Home prices rise for first time in 18 months: RE/MAX | HousingWire

For the first time in 18 months, home prices increased year-over-year in February, a turnaround that RE/MAX said signifies a "very active selling season."

A RE/MAX housing survey released Wednesday shows national home prices in February rose 1.1% from a year earlier and 1.4% from January to $171,881.

Of the 53 metro areas included in the survey, 24 experienced price increases from February 2011, including: Miami (20.5%), Orlando, Fla. (15.8%), Phoenix (12.5%), Tampa, Fla. (11.1%), St. Louis (9.8%) and Detroit (8.9%).

Home sales in February rose 8.7% from a year earlier, continuing a trend of eight straight months above the previous year's total. February home sales climbed 8.1% above sales in January.

Of the metros, 45 saw increases over February 2011, with 26 jumping double digits, including: Albuquerque, N.M. (46.6%), Providence, R.I. (36.7%), Raleigh, N.C. (33.8%), Boston (30.5%) and Chicago (27.5%).

“All the data is pointing to a very active spring and summer selling season this year, which is great news for a recovering housing market,” RE/MAX Chief Executive Margaret Kelly said. “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting.”

Analysts at Barclays Capital on Monday said the homebuilder spring selling season has "arrived strongly enough to kick-start a positive feedback loop in housing for the first time since 2005."

Properties sold in February stood on the market for an average of 103 days, the same as in January and a year earlier, according to RE/MAX findings. In the last 12 months, the average fell below 90 in only two months — 88 in both July and September.

By Justin Hilley HousingWire Mar 16, 2012

Home prices rise for first time in 18 months: RE/MAX | HousingWire

US Mortgage Restrictions to Increase

The poor fiscal health of the Federal Housing Administration (FHA) is expected to make getting home loans even more difficult as the agency responds to increasing legal costs that stem from loan servicing claims and insuring banks against loan defaults. Prior to the $26 billion mortgage settlement between banks and the government, the FHA had applied for a $688 million loan from the U.S. Treasury to cover its rising expenditures. High-risk borrowers who turn to the FHA for loans are likely to find them as unwilling as banks to extend credit due to banks’ demands that the agency cover their losses. With both banks and the FHA raising lending restrictions, many would-be borrowers will be left with nowhere to turn for financing. For more on this continue reading the following article from TheStreet.

Getting a home loan is only going to be tougher, as banks tighten standards for Federal Housing Administration (FHA) loans amid rising legal claims.

Analysts at FBR Capital have long been worried that the FHA's poor fiscal health will lead it to deny insurance claims and file lawsuits over servicing and origination of FHA loans.

The FHA insures banks against defaults on loans and has seen its share of the mortgage origination market rise from 3% in 2005 to 24% in 2011 in the wake of the sub-prime crisis. But the high default rate during the crisis has drained its resources.

The latest budget plan found that the FHA might need as much as $688 million from the U.S. Treasury to bridge a shortfall in its reserves. That problem was quickly resolved by the recent $26-billion mortgage settlement between the nation's largest servicers and the 49 states.

Under the settlement, the five banks would have to inject $1 billion into the agency's capital reserves to settle claims related to servicing.

Still, not all legal concerns have been put to rest. Analyst Paul Miller notes that the settlement only covers servicing violations and not origination violations. He cites the example of Flagstar Bancorp(FBC) which recently entered into a settlement with the Justice Department for $133 million related to fraudulent FHA lending practices.

Bank of America(BAC) also entered into a $1 billion settlement with the Justice Department over allegations that the bank's Countrywide Unit knowingly made loans insured by the FHA to unqualified home buyers.

Recent fines also include Citi Mortgage, a subsidiary of Citigroup(C) agreed to pay $158 million to settle a civil complaint by the Manhattan attorney's office, accusing the company of routinely certifying that loans qualified for FHA when they did not.

According to FBR, the fines imposed on banks could be quite severe, in some cases trebling damages for violations of FHA's "highly complicated and technical" rules.

The recent Flagstar settlement might just be a one-off, but the analysts believe that the "damage to lender confidence" has already been done. "We believe that this settlement could result in lenders reexamining their risk with respect to FHA lending and tightening standards for the FHA product. Our major concern is that the tightening credit policies could lead to fewer borrowers being able to qualify for an FHA mortgage," the analysts wrote in a note Monday.

Recent government measures have aimed at providing relief to the troubled borrower, but as the Federal Reservefrequently notes, the credit conditions for those seeking a fresh mortgage are still too tight.

One reason is banks have pulled back from lending to borrowers with riskier profiles because of rising putback claims from Fannie Mae and Freddie Mac.

Now, higher risk borrowers who have so far managed to avail of FHA loans might now find that even this source of credit is drying up.

Currently, less than 25% of all loans being purchased by Fannie Mae have a credit score below 740. Over the past 10 years, borrowers with FICO scores between 620 and 660 have fallen from 12% to less than 2% of loans purchased, while roughly 75% of loans have a FICO score over 740, according to the report.

by Shanthi Bharatwaj NuWire Investor Mar 13, 2012

US Mortgage Restrictions to Increase

Commercial Mortgage Lending: LIBOR vs. Fixed-Rate Loans

Commercial lending has gotten more complex in recent years as banks increase lending restrictions and get choosier about their lending clients. One significant change is the shift from offering long-term fixed-rate commercial mortgages to using the London InterBank Office Rate (LIBOR), which is a rate determined on a daily basis by the British Banker’s Association. These types of variable-rate loans shift according to market trends and is usually conveyed to the borrower at the start of the loan negotiation as a spread above a specific LIBOR rate. Obviously, these types of loans make it difficult for the borrower to determine the final cost of the loan, so many banks will offer an “interest swap” product that will cover a certain percentage of the unknown value. For more on this continue reading the following article from JDSupra.

If you have been involved in commercial mortgage financing during the past decade, whether as a borrower, lender, or legal counsel, you have likely been a witness to the changes that have taken place in the manner in which loan interest rates are set and adjusted.  For most sophisticated institutional lenders, long gone are the days of long term, fixed interest rates, which remain unchanged throughout the life of the loan.  Instead, many lenders now quote interest rates which either “float” with market conditions or, frequently, adjust to reflect the latest market trends.

The benchmark used by many lending sources to set loan interest rates is “LIBOR.” “LIBOR,” an acronym for the London InterBank Offered Rate, refers to an averaged rate, which is determined on a daily basis on behalf of the British Bankers’ Association.  It measures the cost at which a member bank can borrow from other member banks, on an unsecured basis, for a certain time period utilizing a given currency.  The LIBOR rate is calculated for 10 currencies and for 15 maturities, ranging from overnight borrowing to a 12-month loan period.

It is common to see commercial mortgage lenders quote proposed interest rates based on a “spread” above a specific LIBOR rate, which rate is automatically readjusted at the end of each LIBOR period.  For instance, the lender may quote an interest rate of 3.00% above one month LIBOR, which will adjust monthly at the end of each one-month LIBOR cycle.

Such variable rate loan pricing creates potential uncertainty as to the ultimate borrowing costs for a transaction.  In order to bring some certainty and stability, many lenders offer their borrowers “interest swap” products, pursuant to which the borrower exchanges its variable rate loan obligation for a fixed rate obligation.  The swapped, fixed rate is somewhat higher than the then current variable rate obligation.

Variable interest rate loan documentation, whether based on LIBOR or some other benchmark, requires careful drafting and negotiation to be certain that the details of the interest rate calculations, loan amortization, and swap features are properly covered. Therefore, it is important to consult with an experienced business and commercial financing lawyer.

by Robert Marsico NuWire Investor Mar 12, 2012

Commercial Mortgage Lending: LIBOR vs. Fixed-Rate Loans

Phoenix-area homebuyers squeezed out by investors

Many potential homebuyers who sat on the sidelines watching metro Phoenix's house prices fall during the past five years are back in the market, ready to take out a mortgage and move in.

But many are finding they cannot buy.

Armed with a preapproved mortgage and even enough cash for a hefty down payment, they bid on foreclosed homes and houses up for short sale -- but are outbid by investors buying houses for cash on the spot.

Traditional homebuyers, who typically make an offer contingent on other steps such as an appraisal and securing the loan, find they can't compete with someone who is willing to pay up front the entire asking price or more.

Tight supply makes the competition even stiffer.

Home resales, averaging 7,500 a month, are at their highest level since the peak of 2005-06. But the number of homes for sale is at the lowest level in more than a decade. There currently are about 23,000 homes for sale in metro Phoenix, one-third of the area's housing inventory in 2009.

With demand for houses high and supply so low, many are drawing multiple bids.

That is not to say the bidding wars are driving up prices in the overall housing market nearly as much as they did in boom times. Median resale prices remain near the bottom of the lows to which they fell after the housing crash and wave of foreclosures that began in 2007.

But those low resale values have kept many traditional sellers out of the market, too, experts say. Many homeowners don't have enough equity to sell, or just don't see enough profit to make selling and moving worth it.

The result is that much of today's bidding is on foreclosure homes or short sales, where banks approve a sale for less than the current borrower owes.

And in these cut-rate homes, cash is king.

Foreclosures have declined in recent months, as banks increasingly approve short sales to help residents avoid foreclosure. The drop in foreclosure inventory is working to push up home prices a little each month.

Most metro Phoenix homes for sale are still considered great deals. Market watchers agree that long-term investors paying cash will lead to fewer empty homes and a better market overall.

But for the housing market to truly recover, they say, it must see a return of the regular participants: homeowners confident enough to put their houses on the market, and perhaps more importantly, regular buyers with mortgages and jobs who can afford to buy homes of their own.

"Phoenix's housing market is in a state of fast changes," said Mike Orr, real-estate analyst for Arizona State University's W.P. Carey School of Business.

"Prices are ticking up, and buyers are getting more and more frustrated they can't find homes," said Orr, who also publishes daily real-estate analysis called the Cromford Report.

Traditional buyers

Nakisha and Lenny Williams heard about the great deals for Phoenix foreclosure and short-sale homes more than a year ago. The couple began searching online. The low prices for homes built just a few years ago helped them decide it was time for a move.

The young couple quit their jobs, sold their Chicago-area home for a modest profit and relocated to Phoenix, where they found new jobs fairly quickly and rented an apartment while they shopped for a home. But the Williamses have been outbid on at least five homes so far and have been waiting for more than a month to hear back on their latest bid on a Litchfield Park house.

Nakisha Williams works for a water company. Though Lenny Williams recently lost his construction job, the couple have been saving for a down payment and are preapproved for a mortgage they can afford, if their offer of $120,000 for the home is approved.

"It's crazy for buyers now," said the couple's real-estate agent, Yvette McDonald of Monopoly Realty. "The Williamses are still looking for other homes while they wait to hear back from the lender on the Litchfield Park home, but we can't find anything that is still available by the time we make an offer."

She has several other potential buyers in the same position, making multiple offers that aren't accepted or are topped by other bidders, especially investors.

Investors

Andy Rysdam has $10,000 for a down payment and is preapproved for a mortgage to buy a home for as much as $175,000. Recently, his real-estate agent found a potential house listed late in the afternoon. They went to see it first thing the next morning, and already there were seven other offers on it.

"It's the investors getting the best homes. They have cash," said Rysdam, who is renting and not giving up on buying a home despite already being beaten out by investors several times.

Cash buyers, who are typically investors looking to resell the properties or use them as rentals, account for nearly 60 percent of all Phoenix-area homebuyers now, according to data compiled by AZBidder.com, an online foreclosure-auction service.

"We are seeing multiple offers on any decent home," said Rysdam's agent, Brett Barry of Phoenix's HomeSmart. "These are different than the bidding wars from the boom, but buyers are getting more and more aggressive as the inventory of homes for sale continues to shrink."

Scottsdale real-estate agent Diane Watson is working with a Canadian investor who wants to spend $10 million on metro Phoenix homes that can be turned into rentals.

Wealthy investors can make more money buying foreclosure or short-sale homes in growing areas like Phoenix and renting them for seven to 10 years until prices rebound than they can on most other investments now.

Watson can't find enough homes for her Canadian investor and is considering approaching homeowners underwater on their mortgages and late on their payments to sell through a short sale even before their lender suggests it.

"I am about to go door to door," she said. "People don't realize they have the short-sale option because the deals have been so hard to do in the past, but not now."

Laura Gonzales thought she had found the home of her dreams in Phoenix. The elementary-school teacher has been renting a house in north Phoenix's Desert Ridge area since she moved from California in 2007.

As foreclosures have climbed in her neighborhood and home prices have fallen, she has slowly saved for a down payment. In January, she found "the perfect home" listed for short sale just a block from where she's renting. The house was bigger, and her monthly mortgage payment would be less than her rent.

She made an offer the day it was listed for sale. But already a dozen other offers had been made. She upped her offer by $10,000, but at least two investors upped their offer by twice as much.

The home ended up selling for almost $200,000 -- more than $50,000 over the asking price.

"It was heartbreaking," Gonzales said. "And last month, the same thing happened to me on a house I didn't want nearly as much, but I felt like I had to keep bidding because the homes I like are going so fast in this area."

Diane Brennan of Scottsdale's Keller Williams Integrity First Realty said the housing market is crazy now. "It's nearly impossible to buy a home in the $100,000 range," she said. "I've got tons of buyers and no properties to sell them. One home in south Scottsdale got 43 offers."

A rush to avoid higher prices

Metro Phoenix's median existing-home price has been steadily ticking up since last August when it fell to a 12-year low of $113,000. In February, the median price for the region was up to almost $123,000, according to a monthly analysis from AZBidder. All types of homebuyers see metro Phoenix's prices finally rising and want to close a deal before they go higher.

Some first-time buyers with Federal Housing Administration financing have a bit of an advantage now, said real-estate agent Barry.

Those buyers are required to put down only 3.5 percent, so they can often keep bidding with investors, knowing that if they win and the appraisal doesn't come in that high, the lender will have to lower the price to meet the housing agency's requirements.

Banks might boost supply of homes

Banks still hold many of the homes they took back through foreclosure in recent years; the rush to buy could push them to put more on the market.

"If lenders are holding back on foreclosures and waiting for a sign the homes will sell, well, the time is now," said Jim Sexton of Phoenix's Realty ONE Group.

"Real-estate agents and buyers are all frustrated. The demand for homes is real."

Lenders did slightly increase the number of new notices of foreclosure they sent last month, which could mean more short sales or foreclosures for buyers to choose from in the next few months.

Housing analysts say the current buying frenzy may run its course in six months and not create a lasting recovery. Experts say the region's housing market won't really recover until regular homeowners, who can afford their mortgages, feel like they can sell and make a decent profit -- not the profit of 2006, but enough to pay off their mortgage and net a slight profit if they bought before 2000.

Regular buyers, who have to put down 10 to 20 percent for a mortgage, might have to wait for those regular sellers to put their homes on the market, creating enough supply to ease the bidding frenzy. When demand is strong enough that multiple bids are made on houses owned by homeowners, not lenders, that will be a strong sign of a return to a normal market.

"Once sellers begin to realize the market is recovering, and they can actually make some money on their home, then the market will truly start to stabilize," said ASU housing analyst Orr.

by Catherine Reagor - Mar. 10, 2012 11:25 PM The Republic | azcentral.com

Phoenix-area homebuyers squeezed out by investors

Housing Update Spring 2012

There’s been much talk that the rising gas prices will derail the economic recovery. I will play the devil’s advocate here and say that last year around this time, gas prices spiked as well and it was short-lived through talks with OPEC and we may see that happen again here. I do agree that there is much tension in the Middle East so we have to keep a watchful eye on that situation. 

As for the positive turn in the economy and the increased consumer confidence, I am a believer that we are indeed turning the corner and this year may prove to be the stabilization of the housing market as a couple of the big banks had predicted. It still remains to be seen and we will have a better gage come mid-year.

On the plus side for housing, there will be a new pool of buyers coming out of the waiting period after a bankruptcy which spiked in 2005 although they are still de-leveraging and probably were laid off and now working at a job making less money. Or perhaps they are now a single income household versus a dual income household.

http://www.abiworld.org/am/template.cfm?section=Bankruptcy_Statistics1

In 2005, a record year for bankruptcy filings, 2.08 million cases were filed, with both individuals and businesses filing at higher rates than usual.

After the late-2005 rush to file, there was a lull, but in the years following, filings have increased steadily. Last year, 1.53 million bankruptcy cases were filed in the States, the highest since the law’s passage, and March’s numbers suggest that this year could have an even higher number.

I am also a believer that the trend is your friend and that numbers don’t lie.  I have been tracking the homebuilders since October 2011 and the trend has been increasing since then as the graph of the SPDR S&P Homebuilders ETF shows:

The indexes have also been trading in the positive.

Symbol	Name	Price	Change	Assets *	Avg. Vol	YTD
XHB	SPDR S&P Homebuilders ETF	$20.21	+2.33%	$1,232,036	6,554,611	+18.19%
ITB	iShares Dow Jones US Home Construction Index Fund	$14.17	+3.05%	$513,684	1,544,611	+19.28%
FLM	First Trust ISE Global Engineering and Construction Index Fund	$41.96	+2.47%	$36,801	7,917	+16.46%
PKB	PowerShares Dynamic Building & Construction Portfolio	$13.58	+2.18%	$28,014	17,108	+13.36%

And there is some good news coming down the pike to help the housing recovery. There are whispers of lending guidelines loosening and broadening; hopefully sometime this year. And with the new version of Harp 2.0, it is projected to be able to help an additional 4 million upside down borrowers.

There are more positive signs looming at this time this year as compared to this time last year. I believe we will have a better pulse on the situation come mid summer. Stay tuned.

Market Strengthening: Obama Administration Releases February Housing Scorecard | RISMedia

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the February edition of the Obama Administration’s Housing Scorecard—a comprehensive report on the nation’s housing market. Data continues to show signs that the housing market is strengthening, although the recovery remains fragile. The supply of new and existing homes on the market continued to decline last month. However, home prices dipped again as seasonal lows continued for the fourth month in a row. The continued fragility of the housing market underscores the need for recently-announced expansions of assistance to help prevent foreclosures and strengthen hard hit communities. The full Housing Scorecard is available online at www.hud.gov/scorecard.

“Since April 2009, more than 13 million homeowners have taken advantage of our refinance programs. Following enhancements to the Home Affordable Refinance Program, another 300,000 families have already started the process of refinancing and stand to save on average $2,500 per year—the equivalent of a good-sized tax cut. So the Administration’s efforts have produced significant positive benefits,” says HUD Assistant Secretary Raphael Bostic. “But 1 in 5 Americans still owes more than their home is worth. This lasting scar of the Great Recession driven by housing’s collapse is a clear sign that we are not yet out of the woods. That is why we are asking the Congress to approve the President’s housing proposals so that more homeowners can receive assistance.”

Included in this month’s Making Home Affordable Program Report are detailed assessments for the largest mortgage servicers participating in the program with results from the fourth quarter of 2011. The Servicer Assessments—first introduced in June 2011 and published quarterly—have set a benchmark for disclosure around servicer efforts to assist struggling homeowners.

“The Making Home Affordable Program has established critical standards that have changed the mortgage industry for the better, and the assessments have been a principal tool for measuring that progress,” says Treasury Assistant Secretary for Financial Stability Tim Massad. “By shining the spotlight on key practices, we have prompted servicers to improve their implementation of the Making Home Affordable Program. However, there is still more work to be done to ensure that the industry treats all borrowers properly. The implementation of the broader standards required by the settlement, together with our continued compliance efforts, will help bring this about.”

The standards established by the Making Home Affordable Program were also a guide for many of the servicing standards included in the historic $25 billion settlement recently announced between the federal government, 49 state Attorneys General and the five largest mortgage servicers regarding mortgage servicing and foreclosure deficiencies.

Since inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their processes through ongoing program reviews. The latest Servicer Assessments summarize performance on metrics in three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance. Results for the fourth quarter of 2011 show that servicers are focusing attention on areas identified in previous program reviews and, as a result, are demonstrating considerable improvement in program implementation:

• Mortgage servicers show continued improvement in calculating homeowner income, which is used to determine a homeowner’s eligibility and modified payment amount under the program.

• Servicers are more effectively evaluating homeowners under program eligibility criteria as performance in the “second look disagree” category, which reflects the rate at which Treasury’s program reviews disagree with the servicers’ decision not to assist a homeowner, remains consistently below the established benchmark.

As the Administration continues to push servicers to provide more effective assistance to struggling homeowners, the ongoing recovery of the housing market demonstrates the need for the Administration’s efforts. The February Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

• Market data show progress on housing overhang and sales but continued fragility in home prices. The supply of homes on the market continued to decline last month. At the current rate, it would take 6.1 months to turn over the supply of existing homes currently on the market – and just 5.6 months to turn over the stock of new homes for sale – the lowest inventory of homes for sale since 2006. Existing home sales continued to improve this month, reaching their highest pace since May 2010. However, home prices dipped again in December, as measured by the Case-Shiller index, as seasonal lows continued for the fourth month.

• The Administration’s foreclosure programs are providing relief for millions of homeowners as we continue to recover from an unprecedented housing crisis. More than 5.7 million modification arrangements were started between April 2009 and the end of January 2012 – including nearly 1.8 million trial modification starts through the Home Affordable Modification Program (HAMP) and more than 1.2 million FHA loss mitigation and early delinquency interventions. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 2.7 million proprietary mortgage modifications through January.

• Homeowners entering HAMP demonstrate a high likelihood of long-term success in the program. As of January, more than 950,000 homeowners received a permanent HAMP modification, saving more than $530 on their mortgage payments each month. Eighty-five percent of homeowners entering the program in the last 19 months have received a permanent modification, with an average trial period of 3.5 months. Homeowners in HAMP permanent modifications have saved an estimated $11 billion to date. View the January Making Home Affordable Program Performance Report .

For more information, visit www.treasury.gov .

By RISMedia Mar 7, 2012

Market Strengthening: Obama Administration Releases February Housing Scorecard | RISMedia

Downtown Phoenix to get more apartments

 
Crews are prepping a downtown Phoenix property to lay the foundation for 325 apartments that a Scottsdale-based developer anticipates will house a number of college students after it is finished in 2013.

Executives of Concord Eastridge said they see opportunity in the increasing number of students moving into the downtown area to take classes at three major campuses: Arizona State University's downtown Phoenix campus, with nearly 16,000 students; the University of Arizona's College of Medicine and Pharmacy College campuses, with 560 students combined; and the Phoenix School of Law, with an estimated 1,000 students.

Adding to the potential economic boost is a future Arizona Cancer Center that will focus on clinical research, and Northern Arizona University, which this fall will open physical-therapy and physician's-assistant programs to draw 49 students to the downtown biomedical campus.

Community leaders welcome the $52 million apartment project south of Roosevelt Street, between Third and Fourth streets, as a sign of revitalization. The historical area has had a smattering of dusty and empty lots since the 1970s and 1980s, when land speculators and property owners thought they could make it big by razing and selling properties near downtown Phoenix and what eventually became Interstate 10.

The two-block, eight-story apartment and retail buildings will change the Roosevelt neighborhood significantly, said Cindy Dach, a neighborhood resident who also leads the non-profit Roosevelt Row Community Development Corp.

"It's going to increase our population probably around 30 percent," Dach said. "And even from the simple thing when I walk around at night ... the fact that there's going to be lights on is just going to change the neighborhood and bring more people walking around."

Dach said it also will diversify an area that is home to several artists and their studios, including the nearby Artisan Village at Roosevelt and Sixth streets.

Phoenix officials estimate the two buildings -- a mix of studios and two-, three- and four-bedroom apartments -- will house an estimated 600 people. The apartments will include several amenities for students and young professionals.

"There will be a pool and spa and other amenities on both blocks," said Steven Schnoor, a Concord Eastridge vice president. "Each building has its own pool, its own fitness facility, its own entertainment area -- including a barbecue eating area and lounge -- and interior entertaining spaces."

The list goes on: tanning beds, fitness rooms, community kitchens where tenants can entertain large groups of friends, high-speed Internet and other stuff college kids look for in a near-campus home.

"Really, they're all the amenities that you would expect in state-of-the-art student housing in higher education today," Schnoor said, noting that Concord Eastridge's portfolio includes several college projects.

Schnoor said the company doesn't have an exact dollar figure yet on rent for the downtown Phoenix apartments, but "they will be comparable to what a student would pay to live at (ASU's) Taylor Place."

A single bedroom at ASU's Taylor Place in downtown Phoenix costs $7,670, while a double-bedroom costs $8,560, according to Arizona Board of Regents records. That cost does not include a meal plan.
Concord Eastridge also is making its project a home for small businesses, renting the ground floor of both buildings to retailers.

The developer has been preparing for the apartment project since June, when it paid $3.08 million for the two vacant blocks, 2.89 acres in all, which had been owned by Mortgages Ltd. until it went bankrupt.
Concord Eastridge has gotten some help from Phoenix officials. It will pay no property tax on the site for 25 years -- a burden eased by a special designation granted by the City Council last year.

In Arizona, a city or county can ease property taxes for a project that is meant to spur economic
development by taking ownership of the property under the state's Government Property Lease Excise Tax program. Several properties in downtown Phoenix, from the Arizona Center to the mixed retail-and-office project CityScape are among the hundreds of properties that pay no property taxes in Phoenix because the city owns them.

Instead, the developers pay rent to the city every year of the agreement. Its annual rent to the city starts with $10,000 in the second year and increases 5 percent each year for the contract's 25-year term. After eight years of the contract, it will begin paying excise (sales) tax of up to $350,000 a year.

by Emily Gersema - Mar. 3, 2012 04:28 PM The Republic | azcentral.com

Downtown Phoenix to get more apartments