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Status Of The Phoenix Housing Market Heading Into 2019

The Phoenix housing market has seen stable growth over the last several years. This stability has been a welcome change from the turbulent times that are still fresh in everyone’s mind.   The housing market in the phoenix area started growing at unsustainable rates in 2005, this unsustainable growth eventually lead to a collapse in 2008 that caused the housing crisis and great recession.  The phoenix area was hit particularly hard during the recession. Since 2012, we have seen a very different picture, instead of huge rises and crashes the market has seen steady sustainable growth.

Recently however, Troy Reeves and “The Reeves Team” have started getting questions on whether or not we are starting to enter another bubble.  So, are we entering a bubble?   Or are we just suffering from a case of recency bias that is making homeowners, and potential buyers nervous that the past is doomed to repeat itself?

To answer these questions let’s start by taking a deep dive into some of the metrics that determine the health of the phoenix housing market.

We will start by looking at the Absorption rate of homes in the Phoenix metro area over the last 12 months.  Absorption rate is a very important statistic to measure the health of the overall housing market.  The absorption rate is calculated by looking at the current number of homes sold in a month versus the number of total homes on the market.  The result is the total amount of months it would take to sell out of the current inventory.  Three months is the ideal number for a healthy housing market.  We were around the 3-month mark in March of 2017 however we have been dipping under that number since that point.

So, what does it mean that our absorption rate has been steadily under 3 months?  The biggest takeaway is that there is not an ideal supply of homes on the market to meet the demand from the buyers looking to purchase a home.  This points to a rise in housing prices in the short to medium turn.  While the current absorption rate is not dramatically under the ideal mark if it continues lower look for even sharper price movement upwards.  If you are looking for additional insights into the absorption rate and what it means for your housing situation please reach out to “The Reeves Team” for an even further in-depth analysis.

Next let’s look at the most straight forward metric of them all, price.  While price may not give us as good of a gauge of what’s going to happen in the future as absorption rate, it gives us a great idea of what has happened in the past.  While the past in real estate doesn’t necessarily repeat itself, it does often rhyme.

So what does the price analysis over the last 12 months tell us?  The biggest take away is that we have a great deal of stability in the market.  Unlike from 2005 to 2012 these lines are fairly smooth instead of having huge spikes upwards and huge drops downward we have slow sustainable growth.  As you can see towards the end of the chart there has been a recent uptick in the median listing price and in the median sales price, this is to be expected as we continue to see an absorption rate of under 3 months.

As a side note this pricing graph demonstrates something we at “The Reeves Team” always explain to our clients.  If you want your home to sell quickly and for the highest possible value, it is important to price your home correctly when you put it on the market.  Look at how close the <strong>new median list price</strong> and the <strong>sold median list price</strong> are. This tells us that the homes that are priced correctly are selling and the homes that are overpriced are sitting on the market.  In the Phoenix housing market buyers have options so it’s important to be competitive if you want your home to sell for top dollar.  If you are interested in putting your home on the market or just want to have an idea of how much your home is worth, contact “The Reeves Team“.

Next up let’s look at inventory.  Inventory is a measure of how many homes are on the market, versus how many are being sold.   As with price you can see that the number of new listings and sold listings are very similar.

What is striking about inventory going into 2019 is how stable is has been since the housing market started recovering around 2012.  Take a look at this article written by “The Reeves Team” in July of 2012.  This was one of our most viewed articles ever as you can see by the over 30 comments that were posted when it was written.  Troy Reeves correctly predicted that the housing market was returning to normal and that normalcy has continued on until today.

The last item we are going to look at before we zoom out to the big picture overview is the Sold Days On Market.  This metric takes a look at all the homes that were sold during a given month and averages how long it took those homes to sell.  There are a couple of takeaways from this data over the past year.  The first takeaway is that the metric has been under 90 days for the entire last year.  The Sold DOM under 90 days for a span of an entire year reinforces what the absorption rate told us above, that buyers are wanting homes faster than sellers are listing them.  While the margin is not to wide at this point, it is something that could lead to a run up in prices in the short term if it continues to fall.

The second take away from the Sold Days On Market is that buyers want to buy homes during the summer.  As you can see the days on market dips dramatically during the summer months when kids are out of school.  You can expect this pattern to repeat for the foreseeable future.

After reviewing the detailed short term metrics we can see that prices and inventory seem very stable, and point to continued sustainable growth.  Now that we have looked at the short term lets take a look at the bigger picture and zoom out and look at prices before and after the run up and crash of the housing market.

 

Looking at this chart that began in 2000 and runs to today we can get a great perspective on just what happened and where we are today.  First you can see that we had sustainable growth from 2000 until 2005 when the housing boom, fueled by the rise in subprime mortgages, took off.  As you can see by the parabolic rise in prices from 2005 and peaking in 2007 these prices were not sustainable.  In 2008 the housing prices absolutely fell off a cliff and bounced around at the bottom until around 2012.  Its clear to see looking back that during the 2010 to 2012 time period we were clearly in oversold territory and a rebound back to normal prices was needed.  This rebound was accurately predicted by Troy Reeves” in November of 2012.  To give you some perspective “The Reeves Team” drew a red line that continued out from the original sustainable growth between the years of 2000 to 2005 up until today.  What is remarkable is, even with the parabolic run up and huge crash and recession that followed, the market has stabilized back to where it would have been if the slow sustainable growth had continued from the beginning.

Reasons to be optimistic.

There are many reasons to be optimistic about the housing market moving forward.   The biggest reason to be optimistic, is that it does not appear that we are in a bubble.  While housing prices have had growth at a slightly faster than average pace over the last few years, it is mainly fueled by the fact that prices previously were to low and we have been catching up to where we need to be all along. With that being said, it is always a good idea to keep an eye on prices in the future, and if you see another parabolic jump in prices be cautious.  However, looking at the data we have reviewed, including the absorption rate, prices, sold days on market and inventory a bubble does not appear to be an immediate threat.

Reasons to be concerned.

Wouldn’t it be great if there were no downside and everything was looking positive?  Unfortunately we are not that lucky.  Interest rates have been on the rise in recent years and the Fed Chairman Jerome Powell has indicated he plans on continuing to raise them, possibly even increasing the rate at which we see rates rise.  So what does this mean for the Phoenix Housing Market?  The biggest takeaway is that if rates go up, the amount of money home buyers will be able to finance will go down, as more of their monthly payments will be eaten up by interest.

Final Thoughts.

The effects on the rising interest rates may take time to play out, but for now “The Reeves Team” remains cautiously optimistic that we will continue seeing long term sustainable growth in the Phoenix Housing Market.  The market appears to have completed its return to normalcy and the deep dive that we did on the short term numbers appears to say the same thing.   If you want any additional analysis on the market or your home in particular please reach out to “The Reeves Team“.

Let us know what you think of the analysis below!

How To Win A Multiple Offer Situation

Raise handSo your put in an offer on a home, expecting to play hardball and all of a sudden you find out your in a multiple offer situation, its time to put your game face on.  Homes in popular neighborhoods are still facing stiff competition, and quite often multiple buyers are competing over the same house. In August 2013, 60.5% of offers written by RE/MAX agents across the country faced bidding wars. Tight inventory conditions and relatively low mortgage rates mean that multiple offer situations are still a reality.  When you find yourself faced with this situation here are a few tips to make your offer stand out.

Be realistic

If you’re looking for a home in a sought-after neighborhood, be aware that a winning offer will likely be at or above asking price. This knowledge will help you construct a competitive offer at the outset that is still within your comfort zone. In early 2013, many buyers waived inspection and financing contingencies in an effort to win the bid. This approach can be effective, but it can also be an uncomfortable level of risk for some buyers. Knowing what you’re willing to do in advance will make it easier to make decisions when the timing demands it.

Prepare your financing

Whether you’re planning to get a mortgage or are paying in cash, make sure you have financial documentation ready to send. If you’re getting a mortgage, you’ll need a pre-approval letter. Being pre-qualified doesn’t cut it, since it doesn’t formally verify your income, assets and credit. If you’re paying in cash, be ready to submit proof of funds, which can be an original bank statement, open equity line of credit, copy of a money market account balance, or certified financial statement. Pre-approval or proof of funds need to be available at a moment’s notice and are expected, not optional. In addition, offering earnest money (often 1-3% of the purchase price) is another signal to the seller that you’re serious, so think about how much you’re willing to pledge.

Do a pre-inspection

In the past, inspections typically happened right after a seller accepted a buyer’s offer. However, the rise of bidding wars prompted savvy buyers to schedule inspections before placing an offer, giving them more knowledge about the home and making it easier to waive inspection contingencies. Doing a pre-inspection can put you ahead of other buyers by removing complexity from your offer, and also shows a seller that you mean business.

Be flexible

Selling a home can be a whirlwind. Any flexibility a buyer can offer a seller has the potential to reward them. Being lenient on closing or possession dates might make an offer more palatable to a seller in the midst of one of life’s most stressful times; moving.

Personal touch

Though it isn’t standard practice in every market, personal notes from potential buyers can humanize a transaction and tip the scales in your favor. The Reeves Team has seen several instances where offers were accepted based on the letter, even though they weren’t the highest. This works particularly well if the sellers are attached to their home, but not always so well for estates, where family members may have competing priorities and be less emotionally attached to the home.

If you’re anticipating a multiple offer situation, be sure to discuss your strategy and the risks involved with your real estate agent. With the right attitude and approach, you can get the house you’re looking for. For more information on how to navigate a multiple offer situation contact The Reeves Team.

What Is A Home Warranty? And Do I Need One?

Have you ever see a home put on the market that included a Home Warranty?  What does this mean?  If the sellers are willing to give you a home warranty does this mean there is something wrong with the home you are considering? The short answer is No.  A home warranty is insurance or home protection that helps to protect the buyer, and the seller from any unseen expenses that could arise.

So what exactly is a home warranty?

To explain what a home warranty is we should start by explaining what it is not. A home warranty is not the same thing as homeowners insurance, nor is it a replacement for homeowners insurance. Homeowners insurance covers major perils such as fires, hail, property crimes and certain types of water damage that could affect the entire structure and/or the homeowner’s personal possessions. A home warranty does not cover these perils. Rather, it covers specific components of the home from the breakdown of a home appliance or component.  A home warranty covers you during the sale process and typically up to a year after closing.  Your home warranty can then be renewed on a yearly basis.

What Does It Cost?

The cost of a home warranty is typically a few hundred dollars a year, paid up front (or in installments, if the warranty company offers a payment plan). The plan’s cost varies depending on the property. You will typically pay more for a warranty on a single family detached property than you will for a condo, townhome, or duplex.  The cost usually does not vary with the property’s age, unless the home is brand new, which increases the cost of coverage. The home’s square footage also does not affect the price in most cases, unless the property is more than 5,000 square feet. Separate structures, such as guest houses, usually are not covered by the basic policy, but can be covered for an additional fee.  Garage units are typically covered by the policy however.

The Benefits of a Home Warranty

Like all warranties, a home warranty is protects you against expensive, unforeseen repair bills and provide peace of mind. For a homeowner who doesn’t have an emergency fund or who wants to protect their emergency fund, a home warranty can act as a buffer. Home warranties also make sense for people who aren’t handy or who don’t want to worry about tracking down a contractor when they have a problem. Warranties can also make sense for people with expensive taste in appliances.

Is a Home Warranty for me?

A home warranty can be a great solution to the risks homeowners often face. However, before purchasing one, homeowners should read the fine print in the home warranty contract and contact their real estate agent for advise. Home sellers who want to offer a warranty to buyers and homeowners/buyers who would feel more comfortable having a home warranty should also do careful research to find a reputable home warranty company that will pay for legitimate repairs when they are needed.

Have you ever purchased a home warranty? How did you like it? Have you ever wished you had a home warranty when you had an expensive repair bill? Let us know in the comment section below.

Could Rising Mortgage Rates Keep People from Buying Chandler Homes?

Over the last few weeks, there has been a sharp spike in the rates being offered on mortgage loans. Home mortgage rates are skimming dangerously close to the 4 percent mark. What this means is that the Chandler Homes sellers are not making any more on the sell, the buyer is not paying in less, and the lender is profiting more. This trend has some Chandler Homes buyers hesitant to make the investment in a home now — which may hinder the recent soaring number of Chandler Homes being bought in weeks prior to the rate spike. Troy Reeves of the Troy Reeves team advises buyers that now is still a good time to invest in Chandler Homes as the price of homes are still fairly low. Read more to learn about the rate spike.

 

Rate Spike in Chandler Homes Mortgage Loans

The sharp spike in loans for Chandler Homes mortgages may, first and foremost, indicate that it is a little too late for homeowners to refinance. Last week, refinancing dropped 12 percent. This rate hike comes just as many more people are becoming eligible for loans and as people started to regain lost equity in their house after the crash. However, rates on Chandler Homes mortgage loans are still very low and many people are jumping to buy now in fear that they will miss out on the best buying conditions for Chandler Homes in years.

 

Refinancing Down, Buying Still Up

Although this may be keeping people from buying Chandler Homes as aggressively, plenty of buyers are still eager to make their purchase. Mortgage loan applications across the country actually rose around 3 percent from last month and are up 14 percent from the same month in 2012. Higher rates are indicative of a stronger economy and positive data. The Federal Reserve has pumped in billions of American dollars to get the mortgage market back on track since the housing crash started. Many experts are speculating that the rate hike is an indicator that the help may soon end. These rising rates and the possibility of the Feds pulling their cash infusion comes as home prices jumped 10% in March. People buying homes for the first time are feeling the rising cost of buying a home the most.

 

“by Troy Reeves” at Google

Two Months Later – Was Troy Reeves Right on Housing Market Conditions?

Troy wrote an article just over 2 months ago telling you his thoughts on the current housing market conditions. It’s time to ask – was he right? Let’s take a look back at Don’t Wait: NOW is the Time to to Sell in the East Valley!

 

Due to an unusual shortage in inventory of homes for sale in East Valley, now is the perfect time to sell your home. The Reeves Teams has been watching the Arizona MLS very carefully and we can see that buyers are very active right now and houses are being snatched up. While Troy Reeves believes that the market will continue to grow in East Valley, it will do so at a more manageable rate and buyers will no longer be making knee jerk decisions based on low inventory.

 

Based on our expert projections and by gauging the current market, we do not anticipate there being a better time in the near future to list your property for sale.

 

Let’s take a look at Troy’s take aways from that April article:

  • New builds will have caught up to a more normal demand – 4th QTR 2013
  • Total inventory will increase by almost double in next 12 months (currently around 15,500 – used to carrying 32,000 – 34,000 at a healthy amount.)

 

Many Brokers have said this last 90 days has felt like 2005 all over again (when we had 5K homes on market – and homes almost 40% more.

 

Buyers: Watch the rates! 5,000 – 10,000 is not that hard to swallow, but 1-2% interest rates over the life of a loan certainly is!

 

Sellers: The multiple offers and 2 week selling timeframe will decrease dramatically (this is healthy for an overall real estate market, however Troy’s believes prices of home will be worth more next year this time (7-9% up) but you will be competing with more sellers (both new builds and resales) to get a buyer, you may have to spruce up more than in today’s low inventory when you can do less to your home in a faster sales market.

 

What’s in store?  More inventory means more to choose from, however a seller must do more to compete with more inventory.  Kitchen, bath, paint, yard (be more impressive than the others you are competing with.

 

Interest rates will go up by year end (Feds have told us this).

 

Josh, an agent with the team for over 9 years adds, “I believe that Troy hit the nail on the head with this article.  We are already starting to see an increase in inventory and fewer multiple offer on homes.  Interest rates have also jumped from about 3.5% last month to 4.5% today.  Even with a slight increase in interest rates now is a great time to buy as prices and interest rates will continue to rise over the next year.”

 

Here are some charts to review that we’ve been watching.

 

“by Troy Reeves” at Google

Get More Offers on Gilbert Homes

House_for_sale_gilbert_az

Troy Reeves, founder of the Troy Reeves Team, frequently gets questions from sellers of Gilbert Homes about how to get multiple offers. Getting multiple offers on Gilbert Homes gives you more flexibility, more bargaining leverage, and will ultimately result in a better price on your sell. Here are some quick tips on how Gilbert Homes sellers can get multiple offers – as well as how buyers of Gilbert Homes can compete with other interested parties.

 

Sellers of Gilbert Homes

The first step on the road to getting multiple offers is making sure your Gilbert Homes are in the best condition possible. Spruce up the place and make sure all surfaces are free of clutter, dirt, debris, etc. Also, repainting helps on both the inside and outside as well as pressure washing the driveway & siding, and make sure the yard is well manicured.

 

Once that’s done, its time to build up interested parties. Use your personal networks to extend your reach to buyers and get the word out there about your Gilbert Homes for sale. Also, spread the word around the neighborhood about your home before it ever even goes on the market so neighbors can build anticipation amongst their friends and family who might want to live in the Chandler Homes community.

 

You’ll also want to get a professional agent on board like those who work for the Troy Reeves Team. Pros know all of the proven techniques in reeling in buyers and getting them to make an offer.

 

How Buyers Can Compete

Buyers in this market are definitely competing for certain Gilbert Homes properties because inventory has not yet exceeded demand. If you want to get the home of your dreams at an affordable price, you’ll need to be prepared.

 

Start off by saving a sizable deposit and pre-qualifying for a mortgage before you ever step foot in a home for sale. When you find the home you want, you’ll need to move quickly and make an offer fast. Some buyers will even take offers much lower than asking if you’re willing to start the buying process right away.

 

You’ll also want to keep your demands to a minimum. Sellers aren’t going to jump through hoops for buyers if there are multiple offers on the table.

 

“by Troy Reeves” at Google

Chandler Homes See Mortgage Rate Drop

People buying Chandler Homes over the last month probably noticed that mortgage rates where on a month long rise. After this month long rise in mortgage rates on Chandler Homes, rates are once again falling. This is somewhat surprising, but comes with reason. According to Troy Reeves, founder of the Troy Reeves Team, not many people saw the rate drop coming, but many factors led to this happening.

 chandler housing market

Rates Drop on Chandler Homes

If you plan on buying Chandler Homes this month, you will be pleased to know that the average rate on a thirty year fixed loan is on a slight decline. After nearing a high of 4% a little over a week ago, the average rate fell to 3.93%. On a fifteen year fixed Chandler Homes mortgage, rates dropped from 3.1% (a year high) to 3.04%. This might not seem like a massive drop, but it makes a difference in savings when buying Chandler Homes. Freddie Mac announced these findings in their latest mortgage buyer survey. The drop comes from a dramatic rate increase of sales of Chandler Homes and all homes in this country over the last month. The recent rate hike was a result of the rumors that the Feds were going to reduce purchases of bonds. The previous historic low for 15-year fixed rate mortgages was 2.56% in May.

 

What This Mean for the Chandler Homes Market

Dropping rates in this occurrence is actually positive news for Chandler Homes buyers and sellers. This rate drop is a good sign that the housing market and economy in early is continuing to improve and strengthen. Earlier in the week, the National Association of Realtors made an announcement that sales of homes previously built jumped an impressive 4.2%! This increase was much larger than many experts anticipated, a sign that things in the housing market might actually be going a lot better than the majority of the population and experts perceive. Experts in the industry are relatively split on which direction these rates will head next, most call for either lowering or rising, with very few expecting a leveling off anytime soon.

 

“by Troy Reeves” at Google

Selling Chandler Homes While Buying a New One: How to Pull it Off

Gilbert_New Home Purchase

When you are buying and selling separate Chandler Homes at the same time, it can be difficult to pull off. This common practice is known as move up buying and many people used to do it before the decline in the housing market. Troy Reeves, founder of the Troy Reeves Team, has cited an uptake in move-up buyers and has a few tips when you are looking to buy Chandler Homes, but are also selling current Chandler Homes simultaneously. The process of selling while buying can be tricky, but is completely possible with a high level of planning and forethought.

 

Buying and Selling Chandler Homes at the Same Time

Here’s the common scenarios in Chandler Homes buying and selling, and how to handle them:

 

Buy Chandler Homes Then Sell the Old One 

Buying a home and then selling your current home is the easiest on you and your family. This way of buying a new home allows you to take your time and only move once. The downside of doing things this way is that you’ll be paying for two mortgage payments if your current property isn’t already paid-off; it does workout the best if your current home is paid off beforehand.

 

Sell Chandler Homes Then Buy the New One

Selling your current Chandler Homes and then buying new ones is the safest way to go about move up buying – but it can be the most exhausting way to do things. When you sell your current property before buying a new one, you will go through the entire process of selling your house before buying another. Before you buy your new house, you’ll already be completely moved out of the old one and will have moved into a rental or in with relatives or friends. Doing it this way will mean multiple moves and you’ll likely have to come out of pocket for storage rentals as well. On the other hand, you can take as much time as you need finding your new purchase without rushing the process.

 

Sell Your Chandler Homes While Buying

Timing is key when you are selling and buying at the same time. This is the ideal situation in theory, but snags in the plans could completely throw you off. Don’t attempt to tackle this trickiest of all options without a well thought out back up plan if either house should have problems before signing.

What Amenities Attract Buyers to Chandler Homes?

Selling Chandler Homes can be made a lot easier when you understand the amenities the buyer is looking for in Chandler Homes. Troy Reeves, founder of the Troy Reeves Team, routinely does research on Chandler Homes amenities and which ones promote buyers to make their final purchase. Learn about which Chandler Homes attractions people are looking for the most and you can use this to your advantage when selling your property.

chandler neighborhood

What Adds Values to Chandler Homes for the Buyer?

The below information is based on the best selling points for Chandler Homes. These factors draw in buyers to Chandler Homes and get them excited about their move. Determine which one your properties for sale fall into and use it in your advertise and marketing to sell your Chandler Homes.

Neighborhood

Buyers want to live in a good neighborhood, and a neighborhood which reflects their lifestyle. There is not just a one-size-fits-all expectation when it comes to neighborhoods. A community of people who all gather to cookout with kids playing football in the streets may have its appeal to many, but that’s not what everyone wants or needs. Some people enjoy quiet areas, or adult communities too. Don’t try to disguise your neighborhood as being what you think the buyer wants, a quick visit will reveal what your block is really like, so don’t try to sell it on an angle that’s not accurate to your area. Describe it as what it is and you’ll pull in quality leads of Chandler Homes buyers.

Schools

When it comes to families with school aged children, what school district Chandler Homes are in can make a world of difference. Know what schools are close by and what their rankings are on popular sites like Great Schools and School Digger.

Shopping, Restaurants, and Nightlife

People definitely care about what’s close by when it comes to entertainment. If your home is close to a five star restaurant, high tech movie theater, popular night club, or lots of shopping choices, point that out to your buyers.

Parks, Walking Trails, and Bike Access

Access to public or neighborhood parks, trails for walking or riding bikes, and the ability to ride a bicycle safely matters a lot to many people – especially outdoor lovers. If your house is positioned in a good area for these amenities, have trail maps available at the showing of your home.

“by Troy Reeves” at Google

Know the Different Types of Chandler Homes

chandler homes

There are many types of Chandler Homes on the market and understanding which type would best fit your lifestyle will help you pick your new property. According to Troy Reeves of the Troy Reeves Team, there are three major types of homes that people are listing for sale the most. Read on to learn which one would suit you best.

 

Town House

Chandler Homes town houses are typically narrow, tall, row houses with two or more levels. This kind of housing was once reserved for packed cities but their functionality has made them a more popular suburban type of Chandler Homes. Modern town homes are in communities similar to those like apartment complexes.

 

Benefits:

These kinds of Chandler Homes have their own unique benefits. Most of the time, a town house is cheaper per square foot than an unattached house. This means that you will get more value for your money. When you purchase a town house, you own the house and designated property and you are free to do with it as you like.

 

Disadvantages:

When you live in a town house, you can’t make many changes to the outside of the house or property. You will also have to get used to living in close proximity to your neighbors.

 

Condos

A condo is somewhat like an apartment or town house. It is attached housing but rarely comes with any landownership.

 

Benefits:

Some people enjoy living in a community where they don’t have to maintain property and the community is usually overseen by a homeowner’s association or property management company. Older residents favor these types of Chandler Homes because of the low maintenance aspects.

 

Disadvantages:

When it comes to these kinds of Chandler Homes, the benefits and disadvantages can be the same – it’s all about your perspective. When you live in these Chandler Homes, most of the area is common so you have little to no control over the appearance and upkeep of the surrounding property. You will also have little control over the noise level of your neighbors, pedestrians outside, etc.


Houses
 

Houses are the most common type of Chandler Homes and come with the highest value per square foot on average.

 

Benefits:

Chandler Homes that are houses come with the most benefits. You have total control over the property and the house itself. A house also tends to hold its value for longer.

 

Disadvantages:

When Chandler Homes which are houses need maintenance, you are completely responsible for the charges. House are also more expensive per square foot than other types of Chandler Homes.

 

“by Troy Reeves” at Google