Project Map


Map Code:
Orange – Under Construction
Green – Active Listing
Yellow – Pending Sale

Properties

1) Ashwood Circle — N.W. Corner of N. 3rd St & E. Rose Ln — Phoenix, Arizona 85012

North-Central Phoenix Subdivision Featuring Eight Energy-Efficient, Technologically Integrated Homes ~ ~ $875,000 & Up!

2) 4949 E McDonald Dr – Paradise Valley, AZ 85253

7,000 SF | Spring 2019 | Modern | Infinity Pool Overlooks The Beauty of Paradise Valley | Build to Suit Options | $4,000,000 | UNDER CONSTRUCTION!

3) 4817 N 35th St – Phoenix, AZ 85018

3,148 SF | 4 BR/4 BA | Finished Basement | 8,000 SF Lot | $950,000 | AVAILABLE NOW!

4) 4821 N 35th St – Phoenix, AZ 85018

3,005 SF | 4 BR/4 BA | Finished Basement | 8,000 SF Lot | $950,000 | AVAILABLE NOW!

5) 4119 E Sells Dr – Phoenix, AZ 85018

2,984 SF | Summer 2018 | NEW BUILD | Pool | $875,000 | PENDING!

6) 4533 E Devonshire Ave – Phoenix, AZ 85018

2,600 SF | Summer 2018 | NEW BUILD | $799,000 | UNDER CONSTRUCTION!

7) 6635 E Monterosa St – Scottsdale, AZ 85251

4,006 SF | Fall 2018 | NEW BUILD | Pool | $1,800,000 | UNDER CONSTRUCTION!

8) 6201 E Calle Redonda – Scottsdale, AZ 85251

Spring 2018 | Pool | Rooftop Deck | $1,950,000 | PENDING!

9) 3117 N 60th St – Phoenix, AZ 85018

5,000 SF | Fall 2018 | $1,450,000 | UNDER CONSTRUCTION!

10) 6045 E Rose Circle – Phoenix, AZ 85018

4,000 SF | November 2018 | Views of Camelback Mtn. | $1,700,000 | UNDER CONSTRUCTION!

11) 5937 E Larkspur, Scottsdale, 85254

3,165 SF | Summer 2018 | $750,000 | AVAILABLE NOW!

12) 12424 North 60th Street – Scottsdale, AZ 85254

3,050 SF | Summer 2018 | $725,000 | PENDING!

13) 4050 E Rancho Dr – Phoenix, AZ 85018

4,200 SF | December 2018 | Contemporary Design | Gorgeous Views of Camelback | Build to Suit Options Available | $1,700,000 | UNDER CONSTRUCTION!

14) 4975 E McDonald Dr – Paradise Valley, AZ 85253

5,000 SF | Fall 2018 | ON the Side of Camelback Mtn. | Build to Suit Options Available | $3,000,000 | UNDER CONSTRUCTION!

15) 4710 E Calle Tuberia – Phoenix, AZ 85018

~3,500 SF | Fall 2018 | Pool | 12,000 SF Lot | $1,700,000 | UNDER CONSTRUCTION!

16) 4407 N 35th St – Phoenix, AZ 85018

2,974 SF | Fall 2018 | $850,000 | UNDER CONSTRUCTION!

17) 4115 N 42nd St – Phoenix, AZ 85018

~2,200 SF | December 2018 | $750,000 | UNDER CONSTRUCTION!

18) 4016 E San Miguel Ave – Phoenix, AZ 85018

~4,000 SF | December 2018 | Views of Camelback Mountain | $1,700,000 | UNDER CONSTRUCTION!

Market News

 
June 2018

Home Hunter TV: Nick Blue

Special thanks to ABC15 Arizona and The Home Hunter for having us on this past weekend to talk about Blue Sky Homes and Ashwood Circle.

It was a great opportunity to share more about Smart & Green Building in Phoenix!

Posted by Blue Sky Homes on Thursday, June 14, 2018

 
 

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May 2018

GLAZ May 2018 FC

 
GLAZ May 2018 Blue Sky 1

 
GLAZ May 2018 Blue Sky 2

copyright © greenlivingaz.com



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May 2018

Meet Nick Blue of Blue Sky Homes
May 10, 2018 | voyagephoenix.com

Thanks for sharing your story with us Nick. So, let’s start at the beginning and we can move on from there.

I founded what became Blue Sky Homes in 2009 by purchasing my first piece of real estate via auction, virtually sight unseen, with every ounce of savings, zero construction knowledge and the few dollars I could raise from family considering I had no track record to that point.

My wife thought I was crazy and she was probably right, but I had known for years that I wanted to establish enough passive income to exceed my living expenses via rental properties, but quickly realized I wouldn’t be retiring anytime soon with the limited resources I had at my disposal, so my goal then became to buy, renovate and sell four homes in order to purchase a four-plex and then still have enough capital left over to do it again and again. I still don’t have a four-plex per say, but since that first project we have bought and sold over 300 projects in over $100M in deals.

At first, it was just me looking for opportunities, running operations and raising capital, then I brought my wife, Adralyn, on board to add some design sizzle and clean up the project management, which is when we were able to ramp up the volume while increasing our quality. Now our Arcadia office is comprised of 11 full-time team members and includes five different wings of the business:

1) Development- Blue Sky Homes
2) Assisted Living – Blue Sage Assisted Living
3) Brokerage – Urban Blue Realty
4) Rentals – Blue Enterprise Holdings
5) Construction/Remodels – Blue Sky Construction

Most recently we finished construction on Ashwood Circle, North Central Phoenix’ first Smart & Green subdivision where our homes are as much as 96% MORE efficient than a standard new build. This is a project focused on encouraging community between neighbors through front patio sitting areas and fireplaces. We envisioned neighbors sitting out front, having a glass of wine and building relationships with one another while watching their kids ride bikes in the cul-de-sac, instead of just parking in the garage and staying in the backyard if they go outside at all.

I am a strong believer that happiness comes from living near places you want to go, minimizing commute times and living in a community that looks out for one another. I am proud to say that is coming to life in Ashwood Circle already and we are already 50% sold out only 8 months after breaking ground.

We’re always bombarded by how great it is to pursue your passion, etc – but we’ve spoken with enough people to know that it’s not always easy. Overall, would you say things have been easy for you?

First and foremost, most people thought I was crazy when I started a real estate investment business in the heart of the worst financial crisis our generation had ever seen. Of course, that fear from the masses allowed the opportunity to unfold and we were fortunate to be positioned properly to develop our business during that period.

Given the market was still in free fall with no end in sight back in ’09 and ’10 you had to buy correctly, operate quickly and sell immediately if you wanted to make any money in that game, so I definitely paid dearly for a few of those ‘learning lessons’ along the way. Since then there have been many obstacles to success, but we plan for them and work hard to find creative solutions because there are always solutions.

Running a business is not for everyone and like any other entrepreneur, especially at the beginning, I had my share of sleepless nights and financially ‘thin’ times, but as hard as I might be on myself, the thought of going to work for someone else is what scares me most. I know that successful deals will keep that boogie man hidden away from my life and that along with providing for my family’s well-being motivates me every day.

The ebb and flow of the market is always a challenge and ironically our first challenge came when the market started recovering and it became harder and harder to find deals as more investors came back in play. We grew a lot in that time and stepped up our game to build ground up construction instead of the renovations that had built our business until that point. It was a steep learning curve, but I wouldn’t have it any other way.

There is also the challenge of working with your spouse in a business that always has more to do, so we have learned to ‘shut it off’ and do our best to compartmentalize business and family time. On top of that, we have a four-year-old and she and her dinosaurs just don’t care about deadlines, payroll or sales strategies. Although for room and board we utilize her design eye for consulting work… don’t tell CPS.

So, what’s next? Any big plans?

We want to continue to develop sustainable forward-thinking communities with quality and style in mind. We currently have 15 projects in Arcadia, North Central, and Scottsdale including five contemporary luxury homes, so we are excited to see our design range expand and our team is pumped to tackle these new challenges, including a couple of hillside projects on Camelback Mountain that will be our signature projects to date.

Pricing:

Ashwood Circle Homes starting at $899,000
North Central and Arcadia Homes starting at $850,000

Contact Info:

Address: 4455 E. Camelback Rd Suite D-275
Phoenix, AZ 85018
Website: www.nickblue.com
Phone: 480.900.7202
Email: info@nickblue.com
 
 

copyright © voyagephoenix.com



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May 2018

California set to mandate solar panels on many new homes …
May 2018 | proudgreenhome.com

Solar panels on many new homes soon could become as common as doors and windows.

California’s Energy Commission is due to vote this week on new energy standards that would require virtually all new homes to be constructed with solar panels from 2020. If approved, the state would be the first in the country to make panels mandatory.

Around 20 percent of single-family homes are constructed with solar capacity built in, according to the California Building Industry Association. The new requirement would apply to all homes standing taller than three stories.

San Francisco began Jan. 1 requiring solar panels on all buildings that are 10 stories or smaller.

The push for a solar panel requirement dates back more than a decade to when the energy commission established a goal of improving the efficiency of homebuilding so that “newly constructed buildings can be net zero energy by 2020 for residences and by 2030 for commercial buildings.”

Net zero facilities are those that produce as much energy as they use.

The new mandate would not require homes to be net zero, as state officials stated this goal is not yet cost-effective.

CR Herro, vice president of environmental affairs at real estate development company Meritage Homes, said the new energy standard would add up to $30,000 to the cost of home construction. However, he noted that over the 25-year lifespan of the home’s solar system, the owner’s reduced operating costs would save them up to $60,000.

Bill Watt, a homebuilder and design consultant, told the Orange County Register that those added costs – on top of other building mandates like fire sprinklers – are pushing home prices further out of reach for many buyers.

The proposed manadate is considered welcome news by environmental groups. Pierre Delforge, energy efficiency program director at the Natural Resources Defense Council, told the paper that the move is “another important step towards the environmentally-friendly, healthy and affordable home of the future.”

A large proportion of California’s power supply already is generated by renewable methods, according to California Independent System Operator.

copyright © proudgreenhome.com



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April 2018

Why are these green homes 96% better than other houses?
April 23, 2018 | proudgreenhome.com

Driving into the cul-de-sac of Ashwood Circle, the eight dwellings look like upgrades from mid-century modern homes similar to the ones that line the surrounding streets in North Central Phoenix.

Looks can be deceiving. The homes were actually built in 2017 and 2018 by Blue Sky Homes and boast enviable energy efficiency scores and present a blend of crisp style and high tech. With energy-efficient building techniques and products, the homes are expected to use 96 percent less energy than comparable new build homes of a similar size and outpace existing homes by even more.

Each home was tested by an independent third party energy rater to develop a HERS Index score. The Home Energy Rating System or HERS Index is the industry standard for inspecting and calculating a home’s energy performance. The U.S. Department of Energy has determined that a typical resale home scores 130 on the HERS Index while a standard new home is awarded a rating of 100.

A home with a HERS Index Score of 70 is 30 percent MORE energy efficient than a standard new home.
A home with a HERS Index Score of 130 is 30 percent LESS energy efficient than a standard new home.

Basically, the closer the score gets to zero the more efficient the home. RESNet, the administrator of the Index, reports that more than 2 million homes have been HERS rated.

The homes on Ashwood Circle have been rated with a HERS Index ranging from 4 to 52. Four of the homes on the south side of the street already have solar panels installed, which is one of the factors that lower the HERS Index. For homes on the north side, solar panels are optional. That’s because the panels are on the south face of the roof hidden from the street view, and the panels were installed under more favorable utility policies that changed last summer.

The homes were built on vacant acreage formerly owned by a nearby church, but only long-time neighbors would know it’s a new development. The enclave offers suburban-style living with backyards big enough to accommodate pools within a 10-minute drive from downtown.

The homes offer full smart controls including an automated entry with a touch keypad, automated blinds, Nest thermostats and integrated speakers to play music anywhere in the home.

The remaining model home has a HERS Index of 52 without solar power. For the 3,290 square-foot, four-bedroom home with a full basement, the estimated monthly electric bill will be $167 per month, which is 48 percent more efficient than a code-built home of the same size.

For one of the homes with solar panels and a HERS Index of 4, the electric bill is expected to be $34 per month and is 96 percent more energy efficient.

Blue Sky Homes founder Nick Blue committed to building this smart and green community after taking a course on green building, reading several books on the subject and consulting with many industry experts.

“I strongly believe that the combination of efficiency and technology is what buyers in today and tomorrow’s market are looking for in their residences,” he said. “We want to be on the cutting edge of this movement and build homes that provide lasting appeal.”

Listing agent and Green Realtor designee Jamie Harvey with Urban Blue Realty also expressed his support for the community.

“Blue Sky decided to make this development one of the best in the city and we have been excited to see the response thus far,” he said. “With only three homes remaining after only a month since completion of the community, we could not be happier with the results.”

But more than energy savings, building a community was a top priority. While each home has the block-wall fencing common to homes in Phoenix, each one also features a patio in the front yard where people can gather and interact with their neighbors. Each home comes with a pair of cruiser bicycles to help new owners get acquainted with their neighborhood.

“There are so many destinations in this area, from coffee shops to trendy restaurants to boutiques, that are all just a short bike ride away,” said Raquel Harvey, Blue Sky’s marketing and design coordinator. “We want our buyers to love where they live and get to know their neighbors. The bikes and front yard patios encourage that type of community and we are excited to see it already becoming a reality as families have moved into Ashwood Circle.”

copyright © proudgreenhome.com



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April 2018

(Because Blue Sky Homes now only builds UV pools we’re including a 2013 article describing the advantages)

Ultraviolet Pool System versus Chlorinated Pool System
November 29, 2013 | spectralightuv.com

Chemical Level
• Chlorinated Pool System: A chlorinated pool incorporates a large amount of chemicals in the water. The problem is the production of disinfection byproducts from these chemicals.

Chlorine reacts with other chemicals and organic matter to release harmful byproducts, like chloramines and trihalomethanes (THMs). THMs have been known to cause cancer, and if absorbed through the skin can cause asthma symptoms. Chloramines are responsible for the notorious “chlorine smell” associated with pools, and is released once chlorine combines with ammonia. Not only is it a less effective disinfectant than chlorine, but it’s also a respiratory irritant.

• Ultraviolet Pool System: Ultraviolet light is the primary disinfection system for a UV system. The system uses a physical process to destroy organic matter and pathogens in one fell swoop. Because of this, an ultraviolet pool system replaces the need for harsh chemicals, to ultimately reduce chlorine to 0.5 parts per million – the same level found in drinking water.

Contaminants and Pathogens
• Chlorinated Pool System: Chlorine is one of the most common chemicals used as a disinfectant, because it is relatively effective and cheap, at first glance. Chlorine as a swimming pool disinfectant has been around since the 1920s, to rid pools of waterborne illnesses.

The chemical can wreak havoc on pathogens, but it can’t work alone. The pool water must maintain a proper pH level for chlorine to remain effective (between 7.2 and 7.8). This means if the pH varies slightly, your pool is automatically susceptible to contaminants. And, since chlorine has been around awhile, pathogens have started to become chlorine-resistant, making your water that much more vulnerable.

• Ultraviolet Pool System: An ultraviolet pool system incorporates powerful germicidal light rays to destroy pathogens. It uses 60,000 microwatts of power to bombard anything that may contaminate your water, including bacteria, algae, viruses, cysts and protozoa.

The ultraviolet pool system even kills chlorine-resistant pathogens, so you won’t have to worry about the toughest contaminants. The most common include Cryptosporidium, Legionella and Giardia. If you’re unfamiliar with these, they commonly cause gastrointestinal problems like nausea, vomiting and diarrhea.

Maintenance Time
• Chlorinated Pool System: Many non-pool owners don’t experience the heavy maintenance time that goes into a chlorinated pool. The water may be sparkling blue, but it takes a lot of work to get there. The water in a chlorine pool must be constantly balanced.

Total alkalinity, calcium hardness, pH, and chlorine must remain in check at all times so the water is clear and safe for swimmers. If any of these chemicals are thrown off balance, you could have a number of problems on your hands, like algae-infested water or swimmer’s with red, burning eyes. To combat this, it’s essential to invest in a quality test kit to accurately measure the chemical levels in your pool – including free and residual chlorine that’s difficult to detect.

Ultraviolet Pool System: Ultraviolet disinfection reduces the need for chemicals. You won’t have to purchase expense add-ons like algaecide. You’ll also be able to balance your pH easily since the water isn’t thrown off by the addition or reduction of chemicals. Swimmer’s will no longer experience dried out hair or red eyes from the harsh chemicals, since an this sanitizing method lessens the need for chemicals up to 90 percent.

Cost Difference
• Chlorinated Pool System: A small bucket of chlorine can start at $50 dollars, and move up from there. It sounds minimal, but chlorine must be added frequently, since it can evaporate when exposed to sunlight. And the price of pool chemicals only increases from there, since you must shock, or super-chlorinate the pool to maintain quality water. Since most pool chemical stores make their money on specialty chemicals like algaecides, it’s not uncommon for total chemical bills to reach $70 per month or more.

• Ultraviolet Pool System: It’s no secret that pool chemicals are costly, especially when you add in extras like shock and algaecides. The savings will vary depending on a number of factors, but owners of an UV disinfection systems reported saving more than $400 dollars a year on pool chemicals alone.

Chlorine and the byproducts prematurely wear down all of your pool system components. Ultraviolet light produces water that is more natural and clean, to ultimately safeguard your equipment (and you) from chemicals. And it reduces annual operating costs – between 50 and 70 percent for commercial pools. The SpectraLight system is the same as the cost of operating a normal light bulb.

After comparing the facts, which would you choose? Do you already use an ultraviolet pool system?

copyright © spectralightuv.com



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March 2018

Just how hot is Arizona’s housing market?
March 20, 2018 | azbigmedia.com
by Sage Schneider

Last year was a good year for the housing market homebuilding industry, according to data collected by Belfiore Real Estate Consulting, a residential market research firm that services all of Arizona. In fact, last year was good for Arizona’s residential real estate market with boosted home sales, prices, and agents making deals.

Demand for both new and resale homes was higher than a year ago, while supply was balanced by a limited resale inventory. And despite the shortage of resale inventory, 7 percent more resale homes sold in December of 2017 than the year before.

While the market has picked up in the past year, so has the number of people looking to capitalize on the hot market.

As of January 2018, the Arizona Department of Real Estate counted 45,326 sales agents and 12,128 brokers in Arizona for 57,454 active licensees in total, a 4.4 percent increase in just one year.

“Most of the increase is related to market health,” says Wendy Forsythe, COO of HomeSmart International, a technology-driven real estate company. “A positive year in the market means more people get licenses and 2017 was one of the best years for home sales in a long time.”

She noted two main reasons for this. One is that housing inventory is projected to increase as builders strive to meet demand and more sales require more agents. Second, higher home prices lead to better commissions, encouraging more people to become real estate agents.

One might wonder if having more agents competing for a limited housing inventory will result in changing commission rates to stay competitive. HomeSmart International thinks not, mainly because the trend hasn’t been seen in other markets.

For instance, markets like California that entered the downturn earlier (in 2010 or 2011) than Arizona recovered first and are now ahead in market growth. They have yet to see any indication of agents requesting higher commissions.

According to Forsythe, “This may be because, from a seller’s perspective, limited inventory means properties sell faster, requiring less time, effort and expense from an agent.”

However, Belfiore Real Estate Consulting reported that, starting in September of 2017, co-brokerage fees increased above the standard 3 percent in three of the four Metro Phoenix Area regions. Some of the submarkets that experienced the highest average co-brokerage fee were North Glendale (4.0 percent), Central Scottsdale (3.3 percent), North Scottsdale (3.2 percent), Sky Harbor South (3.2 percent) and Paradise Valley (3.2 percent).

However, this appeared to be only a temporary change. By November, only two regions in the Metro Phoenix area had higher than average commissions. Whether commission percentages will fluctuate during 2018 is yet to be seen.

Sales move forward

Compared with 2016, 11 percent more homes from homebuilders were sold in 2017. Typically, sales fall from November to December due to the holidays, but this past December saw 10 percent more homebuyers signing new purchase contracts than in December 2016. Throughout 2017, builders sold an average of 32 homes for every active community, resulting in almost 18,000 new production and semi-custom home contracts.

Overall, new home supply is up 6 percent, partly due to the proliferation of condominium units in the Metro Phoenix Area. Central and South has the most substantial new home supply, driven primarily by the North Central, Downtown and Biltmore East markets in the Phoenix metropolitan area. Apartments have been on the rise for the last five years, with all-time lows for vacancies in the last 36 to 48 months.

Though housing has become more expensive over the last few years, Metro Phoenix is still one of the most affordable western U.S. metropolitan areas, with the median home price for 2017 around $245,000. Sales of both new and resale homes in 2016 were higher than any year since 2006, and 2017 increased even further.

While the market was focused heavily on rentals after the financial crisis, buying is making a comeback.

“This is because the cost of renting in the Phoenix Metro Area is becoming less desirable than homeownership of a similar size,” says Jim Belfiore, owner of Belfiore Real Estate Consulting. “The laws of supply and demand suggest people will buy a home if they can afford it.”

Currently, increased job security is boosting people’s confidence and purchasing power, allowing more potential buyers to afford a downpayment. Furthermore, the foreclosure crisis that resulted in hundreds of thousands of repossessions and near-repossessions has officially passed. Foreclosures have reached near normal levels, falling 22 percent in 2016, and 28 percent by the third quarter of 2017.

Millennials entering and renters returning

One noticeable shift in 2017 was that Millennials are now reaching a point of financial well-being.

“Unlike previous generations, most Millennials have waited until their late 20s or early 30s to purchase their first home,” Belfiore says. “Now, a large percentage of Millennials are entering the housing market, increasing the percentage of first-time buyers.”

This trend is expected to continue for at least the next decade.

According to Homeowners Financial Group, a local mortgage banker specializing in the residential market, this transition is made easier by recent changes to conventional loan limits, which are allowing more first-time homebuyers into the market. Joe Conner, branch manager and licensed mortgage professional for HFG says, “The loan limit has been raised from $424,100 to $453,100, meaning that home buyers can purchase a more expensive home at a higher price point and still qualify for a loan.”

Due to this change in market subgroups and financial capability, as of 2017 the best-selling areas were new home communities with smaller, lower-priced lots, targeting entry-level buyers. However, these entry-level homes (usually under $300,000) may have a more limited inventory. Because of that, many first-time buyers may want these homes, but be unable to find them, leading them to continue renting or seek alternatives elsewhere.

Another subgroup showing signs of growth is in the older population that lost their homes during the financial crisis or sold out of necessity and began renting instead.

“Recently, credit agencies have changed their policies, choosing not to report certain judgments and liens on credit,” Conner says. “This can improve people’s credit scores, enabling buyers to get better interest rates and qualify when they may not have been eligible previously.”

With renewed confidence and repaired credit spurring them to re-enter the housing market, this older subgroup may begin buying homes again, alongside the Millennials who are buying a home for the first time.

Continued growth for 2018

This year should be healthy as far as the market is concerned.

“It’s the American dream to purchase your own house and most people will strive to achieve that,” Belfiore says. “Right now, we have a burgeoning population, a healthy job market and buyers with increased levels of confidence and financial wherewithal.”

Belfiore reports that out of the 555 active communities in Arizona, 56 percent have 32 or fewer lots remaining. This means that if builders can maintain their 2017 sales average, they may sell out within this year. However, this doesn’t necessarily mean the number of active communities will drop.

Fulton Homes is outwardly optimistic for 2018, according to CEO Doug Fulton.

“We see 2018 as a year we’ll be able to hang our hats on. All leading economic indicators look great and the trends in sales are surprisingly solid even in our typically slow months of November and December,” says Fulton. “It’s time again to bet on housing.”

For the first 10 months of 2017, 12 percent more construction permits were issued than in 2016, with a projected yearly total of 21,200. By 2018, that number is expected to be 23,500, and it could be 25,400 by 2019.

In general, new openings are increasing, while close-outs become slower. Smaller community builders with fewer than 20 lots are also entering the market, and these homes tend to sell less rapidly than the Phoenix Metro Area average.

Builders in high-volume sales areas, such as suburban and exurban submarkets, are upping inventory to be ready with a deliverable supply of homes. However, it should be noted that during the last two years, home construction costs increased 30 to 35 percent, so builders will most likely aim to raise prices to compensate and continue replacing land supplies.

Though construction costs are rising, the projected increase in appreciation, sales volume and continued lack of resale supply offer builders an opportunity to make up the difference. While the estimated new home appreciation rate for 2017 was 4.3 percent, appreciation rate is expected to move to 5 to 7 percent within the next year.

Looking ahead to the rest of 2018, there will most likely be an increase in new home sales. Builders are purchasing more land, developing new subdivisions, and working on more infill projects in urban areas, as well as vertical growth in the form of condos or town homes. However, though the 2018 market is expected to be strong, there are no dramatic increases projected.

“The lack of housing inventory has increased competition between buyers, resulting in more multiple-offer situations and much faster home sales, despite the rise in home prices,” Conner says.

copyright © azbigmedia.com



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February 2018

Phoenix Sees Major Rejuvenation ‘Between the Sevens’
February 20, 2018 | azbigmedia.com
by David McGlothlin

Some of Phoenix’s most desirable neighborhoods to live can be found in an area that’s commonly referred to as “between the sevens,” which is the region between Seventh Avenue and Seventh Street throughout Downtown, Midtown and Uptown Phoenix.

Home to historical neighborhoods like “The Windsor,” prominent office buildings and iconic retail centers, the area between the sevens is also becoming an increasingly attractive place to work and play as new commercial real estate projects take shape, blending modern needs with the area’s rich history.

The latest projects range from adaptive reuse transformations of a former grocery store and other businesses into multifamily communities or trendy bars and restaurants. It also includes the modernization of older office buildings to meet current standards with lots of natural light, high ceilings, large open floorplates and easy connection to amenities.

Whether its people or companies, everyone is looking for a connected place that’s walkable, vibrant and linked to other amenities and uses, says City of Phoenix Economic Development Director Christine Mackay.

In addition to providing great transit options such as light rail, buses and the Grid Bike Share program to get around, Midtown and Uptown also boasts incredible dining and shopping options as well as prime office locations for major corporate companies.

Mackay says the rejuvenation of Midtown started in 2016 when Banner Health moved its corporate headquarters to the Banner Corporate Center on Thomas and Central avenues.

Banner retrofitted an old building, bringing it to the 21st century, explains Mackay, which signaled to other large corporate tenants that the area and surrounding communities would support regional and/or national headquarters.

From there, the 2828 North Central building renovated its bottom floor to include a co-working shared space that’s currently occupied by Mod Phoenix. Meanwhile, the owners of the 2020 On Central building renovated all of its lobbies and shared spaces, which eventually led Facility Source to lease office space.

“Those three things really set the stage for other building owners to come in and start making dramatic changes,” Mackay says.

Now, Midtown is experiencing office renovations across the board because so many of the existing buildings were constructed in the 1970s and 80s.

Mackay also describes an incredible and growing demand to live in Midtown and Uptown. “It’s cultured. It has night life, distinctive dining and pretty much everything is local. It’s exactly what people are looking for today,” she says.

In addition to new office product and multifamily units, the area between the sevens has also seen a surge in new retail projects as it’s becoming more widely well-known as a foodie hotspot with an eclectic and tasty mix for restaurants and bars.

Mackay says, “The restaurants, culture and nightlife is really what’s drawing people into this Central City to live.” In fact, she says, there are not less than 100 restaurants in that area for people to choose from.

Mackay points to the success of projects like The Yard, along Seventh Street and Missouri Avenue, as an example of the pent-up demand for restaurants nearby, which has spurred other retail and dining destinations to follow like The Colony, built by LGE Design Build in 2016.

Looking ahead throughout Midtown, Mackay says, the renovations of Park Central Mall is “the last missing piece before the area returns to full throttle.” Meanwhile in Uptown, she predicts, the completion of Arrive Phoenix will “really prove the market and show what a destination hotel looks like in that area.”

ARRIVE Phoenix

DEVELOPER: Vintage Partners; Venue Projects

GENERAL CONTRACTOR: Venue Projects

ARCHITECT: Arrive Hotel & Restaurants

LOCATION: 400 & 444 W. Camelback Rd., Phoenix

SIZE: 45,000 SF; 79-rooms

VALUE: $20M

START/COMPLETION: Q1 2018 – Q4 2018

Located at what’s been called the Valley’s “hottest intersection” by the Urban Land Institute of Arizona, the project transforms a trio of mid-century gems into Uptown Phoenix’s newest dining, entertainment and urban hotel hub. The two-acre site will also host a boutique coffee shop, poolside taco bar, gourmet ice creamery, and nautical-themed rooftop craft cocktail bar featuring 360-degree city views. For the project, Vintage Partners teamed up with Venue Projects, the visionary developers behind The Newtown and other successful adaptive reuse projects like Windsor/Churn and The Orchard along Central Avenue.

First Place-Phoenix

DEVELOPER: First Place AZ

GENERAL CONTRACTOR: hardison/downey construction

ARCHITECT: RSP Architects

LOCATION: 3001 N. Third St., Phoenix

SIZE: 81,525 SF; 56-units

VALUE: $15M

START/COMPLETION: January 2017 – March 2018

The $15 million residential property for adults with autism and other neuro-diversities will be a first-of-its-kind facility that First Place AZ plans to expand into a worldwide model. First Place AZ Founder, President and CEO Denise Resnik started the nonprofit to ensure that housing and community options are as bountiful for people with autism and other neuro-diversities as they are for everyone else. The project provides a one-of-a-kind approach that combines apartments, a residential training program and a national leadership institute to advance more independent and community integrated living options.

The Curve at Melrose

DEVELOPER: P.B. Bell

GENERAL CONTRACTOR: M.T. Builders

ARCHITECT: Studio 15 Architecture Inc.

LOCATION: 4333 N. Sixth Dr., Phoenix

SIZE: 204-units; 308,618 SF

START/COMPLETION: August 2016 – Early 2018

The Curve will consist of 204-luxury apartments in a vibrant and eclectic urban Melrose District neighborhood positioned within walking distance of Indian Steele Park, light rail as well as numerous locally owned shops and restaurants. Included in the property’s luxury amenities are several that were selected by public vote in 2015, which include a resort-style pool and spa along with an outdoor kitchen and gas grills. P.B. Bell also worked with the Seventh Avenue Merchants Association on plans to reserve three display windows at the property to spotlight community-curated work and displays.

The Osborn

DEVELOPER: Trammell Crow Company; High Street Residential

GENERAL CONTRACTOR: Chasse Building Team

ARCHITECT: ESG Architects

LOCATION: SWC of Seventh Avenue & Osborn Road, Phoenix

SIZE: 190-units; 45,000 SF (retail)

START/COMPLETION: July 2017 – August 2019

The Osborn is a mixed-use grocery anchored retail shopping center and multifamily development. The project sits on a 5.96-acre site located in the heart of Midtown Phoenix where the city’s oldest Bashas’ grocey store, originally built in 1956, used to be located. The site benefits from immediate adjacency to many major employers, desirable affluent neighborhoods, abundance of social venues and high visibility with over 50,000 vehicles passing per day.

Uptown Plaza

DEVELOPER: Vintage Partners

GENERAL CONTRACTOR: Kitchell

ARCHITECT: Nelsen Partners

LOCATION: 100 E. Camelback Rd., Phoenix

SIZE: 116,787 SF

START/COMPLETION: 2014 – June 2016

The Valley’s first retail center located outside of Downtown Phoenix is being restored to its former glory and street appeal as a result of wall-to-wall renovations over the last three years. The property’s renovation aims to restore this iconic shopping center — originally constructed in 1955 by the Del Webb Co. — to its stylish brick-lined, mid-century roots and appeal. The 11-acre renovation includes restoring the original brick façade, adding new landscaping and successfully securing a variety of local, regional and national tenants like Shake Shack, Lou Malnati’s Pizzeria, Huss Brewing Company’s flagship taproom, Creamistry, Flower Child and more. The latest phase included updates to the exterior of AJ’s Fine Foods.

The Grid

DEVELOPER: ABI Multifamily

GENERAL CONTRACTOR: Alexander Building Company

ARCHITECT: Corgan

LOCATION: 5227 N. Seventh St., Phoenix

SIZE: 16,281 SF

VALUE: $3M

START/COMPLETION: Q4 2017 – Q2 2018

The two-story adaptive reuse project will transform the former Uptown Phoenix office building into a refreshed Class A office for ABI Multifamily on the top floor and co-working space on the first floor. A large multipurpose room will be used for entertaining, training and a yoga room open to the community. The design repurposed raw industrial materials, while still maintaining a sleek modern feel. In addition, a perforated metal canopy and second skin will be added to create new dynamic exterior spaces while protecting the building from the harsh summer sun of the desert.

Dignity Health Third Avenue Parking Garage Expansion

DEVELOPER: Dignity Health

GENERAL CONTRACTOR: JE Dunn Construction

ARCHITECT: GLHN Architects & Engineers

LOCATION: 2929 N. Third Ave., Phoenix

SIZE: 177,000 SF

VALUE: $11M

START/COMPLETION: December 2017 – July 2018

While the area’s public transit options like buses, light rail and Grid bikes have made commutes easier, parking is often a top-concern for companies and tenants considering a move to the Central City. That’s why the Dignity Health’s St. Joseph’s Hospital and Medical Center in Phoenix is embarking on a campus-wide parking solution that will add approximately 500 new spaces.

Park Central

DEVELOPER: Plaza Companies; Holualoa Companies

GENERAL CONTRACTOR: DPR Construction

ARCHITECT: richärd+bauer architecture

LOCATION: 3121 N. Third Ave., Phoenix

SIZE: 337,000 SF

VALUE: $57M

START/COMPLETION: Q4 2017 – Fall 2018

“Our goal is to transform Park Central into a truly innovative and exceptional work environment for companies in the ‘New Economy,’” says Sharon Harper, president and CEO of Plaza Companies, which also led the the successful transformation of the Los Arcos Mall in Scottsdale into the ASU Scottsdale Innovation Center – SkySong. As Phoenix’s first-ever mall, Park Central benefits from an exceptional location and unique retail history. In total, 337,000 square feet will be revitalized into several distinct districts, each with its own identity.

copyright © azbigmedia.com



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January 2018

2017’s Strong Housing Market in Metro Phoenix Gives 2018 a Lot to Live Up to …
January 7, 2018 | azcentral.com
by Catherine Reagor

2017 will go down as one of metro Phoenix’s best-ever years for home sales. An early tally shows 93,500 Valley houses changed hands last year. That’s 6 percent higher than home sales in 2016. “Only 2004, ’05 and 2011 were better years for home sales,” said Tina Tamboer, senior housing analyst with the Cromford Report. And in those years, the Valley’s housing market was far from normal. The housing boom, fueled by subprime mortgages and speculators, started in 2004 and was in full swing during 2005.

Metro Phoenix’s housing market hit bottom in 2011, and investors snatched up a record number of bargain foreclosure homes that year. So 2017 could be considered the Valley’s best healthy year for home sales, something real-estate analyst Tom Ruff predicted in August. “2005 went down in the history books as the year our housing bubble rapidly inflated,” said Ruff of Arizona Regional Multiple Listing Service’s The Information Market. “2011 was the year housing prices bottomed out after the housing-market collapse. This leaves 2017 as the very best year for Valley resale homes in our history not influenced by some freakish market outlier.”

Prices still shy of peak levels

2017 was a strong year for housing appreciation in the Valley, but prices still aren’t back to peak levels of 2006. Tamboer said an early analysis of sales on the MLS shows Phoenix-area home prices climbed 6.5 percent last year. The Valley’s median sales price climbed 7 percent in 2016. Metro Phoenix’s median existing-home price is hovering around $250,000 now, after getting an 8 percent boost in December. That is still $15,000 off the Valley’s peak median home price in 2006.

Past predictions

Most housing analysts, understandably, don’t like to make annual predictions about the market. No one wants be to be wrong and get skewered for it, particularly since buying or selling a home is most people’s biggest financial decision.

In December 2016, Realtor.com predicted home prices would climb 5.9 percent and sales would jump 7.2 percent in the Phoenix area during 2017. That forecast ended up being a bit off for both. The national real-estate website also predicted metro Phoenix would have the best housing market in the U.S. last year. The verdict on that one is still out.

Looking ahead in 2018

Here are some predictions — hopes and concerns, really — from Valley housing market experts.

– “Phoenix’s housing market will continue to perform in 2018 much as it did in 2017,” said Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University’s W.P. Carey School of Business. But he said not enough affordable housing, inflation and resulting interest rate hikes along with new tax laws could be factors that work against the market here in 2018.

– Ruff is concerned about not enough affordable housing. “The challenge is to build more housing that people can afford,” he said. “Valley prices can’t keep climbing at the current rate, if people can’t find homes they can afford.”

– Tamboer said she “wouldn’t be surprised to see appreciation soften a bit this year.” She believes home prices will keep climbing in 2018, but potentially not at the same rate as in the past two years.

Will 2018 be the year Valley home prices finally recover from the crash?

The area’s median price needs to climb 6 percent this year for that to happen.

copyright © azcentral.com



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December 2017

Phoenix land and housing forecast: Vitality at last!
December 15, 2017 | azbigmedia.com
by David McGlothlin

The 8th Annual Phoenix Land and Housing Forecast, presented by Land Advisors Organization, provided a provocative and insightful breakdown of the trends, activity and outlooks within the local real estate market. The event was started by Land Advisors Organization, the nation’s largest brokerage firm focused exclusively on land, in 2009 to provide more optimistic and fair coverage of the real estate industry’s future in Greater Phoenix following the start of the Great Recession.

This year’s event offered a wide range of information from a national market overview and where Phoenix ranks to key innovations in the housing market and the rise of the iBuyer through market disruptions like the launch of OfferPad and Opendoor. Greg Vogel, CEO at Land Advisors Organization, described the theme of the event as “vitality at last,” as a reference to Phoenix’s long, slow and steady recovery since the last downturn and positive market conditions being faced today.

National overview and where Phoenix ranks

First up was John Burns, CEO of John Burns Real Estate Consulting and author of “Big Shifts Ahead: Demographic Clarity for Business,” who analyzed the national market and how Metro Phoenix compares. He says the greatest factors always impacting the housing market are: job loss, construction levels and affordability.

Burns mentioned two things to keep an eye on in 2018 and beyond. First was the recently announcement of the merger of two of Arizona’s Top 5 homebuilders, which if approved will account for 13-percent of Arizona’s total market share. In total, the combined company will control approximately 240,000 home sites and have about 1,300 active communities in 49 markets across 21 states. The other is the rise of “build for rent concepts.” It’s when new homes are built and put on the market as rentals instead of waiting for a sale in order for the real estate investor to start recouping investments. These can already be seen at Verrado in Buckeye and Eastmark in Mesa, two of the state’s top-selling master-planned communities.

Although Phoenix currently is in its third largest expansion cycle ever at 8.3-years, Burns predicts an end to the expansion cycle once it reaches 10.5-years. Looking ahead, he’s forecasting “an economic hiccup” in 2020, which he describes as a slowdown but not a full downturn.

Not your grandpa’s Phoenix

City of Phoenix Economic Development Director Christine Mackay led an update on economic development in the Valley that she describes as “changed into a highly competitive and sought-after market for companies to relocate and expand.” In reference to the nation’s fastest-growing city, Mackay says, “This isn’t your grandpa’s Phoenix.”

Most notably she highlighted the growth of technology companies in the Valley that are starting to move back to the Central City. In fact, Mackay said, there has been a 318-percent increase in tech companies in the Central City. “The main reason we can compete with other tech markets like San Francisco, Dallas and Austin, is because of Metro Phoenix’s strong talent pipeline and workforce demographics.”

Overall, Mackay says, Metro Phoenix has experienced a 140-percent growth in the number of companies choosing to relocate regional or corporate headquarters to the Valley. Moving forward, she will continue to pursue focused and strategic efforts to attract new companies and jobs to the area in the industries of biosciences, advanced manufacturing and technology, to name a few.

Vitality at last

Greg Vogel started his Metro Phoenix market forecast by noting clients, banks, builders and homebuyers are all doing better, but he remains concerned about a few factors. Mainly, the fact that the nation’s natural population rate, which is the birth rate minus the death rate, is currently at the lowest level since 1980. In addition to concerns about the slow rate of Millennials having kids and needing homes, Vogel points out an acute shortage of affordable homes. Thus, he said, homes on the lowest end of the price spectrum are experiencing the strongest appreciation due to a lack of supply in the market. Meanwhile, the opposite is true for homes at the highest pricing levels.

Although, Phoenix approved 19,282 single-family homes permits in 2017, Vogel says, the market is still under permitted. In fact, he said, of the 373 subdivisions currently under construction in the Valley, 229 will be built-out in the next 12 months. Vogel predicts housing growth is headed to the south and west parts of the Valley and that construction labor shortages will partially be solved by new building systems. He also expects to see more garden-style apartments being developed along the outer edges of popular submarkets.

copyright © azbigmedia.com



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November 2017

Strong Phoenix Fundamentals Point To
More Growth Ahead, Not A Slowdown

November 15, 2017 | bisnow.com
by Dees Stribling

The Phoenix real estate market has enjoyed a long and mostly robust recovery since the end of the last recession. That is the good news, according to Snell & Wilmer partner Nick Wood, who moderated the Capital Markets panel at Bisnow’s recent Phoenix State of the Market event. But that is also the bad news, since nothing lasts forever.

Wood said he likes to illustrate that point with a story: Two former baseball pitchers in their 80s, Al and Jack, wondered if there was baseball in heaven. So they made a deal: The first one to die would come back and tell the other one. Six months later, Al dies. As Jack, much saddened, left Al’s funeral, Al’s ghost tapped him on the shoulder. “Is there baseball in heaven?” a stunned Jack asks. “There’s good news and bad news about that,” Al says. “The good news: Yes, there’s baseball. The bad news: You’re pitching next week.”

For the Phoenix market, the recovery has been sweet. But will it end soon?

LaPour Partners President Jeffery LaPour, whose firm develops commercial properties mostly in the West, said he has heard that question a lot. “How much longer will that last?” LaPour said. “It has been an uneven recovery, with apartments leading the way in certain urban coastal markets and maybe Texas. As for Phoenix, the recovery is still somewhere in the middle. It’s been slow and steady and it still is.” During past cycles, LaPour said, there used to be three or four companies developing the exact same things in the exact same neighborhoods at the exact same time. “We don’t see that any more. Lending is stricter these days, and the market is better for it.”

Walker & Dunlop Managing Director, Capital Markets Brandon Harrington, whose office in Phoenix has done about $1B in multifamily loans in the last 24 months, said growth has been slow and steady throughout most of Phoenix. In that way, the market is better off than some other places, especially as growth has driven up costs. “Other markets are in later innings, but with the affordability we see in Phoenix, I’d say we’re more toward the middle in all property types,” Harrington said. “There’s quite a bit of runway.”

Newmark Knight Frank Senior Managing Director Mike Garlick said he believes the market still has room to run. “But I like to get away from that question. Phoenix is different from a lot of other markets.” As an example of Phoenix’s uniqueness, Garlick cited the office market. In 2007, about 3.8M SF of new office was delivered in the Phoenix market — the height of the last cycle. The current cycle is more subdued. “So if that was the top of the market, how does the current market compare?” Garlick said. “We’re going to deliver about 1.7M SF this year. It isn’t the same.” What is really important are the fundamentals, Garlick said. “Phoenix isn’t just a homebuilding market any more. We’re diverse. We have healthcare and tech. That is going to support more demand and more growth ahead.”

Parallel Capital Partners CEO Matt Root, whose company is active in seven markets, said he has thought quite a lot about where Phoenix stands. On the whole, he is optimistic. “Absent a geopolitical event, the market is slow and steady. We’re in a moderately productive environment stacked up against a moderate interest rate environment. Consumer and business sentiment is strong. Inflation is low. From a real estate perspective, that’s a recipe for more growth.” As for Phoenix, the market was relatively late in coming to the recovery, which probably will give it more time to enjoy the benefits of the current recipe for growth, Root said.

On the Design and Construction panel, Ryan Cos. Vice President Molly Ryan Carson said Phoenix’s relatively small size as a market is hardly a bad thing. It means there is a lot more room to grow. Phoenix has only five and a half Fortune 500 headquarters,” Carson said. “When I moved here eight years ago, I thought that was a disadvantage. Now I understand that it is a tremendous opportunity. “The market has a lot to offer companies coming in: lower costs, higher quality of life, a workforce that’s exceptionally well trained. You need to sell the story. Once you get people here, and investors get here, they’re hooked. People love it.” Because Phoenix has so much room to grow, the large-scale mixed-use model is possible for placemaking here, Carson said. So is adaptive reuse, which is a fairly new thing in the market. “Adaptive reuse is about enhancing and creating a community, and that’s what Uptown Plaza and Roosevelt Road are trying to do. A rich history is extremely powerful, and Phoenix is just beginning to take advantage of its history.”

Skanska Executive Vice President Ross Vroman said Phoenix is driven by demographics, including in-migration from other states. There is a younger set of people moving here. That bodes well for the future of the market — for demand across the spectrum of properties — but it also means that developers and contractors need to design properties to accommodate younger talent and the companies that hire them. “Early involvement by the contractor is vital to a successful project,” Vroman said. “The end goal is to add vibrancy to the assets. If you know from the beginning what your end game is, what experiences the property is going to offer, that’s the way to build successfully in a market like Phoenix.”

Vintage Partners partner Walter Crutchfield said it is not readily apparent where the Phoenix market is going, but opportunity is still here, including for adaptive reuse projects. Vintage re-created Uptown Plaza, a shopping center built in 1955 that housed the first Piggly Wiggly in Arizona. A tired stucco-covered strip mall is now a standout example of midcentury design, he said. “Community and experience are important in development,” Crutchfield said. “When we first started Uptown Plaza as an adaptive reuse project, we wanted people to be attracted to it. We wanted to create a place where people would say, ‘that’s my spot.'” The playbook for the future of development in Phoenix, especially retail, is out the window, Crutchfield said. “It’s a whole new world now.”

copyright © bisnow.com



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October 2017

US Existing Home Sales
Unexpectedly Rebound in September

October 20, 2017 | cnbc.com
REUTERS
U.S. home resales unexpectedly increased in September as the effects of Hurricanes Harvey and Irma began to dissipate, but a persistent dearth of properties for sale continued to weigh on overall activity.

The National Association of Realtors said on Friday existing home sales rose 0.7 percent to a seasonally adjusted annual rate of 5.39 million units last month. August’s sales pace was unrevised. Economists polled by Reuters had forecast sales falling 1.0 percent to a rate of 5.30 million units last month. Sales were down 1.5 percent from September 2016, the first year-over-year decline since July 2016.

Harvey, which hit Texas in the last week of August, and Irma, which battered Florida in early September, had already affected sales for August. Texas and Florida make up more than 18 percent of the nation’s existing home sales. The NAR said that Houston’s market had recovered quickly, with a 4 percent gain in September compared to a year ago. Florida’s sales were still down 22 percent compared to this time last year. Analysts expect that sales in the hurricane-affected areas will rebound further once delays in sales fade. However, the overall housing sector has been slowing as the number of properties available has not kept up with demand. Supply was down 6.4 percent from a year ago. Housing inventory has declined on a year-on-year basis for more than two years. The median house price was $245,100 in September, a 4.2 percent rise from a year ago, reflecting the shortage of homes on the market.

“As long as we have a housing shortage, this will lead to affordability issues,” NAR chief economist Lawrence Yun said.

At the current sales rate, it would take 4.2 months to clear inventory, down from 4.5 months a year ago. Economists view a six-month supply as a healthy balance between supply and demand. The median number of days that homes were on the market in September was 34, compared to 39 days a year ago.

Across the regions, sales increased in the West by 3.3 percent and in the Midwest by 1.6 percent. They fell 0.9 percent in the South and were unchanged in the Northeast. The Commerce Department reported earlier this week that new U.S. single-family home sales fell to a one-year low in September, as Harvey and Irma disrupted the construction of single-family homes in the South.

copyright © cnbc.com



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September 2017

Don’t Give Up, Buyers:sept 2017
More Newly Constructed Homes Are On the Way

September 19, 2017 | realtor.com
by Clare Trapasso

It’s not much fun being a home buyer these days, with the lack of available homes driving prices—and stress levels—to new highs. But it’s about to get a bit better for those seeking to move into a newly constructed home of their very own.

Permits, the best indicator of how many newly built homes will rise over the next few months, were up in August, according to the seasonally adjusted numbers in the latest residential sales report jointly released by the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Builders were issued 5.7% more permits from July to August and 8.3% more than August 2016.

(The numbers we looked at have been smoothed out over a year to account for seasonal fluctuations in the market.)

However, the bulk of those increased permits were to put up condo and apartment buildings with five or more units. After a dip in July, permits for those buildings rebounded, shooting up 22.8% month over month and 10.2% year over year.

Meanwhile, the number of permits for those perennially in-demand single-family homes—the typical standalone abodes that usually come with yards— dipped 1.5% from July. But they were up 7.7% over August 2016.

“It’s not spectacular construction growth, but it’s slow and steady in the right direction,” says Chief Economist Danielle Hale of realtor.com®. “Eventually, the pickup in single-family home construction will mean [buyers] will have more options. Especially with the limited number of sales right now, more options are really needed.”

Housing starts, where new construction has begun but isn’t completed yet, fell 0.8% from July to August. But it rose 1.4% from the same month a year earlier. That’s likely to fall further, however, as more construction workers begin to rebuild the devastating damage caused by Hurricanes Harvey and Irma.

“The shortage of labor in construction will further intensify as more workers concentrate on rebuilding rather than on new construction,” Lawrence Yun, chief economist of the National Association of Realtors®, said in a statement.

The other big bout of bad news was that the number of completed residences fell 10.2% month over month in August. It was up a little, by 3.4%, year over year. Single-family homes, again, fell the most, by 13.3%, from July to August and were down 2.7% annually.

It’s important to note that new homes aren’t for everyone. They cost significantly more, about 21.4% more to be exact, than existing homes, which have been previously lived in. The median price of an existing home was $258,300 compared with $313,700 for a newly built home in July, according to the most recent data from NAR and the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

“As new construction continues to increase, home shoppers will eventually have more [choices] and a bit more time to make purchase decisions compared to today’s quick-moving housing market,” Hale says.

copyright © realtor.com



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August 2017

Phoenix Housing Market Sees Solid Growth
Despite Slight Dip In Homeownership

August 8, 2017 | prnewswire.com
by Ten-X

IRVINE, Calif. and SILICON VALLEY, Calif., Aug. 8, 2017 /PRNewswire/ — Ten-X, the nation’s leading online real estate transaction marketplace, has released its First Quarter 2017 Economic and Single-Family Housing Market Outlook Report for Phoenix, which reveals a strengthening housing market despite a slight dip in homeownership. In the first quarter, the region’s homeownership rate fell from 63 percent to 62.3 percent and continues to trail the national level, yet is still 120 basis points higher than the same period one year ago.

“It is taking a while for the Phoenix housing market to bounce back, but overall, its recovery remains impressive,” said Ten-X Executive Vice President Rick Sharga. “Home sales growth in the Phoenix metro region led the U.S. in year-over-year gains, yet prices are below their prior peak, which suggests there is still room for them to increase. We continue to see signs of long-term growth thanks to the area’s economic diversity, strong demographics and favorable quality of life. In fact, the region’s population grew at nearly triple the national rate, and employment is at an all-time high.”

Existing home sales in Phoenix edged higher in Q1 to a seasonally adjusted annual rate (SAAR) of 121,794, posting a 10.2 percent year-over-year gain that led the nation. Inventory of homes for sale in Phoenix ticked slightly higher from the previous quarter to 21,415 on a seasonally adjusted basis, yet inventory was down 7.8 percent from one year ago. The average time a home sat on the market dropped sharply to 48 days, a whopping 20 percent decrease from one year ago. Some inventory relief may be coming in the form of new home construction. Compared to one year ago, housing starts and permits were up 2.1 percent and 10.6 percent, respectively.

Phoenix home prices continued their impressive ascent with a 7.1 percent year-over-year gain, which is outpacing the U.S. average. The median home price climbed modestly to $236,440, which is still below the city’s prior peak before the 2008 housing crisis and may point to further appreciation ahead.

“Despite tight inventory and the likelihood of further rate increases, the Phoenix market remains affordable for most buyers. The region’s strong economy and relatively modest price increases are keeping homeownership attainable,” Sharga said.

Phoenix’s economy continued to expand at a solid clip during the first quarter. While payrolls contracted in late 2016, employment was up 2.5 percent year-over-year and remains near all-time highs. The region’s unemployment rate stood at 4.5 percent, near the U.S. average. Professional/business services remained the city’s strongest economic driver. In spite of job losses in three of the past five months, the sector saw an 1.8 percent increase in payrolls from one year ago. Employment in the financial services sector is up 5 percent from one year ago and continues to outpace the national rate.

Phoenix added 93,680 residents in 2016 to account for a 2.1 percent year-over-year increase, which is nearly triple the U.S. growth rate. Domestic in-migration comprised more than half of the increase, thanks to the metro’s strong labor market. However, the region has significantly fewer residents between 25 and 64 years old, which are a consumer’s prime homebuying years.

copyright © 2017 prnewswire.com



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July 2017

Hot Neighborhoods 2017Hot Neighborhoods
May 2017 | phoenixmag.com

by Wynter Holden

Most Popular: Arcadia Lite
Median Price Range: $410,000-$450,000
 

“You can fall in love at first sight with a place as with a person.”
— Alec Waugh, British novelist

The proverbial prom queen of Phoenix neighborhoods, Arcadia is perfumed with orange blossoms every spring – a throwback to the area’s early days as a citrus grove. The bad news? Homes average around $3.2 million, and new listings are scarce. “The livability and quality of life standards are off the charts,” says Nick Blue, owner of local developer Blue Sky Homes, citing the area’s “intelligent urbanization and city planning.”

Follow the floral scent south across the canal to Arcadia Lite and Lower Arcadia, however, and you’ll find an eclectic mix of midsize 20th century homes and McMansions in walking distance of trendy eateries like The Grind, Crudo and perennially packed pizzeria La Grande Orange. “Many of the original homes in Arcadia Lite… offered a tight and confined kitchen space with little to no storage and little in the way of covered parking,” Blue says. While you can still scoop up one of those vintage charmers for around $280,000-$350,000, developers have focused on giving East Phoenix’s trendsetters modern amenities like three-car garages and open-floor concepts. Case in point: The Villas at Baker Park, a 44-home gated community set on the former grounds of Baker Nursery. Starting price: $700,000.

• Homes sell for 97.7 percent of the asking price, on average, compared to 80 percent in the Valley proper
• Has a Big Lebowski-esque watering hole called The Bar
• Near San Francisco tech firm Zenreach’s upcoming Biltmore Corridor office

Life of the Party: Scottsdale Entertainment District
Median Price Range: $240,000-$280,000

“Partying is not a sane way to spend money, but it’s fun.”
— Markus Persson, Swedish video game programmer

Most of Phoenix rolls up the proverbial red carpet by 9 p.m. Meanwhile, Scottsdale’s youthful, stylish jet set is still rocking out at Stetson Drive’s clubs until the drinks dry up and it’s time to Uber home. To keep up with them, local developers are frantically erecting pricey condo complexes with trendy one-word names like ENVY and Inspire in the nightlife district surrounding Scottsdale Road between Camelback and Indian School. Their purpose? Providing comfortable, chic spaces that trust fund babies and future CEOs can be proud of. Even a small one-bedroom is out of reach for the $30,000 millionaires rocking Mommy’s discarded Lexus, but that’s not the demographic this area is trying to attract. “The Old Town area is really booming, and we’re seeing an influx of smaller boutique communities popular with young professionals,” says agent Andrew Birss of ScottsdaleCondoMania.com. According to Birss, you can score a unit in an older building for as low as $200,000-$250,000 right now, with larger units in high-amenity new builds such as Optima, ENVY and Inspire priced in the millions.

• Condo prices jumped an average of $32,000 from December 2015 to late 2016
• Near the new $75 million Andaz Resort
• ENVY owners score permanent VIP access at select Valley clubs

Most Creative: Roosevelt Row
Median Price Range: $390,000-$430,000

“Art is the lie that enables us to realize the truth.”
— Pablo Picasso

It’s the classic gentrification tale: Artsy girl meets affordable ’hood and they fall in love. Artsy girl makes the area trendy. Young professionals move in and price the artsy girl out. RoRo is in the midst of this Pygmalion-like drama, making now a perfect time to move into the funky, vintage-meets-modern home of Downtown’s renowned First Friday Art Walk. The 300-unit Broadstone Roosevelt, 150-unit Portland on the Park complex and shipping container apartments called theOSCAR are expected to open in 2017, making way for hundreds of new residents. “New developments are under construction now and many more are on the way, so the area will only continue to get better,” says HomeSmart agent David Otto.

Luckily, RoRo still offers flexibility while the area is in transition. You can score a cheap, albeit likely run-down, bungalow west of Seventh Avenue for $175,000-$250,000, while newer condos start in the $170,000s and go up to $1.2 million for a three-bedroom penthouse. Venture east of Central Avenue to find Craftsman bungalows and stately four-plex manor homes. According to Otto, RoRo’s single-family houses are skyrocketing in price due to their rarity. “A large three-bedroom, two-bath Craftsman-style can be found priced around $500,000,” he says. “And the prices go up from there.”

• Downtown will get its first grocery store – a Fry’s at Block 32 – in 2018
• Speakeasy swing dance nights every third Thursday at DeSoto Central Market
• Grid Bike rental station on Fifth and Roosevelt streets

Miss Congeniality: Anthem Parkside
Median Price Range: $144,990-$259,990
“Don’t wait for people to be friendly. Show them how.” — Anonymous

Strolling through Parkside is like taking H.G. Wells’ fictional time machine back to simpler days. Residents wave and greet travelers. Couples walk their dogs along tree-shaded greenbelts. Kids pretend to be mermaids in the splash pad. The small-town, Midwestern feel is what attracts families to this popular Anthem neighborhood. “There are an unlimited number of things for my family to do,” says Jodi Hale, who moved to the area with her three sons in 2005. “My kids have access to the Adventure Park with playgrounds, basketball and volleyball courts, and bike and walking trails, as well as over 30 neighborhood parks.”

Situated at the foot of Daisy Mountain in the extreme northern Valley, Parkside includes about 7,000 homes, as well as a 63-acre community park and numerous hiking trails. Around the holidays, community members become one big happy family, hunting for eggs at the annual Anthem Days festival each spring, listening to concerts in the park in May or waving flags in the Veterans Day parade.

“I love how Anthem provides a sense of community for residents,” Hale says. “Especially with annual events such as Music in May and the community light displays over the winter holidays.” On second Saturdays, her family can often be found hanging out with neighbors and listening to live music on the Anthem Civic Building terrace.

• Anthem’s crime rate is 26 percent lower than the national average
• Picked by Parenting magazine as one of the best places to raise a family
• Has a K-8 school onsite

Most Eclectic: North Mountain/Sunnyslope Foothills
Median Price Range: $230,000-$270,000

“In order to be irreplaceable, one must always be different.”
— Coco Chanel, fashion designer

Sunnyslope is a study in contrasts. Its first subdivision was founded in 1911 by area homesteader William R. Norton, whose daughter came up with the town’s name. Over the next 100 years, the town became a patchwork quilt of architecture, from Wendell Burnette’s space-age Dialogue House to the infamous Sunnyslope Rock Garden, a fantasy world (read: front yard nightmare) of glass-studded concrete mosaics. Jenna Alexander of 50 States Realty got a first look inside Sunnyslope’s historic architecture when she helped a client purchase a mid-century home there two years ago.

“The area has character. Some of the houses still have their original windows, but with modern touches like polished concrete floors,” she says. Far enough away from the hubbub of Downtown, the foothills area north of Dunlap Road includes many older, more affordable bungalows from the 1960s-1970s – including a few examples of two-story “upside-down” homes with the main living areas located upstairs. The views of North Mountain are lovely at sunset, especially along East Foothill Drive, where backyards meet the craggy greenstone hills.

• Within biking distance of the Arizona Canal Path
• Has its own local brewery, North Mountain Brewing, on Dunlap
• The iconic “S” painted on the side of Sunnyslope Mountain was awarded historic status

Most Athletic: Arrowhead Ranch
Median Price Range: $320,000-$360,000

“One man practicing sportsmanship is far better than 50 preaching it.”
— Knute Rockne, Notre Dame football coach

Tucked between Adobe Dam and New River in Glendale, Arrowhead Ranch is an epicenter for true sportsmen (and women) – i.e. those who prefer to participate in games and physical activities rather than just watch. “It’s an older community, so people are gutting the homes and bringing them up to modern cosmetic standards,” says former resident Nate Martinez, a real estate agent with RE/MAX Professionals. “Once someone moves in, though, they tend to stay.”

According to Martinez, who has more than 25 years of experience selling homes in the Phoenix area, the Arrowhead Lakes subdivision is especially appealing to outdoorsy types, while the newer Sierra Verde offers popular hiking trails. The community includes two golf courses and a fitness club, with easy access to gym chains Underground Fitness and Mountainside Fitness. Catch San Diego Padres or Seattle Mariners games at nearby Peoria Sports Complex, then warm up your pitching arm on the center’s 12 practice fields. Bikers hitting the 5.9-mile Deem Hills Circumference Trail can often be found tuning up their BMXs at Bicycle Depot of Arizona on Beardsley Road and 59th Avenue, while the strength training set has no shortage of CrossFit options on the community’s west side.
• 15-minute drive to University of Phoenix Stadium
• Free classes at the Arrowhead Fitness Club
• Borders the 1,185-acre Thunderbird Conservation Park

Most Likely to Survive the Zombie Apocalypse: Agritopia
Median Price Range: $335,000-$375,000

“If you believe you can accomplish everything by ‘cramming’ at the eleventh hour, by all means, don’t lift a finger now. But you may think twice about beginning to build your ark once it has already started raining.”
— Max Brooks, The Zombie Survival Guide: Complete Protection from the Living Dead

Founded in 2000 by engineer/restaurateur Joe Johnston, Agritopia’s 160-acre planned community boasts a level of sustainability and self-sufficiency that’s unparalleled in the Valley. We’re talking community gardens, parks, a produce stand and a 12-acre commercial farm, schools and a retro burger joint tucked inside Johnston’s childhood home – basically everything you need to survive post-apocalypse, minus a gun store (although this is Arizona, so just drive a town over). “I came here for the sense of community,” says resident Kelly Shaw, who relocated to Agritopia with her husband and two sons in October 2016. “You see everyone on their front porches socializing. It feels safe, like anyone can knock on their neighbor’s door asking for eggs or a cup of sugar.”

Yep, it’s Leave it to Beaver for the 21st century, with literal white picket fences and helpful friendly neighbors. There’s even a crafters’ market, Barnone, for locals to showcase their homemade goods. Though the community pays for outside water and utilities, we’re pretty sure these creative residents are up enough on the re-skilling movement to put together their own solar panels, water tower and defensive wall should the walking dead ever invade the city.

And unlike other communities, you wouldn’t have to worry about some Negan-type plundering half your supplies. “I love how much we support one another,” says Shaw.

• Urban chickens provide fertilizer for the gardens (and act as an emergency food source)
• Many of Agritopia’s 450 homes have basements (think underground bunkers)
• “Pay on your honor” system at The Farm Store (so old school)

Biggest Smarty Pants: Chandler Boardwalk
Median Price Range: $220,000-$260,000

“Education is not the filling of a pail, but the lighting of a fire.”
— William Butler Yeats

Though everyone talks big about Scottsdale and Paradise Valley schools, the Boardwalk area of Chandler zip code 85224 – from Elliot to Ray roads north-south, and the I-10 to Alma School Road east-west – includes more than a dozen top-rated public, private and charter schools. There’s Great Hearts Chandler Preparatory Academy for liberal arts education and character-building, Paragon Science Academy for budding Neil deGrasse Tysons and The Goddard School for little Einsteins, says agent Mindy Jones Nevarez of Amy Jones Real Estate Group at Keller Williams Integrity First.

According to Nevarez, popular subdivisions include Andersen Springs, Sandstone Place and the Tre Allagio and Via de Cielo condominiums. Many boast social activities for children and adults – for example, residents of Lakeside at Andersen Springs condos can sip and socialize at monthly wine meetings.

• Home values have risen 7.6 percent in the last year compared to 5.9 percent statewide
• Students can take free practice tests at Chandler Sunset Library
• Has a lakeside java joint called Coffee Rush

Most Inspirational: Maryvale
Median Price Range: $110,000-$150,000

“I’m gonna make a change, for once in my life. It’s gonna feel real good, gonna make a difference. Gonna make it right.”
— Michael Jackson

The dark horse of our ’hoods, Maryvale is Phoenix’s oldest master-planned community and one of the most densely populated areas of Phoenix. It’s also pretty expansive, around 35 square miles, with its main corridor spanning 27th to 99th avenues and Camelback Road to the I-10, north and south. The area is a mix of Latino-focused businesses, pockets of original 1950s-1960s ranches and newer builds like the desirable D.R. Horton’s new Vinsanto community at 75th Avenue and McDowell Road. According to real estate agent Jenna Alexander, Maryvale is a prime spot for investors. “They’re looking at these infill areas, and predicting that eventually all of Phoenix will undergo beautification. It’s an exciting time,” she says.

Like Judd Nelson’s character, John Bender, in The Breakfast Club, Maryvale has a bad rep. But, also like Bender, this part of town is in the midst of reform. Thanks in part to a million-dollar Neighborhood Safety Initiative partnership between Grand Canyon University and the City of Phoenix, the area known as the “Canyon Corridor” just north of Maryvale saw a 23.6 percent decrease in violent crime in 2015.

• Home values increased 14.3 percent last year
• Near Ak-Chin Pavilion and the newly renovated GCU Maryvale Golf Course
• The area’s diversity is reflected in its “Mural of Unity” on 75th Avenue

Cutest Couple: Verrado and Buckeye Proper
Median Sales Price: $277,750 vs. $188,000

“He was the toast to her butter.”
— Nicholas Sparks, The Lucky One

Verrado and the rest of Buckeye are the Green Acres of Phoenix couplings, with the same oppositional pull that drew alt-rock siren Gwen Stefani to country crooner Blake Shelton. Verrado’s Main Street could be a movie set with its tree-lined streets and iconic clock tower. “It’s very quaint, like where your grandmother grew up,” says Nate Martinez of RE/MAX Professionals. “It’s a little removed from the rest of Phoenix, but the freeway access makes it a prime location.”

Little ones are likely to be found neck-deep at Heritage Swim Park’s resort pool, while Mom planks her way to perfection at The Center on Main’s fitness facility. Meanwhile, Grandpa has his own digs nearby at Victory, a 55-plus community with a spa, onsite vineyard and the hot new Vic Bar + Kitchen.

Buckeye proper, with its wood-shingled Monroe Avenue stores and stucco homesteads, still has a bit of 1888 to dust off. While there are dozens of master-planned communities from the likes of Beazer and Maracay homes, there are also vacant lots and older stucco ranches for sale – with plenty of room for a bucking bronc or two.

• Verrado’s theft rate is 80 percent below the national average
• Buckeye has its own municipal airport
• The area also sits over the largest untapped aquifer in Arizona!

Most Likely to Succeed: Motor Mile
Median Price Range: $220,000-$260,000

“To change ourselves effectively, we first had to change our perceptions.”
— Stephen Covey, author and public speaker

You can still pick up a pretty sweet pre-owned Porsche on McDowell Road just east of Papago Park, but the drag’s heyday as an auto-retail hotspot ended when Acura and others decamped for North Scottsdale. In their stead: a spate of new single-family and multi-family developments, seductively poised between the protected wilderness of Papago and the emerging culture of South Scottsdale. “The price points are great, and at the end of the day you’re getting a Scottsdale address,” mortgage specialist Rob Binkley says. “It’s gentrifying and coming up.”

Skye on McDowell, from national development titan K. Hovnanian Homes, will include 55 single-family homes in addition to 81 semi-detached units. With more dealerships leaving for a new auto row on Salt River tribal land, the future looks bright for a residential makeover of SoSco.

• Papago Plaza is getting a complete $8 million revamp and merchandizing makeover
• Nearby ASU SkySong is the Valley’s most exciting public-private multi-use space
• Hiking and biking just a half-mile away at Pagago

Best Dressed: PV South
Median Price Range: $1 million-$1.2 million

“Fashion fades. Only style remains the same.”
— Coco Chanel

Technically split between the Biltmore Heights and Camelback East neighborhoods, this stretch of secluded ranch-style lots and hill-straddling mansions evinces the classic desert-chic “look” – lawns are few, cacti are many and the meandering mid-century streets have a genteel pacing. It’s Paradise Valley, but not quite Paradise Valley, as the occasional sub-$1 million home listing – some modest-size ranches even get down into the $700,000s – demonstrates.

“People love the area, especially as the Valley gets more central and trends back into Phoenix,” Binkley says. “You’re closer to the action than Paradise Valley, and it might be even less expensive than Arcadia, which now equals PV in terms of pricing. Plus, acre lots.”

Located north of Camelback Road from 32nd to 44th streets, roughly to McDonald Drive, the neighborhood is our best bet to maintain its fashionable status in the years to come.

• All the cultural hooks of 40th and 44th streets are right there, including restaurants Chelsea’s Kitchen, CRUjiente Tacos and The Henry
• Close to Phoenix Country Day School
• Homes leapt 7 percent in value over 2015

copyright © 2017 phoenixmag.com


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June 2017

Housing Market Sets New Records in Mayjune 2017
June 19, 2017 | housingwire.com
by Kelsey Ramírez

Home prices continued to increase in May as speed and competition hit new highs, according to Redfin, an online real estate brokerage.

Home prices increased 6.8% to a median home price of $288,000. Home sales also increased, rising 7.5% from last year, despite the continued shortage of supply. The number of homes for sale fell 10.9% to just 2.7 months of supply, the lowest level since Redfin began tracking the market in 2010. Six months is generally considered a balanced market between buyers and sellers.

A typical home went under contract in less than 37 days in May, breaking the previous record of 40 days set in April. More than 25% of homes sold at or above their listing price, the highest percentage Redfin recorded. The median sale-to-list price ratio also set a new record, hitting 95.4% in May.

“There is still a lot of momentum in home prices in many metros, not only on the coasts but also in places like Buffalo, Grand Rapids and Omaha,” Redfin Chief Economist Nela Richardson said. “Strong local economic growth and burgeoning demand from older Millennials are accelerating home-price growth in this very competitive, low-inventory pre-summer market.”

“The Federal Reserve’s latest announcement to raise short-term rates will have very little effect on buyer demand or on the overall housing market,” Richardson said. “If anything, it may motivate buyers to make their purchases sooner rather than later.”

copyright © 2017 housingwire.com


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May 2017

Despite Higher Home Prices,Despite High Prices
More Americans Say It’s a Good Time to Buy

May 8, 2017 | realtor.com
by Clare Trapasso

Home prices are steadily rising and mortgage interest rates are beginning to inch up again, but that doesn’t seem to be discouraging many potential buyers.

Nearly two-thirds of Americans, 62%, said April was a good time to buy a home, according to Fannie Mae’s monthly National Housing Survey. That’s just a tad more than the 60% who felt that way in March, and 61% in April 2016. The survey polls 1,000 Americans with more than 100 questions on their attitudes toward owning and renting a home, price changes in the housing market, and the health of the economy.

“Historically, low mortgage rates are a top reason Americans think it’s a good time to buy,” says Sarah Shahdad, a market insights researcher at Fannie Mae. Plus, spring and summer are typically when home buying kicks into high gear. “A lot of people are thinking about getting settled before their kids start school.”

The 27% of folks in April who said now is a bad time to buy cited high home prices, she says. However, the ranks of doubters were a bit thinner than March’s 30%, and 31% in April 2016. “Housing affordability is still a challenge for people,” Shahdad says. “Incomes have not been rising as rapidly as home prices.”

About 53% of those polled said they believe housing prices will go up in the next 12 months, and 62% said mortgage rates are likely to rise over the same time period as well. More than half, 52%, expect rental prices will also go up. Despite those higher price tags, fewer Americans in April (57%) said it was a good time to sell a home, according to Fannie Mae. Those bullish on selling made up 60% of respondents in March. However, April’s responses showed an upward trend year over year, with 52% in April 2016 and 46% in April 2015.

Those who think it’s prime selling time cited low mortgage rates, says Shahdad. This makes it easier on the budgets of existing homeowners who don’t have to pay quite so much when they purchase their trade-up residences or downsize into smaller abodes.

Overall, Americans are feeling more optimistic because the economy is doing better, says realtor.com®’s senior economist, Joseph Kirchner. About 88% of those surveyed by Fannie Mae said they weren’t worried about losing their jobs over the next year, while 25% said they’re making more money than they did last year. “People are going to make a long-term financial commitment to purchasing a home because they have the income, they have the job, and they are more confident they are going to be able to keep that job,” he says. “People’s fears and insecurities [that] they got during the recession are waning.”

copyright © 2017 realtor.com


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April 2017

Existing-Home Sales Hit Highestexisting home sales
Numbers Since Recession

April 21, 2017 | realtor.com
by Clare Trapasso

The spring home-buying market was off to a strong start in March as buyers closed on the highest number of existing homes in a decade. And that’s despite the lack of residences on the market.

Sales of existing homes (that is, ones that have previously been lived in) hit about 5.71 million last month, according to the seasonally adjusted numbers in the most recent National Association of Realtors® report. That was a 4.4% rise from February and a 5.9% increase from the same month a year earlier.

“Sales are the highest since the recession,” says Joseph Kirchner, senior economist of realtor.com®. The last time they were that high was in February 2007, when 5.79 million existing residences were sold. However, it’s still short of the peak of 7.25 million sales in September 2005, the height of the market. But “the supply of homes on the market is getting tighter and tighter,” he adds. “That means home prices will continue to go up and affordability will continue to go down, and it will be more difficult for home buyers to find a home that meets their needs.” However, the market is great for those sticking a “For Sale” sign in their front yards. “Their selling price will be high, and they’ll be able to sell very quickly,” Kirchner says.

And the climbing prices show no signs of slowing down. The median price on an existing home rose nearly 3.6% from February to March, according to the report. It was also up 6.8% from the same month last year. But existing homes are still significantly cheaper than newly constructed homes—by about 25.3%. They went for a median $296,200 in February, according to the most recent data available from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

All types of homes are flying off the market. Buyers snapped up more single-family homes, those in-demand abodes that are often, but not always, standalone structures with yards out back. Sales were up 4.3% from February and 6.1% from the same month in the previous year. They sold for a median $237,800, up 6.6% over the same month a year earlier. Aspiring homeowners and move-up buyers also signed on the dotted line for more condos and co-ops. Both monthly and annual sales rose 5% in March. Prices rose even faster, at 8% annually, to reach a median $224,700.

“Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain,” NAR Chief Economist Lawrence Yun said in a statement. “Sales will go up as long as inventory does.”

Around the country, monthly and annual sales of all kinds of homes were also up—except in the West. The number of existing homes sold in the region, home to pricey cities like San Francisco, Denver, and Seattle, dipped 1.6% from February, to 1.22 million, according to the report. But they were still up 5.2% year over year. Prices in the West rose 8% annually to hit a median $347,500, making the West the most expensive region in the nation. Sales shot up the most in the Northeast, rising 10.1% from February and 4.1% from March 2016. The 760,000 homes sold for a median $260,800, up 2.8% annually.

The number of homes sold in the Midwest reached 1.31 million in March, rising 9.2% month over month and 3.1% year over year. The median price also rose 6.2% annually, reaching $183,00. Sales in the South reached 2.42 million in March, increasing 3.4% from February and 8.5% from the same month a year ago. Prices also went up 8.6%, hitting a median $210,600.

copyright © 2017 realtor.com


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February 2017

Tight Housing SupplyTight Housing Market
A Concern for Spring

February 6, 2017 | Realtor Market Insider
by Stacy Pingree

House hunters out this spring will have to pound more and more pavement to find their home sweet home.

The number of for-sale listings fell again in December to the lowest level since 1999, according to the National Association of Realtors. There were just 1.65 million homes for sale at the end of December, which at the current sales pace would take only about 3 ½ months to exhaust. A normal, balanced market has about a six-month supply.

This, as the busy spring market is already on the verge of starting. “To say early buyer demand is strong in early 2017 is an understatement — it is titanic. Redfin data shows that buyers are out touring in droves, ready to pounce on new listings that fit the bill,” said Nela Richardson, chief economist at Redfin. “The only thing missing is homes for sale to satisfy demand, because there just aren’t a lot of homes available to buy right now. We are in a real estate black hole until those listings show up again.”

In some local markets, the situation is more dire. The share of communities with supply at less than three months jumped from about 13 percent to more than 20 percent in the past year, according to a survey by Proteck Valuation Services, a real estate appraisal and analytics company. For example, in Dallas, the supply of homes for sale dropped by nearly 41 percent from December 2015 to December 2016.

“This means fierce competition for homes, where buyers that are able to act fast and pose less risk to the seller have the advantage. These ‘favored’ buyers would include those already pre-approved for a mortgage, those with larger cash down payments and those with no contingencies (like the sale of another home),” according to the Proteck report.

The shortage is being driven by surging demand and weak home construction. Single-family housing starts continue to rise, but very slowly each month. Builders are still operating at well below normal construction levels, and that doesn’t even account for pent-up demand from the housing crisis and growing household formation.

“The homeownership rate is at a near 50-year low, and it could remain at this level,” said Lawrence Yun, chief economist at the NAR. “I’m not sure if this is the trend that America wants.”

copyright © 2017 Realtor Market Insider


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January 2017

Metro Phoenix New-Home Pricesjanuary-2017
Ready to Rise in 2017

January 6, 2017 | azcentral.com
by Catherine Reagor, The Republic

New-home shoppers will likely see higher prices in metro Phoenix this year. Don’t expect a big jump, but home builders are poised to start raising prices to offset their rising costs.
home prices

Shoppers for newly built homes will likely see higher prices in metro Phoenix this year. Don’t expect a big jump, but builders are poised to start raising prices to offset rising costs of land and labor. Arizona housing analyst Jim Belfiore predicts new-home prices in the Valley will climb an average of 7 percent to 9 percent this year. In 2016, new-home prices in the area climbed about 2 percent.

“Appreciation is the biggest issue for the home-building industry now,” Belfiore told a packed room of home builders, developers and others in the real estate industry at his annual Valley housing forecast on Thursday. That’s because the cost of building has climbed 50 percent in the past two years,” he explained.

“The market’s recovery feels good now but not great,” said Meritage Homes Corp. CEO Steve Hilton. “Home costs are up, but margins are low.”

Valley builders are out of the bargain land they were able to buy during the housing crash in the Great Recession, and a shortage of construction workers has driven up building costs. The median price of a new Valley home was about $311,000 in November, according to RL Brown’s Phoenix Housing Market Letter. That’s only about $1,000 more than it was in June of last year.

Home builders also can likely raise prices more this year because demand from buyers has picked up. The new-home market’s recovery to boom levels is still years away, but about 18,000 houses were built Valleywide in 2016. That’s the most since the end of the boom when more than 60,000 were built during 2006-07. Based on what the builders said at the forecast, most of the new homes will be more affordable and geared toward first-time buyers, particularly Millennials.

Mark Moskal, division president of Gehan Homes, said rising interest rates mean buyers can afford less house. The average rate on a 30-year mortgage climbed from 3.5 percent in August to 4.3 percent last week, according to Freddie Mac. The home builders on the panel all agreed they would focus on more affordable homes to try to tap the growing number of first-time buyers in metro Phoenix this year.

“Millennials are the biggest opportunity that lies ahead for the housing market,” said Greg Abrams, vice president for Pulte Homes.

And rising rents are propelling more Millennials to buy. But it’s not clear yet how much more they are willing to pay for a new home. That’s the million-dollar question for Valley home builders now.

copyright © 2017 azcentral.com


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December 2016

Trends Redefine Corecityscape1
Assets In the Valley

December 22, 2016 | azbigmedia.com
by David McGlothlin

While some criteria for classifying a building as a core asset a decade ago still remain, changing trends in the market and tenant demands are recalibrating the way we think about core assets in the Valley. Property value, land scarcity and an institutional component originally drove market demand for core assets. The same is true today for the most part, but now tenants also look for an urban environment, walkability, amenities and features to help attract and retain employees to the area through the experiences being offered.

“A core asset is one whose value first-and-foremost is retained over time, with the expectation of reliable appreciation,” says Gary Linhart, co-founder and principal at ViaWest Group. Adding to the property’s value is location and limited supply of available land for new developments.

Older properties like the Esplanade and Biltmore Center, largely considered two of the Valley’s most prominent and well-recognized core assets, are starting to show signs of its age and required interior and exterior tenant improvements to keep up with today’s standards. “When it [Biltmore Center, formerly Biltmore Financial Center] was built, it was designed for the long-term, with the highest quality finishes at the time, at the top intersection in Phoenix,” explains Linhart. “However, in order for a core asset to stay a core asset, reinvestment is necessary to keep the building up-to-date with changing trends and tastes.”

So when his company purchased the building last year, its task was to transform the aging structure with upgraded features and amenities to meet current tenant demands. Whereas, newer buildings like Hayden Ferry Lakeside in Downtown Tempe and CityScape in Downtown Phoenix, already have the needed state-of-the-art features built in. Linhart identifies Downtown Scottsdale, Downtown Tempe, Camelback Corridor and Downtown Phoenix as the markets with core assets, which all have nuances that make them different.

“These core assets are in areas where the top companies want to and need to be,” he explains. “At any time, it has to offer to the top tenants in the marketplace the experience, technology and quality of space they demand.”

Today’s core assets are unique in the ability to transform a building and its surroundings into a premiere destination by creating a first-class experience for those entering it. “You have to look at each project holistically; how it ties to its natural surroundings, flexibility, and how people emotionally connect with said place,” explains Rory Carder, president of DAVIS. “Any core asset, no matter what city, requires walkability; it’s the essence of urbanization.” Although Phoenix is still a young city, she thinks it’s making strides in the right direction. “A core asset flourishes on the people that inhabit them,” explains Carder. “It thrives on the energy you feel from that specific piece of real estate.” Carder refers to her offices at Hayden Ferry Lakeside as an example of a core asset in Downtown Tempe where employees can explore any of the nearby businesses or enjoy a yoga session in the park overlooking Tempe Town Lake.

The old corporate environment of the 1980s and 90s is fading away. Instead, employees want options that fit their flex schedules and lifestyles. Linhart says, “The common areas, such as outdoor spaces with shaded seating areas, tenant lounges, fitness centers, on-site restaurants, coffee shops and lobbies are becoming vital components of a core asset.”

Back in the day, a strong institutional corporate tenant and a few nearby restaurants were enough to attract high-end tenants. State-of-the-art structural features were always expected and still are, but the delivery of a quality tenant experience is what sets these buildings apart from the others. Linhart explains, “In a wired-world in which people can work from anywhere, an office building that wants to attract paying tenants must provide an experience, particularly if the office building owners wish to command a premium rent.”

Kevin Calihan, senior vice president of CBRE, echoes that point. Companies need to be in a good position to compete for a quality workforce with a site that will attract Millennials and the educated employees.“Companies want to give their employees high quality of life, a great work environment and that’s what locations like The Galleria and Hayden Ferry Lakeside provide.”

The Galleria Corporate Centre in Downtown Scottsdale, an old mall converted into class A office space, is largely considered a core asset by today’s standards. Calihan says the change in demand to be in close promiximity to retail, entertainment and hospiliatilty options thrusted the Galleria into its current core asset status, which wasn’t the case for the failed mall ten years ago.

Downtown Phoenix’s CityScape is a prime example of a core asset for its location, proximity to nearby amenties, elegant finishes and sheer size, which contributes to its success and 95-percent lease rate. It has all the needed ingredients: amenities, growing urbanization, booming residential developments and entertainment venues. Location, prestige, supply and demand still remain important in securing high-level tenants at core assets, but today’s standards also require an atmosphere for those entering to remember and want, which differentiates a core asset from any other ordinary building.

copyright © 2016 azbigmedia.com


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November 2016

Why Tesla’s new solar roof tilespress_solar_roof
and home battery are such a big deal

October 31, 2016 | techcrunch.com
by Darrell Etherington (@etherington)

On October 28, Tesla unveiled its new solar roof tiles. Few of us in attendance, if any, realized the solar roofing tiles were actual functional solar panels until Elon Musk said so. Sure, it’s a neat trick, but what’s the big deal?

Why does it matter that Tesla is making a fashion statement when the point is green power and a future where we aren’t so dependent on fossil fuels?

I’ve heard from some people suggesting that this is nothing new, because of other similar previous projects, including Dow Chemical’s canned solar shingle project, for example. Others are wary of Tesla’s ability to sway consumers with a solar solution that sounds like it’ll still be quite expensive in terms of up-front (or, with payment plans, deferred but net) installation costs. Still others aren’t clear on Tesla’s goals with this product, or how it fits into the company’s overall strategy relative to its electric vehicles.

It’s easy to dismiss the aesthetic import of how Tesla’s tiles look, but it’s actually important, and a real consideration for homeowners looking to build new homes or revamp their existing ones. The appearance of the tiles, which come in four distinct flavors (Textured Glass, Slate Glass, Tuscan Glass and Smooth Glass) is going to be a core consideration for prospective buyers, especially those at the top end of the addressable market with the disposable income available to do everything they can to ensure their home looks as good as it possibly can.

As with other kinds of technologies that are looking to make the leap from outlier oddity to mainstream mainstay, solar has a hurdle to leap in terms of customer perception. Existing solar designs, and even so-called attempts to make them more consistent with traditional offerings like the above-mentioned Dow Chemical project, leave a lot to be desired in terms of creating something that can be broadly described as good-looking.

It’s like the VR headset — Oculus and Google can make claims about their use of fabric making their headsets more approachable, but both are still just options somewhere along the curve of things with niche appeal. Neither is very likely to strike a truly broad audience of users as acceptable, and neither are solar panels that don’t succeed in completely disguising themselves as such.

Tesla has been referred to as the Apple of the automotive world by more than a few analysts and members of the media, and if there’s one thing Apple does well, it’s capitalize on the so-called “halo effect.” This is the phenomenon whereby customers of one of its lines of business are likely to become customers of some of the others; iPhone buyers tend to often go on to own a Mac, for instance.

For Tesla, this represents an opportunity to jump-start its home solar business (which it’ll take on in earnest provided its planned acquisition of SolarCity goes through) through the knock-on effects of its brisk Tesla EV sales, including the tremendous pre-order interest for the Model 3. It’s strange to think of halo effects with big-ticket items, including vehicles and home energy systems, but Tesla’s fan base shares a lot of characteristics with Apple’s, and because they’re already purchasing at the level of an entire automobile, the frame of reference for what constitutes a valid halo purchase is actually appropriate.

Tesla, like Apple, scores well with customer satisfaction and brand commitment, and that’s something that no one trying to sell a solar home energy system at scale can match. As strange as it sounds, “buying a roof because you like your car” might be the new “buying a computer because you like your phone.”

Tesla’s solar tiles claim to be able to power a standard home, and provide spare power via the new Powerwall 2 battery in case of inclement weather or other outages. Musk says that the overall cost will still be less than installing a regular old roof and paying the electric company for power from conventional sources. But Musk’s claims about the new benefits of the new solutions don’t end there.

Tesla’s tiles will actually be more resilient than traditional roofing materials, including terra-cotta, clay and slate tiles. That’s because of the toughness of the glass used in their construction, making them theoretically more resistant to potential damage from elements like hail, or even debris like fallen tree branches. In fact, Musk also said at the event that the roofs should far outlast the standard 20-year life cycle common for roofing materials used today — by as much as two or even three times. Fewer roof tile replacements means more value, provided that’s not already factored into his estimates of the up-front cost.

There’s also the possibility that the new tiles could become more efficient than existing solar panel options. Though in their current form, Musk says they achieve 98 percent of the efficiency of regular panels. He said that the company is working with 3M on coatings that could help light enter the panel and then refract within, letting it capture even more of the potential energy it carries to translate that into consumable power.

The announcement of Tesla’s solar tiles does not guarantee a sweeping solar power revolution; far from it, since Tesla says it won’t start installing the product in any consumer homes until next year, and a lot can happen between now and then. But Musk also said with full confidence that he ultimately expects the Powerwall to outsell Tesla cars, and easily so.

Solar roofing, Powerwall and Tesla cars taken together represent a new kind of ecosystem in consumer tech, one that carries a promise of self-sufficiency in addition to ecological benefits. Tesla has already tipped its hand with respect to how it intends to make vehicle ownership a revenue generator for its drivers, rather than a cost center. You can see how it might eventually do the same for solar power using solar tile roofs combined with Powerwalls installed in series, giving homeowners surplus power generation and storage with a few different potential options for monetizing the excess (including, say, acting as a supercharger station for other Teslas, or selling back to the grid).

It’s tempting to look at Tesla’s unveiling last week and think that it’s more of an incremental development in the home solar industry. But it’s more likely a step toward a future where individuals have more direct control over power generation, leading to a big difference in how we think about renewable energy.

copyright © 2016 techcrunch.com


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September 2016

Phoenix Chalks Up Another Point Over CaliforniaBerkeley
As Easier Place to Get Mortgages!

August 24, 2016 | bizjournals.com
Eric Jay Toll, Phoenix Business Journal

This is not a good week for California economic developers.

In addition to bad press and a torpedoed effort to solve its housing crisis, CNBC has a report saying Californians in burgeoning high tech markets have the hardest time trying to qualify for a mortgage.

No wonder companies are starting to plant new offices and expansions in Arizona.

Add the CNBC cable channel to the national media piling it on the Golden State. The New York Times and Inc. — as well as us here at the Phoenix Business Journal — have reported on how a number of California businesses are adding staff in Phoenix, as well as other markets outside the Golden State.

On the CNBC list of 37 metros, Phoenix fell into the middle of the pack, ranking No. 17 on the list of “ easiest cities to get a mortgage.” It also ranked more affordable than the markets against which it competes the most.

Housing price differentials were not part of the ranking, but the New York Times story said that housing in Phoenix costs one quarter of the typical San Francisco home.

CNBC reports that in Phoenix, the average home buyer needs a FICO score of 743, and is going to borrow at a loan-to-value of 84 percent.

In the Valley’s top competing markets — Denver, Seattle, Bay Area and Los Angeles — in addition to substantially higher home prices, higher credit scores and bigger down payments are required.

Denver’s average home buyer needs a 754 credit rating and carries an 82 percent loan to value mortgage. In Seattle, ranked one spot lower, a FICO of 755 is reuqired and 81 percent loan-to-value.

CNBC ranked the top 37 markets, so Austin was not included in the mix.

The toughest markets to qualify for loans — in addition to housing prices — were Los Angeles, New York, and the Bay Area including Oakland, San Jose and San Francisco. Credit score averages ran from 758 in Los Angeles to 770 in San Francisco. Los Angeles averaged a 75 percent loan-to-value, dropping to a national-worst lowest loan-to-value of 72 percent in San Francisco.

Of the CNBC markets, Detroit was the easiest market in which to qualify for a mortgage with a 728 FICO and a 90 percent loan-to-value.

copyright © 2016 Phoenix Business Blog


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July 2016

Brexit Could be Boon forbrexit
Arizona Homeowners & Buyers!

July 3, 2016 | azcentral.com
Catherine Reagor, The Republic

Britain’s vote to exit from the European Union hurt U.S. stock markets temporarily, but it could help homebuyers. Both stock prices and U.S. interest rates started falling June 24, the day after Brexit – The average rate for a 30-year-fixed mortgage is now about 3.45 percent, the lowest it’s been since 2012.

“The uncertainty created with Brexit should keep U.S. rates down longer,” Arizona economist Elliott Pollack told me from Austria, where he is vacationing and getting a closer view of fallout from Brexit. “That’s good for housing.”

A little explainer:

When stock markets stumble, more investors opt to buy U.S. Treasury bonds. An increase in buyers pushes up bond prices but drives down their yields or interest rates. And the yield on 10-year Treasury bonds correlates the closest with mortgage rates.

“You get bad news and interest rates fall,” David Newcombe, a co-founder of Scottsdale-based Launch Real Estate, told me. He lived in London until moving to Phoenix in 2003. It’s still unclear how Brexit will shake out because the market rebounded by week’s end. Current lower interest rates mean homebuyers can afford a house that costs 8 percent more than they could at the beginning of the year, according to Realtor.com economist Jonathan Smoke. Homebuyers aren’t the only ones who benefit. If you are a homeowner, it’s a good time to think about refinancing. The monthly payment on a $250,000 mortgage with a 3.5 percent rate is about $220 cheaper than a loan with a 5 percent interest rate.

Stock market declines do often have a negative impact on housing. Last August, when stocks dove over concerns about an economic slowdown in China, luxury-home markets in the U.S. slowed. Metro Phoenix’s luxury market definitely did. Of course, that’s because many million-dollar homebuyers have bigger stakes in stocks than typical buyers.

“The sudden drop in the stock market will be negative for the luxury market,” Arizona housing analyst and British citizen Mike Orr told me. But he doesn’t expect the impact will last long. Orr does think the drop in interest rates could be a longer-term trend. U.S. stock markets started to rally on Wednesday and Thursday, something analysts attribute to an ease over concerns about Brexit’s economic impact. Maybe a $200 or more drop in a monthly mortgage payment can help ease the pain of a drop in our 401(K) accounts this month.

Maybe just a bit.

copyright © 2016 azcentral.com


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June 2016

Metro Phoenix Housing Market June2016
Has Best Month in a Decade

June 9, 2016 | azcentral.com

April just might have been the best month for metro Phoenix’s housing market in a decade. A look at key indicators and some national rankings show why the Valley’s housing market appears to be stronger than it’s been since the boom and crash. Foreclosures fell to the lowest level since 2006. Homebuilding continued to rebound. Phoenix kept its spot as one of most affordable big metro areas for homebuyers. And a national moving survey shows the Valley is one of the top 10 U.S. areas where people are moving. Also, many of the buyers needed for the Valley’s housing market to finally fully recover are here.

An April Street Scout survey of Valley homebuyers and sellers found Millennials and boomerangbuyers who lost houses to foreclosure during the crash are buying metro Phoenix homes at a pace the market hasn’t seen before.

– Home sales in metro Phoenix climbed to 9,041 in April, an almost 8 percent jump from last April, according to data compiled for this column by Arizona housing expert Mike Orr of The Cromford Report.
– Condominium sales reached 1,637 last month, up 1,514 from April 2015.
– The Valley’s median home price rose to $235,000, up from $215,000 a year ago.
– The median condo price reached $146,500 last month, compared with $142,000 a year ago.
– Banks foreclosed on only 231Phoenix-area houses in April, the lowest level since December 2006, according to The Information Market.
– Homebuilding in the Valley is up 25 percent from last year’s pace, according to RL Brown Housing Reports.

Despite home-price increases, metro Phoenix is still the eighth most affordable big U.S. metro area to buy a home, according to the latest quarterly ranking from national mortgage firm HSH.com. The Valley has held that spot for the past year. And finally, moving company U-Haul’s annual survey for the most one-way rentals in 2015 came out this week. Metro Phoenix ranked 10th nationally for the most popular place for people to move. Despite the upbeat signs for the housing market, Orr is careful in how he describe its current status. He told me the Valley’s housing market is a bit “complicated” now.

Orr’s quick take:

– For homes priced below $200,000, there’s an extremely low supply available for sale, fast price appreciation and low sales counts.
– For homes priced between $200,000 and $500,000, the supply of homes for sale is slightly low, there’s strong growth in demand and moderate price appreciation.
– For homes priced between $500,000 and $1 million, there’s a high supply available for sale, good demand and little to no appreciation
– For homes priced higher than $1 million, there’s excessive supply, weakening demand and flat to negative appreciation except for in a few isolated fashionable spots.

Tom Ruff of The Information Market said May’s home sales and prices are likely to be higher than April’s when all are tallied. Summer’s 100-plus-degree days deter some Valley homebuyers. If home sales and prices continue to climb In June and July, it will be a true testament to the market’s strength. If not, there’s always the fall.

copyright © 2016 azcentral.com


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May 2016

Rising Rents Spurring More Rising Rents
Metro Phoenix Homebuyers

By Catherine Reagor
The Republic | azcentral.com

Rents for homes, condominiums and apartments climbed sharply in many Valley neighborhoods during the past few years and are still on the rise. More Millennials and boomerang buyers bouncing back after foreclosure are purchasing metro Phoenix homes than ever.

But it’s not just because they want a place of their own. Rents for homes, condominiums and apartments climbed sharply in many Valley neighborhoods during the past few years and are still on the rise. Billy Day and Jessica Simms bought their first home earlier this year after their rent jumped in central Scottsdale. The couple were able to find a renovated home in their price range in the popular area so they could stay close to their jobs, favorite restaurants and places to hang out. “Our lease was coming to an end and upon evaluating the cost of rent, it was a better financial decision to purchase,” Simms told me.

For homes and condos, the average monthly lease rate in metro Phoenix rose 10 percent during the past year to $1,454, according to the Arizona Regional Multiple Listing Service’s April report. Apartment rents in the Phoenix area jumped 8 percent during the past year, according to the most recent Yardi Matrix report. The Valley ranks No. 7 for the biggest rent increase among major U.S. metro areas. The average apartment renter in metro Phoenix is paying almost $1,000 a month.

Rents are rising faster in some neighborhoods than others, particularly in central parts of Phoenix, Scottsdale and Tempe. Those areas, closer to restaurants, shopping, jobs and light rail are also seeing some of the biggest increases in home prices. The Midtown Phoenix neighborhood Cheery Lynn/The Yard in ZIP code 85014 saw home prices jump 50 percent during the past year, according to Street Scout Home Values, an annual analysis of metro Phoenix’s housing market done with The Information Market. That was the biggest jump for any Valley neighborhood.

It’s tough to find an affordable home in many central Valley neighborhoods now. The many investors who purchased Valley foreclosure homes on the cheap during the crash and turned them into rentals are reaping the reward of higher rents now, and most aren’t inclined to sell. Apartment developers are following buyers and renters. Anyone who has driven central Phoenix, Scottsdale, Tempe and parts of Chandler has seen the many apartment complexes under construction. Most of those developments are luxury complexes with higher-than-average rents. More available rentals in popular Valley neighborhoods will increase supply. If demand from renters doesn’t climb as quickly, then rent increases could slow.

copyright © 2016 The Republic | azcentral.com


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May 2016

Slow & Steady Wins the Race
By Molly Carson, VP Development
Ryan Companies US, Inc.

Ryan Companies USSome believe there are global and domestic issues to be concerned about in 2016 and the not so distant future: the pending presidential election, historically low oil prices and unstable Chinese economy, rising interest rates and so on. These concerns may keep you awake at night.

Why do I feel optimistic – specifically for Arizona? Because with all of the concerns circulating throughout the globe. Arizona continues to experience solid growth – slow and steady growth.

The recession recovery has been both weaker and slower for the nation past recoveries – for Arizona that’s not necessarily a bad thing. The recovery foe our state has not been led by the housing market like in years past it’s been grounded in something much more substantial. An increase in quality employment opportunities due to businesses expansion and new companies locating in Arizona has been very positive. Arizona has seen solid growth in jobs in financial services, professional and technical services fields; industries offering a measure of higher incomes and greater diversity to the state’s economy – issues and hospitality also continue to thrive. Typically the primary driver in an economy uptick, the Arizona housing market is recently starting to contribute in a meaningful way. Arizona’s housing market arguably entered 2016 with one of the largest backlogs ever – a double digits increase from 2015 in permits pulled is projected. A diverse foundation of growth means a continued and more stable recovery.

Is this just a stable recovery? Yes, and that’s ok by me.

The Arizona commercial real estate industry continues to experience positive net absorption in the office market, declining vacancy and rent appreciation. Bifurcated growth albeit, with urban markets like Tempe, South Scottsdale, Chandler and Metropolitan Phoenix are performing far better than (suburban/rural) areas – definitely a positive trend the underlying economic fundamental continue to help our commercial property market to a slow, sustainable growth. This is not the quick recoveries we have been accustomed to, but I believe this will led to a strong foundation moving forward with a decreased risk of sharp, future economic dip.

For the next few years, projection shows Arizona to have one of our nation’s fastest rates of job growth. The stable continues to improve in attracting firms rooted in technologies and innovation. ASU was named the number 1 school in the United States for innovation; it’s no wonder company’s like Go Daddy, Avnet, Amkor and Intel continue to invest in Arizona – our brand is stronger than ever. The Arizona’s time to flourish – I encourage all of you in the commercial market as well as other market, to keep the positive momentum going: Arizona it on its way to win the race.

As vice president of development, Molly is responsible for its selection and acquisition, municipal use permits and approves design and construction coordination, financial packaging and lease or sale negotiation.

copyright © 2016 Ryan Companies US, Inc.


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April 2016

How New Home Sales & Construction Permits
Compare to Last Year (and before the crash)

By Mike Sunnucks, Senior Reporter
Phoenix Business Journal
April 18, 2016

homeconstructionNew home sales and new residential construction permits are continuing their 2016 rise — at least when compared to 2015. But they are still down from pre-recession levels when builders were building and banks handing out mortgages that built toward a Hindenburg-scale bubble and crash.

Scottsdale-based RL Brown Housing Reports’ latest data batch shows new home sales were up 47.6 percent in March versus a year ago. Builders sold 1,408 homes last month versus 954 in March 2015. For the year, home sales are up 37 percent for the first quarter compared to a year earlier, according to RL Brown. Builders applied for 4,258 construction permits for new homes in the Valley during the first quarter. That is up 32.5 percent from the same period in 2015, according to the Scottsdale real estate research firm.

But how are the current numbers comparing to before Arizona’s calamitous real estate crash? The first quarter of 2005 saw builders pull 15,381 permits for new homes, according to RL Brown and a past Phoenix Business Journal report. Builders took out a record 63,570 permits in 2005. They pulled 12,868 permits in the first quarter of 2006.

The housing market has improved over last year but there is a marked difference between now and from when the bubble was about to burst. Existing home sales were up 8.7 in the first quarter of 2016 versus the same period in 2015 (21,736 homes sold vs. 19,995), according to RL Brown.

copyright © 2016 Phoenix Business Journal


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March 2016

Make $44,000? You Can Afford a
Median-Priced Home in Metro Phoenix!

By Catherine Reagor
The Republic | azcentral.com
March 4, 2016

Sale PendingDespite rising home prices, metro Phoenix is still the eighth most affordable big U.S. city to buy a home.

A homebuyer needs to earn about $44,000 a year to afford the $1,025 monthly payments on a median-priced Valley house costing about $221,000, according to national mortgage firm HSH.com’s latest analysis.

That salary is based on a buyer coming up with a 20 percent down payment, about $44,000 for a $221,000 house — the same amount needed in annual pay to buy that home. However, this study was done before the median price of a Valley home jumped $10,000 in December, a trend that could push the area down on the ranking if income increases don’t keep up.

Pittsburgh is the most affordable U.S. metro area. Homebuyers only need to earn $31,134 a year to afford the city’s median home price of $128,000. San Francisco is the U.S. least affordable city for U.S. homebuyers. The median home price in the northern California city is $781,600, and to afford that a buyer has to make at least a $148,000 a year.

First-time homebuyers can get Federal Housing Administration Mortgages that require much less than a 20 percent down payment — as little as 3 percent. Lower down payments mean higher principle balances and bigger monthly payments. A Phoenix homebuyer putting down 10 percent on a $221,000 house must make almost $52,000 a year to afford the payment, according to HSH.

The mortgage-research firm also tracks mortgage interest rates, property taxes and insurances cost by city for its affordability ranking.

copyright © 2016 The Republic | azcentral.com


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February 2016

Home Prices Accelerate at Fastest Pace in 16 Months!
By Andrea Riquier
MarketWatch
January 26, 2016

20160201134454869016000000-oTight inventory pushes home prices higher in November; San Francisco, Portland, Denver register 11% jumps
U.S. home-price gains picked up again in November, with several metro areas notching double-digit annual percentage increases.

The S&P/Case-Shiller 20-City Composite Index rose 0.1% in the three months ending in November, for a 5.8% yearly increase. That was up from a 5.5% yearly gain in the period ending in October, and marked the strongest reading since July 2014. Portland prices were the strongest, rising 11.1% compared with a year ago. San Francisco, at 11%, and Denver, at 10.9%, followed. Some 14 cities had stronger yearly price gains in November than in October.
While the composite index is still roughly 12% lower than the peak set in summer 2006, Dallas, Denver and Portland have all touched fresh highs. San Francisco prices have pulled even with the earlier peak. Only five cities had monthly price decreases, down from eight in October. Chicago was weakest, notching a 0.7% decline. It also had the smallest yearly gain, 2%.

“Low mortgage rates, tight supplies and an improving labor market” are pushing prices higher, said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. Despite solid demand in the housing market, the economy faces headwinds, Blitzer noted, including a strong dollar and the slump in the oil patch.

City Monthly Change Yearly Change:

Atlanta -0.3% 5.7%
Boston -0.5% 4.7%
Charlotte 0.3% 5.3%
Chicago -0.7% 2.0%
Cleveland 0% 2.2%
Dallas 0.2% 9.4%
Denver 0.1% 10.9%
Detroit 0.1% 6.3%
Las Vegas -0.1% 5.2%
Los Angeles 0.3% 6.2%
Miami 0.8% 8.1%
Minneapolis 0.1% 4.8%
New York -0.3% 3.7%
Phoenix 0.3% 5.9%
Portland 0.3% 11.1%
San Diego 0.3% 6.0%
San Francisco 0.3% 11.0%
Seattle 0.5% 9.7%
Tampa 0.5% 6.0%
Washington 0.1% 2.1%
20-City Composite 0.1% 5.8%

Andrea Riquier: 415-439-6400; AskNewswires@dowjones.com

copyright © 2016 Market Watch


Where The Baby Boomers Live in Metro Phoenix
By Angela Gonzales
Phoenix Business Journal

Baby Boomers in PhoenixFor the first time in modern history, the U.S. Census Bureau projects that until the mid-2030s, the number of people age 65 and over will far exceed the number entering the 15-64 working-age population. By 2029, when all of the baby boomers will be 65 years and older, more than 20 percent of the total U.S. population will be over the age of 65, according to the U.S. Census Bureau.

This got Paul Johnson, founder of Phoenix-based Maps & Facts Unlimited Inc., thinking about what that means for the real estate industry in the Phoenix area. “Continuing until 2030, the population of residents 65 and older will grossly outnumber the 15-64 working population,” Johnson said. “The idea was that seniors will be selling their houses and the younger people won’t be able to afford to buy them.”

He expects to see single-family home prices nationally under pressure for quite a while.

“The dream of younger people buying a home and having a backyard and a dog and everything is going to be harder to achieve because they’re going to be burdened with the extra costs of supporting all these old people,” he said.

Looking at the Maps & Facts maps, Julie Johnson, executive vice president of GPE Commercial Advisors LLC in Phoenix, said she sees incredible opportunity for growth in the senior housing industry in the metro Phoenix area.

“People want to age in place as long as they can typically, but some of these new senior housing facilities are absolutely like the Ritz Carlton,” she said. “These places have every first-class amenity and every luxury that the baby boomers are used to and have been spoiled with, and are going to be demanding as they get older.”

She said more health care real estate investment trusts are investing in senior housing projects.

“Right now, about 50 percent of their portfolios are senior housing properties,” she said. That’s changed from years past when they were mostly interested in investing in medical office buildings.

But senior housing properties are less risky to them, she said.

“The operator is the secret sauce to a successful facility,” Julie Johnson said. “If its a high, 85 percent plus occupancy, that means everything is working well and the risk factors are gone.”

copyright © 2016 Phoenix Business Blog


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December 2015

Type of House Millennials Can Afford
By Steven Totten
Phoenix Business Journal

MillennialsIt’s no question that people my age aren’t buying homes as much as they used to.

More than 43 percent of adults under 35 were buying homes in 2005. In the third quarter of this year, only about 35 percent of millennials were doing the same.

But for those born between 1980 and 2000, living in Phoenix means you can get a heck of a lot of space.

Personal finance technology company SmartAsset looked at the median income and net worth of Americans under 35 in 23 of the nation’s largest cities, and applied average price per square foot of real estate in each city to determine how large a home each value represents.

The result? Phoenix millennials can afford a home worth $172,000 on average, or roughly 1,400-square feet, according to data from Zillow.

For Phoenicians across the age bracket, a salary over $43,000 means you can afford a house here.

Compare that to 135 square feet in San Francisco, or 165 square feet in New York, and living in Phoenix starts to look pretty ritzy.

copyright © 2015 Phoenix Business Blog


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August 2015

The Real Estate Report
local market trends

Read here: Phoenix Metro

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May 2015

Mortgage Applications Rise 2.3%
By Diana Olick
cnbc.com

Buyers are returning to the housing market in ever growing numbers, as indicated by continued gains in loan applications to purchase a home.

Total mortgage application volume rose 2.3 percent week to week on a seasonally adjusted basis for the week ending April 17th, according to the Mortgage Bankers Association (MBA). The gain was driven largely by purchase applications, not refinances, even despite lower mortgage rates.

“Purchase applications increased for the fourth time in five weeks as we proceed further into the spring home buying season,” said Mike Fratantoni, chief economist for the MBA. “Applications for FHA [government insured] purchase loans remained strong as well.”

Mortgage applications to buy a home increased 5 percent from the previous week and are now 16 percent higher than the same week one year ago. Applications to refinance increased just one percent, but they are still up 41 percent from a year ago, when rates were considerably higher, around 4.25 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) last week decreased to 3.83 percent, its lowest level since January 2015, from 3.87 percent, with points decreasing to 0.32 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans, according to the MBA survey.

Rates haven’t moved very much lately, which may be why homeowners have seen little incentive to refinance. “In general, there’s a pervasive air of dispassionate complacency,” wrote Matthew Graham of Mortgage News Daily, regarding what he called the “flatness” of rates. “It would be easy to assume that the gorilla will reach the room when the Fed Announcement comes out next Wednesday, but then again, markets might be let down by a lack of ‘clues’ regarding the Fed’s rate hike timeline.”

While most analysts expect rates to rise through the course of this year, some now believe they could go even lower, given how little overseas bond markets have to offer investors. If investors continue to buy U.S. Treasury bonds, and if a still slow housing market means fewer-than-average mortgages and mortgage-backed securities are issued, rates in fact could move lower.

copyright © 2015 cnbc.com


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March 2015

Renting is Now Twice as Expensive as Buying Houses in the US
By Jay Yen
usihomes.com

Renting is now twice as expensive as buying in the USAs rents all over the US continue to soar upwards, online real estate database Zillow has recently found out that renting a home is now twice as expensive as buying one.

According to their recent affordability report, in the third quarter of 2014, renters in the US were spending an average of 30 per cent of their monthly incomes on rent, while homeowners were spending just 15 per cent of their monthly incomes on their mortgage payment.

These findings shed light on a major shift that has occurred in the US housing market over the past few years. In the years before the real estate bubble, between 1985 and 2000, rent was usually more affordable compared to buying houses, in most US cities. Now, in most American metros, if you can just come up with a down payment, you are much better off buying your own house than renting.

Even in the cities which have always been famous for high rents — the likes of Boston, San Francisco, Los Angeles, Seattle and New York — renting was more affordable than buying before the US real estate market crashed in 2008. However, since then, rents have been on a steady upward trend across the country while the cost of buying a home has been falling in many parts of the country, to a point where renting is now the less affordable option — sometimes by a huge difference.

This trend of renting being half as affordable as buying a home is one of the reasons why many housing marketing experts believe 2015 will be the year that most Millennials finally break through and enter the real estate market to buy their first home. It is predicted that the persistently high rents will push many of these young potential buyers into homeownership as it continues to make less financial sense to continue renting if they can put together a down payment.

However, it won’t be easy for everyone – some renters, especially the younger ones, are spending so much of their monthly incomes on rent that they will struggle to put away any savings for a down payment, even if they want to take advantage of the current affordability of buying a home.

Copyright © 2015 usihomes.com


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January 2015

Price Gap Breaks Open Between New and Existing Homes
By Robert Johnson, CFA
morningstar.com

The gap is the widest in history as limited builder lots and a focus on higher-end homes has pushed up new-home prices. This week’s chart shows the median price of a home, one for new homes and another one for existing homes.

If you look at the graph, you can see in the early 2000s that a new home price was always more, but not that much more, than an existing home price. There was very little penalty for going out and buying a brand new home. But since the recession, things have really changed. The gap is the widest it’s been in history. In fact, a median new home price is $280,000 versus something like $205,000 for an existing home–a huge gap.

That gap has several causes. One is that builders haven’t got that many lots right now, because they shut down buying more lots when the recession hit and they focused on maximizing profits on existing lots and on higher-priced homes, not leaving much for the low end of the market. Also, the price of raw materials that go into a home, including labor, have begun to rise, making the cost of building a home go up as well. So now we have this very wide gap.

I think that gap will need to close; we really want to get the new home market going again. What will make that happen? I think builders will have to set up more developments and focus more on lower-priced homes before we’ll see the new-home market really explode yet again.

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November 2014 …


marketwatch.com

Borrowers’ access to mortgage credit is the greatest in at least three years, and standards may continue to loosen from stringent post-crisis criteria as banks adjust to new rules and look to pump up home-loan revenue, experts said Wednesday.

A gauge that tracks mortgage-credit availability ticked up to 114 in March — the highest reading in the series’s three-year history — from 113.5 in the prior month, according to the Mortgage Bankers Association. For context, MBA set the gauge to equal 100 in March 2012.

Despite recent gains, March’s credit-gauge reading is far below MBA’s estimate for a level of about 800 in 2007.

“I don’t think there’s any question that mortgage underwriting has gotten easier or is looser than it was two or three years ago, but it’s nowhere near where it was in 2005, 2006,” said Guy Cecala, publisher of the trade publication Inside Mortgage Finance. “We are talking about easing from extremely tight underwriting standards.”

Of note, not all buyers are equally benefiting from greater mortgage-credit availability. Many lenders are increasingly providing credit to borrowers who want jumbo loans. Jumbo loans are for greater amounts than the maximum that can be backed by federally controlled mortgage-giants Fannie Mae FNMA and Freddie Mac FMCC . It’s typically tougher to qualify for jumbos than other mortgages.

“Lenders are likely moving to create a broader range of jumbo products in order to capture the increasing demand for such financing in the market,” according to MBA.

It’s clear that buyers of greater means are having an easier time in this housing market. Annual sales of existing single-family homes between $500,000 and $750,000 recently rose 6.4%, while sales of homes that cost between $750,000 and $1 million rose 13%, according to the National Association of Realtors. Meanwhile, annual sales for properties up to $250,000, which make up the lion’s share of the market, dropped more than 7%.

An increase in mortgage-credit availability comes at an opportune time for a housing market that has suffered from an unusually harsh winter and rising mortgage rates. Some buyers are acclimating to the new pricier housing environment, which has seen rates rising since May and prices running higher. In February, applications for loans to purchase a home were down as much as 30% from a May peak, but that gap narrowed in recent weeks, and now the gauge is down 18% from May, according to MBA.

There’s been concern that new mortgage rules for lenders and borrowers in 2014 would cut credit access, especially for lower-income borrowers. Indeed, this year’s annual real-estate-lending report from the American Bankers Association showed that 80% of respondents expect new regulations to “have a measurable reduction in credit availability.” However, Bob Davis, an executive vice president at ABA, said standards may thaw once lenders become more comfortable with new rules.

“There will be a tendency for some liberalization over the course of the year,” Davis said.

Data signal that certain banks have already somewhat loosened standards. According to the Federal Reserve’s senior loan officer survey, 16.7% of large banks recently eased credit standards for prime purchase mortgages, while 5.6% tightened, and the rest left standards unchanged. Banks, which saw refinancing applications plunge last year as rates rose, are looking to make up that revenue elsewhere.

–Ruth Mantell

Follow Ruth on Twitter @RuthMantell

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March 2014…

Buying A Home Is Now 38% Cheaper Than Renting
forbes.com
March 5, 2014

Is renting or buying a better financial bet? Every six months, Trulia’s chief economist Jed Kolko runs the numbers to answer that question and help you stay on top of the trends. So what does Trulia’s Winter 2014 Rent vs. Buy Report tell us? Although the gap between renting and buying is narrowing across the U.S., homeownership is still 38% cheaper than renting.

Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas according to Trulia TRLA -3.42%’s latest Winter Rent vs. Buy report. Rising mortgage rates and home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing. Now, at a 30-year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper one year ago.

The rent versus buy math is different in each local market. Buying ranges from being just 5% cheaper than renting in Honolulu to being 66% cheaper than renting in Detroit. But even for a specific market, the cost of buying versus renting depends on how much home prices rise (or fall) after you buy. Our model assumes conservative home price appreciation, but – as we all know after the last decade – home prices can unexpectedly rocket or plummet.

Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting. Also, in some markets, like San Francisco and Seattle, rents have risen sharply; rising rents hurt affordability relative to incomes, but rising rents make buying look cheaper in comparison.

Will renting become cheaper than buying soon? Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering. For each metro, we identified the mortgage rate “tipping point” at which renting becomes cheaper than buying, given current prices and rents. If rates rise, Honolulu would become the first metro to tip, at a mortgage rate of 5.0%. San Jose and San Francisco would also tip before rates reach 6%. But those are the extreme markets. Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Copyright © 2014 forbes.com


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January 2014…

Arizona Republic & ASU’s W. P. Carey School
To Host Real Estate Event
January 02, 2014

The new year brings new challenges for those who want to buy or sell homes in the Phoenix area. Do you know what to expect? The Arizona Republic and the ASU Real Estate Council at the W. P. Carey School of Business are hosting an event to help you find out what’s happening out there.

“Phoenix Housing Market Explained II” is slated for Saturday, Jan. 25, at ASU’s Tempe campus. The event will be similar to one held last spring, and it will feature an overview of the local housing market, including trends like employment and population growth, that can affect the housing industry. The experts will also answer submitted questions from the audience.

The speakers – all experts frequently quoted in the media – will be:

• Catherine Reagor, senior real estate reporter for The Arizona Republic

• Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business

• Mark Stapp, director of the Master of Real Estate Development (MRED) program at the W. P. Carey School of Business

“This is a chance for those thinking about buying or selling homes in the Phoenix area to hear about current price trends and other developments that may affect them,” explains Reagor.

The event will be held in the Business Administration C-Wing Building, or BAC, at 400 E. Lemon St. on ASU’s Tempe campus. Registration starts at 9:30 a.m., followed by the presentations and discussion from 10 to 11:30 a.m. The cost is $25 per person, with a $10-off discount available for subscribers to The Arizona Republic and ASU students and alums.

Parking is available just across the street at the intersection of Apache Boulevard and Normal Avenue. Signage will direct participants from the garage to room BAC 316 on the third floor of the BAC building.

Space is limited, and you can register at tickets.azcentral.com. More information about the event can be found at www.money.azcentral.com, www.wpcarey.asu.edu or by calling 602-444-4931.

More information on the Valley housing market is also available in the W. P. Carey School’s monthly reports at www.wpcarey.asu.edu/realtyreports.
Debbie Freeman, Debbie.Freeman@asu.edu
(480) 965-9271
Communications Manager, W. P. Carey School of Business

Copyright © 2010 Arizona Board of Regents


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THE LAND OF PLENTY

With several major multi-use projects currently in development, the City of Tempe is in the midst of a commercial real estate boom. While it would be easy to heap all the praise for this market resurgence — and the jobs it has brought with it — on Tempe Mayor Mark Mitchell, he would be the first one to spread the gratitude around.

“The recent success is not by accident,” says Mitchell, who was elected mayor in 2012 and has served on the City Council since 2000. “This has taken years of dedication and commitment from the council and employees of the city to attract economic development to the city. We’re seeing the investment that we’ve made in our community attract many opportunities.”

The city is proving to be a major player when it comes to attracting businesses. Many nationally-recognizable companies already have a presence in Tempe, including LifeLock, KPMG, Bank of America, Edward Jones and Medtronic. Additionally, GoDaddy currently has facilities under construction.

“The City of Tempe has done a wonderful job of promoting growth over the past several years,” says Glenn Smigiel, Senior Vice President at CBRE. “Their willingness to work with tenants and developers, demonstrated by a streamlined process for facilitating new projects, has been instrumental in bringing in a wide range of new companies to the market.”

Smigiel recently facilitated the $38.5 million sale of Centerpoint on Mill. The 127,027 square-foot mixed-use commercial project on the corner of Mill Avenue and University Drive was created through a unique public-private partnership between the City of Tempe and developer DMB.

Rather than draw attention to his tenure as mayor, which has seen Tempe add over 5,000 jobs since July 2012, Mitchell chooses to direct praise at current and former city council members, Tempe citizens, real estate professionals and city staff. Each group, according to Mitchell, continues to play an integral role in promoting Tempe as an economic hub in the Valley.

Mitchell points to successful rezoning and redevelopment deals of the past, like Tempe Marketplace and the revitalization of Mill Avenue, as evidence of what smart planning can accomplish. He also emphasizes Tempe’s plethora of qualities that are attractive to businesses, such as its engaged and educated citizenry, central location, proximity to higher education and the willingness of its leadership to work with business leaders to drive economic progress.

Multiuse

Tempe has several major multiuse projects currently in development, including Marina Heights and a third tower at Hayden Ferry Lakeside adjacent to Tempe Town Lake and Liberty Center at Rio Salado.

“To date, we have had $1.4 billion invested in and around the lake,” says Mitchell.

The Marina Heights project, which already secured State Farm as tenant, accounts for a bulk of that investment.

The design of Marina Heights takes its inspiration from the Salt River and the watershed, says Mike Davis, whose firm DAVIS designed the building. “We designed the complex around a plaza that takes its cue from the way the water starts up in the mountains and then runs down to provide for agriculture and other things that helped the city develop.”

DAVIS designed the building with light colored, reflective glass that will pick up the colors of the sky and fit well into the environment of the area.

Each project represents a facet of the city’s vision for development within its boundaries. Included in this vision is a heavy focus on the creation of state-of-the-art multiuse properties that can attract local and national businesses to the city. In order to realize that vision, the city has worked collaboratively with brokers, developers and other partners.

“We are honored to be affiliated with the developers who create job opportunities and change the face of our community through innovation,” says Cheri Brady, Vice President National and Commercial Sales for First American Title Insurance Company, who provided many of the title products and escrow services for many of the new projects in Tempe.

Hayden Ferry Lakeside, which currently features two completed phases with a third under construction, is operating at nearly max capacity, making the lakefront in Tempe one of the hottest destinations for business. Parkway Properties acquired Hayden Ferry I and II last year.

In the seven months following the acquisitions, Parkway nearly doubled the occupancy in Hayden Ferry I and brought Hayden Ferry II to 100 percent occupancy, says Parkway Properties Vice President and Managing Director Matthew Mooney.

Mooney attributes this success to Parkway’s proactive management of the property and Tempe’s status as a go-to locale for businesses. “We feel like there is somewhat of a shift happening,” Mooney says. “If you look at the recovery that’s happened here, the numbers are in Tempe’s favor.”

Just as ambitious is Liberty Property Trust’s Liberty Center at Rio Salado, which will offer a sustainable, mixed use property on over 100 acres with business, industrial, retail, restaurant and hotel space. The sizable site is being developed, in part, to meet the City of Tempe’s stated need for mixed use space. The demand is there and Liberty Property Trust has developed the site with the needs of the city in mind, according to John DiVall, Senior Vice President and City Manager for Liberty Property Trust’s Arizona region.

Mitchell and the City Council have worked with brokers, land developers and businesses to make Tempe an attractive site for economic growth, and the Mayor points to these public-private partnerships as a key factor in promoting that growth. “Whatever the market bears, we are going to figure out how we can work with that,” he says. “Because at the end of the day, it doesn’t do the city any good if those projects aren’t successful. So it’s in everybody’s best interest for us to work together, because our community will benefit from that.”

Tourism

Just down the road from the lake, another aspect of Tempe’s vibrant economy is spurring real estate growth through public-private partnership. With its sunny weather and central location, Tempe has a chance to further solidify its stance as a prime tourism destination in the Valley. In order to capitalize on this, city leaders have long sought to develop a conference center and attract a top-tier hotel to the downtown area, according to Mitchell. That vision is now coming to fruition with USA Place.

Mitchell has a tourism background, having worked in the industry after college, and understands what the industry can mean to a community. “I’m a big believer in tourism,” he says. “The number one industry in our state is technology and the second is tourism.”

But the site will function as much more than a conference center and hotel. USA Place will also serve as the national headquarters for USA Basketball, complete with a 4,500 seat arena.

USA Place fits into a larger vision for the future of Tempe, says Mitchell. By drawing in more out of state visitors through the conference center, hotel and basketball center, Tempe is giving itself a chance to attract more businesses to the city by showing off what a great locale it is.

Mitchell points to opportunities for collaboration between the forthcoming conference center and the different colleges at ASU and how that can positively affect the city. “Imagine if there is a conference center and someone from the Biodesign Institute comes for a 1,000 person conference, and we do a quick tour of downtown to show what we have to offer,” he says. “They see that they can open up a regional division for western states in Tempe and it’s easy to fly here because our proximity to the airport is phenomenal.”

To support his claims, Mitchell points to the positive effect the Fiesta Bowl had on Tempe in the past. He recalls a game in the 1980s when officials from Chase made the trip to watch the game. “The City of Tempe and DMB Associates used the opportunity to show Tempe off to Chase leadership and eventually convinced the company to move into the Centerpoint building on Mill Avenue. The partnership worked out well for the city, bringing about 2,600 jobs and the largest credit processing center west of the Mississippi River.”

“Centerpoint on Mill was originally conceived and master planned by DMB in a unique public-private partnership that spanned 28 years and was the impetus for redevelopment of the Mill Avenue District and downtown Tempe,” says Michael Burke, DMB’s Vice President of Development. “DMB’s flexible entitlements and its strong partnership with the City of Tempe allowed Centerpoint on Mill to be responsive to changes in the market and to meet the needs of its retailers and customers.”

Rezoning

The Mayor and City Council have also remained committed to looking at rezoning options for properties when appropriate and when brought up by the property owner. This allows the city to continually revitalize itself by rezoning properties for multiple uses that appeal to modern tenants.

This type of infill development is a necessity in Tempe because the city is landlocked and cannot expand outward. Rather than view that as a detriment, however, the city has been proactive in using its unique characteristics to develop unique projects and offer developers multiple options as they develop property.

“The one thing about Tempe that is noteworthy to me is it is the only landlocked city,” says Mooney. “As a government, they take a different approach than all of the other cities because they know the one thing they don’t have more of is land. And so they are just much more amenable to urban development and taking a different approach to development than a lot of the other cities, somewhat by necessity.”

Rezoning has helped Tempe aggressively pursue technology companies and fashion itself as a hub for the tech industry in Arizona. “Technology is the leading industry in our state,” says Mitchell. “We have the highest percentage of tech-related businesses out of any city in the Valley at over 20 percent.”

One promising project aimed at the tech industry is Discovery Business Campus, Wentworth Property Company’s forthcoming state-of-the-art complex near Elliot Road and the Loop 101 Freeway, or what Mitchell dubs “the Price Technology Corridor.” The new project integrates the sites previous owner, Freescale, and allows for further development of vacant lands at the site.

The completed plan at Discovery calls for the campus to include facilities for industrial, office, retail and hotel space. With its variety of uses, the site will be a complementary addition to the technology corridor, which already includes the ASU Research Park, the site of the new GoDaddy facility.

Multifamily

In order to house all of the employees that come with the economic boom, Tempe has fostered a progressive multifamily housing atmosphere to provide modern living arrangements for the large amounts of upwardly mobile young professionals the city is attracting from technology and other industries.

Companies like GoDaddy, State Farm and Allstate bring jobs to Tempe and, with that, a need for housing. “There is an opportunity here, because it offers something for people who want to live in Tempe but don’t want a house or a mortgage payment,” says Mitchell.

With the influx of demand, developers are responding. In addition to properties like USA Place that will feature residential, other communities are popping up around the city. Mark Taylor is currently developing a multifamily offering at Elliot Road and the Interstate 10, near the technology corridor. Additionally, there are already new multifamily offerings in the works for downtown Tempe and near the lake.

“There is a another area called Fountainhead Corporate Center near Priest Drive and Broadway Road that was a huge redevelopment area in the past. The property owner is looking at redeveloping that area to include residential units and multifamily,” says Mitchell.

The Future

Just like the mayors and councils of the past, the current leaders in Tempe are dedicated to assuring the city has a positive plan for the future. As a father to two daughters, Mitchell hopes to leave them a thriving community with a bright outlook. “I want my daughters to experience what I had in Tempe, but even better.”

The city is on the right track. Just a few years ago, Tempe had a $17 million transit fund deficit and had to cut $33 million from its budget, but, due to the work of the councils and mayors overseeing those problems, there is now a $5 million surplus in the transit fund and the city is budgeting smartly. The city’s leadership is now focused on responsible development and growth.

In order to make that growth happen, they are making sure to focus on the details that make Tempe an attractive destination for businesses.“All the stuff that is not sexy like infrastructure is important,” Mitchell says. “To attract companies, we need to make sure we have the proper infrastructure in place.”

Additionally, the city plans to continue rezoning and redeveloping old sites when appropriate in order to provide room for new businesses to come in and thrive. As an infill community with a finite amount of space to work with, this type of planning is crucial. “We’re going to continue working with redevelopment projects and relying on our staff like we always do to help us think outside the box,” Mitchell says.

Tempe is primed to take advantage of its recent economic successes and parlay them into future stability. With multiple high-profile developments set to see completion in the next few years, Tempe has the sound planning and leadership to achieve sustained, positive growth.

Commercial Executive Magazine © All Rights Reserved 2013