Uncategorized • December 19, 2023

Welcome to Winter 2023-24 in Flagstaff Arizona!

by Bob Baronas

Unlocking the Charms of Flagstaff: Your Ultimate Guide to Homeownership in the Pines

Hello, future Flagstaff homeowners!

As a Realtor who’s had the privilege of helping countless families find their dream homes in this enchanting corner of Arizona, I am thrilled to be your guide to the vibrant and welcoming community of Flagstaff. Nestled amidst the breathtaking Ponderosa Pines, Flagstaff is not just a city; it’s a lifestyle. So, grab a cup of your favorite brew, settle into a comfy chair, and let’s embark on a journey to discover why Flagstaff might just be the perfect place for your next home.

Nature’s Embrace

One of Flagstaff’s undeniable charms is its natural beauty. Surrounded by the Coconino National Forest, Flagstaff offers a myriad of outdoor adventures right at your doorstep. From hiking and biking in the summer to skiing and snowshoeing in the winter, there’s a seasonal activity for everyone. Picture waking up to the scent of pine trees and enjoying your morning coffee on the porch while the crisp mountain air invigorates your senses.

Community Spirit

Flagstaff isn’t just a city; it’s a tight-knit community that takes pride in its friendly atmosphere. From the local farmers’ markets to the lively events downtown, there’s always something happening. The sense of community is palpable, and it’s not uncommon to make lifelong friends at the neighborhood coffee shop or during one of the many community events that dot the calendar.

Educational Excellence

If you have a growing family, Flagstaff is an ideal place to nurture young minds. Home to Northern Arizona University, Flagstaff provides access to top-notch educational opportunities. The city’s commitment to education extends to its excellent public and private schools, ensuring that your children receive a well-rounded and quality education.

Real Estate Wonderland

Now, let’s talk real estate. Flagstaff’s housing market is as diverse as its landscape. Whether you’re dreaming of a cozy cabin in the woods, a historic downtown bungalow, or a modern family home, there’s something for every taste and budget. As your Realtor, my mission is to turn your dreams into keys in hand, and I’m here to guide you through every step of the home buying process.

Flagstaff’s Four Seasons

Flagstaff enjoys all four seasons, each offering its unique charm. From the blooming wildflowers of spring to the golden hues of fall, Flagstaff’s ever-changing landscape ensures that there’s always something beautiful to behold. Embrace the snowy wonderland in winter and relish the long, sunny days of summer. It’s a place where every season feels like a new adventure.

In conclusion, Flagstaff is more than just a city; it’s a way of life. From the towering Ponderosa Pines to the welcoming community spirit, this Northern Arizona gem has a lot to offer. As your friendly Flagstaff Realtor, I’m here to make your homebuying journey as smooth as possible.

Ready to embark on this exciting adventure? Let’s chat! Whether you’re a first-time homebuyer or looking to make a move in Flagstaff, I’m here to help you find the perfect place to call home.

Here’s to new beginnings in Flagstaff – where the pines whisper, and your dreams come to life!

Happy house hunting,

Bob Baronas

Flagstaff Realtor

Associate Broker

Inflation, interest rates and buying or selling a home

by Bob Baronas

There has been a lot of news in the past couple of weeks regarding inflation and interest rates. The first question we need to answer is what is the Federal Reserve? The Federal Reserve System (the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. The two stated goals of the Fed are to stem out-of-control inflation in the economy and promote full employment. Without getting into the weeds too deep it can be said that the tools used to stem inflation directly and negatively impact the unemployment rate in most cases. That is, the way the Fed chooses to stem inflation is to raise the cost of borrowing money which can often result in putting people out of work. Like it or not, what the Federal Reserve Bank does has an impact on our economy.

So what does this all mean to home buyers and home sellers? I believe there are two main thrusts to this question. One, higher interest rates now disincentivize those who are currently in a home from selling. That is if you are in a home now and are paying a 4% interest rate on your home loan it makes little sense to move if you don’t need to then go on to pay 6.5% on a new home loan. Last year there was a housing shortage with few homes to buy for those interested. This had the result in increasing inflation in the price of homes. Two, new home buyers will continue to have fewer choices, and the cost to buy a home is more expensive independent of the actual price of the home.

Homeowners are staying put. If you are living in your primary residence and are paying on a mortgage you acquired in the past 10 years or so you are sitting in a pretty strong financial position. Your home is worth a bunch more and your loan is much lower than it would be if you established it today. So why would a home seller list their home and move? Well, because this may be a great time to do just that. Higher interest rates create a circumstance where your buying power is just a bit stronger. Investors have largely left the home-buying market due to an increase in interest rates (nearly 2% higher than a home buyer would pay). Fewer are buying homes right now due to higher interest rates that are not expected to drop considerably ever again. That is to say that 5.5% interest will be amazingly low looking into the foreseeable future. People take new jobs, relocate and pass away and all of these folk need to sell their homes in a timely manner. All homeowners in Northern Arizona have benefited from an extremely healthy market over the last several years. With fewer buyers due to increased interest rates homes will be on the market for longer and longer periods of time. When this environment exists negotiation between buyers and sellers is most possible unlike in the last couple of years. Sellers are not losing money on any home they have owned for at least 5 years right not so there must be some flexibility in home pricing for those who must sell their homes.

For home buyers, there is a window right now where interest rates are at the historic average. Interest rates are actually good if one takes out the artificially low-interest rates of the past 10 years or so. I say with confidence, we will not see 4% interest rates in the future and we are unlikely to see 5% interest rates anytime soon. 6%-6.5% interest rates are now gold. Take advantage of them. If I am wrong then in the future refinancing is always an option. If interest rates go up, you will wish you had listened.

If interest rates decline in the next few months (again I don’t expect to see them dip below 6%) I expect another highly competitive home market with inflated home prices. Buy your first home in Northern Arizona now. I don’t see too many scenarios where this will have been a bad choice.

Uncategorized • December 19, 2022

Fed Watch. Anticipating interest rate hikes or reductions

by Bob Baronas

Forecasting Federal Reserve policy changes in coming months. The new expectations from the futures market are for a quarter percent rate hike in February, which should hold through March and May. Note: In the lower chart a 100.0% probability of change is a 100.0% probability the rate will rise. The current rate is 4.25%-4.50%.

AFTER FOMC MEETING ON:	CONSENSUS
Feb 1	4.50%-4.75%
Mar 22	4.75%-5.00%
May 3	4.75%-5.00%

Probability of change from current policy:

AFTER FOMC MEETING ON:	CONSENSUS
Feb 1	100.0%
Mar 22	70.1%
May 3	76.9%

Uncategorized • December 19, 2022

Christmas Week Interest Rate Update!

by Bob Baronas

Last week, the Fed’s decision to slow the pace of rate hikes from 0.75% to 0.50%, along with lower-than-expected consumer price inflation, sent mortgage rates lower. Both signaled that inflation may be starting to cool.

Freddie Mac confirmed: “Mortgage rates continued their downward trajectory this week…. The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand.”

The Mortgage Bankers Association chimed in with the view that declining rates should “encourage more homebuyers to return to the market in early 2023,” as overall mortgage applications already rose 3.2% last week.

Uncategorized • November 16, 2022

Let’s talk about Realtor Commissions and Big Tech

by Bob Baronas

Big tech advertising companies have been getting into the real estate business for nearly 20 years now and in the last few years, they have begun to actually broker the purchase and sale of homes. The early model for these companies was this: Provide a nice website using information from local Realtor Associations and then sell “referral” spots to local Realtors for a fee. When an interested buyer clicks for more information about a home, the highest-paying agent gets the call. (Saturday Night Live recently poked fun of this process and the desperate agents attempting to make their investment to Zillow worth it) I am guilty of giving my money to Zillow early on in my real estate career but have since reformed.

The way Realtors get paid is weird. When you sell your home you pay for your agent (Listing Agent) to sell your home and you pay for the buyer’s agent to help the buyer buy the home. Buyers generally don’t have to pay agents when buying a home but clearly, this is baked into the sales price. There are good reasons this system works and should continue. There are also reasonable arguments for a newer system.

As a Realtor, I know what value I bring to both home buyers and sellers. The compensation is reasonable given that I take on a great deal of risk and liability in the process of assisting people in what can be a complex process. Often Realtors take on expenses such as professional photographers and stagging services not to mention driving, signs, ads, social marketing etc. People go to doctors when sick, or barbers to get a haircut. People can and probably should go to professional Realtors when buying and selling a home.

Right now, if you want to sell your home fast, use one of these big tech companies. Just know that it will cost you, not only in commission, and required fees but in the selling price of your home as well. Here is a chart taken directly from the Zillow website.

Note the 2.5% “on average” Zillow service charge. Doing the math makes selling with Zillow between 8-10% of the value of the home. This is not negotiable by the sellers. You will sell your home quickly but will be paying at least 2.5% more than you would with a Realtor.

Here is Redfin:

Both of these companies sell their services by saying their commission is less than your local Realtor (a Realtor with training and experience in your actual market). And then go on to state that there are also additional fees and that the fees are “at least.” This is where homeowners and buyers lose. Calculate the at least fees and commissions assume a robot computer in another state is buying and selling your home and make a choice.

Local realtors are human-contracted professionals who should be living in the area they work in. When buying or selling a home you should interview several local, full-time, professional Realtors. Realtors are accustomed to competing for business. Agent commission (professional fees for service) can and should be discussed upfront and early. I start all of my listing appointment interviews by answering the two most frequently asked questions:

1. How much do you think my home is worth? (most homeowners think they know already because of the inaccurate Zestimate).

2. How much are your professional services?

(Zillow and others have already told the seller that Realtors charge too much or at least more than they do, which as you have seen is not true).

I am not afraid of having this discussion because I am good at what I do and my fees for service are pretty average within our local market and I know the value that I provide to my clients. I also know the likely value of your home because I have completed a thorough market analysis prior to meeting with you and I have experience buying and selling homes in your area. I know the local market better than the robot computer that has provided the Guestimate.

Finally, consider this: How does Zillow or Redfin, or Open Door make their money? What we know for sure is that they don’t do it by buying your home at the highest prices and selling it for less, how would they make money? Sell it for more than the market? Who would buy it? Nobody buys high and sells low if they have a choice, right? That is not how successful businesses work. Chances are you will be paying for Big Tech profits by getting a lower-than-market-value for your home and, most likely, by paying additional fees outlined in the buyers/seller contract. The Big Tech company will sell your home at market value and add in the commission fee you thought you were saving and charge it to the buyers. Buyers are also probably not getting the best deal here either.

If you need to sell your home today go Big Tech. Let a Marketing Bot and an Investment Bot sell your home. It will be quicker than I could do it for you in many situations. It will likely cost you more than a Realtor, you will have less support in the process and you will get less for your home than you would on the open market.

If you don’t have to sell your home today, find a local, full-time, professional Realtor to assist you in the sale of your home and assist you in the purchase of your next home. Interview several, there are good ones and bad ones out there. We all have the ability to judge character and get a feel for who we want to work with. You will have much more control of your expenses, your outcomes, and your experience and you will have a trusted partner during the process because you interviewed and selected a professional human to assist in the sale or purchase of your home.