the AZ market

Tag: #afternoonbite

  • Afternoon Bite 8/31/2020 (Video)

    Every Monday afternoon Amber Kovarik and I spend 15 minutes discussing the economy, real estate, and lending.

    Today’s Takeaways:

    • Amber explains what the latest changes made by the Federal Reserve Board mean for interest rates.
    • Appraisals are taking longer and longer and costing more and more.
    • Mortgage interest rates have a greater impact on the economy than a recession.
    • Many economists and real estate experts are changing their real estate projections.
    • There are 160 million employed Americans who are looking at their home as their castle. Now home is the focus, more so than ever before. And 11% of those 160 million American workers have at least one child in school.

  • Afternoon Bite 8/17/2020 (Video)

    Every Monday afternoon Amber Kovarik and I talk about what happened this week in our local and national real estate market in 15 minutes or less.

    Today’s Takeaways:

    Second Quarter Earnings:

    In the second quarter of 2020, the total number of closed residential real estate transactions was down 17.8% year over year. This is because April and May were very low contract writing months. June was up. July even more so. (NAR) The drop in transactions is reflected in the Q2 2020 earnings reports from the major publicly traded real estate firms. Only three had year over year revenue gains.

    • Zillow: year over year revenue increased by 28%.
      • Hit a site-traffic record of 2.5 Billion visits.
      • iBuyer acquisitions dropped to the lowest levels since Q2 2018.
    • eXp World Holdings: year over year revenue increased by 33%.
      • Much of the growth is credited to headcount growth.
    • Redfin: year over year revenue increased by 8%.
    • RE/MAX: year over year revenue dropped by 24.2%.
    • News Corp, parent company of Move Inc which owns Realtor.com: year over year revenue declined by 6%.
    • Realogy, parent company of Coldwell Banker, ERA, Sotheby’s, Century 21, and Better Homes & Garden: year over year revenue decline of 27%.
    • Keller Williams: closed transactions were down 15.4% and sales volume was down 15%. (Privately owned company and shares limited data)

    Softbank Vision Fund, the primary source of funding for companies like Opendoor and Compass Real Estate posted profits in Q1 2020 after three-quarters of billion-dollar losses.

    Unemployment:

    • New unemployment claims dropped below 1M for the first time since the onset of the pandemic in March. 963,000 new claims were filed last week.
    • Continuing unemployment claims decreased by 604,000 to just under 15.5M
    • During July 1.8M new jobs were added bringing us down to a 10.2% unemployment rate.
    • The jobs added were mostly in leisure and hospitality, government, and retail (US Department of Labor)
    • The average American homeowner has $177,000 in equity. (KCM) This means that a financially burdened homeowner does not have to go through a foreclosure or short sale in order to sell the property.

    Housing:

    Sales & Prices: Phoenix metro area closed sales are up over 10% month over month and up 15% year over year. The median sales price is $319,490, up 3% month over month, and 12.5% year over year. Healthy appreciation is 3% annually.

    Lending:

    • Fannie Mae and Freddie Mac instituted a 0.5% refi fee for FHA and VA refinances. Adding on average of $1500 to the borrower’s closing costs for $300,000 refinances.
    • Rates are up slightly but still locking in people under 3%.
    • Appraisals are coming in low. Be sure to have the conversations with the appraisers. Give them the comps and ask questions.

  • Afternoon Bite 8/10/2020 (Video)

    Every Monday afternoon Amber Kovarik and I talk about what happened this week in our local and national real estate market in 15 minutes or less.

    Today’s Takeaways:

    Schools:

    • Before there are trends there is consumer sentiment. The conversations about “what do we do next?”
      • Private school and move?
      • Quit job and move?
      • What happens to the top performing school districts when the families move away?
    • Schools are a big part of location, location, location. If they are closed does the demand for a top-notch school district go down?
    • With kids at home, parents cannot go back to work or look for a new job; which will keep the unemployment numbers high.
    • Parents that are working from home are now also simultaneously teaching from home.
    • 85% of college students want to return to campus. Colleges and universities want to reopen but how? Some economists question whether major universities will be able to weather this storm. What would Tempe look like without ASU? (Chronicles of Higher Education)
    • Big 10 voted today to cancel the entire 2020 football season. This will be the first year since 1869 with no college football.

    Jobs:

    • In July 1.8 million new jobs were created.
    • Total filings are 55 million, continuing unemployment is at 16.1 million.
    • Nationally week over week filings decreased after 2 weeks of increases, those were the first increases since March. Hopefully we do not see more increases.
    • Arizona’s new unemployment filings continues to fall. We have not had any week over week increases since the beginning and Phoenix remains the strongest job market in the country.

    Forbearance:

    • Mortgages in forbearance declined for the seventh week in a row, down to 7.67% of all mortgages or roughly 3.8 million loans. (MBA)
    • With the expiration of the CARES Act, some foreclosure protections have ended and mortgage services are chomping at the bit to get the ball rolling on foreclosures. Remember these services are contractually obligated to make these loans whole, having to pay the difference to the lienholder in the secondary market.
    • 77% of loans in forbearance have at least 20% equity.
    • Many borrowers have no idea about options. This is a very important conversation to be having with your contacts.

    Real Estate:

    • Nationwide we are struggling with low inventory. The Phoenix listing market seems to have stabilized, just at an extremely low level. We are 63% below where we should be. Instead of 8,400 active listings we should have at least 24,000! Demand continues to outpace supply pushing prices higher. Right now we are running at an 11% appreciation rate. In years passed we were shocked that we hit 8%! And remember healthy appreciation is 3%.
    • 1031 Exchanges may be on the chopping block again. Getting rid of the nearly 100-year-old tax program to fund Joe Biden’s childcare and elder-care proposal. What does that mean for real estate? (Inman)

  • Afternoon Bite 6/8/2020 (Video)

    Every Monday Amber Kovarik with Guild Mortgage and I spend 15 minutes (or less) talking about what is currently happening in the real estate market, title, and lending. We give a few key points to share without taking up too much time.

    Today’s Big Takeaways:

    • May’s job report was way better than predicted. Rather than losing 8 million jobs, the United States created 2.5 million jobs!
    • Demand has grown 7% in the past 3 weeks and it is increasing daily. It has increased to only 20% below normal.
    • Inventory is decreasing daily and we are now nearly 49% below normal.
    • With demand being higher than inventory, prices are pushing upwards.
    • Many listings are seeing multiple offers. One of Amber’s clients had a new listing that had 70 showing requests this past weekend.
    • Lending guidelines are clearer now. New options available including self employed loan options and jumbos.
    • It is very important to get pre-qualified early on as houses are moving so quickly right now.

  • Afternoon Bite 5/4/2020 (Video)

    Every Monday Amber Kovarik with Guild Mortgage and I spend 15 minutes talking about what is currently happening in the real estate market, title, and lending. We give a few key points to share without taking up too much time.

    Today’s Big Takeaways:

    • Physical showing requests have increased in Arizona since 4/12/2020 by 40%
    • New listings hitting the market in the southeast valley are up 5% the week of April 19th over the week of April 12th
    • New pendings in the southeast valley are up 15% the week of April 19th over the week of April 12th
    • Zillow traffic is up 13% year over year as of mid-April
    • No evidence of prices dropping
    • According to the CARES act, if a borrower calls and asks a question about forbearance then they are automatically added to the count regardless of whether or not they make their mortgage payment. The numbers are unreliable.

    copyright 2020 by Sarah Perkins