Flexible Home Buying Options

Flexible Home Buying Options

Flexible Buying Options to get you from Home-A to Home-B

Contingent Buyer

A Buyer who has to sell home A to purchase home B
It’s very difficult to be a Contingent Buyer, in this market. Your competitive advantage is very low. In this scenario, you’ll be competing against Buyers that have non-contingent financing or cash.

Non-Contingent Buyer

A Buyer who does NOT have to sell home A to purchase home B.
In this scenario, you qualify to carry two mortgages, either for a short time or keeping the original home as an investment property.

A Bridge Loan

A Buyer who has a lot of equity or even owns their home, home A,  free-and-clear but may need that equity to purchase home B.
This is a Bridge loan scenario where we utilize the equity in home A and cross collateralize with the new purchase, home B. Many people like this as they are non-contingent on the purchase of home B and don’t have to make a double move. This is very strong in our current market. You can be patient, find and close on home B, locking in price and interest rate while home A is still rising in value. You as the seller can then sell home A in an appreciating market and fully pay off, home B or keep home A as an investment.

Fix & Flip

A Buyer who has needs to sell home A but needs minor repairs to fully get maximum value in the market.
Investors/Agents will fund the remodel for you, then list the home and get top dollar. This provides more money, for the Buyer, when purchasing home B.



March 18 

A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in an uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today’s numbers.

In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live. In 2005 I met a man in his early 20s who owned 12 homes in the Phoenix area, all with no occupants. How had he been able to buy them? 100% loans from unscrupulous lenders who went bust between 2007 and 2010. The housing industry (and more particularly the lending industry within it) was the cause of the 2008 recession. Phoenix was a hot spot for the cause of the problem, as was Las Vegas.

In 2020, housing is an innocent bystander to a probable recession caused by a pandemic. It has supply at extremely low levels and most homeowners have a large amount of equity. Even if they lost all their income and could no longer pay their mortgage, they could quickly find a buyer to release that equity. There is little likelihood of them facing foreclosure because the lender can be paid off with the sale proceeds. Only when demand collapses do the banks have to foreclose to get their money back. At the moment demand is still well above normal and has only shown very tiny signs of easing. In 2006 demand fell off a cliff yet home builders continued to build even more new homes because lenders continued to write ill-advised loans in huge numbers.

In 2020 builders are probably going to have to build fewer homes than they wish because of shortages of labor and materials. We are unlikely to see a glut of homes on the market for a very long time. A successful vaccine for the novel corona virus is more likely to appear before a surplus of homes could possibly develop.

Because the virus has not been contained yet, except in several parts of Southeast Asia, we are likely to see a lot of people out of work. We do not yet know how long it will take to get control of the pandemic in Arizona, but many people may be out of work for quite some time. These people are more likely to be renters rather than homeowners. Landlords may find it much harder to collect rents and the yields from their portfolios are likely to fall. Some may decide to evict tenants and sell their properties. At the moment the extra supply would be welcomed and receive multiple offers, even in these troubled times. The evicted tenants still exist and therefore still represent demand for shelter of some sort. There will be hardship, but not a flood of homes with no-one to live in them.

Housing demand is created by the existence of people and increases when more people turn up and decreases if they go away. In 2005 the people we were building new homes for were largely imaginary. In 2020 they are very real and migration trends have been very favorable with families and individuals moving to Arizona from other parts of the USA.

All the indicators for the Central Arizona housing market remain very healthy at the moment and we will report any change as soon as we spot one. There is no cause for panic and if you are delaying a purchase because you think the price will come down, you are probably making a poor decision.

Mid-December by the Numbers

Mid-December by the Numbers

We now have 2 complete weeks of December data in hand so it is fair to compare with the same 2 weeks in past Decembers:
  • We have seen 3,268 new listings across Greater Phoenix, 6% lower than the 3,478 we saw in 2017 and the second lowest total after 2014
  • There have been 2,949 closed listings across Greater Phoenix, slightly above the 2,937 we saw in 2017
  • There have been 3,340 accepted offers on listings across Greater Phoenix, down 7% from the 3,607 we saw in 2017
At 6% the drop in new listings is not as severe as for the first week of December which was down 11%. However, it indicates we still see subdued flows of new supply in December, well below the average over the past 18 years.
Closings are running at a good pace, but new contracts are now down 7% having been down 4% after the first week. Buyer enthusiasm is low partly because of higher cost of ownership but also because there is a shortage of attractive inventory for them to choose from.
In 2018, home loan delinquencies are at an extremely low level and home equity is at a high level. Consequently, the fall in demand is merely causing sales rates to drop and allowing buyers a little more negotiation power than a year ago. This is likely to lead to a slower appreciation rate but is very unlikely to lead to home values falling.
Data and commentary courtesy of ARMLS® and Cromford Associates LLC.