Scottsdale AZ Real Estate & Lifestyle

Live Better in Scottsdale - eXp Realty

Heather Tawes Nelson

Things to Do in Scottsdale – June 2023

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– Scottsdale Events June 2023 –

Things to Do in Scottsdale AZ - Farmers Market

June is here and with it comes some new fun events and happenings all over the Valley, and state! Here are some you might want to check out:

  • Old Town Scottsdale June Days – June 1st through June 30th – The City of Scottsdale pulled together a great list of things going on in Old Town during the month of June. Some of them will be highlighted below, but be sure to check out the other offerings.
  • U Pick at Tolmachoff Farms – June 1st through June 30th – Ready for incredibly fresh vegetables? Tolmachoff Farms in Glendale is open for U Pick produce in June. U Pick is available Wednesday, Friday and Saturday mornings and produce is $2.50 per pound (with some exceptions.) Chose from peppers, tomatoes, beets, sweet corn, cucumbers, squash and more.
  • Go Tubing at the Saguaro Lake Guest Ranch – Opens in June – Spend some time just floating down the Salt River. You get to experience the first mile of the river where things tend to be a little more peaceful. 
  • Old Town Farmers’ Market – Saturdays through June – This is the last month to shop atthe Old Town Farmers’ Market before it goes on its summer hiatus. Head on over and shop for fresh produce, baked goods, artisanal goods and more!
  • Flashlight Nights at the Desert Botanical Garden – Saturdays June 3rd – September 2nd – Come experience family-fun at the DBG at night! There will be activities, interactive sessions with some desert critters, performances and more.
  • Free Concerts at the McCormick Stillman Railroad Park – Sundays June 4th through June 25th – The last four concerts of the season will take place in June. Genres on tap are Country Rock, Top 40, Throwback Top 40 and a Glow Up party with a DJ. Each concert is free admission and there will be food trucks for anyone looking to purchase dinner or a treat.
  • Janet Jackson – June 7th – Janet Jackson’s tour will be stopping at the Talking Stick Amphitheater on the 7th. Get ready for an evening of hits and lots of entertainment. 
  • Little Shop of Horrors – June 9th – 10th – This well-loved and famous musical will be taking place at the Scottsdale Center for the Performing Arts. The Detour Company Theater is putting it on and it should be a great couple of nights!
  • Whiskies of the World – June 10th – Whisky lovers – you are in luck! Whiskies from all over the world will be available to sample at this event. India, Israel, Wales, Japan, Scotland and the United States will all be represented. Want to experience more? There are VIP packages and Masterclasses you can sign up for. 

As always, this is just a partial list. Feel free to add any others in the comment section!

Scottsdale AZ Luxury Home Market – April 2023

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– Scottsdale Luxury Home Market Performance for April 2023 –

Sales activity in the luxury home market was mixed in April, but still delivered a solid performance.

This report looks at the luxury home market in Scottsdale. All of the homes were listed for $1 million or more. To show more granular data, we have separated the sales activity into four different price ranges.

– APRIL 2023 –

Scottsdale Homes Priced Between $1,000,000 – $1,499,999

Scottsdale Homes for Sale between $1 and $1.5 million April 2023

– Active Scottsdale Homes on the Market: Inventory was down over 10% between the end of March and the end of April. This is the second lowest we have seen it in the past year.
– UCB Scottsdale Home Sales: The number of UCBs jumped 34.4% month-over-month. April posted the highest number of UCB contracts we have seen in the last year.
– Pending Scottsdale Home Sales: The number of pending sales was also up in April, coming in with the second-highest performance in the past 12 months.
– Scottsdale Homes Sold: After a very impressive March, home sales fell quite a but in April. However, the pending pipeline indicates that May might see an increase in sales again.
– Sales Price to Listed Price: 96.2%- On average, buyers saw a discount of 3.8% off of list price.

Scottsdale Homes Priced Between $1,500,000 – $1,999,999

Scottsdale Homes for Sale between $1.5 and $2 million April 2023

– Active Scottsdale Homes on the Market: The number of homes on the market fell 17.5% month-over-month. Inventory is now at the second lowest we have seen in the past year.
– UCB Scottsdale Home Sales: The number of UCB contracts surged in April and was the highest-performing month of the past year.
– Pending Scottsdale Home Sales: Pending sales saw a modest increase over March, but also tied for the highest level we have seen in the past 12 months.
– Scottsdale Homes Sold: There were 46 sales in April, coming in ahead of the 12 month average of 39.
– Sales Price to Listed Price: 97.3% – On average, buyers saw a discount of 2.7% off of list price.

Scottsdale Homes Priced Between $2,000,000 – $2,999,999

Scottsdale Homes for Sale between $2 and $3 million April 2023

– Active Scottsdale Homes on the Market: Inventory was down slightly in April, but is still trending very high.
– UCB Scottsdale Home Sales: UCB contracts were up by one at the end of the month, making it the highest-performing month we have seen in the past year.
– Pending Scottsdale Home Sales: Pending sales were up over 23% over March. And, this was the second-highest number of pendings in the past year.
Scottsdale Homes Sold: Home sales fell to 31 in April. This was a decent performance, but we are anticipating a rebound in May based on pending activity.
– Sales Price to Listed Price: 94.8% – On average, buyers saw a discount of 5.2% off of list price.

Scottsdale Homes Priced $3,000,000+

Scottsdale Homes for Sale over $3 million April 2023

– Active Scottsdale Homes on the Market: Inventory was at the highest level we have seen in the past year.
– UCB Scottsdale Home Sales: UBC contract activity was level with March at 29, tied for the highest level e have seen in UCBs in the past year.
– Pending Scottsdale Home Sales: Pending sales were also up to 33, just slightly ahead of the 12 month average of 32.
– Scottsdale Homes Sold: After very strong sales in March, sales in April fell quite a bit. We are hopeful that the pending inventory will result in a better sales month in May.
– Sales Price to Listed Price: 92.8% – On average, buyers saw a discount of 7.2% off of list price.

If you would like additional detail on home sales activity, please visit our Scottsdale Luxury Home Market Reports page and click on the downloadable “Scottsdale Market Trends” report.

Search Scottsdale Luxury Homes for Sale

Disclaimer: Information deemed reliable but not guaranteed. Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 5/1/2023 and can change at any time. The analysis looks at single-family luxury resale homes in Scottsdale AZ over the last 12 months. There may be new home inventory in these figures if the developer is using the MLS to market its homes. This blog represents the opinion of the author. No warranties expressed or implied.
Copyright ©2023 Heather Tawes Nelson | Joyce Tawes

Phoenix and Scottsdale AZ Luxury Condo Sales – April 2023

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Luxury Condo Sales in Scottsdale and Phoenix – April 2023

Although sales were down slightly from March, the luxury condo market in Scottsdale and Phoenix still posted strong results.  

This report covers the Scottsdale and Phoenix luxury condo market. All of these homes were listed for $1 million or more. 

ACTIVE LISTINGS AT THE END OF APRIL

The number of units for sale fell from sixty at the end of March to fifty-four at the end of April. Forty-seven of the fifty-four were located in Scottsdale.

The highest-priced listing is a carryover from last month that took a price reduction. This fantastic penthouse at The Plaza Lofts at Kierland has three bedrooms, three and one-half bathrooms and 4,059 square feet. It was on the market for $5,650,000.

The least expensive condo for sale is also a carryover from previous months. This Optima Camelview home comes with two bedrooms and bathrooms and 1,346 square feet. It was on the market for $1,000,000. 

UCB* LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

UCB contracts rebounded significantly in April. We went from two at the end of March to eight at the end of April.

UCB Condos in Scottsdale

  • Portico Condominiums– Portico is under development in North Scottsdale.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,444,500.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,445,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,657,000
  • Optima Kierland – Two bedrooms, two and one-half bathrooms, 2,000 square feet. Asking price was $1,875,000.
  • Seven at Desert Mountain – Three bedrooms, three and one-half bathrooms, 2,721 square feet. Asking price was $2,395,000.
  • ICON at Silverleaf – Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,195,000.

UCB Condos in Phoenix

  • One Lexington – Two bedrooms, two and one-half bathrooms and 2,835 square feet. Asking price was $1,695,000.
  • Esplanade Place – Two bedrooms and bathrooms and 2,417 square feet. Asking price was $1,199,875.

PENDING LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

The number of pending sales was down compared to the end of March. The month ended with fifty-four units in pending status. A majority of these pending contracts were located in communities still under development in Scottsdale. 

Scottsdale Pending Luxury Condos

  • Optima Camelview – Three bedrooms, two bathrooms, 2,000 square feet. Asking pice was $2,250,000.
  • Portico Scottsdale Condominiums – This is a new development in North Scottsdale.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,425,600.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,431,000.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,582,200.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,637,100.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,658,500.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,660,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,669,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,695,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,695,600.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,728,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,738,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,814,400.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,879,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,890,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,899,000.
  • The Reserve – This community is under construction.
    • Two bedrooms, two and one-half bathrooms, 2,639 square feet. Asking price was $1,011,500.
    • Two bedrooms, two and one-half bathrooms, 2,639 square feet. Asking price was $1,012,450.
    • Three bedrooms and three bathrooms, 2,675 square feet. Asking price was $1,063,000.
    • Three bedrooms and three bathrooms, 2,675 square feet. Asking price was $1,159,000.
    • Two bedrooms, two and one-half bathrooms, 2,639 square feet. Asking price was $1,271,450.
    • Three bedrooms and three bathrooms, 2,675 square feet. Asking price was $1,279,900.
    • Three bedrooms and three bathrooms, 2,675 square feet. Asking price was $1,447,500.
    • Three bedrooms and three bathrooms, 2,675 square feet. Asking price was $1,532,900.
  • Ascent at the Phoenician – This is another fantastic development underway.
    • One bedroom, one and one-half bathrooms, 1,698 square feet. Asking price was $1,475,000.
    • Two bedrooms, two and one-half bathrooms, 1,847 square feet. Asking price was $1,600,000.
    • Two bedrooms, two and one-half bathrooms, 2,374 square feet. Asking price was $2,050,000.
    • Two bedrooms, two and one-half bathrooms, 2,679 square feet. Asking price was $2,285,000.
    • Two bedrooms, two and one-half bathrooms, 2,679 square feet. Asking price was $2,395,000.
    • Three bedrooms, three and one-half bathrooms, 3,867 square feet. Asking price was $3,975,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,100,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,450,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,500,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,750,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,895,000.
    • Three bedrooms, three and one-half bathrooms, 3,945 square feet. Asking price was $4,950,000.
  • ICON at Silverleaf – Currently under construction.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $1,995,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,150,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,500,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,625,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,700,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,750,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,800,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,900,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,900,000.
    • Three bedrooms and bathrooms, 3,157 square feet. Asking price was $2,995,000.
    • Three bedrooms, three and one-half bathrooms, 3,170 square feet. Asking price was $2,995,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,175,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,200,000.
    • Three bedrooms, four bathrooms 3,157 square feet. Asking price was $3,350,000.
    • Three bedrooms, three and one-half bathrooms, 3,867 square feet. Asking price was $3,600,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $6,900,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $7,700,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $7,718,000.
    • Four bedrooms, four and one-half bathrooms, 5,534 square feet. Asking price was $8,000,000
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $8,350,000. 

Phoenix Pending Luxury Condos

  • One Lexington – Two bedrooms, two and one-half bathrooms, 2,288 square feet. Asking price was $1,295,000.

LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

The luxury condo market saw a solid sales month in April. Eight units sold and seven of the eight were located in Scottsdale.

Scottsdale Luxury Condo Sales

  • Optima Camelview – Three bedrooms, two bathrooms, 2,222 square feet. Asking price was $1,395,000 and it sold for $1,200,000.
  • The Reserve
    • Two bedrooms, two and one-half bathrooms, 2,639 square feet. Asking price was $1,004,500 and it sold for $1,183,841.
    • Three bedrooms and bathrooms, 2,675 square feet. Asking price was $1,206,500 and it closed for $1,275,053.
  • Plaza Lofts at Kierland – Two bedrooms and bathrooms, 1,636 square feet. Asking price was $1,795,000 and it closed for $1,735,000.
  • Optima Kierland
    • Two bedrooms and bathrooms, 1,465 square feet. Asking price was $1,349,000 and it sold for $1,335,000.
    • Two bedrooms and bathrooms, 1,387 square feet. Asking price was $1,140,000 and it sold for $1,100,000.
  • Scottsdale Waterfront – Two bedrooms, two and one-half bathrooms, 2,227 square feet. Asking price was $1,985,000 and it sold for $1,800,000.

Phoenix Luxury Condo Sales

  • Two Biltmore Estates – Three bedrooms, three and one-half bathrooms, 3,931 square feet. Asking price was $2,995,000 and it sold for $2,775,000.

Learn More About Phoenix and Scottsdale Luxury Condos

Search Phoenix and Scottsdale Luxury Condos for Sale 

Disclaimer: Days on market figures are cumulative days on market. Information herein deemed reliable but not guaranteed. Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 5/1/2023 and can change at any time. The analysis looks at resale luxury condos in Scottsdale and Phoenix over the past 12 months. Information deemed reliable, but not guaranteed.  There may be new condo inventory in these figures if the developer is using the MLS to market its homes. This post represents the opinion of the author. No warranties express or implied.
Copyright ©2023 Heather Tawes Nelson | Joyce Tawes

The Impact of Inflation on Mortgage Rates

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If you’re reading headlines about inflation or mortgage rates, you may see something about the recent decision from the Federal Reserve (the Fed). But what does it mean for you, the housing market, and your plans to buy a home? Here’s what you need to know.

Inflation and the Housing Market

While the Fed is working hard to lower inflation, the latest data shows that, while the it has improved somewhat, the inflation rate is still higher than the target (2%). And that played a role in the Fed’s decision to raise the Federal Funds Rate last week. As Bankrate explains:

“Keeping its inflation-fighting streak alive, the Federal Reserve has raised interest rates for the 10th time in 10 meetings . . . The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020.”

While the Fed’s actions don’t directly dictate what happens with mortgage rates, their decisions do have an impact and have contributed to the intentional cooldown in the housing market last year. 

How This Impacts You 

During times of high inflation, your everyday expenses go up. That means you’ve likely felt the pinch at the gas pump and in the grocery store. By raising the Federal Funds Rate, the Fed is actively trying to lower inflation. If the Fed is successful, it could also ultimately lead to lower mortgage rates and better homebuying affordability for you. That’s because when inflation is high, mortgage rates tend to be high. But, as inflation cools, experts say mortgage rates will likely fall.

Where Experts Think Mortgage Rates and Inflation Will Go from Here

Moving forward, both inflation and mortgage rates will continue to impact the housing market. And as Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Mortgage rates are likely to descend lower later in the year as the consumer price inflation calms down . . .” 

Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), explains: 

“We continue to expect that mortgage rates will drift down over the course of the year as the economy slows . . .”

While there’s no way to say with certainty where mortgage rates will go from here, the experts think mortgage rates will trend down this year if inflation comes down too. To stay informed on the latest insights, connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting and how it could impact your homeownership plans.

Bottom Line

Don’t let headlines about the latest decision from the Fed confuse you. Where mortgage rates go from here depends on what happens with inflation. If inflation cools, mortgage rates should tick down as a result. Let’s connect so you have expert insights on housing market changes and what they mean for you.

Quick Video Update of the Scottsdale Real Estate Market – April 2023

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– April 2023 Scottsdale Housing Market Video –

Here is a one-minute video overview of the Scottsdale, Arizona real estate market that covers the month of April.

April 2023 – Video


Scottsdale Active Listings

Scottsdale homes for sale April 2023

The month of April closed out with 1,061 homes for sale. This is up 72% over April 2022, but at that time, Scottsdale was severely lacking in homes for sale.

Inventory at the end of April was down 9% compared to the end of March. We have been seeing the number of homes for sale trend down over the last couple of months.

Median List Price for Scottsdale Homes

Scottsdale homes median list price April 2023

If you are not familiar with the median listing price, it is it the midpoint price of all of the homes on the market. 50% of the homes are priced higher and 50% of the homes are priced lower. 

In April, Scottsdale’s median listing price for Scottsdale was $1.45 million. This is higher than last month’s $1.4 million, but lower than April 2022’s $1.5 million. 

Days on Market

Scottsdale homes days on market April 2023

This next image gives you a quick look into the health of a given market. Days on Market, also called DOM, calculates the number of days it takes homes to sell on average.

If you see a high DOM, homes are taking longer to sell. A lower DOM means homes are selling at a brisker pace.

Scottsdale’s DOM in April was 72 days. While it comes in 118% higher than last April, April 2022 was a very strong market.

Median Sales Price for Scottsdale Homes

Scottsdale homes median sales price April 2023

Now we will look at Scottsdale’s median sales price for April.

While it was a little less than the previous year’s $1.1M, it did come in a tiny bit higher than March 2023’s figure.

Number of Homes Sold

This next section covers actual home sales activity. The top image is a year-over-year comparison and the bottom image is a month-over-month comparison.

Scottsdale home sales April 2022 vs April 2023

Home sales fell 34% when you compare April 2023 to April 2022. We had hoped to see less of a decrease than we did.

Scottsdale home sales March versus April 2023

Sales in April fell off quite a bit from March’s sales. This was due to fewer pending contracts at the end of March.

We hope that you found this video and commentary helpful as you gather more information to make smart informed real estate decisions.

For more Scottsdale real estate information or if you have any questions about the local area, feel free to contact Joyce at (480) 209-7843 or Joyce@LiveBetterinScottsdale.com.

Click to watch other videos on our Live Better in Scottsdale YouTube Channel.

Interested in other stats for our market? Visit our Real Estate Market Update page.

Disclaimer: Data deemed to be accurate, but is not guaranteed.

Scottsdale AZ Single Family Home Sales – April 2023

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– April 2023 Scottsdale Homes for Sale and Home Sales –

April was a mixed month in terms of sales activity. The number of homes for sale as well as actual home sales were down, but pending contract activity was up.

SCOTTSDALE HOME SALES ACTIVITY – APRIL 2023

Each month, we look at the following four items:

– Single-family homes for sale – Orange Line – The number of homes on the market at the end of the month.
– Under contract, but accepting backup offers (UCB) – Gray Line – The number of homes in UCB status at the end of the month.*
– Pending home sales – Yellow Line -The number of pending sales at the end of the month.*
– Home Sales – Blue Line – How many homes sold over the course of the month.

APRIL 2023 RESULTS

Scottsdale home sales April 2023
  • Scottsdale Homes for Sale: The number of homes for sale fell for the second month in a row. We ended the month with less than 1,000 single-family homes for sale.
  • UCB (Under contract, accepting backup offers): We saw an almost 18% bump in the number of UCJB contracts. April also posted the highest level we have seen in UCBs in the past year.
  • Pending Homes Sales in Scottsdale: Pending sales moved into the 300+ range for the first time since May of 2022.
  • Scottsdale Home Sales: The number of home sales fell quite a bit in comparison to March’s sales. This was due to the lower number of UCBs and pending sales in the pipeline at the end of March.

We have two more things we track on a monthly basis:

Scottsdale real estate market April 2023

Percent Change Month Over Month – On the top is percent change month over month. We compare the current month to the one prior to see how things are trending. For instance, pending sales were up 13.5% in April when compared to March.

Sales Price to List Price – On the bottom is sales price to list price. This compares the average sales price of homes to the average price those homes had been listed for. In April, it was 95.8%, meaning buyers saw an average discount of 4.2% off of asking prices.

*Figures for active homes for sale, UCB sales and pending sales are based on the numbers at the end of the month.

Curious about your buying power? Click on the link to learn more.

Search Scottsdale AZ Homes for Sale

Disclaimer: Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 5/1/2023. Information deemed reliable, but not guaranteed. There may be new home inventory in these figures if the developer is using the MLS to market its homes. This post represents the opinion of the author. No warranties express or implied.
Copyright © 2023 Heather Tawes Nelson | Joyce Tawes

How to Become a Homeowner on a First-Time Buyer’s Budget

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It’s not easy being a first-time homebuyer right now. At the end of last year, housing affordability hit an all-time low.1 Additionally, mortgage rates have risen significantly since 2021, while inventory remains tight for many property categories, we see this even more for starter homes. Even lower-priced condos are harder to snag these days, as investors and downsizers muscle out first-timer buyers by offering stronger, often cash-heavy bids.2

According to the National Association of Realtors, only 26% of last year’s homebuyers were first-timers—the lowest share on record and down from 34% a year prior. This underscores just how steep a hill new buyers are facing.3 As a result, many first-time homebuyers are finding that they need to get creative or risk renting for longer than they planned.

If you, too, are struggling to afford homeownership, here are some workarounds to consider as you plot your first home purchase.

1. Try House Hacking

“House hacking” is a real estate investment strategy in which participants use their homes to generate income in order to offset their expenditures.

For example, renting out a basement apartment or accessory dwelling unit (ADU)—such as a detached garage that’s been outfitted with a bathroom and small kitchen—counts as house hacking. So does splitting housing costs with a roommate or converting a part of your home into an Airbnb.

House hacking isn’t new. But, it’s grown in popularity as a new crop of digital platforms has entered the market and made it easier than ever for homeowners to generate income from their property.

In some cases, house hacking may make it possible for you to qualify for and afford your first home. A lender, for example, may approve you for a larger mortgage if you purchase a home with immediate income potential, such as a legal duplex or a property with a secondary suite that has a kitchen and full bathroom.4

In addition, house hacking could help you pay your mortgage once you move in. Here are just a few of the ways you could use your home to earn some extra cash:

  • Offer paid parking in your driveway on a site like Spacer or SpotHero.
  • Rent out your swimming pool for a few hours on Swimply.
  • Make your home available for photoshoots or events on Giggster or Peerspace.
  • Turn your backyard into a pay-by-the-hour dog park on Sniffspot.
  • List your garage space on an app like Neighbor Storage.

But before you make plans to house hack, make sure you fully understand an area’s laws and HOA rules. We can help you find a home with income potential in a neighborhood with less restrictive zoning and regulations.

2. Team Up With Friends or Family

If you aren’t wild about the idea of welcoming strangers to your home, you may want to consider co-purchasing with a friend or family member instead. This unconventional housing arrangement is also growing more popular as friends and family members cope with higher living costs by pooling resources.

According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, the share of first-time homebuyers living with people other than children or a romantic partner is currently at an all-time high.3 Meanwhile, research from Pew found that multigenerational living has accelerated especially quickly, with a quarter of U.S. adults aged 25 to 34 now living in a multigenerational home.5

Arrangements can be customized to fit your circumstances. For example, you could purchase a home and then rent a portion of it to a loved one. Or you might consider co-buying a home with friends or family members so that you can step onto the property ladder and start building equity together.

Co-ownership could work out especially well for you long-term if it helps you to buy a home that’s bigger, has more investment potential, or is located in a high-demand area and so appreciates at a faster rate. Plus, you’ll get to see your loved ones more often and enjoy the coziness of shared living with people you like having around.

On the other hand, sharing a big financial responsibility, like a mortgage, with friends or family could get messy—especially if you don’t create a clear-cut co-ownership agreement beforehand that outlines your mutual expectations. So plan carefully before you proceed.

In addition, you may need to rethink the type of home you pursue. For example, a smaller home might be cheaper, but do you really want that much togetherness all the time? We can help you set priorities and search for a suitable property.

3. Tap Your Network for Help With Funding

Another established method for affording a first home is to lean on family or friends for financial help. Getting assistance with the down payment or other borrowing costs can go a long way toward making your homeownership dreams come true.

As long as you don’t mind asking for help, a free-and-clear gift that’s intended for your down payment is an ideal arrangement, since it will allow you to borrow less overall. Or, if that’s too big an ask, your loved ones could pitch in toward closing or moving costs.

Alternatively, your loved ones could help by co-signing your loan. For example, if their credit score is a lot higher than yours, it could enable you to secure a lower interest rate so that your monthly payment is more affordable.

According to a recent YouGov poll, more than a third of homeowners (and a whopping 79% of those under 30) received financial help from their parents when buying their first home.6 So you wouldn’t be the only one leaning on family to help afford a home at today’s prices.

Just be sure your parents or other generous loved ones are aware they’re giving a gift, not a loan, and are willing to put that in writing. A lender will want proof that this money isn’t adding to your debt burden and may require documentation from your benefactors.

Another way to tap your network for help is to crowdfund part of your down payment or ask for monetary gifts instead of tangible ones. For example, if you’re getting married soon, you could skip the wedding gift registry and ask guests to contribute funds to your hoped-for home purchase instead.

4.  Look for Special Programs and Assistance

You could also cut some of your upfront mortgage costs by applying for special grants and funding opportunities.

For example, consider using a grant to help you fund your down payment. There are a number of public and private grants and down payment assistance programs that are expressly intended to help first-time buyers.

Just like a gift, you don’t have to pay a grant back. But, depending on your personal situation, you may find some grants difficult to qualify for—especially if you make a relatively high income.

Many grants are reserved for lower-income buyers only.7

Check out grant programs, such as the HomePath Ready Buyer Program, National Homebuyers Fund, the Good Neighbor Next Door Program, and specialized grants from banks. Also look to state and local sources for potential grants and down payment assistance programs, including forgivable and deferred payment loans, Individual Development Accounts, and DPA Second Mortgages.7

Similarly, if you have enough income to support a house payment but can’t spare much cash for your down payment, you may qualify for a government-sponsored loan, such as an FHA loan that allows you to put down as little as 3.5% to 10%.8

We can connect you with a lender or mortgage broker who can educate you about your options and help shepherd you through the process. Some financial assistance programs require you to work with specific lenders, while others require you to apply directly and fill out a separate application. 

In addition, you may look to even less conventional options, such as seller financing. But be aware these kinds of arrangements are rare and hard to find. Depending on the market, you will likely get more help from a seller if you ask them to pay closing costs or contribute to your mortgage rate buydown. In many cases, we can help you negotiate seller concessions that make your home purchase more affordable.

5. Expand Your Home Search

If you’re having trouble finding a home within your budget, consider broadening your search criteria. You may be surprised by the kinds of deals that are available when you’re willing to compromise.

For example, if you’re struggling to find an affordable home in your target neighborhood, expand your search area and consider homes that are further out of town or that are located in up-and-coming areas with lower starting prices. We would be happy to introduce you to some great but lesser-known neighborhoods that we consider hidden gems.

You could also save money on your home purchase simply by dropping or revising some of your must-haves and settling for OK-to-haves instead.

For example, do you really need two bathrooms and a large backyard? Or could you settle for a single bathroom with space to add a second one in the future? And would a small garden, cozy balcony, or rooftop terrace still give you the outdoor time you crave? These types of compromises can sometimes shave tens of thousands off your purchase price.

Similarly, if you don’t mind rolling up your sleeves or working with a contractor on minor jobs, you can look for homes that need a little TLC. Just because a house looks dated doesn’t mean it’s destined to stay that way or that it will take a ton of money to spruce up. In fact, a home with good bones but cosmetic flaws could be a perfect match: With less competition, you’ll have a better chance of purchasing the home at an affordable price. You can then take your time to save more and fix it up to your taste.

Keep in mind, starter homes are rarely forever homes, but merely a first step onto the property ladder. By gaining a foothold in the real estate market now, you can set yourself up to afford a more expensive property in the future.

According to the National Association of Realtors, in 2021, the net worth of a typical homeowner was $300,000, while that of a renter was only $8,000.9 We can help you find an affordable first home so you can start building equity to reach your long-term financial and real estate goals.

YOU CAN DO IT—AND WE CAN HELP

Buying a first home is challenging, but it’s not impossible—especially when you have a savvy real estate professional in your corner. We will work with you to devise a plan to overcome your financial constraints. Then, we’ll help you find a home that not only excites you but also fits your budget and lifestyle. Give us a call to get started with a free exploratory consultation.

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. Housing Wire –
    https://www.housingwire.com/articles/housing-affordability-ends-2022-at-record-low/
  2. Realtor.com – https://www.realtor.com/news/trends/death-of-the-starter-home-where-have-all-the-small-houses-gone/
  3. National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
  4. ValuePenguin –
    https://www.valuepenguin.com/mortgages/claiming-rental-income-for-mortgage
  5. Pew – https://www.pewresearch.org/fact-tank/2022/07/20/young-adults-in-u-s-are-much-more-likely-than-50-years-ago-to-be-living-in-a-multigenerational-household/
  6. YouGov – https://today.yougov.com/topics/economy/articles-reports/2022/05/25/american-homebuyers-finanancial-help-parents
  7. Bankrate –
    https://www.bankrate.com/mortgages/first-time-homebuyer-grants/#types
  8. Investopedia –
    https://www.investopedia.com/terms/f/fhaloan.asp
  9. National Association of Realtors – https://www.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-04-26-2022.pdf

Why Buying a Home Makes More Sense Than Renting Today

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Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability is still a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census shows rents have been climbing pretty steadily since 1988. 

And, data from the latest rental report from Realtor.com shows rents continue to grow today, even though it’s at a slower pace than we saw at the height of the pandemic:

“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732,up by $15 from last month and down by $32 from the peak but is still$354 (25.7%) higher than the same time in 2019 (pre-pandemic).”

In Greater Phoenix in March 2023, the average lease price per month was $2,241 per ARMLS.

With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years). 

Owning a Home Could Be More Affordable if You Need More Space

The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:

So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.

Homeownership Allows You To Start Building Equity

In addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth. 

And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.

Bottom Line

If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options. With rents rising, it may make more sense to pursue your dream of homeownership.  

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