Today's Forecast Sunny. Hi 75 Never Windy
Volume 1, August 2008 Edition
Commentary and Perspective from one of
America's most unique small town areas, edited by Preston Westmoreland of
Russ Lyon Sotheby's International Realty.
Over the horizon, a
finds immigration, other demographic trends will fuel housing demand over
the next decade.
Beth Braverman, CNNMoney.com contributing writer
(CNNMoney.com) -- The current housing market is bleak: home prices and sales
are plummeting, foreclosure proceedings are skyrocketing and mortgage rates
are on the rise.
When will things be
A new study from the
Joint Center for Housing Studies of Harvard University, "The State of the
Nation's Housing 2008," finds the country poised to see an increase in
housing demand over the next decade.
"The good news is
that we still have a growing population," said Nicolas Retsinas, director of
the Joint Center for Housing Studies and one of the study's authors. "As
long as you have more households, more people are going to need places to
Social trends -
people getting married later and divorced more often - are making
single-person households the fastest growing household type, the study
finds. In addition, a long-term net increase in potential home buyers will
be driven by demographic factors: the aging of "echo boomers" into
adulthood, an increased life expectancy for baby boomers and projected
annual immigration of 1.2 million.
From 2010 to 2020,
the number of households in the United States will grow by an average of
more than 1.4 million per year, the study finds.
Unsold homes block
Still, before the
housing market can turn around, it must first work off the record numbers of
unsold homes on the market. From 2005 to 2007, the number of new and
existing vacant homes for sale rose 46% to 2.12 million.
The nationwide glut
of unsold homes has hit the real estate market hard, forcing down sale
prices, stemming new construction and leaving millions of homeowners with
properties worth less than the value of their mortgage.
In early 2008, the
nation had an 11-month supply of unsold new homes and a 10.7-month supply of
existing single-family homes, according to the Harvard study. A six-month
supply of existing homes is considered a buyers' market. Reducing the
current supply will require price declines, a decrease in interest rates,
employment growth, a return of consumer confidence and the revival of
accessible mortgage credit.
A reduction in new
home construction is another key to decreasing inventory, Retsinas said.
Privately owned housing starts fell 3.3% to a seasonally adjusted annual
rate of 975,000 in May from 1 million in April, according to the Commerce
A sharp drop-off in
housing starts has precipitated housing turnarounds in previous bubble-bust
cycles, said Karl Case, a Wellesley College economics professor and a
co-founder of real estate consulting firm Fiserv CSW. Case also sees
long-term growth in the housing market and agrees that immigration and other
demographic trends will help fuel a long-term recovery.
formation continues at pace, prices will recover and starts will rise
again," Case said.
In the housing bust
of the early 1990s, cities with big immigrant populations, like Los Angeles,
recovered more quickly than other metropolitan areas, like Boston, with
lower foreign-born, said Case.
"Not all immigrants
buy houses, but many immigrants buy houses," Case said. "That has a positive
effect on the prices in a market."
Pardon our Dust!
Carefree/Cave Creek by Preston Westmoreland
Federal officials are putting the squeeze on rural Arizona communities to
pave over dirt streets and parking lots to reduce airborne pollutants and
shrink the Valley's brown cloud. This doesn't sit well with many Cave
Creekers who don't like the fact that their town leaders have approved an
ordinance encouraging the paving plea. They love their dirt
roads. One prominent citizen is even circulating petitions for a vote to
have the town ordinance overthrown. The mayor of Cave Creek was quoted
in the Arizona Republic saying it's unfair to mandate these ant-pollution
measures in a town with some many horses. "The horses can't ride on
asphalt" Mayor Vincent Francia was quoted as saying. Some have even fired
off letters to the EPA, asking that the town be exempt from such
regulations. Years ago, in neighboring Carefree, residents along rural
Celestial Drive, one of the few areas of horse properties in Carefree, voted
not to have to town pave over the road, in order to maintain the areas rural
What's the biggest mistake someone can
make when stuck in the desert with a broken car?(scroll down for
Valley home sales are
highest since last summer
Sales of existing homes in May hit the highest
point since last summer, marking a continued uptick in buyer activity since
the beginning of the year.
Some 4,265 traditional sales were recorded last
month, according to an Arizona State University study. Non-foreclosure sales
in May were at the highest level since 4,570 sales were reported in June
2007, the report shows.
Falling prices have helped stoke renewed interest
from traditional buyers and investors looking to take advantage of hefty
discounts on foreclosure properties.
“The lower median price is being impacted by
several forces, including the large number of vacant homes, especially in
certain neighborhoods,” ASU Realty Studies director Jay Butler stated in the
The median price of traditional resale homes was
$223,500 last month. For more check out:
Careful when driving around Cave Creek!
You can't say you weren't warned by these novel signs!
Coming Soon: Is
rattlesnake venom becoming stronger? There's a huge debate on among
Arizona experts. Learn why they are suggesting this next month.
From CNNMoney.com website,
Fortune magazine article titled “6 real estate bargains”
Sun, golf - and prices
in some communities dropping 20% to 30%.
When it comes to attracting retirees, Arizona ranks second in the nation,
having overtaken California in 2000. And real estate values have reflected
its popularity: As recently as 2006, condo prices rose 15% over the previous
But retiree inflows haven't managed to insulate the local real estate market
from the shakeout. In fact, Phoenix seems to be accelerating into the
downturn, with much of its dropoff taking place in the past few months.
Economy.com shows its real estate values falling almost 8% over the past
year, and its foreclosure rate has nearly tripled since 2007, according to
research firm RealtyTrac.
For the real deals, though, stay away from the city center, where values
have held up better, according to Jay Butler, director of realty studies at
Arizona State University. Instead, look to the planned communities that
surround Phoenix, which are magnets for retirees and are dropping more to
the tune of 20% to 30%. A $1 million home at the market's apex might go for
the mid-700,000’s now, Butler estimates. Look to areas like Sun City Anthem,
Palm Valley, and Avondale for solid housing stock at reasonable prices. Some
adult-oriented communities have sweetened the pot: Sun City Anthem has a
48,000-square-foot recreation center with pool and spa, as well as the ASU
Lifelong Learning Academy, an adult-education offshoot of the university.
Are the links, not the books, more your thing? Phoenix's Maricopa County has
158 golf courses, the most of any county in the country.
What do experts say is the
biggest mistake you can make when stuck in the desert in your car?Answer:
Leaving your car and trying to walk a long way for help! Search aircraft
will always find your car first, but from a plane, a person
walking looks like a six-inch-wide rock!
|Maricopa County Active Listings:
|Maricopa County Actives Last mo.
|Carefree Active Homes (last mo
|Carefree Homes Under Contract
|Cave Creek Active Homes
|Cave Creek Homes Under Contract
|Scottsdale Zip Code 85262 Actives
|Scottsdale Zip 85262 Under Contract
|Paradise Valley Active Listings
|Paradise Valley Under Contract
|Paradise Valley Homes over $ 15 mil
|Most Expensive P.V. Home
listed $20 mil
|Homes sold in
the last 30 days/1 year ago: Carefree-6/5, Cave Creek 36/35, Scottsdale
zip 85262- 31/71, Paradise Valley 17/
Carefree foreclosure/short sales 1
Cave Creek foreclosures/short sales 9
The Myth of the $ 80 house! Are some new homes netting
the builder THAT little?
Carefee/Cave Creek by Preston Westmoreland
Yes, and I have it on authority of a local homebuilder!
In some of the entry level homes in the least expensive places to buy a home in
the valley, ie: Surprise and Gilbert, some spec homes by new homebuilders
are only earning the builder $ 80 profit! The builder told me anonymously
that they are amazed when young couples make an offer on the homes and want
$ 15,000 or $ 20,000 in extras, since they've read in the media about the plight
of new home builders. But in reality, the builders are just trying to keep
their crews busy, fearing that if they shut down the project, they'll leave for
better places and won't be available when they need to start up construction
On another issue, it amazes me where some of the new
homes are being built. I snapped a photo the other day of an area that in my
opinion, may be the worst I've seen. Imagine homes being built below a dam, in
the middle of a labyrinth of high power lines, and near the approach and
departure paths of one of the state's busiest airports? Check the photo
below. That's why you need a Realtor who will guide you around some potential
Moving to the area? Check out our website for
more information at:
Click on the "Moving Here" button
Foreclosure indicators continued rise in May
Catherine Reagor, On Real Estate, from the
The housing market continues to search for
a bottom as foreclosures continue to climb across metropolitan Phoenix.
In May, 3,402 homes across Maricopa
County went into foreclosure, according to the Information Market.
Almost all of those homes went back to lenders. May's foreclosure
figure is up from the 2,969 foreclosures or trustee deed sales, filed in
April. Don't expect foreclosures to slow this month either. The number
of pre-foreclosures, or notice of trustee sales filed, also climbed in May.
Last month, there were 6,384 pre-foreclosures filed in Maricopa County,
compared with 6,143 in April.
For more on Catherine's excellent real estate
overviews, log onto azcentral.com