Scottsdale Arizona Real Estate Blog

by Dianna M. Náñez – Sept. 25, 2008 01:05 PM
The Arizona Republic

Tempe is set to get the third Hyatt Regency hotel in the state.

Mayor Hugh Hallman surprised even his fellow council members when he announced the hotel deal Wednesday at his annual State of the City address.

“I found out this morning like everybody else,” Councilwoman Onnie Shekerjian said following Hallman’s address to more than 400 people at the Tempe Chamber of Commerce-hosted event.

“How many other cities in the Valley, in this economic downturn, can boast that they’re getting a Hyatt Regency?” she said.

Hallman said the Regency would be built by 2011 and would have 240 guest rooms, 24 condos, 13,000 square feet of meeting space and a 5,000-square-foot ballroom.

The Hyatt has several of its middle-end hotels located in the Valley, including one in Tempe, but only Phoenix and Scottsdale are home to high-end Regency hotels. The Hotel Regency Phoenix is downtown near the Phoenix Convention Center and the Hyatt Regency Scottsdale Resort and Spa at Gainey Ranch is in north Scottsdale.

Tod Decker, a developer and property owner of the Regency Tempe site, said the Hyatt targeted the Hayden Ferry Lakeside project, near the intersection of Mill Avenue and Rio Salado, because of the convenient location.

“It’s on the (Tempe Town) Lake, near Phoenix Sky Harbor Airport, a block from light rail . . . (and) near the (Arizona State) University,” he said.

Decker said sealing the Regency deal took about two-and-a-half years of negotiations among Decker’s Valhalla Development Group, Hayden Ferry Lakeside master developer SunCor and the Hyatt.

The Hyatt and Valhalla are finalizing documents for the deal, he said, but construction is expected to begin in the summer.

Hallman acknowledged Tempe residents have seen plans for Town Lake hotels fail before. But he said the Hyatt and SunCor were solid businesses that rarely announce unlikely deals.

“They don’t need the press,” he said.

Decker had courted a Le Meridien hotel for the site but that deal fell through this summer. While several hotels are vying for space near the lake, Hallman said the four-star Regency hotel would fill a niche luxury market.

Downtown Tempe condos / Tom Tingle – Arizona Republic

• Condos in Tempe
  • Hayden Square - Some of the first multifamily housing within downtown Tempe.
  Number of units: 119.
  Completion date: 1989.
  
  • Orchidhouse – The first upscale, multistory condo unit in Tempe’s core.

Number of units: 83.
Completion date: 2002.

• Hayden Ferry Lakeside – Two towers complete on Town Lake.
Number of units: 142.
Completion date: 2008.

• Centerpoint Condominiums – A four-tower, high-rise condo complex in the heart of downtown.
Number of units: 357 in first two towers, near completion; another 450 in second two towers.
Completion date: first tower, this fall; second tower, 2009.
Final two towers: Depends on market.

New and recent condo projects near Mill Avenue:

• The Brownstones – 65 units.

• 525 Town Lake – 67 units.

• Regatta Pointe – 136 units.

• Millstone – 48 units.

• Tempe Lofts – 7 units.

• Tempe Urban Living – 15 units.

Total condo units completed or near completion on or near Mill Avenue: 1,039.

If you are looking for a condo in the Tempe area click here:

www.theholmgroupaz.com

y William Hermann – Sept. 25, 2008 11:56 AM
The Arizona Republic

While the Valley home-building market languishes, central Tempe is continuing to see the construction of condominiums.

“The financial community and the development community are treating Tempe as a different market than the general region,” Tempe Development Services Director Chris Salamone said. “There are some obvious reasons: Tempe’s proximity to the airport, the university, the coming of light rail, Town Lake and we are right in the center of the freeway network.”

Developer Patrick Logue, is completing a luxury loft project on Farmer Avenue; units start at $745,235. Two blocks west of Farmer, the 12-unit 675 South opens in the spring with prices starting at $419,000. Developer Jimmy Evans plans in January to begin Spence Avenue Townhouses a block south of Apache Boulevard on Rural Road.

Still, the recent financial crisis has stalled several Tempe developments. Evans has moved at least one project to the back burner, and D.R. Horton’s “Urban Living Series” condos planned for Rural Road and Lakeshore Drive won’t happen any time soon.

“Just say they’re suspended,” D.R. Horton spokesman Tom Davis said.

Farmer Avenue lofts

Logue said he decided several years ago that metropolitan Phoenix “was ready for infill projects.”

He’ll start showing his Farmer Avenue Lofts, located near Third Street on Farmer Avenue, in mid-October.

“Greater Phoenix has grown so much over 40 years that transportation times have dramatically increased: I built here for people who don’t want to commute and hour and a half,” he said.

Logue says he paid “significantly more” for the 1.7-acre lot on which he built his just-completed $13.5 million project than he would have for a similar lot less than a block away.

“It was worth it,” he said. “Just look at the view.”

Tempe Butte, Hayden Flour Mill, Sun Devil Stadium and the towers of Centerpoint Condominiums are framed in the east-facing windows of his luxury condominiums. The contemporary condos range in size from 2,440 to 2,610 square feet and all are three stories tall with a roof deck. They start at $745,235.

“You can walk half a block to the light rail station and two blocks to downtown from here,” Logue said. “And six of them are designed-and it’s zoned here – so that the ground floor can be an office. It’s ideal for an attorney, a real estate agent, an insurance agent-even an art gallery.”

675 South

Two blocks southwest of Logue’s condos, the walls are up on 675 South, a condo project on Roosevelt Street near Sixth Street.

Developer Josh Carlson said the 12 condos will be a contemporary design, with modern interiors highlighted by colored concrete floors, euro-style kitchens, wooden staircases and dual master bedrooms.

The two front condos in the project, at 1,641 square feet each, have work/live space on the ground floor as well as a garage. The two floors above the ground floor include the kitchen, dining room and living room and two bedrooms. The rear building in the complex has a ground level garage and ten 1,573 square foot condos.

Carlson said he expects to begin selling at 675 South in the spring, with prices starting at about $419,000.

Spence Avenue Townhouses

Evans said he’ll break ground in January on his 22-unit, three-story Spence Avenue Townhouses on Rural Road just south of Apache Boulevard.

“Yes these are challenging times, but if you have a financing source – and I am fortunate to have a joint venture partner – there are some wonderful opportunities out there,” Evans said. “This Spence Avenue project is across the street from ASU, across the street from the light rail line and we feel sure demand will be high.”

Evans said that his townhouses will range from 1,000 to 1,800 square feet and that one unique feature will be that seven of them will have elevators.

“Many handicapped people are counted out of multi-story projects like this because they can’t negotiate stairs, and that is really an unfortunate thing,” Evans said. “We think there are handicapped folks who are part of the ASU community who will find this a very accommodating environment – and that’s how it should be.”

Evans said the condos likely will begin in price “in the $249,000 range.” He said he expects to begin demolition on the site by December, “and have the first units open just before ASU starts up next year.”

If you are looking for a condo in the Tempe area click here:

www.theholmgroupaz.com

by J. Craig Anderson – Sept. 20, 2008 12:00 AM
The Arizona Republic

Mortgage lenders and home appraisers are anxiously awaiting news about the status of new lending rules intended to protect home buyers and investors from bogus appraisals.

The Home Value Protection Program, scheduled to take effect Jan. 1, would force originators and brokers of conventional loans to stop dealing directly with appraisers.

Lenders would no longer be allowed to hire their own appraisers or even discuss a home’s estimated value with them. Instead, lending institutions would handle all appraisals through an intermediary that would assign each appraiser from an approved list

The now-defunct Office of Federal Housing Enterprise Oversight endorsed the rule change in March. It affects only loans to be purchased by government-sponsored lending enterprises Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency, the oversight office’s successor created by a federal housing bill signed July 30, has yet to provide specifics about how – or if – the new rules will be enforced.

“You can’t get many answers,” said Paul Johnson, president of Sun Point Appraisals in Scottsdale. “Of course, there’s so much other stuff going on with Fannie and Freddie that this is the least of their worries.”

The impending change stems from an investigation into appraisal and lending fraud by New York Attorney General Andrew Cuomo that began in 2007.

Cuomo has accused appraisers and lenders of conspiring to inflate home values on loans assumed by Fannie Mae, hurting both consumers and investors.

Fannie Mae and the oversight office signed the Home Value Protection Program on March 3 in exchange for Cuomo’s agreement to drop Fannie Mae from the investigation.

The new rules would apply nationwide, not just in New York.

The Housing Finance Agency took control of the financially struggling Fannie Mae and Freddie Mac on Sept. 7 under new authority granted by the housing bill.

Although the agency has no shortage of tasks ahead of it, Johnson said lenders and appraisers need to know soon whether the program will be implemented as planned, because its impact on their business would be significant.

Johnson said he agreed with the oversight office that some additional regulation was necessary to keep lenders and appraisers honest, but he said the new rules seemed oppressive.

Johnson said that one problem was that lenders would not have any control over the quality or reputation of the chosen appraiser and and that it hurts appraisers who do regular business with particular lenders.

“It seems like it’s punishing the appraiser and their relationship with their clients,” he said.

Jill Hoogendyk, president-elect of Arizona Mortgage Lenders Association, said the latest buzz in her industry is that the implementation date will be pushed to March 1, and that the rules will be downgraded to voluntary “best practices.”

“It’s very much all up in the air right now,” said Hoogendyk, who owns HomePoint Mortgage Co. in Phoenix.

www.theholmgroupaz.com

by Ellen James Martin – Sept. 13, 2008 12:00 AM
Universal Press Syndicate

Are you planning to go on a bargain hunt for real estate in the near future? If so, you’re likely to encounter numerous vacant homes, including many that have gone through foreclosure.

“Nationwide, we’re at an all-time high for vacant homes in major markets,” says Dorcas Helfant, a Coldwell Banker broker and former president of the National Association of Realtors (www.realtor.org).

One obvious reason for the multitude of vacant properties is that many homeowners, faced with a tough economy, have been unable to keep current on their mortgage payments. Perhaps they’ve lost a job or had to give up their home after a large increase in their adjustable-rate mortgage payments.

“There’s now a plethora of homes in all price ranges that have gone through foreclosure and fallen into bank hands. Their former owners are long gone,” says Merrill Ottwein, a broker and past president of the National Association of Exclusive Buyer Agents (www.naeba.org).

Ottwein estimates that 80 percent of the foreclosed properties now for sale are in fair-to-good condition. But he cautions that the rest include many “dregs” that were neglected or abused.

“In extreme cases, some of these houses have been deliberately trashed. They’ve been cannibalized by the people forced out. Because they’re angry about the foreclosure, their former owners often rip out appliances, light fixtures – even toilets and sinks,” Ottwein says.

He advises those considering the purchase of any vacant home to make sure they’re getting a true bargain rather than a money pit that will require sizeable expenditures just to bring it up to neighborhood standards.

Here are pointers for buyers considering a home that’s vacant:

Seek out information on a home’s former occupants.

It’s tough to gain details on a house that’s been vacant for months because its owners moved away to take a job transfer. It’s still harder if the empty property has fallen into the ownership of a bank through foreclosure.

“The bank won’t tell you anything. And, frankly, the folks at the bank, or the real-estate agent they’ve hired, probably won’t know much about the people who lived there,” Ottwein says, adding that your best sources are often neighbors.

Most people who must leave due to foreclosure don’t deliberately damage their home. Still, their financial problems could mean they lacked money for crucial maintenance chores during their tenure in the property, he says.

Consider a “pre-inspection” of a vacant place.

Perhaps the property you like has gone unsold for so long that you’re nervous about hidden defects. In fact, you don’t even want to make an offer until you know more. In such cases, Ottwein advises you to consider hiring a home inspector to take a preliminary look.

One of his clients, an Air Force colonel who wanted to learn more about a handsome rambler that had gone vacant nine months before he spotted it. The house was listed at $50,000 below other comparable homes in the same neighborhood, and he was suspicious as to the reason.

On his agent’s advice, the colonel spent $200 for a brief home inspection. This revealed that the house had a serious crack in its foundation. Consequently, he walked away from the property and bought a two-story place in the same neighborhood that proved a better choice, even though it was marked $30,000 higher.

What are the advantages of hiring a home inspector to check a property before you’ve submitted your bid?

“If you decide to go through with the purchase, a pre-inspection will let you set your bid based on findings from the inspection. If you decide to back out of the deal you can walk away without complications,” Ottwein says.

Make sure the utilities are on when the inspection is done.

As Helfant points out, cost-conscious banks that own foreclosed property often shut off utility service to the vacant homes they own, including gas, electric and water. But lack of utility service poses a challenge to home inspectors.

“It’s useless to do an inspection when the utilities are off. You can’t tell if the cooling, heating and plumbing are functioning correctly,” she says.

Helfant strongly recommends that buyers always have a home inspection on a vacant property – if not before their bid is submitted, then after. And even if you have to pay to get utility service restored, she says it’s worth the expense.

Double-check your bid before making a final offer on a vacant home.

“Before you shape your offer, you and your agent should take a careful look at the recent sales history in your neighborhood. These days you have to be extra vigilant to avoid overpaying,” Ottwein says.

Ideally, you’ll want to examine at least three similar properties that have sold in the immediate area in the past three to six months – adjusting for differences, such as a larger garage or a second fireplace.

Although you’ll want to take a home’s condition into account when judging its market value, Ottwein cautions against seeking out-of-proportion discounts to compensate for superficial shortcomings.

“So what if the owners took the lightbulbs with them when they had to move or if they painted the walls in a color you don’t like? Don’t get emotional about these small issues,” he says.

Be on the lookout for sizable savings.

In the past, many banks insisted on unrealistically high prices for their properties. Yet recently, as inventories have swelled, Helfant says more are slashing prices.

“Banks don’t like to negotiate. But these days their starting-point prices can be extremely aggressive – even for houses in great neighborhoods,” she says.

She urges homebuyers and their agents to stay alert to the possibility that bank-owned homes could appear on the Multiple Listing Service at rock bottom prices.

“You have to act quickly to get one of these bank-owned houses offered at a dramatic discount. We’re even starting to see multiple offers on houses in great neighborhoods that are priced at 20 to 30 percent below their market value,” Helfant says.

www.theholmgroupaz.com

Peter Corbett – Sept. 18, 2008 08:51 AM
The Arizona Republic

Westcor announced Thursday morning that it will build a retractable-roof shopping center, anchored by a Dilliard’s department store, at Loop 101 and Scottsdale Road Palisene, an enclosed regional shopping center of 1 million square feet, is planned to open in 2010 or 2011, according to a statement released by Westcor

“We’re making great strides in realizing our vision for this high-profile Scottsdale Road intersection,” said Art Coppola, CEO of Macerich, Westcor’s parent company.

Palisene, northwest of Loop 101 and Scottsdale Road, will add yet another large shopping center to the Loop 101 corridor in the Northeast Valley.

CityNorth is opening this fall northwest of 56th Street and Loop 101.

Westcor and DMB Associates Inc. are partners in One Scottsdale, which is under construction just east of Palisene on the Scottsdale side of Scottsdale Road.

Dial Corp. is completing its headquarters at One Scottsdale and a luxury shopping center is scheduled to open there in 2010 or 2011, Westcor spokeswoman Anita Walker said.

Dillard’s is the first of four anchor tenants that Westcor hopes to attract to Palisene.

The retractable roof at Palisene is not new for Westcor.

Scottsdale Fashion Square has skylights that open but the retractable roof at Palisene will be far larger, Walker said.

Palisene will be built on a site that Westcor acquired in April. The company paid $99 million for 112 acres of state trust land.

www.theholmgroupaz.com

by J. Craig Anderson – Sept. 13, 2008 12:00 AM
The Arizona Republic

With tighter lending standards and a slumping housing market, opening the door to a home of your own is more challenging than it has been in years.

Experts say the rules for obtaining a home loan have undergone more revision in the past 18 months than during any comparable period since the Great Depression, as lenders seek to do away with practices that landed their industry in its current crisis.

Changes include tougher credit-score and down-payment requirements; a recent crackdown on stated-income “liar loans”; the disqualification of rental income on some loan applications; an expected lowering of Federal Housing Administration insurance limits and the pending elimination of seller-funded down payment assistance for FHA loans

More changes are expected in the coming months, and even lenders say they have yet to understand the future impact of a federal housing bill passed in July.

“Everything is pretty much in flux,” said Jill Hoogendyk, president of the Arizona Mortgage Lenders Association.

Here is a rundown of the current situation on several lending fronts:

• Down-payment requirements.

Down-payment requirements, paramount to any prospective home buyer’s ability to obtain a loan, have risen dramatically for conventional loans and are scheduled to increase Jan. 1 for FHA loans.

Up until a year ago, lenders were still offering conventional loans with no down-payment requirement, said Hoogendyk, owner of HomePoint Mortgage in Phoenix. Now the bare minimum is 5 percent for borrowers with “stellar credit,” she said.

Most applicants for conventional mortgage loans can expect to put down at least 10 percent, she said, and certain loan types require up to 30 percent.

The federal government’s recent decision to place mortgage-lending giants Fannie Mae and Freddie Mac into conservatorship should help keep interest rates down for conventional loans, but the increased down-payment requirements have made them cost-prohibitive for most borrowers, Hoogendyk said.

As a result, most borrowers have turned to FHA-insured loans, but an expected decrease in the maximum-allowable loan amount could limit their future appeal.

Lenders expect the limit for FHA loans in Maricopa County to decrease by about $50,000 or more as of Jan. 1. The FHA limit is generally 115 percent of a county’s median home price for the previous year, and area property values continue to decline.

Hoogendyk said she expected the local limit to drop below $300,000 from the current $346,250, which was inflated to begin with.

“That $346,250 was really a gift, because it had nothing to do with reality,” she said.

FHA loans require only about 3 percent down, but that requirement will increase to 3.5 percent on Jan. 1. Meanwhile, Hoogendyk said most sellers in today’s market were covering the buyers’ closing costs, usually another 3 percent, which wasn’t happening prior to the downturn.

• Down-payment assistance.

Still, lenders say as many as 80 percent of recent home buyers in the Valley have taken advantage of a loophole in FHA guidelines that allows sellers, usually home builders, to pay the entire down payment on an FHA loan by funneling it through one of two large non-profit organizations.

A ban on the practice, known as seller-funded down-payment assistance, was included in the recent federal housing bill and is set to take effect Oct. 1. From a practical standpoint, it is already dead, Hoogendyk said, because banks have stopped accepting new loan applications that involve seller-funded assistance.

However, a bill to revive the practice is scheduled for committee action on Tuesday, and some supporters say it has gained traction in recent weeks.

House Resolution 6694 would allow borrowers with credit scores of 620 or higher to use seller-funded assistance, and the U.S. Department of Housing and Urban Development would be allowed to lower that threshold beginning in mid-2009.

Ann Ashburn, president of seller-funded down-payment assistance provider AmeriDream Inc., said there has been support for the bill.

“Support for H.R. 6694 in Congress is gaining steam,” Ashburn said. “This is encouraging news, and the credit goes to the 32,000 Americans who called on leaders in Washington to protect down-payment assistance.”

• Credit scores.

Though there is no credit-score requirement to obtain an FHA loan, Hoogendyk said underwriters have also gotten a lot pickier about credit.

Standards vary from one lender to the next, but the typical credit-score requirement for an FHA loan is now 580, and the minimum score to obtain a conventional loan is generally 620, she said.

To get the best available interest rate on a conventional loan, the borrower must have a near-pristine score of 740.

One loan that was popular during the housing boom but has proven particularly onerous for lenders is the stated-income loan, nicknamed the “liar’s loan. “

Though the loans are still available, increased credit score and down-payment requirements have rendered them inaccessible to most borrowers, Hoogendyk said.

For instance, in the past year the required down payment has crept upward from 10 percent to 30 percent, she said.

Liar loans belong to a category of alternative prime loans, referred to as Alt-A loans, which includes jumbo loans, 80/20 loans, interest-only loans and option-ARM loans, in which the borrower can pay less than the amount of accrued interest for a limited period of time.

None of those loans have been eliminated, Hoogendyk said, but most have become prohibitively expensive in the past year.

• Qualifying income.

Another factor that will limit some potential borrowers is a recently imposed restriction on the use of income from renters to qualify for a home loan, she said.

In July, Fannie Mae announced that it would no longer accept rental income as a qualifier to obtain a second home loan unless the applicant had accrued at least 25 percent equity in the first home.

The purpose was to thwart buy-and-bail schemes, in which a homeowner facing foreclosure qualified for a second loan before walking away from the first mortgage.

Some buy-and-bailers had been using estimated rental income to qualify even though they had no intention of renting out their existing home.

by Michael Clancy – Sept. 11, 2008 10:36 AM
The Arizona Republic

A neighborhood meeting about a proposed development in northeast Phoenix attracted about 200 people Tuesday – and if any of them approved of the project, they did not speak up.

The project would be built on 27 acres northwest Tatum Boulevard and Greenway Road. Most of the acreage has never been developed.

Trillium Residential and JMS Capital bought the land a year ago

The companies’ proposal

The companies have filed one request so far, to rezone 9 acres at the corner from residential to commercial. The strip shopping center would include five buildings holding 48,000 square feet of space. Walgreen Co. and Fresh and Easy already have committed to the project, said zoning attorney Michael Curley, whose firm has been retained by the developers. Curley referred to the development as “boutique retail.”

The residents’ concerns

Neighborhood residents expressed numerous concerns, including:

• Need: They argued that enough shopping is available in the area, including grocers on the southwestern and southeastern corners.

• Traffic: They said the area becomes very congested with rush-hour traffic.

• Type of development: Some suggested offices rather than retail.

• The location: They argued that placing the commercial up against the corner restricts what kind of development is suitable for the rest of the site.

• The apartments: A good deal of outrage was directed at the development as a whole, with some claiming that an apartment complex, no matter how nice, would bring crime and congestion.

• Impact on home values: One questioner asked about the impact of commercial developments on home values.

• Other factors: Several people argued that the developer would not have purchased the property if it did not have an inside track on approval for its rezoning requests. One man claimed to see more than a coincidence in the recent construction of a new sewer line on Greenway.

The developer’s view

Curley said the developer has a different viewpoint on whether the project is needed. He promised that a traffic study would be completed for the project. He acknowledged that the setup of the commercial site would restrict development of the rest of the parcel. He said home values could go up or down, depending on the quality of the projects, but that both projects would be of the highest quality. He insisted the neighbors would continue to have input on the projects.

Next steps

Another such community meeting could be held, but none is scheduled. The developers will incorporate input from neighbors and city staff, then present plans to the Paradise Valley Village Planning Committee. The public hearing there has not been scheduled, but the October meeting is unlikely.

Meanwhile, the city’s planning staff will take a position on the project. If in support, a staff report would be likely to list a variety of stipulations dealing with building heights, project size and buffer zones.

Separately, the village planning group will forward a recommendation to the Phoenix Planning Commission, which will conduct another public hearing and forward a recommendation to the City Council, where a final public hearing will be held and the council will vote.

A second zoning case, for the residential portion, will follow the same procedures.

Quote of the night

Referring to a potential buffer zone between three-story apartment buildings and his home, one man said, “Fifteen feet isn’t going to do it when my wife is lying out in the pool topless.”

www.theholmgroupaz.com