Scottsdale Arizona Real Estate Blog

by Catherine Reagor – Feb. 23, 2012 06:35 PM
The Arizona Republic | azcentral.com

Metro Phoenix home prices are up. Fewer inexpensive homes are for sale, and the number of pending foreclosures is down.

The positive housing-market update comes from Arizona State University’s newest real-estate report.

It’s the first monthly housing analysis from Mike Orr, who was recently named director of the Center for Real Estate Theory and Practice for ASU’s W.P. Carey School of Business.

“Single-family home prices overall in the Phoenix area have been moving up since they reached a low point in September,” Orr said in his debut monthly housing report.

“Also, looking forward, I expect a declining trend in foreclosures.”

Orr also publishes a daily online analysis of Phoenix-area housing indicators called the “Cromford Report.”

The median price of all home sales, including new homes, reached $120,500 in January of this year, Orr reports. That compares with $113,166 a year earlier.

The average price per square foot of Valley houses has climbed 3 percent since last year.

There were approximately 8,000 new and used homes sold in January, up from 7,500 in January 2011.

Orr said investors have snatched up the oversupply of homes for sale under $300,000.

“Many people think there’s a glut of homes the banks are hiding somewhere, and that may be the case in other markets, but not here in the Phoenix area,” he said.

“We’ve gone through so many foreclosures that the system has been working itself out for about five years.”

In January, there were 2,450 single-family foreclosures in both Maricopa and Pinal counties, compared with 4,200 during January 2011, according to the ASU report.

The supply of homes listed for sale in metro Phoenix is down 42 percent from a year earlier.

Julie Schmit – Feb. 20, 2012 10:42 AM
USA TODAY

Lenders are allowing more short sales by financially strapped homeowners and a few people are even getting cash to complete the sale.

Short sales are when lenders allow borrowers to sell homes for less than their unpaid mortgages. They are an alternative to foreclosures.

Short sales have been increasing for months, but the financial incentives — which Realtors say are random and infrequent — are a newer wrinkle.

Examples:

- JPMorgan Chase went national with short-sale incentive offers last year, paying up to $35,000 in some cases.

- Bank of America is testing incentives from $5,000 to $25,000 in Florida to see if they should be expanded to more states. The Florida program began last fall, spokesman Richard Simon says.

- Wells Fargo’s incentive offers range from less than $3,000 to $20,000, spokesman James Hines says.

Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures.

In states such as Florida where foreclosures go through the courts, 50% of loans in foreclosure are more than two years past due, says a January report by mortgage tracker LPS Applied Analytics.

“It’s a lot cheaper to shell out $10,000 or $20,000 to someone than it is to go through a long foreclosure,” says Jim Gillespie, chief executive of Coldwell Banker.

Banks are more willing to do short sales now than in the past, Gillespie says. Cash incentives appear to be “limited but increasing” in number, he adds.

“When a loan modification isn’t possible, a short sale may be a better and faster solution” than foreclosure, says JPMorgan Chase spokesman Thomas Kelly.

The lenders won’t say how often they extend such incentives.

“If you have two similar sellers, one might get it and another may not,” says Colleen Badagliacco of Altera Real Estate in San Jose. “It’s very random.”

Typically, short sale incentives are more common for loans in states where foreclosures take more time, Hines says.

In November, short sales accounted for more than 9% of single family home sales and were up 32% from the year before, according to CoreLogic.

Market researcher Dataquick also shows short sales increasing from January 2011 through last month throughout California and in Phoenix, Miami and Seattle.

The federal government-run foreclosure prevention program also offers short sale incentives, at least $3,000 for sellers, but far more short sales are being done outside the government program.

“The trend is up,” says Moody’s Investors Service analyst William Fricke.

by Catherine Reagor – Feb. 18, 2012 04:44 PM
The Republic | azcentral.com

Scottsdale-based DMB Associates is spending a lot of time focusing on properties in a state next door to Arizona: California.

The developer has several master-planned projects in various stages across the state: in the Lake Tahoe area, the San Francisco Bay Area, central California and in Southern California’s Orange County.

In a state known for its regulations and attention to the environment, DMB is proving it can modify plans to work with neighbors, community groups and environmental interests to develop prime sites.

In January, DMB opened a Pacific division headquartered in San Francisco to be closer to its California projects, particularly the redevelopment of Cargill’s historic salt plant in Redwood City, near Silicon Valley. Eneas Kane is president of the new operation.

Although DMB is developing 150,000 acres of communities in the West and building communities on some of the highest-profile pieces of land in California, including the redevelopment of the Saltworks site in the Bay Area, it has maintained its low-key style.

“It feels like though the housing market hasn’t recovered yet, it has hit an inflection point,” Kane said. “We believe our greatest opportunities are in California right now.”

California’s housing market is much larger and more diverse. And some parts of the state, including the Bay Area and the Lake Tahoe area, haven’t suffered as much during this housing crash.

Evolving focus

“DMB” stands for the first names of its prominent Arizona founders. The D is for the company’s chairman and real-estate attorney, Drew Brown. The M is for Mark Sklar, whose family owned Mundus Travel. The B is for Campbell Soup heir Bennett Dorrance.

In 2010, the developer attracted some prominent investors, including Madrone Capital Partners, which includes Walmart heirs, and Argonaut Private Equity of Oklahoma.

Best known for its DC Ranch community in north Scottsdale, DMB formed after metro Phoenix’s last real-estate crash in the late 1980s investing in bargain commercial properties. But after DC Ranch, DMB’s business plan evolved to partnering with landowners and investors on large residential projects that can be built slowly and with plans constantly updated for changes in the economy and in homebuyers’ preferences.

The partnerships, such as the one it has with Caterpillar on Buckeye’s Verrado, allow for private agreements that don’t require fast shareholder profits and but do allow for a long-term planning and development.

“We build for people,” Brown said. “We are trying to create neighborhoods that will last and evolve.”

The developer has garnered a reputation as a meticulous planner, an amiable neighbor to other projects and a company that won’t sacrifice quality growth for short-term projects, said national housing analyst Tim Sullivan.

In Arizona, DMB continues to develop or plan the communities DC Ranch and Silverleaf and mixed-used project One Scottsdale in the north Valley, Verrado in Buckeye, Marley Park in Surprise and its latest project, Eastmark in Mesa, while considering another residential project on state-owned land in the northwest Valley.

Outside Arizona, it is partnering with other companies on high-profile projects that could be under development for the next few decades.

In 2006, the developer saw the housing crash coming but no one knew how bad it would be for the home-building market.

In 2009, DMB had to restructure and downsize its staff by at least one-third. Then, the developer’s chairman said the company had no plans to sell off any of its current assets and would continue looking for special land for developments in the West.

“We are finally bringing some money in this year instead of just spending,” Brown said. “Of course, we are in development to make money, but what’s as important is the footprint we leave on this country with our projects. If our projects thrive and evolve for decades, we know we will have succeeded.”

DMB’s projects outside Arizona include:

Redwood City Saltworks

On 1,436 acres between San Francisco and San Jose, DMB is working with Cargill to redevelop an industrial salt mine into a community that would provide workforce-priced housing. The two groups started a partnership in 2006. Cargill, an international agriculture and food company, owns the former salt-mining site.

The Redworks site is prime for redevelopment because there’s little other developable land left in the infill community along the waterfront.

Exact plans for the development are still being worked out, but the current goal is to set aside half of the land for conservation and public access to the bay, 200 acres of parks and privately funded restoration of industrial land into tidal marshes.

Originally, 12,000 homes and apartment had been planned on the historic site. But after many meetings with neighbors of the land and community and conservation groups, the plan is being scaled back.

DMB’s research found that 40,000 people commute to Redwood City for work so it’s trying to develop high-density, affordable housing on the site while still conserving much of the land.

Martis Camp

Halfway between Truckee, Calif., and the northern shore of Lake Tahoe, DMB is building a community on 2,177 acres. One side of the project overlooks the lake, while the other side faces the Sierra Nevada. This community has a golf course and a ski lodge. The clubhouse is a large red barn called the Family Barn.

Kane said many of the buyers so far are from San Francisco, particularly Silicon Valley. A few executives from Apple have been spotted at Martis Camp.

About half of the 653 lots at Martis Camp have sold for a total of $280 million. In 2011, 43 home sites sold for a total of $33 million, making it one of fastest-selling resort communities in the country, according to housing analysts.

The DMB Martis partnership managed negotiations that led to an agreement with Sierra Watch, the League To Save Lake Tahoe, the Mountain Area Preservation Foundation, Sierra Club, and the Planning & Conservation League in 2008, which let the project be built.

Tejon Mountain Village

In the middle of central California’s 270,000-acre Tejon Ranch, the largest privately owned piece of land in California, DMB is developing 8,000 acres of a 28,000-acre site.

Plans call for about 80 percent of the site to be left undeveloped. The deal, worked out with the Sierra Club, Natural Resources Defense Council and Audubon California, also means 240,000 acres of 90 percent of the Tejon Ranch property will be preserved.

Ladera Ranch

Through a partnership the the Moiso and O’Neill families, DMB is developing 4,000 acres in central Orange County. About 8,000 homes have been developed in the project so far, and only 8,100 are planned for it.

Ladera Ranch is similar to DMB’s Verrado community in Buckeye, with a variety of midpriced to high-end homes surrounding a town center.

When DMB partners with landowners, the developer usually pays for the communities infrastructure and then works out a deal to split profits from land sales. DMB is private and very private about its finances. Most of its partners are also private firms.

Kukui`ula

Located on the southern shore of the Hawaiian island Kauai, the 1,045-acre high-end resort is a project DMB is developing with Hawaiian firm Alexander & Baldwin.

DMB signed onto the project in the midst of the housing crash, but Kane said the site and opportunity were too good to let go by. So DMB has spent the past few years developing the resort while selling very few of its expensive home lots.

The development has a golf course, spa and collection of swimming pools. It also has a 50-acre farm for residents to pick their own fruits and vegetables. About 1,500 high-end homes, most priced above $1 million, are planned for the community. So far, about 100 houses and lots have sold there.

Planning for the development started in 2001, long before the housing crash, but the project’s development has been slower than expected, Brown said.

By Daniel Bukszpan, CNBC.com

February 13, 2012

Provided by:

Just a few years ago, when foreclosures were coming fast and furious, some cities experienced more than their fair share of the pain. It stood to reason that the harder hit a city was, the less likely it was to make a hasty recovery.

However, according to Realtor.com, the official site of the National Association of Realtors, some of the cities whose housing markets bore the brunt of the foreclosures are now leading the way toward recovery.

See full story: Top 10 Turnaround Towns

Using data from Realtor.com, CNBC.com ranks the cities with the most dramatically recovered housing sectors. The list weighs year-over-year data from the fourth quarter of 2011 and the fourth quarter of 2010, such as median price appreciation, median age of inventory, inventory reduction rates and unemployment rates, as measured by the Bureau of Labor Statistics in November 2011. Realtor.com also sought the perspective of real estate agents, who work on the front lines of the markets that are experiencing turnarounds. Their insights are included here.

See which American cities made this year’s list of the top 5 turnaround towns:

5. Sarasota-Bradenton, FL
Year-over-year Median List Price Appreciation: 10.78%
Year-over-year Median Age of Inventory: -26.57%
Year-over-year Inventory: -31.01%
Unemployment Rate (November): 10.1%
Search/Listing Ratio Rank: 31

The Sarasota-Bradenton area takes the number five spot on Realtor.com’s list. Median list prices have increased by 10.78 percent since last year, while inventory has dropped by 31.01 percent. According to Carol Marra of Keller Williams Realty, current trends are putting Sarasota-Bradenton within striking distance of becoming a seller’s market.

“We have less inventory available for sale and I do see prices inching up,” she says. “Another indicator of our market turnaround is that local home builders have less existing inventory and are generally standing firm on their prices.”

4. Fort Myers-Cape Coral, FL
Year-over-year Median List Price Appreciation: 31.27%
Year-over-year Median Age of Inventory: -17.60%
Year-over-year Inventory: -35.31%
Unemployment Rate (November): 10.5%
Search/Listing Ratio Rank: 26

The Fort Myers-Cape Coral area has slipped one notch to fourth place on Realtor.com’s list of turnaround towns. It held the third-place slot last year, but sales have decreased 13 percent since then, hence the downgrade. Still, it’s bouncing back, with a 20 percent increase in median sale price over last year, better than any other market in Florida.

Denny Grimes, a real estate agent from Fort Myers, describes the housing market as split. “Right now what we are seeing is a market of the haves and have nots,” he says. “Inventory of homes priced under $250,000 is very low. If it were a gas gauge I would say it was blinking on empty. At the higher end of the market — the ‘move-up’ market, priced over $500,000 — we are not seeing as many buyers and inventory is still high.”

3. Orlando, FL
Year-over-year Median List Price Appreciation: 8.22%
Year-over-year Median Age of Inventory: -36.52%
Year-over-year Inventory: -44.02%
Unemployment Rate (November): 9.7%
Search/Listing Ratio Rank: 1

Orlando, Fla., has experienced a 36 percent drop in the median age of its housing inventory, down to an impressive 73 days, according to Realtor.com. The city has also experienced a decrease in the number of foreclosure filings over the previous year, with one in every 323 households posting a filing. This constitutes a drop of 24 percent from November 2010.

According to real estate agent David W. Welch, homes are going fast. “We actually have a shortage of homes — less than six months of inventory — on everything under $300,000,” he says. “Two of my buyers made offers last week. One made an offer on a $90,000 home as an investment. The other made an offer on a rather large $250,000 home as his primary residence. Both homes were short sales, and both homes had five other offers on them.”

2. Phoenix-Mesa, AZ
Year-over-year Median List Price Appreciation: 15.38%
Year-over-year Median Age of Inventory: -27.47%
Year-over-year Inventory: -48.10%
Unemployment Rate (November): 7.7%
Search/Listing Ratio Rank: 7

The other area on this list that’s not in Florida is the Phoenix-Mesa area in Arizona. It used to reside at the number four spot, but jumped ahead two notches between the third and fourth quarters of 2011. This area experienced more than its fair share of foreclosures, and one in every 317 homes still goes into foreclosure. However, the foreclosed homes on the market are being sold at bargain prices, which has caused a 27.47 percent decrease in the median age of inventory.

The city’s unemployment rate in November was 7.7 percent, better than the national average, which can only help boost the local economy. Real estate broker Christy Walker has an optimistic forecast. “The Phoenix market has experienced a positive change in the past year and is poised to continue rebounding throughout 2012,” she says. “Employment is up, foreclosures have dropped significantly, investor sales are substantial and our inventory is hovering around a three-month supply with increasing demand.”

1. Miami, FL
Year-over-year Median List Price Appreciation: 28.57%
Year-over-year Median Age of Inventory: -30.89%
Year-over-year Inventory: -51.44%
Unemployment Rate (November): 9.4%
Search/Listing Ratio Rank: 9

Of all the U.S. markets, Miami was among those that were hit hardest by foreclosures. Today, however, it’s bouncing back, and in a big way. According to Realtor.com, Miami is the leading turnaround town in the U.S. Sales of single-family homes increased by 51 percent in the past year, according to the Miami Association of Realtors, and the median age of the inventory has decreased by 30 percent.

“They say the first to hit bottom are the first to get up, and that’s exactly what we have been seeing in Miami,” says Ines Hegedus-Garcia of Majestic Properties. “Although mainstream media seems to be a little behind with the good news, we have been seeing desirable areas in Miami already showing price increases, almost a nonexistent distressed inventory and even a seller’s market in some instances.”

by Edward Gately – Feb. 17, 2012 08:53 AM
The Republic | azcentral.com

Scottsdale’s latest downtown infill-incentive proposal calls for construction of a 420-unit luxury apartment complex northwest of Indian School Road and Goldwater Boulevard.

Zaremba Residential Co. plans to purchase the roughly 5-acre parcel from Shawn Yari’s Triyar Corp. to build the five-story complex. The property houses a Travelodge hotel, a closed Village Inn restaurant and a mostly vacant office building.

Zaremba’s corporate offices are located in Cleveland, but its western United States operation is based in Scottsdale.

The proposal, referred to as the Scottsdale Goldwater Development, would replace the development plan approved in 2007 for the Hanover project, a complex that included apartments, retail and office uses.

Scottsdale citizens filed a referendum in 2008 to stop the Hanover project. A Maricopa County Superior Court judge tossed out the referendum because it did not follow the proper filing procedures and the issue did not make it onto the ballot. But the project stalled because of the depressed real-estate market and restricted investment capital.

“I can’t say if this will be equally controversial,” said Dan Symer, senior city planner. “I’ve just started to hear from the public in the last few days.”

The Hanover project drew opposition because the city had just started working on its Downtown Plan and some residents felt it should hold off on allowing any projects until after the plan was approved, Symer said. Also, some residents didn’t want apartments downtown, and others were unhappy with the height and density, he said.

Kent Chantung,Zaremba’s director of residential development, said the new proposal is more viable and financing has been secured for construction. Zaremba completed the two-tower West 6th apartment project in downtown Tempe. That complex is 90 percent occupied.

“We are really bringing something that (Scottsdale’s) downtown core can use,” he said.

The city’s controversial downtown infill-incentive district and plan allow property owners downtown to request amended development standards, such as increased height and density, in exchange for public benefits, such as investment in public art and amenities. Zaremba’s proposal seeks an increase in density and floor-area ratio.

The increase in density is needed because the project would be all residential, Chantung said.

At the corner of Indian School and Goldwater, the complex would start at two stories, and then increase to the interior five-story building. The complex’s 600 parking spaces would be hidden from view underground.

Despite the improving economy, it’s still difficult for potential homeowners to obtain first-home mortgage financing, which creates a growing demographic of people choosing instead to rent high-end apartments, Chantung said.

This is prompting a “revised American dream,” he said.

“What this project does is improve the gateway presence into downtown, and brings bodies into the area to support existing businesses without adding competition for those businesses,” Chantung said.

The proposal will be considered by the city’s Development Review Board, Planning Commission and City Council. From there, it would go back to the Development Review Board for final design approval.

Zaremba already has started the public-outreach process and then will be finalizing its application for review.

“We would like to start construction by the beginning of the fourth quarter and start delivering units by the first quarter of 2014,”Chantung said.