Gap in Q.C. road spurs study of threat of fissures to streets

Tribune - July 2007

Maricopa County officials are watching the streets after monsoon rains opened a fissure south of Queen Creek that cracked a road and threatens to damage others. The Maricopa County Department of Transportation is monitoring a ground fissure that cracked San Tan Boulevard east of Sossaman Road after rains last weekend.

Roger Ball, spokesman for the Transportation Department, said the crack is small for now, and county workers placed steel plates over it to allow road travel to continue in the area.

Several fissures - subsidence cracks caused by groundwater harvesting and exposed during heavy rains - appeared over the past week in the Queen Creek area, prompting attention to how they are affecting roads, Ball said.
Fissures damaging roads is uncharted territory for Maricopa County, but engineers did minor work in the area Tuesday and plan to do more comprehensive study next week, he said.

Out of the 2,600 miles of roadway the county maintains, this is the first issue of fissures interfering with the roads, Ball said.

"The big concern for all of us is that we don't exactly know where each and every fissure is," he said. "This is one of those things where as you dig, you may find more. The magnitude of the fissures in this area makes it unusual for us."

Ball urges area residents to report fissures.

Maricopa County officials said legislation enacted last year that requires the Arizona Geological Survey to map fissures around the state is helping in its quest to research and respond to fissure issues.

Mapping recently completed by the Arizona Geological Survey is the first step in preparing more highly detailed fissure maps of specific areas. Those maps will be completed over the next five years.

Geological Survey officials said the first detailed fissure map due out in the next year will focus on the area where the fissure damaged San Tan Boulevard: the Chandler Heights area, an unincorporated area of Maricopa County south of Queen Creek.

That area was selected for the first map because of its growth and the need to show developers and residents where fissures could pose a hazard, Geological

Home sales remain tepid in Valley

Tribune - July 2007

Valley builders and homeowners alike are continuing to struggle in an over-saturated real estate market, as buyers wait to see if prices will keep falling.

Two studies released this week show continued weakness in sales of newly built homes in the Valley and existing Pinal County homes.

Some 2,988 new Valley homes were sold in June, compared with 4,348 during the same month last year, the latest Phoenix Housing Market Letter by analyst RL Brown shows.

Large inventories of both new and existing homes are still hurting the market, Brown said. More than 50,000 existing homes are currently for sale in the Valley.

"There's a lot of people who would buy if they could get rid of their present house," he said.

Stricter lending guidelines created in response to a spate of foreclosures nationwide are also an immense problem, Brown said.

"It cuts deeply into the pool of potential home buyers and especially first-time home buyers," he said.

Building permit activity is also sagging.

In the first six months of 2007, 20,662 single-family home permits were issued, a 24 percent drop from the same period last year.

Brown recently adjusted his five-year forecast downward, anticipating that new home building permits will not reach pre-boom levels of about 44,000 annually until 2011.

Despite the slump in sales, builders began ramping up production on speculative homes earlier this year, likely anticipating buyers returning to the market, said Ben Sage with research firm Metrostudy.

That hasn't happened. "It means they're going to continue to have inventory they need to get rid of," he said. "It'll keep downward pressure on prices."

Still, roughly a dozen new builders have jumped into the market in the past year, said Sage, who heads up the Houston-based company's Arizona division.

"That's the good news for Phoenix," he said. "They believe in this market in the long-term." The existing home market has also shown signs of continued weakness in recent months, especially in Pinal County, where home sellers are competing against builders.

Some 970 existing Pinal County homes were sold in the second quarter 2007, according to a study by Arizona State University's Realty Studies department. That's up slightly from the 840 sold in the first three months of the year but still considerably lower than the 1,785 sales recorded during the same period last year.

Sellers are competing with investors and builders, who are trying to off load homes, said real estate agent in the east valley. Builders are getting cancellations, which adds to the housing inventory. They can afford to cut prices by tens of thousands of dollars, while homeowners can't, he said. "They're the ones with the deep pockets," he said.

For now, sellers need to keep lowering their prices, and if they can't, they shouldn't sell. "Pay the bill and keep making the drive."

AARP magazine praises Chandler

Associated Press - July 2007

ATLANTA - Urban renewal plans that favor mass transit, encourage walking, and allow older people to downsize while staying in their neighborhoods are the reasons that led the AARP to recognize Chandler, Atlanta, Boston's Beacon Hill, Milwaukee and Portland, Ore. as the best places for seniors to live. "What they have in common is that city planners are aggressively making plans to accommodate older residents," said Steve Slon, editor of AARP The Magazine.

The September/October issue profiling the cities will be distributed this week.

While each city is obviously different - from hot to freezing, from expensive and historic to inexpensive and fitness-oriented - they all have taken the lead in becoming friendlier places to live in for people over 50, Slon said.

Chandler was cited for its programs like cab coupons that also help seniors who might not be able to drive, in addition to sunny weather and a much cheaper cost of living than the East Coast cities selected.

In Atlanta, Slon said the AARP looked at city initiatives promoting mixed-income housing as well as mixed-use living in areas like Atlantic Station.

The Fastest-Growing Suburbs in America

Forbes - July 2007

Los Angeles is sometimes called the "Sultan of Sprawl." But you wouldn't know it by looking at the country's fastest-growing suburbs. Not a single one falls in the L.A. metropolitan area.

Instead, Angelinos are packing their bags and heading 60 miles east to San Bernardino, where twelve of the country's 100 fastest-growing suburbs are located. Leading the pack? Beaumont. It has experienced 130% growth since 2000.

It's easy to understand why. Home prices in the Riverside-San Bernardino metropolitan area are 30% less expensive than in L.A. Add comparable household incomes to the mix, and the move from the basin to the valley makes sense.

So much sense that San Bernardino's rate of net domestic migration has near quadrupled since 1990, while the Los Angeles metro posted negative net migration figures over that same period. Last year, it lost 72,000 more residents than it gained.

Our list was compiled using U.S. Census growth data from 2000 to 2006 and provided by Demographia, a St. Louis-based research firm. Since a city's metropolitan statistical area is defined by the counties it encompasses, Demographia excluded those outlying towns which were in suburban counties but didn't have significant economic and social ties to the big city. Suburbs included cities, townships and villages that had more than 10,000 people in 2000.

Behind The Numbers

The fastest-growing suburb in the country is Lincoln, Calif., just outside Sacramento. Its population jumped from 11,746 to 39,566, or an increase of 236%. The fastest-growing big suburb (with a population of 100,000 or more) is Gilbert, Ariz., outside Phoenix, which expanded from 112,766 people to 191,517.

While not cheap by national standards, the growth in Sacramento's outerlying areas is strong because it's a less-expensive alternative to Los Angeles, San Francisco or San Diego. The Phoenix area saw the greatest positive domestic migration of any American metro last year, with 115,000 more people moving into town than leaving. Affordable housing and a growing economy draw a lot of people to the city.

But with sprawl comes both pros and cons.

In Texas, for example, geographic growth is almost completely unregulated. Not surprisingly, the Lone Star State has the lion's share of the country's top-growth suburbs, 20, 12 of which are in the Dallas-Forth Worth metro area.

As a result, these areas have some of the most affordable homes in the nation, since there is plenty of supply to meet demand. But transportation expenses are often high. In Houston, such costs are the No. 1 household expense, according to the Brookings Institute.

Cities that engage in restrictive growth policies find themselves with different trade offs. In Boston's inner suburbs, including Chelsea and Cambridge, zoning and growth restrictions designed to prevent sprawl backfire because they force people to look farther outside the city for affordable housing. According to the same Brookings Institute study, metros with growth exclusion plans like Boston have the most expensive housing stock in the country since there is a limited supply of homes close to the city.

This becomes particularly problematic in northeastern and Rust-Belt cities that are losing population. Places like Phoenix and Las Vegas are spreading out faster than Boston, but they are doing so more efficiently, meaning with a more concentrated population.

Last year, just over 16,000 more people left the Boston metro area than moved in, yet the suburbs continued to expand geographically. The result is a thinning of the area, which makes Boston more of a sprawl, if sprawl is defined as the density of population over a geographic space.

Rounding out the top 10 fastest-growing suburbs after Lincoln were four Phoenix suburbs: Buckeye, Surprise, Goodyear and Avondale; Plainfield, outside of Chicago; Beaumont, outside San Bernardino, Calif.; Frisco and Wylie outside of Dallas; and Woodstock, outside of Atlanta.

Home inspection is worth inspecting

Having your home inspected by a licensed professional is expensive. But Janis Emery of Clarksville, Tenn., says the several hundred dollars she and her husband paid for a home inspection two months ago was worth it.
"You have to think about the money you're spending. ... Even if it's a newly built property, if you're not in the building trade, you don't even begin to know what to look for," Emery says. "I look at it as insurance. It's just money well spent."

Paul and Janis Emery were interested in a rustic Western red cedar home nestled in the woods just outside Clarksville's city limits. They could see there was a crack in the foundation, but it didn't look serious. They called Johnny Goad, owner of J.W. Goad Home Inspections, to come check it out.

"We knew the foundation was cracked," Janis Emery says. "We didn't realize the extent of the damage. Mr. Goad also pointed out some other structural problems in the house we didn't pick up on."

The Emerys decided against buying the house.

Goad is a third-generation homebuilder who began inspecting homes in 2006. He says most people think about having a professional home inspection when they're about to buy a house. Few think about it when they're looking to sell a house, and even fewer think about having an inspection done on a house they've been happily living in for years.

Goad says the seller's inspection is a useful tool. Your home may get a clean bill of health, a useful selling tool. Some inspectors offer password-protected links to your full report online, so sellers can direct potential buyers to the report even before they see the home.

On the other hand, if the home has problems, sellers have the option of fixing them before a buyer or buyer's inspector ever sees them.

"By having the house inspected before they put it on the market, then they're not caught by surprise," Goad says.

Sellers could avoid the heartbreak of having a great sale disappear once the buyer's home inspector files his report.

Maintenance inspections can provide peace of mind that all systems and structures are in good shape, or can give homeowners advance warning of problems.

"Most homeowners never see the far corner of the crawl space, the far corner of the attic," Goad says. "It's good to know what you may need to have done that may be being neglected. If you find something that needs repair in the near future, you can budget for that repair. You have time to get several estimates before it becomes absolutely necessary to have it done."


Goad says the most common problem he finds in any home inspection is moisture. Water in a crawl space or an attic is a problem that can usually be fixed pretty easily, but if the water sits for months or years, mold and rot become bigger issues.

"Some things you may be able to catch before it gets out of hand and becomes a much more costly repair," Goad says. "Especially water-related damage. They only end up getting worse."


If you've never had a home inspection, you would probably be surprised by how thorough it is. A home inspection should take at least two hours and may stretch to four hours or longer depending on the size and condition of the house. The inspector will look at every area of the house, from the basement to the roof.

According to the American Society of Home Inspectors, the standard home inspector's report will cover the condition of the home's heating system; central air-conditioning system; interior plumbing and electrical systems; the roof, attic and insulation; walls, ceilings, floors, windows and doors; and the foundation, basement and structure. The price of the inspection varies according to geography, the size of the home, and whether optional services, such as a test for radon, are necessary. The average cost of an inspection is between $250 and $350, according to Christiana Brenner, a spokeswoman for ASHI.

"My husband said it was the best money we ever spent," Janis Emery says. "It saved us untold thousands."

With home prices dropping, sellers compromise

Tribune - July 2007

Home sellers in Scottsdale and other Valley cities holding out for their asking price should consider following the latest trend - compromise. The East Valley resale home market is slowing, with the number of sales in Scottsdale slipping from 465 in June 2006 to 415 in June 2007, and in Mesa, from 585 to 520 sales, according to a report by the Arizona State University Realty Studies Department.

Home prices also are dropping - an indication that some sellers are willing to make a deal in the troubled market.

Vern Zeman, of Scottsdale, has had his home on the market just two weeks. For his four-bedroom, two-bathroom home, he is asking $395,000.

He is competing with other homes for sale in his neighborhood, but Zeman is optimistic.

"I think we've got a bigger and better house than most of the homes in the area," he said.

He might want to consider joining the trend, though.

In Scottsdale, the median resale home price dropped to $612,750 from last year's $640,000. Mesa reported a similar trend, with the median resale price reported at $235,000, down from last year's $247,600.

Valleywide, the slumping market has shown signs of stabilizing in recent months. However, a massive oversupply of houses for sale and more stringent lending standards are threatening to send it tumbling.

Some 14,990 existing Valley homes were sold from April through June, up from the 14,185 sales recorded in the first three months of the year, according to ASU's report. Second-quarter sales were still significantly below the same period in 2006, which had 18,310 sales.

The recent sales totals are comparable to the historical trends that occurred before the hyper market of the past couple years, Realty Studies director Jay Butler said.

Builders have more room to maneuver than regular homeowners because they have their own mortgage companies and can offer larger incentives, Butler said. But "if you're the typical middle-class home seller, there aren't a lot of options that you have."

Some communities are also being hit by a growing number of foreclosures, Butler said.

Arizona's foreclosure rate was the fifth highest in the nation last month with 5,711 properties entering some stage of foreclosure - a 168 percent spike from June 2006, according to Realty-Trac, which monitors foreclosures.

It's not just low-income individuals who are losing their homes but owners of all financial levels, Butler said.

"It's people really stretching beyond their economic means," he said.

Also in June, 17 percent of homes sold were priced from $125,000 to $199,999, while 41 percent sold for $200,000 to $299,999; and 40 percent cost more than $300,000.

The median existing home price was $263,145, compared with $267,000 in the same month last year.

Realtors expect home prices to bounce back in 2008

Associated Press - July 2007

WASHINGTON - The prices of existing and new homes are expected to bounce back next year after a dreary 2007, a real estate trade group said Wednesday.

The National Association of Realtors also said it expects existing-home sales to rise to nearly 6.4 million in 2008, up from the 2007 estimate of more than 6.1 million. Nearly 6.5 million existing homes were sold in 2006, the association said.

As for new homes, sales are projected at 865,000 in 2007 and 878,000 next year, but the 2008 projection would still be down more than 20 percent compared with the nearly 1.1 million new homes sold in 2006.

More than 1.4 million housing starts, including multifamily units, are forecast this year and in 2008, but that is down from 1.8 million last year.

Existing-home prices are expected to gain 1.8 percent to a median of $222,700 in 2008 after a 1.4 percent decline this year to $218,800, the according said. The median new-home price should rise 2.2 percent to $222,700 next year after a 2.6 percent drop to $240,100 in 2007.

"Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008," Lawrence Yun, NAR senior economist, said in a release. "Buyers now have an overwhelming advantage given the wide selection of homes available in many markets. But with profit margins coming under pressure, homebuilders will limit new construction well into 2008."

Fees to build a house in Gilbert will increase

The Arizona RepublicJul. 8, 2007 10:39 PM
It's going to cost more to build a house in Gilbert starting July 16 when new town fees take effect.

It'll cost $15,968 in fees to build a single-family home in Gilbert, up from $14,633.

Gilbert has charged system-development fees, also known as impact fees in other municipalities, since 1997.

"The council has a policy that they want all new growth to pay for itself," Assistant Town Manager Marc Skocypec said.

Once a development fee is collected, it is then divided into categories to pay for new parks, police, fire and other town infrastructure.

This most recent system-development fee increase will particularly benefit fire protection, parks and recreation, and water and sewer systems, officials said.

Valley investors shying away from foreclosure auctions

Tribune - July 2007

With foreclosure rates hurtling upward, Valley lenders are being forced to take back a growing number of homes from cash-strapped borrowers - costing them tens of thousands of dollars. That's because investors aren't biting at foreclosure auctions since many properties for sale have no equity left, said Tom Ruff, a partner at Glendale-based data research firm Information Market.

"They're looking to buy it at a discount at the sale, and they just don't see that those properties are profitable," he said.

Valleywide, 18 percent of the 676 properties foreclosed on last month were purchased by third-party buyers - typically investors - while lenders took back 82 percent, statistics compiled by Information Market show.

That's a sharp reversal from June 2005, when investors snapped up 75 percent of 105 foreclosed properties.

"That's when the market was just sizzling hot," Ruff said. "Investors were more willing to take a chance."

But with home price appreciation now stagnant, many investors are steering clear of buying up foreclosure properties - leaving lenders to carry hefty financial burdens.

Taking back a home back can cost a bank tens of thousands of dollars in attorney fees, repairs, maintenance, utilities and marketing by a real estate firm.

Many are also being forced to buy back bad loans they sold to national mortgage servicing companies or Wall Street investors, said Eric Bowlby, president of AmeriFirst Financial in Mesa.

And it's causing a climbing number of firms to shut their doors, Bowlby said.

"It's unfortunate," he said. "A lot of people, they've made their bed. Now they have to sleep in it."

It's a problem throughout the country and across income levels, said Patti Crawford, who manages Intero Real Estate Services' foreclosure division in Mesa.

A two-bedroom home off of Thunderbird Road in the West Valley was put back on the market by a lender for $45,000, Crawford said.

Another lender-owned home with four bedrooms was on the market for $1.6 million in Scottsdale, she said.

"Properties are coming back in droves," Crawford said.

Borrowers need to be more careful before they get into loans and make sure they know what they're signing, she said. Many loan officers jumped into the business in recent years to capitalize on the boom - pressuring some homebuyers into loans they couldn't afford. Arizona loan officers aren't licensed, Crawford said. "They're not governed," she said. "Nobody dictates to them what their job is and the legal ramifications."

Arizona builder's troubles reflect housing slump

The Arizona Republic - July 2007

The nation's home builders continue to fall on hard times.

Scottsdale-based Meritage Homes is the latest hit by the slowing housing market.

Arizona's only publicly traded home builder must write off $100 million on land and operations after a second quarter in which home orders fell 28 percent and new-home cancellations climbed to 37 percent, according to preliminary numbers released Friday.

Early this year, many home builders, including Meritage, expected to see the market stabilize during the spring selling season. But by May, it was clear the housing market hadn't yet hit bottom. Now, builders are reporting losses for the first time in several years and writing off money-losing land and other assets such as speculatively built homes.

A few weeks ago, Los Angeles-based KB Home reported a second-quarter loss of $148 million and a $308 million write-off on land and inventory. Florida-based Lennar Corp., another housing giant, also reported a loss and write-offs last month. Both companies build in Arizona.

Housing is Arizona's biggest industry, and the slowdown in building ripples throughout the economy from job losses at contracting firms to weaker sales at furniture stores.

Analysts and builders are now looking to 2008 for any kind of market upswing."One hundred million dollars is a lot of money, but I am not surprised by Meritage's write-down," said national housing analyst Tim Sullivan of the San-Diego based Sullivan Group. "Every builder is doing it now. The housing market has some more pain ahead of it."

RL Brown, publisher of the Phoenix Housing Market Letter, is downgrading his earlier forecast for home building. In January, he predicted 41,000 new homes could go up Valley-wide. That compares with 42,460 new-home permits issued in 2006 and a record 63,570 in 2005.

In June, Meritage warned that April and May homes sales were weaker than expected. About the same time, overall home-builder confidence in the industry dropped to a 16-year low, renewing concern that the housing slump was not over.

New-home cancellations have left the Valley's housing market with at least 20,000 homes built but unsold. Builders have offered hefty incentives of $50,000 and more to sell the houses, but many potential buyers can't sell their existing homes.

The result is a glut of homes for sale that is putting pressure on prices and dragging down the market.

"Weak demand and high inventory levels have increased competition among home builders, pressuring margins, despite reductions in new-home starts, lot supplies and operating costs,"

Meritage Chief Executive Steve Hilton said.Meritage's write-off translates to about a $60 million hit to its second-quarter income. During this year's first quarter, the company reported a net income of $15 million, compared with $79.7 million the year before. Analysts expect to see more of the same problems among other big U.S. builders because the companies need to sell their spec homes and excess land.

In 2005, investors inflated demand for new homes. Builders rushed to buy land, often paying top dollar, and construct homes fast enough to keep up with demand. But prices peaked in many speculator-driven markets like Southern California, Las Vegas, Phoenix and Florida, and demand plummeted.

The value of some land bought during the market frenzy has fallen since then, which accounts for a lot of the recent home builder write-offs.

For example, if a builder purchased a lot for $100,000 but it's now valued at $75,000, accounting rules require the builder's balance sheets to show the drop.

Meritage is taking a $25 million write-off from an acquisition it made in Florida. No specifics were given on the rest of its charges.

"It's the market correcting," Sullivan said.

Pinal pauses to mull growth, future

The Arizona Republic - July 2007

Pinal County is taking a big breath.

Coming down from two years of dizzying growth that poured 100,000 new people into the county's borders, Pinal now finds itself trying to get a grip on development before the next tidal wave of growth strikes.

County leaders, planners and officials in cities and towns throughout Pinal are capitalizing on a cooling housing market to ask themselves some important questions: Where are we? How did we get here? And most importantly, where are we going?

Many say taking a step back to try and guide growth is a luxury that this up-and-coming county sandwiched between Phoenix and Tucson needs to take advantage of now.

"We're going with a clean slate, but that clean slate is quickly filling up," said Jess Knudson, a management assistant with Florence.

Part of the county's move to take a step back and think about what that full slate could look like appears in a report titled "The Future at Pinal."

The county paid the Morrison Institute for Public Policy $272,000 to develop the report as Pinal prepares to map out future land use, open space, transportation corridors and employment hubs.

The idea is to take an in-depth inventory of the region going from rural roots to an urban outlook.

The goal is to develop a vision to steer development so Pinal doesn't disappear into the suburban shadows of Maricopa and Pima counties.

Starting around 2004, growth blindsided Pinal County.

People entered lotteries fighting for homes in the newest master-planned communities. The county issued a record-breaking 18,700 permits for new single-family houses in 2005. And cities and towns started seeing their first chain grocery stores and Starbucks.

It's a different picture today.

From a peak of 1,785 sales in the second quarter of 2005, Pinal's resale market dipped to 840 transactions in the first quarter of this year.

"We're at a trot now instead of a full-fledged run," said Sandie Smith, one of three Pinal County supervisors. The county's Board of Supervisors deals with much of the zoning and development issues that come with growth.

"While we haven't stopped," Smith said, "we can take a deep breath and address some of the issues we have going forward that we couldn't think about when we were growing so rapidly."

Hopes and fears

"We want to talk about what we want to look like when we grow up," Smith said.
It seems to be more a matter of what Pinal County officials and residents don't want the area to be.

• "We don't want to be a bedroom community for Phoenix and Tucson," said Ken Buchanan, assistant county manager for development services.

• "I don't want us to be like California," said Paul Venegas, a Pinal County resident and business owner.

• "We have to be forward looking while still respecting the past," said C. Alton Bruce, the director of growth management in Coolidge.

But across the board, the consensus is the same: Pinal wants to be different.

It doesn't want clogged roads, a pattern of strip malls and bedroom communities - things already set in motion from the first wave of growth.

"We're really good at growth in Arizona," said Grady Gammage Jr., an expert on Arizona growth with the Morrison Institute. "Stopping to take stock and see if we can make changes and build an identity for the future is not something we can do most of the time.

"It's really fortuitous for Pinal that things have slowed down. If the county keeps going on the default growth scenario, Maricopa will come down to two-thirds of the county, Pima will take the other third and Pinal will end up this big McMega drive-through."

Because most of Pinal County's recent growth has come from single-family homes, some dangerous trends already have started to develop.

About half of the county's population marches out of Pinal's borders every morning for work. And sales-tax-hungry cities and towns are aggressively annexing land, priming for the next auto mall or power center.

The county will have to tackle water, transportation and open-space issues.

Time for game plan

Many believe now is the time to develop the game plan that will lead Pinal into what could be a surprisingly bright future.

Cities and towns are revamping general plans, updating impact fees and preparing for larger wastewater treatment plants. Mayors are meeting for breakfast to talk about regional cooperation, and planners are crossing borders to talk traffic.

"People in Pinal want to have a real distinction from Maricopa and Pima counties," said Rob Melnick, director of the Morrison Institute. "They don't want to be lost in the in-between. But just because they have a vision doesn't mean they're going to rise out of the occasion. They really have a shot at this, but they have a huge amount of work to do."

Pinal sits right in the path of the Sunbelt, where urban planning experts have predicted the nation's next wave of migration. With more than 1.3 million people projected to call the county home by 2050, a new Pinal County will inevitably emerge.

The challenge will be to break from Arizona's traditional model of development - cities and towns getting dragged by the rush and routine of growth - to keep Pinal from disappearing into a seamless blend of its neighboring counties.

"As we are all facing the prospect of this tsunami of change, I think we've come to the determination that we need to get a grip on this growth," Pinal County Supervisor David Snider said. "We are being challenged by our residents and our stakeholders to do business in a way that is not 'as usual.' "