybe.  There’s no doubt that foreclosures will continue to bring down prices in Chandler and in much of the Phoenix real estate scene.  But, looking at the graph shows that prices are stabilizing in Chandler, similar to Tempe.  Like much of the Phoenix valley, prices dropped dramatically through the latter part of 2007 and the first part of 2008.  But, prices have stabilized to right around $290,000 in Chandler since May 2008.

Another indicator of the market is the Average Days on Market (ADOM).  This shows how long homes sit on the market before they are sold, on average.

The Average Days on Market for single-family sold homes in Chandler. Click to enlarge.

It should be noted that this shows how long a listing that has sold has been on the market and not the average for all homes currently on the market.  What’s the difference? Take this current statistic from July 2008:

• The average days on market for sold listings was 72 days.
• The average days on market for all active listings was 153 days (this data is not graphed above).

Yikes.  That’s two and a half months versus a just over five months.  So why is the sold listing statistic so much better?  For one, it includes foreclosures.  Foreclosures sell much more quickly because they are usually priced below market value.  On the other hand, many traditional home sellers are still living in 2005 and 2006 and expecting to get that 35% higher price for their property - which is just not going to happen.  These sellers are creating a much higher ADOM for active listings.

What should be noted is that the ADOM for Chandler single-family homes is stabilizing just like the prices.  In fact, since March 2008 the ADOM has hovered around 100 days.  Prices and ADOM have stabilized which shows there is some sort of balance returning to the Chandler real estate market.

Want more stabilization indicators?  Check out the inventory levels in Chandler:

The months of inventory in Chandler, Arizona for the past two years. Click to enlarge.

As a reminder:

• Less than six months of inventory indicates a “seller’s market.” In a seller’s market there are more buyers than there are homes to purchase.  As a result, real estate prices may increase during a seller’s market because there is less inventory than there are buyers.  This is what happened during the 2004 - 2006 real estate boom in Phoenix.
• More than six months of inventory indicates a “buyer’s market.” In a buyer’s market, real estate will often sell below the listing price because there are more buyers than inventory.  Much of the country has experienced an extreme buyer’s market over the past year or two.
• Six months of inventory indicates a “balanced market.” This is the most desirable market for buyers and sellers alike.  Homes will typically sell near listing price because there is a balanced amount of inventory when compared to buyers.  Sellers who market their property correctly and at the current market price will often receive an offer near that list price.  Buyers are more confident in purchasing because prices are stable or appreciating.

Currently, Chandler stands at 6.71 months of inventory.  This means that if no more listings were put on the market and the same number of homes sold for each of the 6.71 months, we’d then run out of single-family homes to sell in Chandler.

Based on this information, Chandler has just over the magic 6-month number.  We are in a buyer’s market but not as dramatic as it was just six months ago.  This means that if sellers continue to price their homes correctly and buyers don’t drop off the face of the earth, the worst of the worst may be over for Chandler.

There are still outside factors that can’t be controlled for all of the Phoenix Valley’s real estate market.  Those include foreclosures and the credit-crisis.  Many news reports have indicated that foreclosures have peaked in Phoenix - which is a good thing.  As the foreclosures on the market are bought up prices can continue to stabilize.  The credit-crisis continues to be a big factor in the real estate market as buyers are finding they can’t get approved for mortgages even with decent credit.

And with the recent changes in FHA Mortgage Loans that take effect on October 1, more buyers may be pushed out of the market.  Currently, a buyer needs 3% down for an FHA mortgage.  On October 1, that requirement increases to 3.5%.  The larger concern, however, is that FHA will no longer allow sellers or home builders to gift the down payment - which has been a key selling point for builders over the past few years with “zero down” offerings as well as for motivated sellers to get their home sold.

Overall, the single-family real estate market in Chandler, Arizona appears to be stabilizing.  Average prices have stabilized to around $290,000 since the second quarter of 2008 while inventory levels have stabilized to just under 7 months over the past three months.

If you’re interested in purchasing a home in Chandler, you can search our site casually or set up a fusionpower search - giving you a powerful personal and secure webpage with homes that meet your search criteria!

I recently stumbled upon a listing in the Tempe area (see previous post) that at first made me half laugh at the stupidity of the agent selling the condo and half empathetically cry for the sellers of the condo.  

“The property, which is listed near downtown Tempe for just under $400,000 is incorrectly listed as being within the Cave Creek Unified District.  That’s one hell of a bus ride for kids to Cave Creek which is roughly a 36 mile drive to the northern-most suburb city of the Phoenix metro area.”

Worse yet is the description used in the listing - or lack of description for that matter.  It gives no detail of the property or the amenities located within this development or the convenience of future light rail and the proximity to downtown Tempe.  The pictures (there are only three and the Arizona Regional Multiple Listing Service now allows unlimited photos) posted for the listing look like they were taken with the first cell phone camera ever created as they are grainy and extremely small.  Worse yet, the agent “stole” a stock photo of a Tempe Town Lake sunset and the Mill Avenue Bridge - and used it as one of the three photos to market the property.  

Now, for the icing on the cake - the property is listed as “Owner/Agent” which means the agent selling the property is also the owner.  My empathetic cry for the seller quickly went away.  Can you imagine what this agent does for his/her clients if this is all he/she does for his/her own property!?!  It’s no wonder the real estate industry has a bad image - who sees the value in paying an agent upwards of $24,000 to market a property in that way?  I sure as hell wouldn’t.

Sellers:  Check and recheck your complete MLS listing for accuracies!  Don’t ever assume, no matter who your agent is, that they’ve listed your home with 100% accuracy.  Better yet, don’t assume they’ve posted it in it’s best light.  There are a few way to check your MLS listing.  The easiest is to simply ask your agent for the complete listing printout.  Ask for the “Agent Report” so that you see everything another REALTOR would see.  Verify that all the information in the listing is correct and that nothing has been left out.

Better yet, go to websites that reciprocate MLS data - perhaps ours - and check your listing’s photos and (hopefully you have one) virtual tour.  On our site, you can view the pictures in full-screen - but only if your agent has loaded photos that are of full-screen quality.  If they haven’t, they’ll be small photos or even grainy if they are of super-low quality.  Not only that, verify that your photos actually present your property in it’s best light.  That means either your agent is a great photographer with a great camera or your agent hired a professional photographer.  

With well over 80% of home buyers using the internet to start their search it’s very easy for them to move on to the next listing if the pictures for your property don’t stir their interest.  Most of us are visual people and will first look at the pictures and then decide if we actually want to read about the property.  Make sure your pictures and virtual tour engage buyers rather than disengage.  And make sure the information on your property is 100% accurate to ensure it comes up on searches as it should.

Arizona Fusion Real Estate is excited to announce new and innovative features that give buyers excellent tools for searching for the first, next or best home ever!  We call it fusionpower search!

fusionpower search allows buyers to completely tailor their search and access it on a personal, secure website.

Have you ever wanted to search within just a specific area ?  For example, maybe you are looking for a home that is north of Broadway in Tempe, Arizona but between Mill Avenue and Rural Road but south of Tempe Town Lake - and when you’re west of Mill you’d like to the search to continue north of University but east of Hardy Drive.  fusionpower search allows you to do just that!

It's okay. Be as specific as you'd like on where and what you'd like to search.

Here is what fusionpower search can do for you if you are thinking of buying real estate in the Phoenix Valley:

•    Search Your Way - Like You’ve Always Wanted ::  Be as specific as you like - a 5 mile radius from work, between Mill Avenue and Rural Roads south of Tempe Town Lake but north of Broadway, within a mile from a light-rail station - whatever your personal search requirements are we’ll meet them!
•    HD Photos :: If the listing agent has made the photos available, you’ll be able to view photos in fullscreen, HD quality.
•    Virtual Tours :: If the listing agent has created a virtual tour you’ll have a direct link all within your fusionpower search webpage.
•    Compare :: You’ll be able to compare other homes that are on the market.  You can see what the average Days on the Market are, what the average list price is and more.
•    Sales History :: If you’d like, we can add to your fusionpower search the recent sales activity and show you what homes have sold in the past three months in your search area so that you can get an idea of what you’d like to offer.  You’ll even be able to compare what the list price was compared to the sales price.  Of course, we’ll review this information again when we’re ready to make an offer.
•    Save Your Favorites :: You’ll be able to save your favorite properties for later so that you always have access to the information.  No more re-searching or clicking through hundreds of listings to show your family and friends.  You can also throw out listings you hate.
•    Schedule Showings Online :: Have questions on a specific property or want to schedule a showing?  Do it online at anytime.
•    Tax Info :: Your fusionpower search will give you instant access to public tax information from the Assessor’s Office on properties that interest you.
•    Mortgage Calculator :: Just click on the basic mortgage calculator to see what your payments might be.  fusionpower search gives you all the search power you’ll need.

Sign up for your personal fusionpower search webpage and when you purchase a home with arizonafusion, we’ll include:
•    A Free Home Warranty :: Up to a $500 value, your Home Warranty protects you from unforeseen issues with major expense items such as the air conditioner, water heater, appliances and more.  The warranty even will rekey your home and provide you with new and unique keys.
•    10% Back :: We donate 10% of our earned commissions to the charity, non-profit or university of your choice.  You can read more here.

Sign up for your fusionpower search website now.

With President Bush signing into law a bill that aims to help over 400,000 homeowners from losing their homes into foreclosure, buyers sitting on the fence should also know that it changes how you can purchase a home through the Federal Housing Administration, or FHA.

The law also requires buyers to put a down payment of 3.5% for a FHA Loan.  Previously, buyers only required 3% as a down payment.

But what may affect buyers even more is that sellers are no longer allowed to gift the down payment to the buyer.  New Home Builders can no longer give you your down payment and sellers can no longer give you an incentive to buy their home by handing you a down payment from their proceeds.

Buyers should be aware of this.  FHA loans are becoming the most popular mortgages out there.  Right now, buyers can still accept a down payment from a new home builder or seller before October 1, 2008.

The new housing bill also gives first-time home buyers a tax credit of 10% of the sales price (up to $7500).  In the Phoenix area you’re most likely going to get the entire $7500 tax credit with current market prices.  It should be noted that although the tax credit will benefit you on next year’s taxes - it is really an interest-free loan from the government.  You’ll be paying it back over the course of the next 15 years.

Is now the right time for you?  If you have good credit and have been waiting for the right time but don’t necessarily have a significant down payment you may want to start searching now - if the time is right for you and/or your family.

You can use arizonafusion’s map-based search or our just released fusionpower search for the ultimate property search experience!