The Valley's
Leading Agent
Russell Shaw
May 2021
Real
My team and I help more people move than any other agent or team in Arizona. I'm not bragging, I'm applying for a job. I want to be YOUR Realtor!


How Does Rent-to-Own Work?
If you want to buy a home, one agreement option available is rent-to-own. Of course, not every homeowner is going to agree to it, and it comes with a set of pros and cons.
      The following is a breakdown of everything you should know about rent-to-own when it comes to buying a house.
      The Basics A rent-to-own purchase has appealing elements, but there are risks.
      Basically, when you enter into this type of contract, you agree that you’ll rent a property for a set period of time before you then gain ownership. The time you rent can be a few months to several years, dependent upon your
Mortgage Rates
U.S. averages as of May 2021:


30 yr. fixed: 2.97%
15 yr. fixed: 2.29%
5/1 yr. adj: 2.83%






individual can own the property, or a company might.
      The contract dictates that the seller will keep a certain amount of money from each
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Spring 2021 Real Estate Trends to Look For
     Spring is always an interesting and exciting time in real estate, so what are analysts expecting we can see this year?
      Increasing Mortgage Rates It appears, depending on how the economic recovery comes along, that mortgage rates could continue to increase. Rates have been on the rise for weeks, while earlier in the year, they were holding under 3%. Analysts believe that it would be a good time for borrowers to try and lock in low rates now, with the anticipation they’ll tick upward through the year.
      The 30-year fixed-rate mortgage is anticipated to average 3.1% through the spring months, while it was averaging 2.9% during the first quarter of the year, according to Fannie



PMI - It’s Not a Bad Thing
     One of a lender’s main jobs is to evaluate risk. If a lender looks at a loan application, what is the risk in making a home loan? How’s the credit look? Can the borrowers comfortably afford the new monthly payment? Is the property going to be owner-occupied or will it be a rental? How much down payment is involved? All of these questions and more must be answered before a final approval can be issued. Certainly having good credit is a positive as is affordability. Lenders also view rental properties as a higher risk than an owner-occupied home, thus the higher interest rate and additional down payment for a rental. But the down payment can carry considerable weight. The more down payment a borrower comes to the table with, the less risk for the lender.
      It used to be that a minimum down payment could be 20 or 30% or more, depending upon the individual lender. Yet it’s obvious that kept a lot of folks out of a home, especially for first time

July 2020 Phoenix Video Market Update

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LUXURY HAS EXPLODED HOMES SELLING FOR 101% OF LIST PRICE ON AVERAGE

For Buyers:
With 54% of all sales closed over asking price so far in April, the average sale price per square foot is now higher than the list price for every price range up to $1M.  In a balanced market, homes typically sell within 97% of list price; that percentage is now 101%. This means that, for the past month or so, the majority of list prices have been the starting price for where negotiations begin instead of a top price to work down from. In past extreme seller markets, $5,000 over asking was typically enough to win a contract; that was true last year as well when the market took off.  However, last January the median over ask was $6,000; by February it was 10,000; in March it was $11,000; and so far in April it’s $15,000.  The highest was $905,000 over list price   closed in March (It was an auction for a 10-acre property in Cave Creek that sold for $2,255,000). By price range, over 62% of homes listed between $250K-$400K closed over asking price; the percentage is 54% for sales between $400K-$600K;  47% between $600K-$900K; 30% between $900K-$2.5M;  9.5% over $2.5M. Putting an offer in over asking price may cause a buyer some anxiety, especially a first-time home buyer.  The median sale price is now $360K. Since January, the sales price per square foot for a home between $300K-$400K has appreciated 6%.  That’s approximately 2% per month and the current sale price to list price ratio within the price range is 102.4%.  If this rate of appreciation continues in the short term, a buyer who paid 4% over asking price on a $360K home ($14,400 over) would recoup their investment through appreciation in approximately 2 months.

For Sellers:
The luxury market has been exploding since last summer and continues to be at the strongest level ever seen in Greater Phoenix. The number of listings under contract over $1M is up 156% over last year; but the number under contract between $2M-$3M is up 296% and over $3M is up  212%. In a typical market, sales prices in this range would be landing around 93% of list price.  However in the 2021 market, the sales price ratio is averaging 98% of list. The luxury market is also keeping up with the rest of the market in terms of marketing time.  Prior to contract, half of the contracts accepted valley wide in the last week were on the market 6 days or less.  Over $1M, the median was 12 days prior to contract.  Over $2M, the median is 67 days. The market over $1M is outperforming in terms of annual appreciation in sales price per square foot.  The median price for a 4,000-5,000 square foot home is running at $1.1M with an appreciation rate of 31%.  The median price for a 5,000-10,000 square foot home is $2.3M with an appreciation rate of 35%.  For perspective, the median price of a 1,500-2,000 square foot home is $365K with an appreciation rate of 25%.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC



  Daily News and Advice

Read about the events shaping the Real Estate market today, find current interest rates, or browse the extensive library of advice and how-to articles written by some of the top experts in Real Estate. Updated each weekday.
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Russell Shaw, Realtor®
E-mail: russell@nohasslelisting.com
Website: http://www.NoHassleListing.com
602-957-7777
Toll-Free 866-357-3604
Realty ONE Group
602-957-7777
11211 N. Tatum Blvd., Ste. 100
Phoenix, AZ 85028


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