10 homes sold in December 2008 in Paradise Valley.  They ranged from just under one million to $2,250,000 and the median price was $1,750,000.  The lower - not unexpected - sales in December meant that total the total month of inventory increased to a staggering 50.5 months.  So if no inventory was added this is how long it will take to go through all the homes. 

The home you live in is not an investment.  It's an expense.  A big push of home ownership by the government and various agencies has misled people, especially when those agencies purport owner occupied homes to be good investment.  

Yes, over the long run your home will more than likely appreciate from increased demand from a growing population and/or inflation and that growth will be based on, more than likely, a leveraged return.  This is good but it does not necessarily create a good investment, and in fact it limits you. 

The only way real estate should be considered an investment is when owner occupancy is taken out of the equation.

When you look at a home as shelter the criteria that it fits are different then the criteria for a pure investment.  Often a good investment has similar characteristics to an owner occupied home: location, amenities, condition, floor-plan and so on. 

Though a home you buy may be in a specific part of town while an investment would perform better elsewhere. Also you can invest in real estate with an IRA but you cannot buy a home to occupy with IRA money.

Take owner occupancy out of the equation and you are free to pursue characteristics that will increase your wealth rather.   Good real estate investments should be in particular price ranges that suite the bulk of the rental pool: the same goes for finishes. 

A real estate investment may perform better in a different part of town or even a different state.  In addition, while your own personal housing may change and you may need to move or change homes, a true real estate investment is not subjected to your life's needs and changes.  It can keep performing while you change.

Of course your home can give you a good return but it may not be maximized.  Since we have limited time and limited investment resources it would be prudent to, as much as possible increase the return while keeping risk low and a good way to do that is by keeping living needs separate from investing.

Simple boxy designs: one or two story stucco, wood shingles, painted brick or horizontal wood siding.  These homes are more common in the period of 1915-1940 or the Period Revival Era.

These homes often feature a front porch along the full length of the structure but more common is a small porch over the entry.  Wood posts or columns support the porch. 

Other distinctive American Colonial features:

• Six-over-six windows.

• Small roof top chimneys.

• Federal or Greek revival trim at columns, cornices, casings and door openings.

• Colonial door surrounds.

You'll find these homes through out the Phoenix historic neighborhoods.  Some of neighborhoods that have American Colonial Revival homes include: Ashland Place, Cheery Lynn, Fairview Place and Willo. 

These homes tend look bad when not taken care of and run down.  The simple design and light decorative leave little room to hide mis-management.  On the other hand well cared for manicured homes are quite beautiful in their simplicity and clean lines.

Some parts of the valley saw a dramatic increase in sales. This is "loose your breath" type of sales increase, something akin to going up on a roller coaster.  This seems to be a good analogy considering the steep quick ride down the market just had.

Showing the most dramatic increases in single family detached home sales from December 2007 to December 2008 are the following cities:

• El Mirage  up 531%

• Litchfield Park  up 247%

• Buckeye  up 163%

• Avondale  up 144%

• Apache Junction  up 137%

• Phoenix  up 135%

• Tolleson  up 131%

• Queen Creek  up 101%

• Laveen  up 100%

Phoenix itself grew 490 to 1328 sales according to the Cromford Report.  Sales in phoenix increased so much because of the increase in supply of low priced homes.  This has been the trend these last two quarters: successively lower prices have perked up the interest of buyers who were for a very long time priced out of the market. 

We have seen an phenomenal drop in prices for certain homes in Phoenix.  The drop has been mostly in the starter homes segment not the move up nor luxury segment. 

Look at our report for homes priced $100,000 or less.  Many tenant residents are now considering buying and some already have.  That is why rental rates have flattened and vacancies increased. 

We'll have a full market review in a few days followed by special more detailed reports through out the month and of course the obligatory look at 2008.

Hilker Estates is a small subdivision in Phoenix Arcadia.  It one of the most desirable subdivisions in one of the most desirable neighborhoods.  Want a prestigious neighborhood? You got it. 

Homes here were built from the early 20'th century to 2006 with probably a lot of remodeling interim.  Most home are single story with an average square footage of 3,307.  Surprisingly only 14 of the 23 have pools.

Lot size vary but are usually about half an acre.  Many of the homes are quite spectacular and match the area well: meaning that they are not pompous over sized versions of some of the newer homes in the valley but, ones with lots of character individuality and style.

If you're not familiar with the area, please, read about Arcadia .   Since this is a small subdivision there are only a couple of homes for sale if that. 

Take a look at homes for sale in Hilker Estates in Arcadia via the link or on the map below.

Luxury Home in Arcadia

We wrote about the necessity of staging a home but, don't stop there: the first impression is crucial and it's usually formed by the first images or view of a property, and this comes from the facade and front landscaping. 

It is usually the front that's presented in online advertising, it's the front on brochures, on other marketing and it's the front that potential buyers see when they drive by the property.  Many potentially interested buyers can be turned off after that first impression no matter how nicely staged the home is inside.

When we arrive at a home it usually takes me a minute or two to open the lock box key: in that time our clients have a moment to scope out the details, to see the rust, the worn wood, old weathered door, spider webs or if the home is staged the freshly painted front door, the clean windows and the fresh flowers in the pot.  Which is better?  That first impression will be a lasting one so make it the best it can be.

The most basic things that can be done are quite simple.  This includes making sure the property landscaping and the building itself are clean, free of debris, thrash, dead flora, weeds and so on.  The yard must be manicured.  These are very easy thing to do and only take some hands on work and no money.

You can go a little further by making the visual appeal even better.  From removing bushes that cover the building to strategically placed potted plants at the entrance and new door knobs, door bell and/or lights are just a few of the things that can be done also with little expense.

Taking it all the way could include planting trees, changing the landscaping all together and refinishing the front of the homes: things like fascia, new front door and so on. 

In each case it's really not about cost because most of the time the effort and expense will be returned in either a better selling price or shorter selling time.

When you search for Phoenix homes at Search Valley Homes you can view a complete profile for each home and as many photos as the listing agents uploaded.  You can also see pricing changes. 

These pricing changes are also shown  when you sign up for email updates or RSS feed updates of homes in your criteria.  

We have also created several feed as listed below which display this information.

Biltmore & Arcadia Homes for sale.

Central Corridor Homes.

Midtown Phoenix Homes For Sale.

Historic Phoenix Homes For Sale.

How do you create a customized home update? 

Go to our home search: select your criteria: run the search: save the search and then select e-mail or RSS updates via the respective buttons.  Once you do this you will receive updates on homes in your criteria including new listings that show up.  It's quick, easy and efficient.

Luxury homes are not immune to the market forces, though a much smaller percentage go into foreclosure.   Higher priced homes lagged when the price peaked and when it began to declining by almost a year after the market as a whole:  the decline in luxury home prices coincides with the troubled financial markets not the sub-prime mortgage market.

I have see luxury homes gutted: with fixtures gone and including the bath tub.  I have also seen sparkling clean luxury homes: some are so well appointed that the fixtures and finishes are worth the discounted purchase price and you get the structure and land free.

There is a limited supply of luxury foreclosed homes.  Quite a few are still short sales and will more then likely revert to bank ownership in due time.

Here is a selection of luxury homes, those $700,000+ in Phoenix, Scottsdale and Paradise Valley .  You always change the criteria to expand or limit the criteria.

A Greater Phoenix MSA foreclosed home search is also available.

If you have any questions ore requests please don't hesitate to contact us.

It's a new year, 2009. 

I truly believe that all of us have it good in this time in this place.  We all go through our own individual lives with the good and the bad but, as a society, as beings we have never had it so good. 

A hundred years ago the simplest things today were luxuries, communication was scarce and knowledge was limited and medicine still in it's infancy: literacy was lower, life expectancy was shorter and so on.  Not long ago what the most of us have now only the wealthy had, if that.

Each year the world gets better, people have more opportunities and - I believe - more consciousness.  It is really up to us, individually to realize our dreams: there is very little in the way. 

So welcome to the best year yet!  Make it your best year!

This has been an exciting year, in deed: "may you live in interesting times" is a good wish for anyone and we certainly do live in interesting times, be they good or bad, but for anyone delving into intellectual understanding and an interest in history and how history influences the present had a enlightening year. 

The coming year will be just as interesting.  After the Cold War ended the world was left without a single focus: from macro to micro: the world is changing and heading in directions which will completely transform the economic and political landscape. 

Look to history to learn how people will react as a society: cultures are deeply rooted.  A good study of history would certainly have helped the outgoing administration understand affects of some of their actions and I hope the new administration does not fail to at least know history before they act in the present: this means not only for domestic activities but to foreign relations as well.

Back to the current economy.  A lot of people took a hard knock even those who call themselves gurus and those people upon whom millions relied on to be keepers of their wealth.   I hope it's sinking in that there is probably no better money manager of your own money then an educated self.  Loosing with the crowd makes it more comfortable: much more comfortable then actually being ahead while others are down.  The only way to do this is to avoid acting with the crowd.

The real estate market in 2009 will not be any different then now except that it will be busier.  In each part of the cycle it's good for some and bad for others.  Does it mean you should not buy or sell?  I don't think so it's that simple: it depends on your needs and motivations. 

For one thing unless your not living in the property don't consider it an investment: Your home is not an investment, it's shelter and should be considered a depreciating asset even though in the long run it's not: You buy, you use it and it deteriorates, just like a car (in general). 

Taking into consideration the last statement, if you buy a home and can afford the payments without stress and you have a reserve then buy: don't put your life on hold.  If living in an apartment does not suite you or if living in a rented homes prevents you from having the home you want then consider buying. The same goes for investing in real estate.

Prices for many homes are below replacement cost and even if depreciation negates part of that gain: the increasing population will make that up.  Just know that if you buying for the long term: it's 7-10+ years not 3-5 years. 

The market is not as bad as it seems or is portrayed.  Some media accentuates the negative so it's not always wise to listen to their one sided stories.  In the U.S. there are states that had an increase in median price in 2008 and are forecast to have increases in 2009.  The U.S. is going through a difficult time but it's by all means not the end and we, as a nation, will get through it and we will emerge, but it will be different, it must be different, we must change because the world demands it and it will be good.

I believe we can make better decisions be more knowledgeable about how to act if we listen: listen to people who's motives are not purely economic, to those who want to know, who tell us how it is.  Below are a few links where you can listen or read the words: a selection that is not only revealing but entertaining as well.

This American Life - The Mortgage Tipping Point. ran on NPR.  I won't comment on it.  Just listen.

The Baseline Scenario is probably the best place for us to learn about the basics of economics, the current crises and gauge how truly the world is flat.

Gauge the bottom of the real estate market This is just a post about some characteristics that define a real estate bottom but by all means does portray to be in the same league as the above two links:  For those that see the opportunities abound right now take a look the bank owned search or homes at really good prices for both living and investing.

Early Warning Wire - no comment - just look.

The market is in flux.  One thing we know is that as a whole the economy and real estate in particular is on the declining end of the cycle: though, if you delve into the details some segments are probably on the bottom while others are in over correction, yet others are at the top end of the slide down: those in over-correction are probably the true buy opportunities because they are at levels below the current market and in many cases below replacement cost: often, you could tear the structure down and do well with just the land. 

It's difficult to say exactly where we are and where we are heading. The opinions, educated and not are varied and it's difficult to find someone to rely on.

I have found a few sources that I have decided for my own reasons rational and not to rely on, and most of the time those sources have been right (over the last decade or so), though my mistake was not acting on them.

By the looks of it we may have a deflationary environment for the coming years but it may be inflationary if the government pumps money into the economy: more likely we'll have flat growth.

The commercial market has started to decline at a later time then residential: luxury residential started later then starter homes and move up homes.  The decline in the markets and the self-feeding asset depreciation will continue until the signals saying otherwise are strong enough to start money moving again. 

How about multifamily homes?

"Apartment owners in C buildings will be the beneficiary of the DEFLATIONARY wave that has hit the U.S. economy and hurts anyone in debt. Decreasing asset and consumer prices benefits those on a fixed minimum wage as long as they hold no assets. Gasoline prices under $1.50 and declining food prices increases savings and the ability of these low income workers that live in C buildings. With financing available for multi-family properties from Fannie and Freddie these properties are the only ones that have a chance to see price appreciation in the next few years." (Early Warning Wire 12/24/08)

Makes sense to me but what about in an inflationary environment that some say we'll head into because the government will have to print more money to get marks moving and the fight the deadly deflation? 

Apartment owners in areas with a strong rental base will have tenants.  The key is to buy the property as a business not for appreciation but for cash flow and debt pay down: that's probably the only secure way to invest and there are properties, many of them, on the market that have cap rates up to 20.  

I'm not surprised there is an increased interest in small apartment buildings.  There are quite a few investors who I look up to that built up a decent portfolio of cash flow properties and choose to work, rather then being forced to work.

Also posted at: Arizona Apartment Investor