Valley Home Market Continues Cooling Off Trend

New home permits fell 24 percent in March 2006 from March 2005 numbers, according to the April issues of The Phoenix Housing Market Letter from RL Brown.

For the first quarter of 2006, there were 12,868 single-family new home permits issues, down 16 percent from the first quarter of 2005. "The metro Phoenix housing market is returning to normal after an extraordinary year that allowed housing prices to rise much more rapidly than at any time in history," said Brown.

Resales fell more than 25 percent in March from a year ago, and are down 16 percent for the first quarter compared to the first quarter of 2005. "There's no question that the Phoenix housing market of April 2006 is different from the market of the last year," Brown said. "It was clear that the 2005 pace was not sustainable." More...

W. Valley I-10 OK'd For Early Widening

Maricopa Association of Governments Regional Council (MAG) unanimously agreed on Wednesday to accelerate Interstate 10's freeway widening, paving the way for new lanes to be added starting in late 2007.

Avondale, Goodyear and Litchfield Park asked MAG to accelerate the freeway widening and will pony up the extra cost to complete the $130 million project early. The southwest Valley project will widen the freeway from the Loop 101 to Sarival Road.

Down the road, Buckeye and Goodyear are expected to push for a second widening project: the segment of the freeway from Sarival to State Route 85. More...

Great news for the West Valley! Read more freeway news here...

Builders' Money To Fund Queen Creek Projects

Developers with stakes in Queen Creek's future plan to fund temporary transportation solutions, such as traffic signals and turn lanes, to alleviate traffic jams until roads can be fixed permanently.

Much of the credit for these donations comes from incoming mayor-elect Art Sanders, who's campaign platform was to have Queen Creek become more business friendly.

The town has scheduled $60 million worth of road improvements over the next five years. The developer donations are designed to be a series of short-term solutions to compliment the existing five year plan that the town has already adopted. More...

Good news for everyone who has experienced the crazy traffic conditions in that area.

Interest In Arizona Commuter Rail Grows

State and regional transportation agencies are launching new studies this months to see if commuter rail can work in Arizona, and a statewide transit conference this week in Tempe aims to rekindle interest in heavy passenger rail, which is nothing like light rail.

Locals envision service linking Phoenix with Tucson and fast growing suburbs in Maricopa and Pinal Counties.The concept is to use existing railroad tracks to set up a commuter rail system.

Union Pacific and Burlington Northern control the tracks around the metro Phoenix and Pinal County areas, and the state and county agencies would need to negotiate with them for track usage and expansion.

The article cites several Western states success with commuter rail. More...

March Gains Push Arizona To Record Job Total

Arizona's economy gained another 22,600 jobs in March, pushing down the state's unemployment rate by 0.3 percentage points to 4.1 percent.

With these new jobs, Arizona's overall nonfarm job count stands at a record 2.6 million, according to the Department of Economic Security Research Administration.

Most of the job growth in March came from the service providing industries, up 18,400 positions.

Construction employment reached another record level at 234,800 positions, gaining 1,300 jobs in March. For more stats, go to www.workforce.az.gov. More on this story here...

Big Companies With A Big Impact

The Arizona Republic, reports on the largest employers in Arizona in its annual biggest companies report.

No. 1 is Wal-Mart, followed by Banner Health, Honeywell International, Wells Fargo & Co, and Intel.

The Arizona Republic has been compiling this list for the last 14 years, starting in 1992.

The state's population growth also is reflected in the list. In 1992, the 100th company had 550 employees.

This year, for the first time, all the companies listed boast more than 1,100 employees.

The article contains a link to get to the complete list of the top 100 employers and contains several articles about the top employers. More...

Amid Concerns, Developers Love Condos

The condo projects and condo conversions just keep coming, even though some experts wonder if they will all be needed.

There were 4,500 permits issued last year in Maricopa county for condo units, the largest number in 10 years, according to Jay Butler at the Arizona Real Estate Center at ASU.

And on top of that, at least 10,000 apartment units were converted to condos last year.

Developers see a market for them because they are more affordable than single-family homes.

Mesa, Chandler and especially Tempe are getting high-rise condos... at least a dozen have been or will be built in Tempe.

Converted condos are selling well but competition is getting stiff, evidenced by developers offering incentives like zero closing costs, zero payments until 2007, and zero condo fees until 2007, to name a few. More...

FHA Is Making A Comeback

Here's a small article written by a local Phoenix area mortgage lender who will be contributing to this real estate news blog from time to time...

Attention homebuyers! The Federal Housing Administration (FHA) is finally getting with the times and is looking to regain market share.

FHA loans have had to compete with non-traditional loan products with faster processing times that overlap into its market and is now responding with several changes. How does this affect you as a potential homebuyer? Well, with Fed Chairman Ben Bernanke now at the controls and another estimated increase in the Fed Funds rate to 5.0% by May those Home Equity Lines of Credit that we fell in love with the last couple of years are no longer so attractive. Just a few months ago if you were looking to purchase a home and not put any money down you would split your loan into an 80% first mortgage and 20% second using a Home Equity Line of Credit for the second. If you bought your home in this fashion you were considered a savvy buyer because you avoided paying Private Mortgage Insurance and took advantage of the low Prime Rate.

Now with the Prime Rate at 7.75% and soon to be 8.0% this option is not necessarily the smartest way to go. Why? Well, FHA will allow you to borrower up to 97% of the purchase price on one loan and there are several second mortgage products for the remaining 3%. Yes, you will have to pay Private Mortgage Insurance but the cost of the insurance is less than what the high Prime Rate is going to cost you and your money is fixed at a much lower rate providing you with more security.

In addition, FHA has realized that buyers in today’s mortgage market have different needs than that of conventional loan customers. Already FHA is more aggressive in its underwriting guidelines allowing for lower credit scores and higher loan to value. But now they are also introducing new products to provide buyers with additional choices.

Other important changes are regarding their appraisal process this was one of the biggest hang ups many sellers and real estate agents had with FHA. Prior FHA had its own property repair and condition standards, its own appraisal form and other forms used only in an FHA transaction which made it a much slower process and delayed closings which can be death for a deal in today’s fast moving mortgage market. Now they have streamlined their processing and accept the same documentation and have the same appraisal standards as their non-traditional competitors.

The biggest and best news is yet to come FHA is looking to approve 100% financing which will easily make it the best and most competitive product for this transaction and we will know in just a couple of months if its actually going to happen. So, homebuyers, ask your Real Estate Professional about the potential for an FHA loan and reap the rewards of these recent changes.

The following are links to the two other mortgage information articles on this site: Interest Rates And Current Market Conditions and Home Mortgage Interest Rates.

For all your mortgage needs we recommend:
Matt Smith, Mortgage Broker
Scottsdale Mortgages/Loan Brokerage
I have personally worked with Matt Smith since 1994!


Sincerely,
Matthew Pellerin
Phoenix Homes Team Leader

Mortgage Rates Head Up

Mortgage rates hit their highest point in almost 4 years this week, a move that is expected to slow home sales even more.

The average rate on a 30-year fixed rate loan hit 6.53 percent, up from 6.49 percent last week.

"Rates are likely to reach 7 percent this year, and that will likely put a brake on real estate in Arizona," said Terry Turk, president of Sun America Mortgage Co.

A 50 percent rise in home values in 2005 means many buyers need low rates to afford a home.

This weeks rates were the highest since July 2002. More...

Plans To Widen I-10 Approved

A plan to add new lanes to I-10 in the Southwest Valley starting in 2008 received approval from the Transportation Policy Committee of the Maricopa Association of Governments (MAG).

The plan still requires a vote of the MAG Regional Council next Wednesday. This approval makes way for the widening of I-10 from the Loop 101 to roughly Sarival.

The plan would add one general purpose lane from the Loop 101 to Dysart and a new HOV lane, with construction starting in 2008 versus 2014 as the original schedule from Prop 400 showed. From Dysart Road to slightly east of Sarival, two new lanes and a HOV lane would be added.

Four southwest Valley communities will share in the cost for the accelerated improvements. More...

Additionally, the much needed widening of I-17 is in the works as well! Here's another one of our articles on the strong need to widen valley freeways now!

Sky Harbor And Williams Gateway Airports

With this month's announcement of Phoenix's partnership with Williams Gateway Airport, the airport's future as a reliever airport to Phoenix Sky Harbor airport became clearer.

"It's ultimate destiny is the Valley's major international airport," said Marty Whalen of Mesa, a former senior vice president and general counsel of America West Airlines. "Phoenix Sky Harbor International Airport is landlocked and Williams Gateway now is what O'Hare looked like in the 1950's.

Studies suggest that it will take 15 years for the Mesa airport to serve 2 million passengers, numbers associated with major metro-area relievers. Smaller carriers are expected to expand service at Williams Gateway to popular destinations like San Diego and Las Vegas until the Southeast Valley's population compels the majors to come in. More...

CityNorth Gets A Head Start

Chicago based Thomas J. Klutznick Co. and Related Urban Development plan to break ground in July on the first phase of the $1.5 billion mixed-use CityNorth homes and condos for sale project located on 150-acres at the northwest corner of the Loop 101 and 56th Street in North Phoenix.

The development will feature 1.1 million square feet of retail space and restaurants including two or three department stores, 2 million square feet of office space, up to 2,000 residential units and two hotels.

The focus of the first phase of CityNorth, in North Phoenix, is High Street, a boulevard lined by three or four story buildings with streetscape retail, plus office space and residential units above. Later phases will have luxury stores, some topped with offices. The developers will eventually build large office buildings and high density housing outside of the urbanlike commercial core.

"One of the great things for us is the project next door," said Webber Hudson of Related Urban Development, referring to Desert Ridge Marketplace. "It's a great success story. CityNorth is going to be much more sophisticated." More... about City-North.

We have been telling our clients to invest in the northeastern section of the Loop 101 in North Phoenix and North Scottsdale for years now. With this and many, many other projects scheduled to be built along that stretch of freeway, housing and retail opportunities are ripe for the discerning buyer.

Sky Harbor International Airport News

Phoenix is poised to become an operator of Williams Gateway Airport, a significant move that solidifies the airports future role as the primary reliever to Sky Harbor International Airport.

This move gives Phoenix a major voice in how and when the fledgling commercial airport would begin to alleviate congestion at Sky Harbor, the nation's seventh busiest in terms of passengers.

"The demand for air service in the Valley is growing so rapidly that we are not concerned of a threat to Sky Harbor," said Deborah Ostreicher, an airport spokeswoman. "We're interested in the sustainability in Valley aviation as a whole." More...

Look for this area to be a real estate hot spot for commercial, industrial and retail development in the very near future.

Housing Blip A Speed Bump, Not A Slump

The region's housing market has gone from red hot to lukewarm in just a few quarters, but most housing experts see the current slowdown as a market correction and not a more serious slump.
"The current slowdown in the market is a short-term imbalance caused by excessive investor activity, rapid price run-ups in a short period of time and, in some cases, poor market analysis by builders that, collectively, have led to an oversupply of housing in certain price ranges, in certain areas," said Rebecca Burnham, a real estate attorney with the law firm Greenberg Traurig.

In December 2004, Phoenix-area resale homes averaged just under eight days on the market and in January 2005, that number dipped to six days. A month later it increased to 35 days, and in January 2006, it rose to 49 days. In February 2006 it rose again to 55 days.

Housing industry experts hope the Valley housing markets' slowing is a market correction and that the region can be propelled by continued population and job gains. More...

As the "investor" homes that are now on the market sell, the market should get back to inventory levels that are more normal and sustainable.

South East Valley Market Conditions

Median resale housing prices still dropping in the South East Valley...

Median resale housing prices fell in the Southeast Valley in March primarily due to the increased number of homes on the market.

The main exception was Ahwatukee Foothills, where prices rose 6 percent from February to March, to $364,250. But that is still below the December 2005 median price of $386,250.

Median prices from February to March fell 5 percent in Gilbert, 4 percent in Tempe, 1 percent in Mesa and 1.6 percent in Chandler.

Jay Butler, director of the Arizona Real Estate Center at ASU, said most homes sold these days are by investors who flooded the market over the last two years. They tend to buy cheaper and smaller homes and are now selling them back for profits.

However, the peak sales season is just getting started. Butler said the May, June and July sales figures should show what is really happening in the market.

The article gives the current median prices and sales volume for each of the Southeast Valley cities. More...

Arizona's Record Job Growth

Economists from the Phoenix Business Journal: 2005 a record year for jobs growth in state...

Employment growth in Arizona set a record in absolute numbers and, in percentage terms, was the strongest in a decade for the state and for greater Phoenix, according to economist Elliott Pollack in the Arizona Blue Chip Economic Forecast report.

State employment growth was revised upward to 5.3 percent from a preliminary estimate of 4.1 percent, as Arizona added more than 125,000 new jobs.

"This is a remarkable performance and far exceeds, in absolute terms, any year in history," said Pollack. "The employment boom seems to be broad based and sustainable."

And despite a slowdown in the housing market, the economic outlook looks good for this year, according to the report. More...

Phoenix Real Estate Market Back To Normal

Metro Phoenix's resale housing market continued to slow in March, with prices holding steady but the number of sales down from a year ago.

There were 7,265 resales in the Valley in March, down from the 10,035 in March of 2005.

The information came from the Arizona Real Estate Center at ASU. Jay Butler, director of the center, said the numbers show that the Phoenix real estate market is returning to more normal levels after last year's frenzy.

The price for a typical Valley resale home was $263,000 in March, up from $213,000 in March 2005, but down $2,000 from the February 2006 median resale price.

Butler noted that the first quarter of 2006 was the weakest since the first quarter of 2003, and that we will get a better indication of where the market is at later this summer. "Prices will start to come down in certain areas," he said. "Some of the older areas will hold prices better. We will see some decline but not significant declines."

Now, buyers have the leverage and are making sellers suffer, according to local agents. "Sellers got greedy last year," said Diane Watson of Realty Executives in Scottsdale. "Buyers are greedy now. Buyers need to recognize it is a healthy market. They can't sit on the sideline waiting for it to fall apart. It's not going to happen." More...

Home Buyers And Owners Feel Pinch Of Rising Rates

MSNBC.com, reports that as adjustable rate mortgages expire, homebuyers are feeling the pain of rising mortgage rates.

Last year, 43 percent of all US mortgages were adjustable or "exotic" in nature.

But borrowing costs have been climbing for two years, in some cases to nearly double what they were in 2003 and 2004, just when the introductory low rates on adjustable rate mortgages are set to expire. That means that homebuyers who were once paying just over 3 percent interest are suddenly facing rates that at 5 or 6 percent and still climbing.

Economist are bracing for an onslaught of late payments and the inevitable worry among lenders and borrowers alike that failed loans will cause a consumer or housing collapse. More...

When Phoenix Meets Tucson

Arizona's two largest metro areas are on course to meet and merge within a decade, engulfing several small towns along the way.

While Phoenix and Tucson are separated by 120 miles, their suburbs reach much farther up and down Interstate 10.

Planned developments stretch 60 miles south of Phoenix, deep into Pinal County. In Tucson, new projects are heading 40 miles north into Pinal County.

Urban researchers are calling the corridor a megapolitan, or "super-sized" metropolitan area. "Megapolitans are the future of the country's growth," said Marshall Vest, an economist and director with the Economic and Business Research Center at the University of Arizona. "Phoenix and Tucson are already merging into one," he added.

The notion of Phoenix and Tucson merging isn't new, but it is happening faster than most expected due to both cities rapid growth. Arizona is the smallest megapolitan and has the greatest potential for growth," said ASU Professor John Long.

The Phoenix-Tucson megapolitan is one of several in the country, including the Los Angeles to San Diego area and the Portland-Seattle area.

As a result of this "megapolitan", land is being bought in Pinal County and other fringe areas at a record pace. More than 600 land deals worth at least $1 billion closed on the fringes of metro Phoenix and Pinal County last year, according to local housing analyst RL Brown. Brown says 40 percent of all new Valley homes could be in Pinal County in the near future! More...

Could it be time for you to look into buying and holding land along this corridor of growth?

$900,000,000 CityScape Development Proposal For Downtown Phoenix Arizona

RED Development LLC and Barron Collier Co. filed its development plan with the city of Phoenix for the massive CityScape project in downtown Phoenix at Central Ave., between Washington and Jefferson streets.

The project is planned for four buildings nearly 40 stories high with 800,000 square feet of office space, 1,200 residential units, 170,000 square feet of retail, and 150 hotel rooms. The project would take five years to complete.

The goal of the project is "to create a new, cohesive urban core for the city that provides day and night activities and uses for residents, tourists and conventioneers," said RED Development Principal Michael Ebert.

The first phase of the CityScape project could begin later this year. More...

Phoenix Realty Executives Ranked Number One!

A quick Saturday post about our company, Realty Executives...

From John Foltz, President and Broker of all of the Greater Phoenix Realty Executives offices:

"The prestigious 2006 Real Trends report has been published. Based on total 2005 sales volume, Realty Executives of Phoenix is ranked #1 in Arizona and #8 across the entire United States.

Realty Executives of Phoenix has been #1 in Arizona every year for the past 34 years.

No other Arizona real estate company has ever ranked in the top ten nationally. The results are conclusive, and numbers don't lie.

Realty Executives will continue to foster and support the growth of individual entrepreneurial Executive REALTORS®. The quality and productivity of the Executives is truly what makes Realty Executives of Phoenix compellingly different."


Main Office:
Realty Executives
4427 N. 36th Street
Suite #200
Phoenix, AZ. 85018
Office: 602-957-0444
Fax: 602-224-1414

Our Branch:
Realty Executives
Paradise Valley Office
11211 N. Tatum Blvd.
Suite #130
Paradise Valley, AZ. 85028


Congratulations to the administrative team and all of our peers at Realty Executives!

I have been with this company since 1994 when I worked as an unlicensed apprentice with Jim Todd (formally a top producer at the Realty Executives' PV Office). I moved on to become a full associate with Realty Executives in 1995 and have never looked back!

If you are an experienced agent and would like more information on becoming an EXECUTIVE, or just have some questions about our company, don't hesitate to call on me personally at (602) 404-9700, email me at Matt@PhoenixHomes.com or visit our main website PhoenixHomes.com to learn more about our team and the company we love, Realty Executives.

Sincerely,

Matt Pellerin, REALTOR

More Than 256,000 Jobs Will Be Added To Arizona

Jobs will continue to be in demand in Arizona during the next two years, with a slight cooling in 2007, according to a report released by the Arizona Department of Economic Security.

"Each of the 11 major industry groups are forecast to add jobs, and rates of growth are generally expected to improve on the healthy rates of 2005," according to the report.

Arizona's economy is expected to add 256,000 non-farm jobs for the 2006-07 period. Arizona is continuing to see job growth due to the influx of new residents.

Arizona's unemployment rate of 4.4 percent means that employers are having a hard time finding enough workers.

The influx of new residents and jobs will help with the soft landing scenario for our residential real estate market. More...

Second Homes 40% Of U.S. Market

Four of every 10 sales nationwide last year were second homes, either investments or vacation properties, according to a report released by the National Association of Realtors.

Nearly 28% of homes bought last year were investment properties, an an additional 12% were vacation homes.

Most of the buyers were baby boomers in their top earning years, looking toward retirement and hoping to build wealth or find a more desirable place to live.

Sales of investment properties is expected to decline, but sales of vacation homes are expected to stay strong for years, because the youngest baby boomers are only 42 this year.

The typical vacation home buyer last year was 52 years old, earning $83,800 a year, and purchased a property that was about 200 miles from the primary residence. The median vacation home price was $204,100. More...

Kierland Commons Phase Two

This post has been moved to:
Kierland Commons Phase Two

Discover North Scottsdale Arizona at our main Scottsdale site.

Chinese Builders Looking At Verrado

Representatives from Chinese development companies recently toured Verrado, the 8,800-acre residential community at the base of the White Tank Mountains in Buckeye, to learn about suburban community building.

The builders are preparing to develop land on the outskirts of Beijing. "Verrado encompasses an entire concept that the Chinese will be using in the future to create cities. Full service cities in the middle of areas where there's no development today," said John Gallagher, founder of Pinnacle Consulting Group, the Valley-based company that helped bring the Beijing group to the United States.

"They have communities that are conceptually like Verrado, but certainly not at the sophistication level of this community," Gallagher said. "They're going to take some of the concepts from here. It's just going to be adjusted to fit the Chinese style." More...

Large Firm Moving To Scottsdale Arizona

Scottsdale has snagged the corporate headquarters for one of Washington state's largest private firms. Services Group of America, parent company of the food distributor Food Services of America, will relocate from Seattle to Scottsdale.

Forbes magazine ranked the company 108 on its 2005 list of largest privately held U.S. firms. The company had $2.5 billion in sales in 2004 and has 4,000 employees nationwide, according to Forbes.

About 90 people from the Seattle headquarters will relocate to Scottsdale. The move to Arizona was to avoid Washington's estate tax, which ranges from 10 to 19 percent on estates valued at more than $2 million, according to a statement released by the company.

The company's founder and CEO has a $5 million home in Paradise Valley.

This shows that the Valley is still a very attractive place to have a business when compared to other areas of the country. More...

Downtown Scottsdale Condos

The Scottsdale condo market is booming, with construction cranes and the steel skeletons of what will soon become luxury dwellings looming against the skyline.

Investors and developers have poured more than $1.6 billion into every segment of the downtown area--- retail, employment, cultural, hotel and residential.

Of the 2,600 new, planned or built condo units, 2,100 are situated in downtown, and those units are selling at average prices of more than $500,000, city records show. Of the 750 condos at Optima, 500 have already been sold!

The buyers of these condo units "are people that have been living in gated communities who are excited about a lifestyle that is more engaging than what is afforded in a gated community," said John Little Sr., executive director of The Downtown Group, the city's liaison to downtown businesses. More...

Home Builder Says Market's Good

Fulton Homes president Doug Fulton's take on the Central Arizona real estate market...

When asked how he sees the market now, Fulton says that this is just a small correction that needed to happen. The velocity of sales and appreciation was not sustainable and we are now getting back to a normal market.

Regarding home prices being too high, Fulton states that you need to look at Colorado, California, Las Vegas and New Mexico. For our economic health, jobs, the net in migration of people, Fulton says we were simply undervalued and that we have caught up to where we needed to be.

He does not see prices correcting more than 10 percent from where we are today. More...