| September 2007 News Articles | ||||||||||
| 09-04: SW Valley leads realty rebound, experts say, from the Arizona Republic, reports that many real estate experts believe that the southwest valley is an indicator of where the overall Valley real estate market is headed. Goodyear, Avondale and Buckeye are among 2007's 10 fastest growing suburbs in the U.S. "People are looking at the idea that the market will recover in three to five years, and what were once the hot areas will become hot areas again," said Jay Butler, director of Realty Studies at ASU. "So if you're an investor or whatever, you may move into some of these areas because they offer a sort of attractive play, not over the next year or two, but over the next four to five years," Butler added. Carl Giordano Sr. and his wife Phyllis of RE/MAX Achievers in Goodyear think the housing market is stabilizing. "Phyllis and I believe this is a good market," he said. "And what I mean by a good market is everything that needed to be weeded out is being weeded out.We're back to old real estate. You've got FHA. You've got VA, and you've got conventional (loans)." http://www.azcentral.com/business/articles/0904biz-swv-homesales0904.html 09-04: Rockefeller development near airport will be huge, from the Arizona Republic, reports that the Rockefeller Group is seeking to rezone 80-acres at the northwest corner of Queen Creek and Gilbert Roads for a large commercial and industrial complex, their first venture into Arizona. Plans filed with the city last week show a cluster of offices, stores, industrial warehouses and restaurants totaling nearly 1 million square feet. Chandler is excited to have new employment in the city. "This project will bring the type of high-paying jobs that are critical to our future," said Chandler Mayor Boyd Dunn. Dunn calls the Rockefeller proposal "a very significant project for Chandler." The layout creates a campus feel south of the municipal airport and puts a grand entrance on Queen Creek Road. The Rockefeller Group purchased the site last year for $21.4 million. http://www.azcentral.com/community/chandler/articles/0830cr-rockefeller0831.html 09-05: Loan firms urged to ward off mortgage defaults, from the Arizona Republic, reports that the Federal Reserve and other banking regulators issued special guidance Tuesday urging loan companies to work with borrowers in danger of defaulting on their home mortgages. The guidelines are not mandatory, but regulators expressed hope that the companies who collect payments on mortgages will heed the advice. The guidance said appropriate strategies to ward off defaults could include modifying the terms of the loan or deferring payments, converting adjustable rate loans into fixed rate mortgages, and extending the length of the loan. An estimated 2 million adjustable-rate mortgages are scheduled to reset by the end of 2008. "More and more consumers with subprime and hybrid mortgage products are facing the very real prospect of losing their homes through foreclosure as their payments reset and become unaffordable," said Sheila Blair, chairman of the FDIC. "It is vital that mortgage servicers work proactively with borrowers facing much higher payments as their interest rates reset," she added. http://www.azcentral.com/arizonarepublic/news/articles/0905Mortgage-Defaults0910.html 09-05: Renting rather than selling your home means making the leap to landlord, from the Arizona Republic, reports that many home sellers who cannot sell their home are considering renting it, thereby becoming a landlord. But before you take that leap, think carefully about the implications. "It's not as simple as just setting out a "for rent" sign, said Stephen Phillips, a Phoenix man who owns rentals in Phoenix and San Diego with his brother. "You need tolerance for calls at 10:30 at night." You need to have a good understanding of landlord-tenant laws, you should be familiar with credit and background checks for applicants, and you'd be wise to develop a network of handymen, plumbers, electricians and alike. You should also know how to keep good reports and have a cash reserve for unanticipated problems. There are tax benefits to renting also, but be aware that if you rent your primary residence before you own it for two years, you could eliminate your $250,000 tax exemption on primary residences. http://www.azcentral.com/arizonarepublic/business/articles/0904biz-HomeRental0905-ON.html 09-06: Pending home sales hit 6-year low, from MSNBC.com, reports that the National Association of Realtors index of pending home sales for existing homes fell 16.1 percent in July from a year ago and 12.2 percent from the prior month. The pending home sales index is designed to predict sales levels over the following two months. The July 2007 reading of 89.9 was the lowest since September 2001. "Numbers like this should put to rest the belief that we've reached the bottom" in the housing market, said Joel Naroff, chief economist at Commerce Bancorp Inc. "There's still a lot of pain that's ahead of us." The NAR attributes the decline to the fact that government sponsored mortgage giants Freddie Mac and Fannie Mae cannot package "jumbo" home loans above $417,000 into securities sold to investors. Some home purchases aren't closing because mortgage loans have been "falling through at the last moment," according to Lawrence Yun, senior economist for the NAR. http://www.msnbc.msn.com/id/20603560/ 09-06: Surviving the slump, from the Arizona Republic, reports that the housing slump is affecting many local companies who's business rely on a strong real estate market. The article cites two firms-- Landiscor Aerial Information and engineering firm Coe & Van Loo Consultants and the impact that the slowing market has had on their business. RL Brown, housing analyst and publisher, said Arizona companies need to face reality and try to make money in the current housing climate, because a repeat of 2004 and '05 isn't going to happen. "Businesses that made a lot of money because of the housing market a few years ago better expect to give some of it back this year," he said. Many in the industry hoped for the housing market to rebound in early 2007, or at least by midyear. Now, the forecast is for housing to stop slowing sometime in mid 2008. Metro Phoenix housing sales and building permits are off 20 to 30 percent from last year, which was down 30 percent from 2005, according to Brown. Home prices are down about 5 percent, and foreclosures have climbed 10-fold. A record 50,000 plus homes are on the market and its taking them an average of 92 days to sell. "Metro Phoenix's housing market has a tough year or two ahead of it," said Tim Sullivan of San Diego-based Sullivan Group Real Estate Advisors. Still, the key is not to panic, he added. Local economist Elliott Pollack said that Phoenix is still drawing people and has an unemployment rate lower than the national average. "The area's growth bodes well for its housing market to rebound more quickly than other parts of the country," Pollack said. http://www.azcentral.com/business/articles/0906survival0906.html http://www.msnbc.msn.com/id/20623088/ 09-07: Housing funk may cost 14,500 construction jobs, from the Arizona Republic, reports that the state's declining housing market could mean 14,500 job cuts in the construction industry through 2008, according to the Arizona Department of Economic Security. Based on building permits,national trends and unemployment claims already coming in from construction workers, that industry will be hardest hit, said Don Wehbey, DES senior economist. "That many (14,500) job drop-offs would really raise some eyebrows," said David Jones, president and CEO of the Arizona Contractors Association. "I think we're going to see some drop off. What I'm hearing is it should pick up in the second quarter of 2008. He said the construction industry faces a labor shortage in the long run to keep up with the state's growth. He pointed to a 2005 study by the Arizona Department of Commerce that suggested that the state will need an extra 40,000 construction workers in the next decade. 09-10: Ariz. posts increase in delinquent mortgages, from the Arizona Republic, reports that the number of delinquent mortgages rose half a percentage point during the second quarter of the year. Now, 3.55 percent of all home loans in Arizona are delinquent and could fall into foreclosure, according to the Mortgage Bankers Association.The delinquency rate on the state's subprime mortgages rose almost 2 percentage points, to 10.21 percent. Arizona's overall delinquency rate is lower than the national rate of 5.12 percent, but the state's increase in foreclosures helped boost the national foreclosure figure. In July, 806 homes were foreclosed on in the Valley, a five-year high. "What continues to drive the national numbers is what is happening in California, Florida, Nevada and Arizona," said mortgage banker economist Doug Duncan. "Were it not for increases in foreclosure starts in those four states, we would have seen a nationwide drop." http://www.azcentral.com/business/articles/0910deliquencies0910.html 09-10: D.C. economist: Arizona construction industry holding its own, from the Business Journal of Phoenix, reports that the construction industry in Arizona is holding up well despite the local and national housing slump, according to Ken Simonson, chief economist for Washington D.C. based Associated General Contractors of America. "The impression I've gotten is that the Arizona construction industry is holding up extremely well," Simonson said. "The commercial (development sector) is even benefiting from the slowdown in residential construction." Simonson noted that Arizona has posted the highest population growth numbers in the nation for the past two years, even with economic slowdowns, which bodes well for the state. "Construction spending, if anything, is gaining momentum," he added. http://phoenix.bizjournals.com/phoenix/stories/2007/09/03/daily37.html?surround=lfn 09-13: http://www.tribunehomefinder.com/story/97000 09-13: Recession could hit strained economy, from the Arizona Republic, reports that the U.S. economy, strained by an ailing housing market and credit woes, could log its worst performance in five years, forecasters said Monday. The number 1 risk though, is that the economy will lose its footing altogether and fall into a recession. A forecast released Monday by the National Association of Business Economics puts the growth of gross domestic product at an anemic 2 percent for this year, the weakest since 2002. More than 60 percent of those responding cited recession "as the major risk facing the economy over the next year, while only a third cited inflation as the greatest problem," the group said. Those most concerned about the recession threat tended to cite problems in the sub-prime mortgage market and potential declines in home values as forces most likely to end the current six-year expansion, the group said. To help the economy, the forecasters predict that the Federal reserve will lower its key interest rate, now at 5.52 percent, to 4.75 percent. http://www.azcentral.com/arizonarepublic/business/articles/0911biz-economy0911.html 09-18: Valley foreclosure rate reaches 10 year high, from the Arizona Republic, reports that foreclosures in metropolitan Phoenix climbed 36 percent in August, the biggest jump so far this year. Last month, 1,093 people lost their homes, according to the Information Market. It's the first time Valley foreclosures have topped 1,000 in at least a decade. Many more local residents are in danger of losing their homes. Notice of trustee sale filings, the precursor to a foreclosure, took their biggest jump this year. Those notices, filed when homeowners are at least a month behind, climbed 29 percent, to 3,203, in August. Nationally, Arizona ranks seventh in foreclosures, according to RealtyTrac. The government could offer some help. Congress passed legislation Monday allowing the Federal Housing Administration to back refinancings for as many as 80,000 people behind on their adjustable-rate loan payments. http://www.azcentral.com/arizonarepublic/news/articles/0919foreclosure0919.html http://www.azcentral.com/arizonarepublic/business/articles/0919biz-mortgages0919.html 09-20: 10,000 "multifamily" units planned for Desert Ridge, from the Arizona Republic, reports that Phoenix planners have seen the future, and it looks a lot like Desert Ridge. With a new emphasis on density and height to accommodate ongoing growth, close to half of all the residential units in the 5,700-acre master planned community will be what Phoenix considers "multi-family units." Those include apartments, condos, townhomes and other units that hold housing for more than one family. Many are to be located in the so-called "core" of the Desert View Village planning area at Tatum and Deer Valley roads. "Density is a big part of the growth solution," said Terry Feinberg, president of the Arizona Multihousing Association. Considering land costs and infrastructure demands, "it is the only way to be efficient." Jay Butler, director of Realty Studies at ASU, said most units of the type being sold at Desert Ridge or nearby Kierland are being picked up by higher-end customers, including seasonal visitors, well-off professionals who do not have children, or empty nesters, whose children have grown and left the home. The units that are already in the ground are proving popular based on the sales and occupancy.
09-21: Expert: Arizona recovery years off, from the Arizona Republic, reports that Valley economist and real-estate investor Elliott Pollack said that it could take three to five years before the Arizona economy fully recovers from the current housing crunch. Pollack's prediction came yesterday at the Phoenix Chamber of Commerce Economic Outlook 2008 at the Arizona Biltmore. R.L. Brown, housing guru and publisher of the Phoenix Housing Market Letter, also spoke. He said it will take 15 months for the Valley to work through its excess supply of new, resale and foreclosure home inventory. "We have a dramatic oversupply of housing," Brown said. "We have a serious problem of overvalued residential real estate in this marketplace today." Pollack estimated that an excess inventory of at least 40,000 homes exists in the Valley. Real estate experts say decreasing that number by even 5,000 to 10,000 would improve the market dramatically. http://www.azcentral.com/arizonarepublic/business/articles/0921biz-cox0921.html 09-21: Economist: Growth will continue on a slower pace, from the East Valley Tribune, also reports on yesterday's Economic Outlook 2008. It reports that Elliott Pollack said that the national and local economy will continue to grow this year and next, but at a slower pace, and that the national economy should avoid a recession. "The economy is no longer running on eight cylinders but on three or four cylinders," he said. "So the economy will still be driving forward, but ... it will be a sub-prime year." Because the current expansion is aging, the Valley's job growth will slow down, following the traditional pattern of past economic cycles, he said. Also, population growth will slow down because potential new residents will have a harder time selling their homes in California or the Midwest, he said. The result is the housing market will remain weak for several years, he added. "This will take a while to resolve,: he said of the housing slump. "The next few years could be ugly." On the positive side, corporate profits are high, business capital spending is up and exports are booming because of the weak dollar, Pollack said. R.L. Brown, publisher of the R.L. Brown housing reports, said a lack of consumer confidence is the biggest obstacle to a recovery in the housing market. "When a consumer has no confidence in a market, he doesn't buy," Brown said. "He sits on his hands because no one wants to appear stupid in making a purchase decision," he added. "Those of us in the industry need to recognize we are living in today's marketplace," Brown said. "We must accept the market as it is," he added. http://www.eastvalleytribune.com/story/97821
09-25: Arizona home values tumble, from the Phoenix Business Journal, reports that the housing party is officially over, according to the Arizona Blue Chip Economic Forecast. Although home sales plummeted, appreciation has held the line. But second-quarter 2007 saw an 0.3 percent drop in value compared with the first three months of the year and a national increase of 0.1 percent. The only other Western states showing a decrease were California and Nevada, according to the Blue Chip. In Arizona, Flagstaff saw the biggest drop at 0.6 percent from the first quarter. Values in the Phoenix area dropped by 0.5 percent. Those declines, however, are minor compared with long-term appreciation. Arizona housing values have double since 2001, according to the report, and even homeowners who bought a year ago saw a 2.2 percent rise in value. "Arizona analysts are now pondering whether they are observing the beginning of a prolonged period of sluggish home prices, or merely a one or two quarter dip in appreciation followed by more gains," the report said. As for the future, prices likely will be sluggish, and may continue to decline modestly next year, the report said. Going forward, however, the rate of appreciation could return to 4 to 5 percent per year. The Blue Chip Economic Forecast is published monthly by the JPMorgan Chase Economic Outlook Center, L. William Seidman Research Institute at Arizona State University's W.P. Carey School of Business.
09-27: Experts: Falling home prices likely to hit broader economy, from the Arizona Republic, reports that U.S. home prices have fallen further since mid 2006 than during the 1990-91 recession, and professional traders bet they'll plunge up to 10 percent more in the next year. Yale University economist Robert Shiller, who has long warned of inflated home prices, says a big hit to U.S. housing assets, worth about $23 trillion, would shock the broader economy. "It will upset balance sheets, it will upset lots of our economic institutions," said Shiller, who argues that prices were driven higher by greed, not people looking to buy a place to live. Adjusting for inflation, housing prices have soared 86 percent in the past decade. Home prices fell less than 3 percent during the economic downturn of the early 1990's and rose through the 2001 recession, but have already dropped 3.2 percent over the past year, according to a closely watched housing-market index created by Shiller. "This time, we're in a bigger boom, and we face the possibility of a bigger decline," Shiller told lawmakers last week. "It's not just an issue of a recession coming up, it's an issue of a drag on the economy, which might extend over many years." http://www.eastvalleytribune.com/story/98267 | ||||||||||
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