Archive for February, 2009
Prices for Phoenix-area real estate are very low, but are they low enough to justify a run on the market?
This is my column for this week from the Arizona Republic (permanent link).
Prices for Phoenix-area real estate are very low, but are they low enough to justify a run on the market?
Looking for some rock-solid investment advice? Buy low. Sell high.
That seems obvious enough — except it often turns out to be the opposite of what people do. There are legions of people in the Phoenix market who bought high and are having to sell low.
The trouble is, it’s hard to know which is which until after the fact. Many people bought homes during the boom at what seemed to be high prices, only to sell them a year later for even higher prices.
That was a very fun game to play — until the music stopped and left you without a chair. Many putative experts — I was one of them — thought the boom would go on even longer than it did.
But what about now? Prices are very low, but are they low enough to justify a run on the market?
The technical answer is yes. Phoenix-area home prices are nicely aligned with incomes, and premium rental homes are comfortably cash-flow-positive from the first tenant.
The market’s response is no. So far, there hasn’t been a fire-sale mentality in the marketplace to go along with the fire-sale prices. I’m working with several investors who are picking up multiple properties, often for cash, but there is nothing like the activity we saw in 2004 or 2005.
But all that could change very soon. The Fed continues to hold interest rates very low, and there is talk of forcing the rate for a 30-year fixed-rate mortgage down to 4%. And the so-far-unadopted stimulus plan includes a $8,000 tax credit for first-time home-buyers.
Lenders will find a way to turn that tax-credit into a short-term loan. And $8,000 is a 10% down-payment on an $80,000 home. Putting 3.5% down on an FHA loan, $8,000 is enough to get an $225,000 property.
If owner-occupant buyers soak up all the excess resale inventory, that should cause prices to stabilize or even start to rise. If, instead, new-home builders use the tax credit to build even more homes in our already-overbuilt market, the bottom will be but a distant dream.
Technorati Tags: arizona, arizona real estate, investment, phoenix, phoenix real estate, real estate, real estate marketing
No commentsAffordable historic homes can be hard to find – except in Villa Verde, a neighborhood built by Frank B. Wallace
Are you looking for a truly historic home in Phoenix for less than $100,000?
This is a doable proposition, but you’ll have to make some compromises. The homes available to you are going to be fairly small, for one thing. And they won’t be in the toniest of neighborhoods. And you should plan to expend some elbow grease, both in restoring the home’s historic authenticity and in undoing past botched remodeling efforts.
This is precisely the same process folks went through in the Willo and Story Historic Districts. They just endured their hardships a decade or two earlier.
It’s a sweet thing if you can buy an historic home that has already been restored, planted amidst other restored homes. But if you don’t have that kind of money, you’ll need to take on the pioneer’s burden in another neighborhood.
The downsides of this process are abundantly clear, but the upside can be very attractive: You can be the urban homesteader who brings a neglected historic neighborhood back to popularity — and to acclaim and prosperity, as well.
Perhaps the best place to explore this kind of opportunity is in The Villa Verde Historic District. This little pocket neighborhood, just west of the Arizona State Fair Grounds, was built entirely by Frank B. Wallace, one of the seminal home builders in early Phoenix history. BloodhoundRealty.com represented Wallace’s family home a few years ago.
The most affordable home for sale in Villa Verde right now is 1902 West Granada Road, which is offered at $59,900, but there are several others available for less than $100,000.
And the homes are completely unique, no two alike. The photo you see above is a detailed image of the Clinker Brick used in the construction of 1920 West Granada Road.
Will Villa Verde be as in-demand as the Willo or Story ten years from now? There’s no way to predict that. But if you’re looking for a genuine historic home in Downtown Phoenix, a home with an impeccable historic pedigree, Villa Verde has a lot to offer for the money. If you’d like to explore your opportunities, you can click this link to see detailed photos of some Villa Verde homes. Or, better yet, give us a call at 602-740-7531 and we’ll take a tour of the available homes in person.
No commentsIn a city known for its bland architecture, Phoenix can claim a very proud distinction in the unique mid-century modern homes of Ralph Haver
Look at this:
That’s just sweet. It’s a Ralph Haver home in the Windemere neighborhood, off of Indian School Road just east of 44th Street. There are only three dozen Haver homes in the community, and there are fewer that 200 Havers in all of Phoenix.
But for all the cookie-cutter tract homes littering the desert, the unique Ralph Haver style redeems them all.
They’re not the most practical homes, and they tend to seem kind of small to modern sensibilities. But they have a home-of-the-future panache you won’t find in more-normal residential structures.
This particular home is interesting because it’s all-but-unchanged on the inside. These are original sheet-metal cabinets, for example:
As I write this, there are a total of five Haver homes for sale in the Valley — and only one in Windemere. (The home shown here is gone, alas.) If you would like to see them first-hand — or other mid-century modern marvels of design — give us a call at 602-740-7531. We’ll take you to a Phoenix that might have been…
No commentsAre you planning on making expensive changes to your home? Make sure they’ll make sense to future buyers
This is my column for this week from the Arizona Republic (permanent link).
Are you planning on making expensive changes to your home? Make sure they’ll make sense to future buyers
I was in a house once where the sellers had spent $20,000 remodeling the kitchen. Black Corian countertops with lime green trim. A black sink with gold-plated fixtures. Black and green marble flooring. And all of it was set off by dramatic spot-lighting, blinding where it hit, gloomy everywhere else.
That kitchen was gauche by Las Vegas casino standards, but the owners could not understand why their house wasn’t selling.
If you’re going to spend money improving your home, be sure your work results in real improvements.
Updating kitchens and bathrooms can be a good idea, but make sure your design decisions fall somewhere in the middle of the bell curve. A bathroom pleasing to a king — or to a gangster — might suit your tastes, but it could make your home hard to sell.
Adding a second story to a ranch home is usually a pretty terrible idea. Like them or not, ranch homes are what they are, and if you violate the low, sleek lines of your home, you may end up with something that looks like the neighborhood goiter.
If you decide to convert that patio into living space, do it in a way that makes architectural sense. A huge family room leading, through the removed double-doorway to yet another huge family room won’t make sense to future buyers. And whether you call it an Arizona room, a Florida room or a Lanai, if it’s not ducted to the main HVAC system and insulated to the same rating as the rest of the home, appraisers will not count it as livable space.
Likewise, a converted garage can be a great way to get a overgrown teenager to move out, but it’s not really a bedroom. The garage is probably worth more as a garage, on resale.
Here’s a useful question: “Would this make sense to me if I were buying this house?” If the answer to that question is not an obvious yes, don’t make the change. No matter what you might want, if your house doesn’t make sense to buyers, it won’t sell.
Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing
No commentsThe Willo Historic District Home Tour is this Sunday, February 8th, but you can tour one-of-a-kind homes whenever you want
The 21st Willo Home Tour & Street Fair will take place on Sunday, February 8, 2009. This is your chance to tour a dozen of the most unique homes to be found anywhere in the Valley of the Sun. Phoenix is well into its extended Spring season, and a walking tour of fascinating homes is a great way to spend your Sunday.
But I get to see interesting homes every day, and, because I do, so do you. Here’s an example from The Willo Historic District:
This is 525 West Granada Road, which is currently offered for sale by Tom Bryant of Realty Executives.
The original 1930 structure is a Tudor Revival. It’s built on a foundation, which is why there are steps leading up to the front door. The historic authenticity of the home has been retained and cherished, as you can see in this stylish and yet almost-rustic kitchen:
But the current owners have upgraded the home in ways that will make sense to modern sensibilities. The original bathroom fixtures have been retained and restored:
But a vast new Master Suite has been added at the back of the home, with era-appropriate fixtures:
This is a sweet home — and you should click this link to see for yourself. Very spacious inside, and there’s a livable guest house and a back yard made for entertaining. The Phoenix Historic Districts are suburban retreats right in the heart of everything, but this home is Historic Phoenix at its most urbane: You’re a couple of blocks north of McDowell Road and a short hop to the new Light Rail line on Central Avenue. You can walk to the Heard Museum, to the Art Museum or to the Burton Barr Public Library.
Walkable Phoenix? That must be a typo, right? It’s not. Give us a ring at 602-740-7531 and we’ll show you the Phoenix that was here before everyone else got here. It’ll be just like the home tour, only just for you — and we’ll be touring homes you can make your own.
No commentsRemodeling your home — if you do it right — can add to your enjoyment now and to your resale value later
This is my column for this week from the Arizona Republic (permanent link).
Remodeling your home — if you do it right — can add to your enjoyment now and to your resale value later
Removing interior walls and low ceilings can make your house feel more open — and more modern. Combined with other improvements — kitchen and bathroom remodeling and energy-efficient windows — opening up your floorplan can add substantially to your enjoyment of your home now, and to its resale value later.
Simply opening the kitchen up to the living and family rooms can make a huge difference. Modern homes are built around the “greatroom” concept, where the kitchen leads to an island which in turn leads to the entertainment space. Whether people are cooking, hanging out or watching television, family and guests are all together, rather than being isolated into separate spaces by function.
A common upgrade people will make to older homes is converting the carport into a garage. This is not a difficult change to make, but there are safety considerations: The door leading from the garage to the house should be fire-rated and self-closing to keep exhaust fumes out of the home.
People also try to convert carports to livable space, often to the home’s detriment. When you step down off the slab, you are stepping out of the house. If you want to convert a carport — or an existing garage or a patio — to livable space, you should start by pouring new slab to the same level as the rest of the home. This is not just a cosmetic issue. You need a better footing for the extra weight the slab will have to bear.
But that’s just the beginning. The walls will need to be built to the same insulation factor as the other exterior walls of the home. And the roof will need reinforcement — and insulation.
It’s not uncommon to see homes that have doubled in square footage by means of converting outdoor spaces to indoor spaces, sometimes with one vast converted patio leading to another. But if these additions are not built to the same standards as the rest of the home — and if they are not ducted to the central heating and air conditioning systems — appraisers will not evaluate them as livable space.
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