The Valley's
Leading Agent
Russell Shaw
June 2023
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!

These Are Six of the Most Expensive Home Repairs
When you become a homeowner, you’re taking on not just the cost of your mortgage and down payment, but you also have to budget for those expenses you might not expect. The repairs you may need to do to your home through your ownership can be nearly impossible to predict and often tough to avoid.
      Some of these projects are major and have a big price tag, but preventative maintenance efforts can help reduce the risk you run into one of these issues.
      1. Roof Repairs Your roof is protecting everything else in your home, and if it needs repairs, it’s critical to be proactive about making sure they get done. The difficult part, along with the cost of
U.S. averages as of June 2023:

30 yr. fixed: 6.57%
15 yr. fixed: 5.97%
5/1 yr. adj: 5.99%

cost of roof repairs, is first that it can be tough to realize there’s a problem until it grows into something much larger. The second issue is that storms often cause roof damage, and there’s
houseThe Best Deals Go Fast!

Want to be instantly notified of all of the newest homes for sale? No obligation and no pressure ever! Emailed directly to you with pictures and full details.

Biggest vs. Smallest House in the Neighborhood
     Okay, let’s address the obvious first. The biggest house has more square footage than the smaller one. Duh. But that’s not what we’re going to talk about today. As it relates to appraised value is the message here.
      When lenders assign value during a purchase transaction, they start with the sales contract. The sales contract should reflect the lowest the seller was to accept compared to the highest price the buyer will pay, all other things being considered. This conjunction works in a non-distressed transaction. A non-distressed transaction is one where the sellers aren’t motivated by the threat of a foreclosure or sudden family issues that might force a quick disposal of the property. What we’re talking about is a fair, open market where

How Does Real Estate Crowdfunding Work?
     If you’d like to be involved in real estate investing, it’s a bit of a tricky time right now. Traditional methods of investing in real estate aren’t necessarily going to make a lot of financial sense during a time when interest rates are incredibly high and might even rise from here, inventory is low, there’s significant economic uncertainty, and prices are still elevated.
      That doesn’t mean you have to count yourself out of real estate investing. Instead, you might just have to shift your strategy.
      One option that people are increasingly considering is real estate crowdfunding, which makes investing in real estate more accessible.
      You might already have some familiarity with the term crowdfunding, as it’s often used to raise money to create businesses or for charitable causes.
      Now, however, you can become a real estate investor

The Very Latest Listings
Click Here to See The Latest Listings

Real Estate Realty

𝗧𝗵𝗲 𝗩𝗮𝗹𝗹𝗲𝘆'𝘀 𝗥𝗲𝗮𝗹 𝗘𝘀𝘁𝗮𝘁𝗲 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗖𝘂𝗽𝗯𝗼𝗮𝗿𝗱 Getting Bare

Most are now aware that the low supply of housing inventory is currently the driving force in the valley’s real estate marketplace. According to the Cromford Index, supply is down a whopping 42% from the peak of October 2022. Where have all the sellers gone? Answer: they are staying home and hanging on to their low interest rates. When will that all change? Either when market conditions (interest rates, economy, shifts in pricing) prompt change or with life changes (divorce, marriage, illness, job loss/change, relocation). Moves can only be put off for so long – whether buyer or seller.

To that point, we saw a sudden drop in demand as interest rates spiked in 2022. Yet even with rates currently only moderately lower than their peak – demand has picked up. Buyers needed time to adapt to the change in rates. Eventually, time wins over inertia and the need to move forces action. This rise in demand is continuing to put pressure on prices to rise, albeit more gently than in years past.

While demand tends to be volatile – supply is generally not. Large jumps in supply typically only come from market manipulation or catastrophe. Nearly everyone shivers at the mention of the 2008 market – a shining example of catastrophe if ever there was one. The valley currently has the lowest number of delinquency rates and foreclosures in history. No catastrophe lurking around the corner for now.

The point is this – supply is scarce at the moment and getting scarcer. The supply needed is not on the immediate horizon. That means prices are rising as they must when demand outpaces supply. But as usual, this is more nuanced as explained by Michael Orr of the Cromford Report:

Those who predict more drops in sales prices will have to explain where a vast new supply is going to come from. Prices only drop when there is a glut of homes coming to market and not enough buyers. In the current circumstances, this is looking very unlikely.

Prices remain far higher than they were before 2022, and have rising [sic] from below $267 in early January to above $281 in mid-May. The rate of increase over the past 4 months could be described as modest, but that would be a little unfair. A 6.6% rise between week 2 and week 20 is equivalent to an annual appreciation rate of 18%.

Do we expect this more-than-modest rate to continue? No. From May through September the weather in Central Arizona gets a little toasty but the housing market usually gets cooler, at least where average $/SF is concerned… the average $/SF tends to go flat or even decline during this period in most years. The main exception was 2020, which was due to the sharp rebound after the initial COVID panic during the spring.

In most years with a healthy CMI, like 2023, we expect the majority of the upward price movements to occur between January and May and between October and December. Our tentative expectation is that prices will remain roughly flat (or dip slightly) from now until October and then rise again during the fourth quarter, as long as nothing dramatic occurs to change our assumptions.

This projection means that we expect to overtake the 2022 price line during September or October and finish the year well ahead of December 2022. It is unlikely that in 2023 we will exceed the peak of May/June 2022, which was fueled by over-excitement among the institutional buyers and iBuyers… All this assumes conditions remain largely similar to today. The further out we look, the less we can rely on this assumption. Anything more than 2 months into the future should be taken as conjecture rather than a forecast.

𝗠𝗮𝗿𝗸𝗲𝘁 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:

- Delinquencies are at all time lows. Therefore foreclosures are at all time lows

- Prices are not going down

- Builders are not building in sufficient quantity to fix supply shortage

If you are a buyer – it is time to buy. Ignore the doom and gloom of the media and pundits – we have a supply problem that cannot be solved this year. If you are a seller, remember that eventually supply will show up. Take advantage of an empty cupboard.

Russell & Wendy Shaw

(mostly Wendy)

  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.
More Articles
May Real Estate Roundup
How Does the BRRRR Method Work?
4 Things About Preapprovals That You Should Know
5 Tips to Save in Your Kitchen Remodel
Is Now a Good Time for Homeowners to Switch to Solar?

Russell Shaw, Realtor®
Toll-Free 866-357-3604
Realty ONE Group
11211 N. Tatum Blvd., Ste. 100
Phoenix, AZ 85028

Equal Housing Opportunity

E-mail this Newsletter to a friend