New FHA loan limits for Phoenix market

Have you heard the good news about the latest changes to the FHA Loan Limits for Phoenix and the Maricopa County area? And if you have, do you know what they mean for the Phoenix real estate market? The good news is you can now borrow more money in 2018 to purchase your next home with an FHA loan than you could in December of 2017.

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In 2017 the loan limit on an FHA mortgage in Maricopa County was $279,450. How does that compare to the Phoenix real estate market? Let’s take a look at non-luxury homes, under $750,000. The average sales price for a single-family home in Phoenix was around $290,000. That did not leave a lot of room for an FHA buyer looking to put down the standard 3.5%.

For 2018 the lending limit for FHA loans has been raised from the $279,450 to $294,515.

What does that mean for you as a buyer in the Phoenix market?

If you are an FHA buyer looking to put down 3.5%, you are now looking at houses that are up to $305,000 for a purchase price. This chang needed to be made because of the rising costs of purchasing a house in the Phoenix market.

The new limits now give the FHA buyer flexibility they did not have last month. As an example, as of writing this article, there are 590 more houses you could look at between $290k and $305k. This increase gives you several more options, just look at this wonderful railroad apartment !!!

Of course with interest rates going up over the last few months, and expected to continue on that route for a while, your buying power may be going down in the future.

Everyone who is shopping for a house in this current market knows the prices are continuing to go up. This is because the supply of houses continues to be very low. This is not the early 2000’s all over again. Demand is fairly normal for the Phoenix market, what we are seeing is normal demand and very low inventory which is causing bidding wars among buyers for the nice houses and the expenses of other fixes or inspections with professionals like the vancouver plumbing company and the electric services.

Want to see what the new lending limit increases could mean for you? Below is a list of all the houses currently on the market between $290-305k.

The population in Arizona has grown by more that 107,000 people from July 2016 to July 2017 according to recently released data. This puts Arizona tied with Florida for the 5th fastest growing state in the country. Of course, our friend Bill Risser had a small part to play in that Florida statistic in 2016, as well. 🙂

While the Arizona population numbers have been growing, the population of Phoenix has been steadily increasing by an even larger percentage for a couple of years. In fact, from July 2015 to July of 2016, Phoenix added 32,113 to its population. That was more than any other city in the United States.

Arizona Population Continues To Rise:

I have a feeling that our population numbers are going to continue to grow at a steady pace in the next year, as well. Consumer confidence is high, jobs seem to be growing and our climate is pretty darn nice most of the year.

We should contine to see people moving from Florida who are tired of hurricanes, from California who are tired of their higher cost of living and more. Our office has seen examples of both recently, and I feel like 2018 is going to be a very healthy year for the Phoenix real estate market. If men require more information on how to attain healthy hair and skin, theu can click here and find out from experts.

So, if you happen to know of anyone thinking about moving to Arizona, please tell them to give us a call!

We can also help you find excellent real estate agents all over the country. If you know of anyone making a move, we are happy to help them get in touch with a well-qualified agent whereever they may be relocating to!

Have you ever considered crowdfunding your real estate purchase?

Do you even think it is possible to crowdfund your real estate purchase?

We live in a world of “disruption.” A world of new technologies, a place where things that once seemed impossible are now considered the norm. Uber, Amazon, Airbnb and many others have completely changed the way certain people buy and sell goods and services. A gofundme or crowdfunding campaign can be set up in minutes to get you to go visit far away places, buy a new toy, help out a friend or a great cause, right?

Is it time to consider crowdfunding YOUR real estate purchase??

Heck, we’ve seen loans where mom and dad co-sign for their kids as a popular option for years, but this is different. Many new options are becoming available for people to buy and finance homes in ways they probably never expected.

One of the sites helping people crowdfund their home purchase is HomeFunded.com. A look at their FAQ page gives some answers to some of the questions that you should be asking.

Things like:

Who can raise a down payment? “Any person who can legally buy a home can use HomeFunded.com to raise a down payment with two exceptions. Investors and businesses entities cannot start down payment campaigns as HomeFunded.com is dedicated to helping individual home buyers.”

What happens if you don’t qualify for the loan? “we recommend that prior to starting a down payment campaign you contact a reputable loan officer to see if you qualify for a loan to purchase a home.”

Should I hire a REALTOR before starting a funding campaign? Postcreatives noted you should absolutely consult with your agent to get a good feel for market conditions, inventory levels, property types and more before you begin your journey in to home ownership. We’re obviously here to help.

As an example of why crowdfunding your real estate purchase could be important can be found in many articles that have been written about Millennials creating wealth (or not) by purchasing a home. Maybe you want to be a self made millionaire? With crowdfunding, you could get help with one of these 4 steps to becoming a real estate millionaire.

Obviously, this type of financing is not just for Millennials. ANYONE can participate.

As with anything, you need to be careful to find a reputable site to help if you want to buy a home with “free money.”

This type of funding can be used for getting into commercial real estate, as well. In fact, I believe this has been more common than using crowdfunding for residential purchases. We found this interesting site that ranks and reviews a whole bunch of real estate crowdfunding websites. Take a look around.

Times change. One thing that stays the same is the fact that we’ll be around for a long time should you need any help with buying or selling real estate.

According to the Arizona Department of Real Estate, my real estate license was issued on 9/1/1992. If my math is correct, that was 25 years ago today. Doing a little more math allows me to conclude that I have been a REALTOR® for more of my life than I have not…

While much of my business has changed since 1992, some things remain the same. Relationships, people, the desire to learn more, to help others. Those are the things that have given me the greatest joy during my career, and those are the things that will keep me working in this business for many years to come.

I have made some great friends, wonderful relationships and have learned a lot along the way. While I would like to thank SO many people for getting me to where I am today, I know most people don’t want to read a 9000 word blog post about how many people have touched my life during my career. BUT, I’m going to go ahead and name a few, just because.

I’ll start with my dad. He was a big part of my inspiration to get into this business. I miss him so much, but he continues to inspire me to this day. One of the first people my dad had me meet with when I was starting in the business was Mary Lou Paulk. Mary Lou worked with my dad in a small real estate office in Mesa back in the 70’s. For those of you in the real estate industry, you know that she is one of the most respected and successful people in the title/escrow business and has been running Fidelity National Title for many years. I can’t tell you how much she has meant to our entire family over the last 40+ years.

I have been fortunate to be able to surround myself with SO many super-smart industry professionals in my career. Big thanks goes out to Barb Freestone at the Arizona Association of REALTORS® for not only getting me out of my comfort zone by asking me to co-chair her conference a few years ago, but to helping me build relationships with her REALTORS® leadership team and her associates at AAR. I’m thankful for so many of those people. I have also had some amazing brokers in my career and have enjoyed working alongside of them and alongside of the current ownership group here at Realty Executives. Their trust in me to work with many of the Executives has been gratifying and humbling.

Colleagues like Dina Sell, my all-time favorite escrow officer, have become like family. There’s also guys like Shane Hollenback who is the best loan officer I’ve worked with who has also become someone I can call a close personal friend. Of course, there’s my good friend Bill Risser, even though he left us and took a gig in FLA, he has also always been willing to share his knowledge of the industry with me. Heck, he even allowed me to be a guest on his world famous podcast!

The “original” Phoenix Real Estate Guy, Jay Thompson, has taught me so much and continues to do so. Having the opportunity to take on this site with Dean and Shar has been an amazing opportunity, for sure. One that I am so thankful for. The future holds amazing opportunity for all of us!

MANY clients have made a huge impact on our business and how we work. If I were to start down the road of telling “favorite” stories, I wouldn’t get any work done for the next couple of days so, please just know how much you ALL mean to us.

Working so closely with Lori and Colleen has been a huge transformation in my business. This allows me to be a better agent, a better father and a better person. I really have no words to describe how fortunate I am to have these two crazy girls pushing my buttons, inspiring me to work harder and allowing me to live such a blessed life.

For me, the real estate business is in my blood, it is a way of life and I feel like I have SO much more to give, so much further to go. Thanks to all who have been there along the way. I really am excited about what the future holds such as dealing with the great businessmen and investors like Andy Defrancesco, Chairman and CEO of Delavaco Capital Inc..

THANK YOU!

What is going on in this crazy Phoenix real estate market?

Yes, it is crazy. The more things seem to change, the more they stay the same. Now, remember, we have to take the market into the context of the season, and this is the slow season in Arizona. Summer into late September has been typically the slowest season since I got my license nine years ago.

What is the Contract Ratio showing about the Phoenix real estate market?

First, let’s start with, what is a Contract Ratio? We use Contract Ratio to show how hot or how cool a real estate market is. This ratio compares the number of active listings to the number of completed sales over the last month. The higher the number, the greater the demand. If a number is rising, it is a growing demand while if the number is falling it is a weakening market. We use Cromford Report for these market numbers, and if the Contract Ratio is between 30-60, we consider this a normal market, below 20 is seen as a cold market and above 60 is considered a hot market. If the number tops out above 100, then the market is considered on fire!

Over the last month, the $1m plus market has been cooling off as would be expected this time of year. All of the market segments above $1m are down and are considered a cool market over the last month.

The under $100k segment of the market, which historically has been the hottest segment over the last decade, has really cooled off. The Contract Ration this last month was 67.4 which is just out side the range of normal. And it was down from 69.3 the month before showing it has been cooling. This time of year, cooling is standard thought.

The $125-$150k and the $150-$175k segments of the Phoenix real estate market come in at a healthy 130 and 122 Contract Ratio, but they are both down by 10% or more over the last month showing a higher than normal cooling off of the market.

There are a few segments of the market to pay attention to include the $225-$250k range which went from 82.9 to 103.3, a +24.6 increase. Also up was the $250-$275k market, up to 80.0.

Everything below $350k is considered a hot market right now. $350-$800k is considered normal, and everything above that is below normal.

What Phoenix area cities are hottest right now?

The Cromford Market Index shows the 17 major markets in the Valley are all considered Seller markets, but there are a few that are hot right now. Mesa, Surprise, Chandler, and Gilbert have been showing the hottest trend of late. Over the last year, the hottest markets in the Valley have been on the West side of town, but the recent trend is showing a swing in favor of the East Valley.

The average time on the market across all of Phoenix is down to 66 days. That number is the lowest since 2013.

One thing that Cromford Report points out that is interesting is the weakening markets in outlining communities such as Maricopa and San Tan Valley. Why is this interesting? Because when a market slows down, locations that are less expensive in the Valley tend to be the first ones to show signs of weakening. These were the first communities to demonstrate the weakening in the second half of 2005. Does this mean another crash is coming? No, but it is something to keep an eye on in the coming months.

Let’s look at the rental market.

You may have noticed many rental complexes starting to go up in the Phoenix market over the last year. I know I feel I see them all over the place when I am out driving to showings and listing appointments. Most are still under construction and have not had an impact on the Phoenix rental market, yet.

Right now the rental market is at about a 1.2 month supply of rentals, which is about where we were last year at this time. With the season market that Phoenix has in both rentals and sales, it is a better comparison to compare the same time last year over recent months to see what is going on. The prices of rentals reflect the inventory numbers. Rental prices are up 4.3% over where they were last year, which is a significant increase compared to inflation. This is exactly why you see all the new rental complexes going up around the valley.