Putting More Equity in Your Pocket

The numbers are out, and the Phoenix Metro real estate market is going strong!  Sales are up 13.8% over last month and are 5.6% higher than last year’s sales.  Housing inventory numbers for new and total inventory were up, but inventory remains low with only a 2.43 month supply of homes. Home prices have also increased in the past year, with the average sales price up 5.6% and the median sales price up 6.3%. Days on market have continued to be consistent for the last quarter and is currently at 69 days on market.

For the first time in 2019, we saw a year-over-year gain in sales volume, the second highest sales volume on record.  Lower interest rates and higher loan limits are helping the market lift. Based on the current activity, we also expect strong sales numbers for May.

Another factor for a strong real estate market is that Phoenix was named as the top destination in the country according to a recently published Redfin Migration Report.  More than a third of people searching for homes last quarter were from out of town. Many are coming from California and expensive cities from other states, for our low cost of living and great weather.  This trend has been increasing thanks to strong job growth and major companies like Allstate, Intel, Boeing, Microsoft, & Facebook moving or expanding operations in the Phoenix Metro.

If you’re considering moving up or down, now is an opportune time to make that move. Let us show you how much more our 20+ years of experience will put in your pocket! Call us at 480-355-8645 or email Info@LocateArizonaHomes.com today!

6 Things Burglars Don’t Want You to Know

While nobody wants their home broken into, the FBI facts are that a burglary occurs every 20 seconds in the US. Home burglars generally have a pattern, as criminals are looking for an easy target they can rob and get out fast. Here are six tips from career burglars that you can use to protect your home and prevent break ins without installing top-dollar security features.

1. Nighttime Burglaries Aren’t the Most Common

Burglars are looking for the most probably time that there will be no one home, which means the daylight hours.  Weekdays are ideal, since weekend schedules are too unpredictable.  The most popular times that break-ins occur are between 12:30PM and 2:30PM when people are usually away at work or school.

2. They Know When You’re Not Home – Thanks, Social Media!

Most people post in real-time when they’re on vacation or away from home. Unfortunately, tech-savvy criminals take advantage of that and scout social media platforms including Twitter, Facebook, Instagram, and FourSquare to find victims. An I-Team survey found that over 10% of burglars used social media to find victims, including one burglar in Orange County who targeted at least 33 women he saw in public and used the GPS data embedded in photos posted to their Facebook & Instagram to break into their homes in 2015. Even for those with private accounts, an old friend from high school or a neighbor down the street could be a potential criminal.  Never post what times you’re not home or how long you’ll be gone and save trip photos to post after you’re back home.

3. They Don’t Like Security

Burglars don’t want anything to do with alarm systems, whether they’re top of the line or not. Homes without an alarm system are almost 300% more likely to be a target. If you have an alarm system, make sure the code isn’t easy to guess like a house number or a birthday, and make sure to keep the keypad clean so a burglar can’t guess based off the numbers you’ve pressed the most. Make sure to use the security features your home already has, like locking your windows, doors, and keeping the exterior of your house well-lit.  Tricks that make it seem like someone is home also work. Motion sensor lights, bright flood lights, timed lights in the house, radio or TV left on, or a car in the driveway are all things that make a burglar nervous that someone is home.

4. Gun Advertisements are Not Security

If you’re a proud gun owner, it entices burglars more than it scares them away.  A gun is stolen roughly every two minutes in the US, so it’s better to keep your guns in a safe.  NRA bumper stickers or Smith & Wesson signs on a house advertises that there’s usually a lot of guns to steal inside.

5. Shrubs & Architecture Make Great Hiding Spots

Tall thick bushes, half walls, big fountains and other overgrown landscaping are great to hide in, not only from you but from the neighbors, too.  Keep your landscaping regularly trimmed and décor elements well-lit. If you do want big plants by your windows, consider something thorny like cacti or roses.

6. Valuables Left in the Open Are an Enticing Target

Expensive things left within clear view of windows are advertising to burglars what kind of items they can steal. Make sure to put tablets, laptops, or anything valuable away from view from first story windows. Key hooks, especially labeled ones, should also be kept out of sight. Mike Fraser, a former professional burglar and host of the BBC show Beat the Burglar, also advised to leave large family calendars out of view since they detail when you’ll be away from home.  Any documents with your personal information should also be kept out of view as they can turn into a gold mine for criminals looking to easily steal your details for identity theft.

Using these tips can help you prevent your home from being broken into.  Be sure to research crime rates and trends in your city and neighborhood, especially when you’re looking to purchase a home in an area you’re not familiar with.  It’s an important step of the home buying process!

If you’re thinking about purchasing a home, please give The Gina McKinley Group a call at 480-355-8645 or email Info@LocateArizonaHomes.com. We’ve love to schedule a free consultation to educate you on the home buying process so you can make the most informed decision for your family.

Costs More…Takes Longer?

Certainly one of the tougher functions in a Real Estate transaction is negotiating the inspection items. Some believe the seller should do everything and yet in a highly focused seller’s market that is not likely the case. The replacement of a roof covering can often become a real issue especially when using the contractor that just knocked on your door. Why? Their workmen may or may not show up and the roof may not get installed on time! When you hire an experienced Realtor those items should be non issues….but it does happen to all of us. The contractors I work with know that and are committed to get the job done on time, and often will wait for their payment until closing. Now a remodeling project…read on…

The one experience that homeowners can agree upon after completing a remodeling project is that it costs more and takes longer than expected. It doesn’t really matter that you researched, planned, and received multiple bids, it will, invariably, cost more and take longer than you originally anticipated.

Replacing floorcovering or painting is a project that a homeowner can easily get bids and contract with the workmen directly. A new level of complexity occurs when the project involves more specialized contractors, like plumbers, electricians, carpenters, counters, and others.

Now, a homeowner is faced with dealing with one general contractor who will run roughshod over the sub-contractors or make the decision to do it themselves. Typically, you’ll pay more for a general contractor, but the trade-off is that they have the contacts and experience to make things go smoothly.

Subs are notorious for wanting to finish their “part” of the project and move onto to the next job. Sometimes, they’re not interested in the “big picture” enough to consider doing things in a way that are best for the overall outcome.

When you start tearing out some things, you find out that there may be unexpected expenses involved. Another common occurrence is that during the project, you get a new thought about changing something else “since it is already torn up anyway.” This will add time and money to the job.

There can be the situation that the homeowner doesn’t even know the right questions to ask or what to consider when trying to coordinate the different workers. The most detailed timetable can be thrown off track if one set of workers don’t show up or finish on time. At best, it delays the project for a few days. At worst, it can delay it for a few weeks because the individual workers may have committed to other jobs that don’t allow them to reschedule.

Once the work is done in a professional manner, you’re probably going to live with it for years. If it is something you’ve wanted to do and it will allow you to enjoy your home more, it is worth doing. Just be patient and enter this adventure with the understanding that it will cost more and take longer than you expect.

We have all experienced good and bad contractors.  If you are considering a home improvement project let me know and I can refer you to a reliable contractor for the project you are considering. 

Call 480-355-8645 Or Email Us Info@LocateArizonaHomes.com

A Historical Perspective

Mortgage interest rate history is interesting and rates have the biggest impact on housing affordability. In 1968 (when I was just a little kid) interest rates were 8.5%, but dropped to 7% a year later.  In October 1981, they hit a high of 18.63%.  A $250,000, 30 year fixed mortgage with that interest rate had a monthly principal and interest payment of $3,896.46.  As crazy as that sounds, people were still buying homes and considered them good investments.

I’ve personally had experience with the fluctuation in interest rates: we missed the high in 1981, but the second home that Dan and I purchased during our relocation across the country was in Dallas in 1985.  Our interest rate was 14.25% on an adjustable rate mortgage!  Less than two years later, interest rates were still over 12%.  Using the same example above, the monthly payment would be $2,571.53.  We paid about that when we relocated to California in 1987; our mortgage payment was $2,575 for a house that we bought for $187,500.  Believe it or not, we were excited to be paying only 2/3 of what we had to pay a few years earlier.

We never found anyone whose mortgage we could assume, but if we had we would have been excited about it too.  VA and FHA mortgages were very popular in certain price ranges and allowed anyone to assume the mortgage regardless of their credit.  The person assuming the mortgage was happy getting a 15-20% bigger house for the same payment, while the person selling was free to qualify for another mortgage.

We didn’t see interest rates change too much during the 90’s between when we bought our house in Ohio, and our first home in AZ. They were hovering between 8-9%, which doesn’t seem like a big change.  On a mortgage payment though, it could range from $1,860-2,015 a month.

During the housing bubble, interest rates had dropped to only 6.04% (a steal if you knew what they were before!) and for that $250,000 house your payment was only $1,505.31. By 2009 interest rates had fallen below 5%, and if you were lucky enough to nail the bottom November 2012 with 3.31%, your payment would have been $1,096.27/month.

Rates have fluctuated slightly for the last few years now, but have increased each week for the last six weeks to 4.38%, which would be a payment of $1,240.12. Most of the experts are expecting them to be above 5% by the end of 2018. As one contemplates the interest rates and their history, a half point shift may seem huge today when in reality it’s pretty small.  Young buyers probably have a different perspective though, most are payment-conscious and they’ve only been around long enough to see the $200/month increase.

Still, the average interest rate over the past 47 years is a little over 8%.  Like real estate, the mortgage markets are cyclical.  Rates have been historically low for a long period but will probably continue to rise.  Based on the history, even 8% would be an excellent rate – until it reaches that point again, everything lower is a bargain.  Having a mortgage and owning a home now is still better than trying to save $250,000 to pay cash while spending the same amount of money each month on rent (if not more!).

If you’ve been thinking about buying a home in the near future, contact me today at 480-355-8645 or by email at Info@LocateArizonaHomes.  I’d love to put you in touch with one of our great lender partners and share some of the things we did to make buying a home at a higher interest rate a great option!

 

Homeowner Tax Changes

The new tax law that was signed into effect at the end of 2017 will affect all taxpayers. Homeowners should familiarize themselves with the areas that could affect them which may require some planning to maximize the benefits.

Some of the things that will affect most homeowners are the following:

  • Reduces the limit on deductible mortgage debt to $750,000 for loans made after 12/14/17. Existing loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap.

 

  • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the existing mortgage being refinanced.
  • Repeals the deduction for interest on home equity debt through 12/31/25 unless the proceeds are used to substantially improve the residence.
  • The standard deduction is now $12,000 for single individuals and $24,000 for joint returns. It is estimated that over 90% of taxpayers will elect to take the standard deduction.
  • Property taxes and other state and local taxes are limited to $10,000 as itemized deductions.
  • Moving expenses are repealed except for members of the Armed Forces.
  • Casualty losses are only allowed provided the loss is attributable to a presidentially-declared disaster.

The capital gains exclusion applying to principal residences remains unchanged. Single taxpayers are entitled to $250,000 and married taxpayers filing jointly up to $500,000 of capital gain for homes that they owned and occupied as principal residences for two out of the previous five years.

 

Not addressed in the new tax law, the Mortgage Forgiveness Relief Act of 2007 expired on 12/31/16. This temporary law limited exclusion of income for discharged home mortgage debt for principal homeowners who went through foreclosure, short sale or other mortgage forgiveness. Debt forgiven is considered income and even though the taxpayer may not be obligated for the debt, they would have to recognize the forgiven debt as income.

These changes could affect a taxpayers’ position and should be discussed with their tax adviser.

If you need a good tax adviser, Contact me today (Info@LocateArizonaHomes.com OR 480-355-8645).  I know some both in Chandler and the Phoenix Metropolitan area.