Luxury Homes Weekly 344th Edition - Jan 28, 2017 |
| This newsletter has been reiterating one observation for a few years: the supply of U.S. housing is low. It's low relative to (a) history, (b) current demand, and (c) increasing future demand predicted by the rates of birth, immigration, and the huge percentage of Millennials living with their parents.
This week brought news of just how serious this matter has become: the U.S. housing supply now stands at a 17 year low. There are 1.65 million homes on market, the lowest since 1999.
As reported in this newsletter previously, the pace of homebuilding remains under trend, as builders face shortages of labor and land.
If interest rates rise substantially over the next year, that will let some of the steam out of demand. However we are so far below trend, that a significant drop in demand will just put us back to equilibrium. The latest numbers suggest the current deficit is 400,000 housing units per year.
Given the most recent month of sales -- down 2.8% nationally, as many buyers simply can't find a suitable home -- the current inventory will be absorbed in just 3.9 months. This is the lowest number since January 2005. That would be an ominous statistic except now is a mirror image of 2005 -- back then, high demand was driving this ratio, and now it's being driven by lack of supply. |
| | | The Dow Jones Industrial Average hit 20,000 this week. This is particularly interesting because it first hit 10,000 in 1999 -- coincidentally the same year our housing inventory was this low.
As Mark Twain wrote, "History doesn't repeat itself, but it often rhymes."
This newsletter was early calling the stock market bubble last year, and just as in 1999, conservative people will look foolish for a while -- until they look smart.
The best illustration I can provide to prove that the stock market is massively overvalued is the chart below from the Federal Reserve Bank of St. Louis.
Note that the ratio of the Wilshire 5000 to Gross Domestic Product peaked at just below 1.18 in Q1 2000 before the bubble burst. We are now at 1.39, totally unprecedented territory.
Here's what's really scary: the current valuation is up almost 40% from the peak of the stock market in 2007 -- from the peak!
The bottom line is now would be a wonderful time to sell stocks. You may witness the market continuing to rise, but it's better to miss out on some of the upside than get crushed on the downside. Nobody ever went broke taking a profit.
It took 17 years to go from Dow 10,000 to Dow 20,000. That's a long time to double one's money. The cash flow and appreciation on just about any type of real estate anywhere in the country beat that, and with a lot less heartburn. |
| | | | Interesting article in Bloomberg recently on changing trends in luxury design. Some are based in technology, and other demographics. But it's an interesting thought that some of the things we take for granted as necessary in a luxury home may be obsolete.
For example, with virtual reality the clear upcoming trend in media and entertainment, the home theater may soon become a relic. |
| | Commercial & Investment Properties
Off market commercial property offering a 10% annual return. $3 million with 50% non-recourse financing available. Please reply to this email if you'd like to learn more.
Looking for something bigger? Smaller? My approach is radically different than most of the large commercial real estate brokerages.
If you're looking for service that is custom-tailored instead of "cookie cutter" please call my direct line at (480) 442-7325. |
| | Best Homes on Market
The best of the best in their respective categories, selected for quality and/or value.
Paradise Valley Charming, bright Santa Barbara style home built in 2013 with superb finishes. Offered at just under $2.3 million.
Arcadia/Biltmore Pre-construction 4 bedroom home in a desirable area north of Camelback for just under $1.3 million. Please note that working with a builder involves some potential risks versus buying a property that's already built, but it may well be worth it - call me to discuss.
Scottsdale Remodeled soft contemporary with high ceilings, lots of light, and a very open and functional layout. Centrally located with easy access to the 101 freeway. Oversized acre+ lot, 4 car garage, 4 bedrooms for just under $1.5 million.
--> Click Here for Pictures or to Schedule a Showing
Deal of the Week Here's a unicorn: a home in Paradise Valley under $1.5 million that checks all the boxes: 5 bedrooms + office + gym, single-level open floor plan, guest house, massive 7 car garage with workshop, pool, and mature landscaping -- on a quiet street with great curb appeal to boot. |
| | | Active Buyer Needs
Perhaps you've been thinking of selling your home, or know someone who is?
Here's what some of my clients are looking for right now: - Quality 4+ bedroom home in Paradise Valley priced to sell. Light remodeling is ok but nothing in need of a huge remodel. Flexible on style, just something cozy with a good layout under $1.5 million.
- Contemporary or Mid-Century remodeled home with 4+ bedrooms under $2 million. High level of finish, a "wow" interior. Preferably single-level.
If you know of anything, please reply to this email or call my direct line at (480) 442-7325.
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| | Home Inventory
Uptick in new listings relative to sales, as is common this time of year. Expect to see this ratio decline as we get into Spring.
Paradise Valley
72 New Listings
19 Homes Sold
Average Sale: $2.2 million - $379 per square foot - 181 days on market
Arcadia/Biltmore
48 New Listings
17 Homes Sold
Average Sale: $1.5 million - $385 per square foot - 106 days on market
Scottsdale
165 New Listings
65 Homes Sold
Average Sale: $1.5 million - $333 per square foot - 155 days on market
Please note the data above covers the past 30 days of luxury homes, defined as follows: any single-family home in Paradise Valley, and all residences in Scottsdale, Arcadia, and Biltmore listed over $950k.
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There are many thousands of listings on LuxeAZ.com. To help you find what you're looking for quickly: Please note that listings are sorted from newest to oldest. So you may bookmark these pages and return at any time to see the very latest listings. |
| | Thank you for reading this newsletter. Your comments and suggestions are always appreciated, and will be used to improve future editions.
I'll be back in next week with all the latest news and analysis.
Sincerely,
Alex
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| | | The bestselling book about real estate that's gotten rave reviews from readers all across the country. Topics include:- Selling your home for top dollar
- Demystifying housing statistics
- Critical elements of successful negotiating
- Closing and escrow explained in Plain English
- Financing, with or without a bank
Would you like a paperback copy with my compliments? Just reply to this email with your address and phone number. If you prefer Kindle, you may download from Amazon here. |
| | | A frank examination of real estate and business by Alex Goldstein and Brian Tracy.
Negotiating in good and bad markets, insider secrets from the real estate industry, and much more.
Would you like a paperback copy with my compliments?
Just reply to this email with your address and phone number.
If you prefer Kindle, you may download from Amazon here.
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Disclaimer: All information is believed to be accurate, but should be verified by the reader and is provided without warranty. Please consult appropriate financial, tax, legal, and real estate advisors before making decisions. This email is not intended to solicit people who are represented by another agent.
(c) 2017 Alex Goldstein PLLC
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