Archives for January 2014

Scottsdale, Paradise Valley popular spots for celebrities By Joe Szabo, Scottsdale Real Estate Team

January 30, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

From Bing Crosby to Beyoncé, Scottsdale and Paradise Valley have been popular stomping grounds for Hollywood headliners since the 1940s.

Its proximity to Los Angeles – and reputation as a desert South Beach – have drawn hundreds of stars through the years to hideaways such as Hotel Valley Ho, Fairmont Scottsdale Princess, Sanctuary on Camelback Mountain and the Hermosa Inn.

According to the Scottsdale Convention and Visitor’s Bureau, stars are attracted to Scottsdale “for rest and relaxation, far from the prying lenses of the paparazzi and congested streets of Los Angeles and New York City.”

See who lives where here

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

Key Factors in Securing a Mortgage by Joe Szabo, Scottsdale Real Estate Team

January 27, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

For most Americans, buying a home is the most expensive purchase of their lifetime, and obtaining a mortgage can be particularly stressful.

Research and preparation won’t take all the worry out of applying for a home loan, but it will go a long way toward reducing your anxiety.

Here are key factors lenders may consider when reviewing your mortgage application.

Credit report & score

Your credit report documents your track record of borrowing from and repaying banks, credit card companies and other lenders. It’s crucial that you check your credit report well in advance of a home purchase in order to give yourself enough time to spot any issues that might raise concerns.

Your credit score is a numeric evaluation of your credit risk level. Lenders will review your credit report and score, among many other factors, to make a decision about whether they will approve your home mortgage application.

Credit cards & other debts

Your debt-to-income ratio, or the amount of credit card and other debt you have compared to your income, is also calculated before securing approval from a lender. If you’re carrying a balance owed on your credit cards and other debts, it may impact your credit score.

Experts suggest that consumers should be especially aware of their credit card charges during the months leading up to a mortgage application. Think twice before canceling a credit card, especially an account that establishes a long-term credit history. You’ll also want to avoid applying for new credit during the three to six months prior to applying for a mortgage.

Employment status

The length and terms of your employment will also be verified by lenders to ensure you bring in enough income to afford a mortgage payment. Whether you’ve been in your position of a long period of time, have multiple sources of income or are self-employed, it’s especially important to have the right paperwork to share with lenders.

Be prepared to provide pay stubs, bank statements and tax returns in order to verify your work history.

Down payment

The expected down payment can be up to 20 percent or more of the home’s purchase price. If your credit history is less than stellar, you may need a larger down payment in order to secure a loan. Down payment requirements vary by lender and loan type, so be sure to verify the required down payment with your preferred lender.

Your lender will also want to know that you have enough cash to cover your closing costs; if you don’t, you might have trouble getting your application approved.

Know what’s off-limits

When deciding whether to extend you a loan, lenders might ask countless questions about your income and expenses. They can ask whether you’re involved in any lawsuits, have filed bankruptcy in the past seven years or been involved in a foreclosure.

The Fair Housing Act and other federal laws, however, put some questions off-limits. Borrowers, for instance, are not required to disclose payments from a spouse or former spouse unless that income is being used to qualify for the mortgage. Lenders cannot ask how much you receive in child support or alimony, but they can ask if you want to disclose this amount because you’d like to use the income to qualify for the mortgage. If you pay child support or alimony, your lender typically will require this information because it affects your ability to repay the loan.

Lenders can’t ask if you’re pregnant or planning a family, but they can ask about your dependents and their ages.

Also, thanks to protections provided by the Fair Housing Act and Americans with Disabilities Act, you cannot be asked if you are ill or disabled.

The mortgage loan application process can be daunting, as lenders need to gather a considerable amount of information to determine whether you’re a good investment. Knowing what lenders look for should help put you at ease and ensure that you’re well-prepared for securing the financing you’ll need to buy your home.

Combined Value of US Homes to Top $25 Trillion in 2013 By Joe Szabo, Scottsdale Real Estate Team

January 23, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

If you wanted to buy every single home in the country, all at once, you’d need to be prepared to spend more than $25 trillion, according to Zillow.

The overall cumulative value of all homes in the U.S. at the end of 2013 is expected to be approximately $25.7 trillion, up almost $1.9 trillion, or 7.9 percent, from the end of 2012. Gains were calculated by measuring the difference between cumulative home values as of the end of 2012 and anticipated cumulative home values at the end of 2013.

The gain in cumulative home values is the second annual gain in a row, after home values fell every year from 2007 through 2011. Between 2007 and 2011, the total value of the U.S. housing stock fell by $6.3 trillion. Over the past two years, U.S. homes have gained back $2.8 trillion, or about 44 percent of the total value lost during the recession.

“In 2013, the housing market continued to build on the positive momentum that began in 2012, after the housing market bottomed. Low mortgage rates and an improving economy helped bring buyers into the market, boosting demand and driving prices up,” said Zillow Chief Economist Stan Humphries. “We expect these gains to continue into next year, though at a slower pace. The housing market is transitioning away from the robust bounce off the bottom we’ve been seeing, toward a more sustainable, healthier market. This will result in annual appreciation closer to historic norms of between 3 percent and 5 percent.”

Real estate in the United States is hugely valuable. The $25.7 trillion total value of the country’s entire housing stock is more than the combined gross domestic products (GDP) of China and the U.S. in 2012. Homes in the New York and Los Angeles markets alone account for more than $4 trillion in combined value.

Home Design Resolutions for 2014 By Joe Szabo, Scottsdale Real Estate Team

January 20, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Resolution No. 1: Plan it out

No matter which design project you want to tackle, designers say having a plan is the key for success.

“Start with a wishlist of projects to complete over the year,” suggested designer Alissa Pulcrano of bright design lab in Portland, OR. “Plan, plan, plan first! Then take your concepts to your favorite designer (or two if you don’t have one yet) and ask them to give you a proposal for your wishlist. Take the time to plan it right.”

Designer Melissa Klebanoff, principal of Melissa Klebanoff Interior Design in Seattle, offer similar advice to clients tackling design projects.

“Assign the following steps a timeframe to keep you on track, and before you begin, determine if the project requires a designer,” she said. “Write down everything you want to accomplish with your project, define it, gather photos and do a space plan if needed.”

Resolution No. 2: Find your style and get inspired

Sometimes the most overwhelming part of a project can be determining which direction to go in. Which color? What about textiles and finishes? The goal here is to not necessarily find the most trendy design but the look that will work for you and your household over time.

Before you begin gathering inspiration, determine the purpose of the room. Does it need to be highly functional and kid-friendly? Or is it a stylish retreat?

Once you have narrowed your purpose, gather photos and spend time visiting websites and saving images. Zillow Digs is one such place to collect inspiring designs all in one space.

It also helps to see materials in person, advises Klebanoff.

“Go to home improvement stores and design centers. Collect the finishes you’ll need and love — like carpet samples, stone samples, fabrics, furniture cuts, lighting ideas, appliance specs, paint colors and so on,” she said.

Resolution No. 3: Focus on one room at a time

Whether you’ve been meaning to clean out and organize the clutter accumulating in the hall closet or finally frame family photos for the living room, it’s best to tackle one space at a time.

“If you have a weekend, develop a plan and focus on one room: paint the living room, and buy a few key pieces, knowing that you can add to it over the year,” Pulcrano said. “Start with an overall design and then ‘chip away.’”

Resolution No. 4: Give the kitchen a refresh

Kitchens have become the center of many American homes — the place that sees the most foot traffic and activity. According to the latest Zillow Digs designer survey, kitchens top the list for planned 2014 renovations.

Kitchens in 2014 are trending toward open, “homey” spaces, says designer Vanessa DeLeon.

“More and more people are wanting an ‘open concept’ space and the feeling of comfort,” she explained. “They want to be able to eat, entertain, relax and enjoy the space with the rest of the house.”

Considering a kitchen remodel? Start researching contractors or designers.

“Ask people you trust for referrals for general contractors they’ve successfully worked with,” Klebanoff said. “Set up interviews with them and present your now very clearly defined project to them for bids. Check their references!”

Mortgage Rates Steady Near 3-Month Highs By Joe Szabo, Scottsdale Real Estate Team

January 16, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Mortgage rates were unchanged to just slightly higher to begin the holiday-shortened week. With the exception of last Thursday, rates are the highest they’ve been in more than three months. The most prevalently quoted rate for ideal, conforming 30yr Fixed loans remains 4.625% (best-execution).

Market conditions were exceptionally calm today, and there’s a good chance that will continue as the holidays keep market participants away. Most lenders will release rate sheets as normal tomorrow, but bond markets, including the secondary mortgage market, will close 3 hours earlier than normal and remain closed all day Wednesday. In general, lenders tend to be more conservative with rates during this time of year.

“Conservative” in this case, means “less likely to change rate sheets in the middle of the day” and “wanting to see more market improvement than normal before offering lower rates.” The current scenario is compounded by uncertainty over the latest round of fee increases for Fannie/Freddie loans.

The fee increases pertain to the Guarantee Fees (or “G-fees”) charged by Fannie and Freddie in order to guarantee the repayment of mortgages. G-fees are a regular feature in Fannie/Freddie loans and they’ve been steadily rising since 2010. The announcement of an increase of 0.10% on December 9th was no surprise.

But there are two components to G-fees–the permanent (or “ongoing”) 0.10% mentioned above which affects all similar loans equally, and the upfront G-fees which depend on credit quality (also known as Loan Level Price Adjustments or LLPA’s). The same announcement that raised the ongoing G-fee by 0.10% also served as notification that Fannie and Freddie would soon release updated LLPA’s. They did this last week and the implication was fairly alarming for rates in the first quarter of 2014.

Late Friday, incoming FHFA Director (that’s who oversees Fannie/Freddie) Mel Watt said in an email that he would freeze the fee hikes until he had an opportunity to review the rationale for the decision and the impact on the housing market. This would be on January 6th, but some lenders have already begun pricing in the effects from the fee hikes for certain loans. It’s as yet unclear if borrowers who lock now based on the higher fees would receive the more favorable terms if the fee hike is indeed frozen. When in doubt, be sure to ask your lender if you’re locking a loan between now and then.

Loan Originator Perspectives

“Slow day in MBS Land as expected this Christmas week. Some minimal losses from Friday’s close impacted pricing, but only slightly. Biggest and best present for all involved in housing industry is Mel Watt’s announcement late Friday that he intends to delay or revise increased agency fees that were slated to raise rates/costs for all borrowers as early as January. We’ll keep our eyes open for updates on this critical issue. In the meantime, hope all have a blessed holiday!” -Ted Rood, Senior Originator, Wintrust Mortgage

“Slow week so not much to focus on. Another early Christmas present from incoming FHFA chief, Mel Watt in the form of delayed LLPAs. Fees that were to kick in almost immediately are now delayed pending his review of the rationale. If he’s rational then they will be tabled forever. I think we have a good chance this will be the end result considering he made this decision before he was even sworn in. Thanks Mel on behalf of mortgage originators and future and current homeowners everywhere.” -Mike Owens, VP of Mortgage Lending Guaranteed Rate, Inc.

Today’s Best-Execution Rates

30YR FIXED – 4.625%
FHA/VA – 4.25%
15 YEAR FIXED – 3.5%
5 YEAR ARMS – 3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

The prospect of the Fed reducing its asset purchases weighed heavy on interest rates for the 2nd half of 2013, causing volatility and generally pervasive upward movement.
Tapering ultimately happened on December 18th, 2013. Markets had done so much to come to terms with it ahead of time that it essentially just confirmed the the 6 month move higher in rates, but didn’t make for another immediate spike higher.
That said, we should assume that we’re still in a rising rate environment on average.
NOTE: Lenders will be adjust rate sheets at various times in December and January to account for the most recent hike in Guarantee Fees. This will unequivocally raise rates by at least an eighth of a percent for almost every borrower, and in most cases .25-.375%. Depending on the lender, those changes will take place overnight and have already begun.
(As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario. There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

November and December 2013 Scottsdale Arizona real estate market update

January 16, 2014 Joe Szabo

Happy New Year! Before we look ahead to 2014 lets evaluate the November and December 2013 market activity. The median home price in Scottsdale Arizona dropped slightly in November but increased in December landing at $375,025. This is up 4.9% since December 2012. New listings, new contracts and closed sales are down a bit from previous months which is typical of the busy holiday season. This is how December shaped up: 592 new listings, 426 new contracts and 502 closed sales. The hot seller’s market is starting to cool off and balance out the market. Would be a great time for buyers on the fence to make a move! We anticipate and active first quarter 2014!

: November and December 2013 Scottsdale Arizona real estate market update

: November and December 2013 Scottsdale Arizona real estate market update

Considering a purchasing or selling a property in Scottsdale? Take advantage of the great market conditions and get your home listed for sale before the snow birds and students return in the fall.

We hope that you enjoy reading and analyzing the Scottsdale Luxury Home Report and should you have any questions or comments, please feel free to Contact Joe Szabo at 480.688.2020 or email him directly at [email protected]. You can also visit https://scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

November and December 2013 Paradise Valley Arizona real estate market update

January 16, 2014 Joe Szabo

Happy New Year! Before we look ahead to 2014 lets evaluate the November and December 2013 market activity. The median home price in Paradise Valley Arizona dropped slightly in November but soared in December landing at $1,575,000. This is up 44.5% since December 2012. New listings, new contracts and closed sales were down a bit from previous months which is typical of the busy holiday season. This is how December shaped up: 51 new listings, 33 new contracts and 37 closed sales. The hot seller’s market is starting to cool off and balance out the market. Would be a great time for buyers on the fence to make a move! We anticipate and active first quarter 2014!

: November and December 2013 Paradise Valley Arizona real estate market update

: November and December 2013 Paradise Valley Arizona real estate market update

Considering a purchasing or selling a property in Paradise Valley? Take advantage of the great market conditions and get your home listed for sale.

We hope that you enjoy reading and analyzing the Paradise Valley Luxury Home Report and should you have any questions or comments, please feel free to Contact Joe Szabo at 480.688.2020 or email him directly at [email protected] or [email protected]. You can also visit https://www.AZLuxuryHomes.com or https://scottsdalerealestateteam.com to find out more about Paradise Valley Homes for Sale and Estates for Sale in Paradise Valley and to search the Paradise Valley MLS for Scottsdale Home Listings.

Please note that this Paradise Valley Real Estate Blog is for informational purposes and not intended to take the place of a licensed Paradise Valley Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale and Paradise Valley Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Paradise Valley, The Szabo group delivers experience, knowledge, dedication and proven results.

Create an outdoor dining space to add value to your home By Joe Szabo, Scottsdale Real Estate Team

January 13, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

When you buy a Scottsdale home, it is your space to live in and enjoy and you can renovate and redecorate in order to improve your surroundings in any way that you choose. One of the ways that you can enhance your enjoyment of the property as well as add to the value of the home is to create an outdoor dining space. On a beautiful summer day, what could be nicer than having a place where friends and family can gather and enjoy a few drinks, barbecue up some tasty food and breathe the fresh air?

Here are some tips to keep in mind when you are adding an outdoor dining space to your home:

·Choose the right location. You want your backyard dining area to be peaceful, quiet and private, so find the best spot on your yard that will be screened from view and sheltered from street noise.
·Clear a space. Choose an open area where you can place the outdoor dining table. If you put it underneath a tree, you run the risk of having leaves, sap, or insects drop into your food!
·Lay the groundwork. Create a patio surface with stones or tiles first, which will give you a stable and flat place to put your table, chairs and barbecue.
·Invest in sturdy furniture. Outdoor tables and chairs take a lot more wear from rain, sun, and the elements than their indoor cousins. Make sure you buy solid items that will last you many years.
·Create some shade. If you want to enjoy yourself even in the direct heat of the afternoon, add a sun umbrella to your table. There are many different styles, and many can be adjusted and tilted to provide shade as the sun moves through the sky.
·Make sure your barbque or cooking area is in a safe spot. Check that it is nowhere near anything flammable, or that it is not too close to trees or the side of the house.
·Decorate and set the scene. Improve the surroundings of your backyard dining room with some beautiful flowers, a fountain or a tranquil rock garden.

Once you have created the ideal outdoor space, it’s time to invite some good friends over to have a few drinks, barbecue up some burgers and relax!

Rising demand for new construction presents opportunities for real estate agents By Joe Szabo, Scottsdale Real Estate Team

January 10, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

Do you know what niche has a demand so large that it could someday account for up to 35 percent of all sales? You may be surprised to learn that niche is new construction.

Laurence Yun, chief economist for the National Association of Realtors, predicts that in 2014 there will be approximately 5.1 million home sales. This is about the same pace as 2013. While new-home sales had a 25 percent increase from 2012 (from 400,000 to 500,000), they still accounted for less than 10 percent of the total sales in 2013.

Demand is outpacing new-home construction
Yun predicted that while housing starts will increase by 25 percent to about 625,000 in 2014, to keep pace with the demand, new-home starts would have to increase by another 50-60 percent. A Harvard study estimates the shortfall to be approximately 1.8 million new homes per year.

Majority of buyers would consider buying new construction
A builder consortium that included 32 builders across 25 markets found that 54 percent of the buyers surveyed said they would consider purchasing new construction. A sales pace of 5.1 million units translates into 2.75 million home purchasers who would like to consider new construction as part of their home search. Given that there will be only 625,000 actual new units built, the potential shortfall could be more than 2 million new homes. What can you do to capitalize on this opportunity?

1. New-home sales drive resales
The National Association of Home Builders reports that 70 percent of their buyers have an existing home to sell. The agents who represent builders seldom take outside listings. This means that if you represent new-home purchasers, you have a very high probability of listing their home as well.

A second opportunity occurs when the builder has sold out most of its inventory. In many cases, the builders close down their sales office and then list the final one or two properties with an outside agent. If you have been actively showing and selling that builder’s product, there’s a good chance you may obtain that listing as well.

2. Infill: the real opportunity
While many agents would like to represent the big builders, most fail to realize that the greatest opportunity may be with small builders. While it takes special training to represent a large builder, which often includes being able to lay out changes to blueprints, the real opportunity for most agents is with “infill.”

The term “infill” refers to creating new construction in areas that are already built out. This opportunity is greatest in major metropolitan areas. In fact, the prediction from NAR’s new-home panel was that by the end of 2014, 30 percent of all new construction would be due to “infill” properties. These smaller projects are usually of no interest to big-name builders and also fly under the radar of most real estate agents.

One of my former real estate partners in Los Angeles capitalized on this approach by working with several different condominium developers. Sometimes the builder found the property, or my partner located it. Prime targets for acquisition might be three houses on adjoining lots with zoning that would allow for six to 12 units on the property. Other times, the opportunity might be with two adjoining fourplexes where the property could be zoned for 20-24 condos.

This agent not only sold the units, she also obtained listings on what the buyers had to sell. Even after the project was sold out, she continued to be the listing agent of choice for her past buyers when they decided to move.

You can take advantage of this opportunity by becoming an active member in your area’s local builders association. Familiarize yourself with the zoning laws, environmental requirements, absorption rates, and the spread between the property’s current value vs. what it could bring once it’s replaced with new construction.

Your goal is to make yourself the indispensable expert. Help the builders you meet keep abreast of what is occurring in the market, where it is trending, as well as how quickly their project may sell once they complete construction nine to 24 months from now.

3. Single-family opportunities
An entirely different option is to locate foreclosures or dilapidated properties that can be acquired for lot value, torn down, and then replaced with new construction. This is an especially good option in many luxury markets, since most of these areas are already built out.

The beauty of working with a smaller builder is that you obtain a commission on the land sale and on the listing side once the property is built out, as well as possibly selling it to a buyer who has another property to sell. That’s a total of four commissions!

Reasons why that extra bedroom might be worth it by Joe Szabo, Scottsdale Real Estate Team

January 7, 2014 Joe Szabo

By Joe Szabo, Scottsdale Real Estate Team

You are looking at buying a Scottsdale home, but you are wondering whether or not it is worth it to pay a little extra for a home with one more bedroom. It’s a tough decision to make, especially when balancing other factors such as location, price and the other features of the home. However, having one more bedroom than you think you need could end up being a good thing for a number of reasons.

Expanding Family

Perhaps you only planned on having two children, but a third one might come along as an unplanned surprise… will you have enough room for everyone? One of your children’s friends might have a bad home situation and need a place to crash for a while. One of your elderly parents might need to live with you for a while. There are many situations when the family living under your roof might expand, (even if it’s just having guests over the weekend or holidays) so make sure that you have the space to accommodate. I posted an earlier blog on buying a home for guests that might be of interest. Search www.arizonasrealty.com for my other blogs.

A Home Office

If you are working from home or have your own business, a private space in the home to work can be worth its weight in gold. It’s really difficult to be productive when you are trying to work at the kitchen table with the rest of the family buzzing around you, so turn your extra bedroom into a home office.

Resale Value

Buying a slightly larger house with one more bedroom means that the home will be easier to sell in the future. This is especially true if all of the other homes in the area have similar amounts of bedrooms. Buyers these days want more rooms and an added bedroom gives them options that could be the deciding factor between yours and the home down the street.