VIEW: Phoenix & Scottsdale allure outweighs other challenges
By Gary Shapiro | Point of View
The more things change, the less they change. That’s pure wisdom.
If you think real estate in Arizona is going to go from desirable to undesirable, you need to reconsider your position. Whatever challenges we’re facing; we’ll get through it. Stay away from negative people, nay-sayers and prophets of doom.
In my 51 years as a local Realtor, I’ve seen it all. Things come and go. The pendulum shifts and ultimately stabilizes.
Here are the unadulterated, non-biased facts from the industry’s “source Perrier,” the Arizona Regional Multiple Listing Service.
Yes, it is taking a little longer to sell a home today than last year. It was 38 days in August 2022 and 28 days in August 2021. Those are the averages across the board. Some areas, sizes and types of property and price ranges have different statistics.
The 10-year average days on market from 2013 to 2022 is 59 days. The worst market was in 2014 when it took 85 days on average to sell. The industry didn’t even track days on market until August 1999. Take a guess on what the days on market was then. It was 93. Much worse than today’s 38.
So, why are we worrying? It’s no big deal. From my perspective, days on market is by far the least important, least understood, and overrated measurement in our industry.
As we come out of the pandemic, there’s been a lot of talk about the “new norm.” Some of us are eating out again. Some people are still working from home or on a hybrid basis. Some of us have mastered meetings on Zoom and like ‘em. We’re all trying to get a handle on whatever new comfort level exists.
I’d like to offer a voice of reason and stability as we navigate our future.
I’m grateful lenders have established new and reasonable criteria to evaluate loan applicants. It was sheer lunacy to grant mortgages to potential borrowers who lacked capitalization and proof they would succeed as a homeowner or landlord. As a result, we should not experience a repeat of yesteryear’s historic and tragic failures.
Yes, we’ve been spoiled by unrealistic interest rates. Get over it.
(Photo: Arianna Grainey/DigitalFreePress.com)
Always searching for better days
When I first started in the real estate business in 1971, the typical 30-year fixed rate mortgage was 7.7 per cent. Today rates are around 5.2 percent. That’s still doable for many borrowers.
We’ve gone through other cycles when rates were temporarily unattractive. Buyers in 2006 paid an average of 6.41 percent. In 2000, rates hovered around 8.05 percent, which was a bargain compared to 10.13 percent in 1990. Real sticker shock took place in 1981 when rates averaged 16.63 percent, which is the record high over the past 50 years. By the way, the average rate over the last 50 years is a tolerable 7.81 percent.
Rates don’t really matter unless they preclude you from buying. Bragging about loan rates was a popular cocktail party conversation in the old days when we actually went to parties. No one cared.
What really matters is the buyer who purchased a home in 1992 and paid 8.39 percent for his mortgage has probably refinanced it several times.
Here’s the no-brainer. If he still owns that home and has made all of the required monthly payments, his property is now free and clear and worth exponentially more than what he paid 30 years ago.
That’s equity. That’s wealth. That’s the American Dream come true.
As they say in sports, “keep your eye on the ball.” As we say in real estate, “stay focused on the big picture.” So, here’s some reliable information so you can make strategic decisions.
Be careful how you evaluate the news and advice from people, organizations, institutions and the media.
If you meet an agent who is more focused on why you should sell versus what you can do to create and maintain legitimate wealth through real estate, run and seek alternative advice.
If you’re approached by a solicitor whose goal is to buy your house himself, he can’t possibly have your best interests at heart. His definition of top dollar or fair market value is different.
Instead, look for a professional who will market your asset to a legitimate independent third party. The best scenario is an “arm’s length” transaction where your agent has a fiduciary duty to you versus the self-serving motivation that comes from someone acting as a principal in the transaction.
If you’re diligent and ask friends and neighbors for recommendations and interview those candidates, there are around 9,100 Realtors working in approximately 1,375 offices who belong to the Scottsdale Area Association of Realtors to choose from. You should be able to find a good advocate, counselor and expert to help you focus on the right issues to help you achieve your goals.
Lastly, don’t worry about selling your house overnight or in the first week or two, etc. Give it time. Anything that’s worthwhile takes time. The “old” norm is the “new” norm. Good luck.
Editor’s note: Mr. Shapiro is a Scottsdale Charro, Realtor and co-founder of Scottsdale Leadership.
