Scottsdale AZ Real Estate | Bill Duffey | REMAX | Carefree, Cave Creek, Paradise Valley and North Phoenix - Homes, Land and Commercial Properties

RE/MAX Excalibur REALTOR®Bill Duffey, Scottsdale AZ 480-585-2904

Scottsdale / Carefree / Desert Mountain / Paradise Valley / Cave Creek / North Phoenix

Scottsdale area MONTHLY NEWSLETTER

September 2007

from Bill Duffey   

RE/MAX Excalibur    480- 585- 2904  

Hope you all had a wonderful summer.

I finally took some time to vacation in Montana.  As many of you know, I was born and raised in Montana.  Although it was a refreshing visit, the forest fires in Montana caused a lot of smoke and closed many roads.  So much for vacations, now, it is down to work – for another year.

So, how did this national market develop?  In an nutshell, Wall Street entered the market and spread the risk of mortgage loans to a large number of investors.  That caused Banks (and other finance companies) to move their risk to the market and they started lending more.  Low interest rates and lower credit requirements caused a rush to buy inventory (not large enough to accommodate the increased demand) - prices rose and builders went on a building binge, while demanding small deposits on their new builds.  Now, many builders are in trouble, having over-built (many of the small deposit Buyers are now canceling contracts) and credit-questionable/low interest rate Buyers are dumping their properties.  Now, we have a glut of properties on the market and fewer credit-worthy Buyers.  Lately, we have seen previously "approved" loans being pulled out from under Buyers, at Closing.  A disturbing trend, for sure.

 Where is our local market and what lies ahead?  Well, we will know before the end of the year if a positive trend is going to re-establish in the Scottsdale area.  The sky is not falling and the property values in our area are being maintained.  The good news is that with the low dollar exchange rates, foreign capital is definitely headed our way.  While in Montana, I chatted with my colleges there and they are seeing the same trend.   Lots of foreign investors!

 As the capital markets straighten out, our market should improve - so, now is the time to tell your friends to buy in the area.  This is the best market I have seen for Buyers in a number of years - at higher prices, for sure, but still a value – going forward.  Remember, we have the 2nd best job growth numbers in the country!  That is a key positive indicator for our local market and the one I rely upon the most.

 Hope you enjoy this month’s newsletter!  Let me know what you think, or if you have suggestions about future issues. 

Coming up - I have several parcels of land.  Two acres (on the top of a ridge) in Carefree circa $650k, two 10 acre parcels at $1.25M each  (these have one split left), 4 acres circa $600k (off of Dynamite) and a couple of homes that have not listed, yet (ranging from $1M to $2M).    ....just give me a call.

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Arizona job growth No. 2 in nation

Ryan Randazzo
The Arizona Republic
Aug. 16, 2007 04:43 PM

Arizona job growth slowed in July with the rest of the nation, but remains among the top growth economies, according to a Thursday report from the Department of Economic Security.

The state lost fewer than expected jobs for the month to land at 3.7 percent unemployment, compared with a 4.6 percent national rate. But the nonfarm rate of growth slowed to 2.8 percent for the year, compared with a rapid 5.3 percent growth rate at the same time a year ago.

How does job growth compare with the rest of the nation?

The national average growth rate as of June was 1.1 percent. Arizona is No. 2 behind Utah, and followed by Wyoming, South Dakota and Louisiana.

Where did Arizona's major industries increase?

Transportation and utilities added 1,800 workers during the month, followed by construction's 900 new workers. Natural resources and mining picked up 300 employees, and information companies put 100 more people on their payrolls.

Any surprises there?

The construction industry reversed a four-month down trend amid the housing-industry havoc. "The picture here in Arizona is a heck of a lot better than other states," said Don Wehbey, the department's senior economist.

Losses?

Leisure and hospitality services cut 6,300 jobs, representing the third month of seasonal declines. Professional and business services declined by 500, and government was down 13,100, mostly because of educators out of work for the summer.

************************************ Listing Data

********************  Median Price Data

********************  Average New Listing Price/Month

  NOTE:  I have another one in this area at $649,900 (two acres on the top of a ridge - great views)...will list at the end of the month.  Soon to come, 4 acres off of Dynamite (circa $600,000).  Have several estate homes that will list in this general area for $1m-$2M.  Call me!

**************************  Scottsdale Data Only

  We are number one!

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A BUYER’S MARKET

 The Phoenix residential real estate market has currently become a “BUYER’S MARKET”. 

Below is the supply and demand evidence that supports the introductory BUYER’S MARKET sentence.

 Supply

The reality of today’s market is that supply is at a record level:

Resale listings are at a RECORD level.

New Home specs are at a RECORD level.

 Demand

The reality of today’s market is that demand has fallen 40% from last year to a level below the demand level in 2003.

Time-on-market

The reality of today’s market is that time-on-market is increasing monthly.  Note that as of October 2006, this measurement has now reached a record high.

 Sales Price

The median resale sales price as reported by ARMLS has shown a slight raise for three of the last five months, but it has declined in the past two months.

 What does the future hold?

 We believe that the pattern which is emerging in the new home market is an indication of where the real estate market as a whole is headed. 

 Existing and Emerging Price Pattern in the New Home Market

Following are the events which have lead up to the current New Homes Motivated Seller market (BUYER’S MARKET). 

1.      Spec inventory level began a significant acceleration in October 2005 (400+ per month).

2.      Spec inventory level reached the bottom end of the normal range in November 2005 (1752).

3.      Spec inventory level reached the middle of the normal range in December 2005 (2218).

4.      Spec inventory level set a new record in January 2006 (2451).

5.      Spec level has continued to grow (4753 – end of October).

 As the spec count began to approach a normal level, builders began offering small incentives, then came larger incentives and increased Realtor® commissions.  Over the last few months some incentives has grown to as large as $89,000.  In the last month we have the seen the beginning of a shift from the open-end incentives to actual price reduction.  Some of these spec price reductions have been as large as $100,000.  The number of builders making large price reductions seems to be spreading.

  Impact on Resale Market

A logical progression of these price reduction leads from the new home builders, to investors holding houses in new home subdivisions, to the investors in resale homes, and finally to the individual home owner.  How large and the exact timing of the impact on pricing in these market segments is uncertain.

 *Courtesy of Ultimate New Homes Newsletter September 2007

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**************  Foreign Investment in the USA

*****************************  More Real Estate News *********

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Pending Housing Sales Rise - Is The Slump Over?

By Blanche Evans, Realty Times Columnist

June is a pivotal month for housing sales. Deluged with bad news that has already been released about June's performance, will anyone give credence to a rise in month-to-month pending home sales?

Pending sales of existing homes rose 5 percent in June compared with May, found the National Association of Realtors in its monthly pending sales index. That's the largest monthly gain in more than three years. Better yet, increases in pending sales were reported across the country, said the trade organization.

But the news contradicts the other news announced by the NAR, only a week before - that existing home sales fell for the fourth straight month in June. The 3.8 percent drop was the slowest pace in four and a half years, and altered the seasonally adjusted sales rate downward to about 5.75 million units.

In another apparent contradiction, the median home price in June was up in June, by .3 percent. That's a 3.3 percent increase in home prices over May 2006.

So if people weren't closing as many homes in June, why did they sign a greater number of contracts, which is what pending sales represent?

The reason is sales were already trending upward, that's why. Home sales are homes that have closed. Pending sales are those that have been put under contract, with closings set the following month or so. Nationally, the supply of unsold homes on hand in June dropped 4.2 percent to an 8.8-month supply. That's still high, but that's way down from the 15-year high set in May.

Is it time to uncork the champagne?

Cautiously optimistic, Lawrence Yun, NAR's senior economist points out that the pending sales index while up, still remains 8.6 percent below year-ago levels.

"However, it is too early to say if home sales have already passed bottom," Yun explains. "Still, major declines in home sales are likely to have occurred already and further declines, if any, are likely to be modest given the accumulating pent-up demand."

June is typically the last big month for families with school-age children to change homes, so they can be settled in time for school to start in August. Families with children under the age of 18 account for 48 percent of homebuyers, says the NAR. For the first time in 2006, families with children are no longer the majority homebuying demographic. Singles, single parents, couples and co-residents without children are the majority of homebuyers today.

Copyright © 2007 Realty Times. All rights reserved. 8/2/07  Used by permission.

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Daily Real Estate News  |  August 2, 2007

Home Values for the Top 20 Markets
The annual growth rate in prices of existing single family homes across the United States continued to decline for the 18th consecutive month in May, according to the Standard & Poor’s/Case-Shiller Home Price Index.

Overall, the top 20 cities in the index declined 2.8 percent year-over-year, although five of the cities showed increases.

Cities measured by the index where values have increased in the 12 months are Atlanta, Charlotte, Dallas, Portland, and Seattle. Detroit continues to lead the metro areas in growth rate declines, down 11.1 percent from a year ago.

Here are the top 20 metropolitan areas and the percent of change in their real estate values over the last year:

• Atlanta: 1.7 percent
• Boston: -4.3 percent
• Charlotte: 7 percent
• Chicago: -0.6 percent
• Cleveland: -2.8 percent
• Dallas: 1.8 percent
• Denver: -1.4 percent
• Detroit: -11.1 percent
• Las Vegas: -4.1 percent
• Los Angeles: -3.3 percent
• Miami: -3.3 percent
• Minneapolis: -3.5 percent
• New York: -2.3 percent
• Phoenix: -5.5 percent
• Portland: 5.7 percent
• San Diego: -7 percent
• San Francisco: -3.4 percent
• Seattle: 9.1 percent
• Tampa: -6.7 percent
• Washington, D.C.: -6.3 percent

— REALTOR® Magazine Online

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COMMERCIAL REAL ESTATE INVESTMENT  - AT RECORD PACE WITH IMPROVING FUNDAMENTALS

The commercial real estate markets are continuing to grow with record investment, with appetite for office properties at historically high levels and fundamentals improving in almost all markets, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of REALTORS®.

In many markets, pent-up demand for new space is adding new supply, but there is a lag effect when it comes to filling older space vacated by tenants on the move. This phenomenon is particularly noticeable in the office and industrial sectors in several markets. In the multi-family sector, one very noticeable trend seen this year has been the reverse condo conversion. In 2003 with tight housing markets, several multi-family rental buildings/complexes were purchased and converted into condominiums. In 2005 this trend accounted for 30% of all multi-family acquisitions. This year we have seen several reverse condo conversions, where newly built condo buildings are now be marketed as "rentals."

The NAR forecast for five major commercial sectors includes analysis of quarterly data for various tracked metro areas. The sectors include the office, industrial, retail and multifamily markets. Metro data were provided by Torto Wheaton Research and Real Capital Analytics.

Check out the latest report at: http://www.realtor.org/Research.nsf/files/CREOJune2007Sum.pdf/$File/CREOJune2007Sum.pdf

Investment in the Office sector at a record pace, with fundamentals improving...

With a sales transaction volume of over $157 billion in the first four months of 2007, the year is staring out with a bang. Over 60% of this transaction volume is from trades within the office sector. In April alone over $14 billion worth of former the Equity Office Properties portfolio was spun off by the Blackstone Group.

The $157 billion transaction volume is significant, when compared to previous years. In all of 2006, $306.8 billion worth of real estate traded hands and $267.6 in 2005 and the $150 billion that traded hands in 2004. An every increasing sales volume goes hand-in-hand with rising per square foot prices and falling cap rates when examined over the last few years.

NAR FORECAST: The flow of capital (both equity and debt) will continue to be strong throughout 2007. Large portfolio transactions and REIT privatizations could make 2007 a major investment transaction year. Concerns by regulators about risky levels of lending concentrations in commercial real estate by some banks, could have some impact on capital flow, but should not deter large institutional inventors, investment banks and foreign investors from seeking price appreciation and income-streams from commercial real estate investments.

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Daily Real Estate News  |  August 13, 2007

Buy Retirement Home Now, Move in Later
With prices in many areas at a low ebb, it might make good financial sense for Baby Boomers to buy their retirement homes now, even if they're still years away from actually moving. They can find renters who will pay the bills until they're ready to live there.

Here’s some advice for people who are considering this strategy:

• Shop carefully. It's best to buy a home that can be rented for a rate that, after tax considerations, will cover the mortgage, real estate taxes, and insurance.

• Study up on housing trends. Ask the local or state planning department for demographic and economic data. The information can reveal facts that will influence whether or not to buy. For example, big companies going out of business or military base closings can be bad news.

• Don’t forget maintenance. Consider who’ll take care of the house in the owner’s absence. Property managers charge 6 percent to 15 percent of the monthly rent. Family members may be willing to do the job for free, but they could be ill equipped to do the job if the don't have any experience.

• Consider financing. Boomers with sufficient equity in their current homes can tap it to either buy their retirement home outright or secure a much lower mortgage rate compared with a loan at the rate often offered to buyers of investment property.

Source: The Washington Post, Belly L. Kass, Esq. (08/11/07)

 *********************    Terry Goddard Warns of Threatening Email Scam 

(Phoenix, Ariz. - July 11, 2007)  Attorney General Terry Goddard is joining the Yavapai County Sheriff’s Office in warning Arizona residents of an email scam circulating in the state that involves a threat to kill.  

The sender of the email, with the subject line “get back to me immediately,” claims to have been contracted to kill the recipient of the email.  The email indicates the sender has a recorded conversation with the person who ordered the killing. The email also claims possession of photographs allegedly showing some sort of inappropriate behavior by the recipient.  

The sender demands a payment of thousands of dollars immediately to retrieve the tape recording and photos and cancel the “hit.” The recipient is warned to not contact law enforcement or leave their house after 7:30 p.m. 

This is a scam!  It is being done to steal money from innocent people. If you receive an email like this, please notify local law enforcement or contact the Attorney General’s Office.   

“The threat of violence is a new tactic,” Goddard said.  “We have not seen one before that threatens physical harm, but the goal of the scammer to get money is familiar. It is important that Arizona residents understand this is fraudulent and not fall victim to it.” 

If you believe you have been a victim of fraud, please contact the Attorney General’s Office in Phoenix at 602.542.5763; in Tucson at 520.628.6504; or outside the Phoenix and Tucson metro areas at 1.800.352.8431. To file a complaint in person, the Attorney General’s Office has 35 satellite offices throughout Arizona with volunteers a vailable to help. Locations and hours are posted on the Attorney General’s Web site at www.azag.gov.

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Scottsdale Airpark is One of the Premier Business Locations in the West 

By Scottsdale Mayor Mary Manrose

In many respects, the city of Scottsdale and the businesses that make up the Scottsdale Airpark have the same long-term goal. We're all striving for quality and sustainability.

Look around our city and you'll see examples of quality everywhere. We have built an excellent community, with amazing public amenities, first-class services, a thriving downtown, a world renowned resort industry, a balanced economy and a commitment to preserve a third of our land area as permanent open space.

Look around the Airpark. Its phenomenal growth and the quality and diversity of its businesses are truly remarkable. It is one of the premier business locations in the West. The quality is here, but how do we sustain and build on it? How do we assure that our city and the businesses comprising our largest employment center can continue to thrive?

A bit of history will help frame the future. It has been more than two decades since a study of the city's economy told us that Scottsdale should focus on a much more diverse economic base, while continuing to build on the strength of its outstanding tourism industry. Scottsdale's civic and business leaders took the advice to heart.

While tourism continues to be a critical component of the economy, Scottsdale's overall business base has changed dramatically. Today's Airpark is a testament to that change. The number of jobs in the Airpark topped the 50,000 mark last year (an increase of 18,000 jobs since 2000) and they represent a remarkable range of products and services. The Airpark has played a critical role in making Scottsdale a "job exporter" to the rest of the region. More people come to Scottsdale to work than leave the city for jobs elsewhere. Scottsdale has become a stronger community by design, not by accident.

The only way to sustain this strong economic base is through a continued commitment to quality and a strong partnership between the public and private sector.

While the city continues to grow, we have put a great deal of effort into the revitalization of our downtown and southern area. We created a one-of-a-kind partnership with Arizona State University and launched SkySong, where the first building is nearing completion at McDowell and Scottsdale roads. We have removed barriers to revitalization in other areas. The results have been incredible. Since 2003, nearly $3 billion has been invested or is committed to planned projects in the downtown and southern area with 80% of the investment coming from the private sector.

Major revitalization is now beginning to touch the older areas of the Airpark, even as new development occurs around the Loop 101 corridor. I am proud that Scottsdale was able to retain Dial's corporate headquarters, set to relocate in the extraordinary One Scottsdale development now underway at Scottsdale Road and the 101. A new 1.2 million-square-foot mixed use development, Scottsdale Crossing, is planned for the site of Dial's current research facility.

More revitalization is inevitable and growth in and around the Airpark is bound to impact the area too. That's why current transportation projects and major new planning efforts will be critical to its future.

On the transportation front, the city's five-year plan for capital improvements includes more than $221 million in street and transportation improvements. We continue to invest in smarter streets, with our 286 traffic signals (and 45 traffic cameras) tied to the city's computerized Traffic Management Center.

Regional tax dollars this fall will fund the construction of carpool lanes on the Loop 101 from the Airpark area south to its link with the 202. And Scottsdale continues to work at the regional level to accelerate the design of additional general purpose lanes for the 101.

Looking to the future, the city is in the midst of a Transportation Master Plan, a comprehensive study of our transportation network, including streets, transit options, trails and paths. Because access in and around the Airpark is a major issue, the city has an Airpark Circulation Study underway, and its results will be incorporated into the Transportation Master Plan.

Finally, the city is poised this fall to begin a new Community Area Plan for the Airpark, one of six area planning efforts that will lead to an update of the Scottsdale General Plan in 2011. The area plan will consider existing and future land uses and the Airpark's connections to the Scottsdale Airport.

Scottsdale will be working with businesses and organizations in the Airpark to make sure business and property owners, employees and neighbors have the chance to provide input on the Community Area Plan.

Management expert Peter Drucker once observed the "The best way to predict the future is to create it." That's exactly what Scottsdale is doing. As your Mayor I am committed to quality and sustainability. I urge you to get involved as we continue to create the future of our great city.

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Home prices in Valley off 2.7% from year ago - Other hot areas hit harder

Catherine Reagor
The Arizona Republic
Aug. 20, 2007 12:00 AM

Home prices in metropolitan Phoenix slipped 2.7 percent in the past year, but the Valley has lost less ground in appreciation than other hot housing markets that led the nation in run-ups two years ago.

In 2005, metro Phoenix home prices jumped 55 percent, according to the National Association of Realtors. That was the biggest increase in the country. Other price leaders were Las Vegas and several Florida cities.

In the second quarter, prices in Las Vegas dipped 3.6 percent vs. a year earlier. In Florida, Daytona home prices slid 8.3 percent. In Palm Bay, the drop was 15 percent. Orlando fared better with a 2.4 percent drop.

The dip in local home prices is Valley-wide, with some parts of the area faring better than others.

Speculators flocked to Las Vegas, metro Phoenix and Florida cities because of their growth and inexpensive homes. Now, those who didn't cash out are driving prices down by creating a glut of homes for sale or letting them fall into foreclosure.

***********************************  Misc.

CLEAN THAT SPILL!

If there are solids, scrape them up and blot with lots of clean towels. Paper towels work well. One key pointer: Do not rub! If you're thinking of using spot remover, wait until you have thoroughly blotted the area. You probably know that club soda is an instant spot remover. Pour a little on the spot, wait a few seconds, and blot the area.

Regards,

William Duffey

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