I hope you are enjoying a sun-kissed, restful summer. While I'm sure you have been spending time outside in our beautiful weather, you may have also seen the news or followed the real estate changes on social media. Some stories have correct information while others seem to exaggerate or have the facts completely wrong. This month I thought I'd cover the general changes. 

First and foremost, I have and will continue to provide full-service to my clients. There will be brokerages and agents who will provide limited service with varying commission agreements. This has always been the case. Consumers have a choice in representation - full-service or limited representation. I like to think of it as Supercuts or a hair salon. Both offer haircuts but at differing levels. The important thing to know is that you have a choice.

Secondly, if you are selling your home, the compensation to the buyer's broker will not be in the MLS. We will be discussing the commission or compensation you agree to pay my brokerage. Then we will discuss the amount of compensation/commission you would like to offer the buyer's broker/agent. In the past, this has been a lump percentage that is divided between the seller's broker/agent and the buyer's broker/agent. We have discussed this split but now the two amounts are separated on different documents. The media has implied or even out-right stated that buyer's agents will no longer be paid by the seller. This is a possibility. However, it is still a good practice to offer this compensation to the buyer's broker as the buyer tends to have many other costs such as down payment, loan costs and closing costs. Please know we will spend time talking through the many options when it's time to list your house. 

Finally, I will ask all potential buyers to sign a representation agreement. I have used the Buyer-Broker Employment Agreement throughout my entire career. The signing had taken place nearer the time when the buyer was ready write an offer on a property. The new regulations require these to be signed before showing a property. There are 3 different Agreements each with varying time periods and conditions. Please let me assure you that we will discuss the best option for you at the time you are interested in looking for a house. The media has called these forms "contracts" and to a degree they are contracts. However, I prefer the term "representation agreement". Negotiating is a part of buying a house. This includes purchase price and terms as well as my compensation. This is the most misunderstood part of the new regulations so please do contact me with questions. 

While there will be some hiccups as we all navigate through the changes, please know that my commitment to you remains the same. I promise to provide exceptional service to each of you as your trusted agent.

One more exciting thing..... Realty Executive of Flagstaff is now Realty Executives of Northern Arizona! This new name better reflects the communities we serve. Along with this new brokerage name, I have changed my website to HighlandLivingAZ.com. 

Please don't hesitate to contact me if you have any questions or if you would like to sit down with a cup of coffee and discuss the changes or our local real estate market.

Happy Spring! After the late snowfalls, it looks like we may be headed toward Spring-like weather which is great news!

Last week brought other news regarding the lawsuit against the National Association of Realtors (NAR). I am sure you have all read or heard that the National Association of Realtors have reached a settlement with the plaintiffs. The dissemination of this settlement through the media has come with some misinformation.

First and foremost is the idea that compensation paid to a Realtor’s brokerage by their client has never been a fixed amount. This number has always been negotiable and has never been a set amount. Typically, the seller has paid the compensation to both the listing agent’s brokerage and the buyer’s agent’s brokerage. The commission amount to both parties is a number agreed upon by the seller and the listing agent/brokerage. This settlement will decouple the commission amounts. There will be a separate commission offered to each brokerage. The Arizona Residential Listing Contract has had this separation for some time. Again, these amounts and who pays them are and always have been negotiable. 

Second, home prices will not be coming down. I read several articles implying that Realtors artificially inflate home prices to garner larger compensation. Realtors do not have that kind of influence on the real estate market. Home prices are affected by many different variables. The number one variable is simple economics: supply and demand. Location also has an impact on home prices. There are many other factors but these two have the greatest effect.  

Finally, it is important to note that this settlement still needs the approval of the court. I will do my best to keep you informed and updated as I receive more information.

One final, final thought, I want you to know that I love being a Realtor. Homeownership is one of the best ways to increase generational wealth. I am proud to be a part of this legacy for so many people. I have been and will continue to be transparent about compensation/ commissions and the value of having representation as a seller or buyer. Please reach out to me with any questions you may have. I am always honored by your referrals.

Warm regards,

Kim

Happy Fall!  Every year seems to move faster than the last. This year I celebrated 11 years as a Realtor. Considering this, I thought it might be interesting to compare today’s real estate market with the market ten years ago. The graph below compares statistics for the 3^rd Quarter of 2013 to the 3rd Quarter of 2023.

It is no surprise the median sales price for homes in Flagstaff has increased by 154%. The mortgage interest rate in October of 2013 was 4.39% for a 30-year fixed. On Monday, the mortgage interest rate for 30-year fixed rose to 8.0%. This is the highest we’ve seen since 2000. You might be asking yourself if we are in another real estate bubble. Although it’s not reflected in the graph above, the months of inventory and the number of unsold listings skyrocketed in 2007-2008. This was more dominant in larger, metropolitan markets such as Phoenix and Las Vegas. The number of unsold listings and the months of supply have both decreased from 2013 to 2023. It is also important to note that the percentage of cash sales has also increased, demonstrating the strength of investors and second-home buyers.

While some of these stats might seem depressing, there is hope. Mortgage interest rates fluctuate. If you buy a home with a higher than desired rate, you can refinance when rates go down. If rates continue to rise, it’s best to get into a home sooner rather than later so you are not paying a higher rate along with higher prices.  Builders and sellers are beginning to offer point buy-down opportunities for interested, qualified buyers. Our Flagstaff market might have seen fewer sales this year but none of them were distressed properties. (One caveat, the MLS doesn’t show foreclosure sales that happen on the courthouse steps. It only records those properties sold through the MLS. The distressed properties would be classified on the MLS as short-sales.) There have been fewer unsold listings and homes are selling for closer to the list price. Demand for homes is still exceeding the supply we have available in our area. Owning real estate remains the best investment and the greatest indicator of generational wealth.

I could go on and on but this seems enough for now. If you would like a longer explanation or if you have questions, please let me know. I love to talk about our real estate market! If you know of friends or family who have real estate questions, I would appreciate the referral.

Our office, Realty Executives of Flagstaff, is once again competing in Best of Flag. It would be so appreciated if you would vote for us in the Real Estate category. You can text 654 to 928-770-6559. You can vote once daily through October 31.

 Kim

If you’re like most people, your home is your most important investment. On the one hand, it’s a financial asset (and hopefully a growing one!) But, on the other hand, it plays a huge role in your overall lifestyle.

So, ideally, your home should be right for you from both a financial and lifestyle standpoint.

Is it?

That’s a question worth answering.

In fact, I recommend that my clients review the financial and lifestyle values of their property at least once a year. It’s helpful to know what your property is worth on today’s market and it’s absolutely vital to know if your home is still supporting the lifestyle you want. (For example, is it now too big or too small for your needs?)

I can help you with that analysis.

Give me a call. I’d be happy to arrange a visit and do an “Annual Checkup.” I can give you a good idea of what your home would likely sell for on today’s market - and help you determine the degree to which your home is fitting the lifestyle you want.

Reach out to me anytime.

Wishing you many blessings,

Kim

I hope this newsletter finds you and yours healthy, happy and safe. Before I launch into our real estate market...If you are experiencing flooding, please feel free to reach out for help. 

Moving on to our market... We have seen some significant changes within the last month. Most notable is the number of closed sales. In July 2022 we had 119 closed sales. This was down 14% from June of 2022 and down 35% from July of 2021. There have been 77 closed sales as of August 23 for this month. Much of this change is due to low inventory. If you are thinking of selling your house, there is no better time than now. 

Another interesting change is the percent of closed sales above the list price of the home. This percentage is now around 67% when at the height of the market we were seeing close to 80% of sales above the asking price. What does this mean? It means that both sellers and buyers can look forward to a more stable market. Sellers will find pricing to be competitive and, at the right price, there are still multiple offers. Buyers will have the opportunity weigh their options and to make solid offers. Interest rates are fluctuating but are on the lower end from an historical perspective. 

Even with these slight shifts, it is still a sellers’ market but buyers shouldn’t be discouraged. Housing prices are ever increasing and there is no better investment than real estate.

Having a Realtor on your side is very important in this ever-changing market. I can provide expert guidance whether you are buying or selling. If you would like a market analysis of your home or more specific market statistics, please let me know. I am here to help you, your family and your friends.

Wishing you love and blessings,

Kim