Industrial Investment Sites Carry Premium Price Tags

Valley industrial space is in such demand that commercial brokers are negotiating deals for what they say are premium prices.

Recent Cushman & Wakefield commercial brokerage data shows the Phoenix industrial market continuing to expand. The region has seen nearly 2.3 million square feet directly absorbed as of mid-year 2006.

Cushman & Wakefield reports that manufacturing space continues to be the dominant product type, followed by high tech. The overall vacancy rate remains low at 5.9 percent, compared with 6.8 percent at mid-year 2005. More...

This shows that the Valley is still creating jobs and businesses are looking to expand or relocate operations here--- good news for our real estate market!

Job Growth Headed To Peak Levels

Arizona employment is expected to grow by 4.6 percent this year, which would make 2006 the second-best year for job growth since 1998, according to the Blue Chip Economic Outlook.

Through the first six months of this year, nonfarm jobs were up by 5.2 percent. The outlook is not quite as positive for the real estate sector. Second quarter figures from the National Association of Realtors rated Arizona's 26.9 percent drop in single-family residential sales the steepest of any state. Although that represents a sharp drop from 2005, the actual level of activity tracks very closely to what should be expected based on historical performance of the Arizona economy, said Lee McPheters, contributing editor.

"This year will most likely see sales of new homes and resales revert to trend levels, down sharply compared to recent years but not a collapse in the market when viewed over the longer term," he said. More...

Cave Creek Arizona - New Character?

Condos and commercial projects changing character of Cave Creek...

Cave Creek is experiencing a surge in upscale residential condominiums, commercial condos and office building projects flanking the town core and gateways to the town. In fact, Cave Creek real estate sales have been up considerably in the past few years which has residents wondering if they'll lose that small desert town feel.

The town council recently approved a development agreement with Joel Broder for his Village at Surry Hills condo project.

They also approved Javelina Crossing, a three office building project totaling 17,200 square feet.

Also approved was Parkway Office Building at Cave Creek and school House Road, and Sonoran Villas, a 15-unit condo project located at the former site of the Andora Crossing Bed and Breakfast Inn. More...

Builders Work To Mend Fences With Agents

Home builders are spending big bucks and dishing out heaping helpings of hospitality to real estate agents that they spurned during last years housing boom.

Large commissions and incentives are back as homebuilders try to get help moving their inventory. Last year, during the boom, many homebuilders cut commissions, started paying a flat fee, or eliminated agent commissions all together. Yet some agents are still steering clear of new subdivisions unless clients ask to see the homes.

Homebuilder events are on the rise in an attempt by builders to repair the relationship with Realtors.

"It's not a good feeling to feel like you are expendable," said Brett Barry of Realty Executives. "We don't get a lot of respect anyway, and the builder community, at that time, didn't show us any respect. They said, 'We really don't need you'. Maybe the builders don't feel they are in a crisis, but right now they need every buyer they can get." More...

Boo home builders... It's not like we are asking for these HUGE bonuses and commissions now. What would be nice is if all home builders would set the commission they are willing to pay and then leave it alone. Why offer double commission now and in some cases none at all when the market was white hot. It makes no sense to me at all.

I wrote an article about this very topic last year knowing full and well that they would come crawling back to us.

Well, it looks like I need to add a search feature to this blog. I can not for the life of me find the post where I talk about Trend Homes and how they stuck it to me partially through the process with one of my buyers.

Anyone else have an experience to share or a comment about this topic? Please feel free to leave it by clicking on the comments button below this post.

Sincerely,

Matt Pellerin

Local Title Company Is Looking To Grow

Despite the drop in Valley home sales, North American Title Company is looking to the future by taking an aggressive goal of growing its business by providing associates within the company ways to advance their careers. North American is looking for top quality escrow officers who share their vision of the customer comes first.

Spearheading this approach is industry icon Tricia Potter Powell, a 22-year industry veteran who was wooed out of retirement by North American a month ago, she said, because the company "has the right attitude". Potter Powell is a member of the Financial Women International Hall of Fame.

"Their vision intrigued me," said Potter Powell. "When competitors were taking advantage of the boom, North American took a different approach. Rather than opening branches on every corner, (the company) chose to concentrate on existing offices and customers." During this busy time, clients say North American put them first.

North American is looking at opening additional offices in 2007 and 2008, and expanding their coverage outside of Maricopa County.

Article supplied by North American Title.

The Rise Of The Million-Dollar Condos

Scottsdale Waterfront Residences condo development
(at Scottsdale and Camelback Roads)

The new trend in downtown Scottsdale of million dollar condos seems to be working at the Scottsdale Waterfront, where only five units remain unsold in the luxury towers. Three of them are priced between $1.6 million and $1.9 million, while two penthouses are going for at least $3.25 million.

At least eight other nearby condo developments are fetching prices in the millions for downtown living.

"You would think it would be a lot of out-of-town buyers used to high-rises but there's a lot of people moving from Desert Mountain (in north Scottsdale) and Paradise Valley, and they're looking to downgrade their lifestyle," said Marty Stephens, president of the Scottsdale Area Association of Realtors.

David Roderique, Scottsdale's general manager of economic vitality, said that Scottsdale has close to 3,000 units that are in some stage of development in downtown. More...

One Scottsdale Asks City For Bonds To Grow Area

One Scottsdale, a $1.5 billion DMB Associates Scottsdale real estate project (northeast of Scottsdale Road and Loop 101), is asking the city of Scottsdale to amend its development standards to allow for taller buildings and the ability to float $50 million in bonds for infrastructure improvements to widen Scottsdale Road and Thompson Peak Parkway, build a freeway frontage road, and improve drainage, water and sewer. Current approved heights for the development is 60 feet, and DMB wants to go up to 90 feet.

When completed, One Scottsdale will have 1.8 million square feet of world-calss retail shops, commercial office space, restaurants, and a total of 1,100 residential condominiums, penthouses and urban estates. Two to three high-end resort boutique-class hotels are also planned. More...

Census: Maricopa Added 52K Homes In One Year

More homes were built in Maricopa County than in any other county in the nation in the 12 months which ended June 30, 2005. An estimated 52,000 homes were built in Maricopa County during that time, soundly beating Clark County, Nev. who had 35,000 homes built during that same period.

Pinal County added 10,111 homes during that time frame, making it the third fastest growing area in the country. Samual Colon, a demographer with the Department of Economic Security, said Pinal County growth is being fueled by spillover from Maricopa and Pima counties. As housing becomes more expensive near Phoenix and Tucson,home buyers are increasingly choosing to live further away.

"If you can get a bigger home for less... outside Maricopa County and you still don't have to drive that far, that's a no-brainer," he said. Statewide, 86,510 homes were built during that 12-month period, the fifth largest increase in the nation. More...

Ahwatukee Foothills, Nearly $400,000 Median Price

Median home prices in Ahwatukee Foothills just keep climbing and are about to break the $400,000 mark. Median prices in Ahwatukee have risen about 80 percent in the last two years, and sales have been hurt by the run-up.

There are also currently 17,550 homes on the market in the Southeast Valley as of July, according to the Arizona Regional MLS. The number of single-family Ahwatukee homes sold through July was 894, compared with 1,220 at the same time last year.

One area that is doing well is the luxury home market, those priced at about $700,000 and above. "It's amazing," Realtor Sharon Barthel said. "I think it's because no matter what the market is like, those people on the higher end don't care what the interest rate is." More...

Mortgage Rates Down For Fourth Week In A Row

Rates on 30-year mortgages fell for a fourth consecutive week as a slowing economy eased concerns about inflation.

Mortgage giant Freddie Mac said Thursday that 30-year, fixed rate mortgages fell to 6.52 percent, down from 6.55 percent last week. That's the lowest rate since April 13th. Rates on a 15-year, fixed rate were at 6.2 percent, no change from the week before.

"A year ago, 30-year mortgages averages 5.80 percent and 15-year mortgages stood at 5.40 percent. Long-term rates continue to relax as economic reports support a picture of a weakening housing sector and a slower growing economy," said Frank Norhaft, chief economist at Freddie Mac. More...

Great news for a slowing housing economy!

Trend In Luxury Homes Goes West

In recent years, the West Valley has become a hot spot for luxury, custom-built mansions that resemble those in the Northeast Valley. One main lure is the affordable land, but there is also the open space, large lots, intimate mountain views and close proximity to the state's second-largest lake, Lake Pleasant.

"The Lake Pleasant corridor is becoming the next North Scottsdale, just with a different flavor," said Bryan Cromer, a project manager for Alexander Homes. "It's the Valley's next luxury-home boom area."

Alexander Homes is building Montana de Oro Ranch, a 24-lot, gated community near Pinnacle Peak Road and 93rd Ave. Some homes in the community will have price tags over $1 million. They are also building at Casa de Sunrise, a 29-lot luxury gated community at 81st Ave. and Pinnacle Peak Road.

In addition to small communities like Montana de Oro Ranch and Casa de Sunrise, buyers are building their custom-built dream homes in master-planned developments like Sonoran Mountain Ranch, West Wing Mountain and Verrado. More...

Developer Seeks Control Of Tempe Flour Mill Project

A winery and an Italian-style bakery could join boutiques, non-chain stores and mid-rise condos by the Hayden Flour Mill site in Tempe. Avenue Communities tonight will seek Tempe's approval of an agreement that would transfer the flour mill site from MCW Holdings to Avenue Communities.

The land has the potential to be a high-profile development, said Ken Losch, a principal for Avenue Communities. "The mill site is the most interesting property in the whole Valley," he said.

The prospective winery would be with Signorello Vineyards in Napa Valley.

Avenue Communities is also developing the Centerpoint Condo project in Tempe containing 30-story towers. More...

Home Sales Slowdown Seen Spreading

The slowdown in the once sizzling housing market is spreading, with 28 states and the District of Columbia reporting spring sales declines, led by big drops in former boom areas of Arizona (down almost 27 percent), Florida and California.

Nationally, sales were down 7 percent from April through June compared with the same period in 2005, according to the report released by the National Association of Realtors.

The report showed the biggest declines occurred in states that were enjoying red-hot sales during the five-year housing boom. In all, 20 states showed sales increases, led by Alaska, Arkansas, Texas, North Carolina and Vermont.

In a separate survey of price changes in 151 metropolitan areas, the Realtors reported that 26 metro areas experienced outright price declines while 37 areas were still enjoying double-digit price increases. More...

Builder Enters Mass-Produced, Luxury Market

Nicholas Homes has branched out into the million dollar home market with its newest community, the Estates of Montelena in Queen Creek.

The development will have production homes starting at $575,000 for about 3,000 square feet, up to $774,000 for more than 5,500 square feet. Add upgrades and lot premiums and the prices are expected to exceed $1 million for some of the homes.

In the midst of a Valley-wide real estate cooldown, Jay Butler, director of the Arizona Real Estate center at ASU states that higher-end homes are usually less affected by a bumpy market. He said high-end housing is more flexible to waves in the overall market than its lower-priced competitors because builders have more leeway on price and buyers with that kind of cash aren't as concerned about rising mortgage rates. More...

Developers Snap Up Land Along 101

Since late 2004, developers have snapped up nearly 900 acres along the Auga Fria Loop 101 freeway, a sure sign that the transportation corridor is poised to become a major employment hub for the West Valley.

"For commercial development, the most successful properties are along the freeway or high-traffic corridors," said Justin Miller, a senior associate with Grubb & Ellis/BRE Commercial.

"You will start to see major employment campuses emerging." James Mason, economic development specialist for Peoria, said it's not only the growing number of residents in the West Valley that is driving demand for office space. Company executives are moving to upscale communities, such as Verrado in Buckeye and Vistancia in Peoria, and are looking for offices closer to home. More...

Look for this trend to continue in the West Valley.

Home Prices Dropped In July, But Sales Up From June

The median resale price of a Valley home fell to $264,900 last month, after climbing to a record $267,000. The number of July resales rose to 5,545, up from the 5,460 in June.

However, July's totals were the weakest since July 1999, when 5,240 resales were recorded. In July 2005, 10,200 resales were recorded.

For the first seven months of this year, there were 41,835 resales, compared with 68,235 during the same time frame last year.

The numbers were released by the Arizona Real Estate Center at ASU. More...

Council Pleased With Proposal For Lofts

Chandler City Council gave a thumbs up to an area plan that sets the stage for high-density lofts that would replace an eclectic mix of small businesses, dusty lots and older homes between Frye and Pecos Roads. The council is expected to vote on the plan Sept. 28th.

Now a daily gathering spot for day laborers, the strip of land could become Chandler's only cosmopolitan housing spot, placing up to 2,500 new residents among new shopping centers around the Santan Freeway and historic downtown stores, restaurants and city offices.

Mayor Boyd Dunn called the proposed area plan "an exciting possibility". He said city officials are ready for major changes in Chandler's core and have started talking about another redevelopment target--Chandler Blvd. between Arizona Avenue and McQueen Road. More...

Sticker Shock Kills Phoenix State Land Sale

No builder or investor was willing to pay the State Land Department's $150 million asking price for a 325-acre parcel of state land near the Loop 101 and Arizona 51 in the Desert Ridge market area. In the past few years, land in Desert Ridge sparked bidding wars as home prices and sales in the area soared.

In 2005, homebuilders went on a buying spree when a record $7.7 billion was spent on residential land across the Valley. But the market has changed dramatically since then. "The real estate market is in transition, and land sales have obviously slowed down," said Mark Winkleman, state land commissioner.

Real estate analysts say the housing market is headed back to 2004's level of sales and price increases. More...

As Demand Cools, Condos Revert Back To Rentals

Due to a softening of the housing market and the increased demand in the rental market, many condo conversion projects across the nation are converting condos back to rental units.

"There was a huge craze," said Larry Leitzman, a Tampa-based researcher with Grubb & Ellis. "Everybody was taking apartment buildings and converting them to condo's. A lot of them are reeling them back in and taking the apartments that didn't sell and converting them back to rentals," he added.

The article notes that Miami, Fort Lauderdale, Orlando, Las Vegas, San Diego and Phoenix as markets seeing conversions of condos back into rental units. Estimates are that between 25 percent and 40 percent of all condos being developed or converted in those markets are likely to be offered as rentals instead.

Condo conversions peaked in September 2004 when nearly 28,000 units were converted. Levels fell back to 3,354 units in June 2005, and experts see further softening in the number of condo conversions for the remainder of 2006 and 2007. More...

Foreclosures Up In The Valley

In July, the number of "Notices of Trustee Sales" recorded in the Valley climbed to 837, from June's total of 776. Notices are sent to homeowners with loans that were more than 3 months behind on their mortgage payments.

Tom Ruff of Phoenix-based data firm Information Market, which tracks foreclosures, said that by year-end trustees sales could be climbing by 100 a month.

The increase in the foreclosure numbers is being attributed to higher mortgage payments on many adjustable rate mortgages kicking in, putting the squeeze on homeowners who used these ARM's to purchase when the market was hot.

Tim Rocho, chief executive of Scottsdale-based Real Estate Fortune, said many of the homeowners in trouble are too highly leveraged to sell or refinance and get them out from under their debt. More...

Pinal Looks At The Road Ahead

County unveils 5-year plan to improve transportation...

Pinal County officials hope to alleviate some traffic congestion with a five-year plan to add miles of new paved roads and continue maintenance on the county's worn and rough roads.

The plan will cost about $24 million, with funding coming from the county's recently extended half-cent transportation sales tax. County officials stressed the capital improvement plan is part of an overall push with developers and state officials to improve Pinal County transportation.

ADOT is planning new freeways in the area, but they are at least ten years away. But improvements to existing two-lane state highways could begin in a few years. More...

The article lists the main transportation projects planned for Pinal County. And we all know that growth follows the transportation corridors!

Pinal County Cools

Pinal County's resale market continued to show signs of cooling during the second quarter of this year, with the median resale price dipping to $211,000, compared with $211,500 in the first quarter of 2006. The market peaked at $220,000 in the last quarter of 2005.

The information was released by the Arizona Real Estate Center at ASU. Sales volume inched upward by 6.3 percent in the second quarter 2006 to 1,180 homes, up from 1,100 in the first quarter.

The new home market in Pinal County has also cooled off, and builders are offering huge incentives to both buyers and Realtors to move the inventory. "Right now, if you want to live in Pinal County, it's economically better to look at new homes," said Jay Butler, director of the real estate center.

Colleen Bechtel, an associate broker with Keller Williams Legacy One, said resale home buyers are now typically making offers lower than the asking price and want the seller to pay some of the closing costs. More...

Scottsdale Condos Opening As Fever Dips

Scottsdale's condo market is showing signs of slowing just as the Hotel Valley Ho condo project is ready to complete its first condos.

"It's certainly not as strong as it was two years ago when people were signing up without even looking at anything," said Alyssa Wick Thomas, a sales agent for Russ Lyon Realty. "Now they're analyzing everything and crunching the numbers."

About half of the Valley Ho's 37 condos have sold. Some other projects in the first wave of what is expected to be 2,000 new downtown Scottsdale condos will welcome their first residents during the next few months, including Optima Camelview, Main Street Plaza and Scottsdale Waterfront Residences.

Many potential buyers put deposits down on condo units in 2005, but now as the developers are getting their public reports in hand, some buyers are cancelling. It is clear that many were just testing the waters.

Scottsdale's resale condo market has seen sales dip 18 percent from May to June. Valleywide, sales of existing condos were off 30 percent from May to June. More...

Condo Projects On Hold, Cancelled Nationwide

Nationwide, developers are nixing or delaying condominium projects as homes sales slow, construction costs soar and lenders start to balk at financing units that might not sell. What's making it worse is the glut of high-priced condos and too few people who can afford them.

In Las Vegas, projects nixed include high-profile developments such as Aqua Blue, a $600 million, 825-unit luxury condo-hotel resort that counted Michael Jordan as an investor; the $3 billion, 4,400-unit Las Ramblas, backed by George Clooney; and Ivan Las Vegas, a $700 million, 945-unit tower named after Donald Trump's ex-wife.

Other markets at risk include Boston, San Diego, Las Vegas, Seattle, Chicago, Orlando, Washington DC, Manhattan and South Florida. A big part of the problem is that many condo projects are priced high-end, in most part because developers paid high prices for the land, but most buyers cannot afford the prices.

"The sweet spot of the market is probably $250,000 to $700,000", said Philadelphia condo king Allan Domb. " That's what the majority of the population can afford. Many condos are priced higher. That's part of the problem." More...