Arizona is becoming more relevant in the stock market again, thanks largely to real estate.
The number of public corporations headquartered in Arizona is growing for the first time in three years, helped by a spate of initial public offerings — including two so far this month.
Is it the start of a trend? That’s hard to say. There hasn’t been much of an overall spike lately in the number of U.S. companies selling shares for the first time despite a relentless climb for the stock market — the type of bullish backdrop that normally drives the new-issue market.
But the two recent deals and a third in April have boosted Arizona’s flagging list of public companies.
Those three new players come in addition to three other Arizona IPOs in 2012 and the relocation of a homebuilder to Arizona from Florida.
The Arizona public-company count will rise further if Sprouts Farmers Markets goes ahead with an IPO for which it filed preliminary papers late last week. The Phoenix-based chain, which has more than 150 natural/organic grocery stores spread across eight Southwestern states, is seeking to raise up to $300 million.
Add it all up, and it might help to soften the blow of US Airways’ pending corporate relocation from Tempe to Texas as well as the 2012 acquisitions of Scottsdale’s Medicis Pharmaceutical and JDA Software by out-of-state companies.
Having a bunch of local public-company headquarters affects more than just bragging rights. Corporate suites also bring highly paid administrative jobs, more ties with ancillary businesses, a broader mix of local leaders and greater support for charities in the area.
Communities benefit from an economic-development perspective, but potential investors in these companies should be cautious, especially as the stock market generally becomes more expensive as it continues to hit new highs.
American Residential Properties, which Thursday sold $288 million worth of shares in an IPO, is the state’s newest public company. With the addition of seven public corporations over the past 12 months, that gives the state 45, according to an Arizona Republic tally, after subtracting US Airways, Medicis and JDA Software, all of which continue to have operations here.
The recent activity gives Arizona a growing concentration of real-estate companies with shares trading in the stock market. Scottsdale homebuilder Taylor Morrison Home Corp. went public in April in the nation’s fourth-largest IPO for the year to date.
Including homebuilder Meritage Homes and Cavco Industries, which builds prefabricated housing, eight of the state’s 45 public companies have a real-estate slant. The list also includes Scottsdale-based Healthcare Trust of America, a large owner of medical-office buildings that went public in June, and InnSuites Hospitality Trust, which operates hotels.
The Arizona public-company count will rise further if Sprouts Farmers Markets goes ahead with an IPO for which it filed preliminary papers late last week. The Phoenix-based chain of more than 150 grocery stories spread across the eight Southwestern states is seeking to raise up to $300 million.
Three of the newer Arizona public companies — American Residential Properties, Healthcare Trust and Spirit Realty Capital — are real-estate investment trusts, or REITs. So is InnSuites Hospitality Trust. These entities don’t face corporate income taxes as long as they pay out nearly all of their income, 90 percent or more, as dividends. That explains why REITs offer higher yields than most stocks.
Unlike bond interest payments, dividends often rise over time as a company grows — another advantage. However, REIT dividends received by shareholders generally are taxable, even if the payments aren’t at the company level. Also, dividends can be cut.
Shares of Healthcare Trust last week were yielding 4.4 percent, highest among Arizona’s public companies.
A steady appetite among investors for dividend-paying stocks explains why some of these companies have been selling shares on Wall Street for the first time.
Renaissance Capital of Greenwich, Conn., reports that dividend-paying stocks represented 45 percent of all IPOs in the first quarter — the highest proportion since mid-2008. IPOs typically are fast-growing startups that don’t pay dividends but instead entice investors with the potential for lofty capital gains down the road, so the recent income focus is a switch.
Investment adviser Harry Papp of L. Roy Papp & Associates in Phoenix views IPOs with skepticism and, in particular, cautions investors not to get mesmerized by yields.
“With REITS, utilities and other high-dividend stocks, a lot of people are chasing yield,” he said. “In general, we think REITs are awfully expensive.”
Rather than IPOs, Papp prefers to buy shares in corporations after they have been trading awhile.
The recent influx of public companies is good news for Arizona, though the heavy concentration of real-estate firms might be a mixed blessing. If the state wants to diversify its economy more to mitigate those sharp cyclical real-estate swings, it would be nice to see more banks, consumer-products companies, manufacturers or other types of companies set up headquarters here.
Stephen Barnes of Barnes Investment Advisory in Phoenix cites the increase in real-estate companies, especially IPOs, as a sign that properties aren’t the screaming deals they had been fairly recently.
“These companies weren’t selling shares when their assets were cheap,” Barnes said. “We might have passed the best point to buy in this cycle.”
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Arizona is becoming more relevant in the stock market again, thanks largely to real estate.
Developer Lyle Anderson is ready to lead the resurgence of the high-end housing market with his latest residential community amid the natural desert in north Scottsdale.
Sierra Reserve will encompass 223 acres surrounded by more than 36,000 acres of permanent open space in the McDowell Sonoran Preserve, at 118th Street and Dynamite Road. It will include about 250 residences and the far northern portion of the acreage will house a boutique resort.
“We’ll start construction of the houses sometime this fall,” Anderson said. “We actually have right now people who are expressing interest and are getting on the priority list. We feel there is a pent-up demand for this kind of product, new with all the modern technologies that are available.”
This community will be much smaller than Anderson’s other Scottsdale communities, Desert Highlands (850 acres) and Desert Mountain (8,000 acres).
Sierra Reserve is one of three projects planned for the eastern Dynamite corridor that involve resort and accompanying residential on hundreds of acres adjacent to the preserve. Sereno Canyon and Reata Ranch also have been approved by the City Council but are not moving as quickly as Anderson’s project.
Sereno Canyon will have 397 units, including a resort and accompanying residential, on 350 acres. Reata Ranch will have 330 resort and resort residential units on 220 acres.
“The market is coming back, and I’d like to be at the beginning of the market rather than the end of one,” Anderson said. “We’ve all been at the end of one. We’re at the beginning of a nice market. I think we’re on the verge of a large rise in prices in good residential real estate in the area.”
Joe Galli, executive director of the North Scottsdale Chamber of Commerce, said Sierra Reserve will have a positive impact on the city’s bed-tax revenue and economy.
“From the economic-development standpoint, it’s not just the construction and the sale of the new residential units, but the footprint of the new high-end boutique hotel keeps north Scottsdale at the top as a destination community for the metro Phoenix region,” he said. “A lot of people come to this community and stay in one place, they golf in another, and they spend here, there and everywhere in north Scottsdale. That’s very important to our community’s bottom line.”
Anderson has been marketing Sierra Reserve to members of the Golf Club Scottsdale, which is next to the community, and some area brokers. The project also sent out a mailer to the surrounding market down toward Paradise Valley this week.
“Several people have already said they want to buy, several have identified sites and floor plans, and we’re now showing architectural elevations,” said Richard York, Sierra Reserve’s designated broker.
Anderson is known for developing upscale communities around world-class golf courses, but there won’t be a golf course at Sierra Reserve. Homeowners interested in belonging to a club will be invited to join Golf Club Scottsdale.
In addition, Anderson’s communities typically feature a handful of models from which buyers choose. With Sierra Reserve, it’s offering about 20 floor plans, ranging in size from 3,000 square feet to 6,100 square feet, as well as several exterior options.
“So if you can pick up one of our designs and with an (exterior) option, then you’ve got a custom home,” Anderson said. “You don’t have to go through buying a lot, getting an architect, lining up a building and managing that whole process, which is very difficult for people.”
The homes, which will be sold from $1.5 million to $2.5 million, will all be single level to protect the views.
At the center of Sierra Reserve will be the Villa,a 15,000-square-foot gathering place for residents. It will include five buildings with connecting patios, covered walkways and water features, as well as 5 acres of lawns, courtyards and gardens.
For residents, the Villa will be “an extension of your home,” Anderson said.
The resort component is moving a little slower than the housing.
“Resorts take about three years to gestate, so we’re in the process of doing that,” Anderson said. “We’re in the process of looking right now at several concepts, and we’re talking to a lot of people. The land is very beautiful, it’s a very natural, pristine area of the desert with 1 million acres of preserve next to it, which is very unusual and very ecologically desirable.”
Anderson will be improving 118th Street, which will be the main access to and from the resort.
In November 2011, the City Council unanimously approved a non-major General Plan amendment and rezoning for Sierra Reserve.
Residents in the area have been concerned about the spread of higher-density residential and the potential strain on area infrastructure. Numerous residents expressed concern during the city’s zoning approval process for Sereno Canyon.
This has not been an issue with Sierra Reserve, Anderson said.
“When we rezoned it, it was 3.5-acre lots and there were like 50 here, and it was really not a good plan from the standpoint of the market,” he said. “The market died for that because people don’t want to build these big McMansions as much as they used to. So we went to the city, had a lot of meetings and asked them what they wanted, and we wound up taking a 220-acre parcel and creating 325 units, so it’s about 11/2 units per acre.”
GRAND RAPIDS, Mich. — Beth Heinen Bell and her husband, Christian, are sick of renting.
They want more space. They’d like to host friends for dinner. And now, having seen the real estate market start to rebound, they want to turn housing payments into long-term equity.
So after a decade as someone else’s tenant, the Bells, like a rising number of Americans, are finally ready to buy a home. Yet they’re running into an obstacle that’s keeping the national housing recovery in check: There aren’t enough homes for sale.
The housing shortage around Grand Rapids, Mich., a city known for its furniture industry and sleek downtown hospital complex, is fairly typical of what the country as a whole is facing this spring.
Some markets along the East and West coasts have grown red-hot. A handful of other cities remain depressed nearly four years after the Great Recession ended. But many more places are like Grand Rapids — a metro area of roughly 1 million that is strengthening slowly but steadily.
Like so many others, this Midwestern city 150 miles west of Detroit never experienced either the buyer frenzy or the price collapse that marked the boom and bust. Yet it, too, was affected. Prices fell. Homeowners lost equity. And now, many remain unable or unwilling to sell.
The shortage of homes is occurring just as ordinary Americans want to buy again. More of them feel confident about their job and retirement account. Mortgage rates are near historic lows. And prices are rising again, easing fears that new buyers might lose their investment in a home.
“The last four years have been rough,” says Christian Bell, a 31-year-old Presbyterian minister. “But housing prices are starting to come back up.”
A tight supply isn’t the only factor slowing what is otherwise shaping up as the strongest spring buying season since the housing boom ended nearly seven years ago. Some Americans have grown to prefer renting. Others who would like to buy lack strong enough credit or a large enough down payment to meet the stricter standards banks now impose.
Part of the reason for the supply problem is that when the housing market collapsed in 2006, many people lost so much equity in their home that they were unable or unwilling to sell. Prices have started to rise, but not enough to restore what many lost. Some still owe more on their mortgage than their home is worth.
Even many who have enough equity to sell want to wait for further price increases.
“Every buyer wants to buy at the bottom, but no seller wants to sell at the bottom,” says Stan Humphries, chief economist at real estate information site Zillow. “They’ve got this hypothetical price that they think the house is worth at the peak, and they don’t want to sell below that.”
Others don’t want to leave. During the depths of the recession, they chose to renovate their house instead of finding a new one. After paying for renovations, they now feel more invested and comfortable in their home.
That leaves many first-time buyers like the Bells — a group that makes up about one-third of buyers — competing for a small number of homes.
Just a few years ago, the housing market was facing an oversupply of homes, one that eventually led prices to collapse. The bubble — and the bust — were worst in areas like Arizona, South Florida, Southern California and Las Vegas where developments kept popping up on vast tracts surrounding cities.
Banks offered absurdly low teaser rates to new homeowners who often bought with no money down. When their loan rates climbed after the introductory period, many were left unable to pay. Banks foreclosed, home values fell and those homes ended up being sold for a fraction of their cost.
In the past two years, hedge funds, banks and other investors entered those markets and helped soak up the supply and lift prices. Now, the country is facing a shortage of homes for sale.
In a few especially hot areas, such as around San Francisco and Seattle, some of the same kinds of bidding wars that inflated the housing bubble are back. Crowds of buyers are creating traffic jams outside open houses.
“People have been wanting to move for a very long time,” says Glenn Kelman, CEO of online real estate broker Redfin. “Somebody rang a bell and said the boom is back, and nobody wants to be late to the party.”
The market in Grand Rapids is more subdued but still driven by a supply shortage.
The Bells recently toured a 142-year-old home. Calling it a “fixer-up project” would be generous. Floors drooped. Doorways tilted. The master bathroom had a comically low ceiling. The only thing working in the living room was a mouse trap.
It was the only affordable house for sale in the small historic Heritage Hill neighborhood the Bells love. Within walking distance are shops and a church converted to a brewery. Restaurants are packed on weeknights with young professionals snacking on bacon cheddar meatballs, polenta fries and chicken fried livers.
The only thing harder than finding a seat at the bar during happy hour is finding a home for sale nearby.
Nationally, there were just 1.93 million homes on the market in March, down 16.8 percent from the prior year, according to the National Association of Realtors. In a healthy market, there’s roughly a six month supply. This March, that number had fallen to 4.7 months — a situation stacked against buyers.
As more would-be buyers bid on fewer properties, prices are being forced up at a rate that might be overstating the market’s health. Prices in the top 20 cities have risen 9.3 percent in the past year, according to the S&P/Case-Shiller home price index. That’s the fastest year-over-year increase since May 2006.
Homes now sit on the market for just 62 days, down from a median of 91 days last year. Would-be buyers who like a home are being urged to act fast.
The tight supply is a key reason that Susan Wachter, a real estate and finance professor at the University of Pennsylvania’s Wharton School, estimates a full recovery is still three to five years away. Even so, Wachter calls this “a breakout spring.” The public now recognizes, she says, that the housing recovery will last.
The Bells have already lost out on one house they liked.
“We wanted a day to think about it,” says Beth Heinen Bell, 32, a communications coordinator for a writing festival. “We left the house, and our agent got a call that there was an offer in.”
Diane Griffin, CEO of Griffin Properties, which has been helping the Bells search for a home, says a major problem is that many potential sellers aren’t being realistic about price. She often has to explain that their property isn’t worth what it was during the boom.
“This is the most difficult conversation I have with people,” she says. “I have it multiple times a day.”
Prices here bottomed in October 2011, after falling 24.5 percent during the prior 5½ years. They have since risen 7.6 percent, to a median of $114,400, giving many buyers enough confidence to come into the market. Yet even so, home values remain 17.2 percent below the peak, according to Zillow. If prices continue to rise, they will eventually help more sellers come off the sidelines.
Maureen and Bruce Hart are one of those couples who aren’t ready to sell.
They’ve been in their house in East Grand Rapids since July 1990. Their two grown kids have moved out. Moving into a smaller home — with a smaller mortgage — makes sense. Yet the couple just spent more than $100,000 on renovations. There’s a new kitchen, new roof, new bathroom, new windows and the addition of a porch.
“We really thought we were going to stay,” says Maureen Hart. Then a house down the road sold for nearly half a million dollars. “That was a real eye-opener.”
A real estate agent suggested listing the home, in a suburban neighborhood with packs of after-work joggers and cyclists, for $393,000. The Harts feel it’s a good price. Still, they hesitate because they wouldn’t recoup the money they spent on renovations.
Their other hesitation, Maureen Hart says, is that “we haven’t really found anything we would be comfortable moving into.”
In many ways, the Harts need more homeowners like themselves to offer their properties for sale.
Some relief will also eventually come from faster construction. Builders broke ground on homes in March at the highest annual rate since June 2008. But construction firms aren’t yet ready to return to
the even greater levels of building needed to fill the housing shortage. They’re worried about rising costs for materials and labor. And many have had trouble finding skilled workers.
The overall pace of homes under construction rose to a seasonally adjusted annual rate of 1.04 million in March, the Commerce Department reported. March’s pace was nearly 46 percent higher than in the same month in 2012.
Analysts say prices and sales still need to climb further before builders ramp up construction. The prices that new homes are selling for still don’t match the cost of construction.
For now, that leaves would-be buyers with few options. Agents urge their clients to act fast, knowing how fierce the competition is. But often, it’s not quick enough.
Grand Rapids real estate agent Michelle Gordon says that on Monday mornings, she typically gets a list from her clients of six or seven homes they want to tour that Saturday.
By the time the weekend comes around, Gordon says, “I’m lucky if I have two to show.”
Phoenix officials plan to upgrade the city’s permit system and overhaul portions of its zoning ordinances, which could help the city bolster infill development.
In addition, the City Council last week approved the creation of an advisory group that will create a pilot program to offer “relief and incentive for infill development,” city officials said.
Planning officials say there’s demand now to develop on the city’s old lots either by renovating buildings or constructing new ones.
Cindy Stotler, planning and development’s assistant director, said there could be a variety of reasons for the uptick — maybe people don’t want to drive so far because of high gas prices, maybe the infrastructure costs more on the outskirts, maybe light rail has made the urban areas more attractive.
“People want to live in town and live the urban lifestyle,” she said.
The department doesn’t keep statistics on interest in infill, but staffers noticed the growing demand starting in 2010, said Derek Horn, planning and development’s acting director.
“There’s a lot of work we can do in urban areas,” Stotler said. “One of the things we want to do is promote broken development in areas where we made investment in light rail. And, also, we have existing infrastructure. So, we don’t have to leapfrog development and build new waterlines.”
Leapfrog development happens when developers build on the fringes of existing communities, “leapfrogging” over existing land that can be developed.
Developers historically are hesitant to undertake infill projects because they can be cumbersome, Stotler said. Neighbors can cause roadblocks. Investors see hassles and smaller rates of return. Permitting and zoning take longer.
“If you (redesign) a lot to change the lot lines, all these new rules and regulations kick in, sometimes making your lot unfeasible and making your project not pencil out,” Stotler said. “It costs more money. You never know what you are going to find when you dig in the street. This size waterline, that size waterline.”
The City Council endorsed ideas to spur infill development and smooth the building process overall:
City officials will select advisory-group members. The panel will make recommendations to the council later this year.
The city will ask the advisory panel to identify barriers that cause developers to bypass potential infill opportunities, Horn said. Infill has advantages such as access to existing public services like schools, utility lines, police and fire.
The advisory panel would consist of developers, design professionals and neighborhood representatives.
Phoenix wants to upgrade its permitting system. The department plans to spend as much as $3.5 million on a software program that would allow access to plan reviews, remote inspections, planning cases, historic-preservation processes and permits.
Workers would be able to use smartphones and tablets with the software program, officials said. This process would reduce the time it takes to issue a permit, Horn said.
When people apply for a permit today, they submit an application on paper and must appear in person downtown, Horn said.
Planning officials would like to overhaul the city’s zoning ordinances.
City officials want to combine related chapters to reduce inconsistencies and streamline uses in certain zoning districts, said Alan Stephenson, planning and development’s acting deputy director.
Several people who deal with the city often on development issues said they like what they hear so far.
Paul Johnson, a former city mayor who has been building since he was a teenager, said it’s quicker to get a building permit to construct something outside of Phoenix.
A permit in a suburban city might take six months, but one in Phoenix can take as long as 18 months, Johnson said.
He offers advice to Phoenix: “How do you keep the infrastructure low? How do you create cool, hip places along light rail in the city? Reduce the amount of time to get them done. If it’s not done in time, the market will go somewhere else because it is more efficient.”
Phoenix already has been fast-tracking its process for building-plan reviews and inspections by expanding a self-certification program that allows architects and structural engineers to review their own building plans to ensure that they comply with city code.
Once building plans are submitted through the program, a permit is guaranteed within 24 hours.
David Wetta of Wetta Ventures LLC bought a 2-month-old vacant lot on the northwestern corner of Osborn Road and Seventh Street. The site once housed the Bethel Methodist Church congregation, which had a church and school buildings dating to the late 1800sand 1940s.
The project, called “Old School 07,” is an example of adaptive reuse, — renovating existing buildings — and an urban-infill project.
The property will have three stand-alone facilities that will house a Z’Tejas restaurant, retail stores and a Starbucks.
Wetta said they had to do a lot of work to prepare the site that they might not have done on a new build: removing asbestos, clearing out materials from an unexpected basement, and replacing the aging sewer and water system.
“Surprises translate into extra time and money,” Wetta said. “The beauty of it is, you take the church building, you reinvent the building. You end up with the history of the old building and make that important connection to the past and you bring it up to code. It can work, and it takes a lot more patience.”
The developer said he received a permit in less than four months, which he attributes to thorough planning. However, he, too, offers advice to Phoenix.
“The zoning code and the building code have not been updated to deal with the unique issues and challenges of infill sites,” Wetta said. “We must implement changes now. My concern is that if the codes aren’t revised soon, important opportunities will be lost.”
Longtime Valley zoning attorney Paul Gilbert said he has faced another challenge with infill projects: Many of the zoning records are old and confusing.
“Sometimes, the (property) records are incomplete,” Gilbert said. “It takes a lot more time to research to know what restrictions you have on the property. There are so many overlay zoning districts that it’s very confusing.”
Stotler understands the challenges.
One step at a time, she said.
Joy Li, a fashion designer originally from New York, opened her boutique five years ago at downtown Scottsdale’s SouthBridge, just as the economy slipped into recession.
“It was very, very tough because you had to have faith in knowing that this was going to get built up,” she said. “It was a learning experience to build a business by yourself when everyone else around you is disappearing.”
The four-building restaurant and retail complex along the south side of the Arizona Canal was hard hit by the recession, as numerous merchants were forced out of business.
Studio Joy Li; Amy inc., a fashion boutique; and the Garage Boutique for Kids were the first and only remaining original tenants of the Mix Shops at SouthBridge, along Stetson Drive.
“No one else is from the beginning,” said Fred Unger, SouthBridge developer. “All the restaurants failed.”
Today, the SouthBridge district, the commercial triangle bordered by Stetson, Sixth Avenue and Scottsdale Road, is a very different picture. The neighborhood is bustling with thriving independent merchants.
The district includes about 40 tenants. It includes such restaurants as Mercellino Ristorante, Barrio Queen, Herb Box and Tapas Papa Frita.
“SouthBridge is now 99 percent leased and we have strong interest in the two small vacant spaces,” Unger said. “In the entire district, we have only three small vacant spaces. It’s never been that good.”
Li said the new merchants and activity are an encouraging sign.
“It’s nice to see new merchants that take pride and passion in the product they’re offering or the service, vs. the big guys who are just funded by a lot of money, but not caring about product and people,” she said. “It’s very interesting to watch it grow and who comes in.”
Classic Cakes and Confectionsis preparing to open in the Mix Shops. The company has been in business about seven years and its commercial kitchen is at 32nd Street and Shea Boulevard.
“This will be our retail location,” said Lisa Levinson, a co-owner. “We love the area, we love the people around here.”
The business provides special-order cakes, pies and pastries, and is now open to walk-in service in its retail location.
“We do a lot of big wedding cakes and things for the resorts, like the Phoenician Resort, the Arizona Biltmore, the Montelucia Resort and Spa and Sanctuary Camelback Mountain Resort and Spa,” said Neil Levinson, co-owner. “We feel Old Scottsdale needs a good bakery.”
Also at SouthBridge, Twist has just opened its first high-end salon in Arizona. It has two other salons, in Beverly Hills and Los Angeles.
“We came to Scottsdale because they told us the most beautiful women were living in Scottsdale, so we came in to enhance their beauty,” said Oliver Ifergan, the owner. “I think SouthBridge was a great asset to us because you already have so many cool stores and we wanted to be part of that, part of the experience of coming here.”
Ifergan plans to open five Twist salons in Phoenix-Scottsdale, and the SouthBridge location already is successful, he said.
Also on the second floor, Pearl MedSpa opened in late October offering plastic surgery and advanced aesthetic treatments in a spa environment. This is its first location outside Portland, Ore.
“We saw the opportunity to enter into the market with the increasing population in the area, and we want to provide the finest experience and the highest-quality service,” said Carol Robbins, Pearl MedSpa’s CEO. “We plan to make a major impact at SouthBridge and Scottsdale.”
Merchants in SouthBridge want to corner the bridal market by offering one-stop shopping for all wedding needs. The second floor of SouthBridge includes four stores in one — the Flower Studio, Destiny’s Bride, De Noce Ferrer/Amy Mancuso Events and Savvi by Mr. Formal.
Lisa Daversa, owner of Destiny’s Bride, moved her business about a year ago to SouthBridge from the Borgata of Scottsdale. That shopping center is set to be replaced with a condominium complex.
“This whole thing was empty,” she said. “Fred asked me to come here and put together a couture wedding experience, and I told him about bringing other vendors who were all related to that, so that a customer could come here for almost everything. This is where young women go to pick fine wedding gowns and it has that sort of level.”
De Noce Ferrer, which specializes in designer bridal evening shoes and handbags, opened in October and is owned by Amy Mancuso, who also runs her wedding/event planning business.
“I love the area, I love the Waterfront,” she said. “I love the vision that they’re trying to bring for the shops here now and into the future,” she said. “This is the golden area down here for Scottsdale.”
Surviving and thriving
Katie Wilson, owner of the Garage, was the original tenant in the Mix Shops and has survived while other children’s boutiques have closed in Scottsdale. She relocated her business from the Borgata.
Surviving the recession meant making small changes in her business to appeal to more customers.
WASHINGTON — The number of Americans who signed contracts to buy homes rose in March to the highest level in three years.
The National Association of Realtors says that its seasonally adjusted index for pending home sales rose 1.5 percent to 105.7. That’s the highest since April 2010, when a homebuyer’s tax credit boosted sales. It’s also above February’s reading of 104.1.
Signed contracts are 7 percent higher than they were a year earlier. There is generally a one- to two-month lag between a signed contract and a completed sale.
Still, sales are being held back by limited supply. Sales of previously occupied homes dipped in March to a seasonally adjusted annual rate of 4.92 million, down from 4.95 million in February.
Spur Cross Conservation Area. Harold’s Corral. Black Mountain. Rancho Mañana Golf Course.
The Cave Creek Merchants & Events Association is looking for you if you’ve never heard of these landmarks.
This weekend the association is launching the inaugural scavenger hunt, Clueless in Cave Creek, today from noon to 4 p.m.
Fran Booth, membership director of the association, said the townwide scavenger hunt offers participants the opportunity to explore the town as well as experience a romp throughout the desert foothills, and have a fun time with friends.
“I felt a community-wide scavenger hunt would be the perfect way to use one’s creative thinking, teamwork and sense of adventure while discovering the wonderful and colorful places that dot the desert foothills,” Booth said.
Teams of four will receive a set of clues to begin their journey and must figure out where the various destinations are by following rhyming clues that provide a hint as to where they are headed.
Booth said each team must bring a digital camera — no smartphones — to document tasks at each location.
Teams will conclude the journey at a central location for music and presentation of prizes.
Cost is $30 per twosome or $15 per person, and for ages 21 years and older. Registration is 10:45 a.m.-noon at the Buffalo Chip Saloon, 6811 E. Cave Creek Road, which is where the hunt begins. Participants may register in person at the Buffalo Chip, or to receive registration forms by e-mail, call 602-400-3330 or visit cavecreekchamber.org.
The event is produced by the Cave Creek Merchants & Events Association, which is focused on the development, management and implementation of the town’s signature events and providing marketing leadership for its merchants and organizations.
U.S. home prices rose 9.3 percent in February compared with a year ago, the most in nearly seven years. The gains were driven by a growing number of buyers who bid on a limited supply of homes.
The Standard & Poor’s/Case-Shiller 20-city home price index increased from an 8.1 percent year-over-year gain in January. And annual prices rose in February in all 20 cities for the second month in a row.
Phoenix led all cities with an annual gain of 23 percent in February. Prices jumped nearly 19 percent in San Francisco. In Las Vegas, home prices increased 17.6 percent and in Atlanta they rose 16.5 percent.
Eleven of the 20 cities reported price gains in February compared with January. Those monthly numbers are not seasonally adjusted and reflect the slower winter buying period.
The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.
Steady hiring and near-record low mortgage rates are driving up demand, helping sustain the housing recovery that began last year. Buyer traffic was 25 percent higher in March than it was a year ago, according to the National Association of Realtors.
At the same time, prices are surging because buyers have fewer homes to bid on. The number of homes available for sale has fallen nearly 17 percent in the past year to 1.93 million, the Realtors’ group said last week. At the current sales pace, that supply would be exhausted in 4.7 months, below the 6 months that is typical in healthier markets.
Home prices nationwide are still about 30 percent below their peak reached at the height of the housing bubble in August 2006. They are only back to where they were in the fall of 2003.
And Stan Humphries, chief economist at Zillow, a real estate data provider, cautioned that the national figures are being skewed by sharp rebounds in cities hit hard during the housing bust, including Las Vegas and Phoenix. Investors are helping drive up prices in those cities.
“This report needs to start being taken with a grain of salt, Humphries said. “The appreciation rates we’re currently seeing … are not broadly reflective of what’s happening in the national housing market right now.”
Steady home price gains can help drive the housing recovery. Higher home prices encourage more people to buy before prices rise further. They can also entice more homeowners to sell by making them more confident they’ll get a good price. In addition, higher prices raise the equity people have in their homes, which makes selling more profitable.
But many homeowners still owe more on their mortgages than their homes are worth. That can make it difficult to sell.
Higher home values can also help the economy. They increase homeowners’ wealth, which encourages more spending. Consumer spending drives 70 percent of economic growth.
Sales of previously occupied homes leveled off over the winter but may increase in the coming months. A measure of signed contracts to buy homes rose to a three-year high in March.
Homebuilders are also starting work on more new homes and apartments. That creates more construction jobs. Builders started work on more than 1 million homes at an annual rate in March. That’s the first time the pace has topped that threshold in nearly 5 years.
WASHINGTON — A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 ½ years. The increase suggests sales of previously occupied homes will continue rising in the coming months.
The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That’s the highest since April 2010, when a homebuyer’s tax credit was about to expire.
There is generally a one- to two-month lag between a signed contract and a completed sale.
Pending home sales rose in all regions, but just barely ticked up in the West, where a limited supply of available homes is holding back sales.
The increase is the latest positive report for the housing market, which began recovering last year after a deep, six-year slump. Steady hiring and nearly record-low mortgage rates have encouraged more Americans to buy homes. More people are also moving out on their own after living with friends and relatives in the recession. That’s driving a big gain in apartment construction and also pushing up rents.
“Housing market activity appears to have ended 2012 on a positive note and is off to a strong start in 2013,” Cooper Howes, U.S. economist at Barclays Capital, said in a note to clients.
Sales of previously occupied homes ticked up in January after rising to their highest level in five years in 2012.
And new-home sales jumped 16 percent last month from December to the highest level since July 2008, the Commerce Department said Tuesday.
Home prices, meanwhile, rose by the most in more than six years in the 12 months ending in December.
Steady price increases are also contributing to the housing recovery. They encourage more people to buy before prices rise further. Higher prices also build homeowners’ wealth, which can spur more spending and economic growth.
Builders, meanwhile, started work on the most new homes in 4 ½ years in December. Last year was the best year for residential construction since 2008, just after the recession started.
Scottsdale’s elected leaders may be open to renewed discussions on joining the Discovery Triangle, a regional planning effort the city has so far eschewed.
The Discovery Triangle Development Corp., a public-private partnership, is working to promote the 25-square-mile region anchored by downtown Phoenix to the west, Arizona State University in Tempe to the southeast and Papago Park to the northeast.
Its goals are to promote redevelopment and new investment by partnering with entrepreneurs, developers and municipal leaders, including those from Phoenix and Tempe.
Scottsdale has so far declined to join.
That could change if the Scottsdale City Council decides to renew talks and reconsider joining the 3-year-old initiative.
Last week, Scottsdale Mayor Jim Lane said he is “open to renewing discussions” after previously voting against the project. He said he still harbors concerns about the use of incentives to attract developers and linking the city’s well-known brand with its municipal neighbors.
Lane’s consideration, however lukewarm, could have the potential to tip the scales in favor of Scottsdale’s participation.
Four out of seven council members have expressed some interest in joining, though there are still some reservations, according to a recent Arizona Republic questionnaire.
Participation would require at least four yes votes from the council.
In a statement, Discovery Triangle officials said they are “delighted with some of the renewed interest expressed by Scottsdale council members and business leaders” and “look forward to continuing to explore opportunities to build on this regional urban effort.”
In his response to the questionnaire, Lane said he supports regional efforts but “cannot support Scottsdale signing on to a program” that surrenders the city’s “high standards in land-use control, use of development incentives or not and the overall use of the Scottsdale name in identifying Scottsdale with Phoenix and Tempe as one.”
A tri-city effort would expand the Discovery Triangle boundary northeast to encompass south Scottsdale and SkySong, the ASU Scottsdale Innovation Center at McDowell and Scottsdale roads.
Although SkySong is not a part of the boundary, Discovery Triangle officials said they continue to work closely with ASU and SkySong to promote innovation and attract businesses to the region.
In Scottsdale, a divide has emerged between supporters who believe the city should partner with its neighbors and those who say the project has the potential to erode its individuality and bring light rail into Scottsdale. While extensions of the rail system are planned over the next several years, Scottsdale leaders have yet to embrace the concept.
Council members shared their thoughts on the Discovery Triangle in the recent questionnaire.
Councilman Bob Littlefield, who voted against the project in 2010, said his stance hasn’t changed.
“I have met with the proponents of the Discovery Triangle many times, and they were never able to quantify any specific benefits that Scottsdale might derive from this effort,” he said.
Councilman Dennis Robbins said Scottsdale has enough regional associations and can serve the residents “without adding another one to the list.”
Newly elected Councilman Guy Phillips also is opposed, saying, “There is no need to advance a failed concept.”
“I am not an advocate of exploiting Papago Park, nor do I advocate light rail or modern streetcar coming up McDowell Road,” he said.
But Vice Mayor Suzanne Klapp said that the Discovery Triangle now has three years of experience and that the council “should consider the value of their track record” and the potential to further the city’s goals, particularly along and near McDowell Road in south Scottsdale.
“(The Discovery Triangle) is a creative group looking for ways to revitalize older neighborhoods,” Councilwoman Linda Milhaven said.
“We have much to learn from these creative minds. We must also remember that we are part of a larger regional community, and the economic tides of our region raise and lower all boats.”
She added that joining would give Scottsdale “a seat at the table.”
Councilwoman Virginia Korte said that she supports discussions with groups that share the city’s goals but that any potential alliances “must make good financial sense for Scottsdale.”