5 things to do in a buyer's market

The Arizona Republic - April 2007

With so many homes out there, buyers now have more time to ponder available homes.

The average number of days on the market in February of this year was 96 days, according to the Arizona Multiple Listing Service. That's up from 54 days in February last year.

And there's a record number of Arizonans trying to sell their homes in today's slowed market. More than 50,000 houses and condos - of which about 95 percent are in the Valley - were listed in March, according to preliminary figures from the Arizona Regional Multiple Listing Service. A healthy market typically carries about half that number, analysts say.

Even in a market that favors buyers, you need to do your homework if you're trying to find the perfect home. Try these five things:

Get prequalified. Prequalification tells you how much you can afford and what you can expect to pay monthly. It helps narrow your choices.

Looking at homes that aren't in your price range is frustrating. If you fall in love with a house you can't afford, you'll have a hard time being satisfied with anything else.

Determine where you'd like to live. If you have school-age children, research schools and test scores. Look into neighborhood services. Check out transportation routes. If you take the bus, look for the nearest bus route. If you drive or carpool, drive from that area to your office during rush-hour traffic to know what to expect.

Research home prices and have realistic expectations. Sales of existing single-family homes in Maricopa County increased more than 25 percent from February to 5,385 as the market cycled out of its traditional post-holiday slowness, according to the realty studies program at Arizona State University. The median home price increased, as well, though at 2.1 percent, bringing it to $265,470. That's up from $260,000 in December, according to the Arizona Real Estate Center at Arizona State University's Polytechnic campus.

Nevertheless, there are many sellers who still are expecting last year's conditions. Some have overpriced their homes and won't negotiate. You may not be able to budge them from the price they want. You can try waiting it out for a few months, and if the home hasn't sold, extend another offer. Or look for another home whose owner is willing to negotiate.

Get a home inspection. This will point out defects or problems that should be fixed. It also will help determine how many years are left for the major appliances and features, such as the roof and carpeting.

Interview several lenders. Have them explain your options. Tell them your concerns and whether the payment amount is an issue. Choose someone who provides service (you'll know by how quickly they return your phone calls) as well as good terms. Make sure you understand all aspects of the loan you're getting.

U.S. housing market worsens as Valley improves

Staff and Wire Reports - April 2007

NEW YORK - The nation's real estate woes deepened in the first quarter of 2007, pushing consumer confidence to its lowest level since August.

Newly released data show that U.S. home prices fell their steepest in almost 15 years in February. And the industry got another shot of bad news when sales of existing houses plunged in March by the largest amount in nearly two decades.

Analysts worry consumer spending will soon begin to slow as a result. "Consumers are not feeling good about the economy," said Gary Thayer, chief economist at AG Edwards & Sons Inc.

The news was better here in the Valley, where the housing market actually began to show signs of life in March.

The Phoenix-area median house price of $265,470 continues to run above the U.S. figure, and March existing homes sales in the area increased over the January and February totals.

Any improvement in the market is welcome, because there are more than 50,000 houses posted for sale on the Arizona Regional Multiple Listing Service, which covers mainly the Valley.

Gilbert's Cosmo Park named top dog park in U.S.

The Arizona Republic - April 2007

Gilbert's Cosmo Park is the best all-around dog park in the country for 2007, according to a monthly dog magazine's recently released rankings.

Dog Fancy, which bills itself as "the world's most widely read dog magazine," lauded Cosmo Park for its doggie exercise equipment, man-made lake and beach area, as well as the amenities catering toward dog owners.

The recognition appears in the magazine's June issue.

Cosmo Park, near Ray Road and Loop 202, opened last July to major fanfare, with about 1,500 canines and 6,000 owners flocking to the grand opening.

"Cosmo Park is a pretty special place, and it's nice that people outside of the Valley and outside of Arizona are recognizing that," town spokesman Greg Svelund said.

Other dog parks in states ranging from California to Florida also took home individual honors from the magazine.

'Growth monster' keeps on moving in Gilbert

Tribune - April 2007

Fairview Street, on a Gilbert county island, seems to have gone back in time. Children play in the street. Residents ride their horses freely outside the large lots of an acre or more.Watch audio slideshow And road rage that neighbors say had taken over the 25 mph county road just south of the Santan Village Parkway exit of Loop 202's Santan Freeway has been stopped by temporary barricades.

"It's pretty quiet now that we don't have the rat race going on," said Larry Krugen, appointed president of the Higley Ranches Homeowners Association, as he recently walked down the closed street. "This is the way the neighborhood used to be five years ago. Now we can get up on our horses. We can go for walks, see kids playing."

But changing times threaten to shatter that serenity. The traffic barricades, put up to keep out cut-through traffic coming off the freeway, will be taken down as Maricopa County officials study the traffic problem.

The Higley Ranches area is just one of the rural neighborhoods along Gilbert's leg of the Santan Freeway that is seeing life change as commercial development arrives and begins to transition what was once a highly rural region into what is anticipated to become the economic core of Gilbert. And that has created a divide between rural and urban life.

"I fully believe (Gilbert officials) would prefer that everybody move, and it turn into another quarter- or fifth-acre lots for suburbanites," Higley Ranches resident Jim Torgeson said. "The whole plan, they counted on victimizing the county islands, and they did."

Gilbert Mayor Steve Berman said that while some homeowners along the freeway have sold their homes to developers eager to bring offices and retail to prime real estate, the town itself can't take the homes and replace them with businesses or smaller home lots.

"We haven't zoned anybody's house and turned it into a Wal-Mart," he said.

But the growth is bringing so much new business and traffic to a once quiet region that it has caused some newly annexed residents so much angst that they've created a political action committee called Manage Commercial Density.

The group is collecting signatures to get a referendum on a ballot that would ask voters to overturn the zoning of a shopping center and commercial lot on land adjacent to their homes, at Germann and Greenfield roads.

"We moved here after the freeway was coming in, but we had no idea it would be every corner in Gilbert that was going to be turned into commercial," said Mike Webb, a group member. "It just seems the city won't stop."

The growth is a cause of concern for residents in various rural areas along the freeway, especially from the Val Vista Drive exit to the Greenfield Road/Santan Village Parkway exit. Major projects are under construction along that stretch, including two regional malls, what's expected to be the state's largest auto mall, and a large health care complex near Mercy Gilbert Medical Center.

The freeway also is the target of town talk to zone for mid-rises as a way to attract larger companies.

On Gilbert's general plan maps, some rural residential areas are included in future plans for the town's limited business and office space.

And where the freeway turns north after Val Vista, many commuters from Queen Creek and Pinal County exit in this vicinity and speed through the local streets.

It all adds up to one thing for county residents who moved to rural homes once surrounded by cotton fields and cows: Growth is encroaching on their lifestyle, and some fear it may not stop until they're all gone.

Town officials said they have no plans to run off rural residents, but admit that the town zoned retail, industrial and business parks where they made logical sense to succeed: Off the town's only freeway, including where homes are now.

Town Manager George Pettit said it's up to homeowners whether they sell their land to developers in coming years, in what has become largely a metropolitan area rather than a rural location.

"I think over time you will see that, just because of the economic land value," Pettit said. But "from some people's perspective, this is their property and they lived there 20 years. They thought they were running ahead of the growth monster, and it wouldn't catch them."

Town Councilwoman Joan Krueger criticized Manage Commercial Density's referendum attempt, and said the town needs the retail and business development, including the strip mall the residents oppose, to be healthy in the future, because the town relies too strongly now on revenue from new homes.

"People's neighborhoods are being infringed on by the growth. They don't want their lifestyles to change, I understand that," Krueger said. "But the accusation that somehow the council is making this growth happen is hogwash. Growth happens."

Average Valley apartment rent rises over $800

The Arizona Republic - April 2007

As many homeowners are lamenting flat or falling home prices, Phoenix-area apartment renters are watching monthly rents rise.

The rent for the average Valley apartment recently topped $800 for the first time. A first-quarter report just released from RealFacts put the monthly payment on a typical apartment at $805. The real estate data firm reports Valley rents climbed 4.4 percent during the past year.

But renters might get some relief this year. More apartments are going up, as many as 3,500, according to apartment brokerage firm Hendricks & Partners. Also, some of the many condominium conversion projects planned in 2005 and 2006 have failed and likely will go back to apartment rentals. It's all about supply and demand.

Despite rents topping $800, the Valley is still an affordable apartment market compared with other parts of the West. Like metropolitan Phoenix home prices, apartment rents are about half what they are in Los Angeles, San Jose and San Diego.

Metro Phoenix rents are also more affordable than Flagstaff's. The average apartment in the northern Arizona city is leasing for $816 a month. Tucson seems cheap at $655.

Next big land auction
Last week's record $149.4 million sale for a prime piece of state land in Phoenix's Desert Ridge area could be dwarfed this week.

A 124-acre parcel at Pima Road and the Loop 101 goes on the auction block Tuesday morning.

But don't look for a bidding war among home builders, although it's a prime spot. The property is zoned for commercial development. The State Land Department leases commercial land instead of selling it. The annual rent on this site: $1.37 million.

Developers want long-term leases if they must lease land, and the rents on this parcel eventually could add up to $850 million. That's would make it the biggest commercial lease for the Land Department. First Industrial is the only registered bidder so far.

The site will likely sprout a business park, with more jobs for the many new rooftops in north Scottsdale.

Yavapai growth group
The Prescott area is growing and metro Phoenix is growing toward it. To try to stay in front of that growth, the Central Arizona Partnership has been formed.

It's modeled after metro Phoenix's real estate lobbying, planning and policy group Valley Partnership. To get the new growth group started, Maria Baier, former chief executive of Valley Partnership, will run the Central Arizona Partnership pro bono.

But Central Arizona Partnership could soon have to find a new executive director. Baier, who resigned from Valley Partnership last summer, recently announced her candidacy for the 3rd District seat on Phoenix's City Council.

Developer plans new center in east Mesa

A proposed mixed-use development could bring a hotel and convention center, restaurants and high-end shops to east Mesa. Property owner Nelson Stewart is planning an open-air shopping center and offices on 170 acres at the northeast corner of Elliot and Hawes roads on the Santan Freeway's west side.

Still in its conceptual stages, Stewart's master plan for the land was approved by the city's Planning and Zoning Board on Thursday evening - despite protests from more than a dozen neighbors.

There will be many battles before a specific plan is ultimately approved, said Alex Finter, a planning and zoning board member. But Mesa has struggled for years to get high-end commercial, Finter said.

The upscale development would likely be similar to Kierland Commons, a mixed-use shopping and urban living center near the Scottsdale-Phoenix border, said Harold Decker, a senior economic development specialist with the city.

"Now (shoppers) drive to Scottsdale or Chandler or Tempe to go to these higherend stores," Decker said.

The development, called Gateway Super Regional Center, would bring attention to the south East Valley, he said.

Project plans also include offices, a gourmet grocery store, health club and entertainment venue, city planning documents show.

Situated near U.S. 60 and Loop 202, the site is in a good location to serve a larger, regional market, city Planning Director John Wesley said.

That land is vital to the development of southeast Mesa, said local land use attorney Ralph Pew, representing Stewart.

"It is really an opportunity to bring to the community something new and something different," Pew said.

With roughly 600,000 square feet of planned office space, it would become a major employment hub for the community, he said.

But resident Tom Pielach doesn't see the need for another shopping center in the area.

"We're being inundated by shopping centers," said Pielach, homeowners association president of the nearby Eastridge subdivision.

Many homeowners are also up in arms about the proposed hotel, which would sit on the property's northern edge near homes, he said.

"People are going to be looking down into our yard," Pielach said. "That's a big concern."

At Thursday's meeting, many neighbors also voiced concerns over the loss of open space.

"It just breaks my heart and saddens me," neighbor Merie Kammerer said.

"We just wanted to live where we had a little bit of room." The city's planning department is recommending the hotel be built at the site's southern end, closer to the freeway and away from homes. Stewart is planning to have the project completed within five years, Decker said. With the center still in initial planning stages, the earliest construction work could start would be in six months to a year, he said. The project will be considered by the City Council next month.

Troubled developer vows 'world class' job - Superstition Vistas

The Arizona Republic - April 2007

A Las Vegas development company insists it will build a "world class" master-planned community in Lost Dutchman's Heights south of Apache Junction, despite a history of workmanship complaints and a fine for violating campaign finance laws.

Rhodes Homes was the surprise winner, bidding $58.6 million in December for the State Trust land in Pinal County. It placed $6 million in escrow to begin planning the entire 7,000-acre Lost Dutchman's area, a step that must be completed within two years before construction can begin on the 1,010-acre chunk purchased by the company.

"I'm extremely confident of our ability to plan and develop a world class master-planned community," said Christopher C. Stephens, executive vice president of Rhodes Homes. "I think most development companies have things in their past as well."

A major developer, Rhodes has built 7,000 homes since owner James M. Rhodes, a former carpenter, founded it in 1985.

But the company also has endured a series of setbacks, including a $148,000 civil settlement for violating federal campaign finance laws in June 2005 and being part of a $16.2 million judgment to settle a construction defect suit stemming from soils shifting at the Casa Linda development, leading to cracks in houses, according to Arizona Corporation Commission records.

In the past five years, Rhodes has been investigated 43 times, with 23 workmanship complaints sustained and one complaint sustained for owing money to contractors, subcontractors or suppliers, according to Nevada State Contractors Board records.

A J.D Power and Associates customer satisfaction survey in September 2006 gave Rhodes a below-average score in the Las Vegas housing market, with the company finishing 18th out of 20 builders. Rhodes received a score of 76, with the average score 112.

Stephens downplayed the company's role in the Casa Linda case, saying Rhodes bought the lots from another company. The Corporation Commission records said Rhodes built 10 to 15 percent of the homes and was held responsible for $200,000 in the judgment.

"I think it's something that comes with the business," Stephens said. "We are absolutely in this business for the long haul. It wouldn't do us any good not to do a good job with our development.

"He said the quality of the company's work at Lost Dutchman's Heights "will speak for itself.

"Deputy Arizona Land Commissioner Jamie Hogue said Rhodes' performance is being watched by several government agencies, including the Land Department, Apache Junction and Pinal County.

"This is a huge piece of land and it is determining the future of what that area will look like," she said. "So far, the relationship has been great. They've been very responsive.

"Rhodes has come under intensive scrutiny from the Arizona Corporation Commission, which investigated the company's background as part of its application to form the Perkins Mountain Water Co. to serve two large master-planned communities in Mohave County.

The commission is also studying whether there is adequate water supply for the Rhodes subdivisions, Golden Valley South with 33,000 units and the Villages at White Hills, with 20,000 units. They would form a Las Vegas suburb.

The commission's staff found that Perkins is "a fit and proper entity" to operate the water company, but required Rhodes to put up an unprecedented $5 million performance bond.

A decision from an administrative law judge is pending and the commission has final authority to accept, amend or reject the ruling.

"We were willing to post that bond as evidence of our commitment to future residents," Stephens said.

Zillow.com estimates draw fire, state ban

The Arizona Republic - April 2007

An Arizona regulatory board has ordered Zillow.com to stop offering its online estimates of home values.

The Arizona Board of Appraisal has issued two cease-and-desist letters to the popular real estate Web site, claiming Zillow needs an appraiser license to offer its "zestimates" in Arizona.

"It is the board's feeling that (Zillow) is providing an appraisal," said Deborah Pearson, Board of Appraisal executive director.

Seattle-based Zillow cautions users that its information is a starting point for consumers, not a definitive value. It has been popular since its launch in February 2006. It claims 4 million users a month, including those curious about their home's value, and the value of friends' and neighbors' residences.

It has drawn criticism from real estate professionals and others about accuracy. The non-profit National Community Reinvestment Coalition filed a complaint in October with the Federal Trade Commission alleging Zillow was misleading consumers and real estate professionals with its estimates.

"We have responded to the letters from the Arizona Board of Appraisal and hope to engage in a productive dialogue with them," said Amy Bohutinsky, Zillow director of communications.

Foreclosures rocket in Valley

The Arizona Republic - April 2007

The number of Valley residents who lost their home to foreclosure spiked more than tenfold in the past year as more and more homeowners fell behind on their mortgages.

The problem may soon get worse. Mortgage delinquencies hit a four-year high last month.

Slower homes sales, dips in housing appreciation and homeowners unable to keep up with rising subprime mortgage payments are all behind the jump in foreclosures.

The Valley's housing market could take a hit if lenders try to resell foreclosed homes quickly by cutting prices. Too many foreclosures in one neighborhood can pull the area's home values down.

"Our economy isn't bad, but foreclosures will continue to rise," said Jay Butler, director of realty studies at Arizona State University Polytechnic. "The fallout from the subprime market is just beginning.

"Last month, 553 Valley families lost their homes, according to the Information Market, a property-record research firm. At the same time, 1,705 homeowners got notices from their lenders that they were at least three months behind on their mortgage.

In March 2006, 782 homeowners were delinquent, but only 40 houses were taken back by lenders and sold at a foreclosure or trustee sale.

The reason: The then-hot housing market allowed homeowners in trouble to sell, refinance or find a way to make up what they owed.

Houses are now selling much more slowly, with a record 50,000 of them on the market in metropolitan Phoenix. Housing appreciation has been flat or has fallen in many parts of the Valley during the past year.

"Many homeowners who bought at the peak and are now struggling may just end up walking away from their houses," said Margie O'Campo de Castillo of Arizona Dream Realty.

"People who bought new homes on the Valley's fringes a few years ago are particularly having trouble selling for what they owe now."

Some hit harder

Homeowners with subprime loans are struggling the most. And most don't have the best credit, which is why they had to go with the higher-interest-rate loans.

Economists are concerned that many people stretched their incomes to get into those loans and lenders looked the other way to make the deal. Heather Ferguson thought she was getting a low-rate mortgage when she bought her Fountain Hills home in 2005.

"I wasn't a real estate expert, but I had decent credit and could afford the payments on a 6.5 percent loan," she said.

But after waiting for her loan broker for four hours at the title agency, she ended up signing for a subprime loan that started with an 8.5 percent interest rate that has now climbed to almost 12 percent. Her payment went from $980 to $1,680.

She fell behind last year, and her lender sent her a notice it was going to foreclose. Ferguson got help and is working to refinance out of a subprime loan to keep her home.

The first thing homeowners should do when they fall behind is alert their lender and try to get help, experts say.

"We call it ostrich syndrome," said Diane Drain, a Phoenix real estate attorney. "They put their heads in the sand until a few days before their house is going to be auctioned off. Then it's too late, and they can lose any equity they had and get a big black mark on their credit record."

Facing reality

People behind on their mortgages are often dealing with other financial or personal problems and are in denial, experts say.

"They think the Valley's housing market a few years ago was normal," said Joann Hauger of the non-profit group Community Housing Resources of the Arizona. "Struggling homeowners shouldn't think those price run-ups are going to return and save them.

"In metro Phoenix, foreclosures are still low compared with other states, like Florida and Michigan, which lead the nation in foreclosures.

What is helping Arizona offset pain from foreclosures and more slowing in the housing market is job growth.

University of Arizona economist Marshall Vest said the state's economy is still strong but won't get the boost from housing it did during the past few years.

Chandler home sales up

The Arizona Republic - April 2007

The annual home resale season appears to be off to its normally strong spring start, as the number of houses sold in the Southeast Valley increased an average of 28 percent from February to March, according to Realty Studies.

However, prices were down from the same month last year.

The number of sales increased from February to March in each community except Tempe, where the number fell from 135 to 125, or 7 percent.

Sales elsewhere increased: Mesa, 460 to 620, or 35 percent; Chandler, 280 to 380, or 36 percent; Gilbert, 230 to 290, or 26 percent, and Ahwatukee, 85 to 120, or 41 percent.

However, median prices fell throughout the Southeast Valley in March, compared to a year earlier, as the high number of homes for sale created competition among sellers.

Median prices for existing homes fell from March 2006 to March 2007 in every community in the Southeast Valley, with Ahwatukee Foothills and Gilbert experiencing the greatest decreases of 7 and 8 percent, respectively, according to the latest numbers released Tuesday by Realty Studies at Arizona State University.

"People are lowering their prices, if they can, to sell," said Jay Butler, director of Realty Studies.

With the Arizona Regional Multiple Listing Service reporting almost 16,700 homes for sale at the end of February, the Southeast Valley has a glut of homes on the market that will take some time to sell. Homes are taking an average of at least 98 days to sell in the Southeast Valley, according to ARMLS.

Butler said he can't predict when the inventory will be sold off. "It raises a lot of issues like why is the inventory so high?

If we had tremendous population growth that everyone is talking about, why are we looking at high numbers?" he said.

Possible explanations could be investors trying to unload homes, and that January is usually the month when the Phoenix area tends to get the highest listings and fewest buyers.

It's a buyer's market - like never before

Housing experts suggest reasons for record 50,000 listings in state
The Arizona Republic - April 2007

Dave and Karen Rysdam got a jolt when pricing their Glendale home to put on the market.They wanted to sell in the low $600,000s, but their agent recommended an aggressive price in the low $500,000s.

Surprised, the couple consulted an appraiser, who offered similar advice. Reluctantly, they listed the house for $519,900.

"The initial reaction was, 'This is too low.' But when you take the emotions out and look at factual data, it feels like it is right given today's market conditions," Dave said.The Rysdams are among a record number of Arizonans trying to sell their homes in today's slowed market.

More than 50,000 houses and condos - of which about 95 percent are in the Valley - were listed in March, according to preliminary figures from the Arizona Regional Multiple Listing Service. A healthy market typically carries about half of that number, analysts say. The glut of housing poses problems for an ailing market struggling to find its feet in the wake of a housing frenzy.

Listings have been climbing steadily since the boom fizzled, with the total exceeding 40,000 last year. Analysts have said reducing inventory is necessary for recovery in both the new and resale markets, yet resale listings are at an all-time high.

So what is driving the numbers? Analysts point to several things:

• Sellers are unrealistic. Many are pricing homes higher than what buyers are willing to pay.

• It's partly cyclical. Sellers dust off their homes after the holidays and put them back on the market for the spring buying season.

• Investors are unloading homes. Those left over from the boom are trying to get rid of houses that are declining in value.

"They are the amateur speculators of last year or the year before," Valley housing analyst RL Brown said, noting that big inventory means price softness. "Their 'wink-wink' loan of two or three years ago is about to change into a serious burden.

"Brown, who heads Home Builders Marketing, sees a few other types of would-be sellers who are helping push the number of listings higher. One is the house shopper who sees lending standards tightening in the wake of the subprime loan scandal and figures and believes he better get a loan now because he won't qualify in a few months.Another is the casual seller just seeing what kind of offers her home may draw. Then there is the seller who absolutely has no idea what is happening in the market and what homes are worth, Brown said."They are the dialed-out folks," he said.The Rysdams don't seem to fit in that category.

Dave, director of financial systems for Honeywell Aerospace, combed his neighborhood to check out the competition. The Rysdams spent about $20,000 upgrading the house for sale. The couple bought their house for about $205,000 in 1994 and expected to do well selling it because they didn't pull "a penny" of equity out. They are averaging a showing a day, but if they don't get an acceptable price, they are prepared to walk away from a $30,000 deposit on a new house."For us, the only real variable is what we get out of this house," he said. "I'm a finance guy. ... The market doesn't care how much I owe on my house. It's irrelevant to what the market will pay for your house."Not all homeowners are of the same mind. Some agents say they are going on listing appointments only to find cranky and argumentative sellers. Agents are turning down listings because sellers won't budge from their target prices, a radical change from the boom years when agents scrambled to secure listings that sold in a few days or even a few hours.

"If you go to a lawyer or a doctor, you are paying a lot for that opinion," said a local real estate agent. "But in real estate, they argue with you, even though they are paying huge amounts for you to sell their house.

"Housing analyst Tim Sullivan of the Sullivan Group in San Diego thinks resale listings should stabilize and maybe begin to fall midsummer. The real estate said she thinks it will take most of this year to work inventory down to more healthy levels. She said more of the sellers she deals with are realistic about prices, and after six or seven counteroffers, a house may sell.

But buyers still hold the upper hand, she said. And she has seen that directly at one of her listings."The buyers want everything," she said. "Sellers don't want to give up everything. In this house, the seller has reduced the price $50,000. In her mind, she has done all she could do. And now the buyer wants her two favorite chairs."

3 builders bet on Valley housing turnaround

The Arizona Republic - March 2007

Three opportunistic home builders are jumping into metro Phoenix's new-home market, undeterred by the glut of unsold houses and high prices left over from the housing boom. Newcomers Mattamy Homes of Canada, John Laing Homes of California and Orleans Homebuilders of Pennsylvania say that now is the right time to stake their claim in one of the most competitive housing markets in the country. They're grabbing cast-off land at bargain prices from the established players and picking up executive talent with years of experience at local companies.

Mattamy and Orleans are working on their first models, Mattamy in Pinal County and Orleans in Gilbert.All three multistate builders plan to target move-up buyers, people looking for their second or third homes. Mattamy is also building homes for first-time buyers. Both Laing and Mattamy have yet to set prices, while Orleans homes will start in the $300,000 range. Metro Phoenix's median new-home price was $306,355 last year. The builders say they realize the challenges of the local market and plan to start small, building just a few homes as they get their feet on the ground. The Valley is ruled by production builders that knock out thousands of houses a year. Market leader D.R. Horton alone racked up more than 5,600 new-home permits last year across its three Phoenix-area divisions, according to Home Builders Marketing. They also say they're in it for the long haul. "This is a great opportunity for a builder to get into a market that has been tough to get into for the last five years," said Mark McHone, president of Mattamy's Arizona division.Housing analysts say there is a risk in moving into a home-building market that is trying to get back on its feet after the excesses of a boom. An estimated 10,000 spec homes are on the market here. That is in addition to the more than 45,000 existing homes for sale. Bringing more houses to the market without a significant reduction in inventory could prolong what is already a painful slump, analysts say. "It's always risky coming in," said Jay Butler, head of realty studies at Arizona State University. "How much does the market have on the downside? But if you are coming in as the new builder, you don't have the image issues. You're the new kid on the block, doing something different."

Expecting a rebound
The market may be struggling now, but the newcomers expect it to rebound and be a profitable place to do business.They see the current downturn in an opportunistic way, similar to investors who buy beaten-up stocks at low prices. One of the big attractions is the excess land being dumped by builders who overbought during the boom.

The new builders are going after finished lots: land that already has streets, sewers and other off-site improvements that is ready for a building permit. That lets them get their houses on the market faster, rather than starting with vacant dirt and taking it through city approval processes.McHone said his company recently bought 240 lots from Engle Homes in the Queen Creek area and submitted requests for building permits. Mattamy will start building there in about four months. The company also is under contract for lots in the West Valley and northwest Valley. John Laing Homes is expected to announce Monday that it is coming to the Phoenix area. Laing was bought by Emaar Properties of Dubai for $1.05 billion in cash last year and has money for expansion. Phoenix was its first choice.Hiring superintendents

There not only is a land-buying opportunity now but the chance to hire superintendents in short supply during the boom, said David Walls, Laing's Phoenix division president and a former executive at Monterey Homes, a luxury home builder in the Valley. Superintendents supervise construction for the builders, dealing with everyone from trade contractors and sales offices to city inspectors and home buyers. There also is less pressure now on trade contractors than during the boom, when soaring demand pushed delivery times to nine months or longer. Analysts say that delivery times have fallen below six months but that builders aren't putting up too many new homes. They're trying to sell the ones that already are built or under construction for buyers that canceled contracts.Small builders now will have a better chance of staffing their jobs now that subcontractors aren't overloaded. Builders now hold pricing leverage, too. Ray Leppien, head of Orleans Arizona and a former DMB Associates executive, expects quality to improve now that subcontractors aren't just scrambling to fill jobs. "Finding those bodies meant they were not the most qualified people to do the work," he said.The national and local housing markets face some big unknowns in addition to cleaning up their inventory and their finances in the wake of the housing boom. Mortgage fraud and subprime lending pose threats of foreclosure and reduce the pool of first-time buyers. RL Brown, the analyst who heads Home Builders Marketing, said the newbies will have a tough go if the market falls into a prolonged slump."The risk is that the overall U.S. housing market would collapse for an extended period of time," Brown said. "That's the ultimate risk. But the potential is that when the market normalizes at whatever that is, it will be one of the best housing markets in the world - the world, not the nation."

When there's no sale in sight

Arizona Republic - March 2007

Real estate is cyclical like the seasons. A hot market in a given neighborhood one year could fall flat the next. Imagine the frustration of home sellers who think they're in a vibrant market, only to discover it's turned stone cold just after their agent posted a For Sale sign.
Sid Davis, a veteran real estate broker, says silence can be deafening for homeowners who've had their properties on the market for a while, yet have had few showings and still fewer expressions of interest. Sometimes the culprit for a slow-moving market is easy to pinpoint.
"These can be places with lots of inventory yet where wannabe buyers are still holding out, waiting to see if prices will slip a little before they commit," says Davis, author of "A Survival Guide for Selling a Home."
Are you a frustrated and fearful home seller?

These pointers could prove of value:
- Try to manage the stress of the situation. When a home remains unsold longer than its owners think appropriate, people's fears express themselves in various ways, ranging from irritability to insomnia to near hysteria, according to Davis.
Your emotions are especially likely to undermine your plans if they're telegraphed to the buying public through advertising that signals desperation, according to Davis.
"A house that's priced correctly is going to sell on its own merits. If you advertise your place with phrases like 'Owners must sell,' you'll just attract lowball offers from folks who hope to take advantage of your panic," he says.

- See your home sale in context with the neighborhood market. Perhaps properties in your community were selling at lightning speed just over a year ago. When neighbors gather, people still talk about the days when multiple bids were the norm and rival bidders drafted over-list-price offers on the hoods of their cars.
But reminiscing will get you nowhere if market conditions have changed dramatically in favor of the buyer. The better approach is to take a more analytical look at your local market, says Ray Brown, co-author of "House Selling for Dummies."
Brown suggests you ask your listing agent for a set of statistics known as "average days on market." These data reflect the time it takes for a typical house to go from list to sale. Notice whether this average time span is narrowing (which indicates a warming market), or widening (which indicates a cooling market).
If you're already over the typical days on market, you probably have two options: Improve the look and condition of your home, or cut the asking price.

- Don't make it a practice to annoy your listing agent. As Davis points out, it's extremely valuable for would-be sellers to garner feedback from those who come through their home. Whether the feedback comes from possible buyers or real estate agents in the area, it can help you make midcourse corrections.
Normally, visitor feedback reaches home sellers via their listing agent. Your agent should be in touch at least every few days, if not once a day.
Unfortunately, when sellers become frustrated with the pace of their progress, some begin projecting their frustration onto their listing agent, Davis says. "Believe it or not, they start calling you hour in and hour out, asking what's going on. But bugging the agent is totally counterproductive," he says.
Davis recommends that frustrated home sellers arrange for a lengthy sit-down with their listing agent to brainstorm on ways to gain momentum toward their goal.

- Take another look at the condition of your home before cutting the price. If your home has languished unsold for a period longer than the average for your market - or if showings have been few since you listed - you may ultimately have to cut your asking price. But Davis says this should happen only after you've reconsidered steps you can take to make your property look better.
Sometimes superficial issues are off-putting to visitors. Don't make the mistake of thinking buyers will look beyond a little messiness, such as a playroom littered with toys, a sink full of dirty dishes, or the desk in a home office stacked with papers.
"The fact is that buyers never look beyond grime or clutter. Some won't even spend five minutes in a dirty house, let alone put an offer on it," Davis says.
Along with hiring help for a professional cleaning and decluttering operation, your prospects for sale could increase significantly with a few relatively small expenditures in your bathrooms and kitchen, or fresh paint throughout your place, he says.

- Resist the urge to take your house off the market for a lengthy time. Davis allows you should probably not permit showings during those few days when the painters are present or when a contractor has arrived to replace your kitchen countertops. Just have your agent put a note in the listing to say showings have been suspended for a couple of days.
Still, he contends it's usually a mistake for frustrated sellers to pull their property off the market for months on end, hoping selling conditions will improve later.

Finding a mortgage in tougher times

Wall Street Journal - March 2007

Just two days before Shari Scott and her family were supposed to move into their new home, her loan officer at New Century Financial Corp. called her with some bad news: The company wasn't going to be able to lend her the money for her mortgage after all."I literally stopped the car and threw up," says the 30-year-old accountant from Burleson, Texas, who got the news on her cellphone while driving home from work this month. By that point, she already had the mortgage title papers in hand and was supposed to close on the loan the next day. "Homeless was the first thing that went through my mind," she says.Scott's plight shows how the turmoil on Wall Street is hitting Main Street. Fears about defaults have slowed the flow of investments to riskier segments of the mortgage market, which has dried up the amount of money available for loans to riskier borrowers. As a result, some mortgage companies such as New Century Financial are halting new loans to borrowers with blemished credit histories, while others are tightening lending standards. Some lenders are backing out of loan agreements, leaving borrowers scrambling for more expensive financing. Scott was able to arrange a new subprime mortgage, but the monthly payment was several hundred dollars more than the New Century loan. A New Century spokeswoman declined to comment.

For prime borrowers, or those with the best credit, finding a mortgage may actually have gotten easier, and the loans more affordable. Declining yields on Treasury bonds have pushed down rates on 30-year fixed-rate mortgages to about 6.3 percent currently from about 6.5 percent early last month, according to HSH Associates. Lenders may be willing to negotiate an even better deal for the best borrowers.Meanwhile, borrowers in the gray area between prime and subprime, a category known as Alt-A, are encountering tighter lending standards, as are buyers of investment properties. "Four or five months ago, I could get a loan for zero down," says Howard Shatsky of Los Angeles, who has been trying to secure financing for a real-estate investment. "It makes it hard for somebody without a very high credit score to get a loan," he says. "Right now, I'm a little nervous."The turmoil that began in the subprime sector has changed the dynamics of getting a mortgage and, coupled with flattening home prices, is squeezing many consumers' finances. Here's what the shakeout means for borrowers across the credit spectrum.

Subprime
Borrowers with weak credit are having the greatest difficulty finding loans. Many cash-strapped borrowers are getting shut out of the market as lenders drop products, such as no-down-payment loans that carry little, if any, documentation of income, assets or employment. Other borrowers are now being required to pony up money for a down payment or to boost their credit scores.Patrick McCarroll, a mortgage banker in Fort Worth, Texas, says he has been inundated with notices from subprime lenders in recent weeks that are suddenly dropping loans and changing terms. Many are now requiring a 5 percent to 10 percent down payment on loans that previously required none, and a higher credit score in order to qualify, he says."If borrowers can't afford to put any money down, they should stay out of the market," says Mitch Ohlbaum, a mortgage broker in Los Angeles. "You're going to get so badly beat up on the rates and terms."Borrowers who can find a loan are likely to pay interest rates that are several percentage points higher than they were a few weeks ago, brokers say. Adam Stein, a mortgage broker in Auburn, Wash., says that while he was able to find new financing for two clients after their loan agreements collapsed, the terms on the new loans are less favorable. "While I might have had at least five lenders competing for their business before, now I'm lucky if I can find one," he says.There are a number of ways to gauge a borrower's credit scores, but the most widely used is the FICO score developed by Fair Isaac Corp. (Visit myfico.com for more details.) The best mortgage rates are offered to prime borrowers with scores typically of 720 or more. Subprime borrowers often have scores below 620, while many of the newer nontraditional loans are aimed at those Alt-A borrowers with credit scores between 620 and 700.It's not just low-income borrowers who are getting caught by problems in the subprime market. Borrowers with higher incomes can also have scuffed credit. In recent years, many Americans took out adjustable-rate mortgages that often carry a low teaser rate that rises sharply after two or three years, to buy properties they expected would rise in value, allowing them to sell before the rate adjusted. Many of these loans came with inducements - such as little or no down-payment requirement - to make a mortgage more attractive.Vicky Pierce of Plano, Texas, took out an ARM in 2003 with a fixed rate of 6.5 percent for three years on a rental property. "I really didn't expect that we would have that property very long," she says. "Our hope was that the market would appreciate and we'd sell it within three years." But an expensive divorce that dinged her credit score derailed her plans. Because she had pulled cash out of the loan, she had very little equity in the property, making it hard to sell the property without losing money.Now, after the rate on her loan reset last fall to 8.5 percent, her monthly payments are $400 higher and she expects the payments will jump by another $400 in May. Ms. Pierce is trying, so far unsuccessfully, to sell the rental property. Her backup plan: Sell her main residence and move to a smaller home.One alternative for some subprime borrowers is to consider a loan insured by the Federal Housing Administration, a government agency that helps low- and middle-income home buyers qualify for low-interest mortgages. The FHA, which offers lenders a guarantee that a loan will be repaid, requires borrowers to make a minimum down payment of at least 3 percent and pay mortgage-insurance premiums that could amount to as much as 2 percent of the loan.

Prime
Borrowers with good credit looking for conventional loans, able to make a down payment and willing to document their income are being rewarded with lower rates. Big banks, such as Bank of America Corp. and J.P. Morgan Chase & Co.'s Chase Home Lending, say they are seeing substantial gains in new loan applications and refinancings amid the drop in mortgage rates in recent weeks and as buyers gear up for the spring selling season. "We think we may have gained some market share," says Bob Caruso, Bank of America's national servicing executive."If you have a credit score of at least 720, the lending pool increases dramatically," says Philip Tirone, a mortgage broker in Los Angeles, who is advising clients with the best credit and who have adjustable-rate mortgages to think about refinancing into a longer-term fixed-rate loan. "Since there are more lenders competing for your business, you'll be able to negotiate a better rate."

Alt-A
Some of the concerns hitting the subprime market are spreading upward to borrowers with midtier credit scores, and those who take out Alt-A loans, a catch-all category that includes many of the nontraditional loans that helped to fuel the housing boom, such as option ARMs and mortgages that carry little, if any, documentation of income or assets.Now, lenders are dropping loans that provide 100 percent financing for borrowers in this category who aren't willing or able to document their income or assets. In notices sent to brokers this week, Capital One Financial Corp.'s Greenpoint Mortgage raised the minimum credit score and cut the maximum amount homeowners could borrow without documenting their income and assets on certain mortgages. Earlier this month, Countrywide Financial Corp. stopped offering borrowers the option of no-money-down home loans. Chase Home Lending reduced the maximum amount homeowners could borrow to 95 percent from 100 percent without documenting their income and assets last month.Borrowers can boost their chances of getting a loan and a better rate by taking steps now to raise their credit scores. Consumers in the middle of closing either a subprime or Alt-A mortgage should also ask their agent to extend any contingencies - a standard clause that allows them to back out of a deal if they cannot sell their current home or obtain financing - until the loan is closed, brokers say. Otherwise, borrowers could be at risk of losing their deposits.

How Good Are Zillow's Home-Price Estimates?

The Wall Street Journal - March 2007

In the year since its launch, Zillow Inc. has made millions of Americans familiar with computer-generated estimates of home values, created a new online addiction and become a staple of dinner-party chatter.

But just how accurate is it? A Wall Street Journal analysis of 1,000 recent home sales shows that Zillow's "Zestimates" often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible -- off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million.
Zillow, based in Seattle, operates a Web site that offers free estimates and other online tools for real-estate buyers and sellers. It draws revenue from online advertising.

The Journal looked at transaction prices recorded for 1,000 recent home sales in seven states, using data from First American Real Estate Solutions, a data provider in Santa Ana, Calif., and compared those prices with Zillow estimates, which didn't yet reflect the sales. The median difference between the Zillow estimate and the actual price was 7.8%. (That was close to the 7.2% median "margin of error" reported by Zillow itself on all transactions involving homes whose value it has estimated.)
The estimates were about equally split between ones that were too high and those below the mark.

Zillow came within 5% of the price in a third of the transactions studied by The Journal. It was more than 25% off target on 11% of them. In 34 of the 1,000 transactions, Zillow was off by more than 50%.

Zillow had estimated that a four-bedroom, 7,600-square-foot home in Fall City, Wash., was valued at $661,756. The home, built last year, sold in early January for $2.7 million. "If you don't visit the property, you're never going to know that it's in an exclusive, gated part of the neighborhood," says Maria Danieli, who represented the sellers. Ms. Danieli says Zillow may be fine for "cookie-cutter" neighborhoods but "they can't compute" the values of the luxury homes she sells.

Zillow executives acknowledge that the estimates can be way off in some cases. The estimate "is a starting point" for people trying to figure out how much a home should cost, says Amy Bohutinsky, a spokeswoman for the company. "We don't recommend it as the final word."

Sometimes the estimates take big lurches in brief periods as Zillow's computer analyzes the latest home-sales data, updated weekly. "My God!" said Jonathan Miller after he looked up his own house in Darien, Conn., on Zillow last week. "My value has dropped 25% in six months. There's no way -- that would be the market collapsing!" Zillow has the house pegged at $1,442,851, down from about $2.1 million last July. Mr. Miller, chief executive officer of Miller Samuel, an appraisal firm based in New York, watches his local market closely and figures his home is valued at around $1.9 million.

Zillow can be quite accurate in some markets, Mr. Miller says, but he argues that the estimates are hit or miss. He suggests that Zillow should produce only an estimated price range rather than an exact figure: "When you go down to the $1 level, you're implying precision." Ms. Bohutinsky, the Zillow spokeswoman, notes that Zillow produces both a range and a precise estimate and says users like both.

Zillow also missed the target for Josh Benton, a management consultant at Kurt Salmon Associates in Atlanta. He sold ahome last fall for about 15% more than Zillow's estimate. Still, Mr. Benton says he found Zillow useful for getting a sense of the relative value of houses in a neighborhood. And he liked the site's aerial views of neighborhoods as a research aid. "Overall, it's an excellent site," he says.

Zillow's estimates come from a proprietary computer program that takes into account sale prices for nearby homes that appear comparable, the size and other physical attributes of the home, its past sales history and tax-assessment data, says Stan Humphries, vice president of data and analytics.
Zillow tends to work best for midrange homes in areas where there are a lot of comparable houses, he says. It is less accurate for low- and high-end homes because there are fewer of those and thus less data available from comparable sales, known as "comps." Values of rural homes are hard to gauge for the same reason. Partly for that reason, none of the Web sites can offer 100% coverage of U.S. homes; Zillow says it has estimates on about 57% of all homes.

Even where there are numerous apparent "comps," computer programs like Zillow's can stumble when vital information is missing. Data fed into the computer, for instance, may not reflect the fact that a house has just been remodeled, destroyed by fire or put into foreclosure. Reported prices can be misleading, too. Sometimes homes are sold between family members for a token price, or sellers offer incentives to buyers, such as help with closing costs, that aren't reflected in the recorded price.
Zillow isn't the only site offering such free estimates. Others include RealEstate.com, RealEstateABC.com and Reply.com. But Zillow's site gets more traffic than those rivals. All of these sites appear to have overestimated the value of a house on Olivant Street in a tough area of Pittsburgh that sold for $700 last year in an auction of foreclosed homes. As of early this month, Zillow estimated the value at about $33,000, RealEstate.com at $57,000, Reply.com at $69,000 and RealEstateABC.com at $86,000. Several nearby houses are abandoned or boarded up, blighting the block -- something computer models don't take into account.
Zillow lets users try to correct for things computers might miss. For instance, people can use Zillow's "my estimator" tool to account for the value of remodeling or to choose what they regard as the most relevant "comps," screening out those that aren't really similar homes.

Making estimates is particularly difficult in some areas. Some states, including Texas, don't provide public records showing housing transaction prices. To improve its performance in Texas, Zillow last month began tapping sales data from multiple-listing services, databases of property for sale through real-estate brokers.

New York City also is a difficult area for Zillow and other estimate providers because of the large number of cooperative buildings. Tax assessments are made on the co-op buildings rather than individual units, removing one indicator of value. And there is less public information on such things as square footage in individual homes, Zillow says, though the company is finding alternative sources for such data.

Real-estate agents and appraisers tend to sneer at Web site valuations and insist that consumers still need their local expertise to get a true idea of values. Masood Samereie, an agent at Century 21 Hartford Properties in San Francisco, says one of his clients last year lost his chance to buy an attractive home because, relying on Zillow, he made an unrealistically low offer.

Home builders cut prices, frills to draw buyers

The Arizona Republic - March 2007

Buyers priced out of the new-home market by the big price increases of the housing boom may get another shot at something they can afford.Many builders are cutting costs and prices as they struggle to attract more buyers and regain their footing in a market flooded with an excess of unsold homes. They're creating less-expensive houses for new communities and spending less on finishing touches in existing subdivisions.They're asking subcontractors, like framing and concrete companies, to rebid projects at lower costs. And they're pressing suppliers for better prices on things like carpet and electrical fixtures that are among the hundreds of options that can quickly cause a house's base price to balloon.

It's good news for consumers who may have thought housing had passed them by. But it also may mean getting less home because many of the features previously included in the price have either been cut back or become optional."Consumers were throwing money around during the run-up. But now, buyers are trying to get as much house as possible," said Ben Sage of Metrostudy, a housing consultant.If lower ceilings and less-expensive fixtures can save a buyer upward of $10,000 on the price of a new home, it may be worth it, builders say.Ingrid and Louis King just bought a new house for $300,000 in the Sun Valley area of Buckeye.Louis said the house would have been much more expensive if they had picked out all the add-ons themselves. "We had some sticker shock," he said. "On the higher-end homes, the upgrades are standard. In the less-expensive communities, they aren't added on to the base price." Builders that rely on mass sales see the cutbacks as a way to get back on track and broaden their pool of potential buyers.Construction of new homes has slowed dramatically since 2004 and 2005, when demand was pushed out of proportion by investors. Then, builders besieged by buyers were rationing lots and raising prices. The median price for a new single-family home jumped to $306,355 last year from $195,000 in 2004, a 57 percent increase. Builders enjoyed record sales and profits, but the incomes of their potential buyers didn't keep pace. Per capita income increased 9.9 percent in the Phoenix area from 2003 to 2005, according to the U.S. Commerce Department. "It's a challenge for builders," said Reed Porter, president of Trend Homes, a private builder based in Arizona. "You need to have prices at a place where average Phoenicians can afford."

The reckoning
The reckoning came last year as builders began to cut production as buyers canceled contracts and unsold houses began to accumulate. They pulled 42,460 permits for new homes in 2006 after running in the 60,000 range the previous two years. The permit total is expected to dip further this year while builders sell off empty houses. According to Metrostudy, there were 11,161 finished but empty homes in metropolitan Phoenix at the end of December 2006. There were more than 43,000 single-family homes listed with the Arizona Regional Multiple Listing Service in January. With too many unsold homes, builders began to discover that the high prices of the boom were not affordable to rank-and-file buyers.The local and national housing markets flipped from bliss to bleak in the first half of last year. The change showed up in earnings reports from public builders. Revenue and earnings were down. Cancellations of sales contracts hit the 30 percent range for some companies, leaving them with swelling inventories of houses.The energetic pursuit of land during the boom became a liability when it became clear the companies wouldn't need as much as they had. Quarterly reports started showing big write-offs for land. Meritage Homes, the only public builder based in the Valley, reported a 12 percent drop in earnings for 2006, even though revenue from home closings increased 15 percent. The culprit: $78 million in charges to cancel options or make reductions in the value of inventory.It was a chorus for other big builders. Pulte Homes wrote off $151.2 million in deposit and pre-acquisition costs for land deals it decided not to pursue. Analysts are split on when home building will recover.

Changes under way
Builders are using a variety of strategies to make their houses cheaper and find more buyers. KB Home has three Valley communities offering triplex homes, three houses in a single building. One 1,200-square-foot plan has a base price of $149,900, said Brooks Longfellow, vice president of operations for the Phoenix divisions of KB Home. Pulte Homes now offers a half-patio that doesn't span the entire back of the house and has an optional bedroom bay window that once was standard in some home plans. Spokeswoman Jacque Petroulakis says that moves like that can knock $3,000 to $8,000 off the price and estimated that buyers could save as much as $30,000 with some options removed from the base price.Then there's the rebidding with subcontractors. That alone can knock 10 to 12 percent off the price of lower-end homes, said Doug Fulton of Fulton Homes. There is no doubt builders are getting tough, said Bill Washburn, vice president of operations for SelectBuild in Arizona, a subcontracting company. "We'll receive letters or direction that you have to lower your price 10 percent or 15 percent," he said. "They are taking a harder line." It's unclear whether the new emphasis on price will bring any fundamental changes to Valley housing. The single-family home has ruled this market since the end of World War II."We'll never see the heady days like in '05, when builders would load up the houses to justify the prices they would charge," Sage said. "This is a reasonable response to a slow market that will somewhat reverse itself when the market normalizes."

IMAX theater looms large for Mesa shopping area

The Arizona Republic - March 2007

There's a big addition coming to Mesa's movie screen selections.Mesa will be getting the state's fifth IMAX theater this summer when Dickinson Theaters opens its cinema at Signal Butte and Baseline roads. Developers expect the theater to open in late summer or early fall, said Tim Dollander, a principal with Diversified Partners, the Scottsdale firm overseeing the development of the twin Superstition Gateway East and West centers in southeast Mesa.

Tenants there began opening late last year, with Best Buy and Wal-Mart among the first. Other tenants, including Village Inn and Chili's, are expected to open next month, Dollander said.But it's the presence of another IMAX, which features large screens, that changes the complexion of this center, he said.Superstition Gateway, like many power centers, is designed to draw customers from a five- to 10-mile radius, which could have more than 200,000 residents within the next five years. IMAX changes that equation, Dollander said."Obviously, IMAX brings a different customer coming to our project. It's only going to enhance the number of trips that are coming to the entire project," he said. "That will certainly broaden it because there are only a few in the Valley and this should draw from the entire southeast Valley. The closest one is at Arizona Mills."The Valley also has IMAX theaters in north Phoenix and at the Arizona Science Center. IMAX came to the Valley in 1991 when a screen opened at the Scottsdale Galleria near downtown Scottsdale. The theater closed with the mall. The first IMAX in the state, and still in operation, opened near the Grand Canyon in the 1980s.

Phoenix housing prices drop, but freefall not expected

The Arizona Republic - March 2007

Metropolitan Phoenix home prices have dipped in the past year, but economists say not to expect a freefall of Arizona's housing prices.Home sales and building have cooled statewide since 2005, but so far, "worries about a bursting housing bubble have not become reality," according to the February issue of the Arizona Blue Chip Economic Forecast.It cites information from the Office of the Federal Housing Oversight that show Arizona home prices were up 10percent during the fourth quarter of 2006 compared with the fourth quarter of 2005

Helping Arizona home prices are cities like Yuma, Prescott and Flagstaff, which posted double-digit gains in 2006. The Valley's home prices climbed 3percent during the same period. Nationally, home prices were up 6percent.Metro Phoenix led the nation for home price run-ups in 2005 with an almost 50percent jump, according the federal housing agency.The Valley's median resale home price fell about 5percent last year. The Blue Chip Economic Forecast is complied from economist's consensus forecasts and published by the JPMorgan Chase Economic Outlook Center, an affiliate of the L. William Seidman Research Institute in the W.P. Carey School of Business at Arizona State University.

Home permits hit 5-month high in January

The Arizona Republic - February 2007

Home building across metropolitan Phoenix hit a five-month high in January, signaling spec homes finally could be selling and more buyers are getting back into the market.

Single-family permits climbed to 2,876 last month, according to RL Brown's Phoenix Housing Market Letter. That's the highest level since August 2006, when builders pulled permits for 3,014 new homes.
Brown attributes the uptick in housing construction to builders cutting prices on homes and drawing buyers to some fringe communities once again.

In January 2006, 4,423 single-family permits were issued Valley-wide, but early last year the market was still operating at the frenzied pace of 2005 that couldn't be sustained.

"We have seen some life returning to the new-home market, albeit at a pace far below which we have been accustomed to in recent times," said Brown in his February newsletter.

Overpricing a home could lead to no sale

Inman News - February 2007

Sellers need to stay on top of rapidly changing markets
Overpriced home listings usually don't sell in any market. In today's market, there's no margin for error when selecting a list price. If your price is too high, the market can literally pass you by.

Many sellers ask: What's the harm in pricing high initially? You can always come down. While this is true enough, you may end up with a lower selling price if you start too high to begin with, particularly if the market is declining.

Today's real estate market is generally balanced, although there have been modest declines in median sales price in some areas. Prices are still going up in areas with low inventory and high demand, but the appreciation rate in these areas is slower than it has been in recent years.Given today's market conditions, buyers are more cautious about home purchases than they were last year. They are looking for value. A high price sends a message that you are out of touch with the market. Making an offer takes a lot of time and energy. Most buyers aren't willing to do this if they think that the seller is unreasonable.

Another factor that can keep buyers from making offers on overpriced listings is that they don't want to offend the sellers. Buyers feel that a low offer might jeopardize their chances of buying the property. They'd rather wait to see if the sellers lower their price before making an offer.
There is more emotion involved in a home purchase than in most other business negotiations. Home buyers usually need to feel passionate about a property before they'll make an offer. Today's buyers are concerned about overpaying in a soft market. It's hard for them be enthusiastic enough to make an offer if a listing is priced too high. A listing that might look great to them at the right price might not even be appealing at an above-market price.So, one risk of overpricing is that you don't receive any offers at all. Another related risk is that your home might not even be shown to buyers if it's priced too high. There usually is a direct correlation between the amount of showings a listing receives and the time it takes to sell.

HOME SELLER TIP: Before your home goes on the market, ask your agent to update the market evaluation of your home. Your home is most marketable when it's new on the market. So capitalize on this enthusiasm by presenting a good product at the right price.Since the market is always changing, you may find that your list price could be too high soon after your home is on the market. Many sellers object to lowering their price too quickly. They're afraid they'll leave money on the table.However, the best time to lower your price is as soon as you discover that the price is high. This way you quickly rekindle interest in your property. Leaving your home on the market too long at a high price can cost you money if prices decline.
After your home is on the market, keep an eye on your competition. Ask your agent to keep you informed about listing activity in your area. Find out which listings are selling and which aren't. How does your home stack up in comparison?

THE CLOSING: Pricing lower than your competitors can often bring about the desired result.

Flippers still profit in real estate slowdown

Inman News- February 2007

Are you a real estate "flipper" or a "keeper"? Most home buyers are keepers, owning their houses and condos for five or more years. However, even as residential sales prices currently "stagnate" or "plateau" in most cities, according to the latest statistics from the National Association of Realtors and other sources, flippers continue to profit

WHAT IS A REAL ESTATE FLIPPER?
There is no official definition, but a real estate flipper is a buyer who acquires a property and holds title less than 12 months. Other names for property flippers are "quick turn specialists" and "speculators."There's nothing wrong, illegal, immoral or fattening about that. However, buying low and selling high isn't always easy.Real estate flippers usually must add value to earn profits. Not only do flippers buy 25 percent or more below the market value of equivalent property in good condition, but they increase the purchased property's desirability by improving it to increase the value more than the costs incurred.The most profitable real estate example of adding more value than the improvement costs is fresh paint. Everybody has witnessed a shabby run-down house suddenly brought to life by exterior painting.Although your results will vary, spending $1,000 on exterior paint of a house often produces $10,000 increased market value, sometimes more. Interior paint can produce similar profitable results.
SPECIAL TAX BREAK FOR OWNER-OCCUPANT FLIPPERSIf you enjoy tax-free income, consider becoming an owner-occupant flipper. That means you buy a house or condo, move in to make it your full-time principal residence for at least 24 months, and then profitably resell it after making valuable improvements that add more market value than they cost.Thanks to Internal Revenue Code 121, your principal-residence sale profit is then tax-free up to $250,000 (up to $500,000 when both spouses meet the occupancy test and file a joint tax return in the year of sale)

WHO SHOULD BECOME A REAL ESTATE FLIPPER?
Flipper properties are especially attractive to beginner real estate investors getting started. Having earned substantial profits from fast-flip properties, I am aware the profits don't always materialize as quickly as expected.For this reason, especially for the first few properties, a "get rich slow" attitude is best. Later, after experience is gained, flipping properties becomes easier, perhaps even developing into a full-time profitable business.Flippers are especially ideal for investors with a flare for spotting sound, well-located real estate in need of upgrading. When you see a run-down house and cry out "yuck," you are a potential property flipper.

SECRETS OF PROFITABLE PROPERTY FLIPPERSAlthough any type of property can be flipped, most flippers specialize in houses because they offer the best potential and the largest market of prospective buyers. The secrets of profitable property flips include:1. Find a motivated seller who wants to sell due to an urgent reason and is willing to sell below market value in return for a quick sale. Strong seller motivations include out-of-town job transfers, unemployment, divorce, financial problems, illness, death in the family, and moving to a better house.2. Look for fix-up properties needing inexpensive cosmetic work. "El dumpo" houses often just need fresh paint, new light fixtures, cleaning and minor repairs, new carpets and flooring, and fresh landscaping.Examples of unprofitable but necessary fix-up work to avoid include structural changes, new roof and foundation repairs, which are very expensive but add little or no market value.3. Search sources of "fast flip" properties, including real estate agents, newspaper classified ads, foreclosure sales, probate sales, bankruptcies, expired MLS (multiple listing service) listings, vacant rental houses, absentee out-of-town owner lists, and properties with unpaid property taxes.4. Drive around desirable neighborhoods looking for vacant, run-down or abandoned houses. Jot down the address, take a digital photo to remember the house, and then check the owner's mailing address at the tax collector's office to discover an owner who might be anxious to sell.If you discover a house that has been owned for many years, often with a small or no mortgage and a large equity, that owner might be extremely eager to sell at a bargain price.

DISADVANTAGES OF FLIPPERS
But flipper properties, even when they produce large profits, are not without possible disadvantages such as:1. Profits from the sale of investment properties held less than 12 months are taxed at ordinary income tax rates. However, when a flipper holds title more than 12 months, then the sales profits are taxed at the long-term capital gains tax rate, currently 15 percent or less, plus applicable state tax.Of course, if you own and occupy the property as your principal residence more than 24 months within the last 60 months before selling, then your profit up to $250,000 (up to $500,000 for a qualified married couple) is completely tax-free. Home sellers who repeatedly sell their homes every 24 months are known as "serial home sellers."2. Some flippers don't enjoy the work of fixing up property to add market value. Serious flippers quickly learn do-it-yourself work wastes time and money. The smartest flippers hire professional contractors. However, obtaining cost estimates and supervising workers can be time consuming.The goal of every property flipper is to add at least $2 of market value for each $1 spent on cosmetic improvements. Wise management can often orchestrate improvements on a typical house to completion within 30 and 60 days.3. Fast flippers who sell quickly after completing their added-value improvements forfeit long-term market-value appreciation, which has averaged about 5 percent annually, according to the National Association of Realtors. In recent years, this annual appreciation was even greater.Flipping properties for resale profits is a great way to start investing in real estate. But flippers should be aware of the pros and cons of this profit opportunity, including the income tax aspects of long- and short-term profits.

City puts brakes on airport growth - Bans commercial passengers

The Arizona Republic - February 2007

Chandler has put the brakes on growth at its airport, and that includes a ban on commercial passenger service.

In a decision Thursday, the City Council changed municipal law to prohibit Chandler from seeking Federal Aviation Administration approval for commercial passenger operations.

The decision also reduces the maximum potential runway length from 6,800 feet to 5,700 feet. The current length is 4,850 feet. And it requires that runway pavement be designed for craft weighing less than 75,000 pounds.

"This should give citizens living around the airport some comfort to know that it will not expand to allow larger aircraft," said Becky Jackson, president of the Citizens Bond Committee and the Chandler Chamber of Commerce.

Her committee urged the limitations, and Jackson said she is hopeful they will reduce opposition to a May 15 bond vote that seeks to lengthen the runway to 5,700 feet.
The move was the latest action designed to protect what has become one of the city's biggest economic development areas in the face of long-standing rural neighborhood opposition.

"Every time you say airplanes and longer runway, people go off the deep end," said John Walkup, owner of Chandler Air Service and a leader in the pro-bond group. "We have tried to tell everybody for years that there won't be big jets, large aircraft here . . . this (the new law) is a way we can get public support for the longer runway without having people feel threatened."

Built in 1948 for crop dusters, the 542-acre airport at Cooper and Germann roads is now a hub for private and corporate planes. The nine square miles around it is bustling with new commercial construction and is likely to become one of the city's largest employment centers.

In the late 1980s, residents voted to ban jets there, but the city attorney declared the vote unconstitutional. As a compromise, the city agreed to keep the runway to 4,800 feet - too short for most jet aircraft. In 2000, a bond election that would have extended the runway to 6,800 feet failed.
The latest master plan recommended a 5,700-foot runway, and airport manager Greg Chenoweth has said the longer runway would be safer but would not accommodate larger aircraft.

At recent public meetings consultants said the airport's use will increase in coming years even without expansion.

Residents living on rural acreage near the airport have been fighting runway extension efforts for years and have vowed to oppose the latest one. Beverly Parris and Guy Pepoy are leaders of that group and have said they fear the longer runway will increase noise and traffic. Neither was available for comment Friday.

Your home value may surprise

The Arizona Republic - February 2007

If you've seen homes selling for less in your neighborhood lately, you might be thinking there's a silver lining. Your home could be worth less, so your taxes might be less, too. Right?

The answer is an unqualified maybe.

Homeowners in Maricopa County got an envelope in the mail last week showing their homes' new assessed value. And on average, that value is up. Not the 52 percent rise of the boom days, but still up, 13.4 percent overall.
Figuring out what that means for your taxes is a trickier proposition.Valley home valuations rise again, 13.4 percent overall Many Valley homeowners got a surprise in the past couple of weeks when they looked at their new property valuations.

Home values climbed in most cities for the second year in a row, despite the slowdown in metropolitan Phoenix's housing market.
That's the good news. The bad news is property taxes could rise as well.
Tax bills are due out in October, and those could surprise homeowners more than their recent valuation.

Property tax bills lag valuations by almost 18 months because of Arizona's complicated property-tax system. So the tax bill homeowners get in the mail this October will be based on the assessment of their home's value a year ago - after Valley housing prices skyrocketed 52 percent.
"The tax bill people get this fall could be the one with the big increase," County Assessor Keith Russell said.

The valuation most Valley homeowners got in the mail during the past few weeks will show up on property-tax bills in fall 2008. These valuations show an overall 13.4 percent increase on single-family homes.
"We recognize the housing market slowed last year and tried to incorporate that in the most recent valuation," Russell said.

Despite the increase in property valuations, few homeowners are likely to complain. The assessor's new values on most Valley homes are below the actual values or prices those properties could sell for now.
Nick Wood, a Phoenix zoning attorney who lives in Ahwatukee Foothills, said his latest valuation jumped 4 percent over last year's valuation to hit $685,500.

Like other homeowners, he has mixed feelings because while the increase could mean higher taxes, it also means his house is appreciating.
"You know, part of me says it is excessive, but another part of me says obviously the value of the house has increased and there should be an increase. There is justification for an increase. So it's kind of bittersweet."
Convoluted system Residential property taxes in Arizona are not easy to understand.

Homeowners are taxed through a formula based on valuations set by the county assessor and tax rates set by different budget decisions from more than a handful of municipalities and school districts.
The particulars can vary by city, but here is the basic breakdown of how taxing districts determine your taxes: special districts 7 percent; community college 10 percent; county 11 percent; cities 11 percent; and schools 61 percent.

Decisions those groups make later this year and next year will determine what homeowners' tax bills are for fall 2008. But the taxes will be assessed on the valuations just received.
Last September, most Valley homeowners were pleasantly surprised to find that their tax bills fell. The average property bill in Maricopa County declined 3 percent.

An individual tax bill is a measure of how large the overall tax burden is and how many people have to pay, according to the county assessor.
In fast-growing communities, the cost of city, school and special district services is spread among more taxpayers. In communities where those public agencies float lots of bonds, the total tax rate goes up.
What you pay is the result of the battle between the two. If a community grows faster than it generates new taxes, the individual bill falls.
"Even if cities hold tax rates flat, they are going to bring in more money this year because of the Valley's growth," said Jay Butler, director of realty studies at Arizona State University's Polytechnic. "If cities are smart, they will drop tax rates to keep their homeowners happy."
Appeal is possible Anyone can appeal his or her property valuation.
If homeowners do not think they can sell their homes for the "full cash value" listed on their valuation, the assessor says to appeal. Homeowners are actually taxed on the "limited property value" on their statement, which is significantly lower.

County Treasurer David Schweikert said homeowners should appeal if the assessor has something wrong with the information the valuation is based on. For example, if the square footage looks high on a valuation or if the assessor has a swimming pool on the property when there isn't one.
"Homeowners should also look at 'comps,' or comparables, in their neighborhood to see if they line up with the assessor's valuation," he said, referring to what similar homes are selling for nearby.
They can check values of other homes on the assessor's Web site, www.maricopa.gov/ assessor.

Last year when valuations hit a high, appeals were filed by 12,000 of the 1 million Maricopa County residential property owners. That was up by about 1,200 from the number of people who appealed the valuations before.

Russell says about 50 percent of appeals are successful.
What could spur more appeals this year is a wave of mortgage fraud in the Valley that has inflated some home values through scams called cash-back deals. The fraud involves obtaining a mortgage for more than a home is worth and pocketing the extra money in cash. The deals are pushing up comparables beyond the true value of a home. Mortgage fraud opponents say the deals could inflate property taxes.

"Mortgage fraud could create a nightmare for the county assessor trying to base fair valuations on comps," Schweikert said.

Fewer houses are selling, but median price is higher

The Arizona Republic - February 2007

Home sales across metropolitan Phoenix continued to slide in January. But the median home price climbed.

The number of existing Valley homes to change hands fell to 4,520 in January from 4,620 in December, reports Realty Studies at Arizona State University's Polytechnic campus. There were 5,260 resales recorded in January 2006.

Last month was the slowest January for resales since 2003.
The median price of a used home climbed to $260,000 last month, after falling to $255,900 in December. The median price hit a high of $267,000 in June.

Jay Butler, director of the Realty Studies center, said the size of the homes that sold in January also climbed, so the higher price is due partly to a greater percentage of bigger and more expensive houses selling.
The median square footage of a house to sell last month was 1,700 square feet, compared with 1,620 square feet in January 2006.

Realtors Seek to Protect Home Buyers From Predatory Lending

NRW - February 2007

WASHINGTON, D.C. - The National Association of Realtors® told a Senate panel that NAR supports stronger anti-predatory lending legislation and more consumer education on nontraditional mortgage products.In testimony on “Preserving the American Dream: Predatory Lending Practices and Home Foreclosures” presented to the U.S. Senate Committee on Banking, Housing and Urban Affairs, NAR said that abusive and predatory lending practices are putting our nation’s communities at risk. These practices can cause more families to lose their homes and savings through higher foreclosure rates. The vacancies that result can deflate the value of surrounding homes, as well.

“Predatory lending can be disastrous not only for the borrower and his or her family, but also for the entire community,” said NAR President Pat Vredevoogd Combs, of Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt. “High foreclosures of single-family homes are a serious threat to neighborhood stability and community well-being. Realtors® help families achieve the dream of homeownership, and NAR supports responsible lending with increased consumer protections to ensure that the ‘dream’ our members help fulfill does not turn into a family’s worst nightmare.”

“Real estate professionals have a strong stake in preventing predatory lending,” said Combs. “We have to make sure that while addressing predatory lending, the legislative and regulatory responses to lending abuses do not go too far and inadvertently limit the availability of reasonable credit for prime as well as subprime borrowers.”

Pinal home sales, prices stall

Tribune - February 2007

When Shannon and Chad Edgerton jumped into the housing boom frenzy, they didn’t want to miss out on the giant equity gains homeowners were celebrating.

But the couple plunged in a little too late when they bought a roughly 1,280-squarefoot home in the Queen Creek area in 2005. Since then, home sales and prices have tumbled throughout Pinal County. Some 3,860 existing Pinal County homes were sold in 2006, down from 6,115 the year before, a report by Arizona State University’s Realty Studies shows.
Like the sales activity, the median price in Pinal County also slid — dropping from $220,000 in the fourth quarter 2005 to $191,500 in the same period last year. “Our timing wasn’t quite right,” Shannon Edgerton said.

Now, many homeowners in Pinal County have put their homes back on the market — hoping to at least break even.

Industry observers, real estate agents and homeown- ers say there are a number of reasons why outlying areas like Queen Creek have been hit hard by the housing slowdown.

THE COMPETITION
Edgerton’s three-bedroom home is one of thousands that have risen from the dusty Queen Creek landscape in recent years.
And the building hasn’t stopped.
Workers are still framing and roofing new houses, even as builders are trying ng to unload existing inventory.
They’ve tried to entice buyers with pools, cars, appliances, landscaping and tens of thousands of dollars in incentives.
“They keep offering all of these things that we can’t compete with,” Edgerton said.
The Edgertons, looking for a larger home for their growing family, have received 15 or so calls since putting their home on the market in September.

At one point, builders were offering $60,000 and more in incentives and giving some agents 8 percent or 10 percent commissions.
Sellers are also competing with other resale homes.
At the height of the boom, sellers got 15 offers on their homes, and now there are 15 homes just like theirs for sale in the same area.
Still, the situation seems to be improving with builder inventories shrinking and fewer incentives being offered.
Agents are also receiving more calls from interested buyers.

THE DRIVE
With so many new residents in peripheral areas, traffic on the two lane roads has become increasingly congested for commuters driving to work.
During the boom, that drive was worth it for many, said Jay Butler, director of ASU’s Realty Studies program.
“When you had that big run up in prices, nobody cared where they lived,” Butler said. “They were going to be instantaneous millionaires.”
Now, prices are continuing to drift downward, and people aren’t as willing to deal with the traffic, he said.

“You buy a home to live in and enjoy, but if you’re spending 10 hours a week driving on the freeway, you’re not enjoying it,” he said.
Queen Creek is especially bad, an agent from the east valley. One crash can back up traffic for hours, she said.
Queen Creek homeowner Justin Lane is looking to move his family from a two-story home to a one-story and hopes to find a place closer to his Chandler office.
His home has been on the market for a year.
In that time, Lane has mostly received calls from investors with low-ball offers.
It’s frustrating, but at least the family isn’t in a situation where it has to move, he said.
“We understand there’s a timing in all of this, and it’s going to come back around,” he said.

THE INVESTORS
The huge influx of investors hoping to flip or rent out properties has also taken a toll on the Pinal County market. A majority of the homes for sale in those areas are likely owned by investors trying to get out, ASU’s Butler said. Edgerton said she’s seen an increasing number of renters and for sale signs in her area.
“If it wasn’t for the investors, I don’t think we’d be having this much of a problem,” she said.

The single-family rental market is highly competitive right now, Butler said. People can get good rent prices for homes closer to urban cores in Maricopa County, he said. Nathan King, a financial officer in the Air Force, was transferred to Wichita, Kan. just months after his family moved into their Queen Creek home.

They tried to rent the place out but couldn’t find any takers. King then listed the home in August and, like many sellers in the area, has dropped his asking price several times. Meanwhile, he bought a second home in Kansas.

“It’s been pretty frustrating,” he said. “It’s never fun to have two house payments and not be able to find renters.” Still, King is optimistic. “I know that the Phoenix area is still one of the fastest growing in the U.S.,” he said. “I just feel they built too many homes too fast.”

Renters will dig deeper in 2007

USA TODAY - February 2007

Renters be warned: Landlords are expected to raise apartment rents for a third-straight year in 2007, forcing tenants to turn over a growing chunk of their pay and making it harder to save for a home, a report to be issued today by Marcus & Millichap finds.

With the projected rise of 5% this year, rents would be 14% higher than at the end of 2004, the report says. Over the same period, paychecks are expected to rise 4%, adjusted for inflation.

The widening gap is likely to worsen the crisis for workforce housing, especially in coastal cities, says Hessam Nadji, a managing director at Marcus & Millichap, a real estate investment brokerage. "This is a national trend. We're seeing rents rise in the majority of markets, and we see this continuing for at least three years."

From 2000 to 2004, most landlords couldn't raise rents because so many tenants were leaving to buy houses or condos. To feed that buying frenzy, about 300,000 apartments were converted to condos for sale in the past three years. Now, even with 92,000 new rental units this year, the stock is still too little to meet rising demand.

"It's horrible. I'm going to pull my hair out," says Veronica Gonzales, 25, CEO of an event planning firm in Manhattan, where rents are expected to jump more than 7% this year, the sharpest increase in the USA. Gonzales has been hunting for six months for a place in the city for $2,000 a month. Unfortunately for Gonzales and other apartment dwellers, rents are rising because the payment gap between renting and owning remains wide. Even with this year's increase, the national median rent will be $943 a month, only 60% of the median mortgage payment of $1,566.

Renters will get a bit of a break in places such as Miami, Las Vegas and San Diego, where investors bought thousands of condos, hoping to flip them for a quick profit. Since the market faltered in late 2005, many of those condos have been empty, and investors are seeking tenants to help pay the mortgage.

Mohamed Amar bought two Las Vegas condos in 2005 that he's trying to rent. "I thought it was a good investment," says Amar. "But when I tried to put it on the market, the developer started cutting the price, and they killed everybody." Yet, even in these cities, the report says, rents will rise this year.

Energy efficient info in home listings good step forward

Tribune News - February 2007

QUESTION: I just read in our local newspaper here in Portland, Ore., that the real estate Multiple Listing Service is going to start including information on energy-efficient features in their listings. I've long been an advocate of saving energy and wonder if you think this means that energy costs are finally getting accepted as important to homeowners.

ANSWER: This sounds like a great step forward, and one more example of how people are realizing that we can indeed control our own energy costs. When most people look for a new car, for example, they ask about the estimated gas mileage since they know ownership of a vehicle includes significant costs for keeping it running as well as buying it. More and more people are finally getting the same message about their home, especially as rising energy costs in recent years have brought monthly energy bills to levels approaching what they're paying for their mortgages.

I enjoyed reading so many articles and letters to the editor before the recent elections from people who were sure that falling gas prices were just one more indication that politicians and big business set our energy costs. In reality, world oil prices are set by the OPEC countries, not our country's politicians. Yet it looks like many people are convinced that our politicians can just pass laws or regulations that will save us energy if they want to.
The real answer to energy costs can be seen in the real estate listings you wrote about or in the growth of the energy inspection and auditing industries or in the number of energy-saving products you see on the shelves in building supply stores. You have the power and the ability to control your own energy costs.

When buying an existing home, check out the energy features and ask to see the energy costs the current occupants have. When building a new home, insist that the builder incorporate energy-saving features (features that can be paid for as part of the mortgage payment so you don't even notice them, and savings you'll start getting from the first day you move in).

Or just go through your current home and start identifying ways you can lower your energy costs now. You can replace incandescent bulbs with compact fluorescents, make sure you have enough attic insulation, set your thermostat to the most efficient levels, seal the cracks and holes in the walls, use drapes and blinds to keep the sun out when you don't want it or in when you do, or literally dozens of other things that are low-cost or even no-cost that you can do yourself.

Pinal County home resales are declining

The Arizona Republic - February 2007

Pinal County's resale housing market is steadily declining.
The number of sales dropped to 720 in the final quarter of 2006 from a record high of 1,785 in the second quarter of 2005, according to Realty Studies at Arizona State University's Polytechnic Campus.

The median price of an existing house in Pinal County also has steadily dropped, according to the figures released Friday.

In the fourth quarter of 2006, the median sales price for an existing house was $191,500, down from $220,000 in the fourth quarter of 2005.
Although the county has a limited job base and commercial real estate sector, people were willing to drive longer distances to find affordable housing, Realty Studies officials said.

While affordability has improved, higher gas prices and more congested highways have begun to limit the county's housing market, the firm said.
"Because investors were also drawn to the inexpensive housing in Pinal County, higher prices have limited their role in the local housing market," said Jay Butler, Realty Studies director.

"In order to reduce inventories, new-home builders have been aggressively pursuing buyers through incentives such as specially priced upgrades, free pools and gift cards."