Archive for December 26th, 2011

AZ Central – Mortgage rates fall to historic lows again

WASHINGTON – The average rate on 30-year fixed mortgages fell to a record 3.91% this week, third time this year that rates have hit new lows.

Freddie Mac says the rate on the 30-year home loan fell from 3.94% the previous week. The average on the 15-year fixed mortgage was unchanged at 3.21%. That’s also a record.

Low rates offer an historic opportunity for those who can afford to buy a home or refinance. But many Americans either can’t take advantage of the rates or have already done so.

Average mortgage rates have been below 5% for all but two weeks in 2011. Even so, this year is shaping up to be one of the worst ever for home sales.

AZ Central – Triyar to transform Scottsdale bar district

Triyar Entertainment is unveiling two new plans to transform downtown Scottsdale’s entertainment district with high-end apartments, street-level retail and a relocated and redesigned beach club with additional restaurants and bars.

In addition, the company has revised a previous plan for a new beach club in the district.

All three proposals would be located within close proximity.

The company has been instrumental in the evolution of the area. Triyar developed the W Scottsdale southeast of Scottsdale and Camelback roads, and the Downtown Entertainment Plaza, a restaurant/bar complex on Saddlebag Trail south of Camelback.

It now houses Majerle’s Sports Grill,El Hefe Super Macho Taqueria and Wild Knight.

In April,Triyar announced plans to build Scottsdale Beach Club, a one-story complex with resort-style pool, four bar areas, a floating stage, a full restaurant and other amenities, on the northeastern corner of Stetson Drive and Wells Fargo Avenue.

Now, the developer has submitted zoning pre-applications to Scottsdale that include projects on two separate parcels in the entertainment district. Residents got their first look at the plans during an open house this week at the W Scottsdale.

Shawn Yari,Triyar’s owner, and Benjamin Graff, the developer’s zoning attorney, couldn’t be reached for comment before the meeting. However, the pre-applications include numerous details for what the developer has in mind.

The pre-applications include:

A mixed-use development on the northeastern corner of Stetson Drive and Wells Fargo Avenue, with about 132 residential units, about 5,550 square feet of first-floor retail and surface-level parking.

A mixed-use development on the northeastern corner of Stetson and Civic Center Plaza, with about 92 residential units wrapped around an existing parking garage with access from Civic Center Plaza and 75th Street.

Also, Triyar has indicated to the city that Scottsdale Beach Club would be relocated to the block that now houses Myst nightclub on Shoeman Lane and Suede restaurant/bar on Indian Plaza across from Axis/Radius.

All but the southwestern corner would be demolished to make way for a redesigned pool club, which would include a pool with a live-entertainment area, three restaurant/bars along Saddlebag and a restaurant/bar and nightclub/bar on the west side.

The properties that would house the mixed-use developments now include an older medical office building, apartments/condominiums along the west side of Civic Center Plaza and an office along Stetson.

“It looks like these guys are going forward — they have architects working on it,” said Kim Chafin, senior city planner.

Triyar’s plans for the beach club already have drawn criticism from the Association to Preserve Downtown Scottsdale’s Quality of Life.

The group, made up of citizens and merchants, formed this year with the goal of pressuring the city to address complaints about patrons of the entertainment district.

The district already has the highest concentration of bars in Maricopa County, and the city has strengthened law enforcement and code enforcement in the area to minimize the prevalence of vandalism, disorderly conduct and criminal activity in the area.

“The pool place is in the middle and it’s surrounded by five other bars,” said Bill Crawford, association president. “The pool is a sixth bar. We don’t have room for that, we don’t have room to accommodate the guests, and we don’t have the parking.”

Les Corieri, president of the Scottsdale Downtown and Entertainment District Association, the bar owners’ group, said the proposal would be replacing existing bars, Myst and Suede, “so as far as density, it’s not that much greater, because the older bars would be torn down.”

“For me, it’s synergy, people in one area,” he said. “From a police perspective, it’s easier to police. I think it will be fine.”

Triyar has not indicated the building heights of the mixed-use developments, Chafin said.

“With the infill-incentive district, you can go for more height,” she said.

While parking would be provided on the mixed-use sites, it would not be included at the beach club, as indicated so far by Triyar, and that will be a problem, Chafin said.

Parking already is a big problem in the area, she said.

The property that would house the beach club includes some areas that are zoned specifically for parking space only, Chafin said. Triyar wants to have those areas rezoned to remove that parking-only designation and therefore remove that parking space from the site, she said.

The city has not allowed this type of zoning change before, and this will be an issue, Chafin said.

City Manager David Richert recently said there’s more interest now in investing in new developments in the downtown area and that providing more parking is a part of the plans taking shape.

“I think they’re seeing that we’re starting to come out of this low end of the recession, and they’re starting to make some investments,” he said.

AZ Central – 240-unit Zocallo luxury apartment project taking shape

Developers of the Zocallo apartments on the former Barcelona nightclub site hope to start construction by late next year and welcome their first residents by mid-2013.

P.B. Bell & Associates Inc. of Scottsdale and Investment Property Associates, of Grand Haven, Mich., recently bought the 5.8-acre property for $10.25 million. The seller was Chicago-based Scottsdale Place LLC.

The joint-venture development partners plan 240 apartments in four four-story buildings northeast of Scottsdale Road and Greenway-Hayden Loop. Apartment developers coveted the site because of its proximity to the Scottsdale Quarter, Kierland Commons in Phoenix and nearby office parks.

“We think it’s ground zero,” said R. Chapin Bell, P.B. Bell president. “It’s a great urban-infill location for entertainment and jobs. Residents can park their car on weekends and never have to leave.”

The Zocallo project surfaced this summer amid a surge of rezoning requests for apartment development.

9,000 apartments in forecast

A fourth-quarter market-research report from Marcus & Millichap said there are 9,000 apartment units in the planning pipeline for the Valley and 3,500 have been approved.

Only 375 apartments have been added this year, a 0.2 percent increase in the rental supply, and a fraction of the 2,675 units added in 2010.

Pete TeKampe, Marcus & Millichap vice president of investments in Phoenix, said the pace of development will depend on the economic recovery and employment growth.

“We’re adding jobs but there’s still a lot of uncertainty in the economy,” he said.

With that unease has been a shift of social attitudes about owning vs. leasing property.

“Renters were looked down upon five years ago,” said TeKampe, adding that leasing has become a more flexible option for workers interested in mobility.

Developers are targeting young professionals who want well-appointed apartments in good locations and can afford higher rents. A dozen apartment projects proposed for Scottsdale include nearly 5,000 units.

The Zocallo apartments, with underground parking, will feature studio, one- and two-bedroom units of 800 to 1,200 square feet.

Amenities will include custom cabinets, granite countertops, balconies and private rooftop decks.

Scottsdale’s Design Review Board must still review the project.

Aircraft noise debated

Rezoning of the nightclub property ran into resistance because of its proximity to the Scottsdale Airport.

The Airport Advisory Commission recommended denial of the rezoning because of concerns about aircraft noise complaints, but the City Council approved the project in October.

The developers agreed to add soundproofing to the apartments, have residents sign a disclosure statement about the nearby airport and pledged that Zocallo would remain a rental community.

Airport commissioners expressed concern that a conversion to condominiums would bring more complaints from residents, since renters are generally less likely to object to aircraft noise.

MT Builders will be the general contractor for the Zocallo project, with a design from L.R. Niemiec Architects Inc. Both are based in Scottsdale.

Investment Property Associates, which develops apartments, student and senior housing, will manage Zocallo.

Orion Real Estate Solutions of Scottsdale negotiated the property sale on behalf of Scottsdale Place LLC. The buyers were represented by Cindy and Brad Cooke of Colliers International in Phoenix.

AZ Central – Housing collapse almost over, Zillow says

After years of pain and a market free fall that has shaved $6.8 trillion off the value of the nation’s 104 million homes, the decline in U.S. house prices may be nearly over.

U.S. homeowners lost $681 billion this year, according to a study by real estate website operator Zillow set for release today. That’s less than the $1.1 trillion drop in value in 2010, let alone the $2.7 trillion in losses in 2008, Zillow said. And a Zillow survey of 109 economists says U.S. home prices will stop falling late next year or early 2013, with the most optimistic quarter of economists predicting an 18% rebound by 2016.

The reason is that the economy is slowly turning around, as prices have come into balance with buyers’ incomes and how much they’d pay to rent comparable homes, said David Blitzer, chairman of the index committee at Standard & Poor’s, which publishes the S&P/Case-Shiller national home price index.

The negatives are that consumer confidence is low and there’s an overhang of foreclosed homes whose owners will discount them for resale, economists say.

“If it weren’t for confidence and consumer debt, we’d be in a boom,” Blitzer said. “Houses are cheaper than they have been since 2003, and mortgage rates are the lowest in 40 years.”

Two key numbers that foreshadowed the housing bust that began in 2006 now point to a stabilization and recovery, economists say.

- The ratio of the average home price to median income is now 13% lower than its average from 1990 to this year, Moody’s says. In 2005, the average price was 44% higher than the long-run average.

- The ratio of rental costs to home-buying expenses is about 15% lower than in 2000, according to S&P. At the peak, housing prices were about 20% higher than average, relative to rents.

Economists differ over how sharp the housing recovery will be, said Stan Humphries, chief economist for Zillow. The most pessimistic economist in Zillow’s survey thinks prices will decline an additional 26%, he said.

His own forecast is 3% appreciation by 2016 — total, not annually, he said. One reason is that unemployment, while falling, is still high.

The nation’s largest real-estate brokerage firm expects little recovery without a turn in the job market, said Richard Smith, CEO of Realogy, owner of Coldwell Banker and Century 21.

“I don’t see a spiking recovery until there’s an improvement in jobs, and until then it’s a steady but slow recovery off a pretty dismal pace,” Smith said.


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