Why January And February May Be The Best Months Of A Year To Buy A Home!

December 21, 2018 By

If the cost of a home is important to a buyer or if appreciation is important to a buyer now may be the best time to write an offer!

Why?  In each of the last five years the month that had the lowest median purchase price of the year was the month of January.  This is a topic I have written about before, but I want to remind everyone that January can be a good month for buyers to close on a home.

This can be seen in Chart One.  Chart One shows the median purchase price for a previously owned single family home in Maricopa County for each month from January 2014 through November 2018. The majority of homes that close in January went under contract in December.

Table One shows the appreciation at the beginning of the year compared to the end of the year.  It compares the January median purchase price to the December median purchase price for the last four years, except for 2018 which shows the median purchase price for November.  At the end of the last five years the median purchase price was from five percent to nine percent higher compared to the beginning of the year.  For example, the median purchase price in January 2018 was $273,750.  In November it was $292,000 seven percent or $18,250 higher than in January.

What if a buyer missed closing in January but will close in February?  Chart One shows that February is the month with the second lowest median purchase price of the year!

So if price and appreciation are important to a buyer now may be the best time to write an offer with a January or February closing.

A point to remember is that for both Chart One and Table One the information is for previously owned single family homes in Maricopa County.  Any city, or zip code, or subdivision within Maricopa County may trend differently.

May you have a Merry Christmas and a Happy New Year!

Fletcher R. Wilcox

V.P. Business Development, Real Estate Analyst & Author of www.TheWilcoxReport.com

A report on real estate, lending, population and job growth trends in Greater Phoenix.

Grand Canyon Title Agency

FWilcox@GCTA.com

602.648.1230

Grand Canyon Title Agency is a wholly owned subsidiary of the Fortune 302 company FNF

 

Chart One

Table One

Filed Under: Arizona Real Estate Market, Boomerang buyers, Buyer or seller market, Canadian buyers, Canadian sellers, cash purchases, Chandler, Fidelity National Title, Fletcher Wilcox, Fortune 500, Gilbert, grand canyon title agency, Greater Phoenix Real Estate, home loans, Homes sales, Job growth, New listings, Paradise Valley real estate, Phoenix real estate, Phoenix real estate sales, Pinal County, Population growth, real estate sales, Scottsdale listings, Scottsdale luxury market, Scottsdale luxury real estate, Scottsdale real estate, Scottsdale relocation, Scottsdale retirement, Single Family Sales, The Wilcox Report

A Historic Review of the Thirty-Year Fixed Mortgage Rate. Remember when it was 16%?

November 7, 2018 By

THE WILCOX REPORT

By

Fletcher R. Wilcox

V.P. Business Development, Grand Canyon Title Agency

FWILCOX@GCTA.com  602.648.1230

This report was published in the November 2018 edition of the Arizona Journal of Real Estate & Business 

Mortgage Rates in Perspective: Do You Remember How High Rates Used to Be?

Since 1971 Freddie Mac has tracked the thirty-year fixed mortgage rate. Chart One shows a partial history of their tracking.  The year with the highest annual average thirty-year fixed mortgage rate was in 1981 when it was 16.63 percent.  In 1990 it was 10.13 percent.  At the turn of the century it was 8.05 percent.  The annual average thirty-year fixed mortgage rate from 2012 through 2017 was under four percent for five of these six years.  The year it was the lowest since 1971 was 2016 when it was 3.65.

In 2018 the monthly average thirty-year fixed mortgage rate was over four percent every month from January through September. The September 2018 thirty-year fixed mortgage rate of 4.62 percent is the highest rate in seven years.  It is expected to continue to increase due to the strong economy, tax cuts and expectations for increases in inflation.

There is an alternative to get a lower mortgage rate than what the thirty-year fixed mortgage rate has to offer. It is the 5/1 adjustable rate mortgage known as the 5/1 ARM.  For the first five years this mortgage rate is fixed at a lower rate than the thirty-year fixed rate.  Then after five years it adjusts once a year.  Eventually the 5/1 ARM could go higher than the thirty-year fixed rate.  Chart Two compares the 5/1 ARM to the thirty-year fixed rate for the first nine months of 2018.   It shows that in September the 5/1 ARM rate was slightly below four percent at 3.93 percent compared to 4.62 percent for the thirty year fixed mortgage rate.

While increases in mortgage rates equates to consumers paying more in monthly principle and interest some consumers will be able to offset these increases due to a rise in their personal income. Personal income in Arizona was up 3.8 percent in the second quarter of 2018.

A Mortgage Payment Today is Less Expensive than in Previous Real Estate Boom

In 2018 the median purchase price finally surpassed the all-time high median purchase price record set in 2006. In 2006 the annual median purchase price was $279,900, for a previously owned single family home in Maricopa County, compared to $285,500 thus far in 2018.  However, a mortgage payment in 2018 is still cheaper when compared to 2006.  The principle and interest payment for a thirty-year fixed mortgage in 2006 for the median purchase price of $279,900 with ten percent down was $1,577 compared to $1,320 in 2018 for a median purchase price of $285,500 with ten percent down.  The difference being the thirty-year fixed mortgage rate.  In 2006 it was 6.41 percent compared to 4.62 percent in September 2018.

Sales and New Monthly Listings for Previously Owned Single Family Homes in Greater Phoenix

Sales of previously owned single family homes in Greater Phoenix (Maricopa County) were down six percent in September 2018 compared to September 2017, but up were up 1% overall for the first nine months of 2018 compared to 2017. New monthly listings of previously owned single family homes were down seven percent in September 2018 compared to September 2017 and were down one percent overall for the first nine months of 2018 compared to the same time period last year.

Conclusion

Sales of previously owned single family homes in Greater Phoenix are down for the last three out of four months compared to the same time period last year. It is my opinion that this is due primarily to lack of inventory and not as much the increase in mortgage rates.  However, mortgage rates most likely will continue to rise because of the strong economy.  It would not be a surprise over the next few months for the thirty-year fixed rate to hit five percent and the 5/1 ARM to hit four percent.

Fletcher R. Wilcox

V.P. Business Development, Real Estate Analyst & Author of www.TheWilcoxReport.com

A report on real estate, lending and job growth trends in Greater Phoenix.

Grand Canyon Title Agency

FWIlcox@GCTA.com

602.648.1230

 

Filed Under: Uncategorized

Commercial Real Estate Seminar Friday October 26! Find out about jobs and population!

October 22, 2018 By

https://www.asreb.com/programs/seminars/

Join us Friday, October 26th from 9:00AM – 12:30PM for our Commercial Real Estate Seminar!

During this seminar, local industry experts will discuss the following:

  • How many jobs have been created in Arizona over the last year
  • Why the commercial real estate market is on fire
  • Why Amazon and other large companies coming to Arizona
  • Why target companies in San Francisco and Silicon to move to Arizona.
  • The future of the retail shopping centers
  • Development of apartment complexes and the growth of our population

Join moderator, Fletcher Wilcox, and our panelists, as they discuss Commercial Real Estate in Arizona. Seats are limited and often sell out, so register today for this seminar you won’t want to miss!

Filed Under: Uncategorized

Luxury Home Seminar September 28 at the Arizona School of Real Estate!

September 26, 2018 By

Filed Under: Arizona Real Estate Market, Buyer or seller market, Canadian buyers, Canadian sellers, Fidelity National Title, Fletcher Wilcox, Fortune 500, grand canyon title agency, Greater Phoenix Real Estate, Homes for Sale, Homes sales, Listing inventory, Paradise Valley real estate, Phoenix real estate, Phoenix real estate sales, Pinal County, Population growth, Scottsdale listings, Scottsdale luxury market, Scottsdale luxury real estate, Scottsdale real estate, Scottsdale relocation, Scottsdale retirement, Single Family Sales, The Wilcox Report, Uncategorized

WHY RENT WHEN YOU CAN OWN — BUT WHAT IF I CANNOT FIND ANYTHING TO OWN?

July 18, 2018 By

Arizona Journal of Real Estate & Business

July 5, 2018

Fletcher Wilcox

V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency

FWilcox@GCTA.com   602.648.1230

THE MOST DESIRED REAL ESTATE PRODUCT TO OWN OR RENT IS A SINGLE-FAMILY HOME 

There are 1,043,000 single-family properties in Maricopa County, sometimes called the Greater Phoenix area. Single-family properties are by far the most popular residential product to own. Over 80 percent of sales this year on the Arizona Regional Multiple Listing Service, Inc. (known as ARMLS) were single-family homes. Owning single-family homes for rent is also popular. Twenty-six percent, or 273,000, of the single-family homes in Maricopa County show up in the county records as non-owner occupied.

PURCHASE PRICES AND RENTAL PRICES STEADILY INCREASING FOR SINGLE-FAMILY HOMES

The chart below shows the median purchase price and the median monthly rental price for years 2000 through 2018 for Maricopa County. The median purchase price has increased seven consecutive years while the median monthly rental price has increased five consecutive years since 2013. The monthly median purchase price and rental price in May 2018 were the highest they have ever been at $294,000 and $1,595, respectively.

The demand to either own or rent a single-family home is due to a growing population, more jobs, and higher wage earnings, while supply has not kept up. New home building is making a comeback, but for years its growth was stunted because of the real estate recession.

WHICH IS GOING UP FASTER: PURCHASE PRICE OR RENTAL PRICE?

Table 1 shows the median year-over-year changes by month for both purchase and rental prices for the first five months of 2017 and 2018. Purchase prices have increased between eight and ten percent while rental prices are up between four and seven percent.

When comparing January 2018 to May 2018, we find the purchase price up $21,000, or eight percent, and the rental price up $160 per month, or 11 percent. Of course, if I owned my home, my appreciation since the beginning of the year would be up around $21,000. If I rented, I would not have asset appreciation — just a rent increase.

Table 1. Median Purchase and Rental Price Year-Over-Year Changes by Month, Jan. to May 2017 & 2018

COMPARING A MORTGAGE PAYMENT TO A RENTAL PAYMENT

Table 2 features scenarios comparing a monthly mortgage payment to a monthly rental payment. Monthly mortgage payments were estimated using the May 2018 median purchase price of $294,000 with five different down payment amounts and two types of conventional loans. The May 2018 median rental payment of $1,595 is the number to which these monthly mortgage payments are compared.

The two loan types are a 30-year fixed with an interest rate of 4.66% and a 5/1 adjustable-rate mortgage (ARM) with an interest rate of 3.87%. Both rates were quoted on Freddie Mac’s website on May 24. A 5/1 ARM is a loan with a fixed rate for the first five years. In the sixth year, the rate may adjust higher and may increase every year thereafter. For each mortgage payment category, in addition to principal and interest, I added mortgage insurance for loans with down payments of less than 20 percent. I also added monthly payments of $100 for property taxes and $50 for homeowner’s insurance to every payment category. These are only estimates.

Table 2. Sales and Median Sale Price, April 2017 vs. April 2018

Of course, there are many factors to consider when it comes to deciding whether to own or rent. When owning, you may have a monthly HOA fee. Renters have to pay a monthly rental tax of one to three percent (depending on the city) on their rental price and should pay for renter’s insurance. How long do you plan on staying in the home? What is the probability of a job relocation? What kind of home repairs may be needed if you own? Also, consider the equity you stand to gain if you own, but won’t if you rent.

WHY RENT WHEN YOU CAN OWN — BUT WHAT IF I CANNOT FIND ANYTHING TO OWN?

Why pay rent when you can own? and Why pay your landlord’s mortgage? have been popular lines of ad copy for years now, but they seem to overlook the challenge of locking down a purchase in today’s competitive single-family home market. My advice to buyers: do not give up! Be prepared and persevere! Get loan pre-approval through a lender for a house in your price range. Pick an area you would like to live in and learn everything you can about it. Meet with a real estate agent and get trend information on inventory, days on market, sales, and prices. And when a home that meets your needs hits the market, don’t wait — write the offer! Contact me if you need a recommendation for a real estate agent or a lender. Whatever you do, do not give up on owning!

 

Fletcher R. Wilcox

Fletcher is the founder of The Wilcox Report. His market analysis on residential real estate in Greater Phoenix has been mentioned in publications such as the Wall Street Journal, MarketWatch, Bloomberg News, HousingWire.com, National Mortgage News, the Arizona Republic and the Phoenix Business Journal. He has been a guest speaker on both local and national TV and radio.

He gives insight to real estate agents on how to use real estate statistics for influence with sellers and buyers.  He teaches contract law renewal hours for Arizona real estate agents.

Fletcher may be reached at FWilcox@GCTA.com  602.648.1230

Grand Canyon Title Agency is a wholly owned subsidiary of the Fortune 293 company FNF

 

Filed Under: Uncategorized

Contract Law Class in New $2,148,650 Staged Home in the heart of Scottsdale by Cachet Homes!

June 24, 2018 By

Wednesday, June 27 10:00 a.m. to 1:00 p.m.

 

Custom features include: Sierra Pacific wood windows and doors, Sub-Zero, Wolf and Asko appliances, a completed resort style rear yard including a pool, spa, outdoor fireplace and BBQ. 4,478 sq. ft. includes 4 bedrooms, 4 1/2 baths, game room, den.

 

When: June 27 from 10:00 a.m. to 1:00 p.m.

This is a complementary class and lunch by Cachet Homes. Come early and tour Cachet Homes newest custom home at Fox Haven.

 

Where: 10333 N 79th Way, Scottsdale, 85258

While on Hayden go West on Gold Dust which is one block south of Shea Blvd.

and then turn right on 79thWay.

 

RSVP to FWilcox@GCTA.com or mailto:sgoodrich@cachethomes.net

CONTRACT TO CLOSING: CONTINGENCIES, CLAUSES & CURES

Three hours of contract law continuing education

INTERNAL DYNAMICS SCHOOL OF REAL ESTATE

Class taught by Fletcher R. Wilcox, V.P. Grand Canyon Title. Fletcher served on one of the Arizona Association of REALTORS subcommittees which made recommendations to the February 2017 AAR Residential Resale Real Estate Contract.

Filed Under: AAR Residential Resale Real Estate Contract, AAR Residential Resale Real Estate Purchase Contract, Arizona Real Estate Market, Fletcher Wilcox, grand canyon title agency, Greater Phoenix Real Estate, Mesa, Phoenix real estate, Phoenix real estate sales, Scottsdale listings, Scottsdale luxury market, Scottsdale luxury real estate, Scottsdale real estate, Scottsdale relocation, Scottsdale retirement, The Wilcox Report

Record First Quarter Due to Population, Job and Wage Increases.

May 18, 2018 By

May 2018

Residential Market Update

Published in Arizona Journal of Real Estate & Business

Fletcher R. Wilcox

Fletcher R. Wilcox is the author of TheWilcoxReport.com. He is V. P. of Business Development and a Real Estate Analyst for Grand Canyon Title Agency. Fletcher can be reached at FWilcox@GCTA.com and 602.648.1230.

 

2018 Dollar Sales Volume Hits All-Time High for a First Quarter

Strong demand to own a home in the first quarter of 2018 led to the highest dollar sales volume ever for a first quarter.  The previous first quarter with the highest dollar sales volume was in 2005.  First quarter dollar sales volume for both 2005 and 2018 was over five billion dollars with 2018 being 445 million higher than 2005.  Dollar sales volume measures the strength or weakness of a market.  It is comprised by adding the sale price of each sale for a total.  The dollar sales volume in this report is for previously owned single family home sales in Maricopa County.  Previously owned single family home sales are eighty percent of residential sales making it the most popular residential product for buyers.

When comparing first quarter 2018 to first quarter 2017 there were 16,227 sales in 2018 which was four percent higher than the 15,602 sales in 2017. The median sale price in first quarter 2018 was $277,000 compared to $255,000 in 2017 for a five percent increase.

Demand to Own Fueled by Population, Job and Wage Growth

Population Growth: According to the U.S. Census Bureau Maricopa County for the second year in a row was ranked the number one county with the greatest increase in population.  The population of Maricopa County increased by 73,650 in the 2017 rankings, or 202 people a day.  Finishing second was Clark County, Nevada with a population increase of 47,355 or 130 per day.

Job Growth: In 2007 there were 1,865,800 people employed in Maricopa County.  Three years later in 2010 – there were 225,700 less people working.  Back then many people that lost their jobs stopped making their mortgage payments.  Mortgage payments not made lead to foreclosure notices.  Foreclosures notices lead to cheap REO sales driving down home values.  This is far from the situation today.  In 2017 there were 325,900 more people employed than in 2010.  With a growing number of employed people, and since everyone has to live somewhere, the sheer number of employed people creates a lot of competition for existing inventory.  Prediction: By the end of 2018, the average monthly number of people employed will be over 2,000,000 per month for the first-time!

Rising Wages: At the time of writing this article only wage information for Arizona was available.  Maricopa County which is located in Arizona has seventy-one percent of all employed workers in the state.  According to the U.S. Bureau of Economic Analysis the average state earnings for the fifty states increased 3.1% in 2017.  Earnings are defined as wages and salaries.  Arizona earnings were above average.  Arizona had the third highest earnings at 4.8 percent, behind only Idaho and Washington.  Leading Arizona’s earnings was healthcare with an increase of 6.4 percent.

Conclusion

There is a lot of news that positively affects the Maricopa County real estate market. Population, job and wage growth should continue to increase.  These increases will keep the fierce competition amongst buyers for single family homes at the most popular price ranges.  Also, because of the sheer dollar sales volume of the market, expect increased competition amongst real estate companies as more of them, some with new business models, enter our market for a piece of the dollar action.  I do expect 2018 will end as one of the best years ever for the Maricopa County real estate market.

Fletcher R. Wilcox

Fletcher R. Wilcox is the author of TheWilcoxReport.com. He is V. P. of Business Development and a Real Estate Analyst for Grand Canyon Title Agency. Fletcher can be reached at FWilcox@GCTA.com and 602.648.1230.

Filed Under: Arizona Real Estate Market, Buyer or seller market, Canadian buyers, Canadian sellers, Fletcher Wilcox, Fortune 500, grand canyon title agency, Greater Phoenix Real Estate, Homes for Sale, Job growth, Paradise Valley real estate, Phoenix real estate, Phoenix real estate sales, Pinal County, Population growth, real estate sales, Scottsdale listings, Scottsdale luxury market, Scottsdale luxury real estate, Scottsdale real estate, Scottsdale relocation, Scottsdale retirement, Single Family Sales, The Wilcox Report, Westside Real Estate

Maricopa County Does It Again! Leads All Counties In the U.S. For Net Population Gain!

May 5, 2018 By

Maricopa County Does It Again!

May 4, 2018
By Fletcher R. Wilcox author of The Wilcox Report
V.P. Business Development & Real Estate Analyst
Grand Canyon Title Agency   FWilcox@gcta.com  602.648.1230

According to the U.S. Census Bureau Maricopa County for the second year in a row was ranked the number one county with the greatest increase in population.  The population of Maricopa County increased by 73,650 in the 2017 rankings, or 202 people a day.  Finishing second was Clark County, Nevada with a population increase of 47,355 or 130 per day.  The county with the greatest net loss of people was Cook County, Illinois.  Its population decreased by 20,093.

This increase in the population of Maricopa County will continue to fuel the demand for housing!

Below are the top ten counties for increasing and decreasing population.

Fletcher R. Wilcox is the author of TheWilcoxReport.com. He is V. P. of Business Development and a Real Estate Analyst at Grand Canyon Title Agency. His market analysis has been referenced in the Wall Street Journal, Bloomberg News, HousingWire.com and National Mortgage News.  He teaches real estate agents how to use market data for influence with sellers and buyers.  To contact him to speak at an event Fletcher may be reached at FWilcox@GCTA.com and 602.648.1230.

 

 

 

 

Filed Under: Uncategorized

CYBERSECURITY SEMINAR: LOTS OF TOPICS COVERED. THE FBI WILL ADDRESS YOUR CYBERSECURITY.

April 23, 2018 By

REGISTER

SEE TOPICS BELOW!

Filed Under: Arizona Real Estate Market

Which months have the highest and lowest sale prices?

April 18, 2018 By

Residential Market Update

March 2018

Arizona School of Real Estate & Business

Fletcher R. Wilcox

Fletcher R. Wilcox is the  founder and author of TheWilcoxReport.com and Vice President of Business Development for Grand Canyon Title. His market analysis has been referenced in the Wall Street Journal, Bloomberg News, HousingWire.com and National Mortgage News. Fletcher can be reached at FWilcox@GCTA.com and 602.648.1230.

This report reviews trends for previously owned single family homes in Maricopa County. The information is compiled from the Arizona Regional Multiple Listing Services, Inc. known as ARMLS.

Strong Start in 2018 for Sales and Median Sale Price but not for New Listing Inventory

January 2018 sales of 4,404 were up three percent over January 2017 and February 2018 sales of 5,026 were up 7.7 percent over February 2017. The median sale price in January 2018 of $273,000 was $21,635 or 8.6% higher than January 2017.  The median sale price in February 2018 of $276,000 was $21,500 or 8.4% higher than February 2017.  New monthly listings, however, did not perform as well.  There were 7,393 new listings in January 2018 which were just 61 more than January 2017, while February 2018 had 6,907 new listings which were 311 or 4.3% less than February 2017.

Which Months May Have the Most and the Least New Monthly Listings?

New monthly listings are defined as the number of homes listed with ARMLS in a particular month. The line chart below shows the number of new monthly listings, month by month, starting January 2014 through February 2018.  We see similar patterns in each year.  At a certain time in the year the chart forms a V pattern.  The bottom of the V is December when the least number of sellers put their homes on the market giving buyers the least number of choices.  Then new listings skyrocket in January which is the beginning of the listing season.  In January 2018 new monthly listings of 7,387 were 3,109 more or 42% higher than in December 2017.  In February new monthly listings go down a little from January because it is a shorter month, then they go up in March.  March for the last four years is the month with the highest number of new monthly listings.  After March the number of new monthly listings generally goes down then goes up in again October.  After October the number of new listings go straight down forming the bottom of the V.

Which Months May Have the Highest and the Lowest Median Sale Price?

The table below shows the median sale price, month-by-month, from January 2014 through February of 2018. I define the sale price date as the day of close of escrow which occurs when the deed is recorded.  All of these years show January as the month with the lowest sale price with the only exception February 2014 when it was the same as January 2014.   The years 2015, 2016 and 2017 all start the first half of the year with a similar trend.  January starts the year with the lowest sale price for the year.  It then increases five consecutive months until June.  Then after June there is a July sale price drop.  The July 2015 drop from June 2015 was 2.1%.  In 2016 it was 2.3% and about 1% in 2017.   The month(s) with the highest sale price from 2014 through 2017 were the following:  In 2014 it was December at $223,000.  In 2015 it was June at $240,000.  In 2016 June and September were tied at $255,000.  In 2017 it was June at $270,500 until November eclipsed it at $271,000.

For each of the years — by the end of the year — the sale price was always higher than the beginning. In 2014 the December sale price was 6.2% higher than January.  In 2015 it was 9.2%, in 2016 5.4% and 7.4% in 2017.

Sometime in 2018 the sale price most likely will surpass the highest month ever which was June 2006 when it reached $287,500.

 

Conclusion

These trends apply to properties in Maricopa County as a whole and may or may not apply to a specific property. This where a real estate agent comes in.  An agent can do a market analysis of a specific property to determine how it compares to the overall trends, and then explain to their customer if these trends apply.

There is one thing that I know that does apply to real estate in Maricopa County. Selling and buying real estate in 2018 will be another exciting year to be in the business!

Filed Under: Uncategorized
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