January

Keeping a Clean House - the simple way, part 2

"If I had to pick one thing, which you as a homeowner has control over, that makes the biggest difference in how a house "feels"? Having a clean and clutter-free home wins the prize, every time."
Earlier in the month I wrote about a couple simple habits that people with clean homes do everyday. They're the kinds of things that take 5 minutes in the morning, yet they can make a profound difference in how your home looks, functions, and feels. (And I'm not talking about Martha Stewart style deep cleaning or crafting your own furniture - these are just simple routines, doing things you would have done anyway but just a little bit differently.)

Well, since this is Part 2 (you can read Part 1 here), let's get down to it. Here are a few more habits of people whose homes tend to always be clean:

3.) Do a load of Laundry every day (for families - not as important if there's only two of you.)

Laundry is a bad deal. At best it's a pain in the butt chore; at worst it's a Sisyphean task that can never be accomplished! Let's see if I can sum up how laundry usually works:

  • During the week everybody's clothes pile up into hampers, until they eventually overflow (and make the bedrooms look cluttered.)
  • At some point during the week, somebody is going to want or need to wear something they can't find. "Check the dirty clothes" will be your reply - and then you'll have to determine what to do with this request.
  • In addition, you may find some dingy smells lingering around - especially if your teenagers play sports.
  • Eventually, probably on Sunday, you'll have to get psyched up for "Laundry Day", where you'll hole up in the house and crank out load after load of wash.
  • You can't really get out and do things, because you need to be there to empty the dryer and change out the next load. So you basically lose a weekend-day.
    • Forget about it on the weekends when you also need to do sheets and towels!
    • And who's going to fold that mountain of clean clothes - yikes.

Yeah, that's how our laundry system ran for years, until my wife eventually figured out a better solution. Now we do a load of laundry everyday, and it looks more like this:

  • Each morning, as the boys wake up and before breakfast gets started, round up the few items from everybody's hamper and throw them in the washing machine.
  • Depending on the day (and your energy plan), they either go into the dryer that morning on the way out the door, or they go into the dryer when we get home from work.
  • Later in the evening it takes a couple-few minutes to fold the clothes while a tv show is on.

The payoff for Laundry Everyday: No lost weekends, no clutter or overflowing smelly clothes, and no problems with not having something available to wear when you want or need to wear it.

4.) Don't Procrastinate

You got the mail? Good. Bills go in the office, greeting cards go on the shelf, and junk-mail gets shredded. And you're done - no clutter.

Your package arrived from Amazon.com? Awesome! Your new doohickey gets the attention, but the receipt gets filed, the air bubble bags get popped and thrown away, and the box gets broken down and placed in the recycle bin. And you're done - no clutter.

The kid out-grew some t-shirts which are now sitting in a pile next to his dresser? Get 'em outta there - put them in a bin of "to be donated" in the garage. And you're done - no clutter.

Are you sensing the trend here? You're going to have to address these things at some point - opening and sorting mail, throwing away packaging and boxes, etc. Why let them sit around and clutter your house for a few days, or weeks? Better to just do it, and be done with it.

The payoff for Not Procrastinating: This one's a no-brainer: You're not spending a single second extra - these are the exact same tasks you'll have to do later anyway, but now your house stays clutter-free.

5.) Use Baskets to Eliminate Clutter

This one almost falls into the home design and function category, but because we're talking about people's habits, I'm going to include it in our list.

Every room has those few extra things - too small to permanently mount but too big or too many to leave laying around. Get a good basket (that matches your decor), and put all these little miscellaneous things into it. Yes, put them away. Every time.

  • In the living room you've got multiple remote controls, some coasters, and a pair of reading glasses. When you're finished using them, put them away. Every time.
  • The kitchen is the worst offender, with extra keys, scissors, some coupons, pens and pencils (only half of which actually write), a screw that goes with heaven knows what, and a couple things you aren't even sure what they are. The first thing to do is to get rid of (or find a more permanent home for) the things you never use. Then, keep everything else handy and yet out of sight in a basket or drawer. Get something out when you need it, and then put it away again. Every time.
  • The bedroom is another place with lots of small items which get used frequently: watches, jewelry, wallet, car keys, loose change, a pen, etc. Have a place available to put these things where they won't be clutter and where they won't get lost, and then put them away - Every time.

The payoff for Using Baskets to Eliminate Clutter: You can get baskets (or boxes, or containers) in any size, color, or style to match your needs and your decor, so they'll help make your home look great. They'll reduce clutter because all those little pieces will be hidden from view. And they'll help you keep your stuff from getting lost - be honest, who hasn't wasted time digging through the couch or wandering from room to room looking for a tv remote or their car keys?!


When you take a step back and look at the big picture, these people whose houses are always clean don't do any more cleaning - they have simply developed the habit of spending a few extra seconds "now" to finish a task, rather than waiting until later to do the same task (or in some cases an even larger task.)

2 or 3 minutes to start a small load of laundry in the morning - frees up time for the weekend. Three seconds to put the tv remote in a basket when they're done watching tv - saves the next person 90 seconds trying to find the remote. Another 3 seconds dropping their car keys into a container when they get undressed - saves 5 minutes of stressful chaos trying to find keys when you're late for work the next morning!

Small amounts of time, small amounts of energy. Simple habits. Big Results!

Hopefully you can develop some of these habits too, and turn your home into an always clean and always ready for guests home!

- Chris Butterworth

This was part 2 of a series; read Part 1 here.

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Keeping a Clean House - the simple way, part 1

My wife read an article recently which outline a few simple things people who have clean houses do everyday, and she was happy to report we do them all. (well, she does them all mostly, but I'll step in to take a little of the credit!) And as she reviewed the list with me, I was blown away by both the simplicity of it, and by the number of people who don't do it.

We all know the difference between a clean house and a, well, not-so-clean house, right? You probably have a few friends with homes you like to visit, and a few others with homes you can't wait to leave!

Clean homes are more inviting, they're more relaxing, they're less stressful - they're just better, both in the short term (day to day living) and the long term (more home value, less maintenance repairs), so why wouldn't you keep your house clean?

Probably because it's too much work, or at least it's perceived to be, and you don't have enough time. Well, let's take a look at these habits people with clean homes have, and see how difficult they really are.

Here are the first 2 things people with clean houses do:

1.) Empty the Dishwasher in the morning

A dirty kitchen is probably one of the huge differences between homes where you want to hang out, and homes where you don't.

If you spend 3 or 4 minutes emptying the dishwasher in the morning, you'll have a perfect place to put your dirty dishes the whole rest of the day, rather than letting them pile up in the sink, or on the counter and stove.

  • The dishes will have to be put away anyway, why not in the morning?
  • Once the dishwasher is empty, it takes about the same amount of time to set a dirty plate in the dishwasher as it does to set it in the sink. (maybe there's a 4.62 second variance, but that shouldn't be enough to complain about - you're not THAT busy!)
  • If you rinse the plate off before putting it in the dishwasher, you're probably saving yourself time compared with having to scrape off that crusty food when you finally get to the dirty dishes later on in the day, or tomorrow.

The Payoff for an Empty Dishwasher: For the rest of the day (and everyday thereafter since you'll do this everyday), your kitchen will be less cluttered with dirty stuff all over the place. In addition, you won't have as many breeding grounds for bacteria to fester and grow.


2.) Make your Bed when you wake up

This doesn't seem like that big a deal at first glance. After all, you generally aren't inviting people into your bedroom on a regular basis. But the difference in overall appearance will surprise you.

  • Once your bed is made, the room looks more complete and comfortable. There's an emotional / subliminal piece (or peace - both are true) here as well - "finishing" the room can lead to lower stress levels.
  • When the bed is made, piles of stuff on the floor look much more out of place - you'll have a desire to pick these things up (or to not drop them there in the first place anymore.)
  • When the bed is made, any dust or pet dander that lands on the bed during the day will now be on the outside of your blanket, rather than inside where you sleep. This should make a for a better, and possibly less itchy, night's sleep.

The Payoff for a Made Bed: It's the primary focal point of your bedroom; when it looks clean the rest of the room tends to follow.


When you think about the rooms where you spend the most time, your kitchen and bedroom are probably the top two. These two simple habits - emptying the dishwasher in the morning and making your bed when you wake up - will cost you less than 5 minutes each morning, but they'll have a profound effect on keeping your house clean.

I'll write more about the simple ways to keep your house clean in the coming weeks, so stay tuned.

If you don't already practice these habits, give them a try - I'd love to hear what you think!

- Chris Butterworth

This was part 1 of a series. Read part 2 here.

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FHA Mortgage Insurance Rate Reduction - what does it really mean?

Earlier this month President Obama visited Phoenix, giving a speech from Central High School in which he outlined an upcoming 0.5% reduction of the FHA Mortgage Insurance rates. But what exactly does this mean?

President Obama lands in Phoenix, AZ
image credit: azcentral.com


First of all, let's talk for a minute about FHA loans. FHA loans:

  • require a very small down payment of 3.5% of the purchase price.
  • allow ALL other money to come from a gift &/or seller concession, which means if a buyer can save up for a 3.5% down payment and can qualify for the monthly payments, he/she can buy a house.
  • allow for slightly easier credit scoring criteria than conventional loans.

Now, if you make the argument that owning a home is beneficial (and I would, especially over the long term), and FHA helps people buy a home who otherwise wouldn't be able to buy a home, then it stands to reason that FHA loans are a good thing. However, FHA loans are rather expensive when compared to the conventional FNMA counterparts - since low down payments and lower credit scores are more risky loans, they cost a little more, and this cost comes in the form of mortgage insurance.

FHA loans charge 2 different types of mortgage insurance:

Up Front Mortgage Insurance Premiums (MIP) - the lender will calculate a percentage of your loan balance and add it back into the FHA loan, giving a new, higher balance, upon which the payments are calculated. This premium is usually, but not always, non-refundable.

Monthly Mortgage Insurance (MMI) - each year the lender will calculate a percentage of the current outstanding loan balance, and spread this premium out over the next 12 monthly payments. This premium will decrease over time as the loan balance is reduced.

For comparison, conventional FNMA loans only charge the monthly type of mortgage insurance, called Private Mortgage Insurance (PMI), and the rate used to calculate the premium is usually lower than the FHA's rate.

Going back to President Obama and the new lower rates, let's take a look at the FHA's recent mortgage insurance rates (click chart for full size):

FHA Mortgage Insurance Rate Changes, assuming 3.5% down payment and 30 year term

Historical FHA Mortgage Insurance Rate Chart


I look at that chart and see two things that jump off the page at me:

  1. Rates are still way up compared to historical measures - yes, they're giving a 0.5% reduction this month, but they're still almost double what they were for many decades prior to 2008.
  2. MMI never goes away - yes, the annual premium (and corresponding monthly payments) will decline over time as the loan balance declines, but they never go away. You're stuck paying mortgage insurance for as long as you have that mortgage - 10 years, 20 years, 29 years.. That's absurd.


So what does all this mean?

Well, FHA rates will be lower this year than they were last year. And if an FHA loan is the only way you can buy a house, then it's an option probably worth considering. You'll have to pay mortgage insurance for long after it should be required, but that just might be the cost of home ownership (which includes pride/stability, equity, fixed payments, and eventually no housing payment.) However, if you can find a way to squeeze into a conventional FNMA loan, that would be a much better option.

You might also want to keep one eye on interest rates, so you can refinance to a conventional loan once that's an option. I wrote about the benefits of doing so on my Rags To Recovery website just last week.

You're probably going to be hearing more about the FHA insurance premium reduction in the coming weeks; hopefully this helps put it into perspective..

- Chris Butterworth

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sources
http://www.astonlau.com/2012/03/a-history-of-fha-mortgage-insurance-premium-changes/

Look at all that storage space upstairs

If you live in a single level, newer style home (built since the 1980's), you probably have a whole bunch of storage space you didn't even know about. It's upstairs, in the attic.

My first experience with this was in a newly constructed house I bought in 1998. I climbed through the attic opening in the master closet, and decided to crawl around the rafters, monkey bar style. I was blown away by how much empty space was up there.

I ended up cutting a different opening in the garage in that first home, and eventually was able to store more than 50 boxes of kids' clothing and Christmas decorations.

This is a view of one side of my current home's attic. My shelves are built on the other side, which looked almost identical prior to installing shelving.


When we moved into our current house a couple years ago, I was excited because the previous owners had installed a pull-down ladder leading up into the attic. Unfortunately, when I climbed upstairs I only found a couple of shelves built out, and still a bunch of wide open space.

I had to build my own catwalks and shelves, but it really isn't that difficult, and now I have more storage space than I've ever had.

I've built 3 different types of storage, depending on how much space is available and how the support beams are connected: Shelves, Platforms, and Hooks.

Shelves and Platforms are built in the upward, V-sections of the rafters, where the beams come together in a V (or a VI-type shape) and there is plenty of vertical space above. Hooks are great for wherever there is plenty of space below.

Type 1 - Shelves. When there is an extended section of rafters of similar pattern, I connected 2 x 4s to the existing beams, and then laid plywood over the top.

Either nails or screws will work fine. The trick is to get the 2 x 4s level, but they'll work just fine even if they're not exactly perfect.

My main shelf is about 12 feet long, with room to build another 10 feet-ish deep. Each 2-foot section can hold 6 tupperware-type storage containers.


To build the shelves, I attached crossbeams (2 x 4s) to the existing trusses, and laid plywood across the top.


This view from below shows there's not much involved.


Type 2 - Platforms. When there is a V in the existing beam with vertical space but not much horizontal space, I'll build a platform by driving a screw into the vertical post, and simply resting a piece of plywood across the beams. The plywood rests on the screws on one side and the angled V-beam on the other.








Type 3 - Hooks. It's also easy to drill or nail into any beam where there's space below it but where building a full shelf isn't feasable. This is perfect for hanging things that fit in bags. (or anything with handles, etc.) You can see one bag hanging from a hook in the last picture below.

Practical Application. Here is a pile of Christmas decorations, all packed up and sitting in the garage:



And here is that same pile of decorations, packed away nicely on a 4 x 8 plywood shelf, a small platform, and a few hooks:



Obviously not everything works well for attic storage. Anything that might melt, or that might get ruined in extreme heat, should be kept down below. Anything that you need frequent access to isn't a great candidate either, since getting up and down can be a pain in the butt.

I store things I expect we'll need once a year or less. Holiday decorations - Christmas, Easter, Fall (Halloween and Thanksgiving) - beachy things like boogie boards and sand toys, snow sleds, hand-me-down clothes from in-between the boys' sizes, extra chairs for those wild parties we throw every couple-few years... You know, that kind of stuff.

The most important thing to remember about walking and building in the attic is to watch your step. Only step on the 2x4 support beams, or the shelves-walks built on top of the 2x4 beams. DO NOT STEP IN BETWEEN THE SUPPORT BEAMS, as you're likely to end up falling through the attic into the house below!

Thanks for reading,

- Chris Butterworth

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What's your backup plan?

What's your backup plan?


Happy New Year's everybody!

This week, maybe as a send-off to 2013, my hard drive crashed. One minute it was working fine, and the next I got a pop-up window saying my device could not be read. If you're like me, this could have been devastating. I had everything stored on that drive - 13 years' worth of family photos, videos, and music, along with my entire real estate business, and just about everything else I've worked on over the last decade or two...

Photo - my dead drive, with my backup drive (left) and my new backup drive (right).

This isn't going to be a typical real estate post, but I do think this is an important topic. And while I'm not going to write about New Year's Resolutions this year, it seems like an opportune time to ask the question:

"What would you do if your computer / tablet / smart phone didn't boot up tomorrow?"

The thing about technology, it doesn't matter if we're talking about computers, or tablets, or cell phones, and it doesn't matter whether you use Windows, or iOS, or Android, is that it will fail. Eventually all technology fails. (It's more common that we lose or damage our phones, but that counts too.)

Today there are more ways then ever before to sync and backup your stuff:

  • Online backup services like Crashplan, Mozy, and Carbonite.
  • Cloud storage services like Dropbox, Google Drive, and Amazon.
  • Device backup/sync with iCloud, Google+, and Skydrive.
  • For Photos, Flickr and Shutterfly allow massive amounts of photo storage. I'm sure there are dozens of others, too, but those are the two I've used.
  • External Storage (my choice) - plug in an external hard drive and copy everything to that drive. And if that's your only copy, plug in a 2nd one so you have 2 copies.

My method of choice was born out of convenience. I work from multiple computers and multiple locations throughout the day, so I carry a portable harddrive with me, and my portable drive has EVERYTHING on it - way too much data to store and access in the cloud, plus I don't have to worry about having a good internet connection to access any cloud storage.



However, since I carry everything with me, I need to be prepared for if/when I lose or damage that drive. So, I have a 2nd portable harddrive plugged into my primary computer, and whenever I work from that computer the primary drive is backed up onto the 2nd drive. This way I always have a current backup of all my stuff. (And because I'm a backup fanatic, I also have a 3rd portable drive that I store in a different location and backup to once a month. That way, even if something devastating happens to both of my main drives, I'll still only lose a small amount of data. But I get that that's over the top for most people..)

So, back to the question at hand: "What would you do if your computer / tablet / smart phone didn't boot up tomorrow?"

Me? I simply switched to my secondary drive and continued to work as if nothing had happened. I spent a couple hours trying to trouble-shoot and bring my primary drive back to life. But once I had to pronounce it dead, I went to Best Buy and bought another one (1 terabyte for $65) to become my new backup. Quick, painless, and without any data loss.



Again, I'm not here to preach about New Year's Resolutions, but I do think it's important, now that everything in our lives runs on technology, to have a plan in place for when that technology fails.

I'd encourage you to spend a few minutes (and/or a few dollars) looking into one of the solutions above to make sure you won't lose anything important, or irreplaceable, when your device lets you down.

Hopefully this is one of the ways you can make 2014 a great year!

-Chris Butterworth

More Stats - More Confusion

More Stats - More Confusion


The Greater Phoenix area was built on suburban sprawl - going as far back as I can remember. (McCormick Ranch was a master planned community built way out in the middle of nowhere - back when Shea was the far northern end of the world in the mid-1970s!) This tremendous growth, which we have all known as "normal" over the last 40+ years, was built on 2 factors:

  1. Population growth, as people moved to Phoenix from other parts of the country.
  2. Trading up, as people and families traded their starter condo for a small house, and then their small house for a larger house, etc.


Today, I don't have current numbers for population inflows (I'll have to look into that), but the charts and stats tell me the 2nd factor is non-existent. That does not bode well for "normal."

Here are lots of charts & comments, with additional thoughts at the end:

Existing Home Inventory (nationally)

existing home inventory - nationally


  • Chart courtesy of www.calculatedriskblog.com
  • Notice the rapid drop in inventory over the last couple years - this is putting upward pressure on prices nationwide. It's why there is so much media these days saying 2013 will see pricing increases.


Distressing Gap (nationally)

gap in sales between new and existing home sales


  • Another great chart provided by www.calculatedriskblog.com
  • This chart shows the gap that appeared in 2007-08 as existing home prices fell to the point at which new construction couldn't be built at a competitive price. The gap has remained wide due to the depressed pricing of foreclosed homes around the country.
  • Locally, our gap has been receding as builders have ramped up production recently.
  • Nationally, they expect to see this gap narrow over the next year or two as the wave of foreclosures recedes.

New Listings by Month - Maricopa County

new listings by month - maricopa county sfr


  • There's a seasonal dip at the end of every year, so we would expect November and December to be a little low.
  • This year, November and December fell off a cliff. Where are the new listings?
  • I'm hopeful this is seasonal only, and January's number shows strength.
  • If not, what are people waiting for?
  • Are we out of foreclosures?
  • Are families trapped by negative equity? (and everyone who can/will short-sale/foreclose has already done so?)
  • Are investors out of good deals, where they're able to find homes for pennies on the dollar?
  • Now that prices are pointed upward, are families waiting for prices to get even higher?
  • I don't know the cause, but I can tell you this isn't a normal market.


Occupancy of Homes Sold - Maricopa County

occupancy of homes sold in maricopa county

  • This has been my bread and butter chart for years. The market won't be normal until there are far more occupied homes than vacant homes.
  • The trend was going in the right direction in Spring 2012; what happened after that? Why did the gap widen again?


New Vacant Listings as a Percentage of the Total - Maricopa County

New Vacant listings as pct of total - maricopa county


  • Same as the chart above.
  • When more than half of the new listings are vacant, we're not in a normal market.


Days on Market - last 25 months



  • Notice how fast the market heated up this year.
  • Remember the last time the market heated up really quickly? Hint - it didn't end well..


Price per Square Foot - last 25 months

price per square foot - maricopa county


  • Another angle of the same picture from above, showing how quickly the market has heated up.
  • Approx. 5% increase in 2011. (76.6 to 80.2)
  • Approx. 28% increase in 2012. (81.0 to 103.8). Does that sound like a market we would want to maintain?
  • Notice the chart is leveling off. Maybe this is because we've reached the point where prices should be. Maybe this is seasonality and we're about to see another large price hike..?


Historical Price per Square Foot - Maricopa County

historical price per square foot - maricopa county


  • Through 2002, prices were normal; appreciation was nominal.
  • 2003 was the start of the bubble, and by early 2006 prices were way out of line.
  • Prices today are about where they were in 2002-2003.
  • Maybe we're priced about right today.
  • If prices continue to rise, I'll contend we're heading into bubble territory. Especially since the traditional move-up market doesn't exist.


Additional Thoughts


  • This is a stressful time here in Phoenix and Maricopa County. There's no sure direction on where the market is headed.
  • Are prices stabilizing? Does that mean investors will start selling homes they've been renting, increasing supply and driving prices downward?
  • Will more traditional move-up families decide it's time to sell their home and move up to another?
  • Will the supply shortage continue, sending the buyers in the market into hyper-competitive mode, which then drives prices up further?
  • And on top of everything else, what will happen to interest rates this year?


I have far more questions than answers these days, and it's not from lack of paying attention. This is just a very unique, very strange time in Phoenix history..

-Chris Butterworth

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Zip Code Charts are out for December 2011

I've updated and published my Zip Code charts for last month's activity, December 2011.

Email subscribers should have received an email yesterday - let me know if you didn't get an email or had trouble with any of the links.

Anyone else want to see the activity in your own zip code? You can sign up here (and it's free!)

-Chris Butterworth

What time of day do people search for homes?

I saw this on visual.ly this morning and thought it was interesting.

house hunting by day and time

If you click through to the site, you can fine-tune the chart to be state &/or computer-type specific.

Most interesting stat: almost 20% of all online traffic came via cell phones and tablets. That's one in five, and the numbers are just starting to explode upwards - I won't be surprised if it's 50-50 in a few years.

- Chris Butterworth

Maricopa County Sales Charts - December 2011

Here’s a look at the recent trends county-wide.  I’m pulling a rolling 13-month history so we can see the last year’s trends plus a comparison of this month to the same month last year..



A look at the charts shows a similar story to what we saw in my Distressed Activity post last week; inventory levels have dropped, and we’re seeing that affect pricing and days on market.  Have a look…



Specific Zip Code reports are now available!  If you’d like to see how the sales activity in your zip code compares with the county as a whole, just click here to sign up, and you’ll receive your zip code report via email each month.



and now, on to the reports.  (click each chart to embiggen)



Number of Homes Sold by Month





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Average Sold Price





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Average Price per Square Foot





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Average Number of Days on Market





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** The data for all these charts represents Single Family Homes sold in Maricopa County via the MLS.  All data was pulled from the Arizona Regional Multiple Listing Service, and is thought to be accurate but is not guaranteed.  Please do not make any life-changing decisions based solely on the information contained herein.



Questions, comments, suggestions?  Please give us a call/email anytime – we’d love to hear from you!



- Chris Butterworth

Website Renovations

We've made some major renovations here at ThePhoenixAgents.com. I'd love to hear your feedback - let me know what you think, especially if there's something you'd like to see which isn't there, or if something looks/acts goofy..



What look did we go for? Well, we're trying to accomplish 3 goals with this design:


1. Less "web leads".


Frankly, we're tired of flighty, flakey, dis-loyal "leads" looking for a good home in a good neighborhood for under $50,000!


Can we make money from the leads this site generates? Yes. We've met plenty of new friends whom we've helped buy &/or sell. But the vast majority of the web traffic we see doesn't become friends; it's mostly a frustrating experience and a waste of time. I'd much rather focus my energy on producing good content and helping the folks who like us!


2. More "homey".


This part was easy - once you take down the buttons and hooks designed to engage "web leads", the site instantly looked better.


I want the people who read us regularly to feel more comfortable while they're here. Fewer buttons, less clutter, easier to find the information you're looking for. I'd rather have 500 people really like our site than to chase down thousands of disloyal strangers. (and if we treat them right, those 500 are likely to refer us to their friends and family - kind of like the old days of real estate, no?)


3. Heather calls time out.


You'll see a little less of Heather around the site this year, as she's taking a little time off to pursue an opportunity that doesn't come around too often. You can contact her directly if you want the full scoop. Otherwise, I'll do my best to keep her seat warm for when she returns.


That's it! Nothing Earth-shattering. We're even using the same theme, fonts, and colors. But I think it feels a lot different, and I hope you enjoy it!


-Chris Butterworth

Distressed Activity by Month - December 2011

** New Charts this month!



I’ve got good news and bad news.  I also have a handful of new charts!



This post will be a little longer than usual, mostly due to the new charts, but also because there’s more to talk about than usual..



(Click on any chart to see a larger version.)



Listings First – Here are the new distressed listings hitting the market each month going back to January 2009, broken out by different types and views.



Chart 1 - New Bank Owned Listings  - (new listings actually owned by the bank – think foreclosures and REOs.)



The trend on this one is significant, obvious, and heading in the right direction!  We added a “mere” 1,267 new bank-owned listings to the market last month.  Yes, that’s a big number historically, but it’s now 2 months in a row with the smallest 2 numbers we’ve seen in the last 3 years.  This means A) fewer properties are going through the foreclosure process, and B) fewer bank-owned homes on the market for sellers to compete with.





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Chart 2 - New Short Sale Listings (new listings, still owned by the ‘owner’, but needing the bank to take a short payoff because the home is worth less than the mortgage balance.  The bank will need to approve the sale.)



Another low point, although this trend doesn’t look as strong as the last one.  The last 3 years has shown quite a bit of seasonality, or random ups and downs, without much of a trend in either direction.  This month’s 1,605 number is the lowest number on the chart by far – about 20% less than the next lowest months (Dec ‘10 and Dec ‘09 – hmmm.)  Since December seems to be an annual low point, I’m not ready to buy into this as a trend quite yet – let’s wait to see what happens next quarter.





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Chart 3 - New Bank Owned + Short Sale Listings  (a combined look at the above charts – these are the new listings where the bank is going to take a loss on the property, and the best reflection of my former Distressed Listings chart.)



This chart shows exactly what we’d expect to see – a small number of bank-owned listings, coupled with a small number of short-sale listings, equals a small number of bank & short sales.  (don’t need to be a rocket surgeon to figure that one out!)





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Chart 4 - New Vacant Listings  (new listings which are vacant homes.  While not all vacant listings are distressed listings, I am including them because they represent a very large percentage of the overall market, and therefore provide some measurement of Distressed.)



This is another piece of good news.  Looking at the distressed activity from a different angle, we can see there are far fewer vacant homes out there with For Sale signs in their yard.  And this isn’t just a good month – this has been a declining trend over the last six months.



Charts 1 and 4, taken together, should give us a very clear picture of the market’s healing in 2012.





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Now the Sales - I’ve pulled all the homes sold since 1/1/2009 for Single Family Residences in Maricopa County, broken out by who owns them and who lives in them.



After 3 years of data, and the inflection point last month, I switched to a line chart to see the trends a little easier.  And trends they are.  Fewer purchases of bank-owned homes; more purchases of short-sales, and more purchases of traditional equity sellers!  I’d prefer to see fewer short sales, but short sales are very good for the market’s healing – much better than letting a home go through the foreclosure process, sitting vacant for a couple years before an investor finally buys it and either flips it or rents it out.  A short sale typically puts a new homeowner into the home in about a quarter of the time.



Chart 5 - Home Sales by Type of Owner





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No change in Chart 6:  Vacant homes have been dominating Occupied homes for over 3 years.  This is another good indicator chart – fewer foreclosures and fewer vacant listings will eventually lead to a higher percentage of occupied homes being sold.



Chart 6 - Home Sales by Type of Occupant





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And now the bad news



The next 3 charts are new, and they don’t share the optimism of the older charts.  Yes, bank-owned and vacant listings are trending downward, and in steep fashion.  But what does that mean in relation to the overall market?



Here’s a look at the total number of new listings hitting the market each month.





Notice the steep drop-off over the last few months?  Suddenly it’s not quite as impressive to think there aren’t as many bank-owned listings, since there are less listings overall.



In order to see just how much effect one had on the other, I pulled together the percentages – what percentage of the overall market are bank-owned listings?



There’s a long-term trend heading slightly lower, but not much.  We started this experiment 3 years ago in the low 60s.  We peaked near 70%.  We dropped down to the low 50s, before spending most of the last 2 years hovering around 60%.  And recently we’re back down to the low 50s.  Not exactly earth shattering, but at least it looks like it’s going the right direction.





I’m not sure I can say the same thing about the vacant listings, unfortunately.  Vacant listings made up more than 60% of the market in 2009, and then hovered around 60% in 2010 and 2011, before closing out the year at 61.6%.  This doesn’t look like any kind of trend at all.





 



All charts:  I am including Single Family Detached Homes listed for sale (or sold) in Maricopa County via the Arizona Regional Multiple Listing Service.  These numbers are believed accurate but not guaranteed.



What does it all mean?



While I’m very pleased with seeing fewer bank-owned and vacant homes hitting the market as new listings, the fact that they aren’t being “replaced” by traditional sellers adds a whole ‘nother wrinkle to the “when will we recover?” question.



In addition, the fact that there are finally more sales of traditional sellers than bank-owned homes is most likely a charade.  Since the gap between vacant and occupied homes selling hasn’t really closed, I think the upswing in traditional sellers is due to investors re-selling homes they’ve purchased directly from the banks.



Overall, this shows a market which still isn’t picking up any steam at all from regular, traditional, I own the home I live in and I want to sell it – type sellers.



Stay tuned…



Your feels like he needs to look into this even further Realtor,



Chris Butterworth

Fair housing laws

Theresa Boardman from the St. Paul Real Estate Blog wrote a great piece for Inman.com recently, about how confusing fair housing laws can be.

I support fair housing and I understand it and I understand why we have the laws. It is the language and the rules for following fair housing laws that I struggle with.

That language can be confusing. I cannot advertise a home as a family home or as a great place to raise a family, but on our multiple listing service homes are put in categories. They are labeled as single-family homes or multiple-family homes, condos or townhouses.

Some of my listings have two living rooms -- in the historic homes we can call them parlors. The second living room is always called a "family room." I don't understand why the term family room is not a violation of fair housing language.

We also use the term "master bedroom." I don't even know where to start with that term. Are the other bedrooms for servants? Usually a master bedroom is the largest bedroom in the house. It doesn't need to be called the master bedroom. It could be called the owner's bedroom, or simply the biggest bedroom.

She’s got a couple of great points! And as usual, it’s written in a very readable, engaging style. Love that Theresa.

As a professional Singleton, I’ve never thought about it… but now that I do, the term “family room” is a little odd.  It’s a little exclusionary, isn’t it?

I don’t have a family. Should I not sit in my family room? Should I call it a sitting room? What if I lie down on the couch while I’m in it? Then is it a Lying Room? Or is it a Laying Room? Are Laying Rooms for taking naps or laying eggs?

This reminds me of comic Stephen Wright, the other funny language guy.

 

And now I’m reminded of the original funny language guy, Gallagher.

 

Getting back to Fair Housing laws…for a real explanation click on this fair housing post. For online crime stats, demographics and walkability scores, click our “ThePhoenixAgents” Moving page.

Clean your dryer lint trap

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Did you know that the stuff they put in dryer sheets to make your clothes soft comes from…

...well forget about it. Trust me, you don’t want to know what it comes from. Suffice it to say that I found out what it comes from one day when I stumbled on a vegan lifestyle website.

But, did you know that your laundry fabric softener builds up on the dryer lint catcher? That decreases air flow and makes your clothes dryer work harder. You won't see the waxy film but it's there.

Pinch a few pennies and keep the planet a teensy bit greener by cleaning your dryer’s lint catcher every once in a while. Old Republic Home Warranty company recommends you do this every 6 months. Even Snopes.com says "clean your dryer lint trap."

Remove the lint catcher and wash it in hot, soapy water. Scrub it with an old toothbrush to remove the built-up fabric softener. Air dry and replace. (save this up for that random, dateless Friday night when you re-organize your sock drawer)

disclaimer: this blog does not  accept sponsored/paid product or service reviews. Blog authors received nothing of value in exchange for writing this post. But if anybody wants to offer to clean our clothes dryer lint catchers, we’re totally open for that. totally.

Related Posts - save money on your laundry/random uses for vinegar , ketchup the magic stain lifter , 2 cheap cleaners you MUST have in your kitchen

Charting 2010

The Calculated Risk Blog published a post using a number of charts to show & tell the economy’s story of 2010.

Keeping in mind these are from a national view, and that Arizona’s numbers will be different, I still thought a few of them were worth sharing, especially since they tell a story of being through the worst of things…

Existing Homes – Months of Supply

Take a look at the blue line in this chart.  Inventory (nationally) has been above 7 months (the balanced market number) since mid-2006, but it looks like the number might have peaked.

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Mortgage Delinquencies and Foreclosures

We’re still in record territory, but it looks like we might have peaked.  We’ll have to stay tuned to this one over the next couple of quarters.

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Percent Job Losses

I’ve shared this graph before, but I still can’t get over how much worse this recession is than anything we’ve experienced since World War II.  That being said, it looks like we’re heading in the right direction.

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Obviously things aren’t going to get back to “normal” overnight, but I like seeing the big picture heading in the right direction.  I’ll work on some similar charts specific to Arizona to see how things compare locally.

Your hoping the glass is half full Realtor,

Chris Butterworth

Save money on laundry

Image ID 1078391 by Stock Exchange user coptaFound today’s money saving tip on HomeEc 101, a nifty blog about all the things you were supposed to learn in your high school Home Economics class but probably didn’t pay attention to.

You can use Borax or vinegar in your laundry to save money. I never knew this, did you?


  • Vinegar is a cost-conscious alternative to liquid fabric softener.


  • Borax in the laundry water gives you soft water. This is especially helpful for many folks in the metro Phoenix area, since we have notoriously hard water which causes detergent buildup.




Do you have any great laundry tips? Or other household tips? Thanks to the New Normal economy we’re all struggling living through, every money-saving and time-saving tip is very, very welcome. Post your comments below!

Disclaimer: this blog does not currently provide paid/sponsored reviews of products, services or blogs. This blog post author received nothing of any value in exchange for writing this post.

Truly Useful Technology – Beer Drinkers Rejoice!

I don’t know about you, but for me the word technology brings up images of computers, cell phones, and other electronic gadgetry.  But real technology is more useful than that.  Real technology expands our civilization (cars & roads), powers our lives (energy), and wins wars (name your weapon here).

Does this count as a truly useful technology?

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The company claims stadiums can go from eight beer pourers for every two cashiers, to one beer pourer for every eight cashiers. 

It might not change the world, but it should at least cut down on the lines at the Arizona Cardinals games, which makes the world a little better!

(Hat tip to the 40tech blog)

Your suddenly thirsty Realtor,

Chris Butterworth

Landlords: IRS says send a 1099 to vendors

Hat tip to Scottsdale colleague Dru Bloomfield: the IRS is changing their rules for landlords. Not a huge change, but one you absolutely want to know about ahead of time. It always stinks to have to go back and create a paper trail for the IRS!



New IRS 1099 Requirements for Landlords

Starting in 2011, there is a new tax requirements for landlords. All landlords who receive $600 or more in rent for the year must send a 1099 to all service providers that the landlord paid $600 or more during the year, such as plumbers, carpenters, yard services, and repair people.

The new requirement applies to owners of both residential and commercial property. Prior to 2011, this requirement had only applied to those involved in full-time property management, but now the requirement covers all types of landlords. Landlords will need to gather federal tax ID numbers from service providers in order to file the 1099s. Failure to file the 1099s with the IRS can result in fines of $50 per 1099 not filed with the IRS. In 2012, these requirements will expand to cover providers of good to landlords.

You’ll want to ask for a completed W-9 from each of your vendors (when they do the work!) so you can issue the 1099 at the end of the year.

Bank of America posts earnings loss

Bank of America just posted a big loss.

Bank of America, among many other things the #2 residential mortgage lender and #1 servicer, reported a second straight quarterly loss, driven by write-downs in the value of its mortgage business.

The bank lost $1.57 billion, or 16 cents a share, compared with a loss of $5.2 billion, or 60 cents a share, a year earlier. Last year's results included a one-time TARP charge of $4 billion. Without the mortgage business write-down, the bank earned $756 million, or 4 cents per share.**

See also my broker Jay Thompson, a.k.a. The Phoenix Real Estate Guy, wrote a blog post the other day, grouching about Chase’s earnings for the 4th Quarter. Chase earned a whopping $52 million per day in profit in the 4th quarter of 2010.

Meanwhile, I’ve been thinking about Bank of America’s new billboard advertising campaign. Have you seen these? The basic message is “we’re everywhere” with billboards like these:

Where you live. Where you work. Where you play.

So many ATMs it’s like they’re following me. (with a pretty, smiling woman in the picture)

More ATMs than anyone else in the history of the world.

OK, I made that last one up. But the point is, they’ve spent a busload of money to remind us how big they are.

2008: BofA spent $319 million in U.S. advertising (source, BankInvestmentConsultant.com)

June 2009: B of A spent $125 million on U.S. advertising to date. (source, BrandWeekc.om)

January 2010: B of A plans to spend between $15 million and $20 million on a new marketing campaign aimed at the IRA rollover market. (source, BankInvestmentConsultant.com)

What happened to “too big to fail”? Did we all forget that saying already? It’s only been about a year and a half since we realized that some U.S. banks were so ginormous that if they failed the world would explode.

And now, Bank of America’s entire billboard ad campaign is centered on the idea of “we’re so huge, you can’t escape us.” Doesn’t that make them too big to fail, by definition?

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**As an aside, I love how we all let corporations get away with spinning their earnings reports. BofA gets to say “without that loss of 3/4 of a billion dollars, we had positive earnings.”   I’d like to be able to say to my creditors, “well, without that pesky mortgage of mine that’s underwater by $100,000, I’m fine. Really. Give me some more credit, I think I need to take a vacation this month.”

When pigs fly.