Mortgage And Real Estate News

Thursday, April 26, 2012

Home Sales Contracts Rise 4.1% in March - CNBC

Sold sign

More buyers signed contracts to buy existing homes in March than the previous month, according to a monthly survey just released by the National Association of Realtors.

The Pending Home Sales Index rose 4.1 percent from February and is now 12.8 percent higher than March of 2011.

“The housing market has clearly turned the corner,” said NAR chief economist Lawrence Yun in a release. “Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas as the year progresses.

Contract activity was strongest out West, with the index jumping nearly nine percent.

Both the Northeast and Midwest saw declining activity.

The bulk of distressed properties are in the West, with California, Arizona and Nevada still leading the nation in foreclosure activity.

A recent spike in short sales, where the bank allows the home to be sold for less than the value of the mortgage, could be lifting the numbers in those states. Distressed sales accounted for 29 percent of all sales in March, according to the Realtors and a much higher share of sales out West.

Final sales of existing homes (closings) fell unexpectedly in March, leading many to blame the unusually warm winter for pulling demand forward. First quarter home sales saw their highest quarterly volume in five years. This bump up in new contracts, though, may be a sign that spring isn’t a complete wash. Contract cancellations, however, have been running unusually high, upwards of 30 percent, due to low appraisals and a still-tight credit market, but Realtors claim those buyers have been staying in the market, offering other contracts.

by Diana Olick CNBC Apr 26, 2012

Home Sales Contracts Rise 4.1% in March - CNBC

Wednesday, April 25, 2012

Borrower Behavior & Loan Stats Of Interest | The Basis Point

Here are some interesting borrower and loan stats that have caught my eye lately…

(1) Ellie Mae released a report using a sample of loan application data from its database for March compared to February 2012 and September and December 2011. (Ellie Mae States that there were two million loan applications processed through its systems in 2011.) In March, 61% of originations were for refinancing, about the same as three and six months previous but down from 67% in February. FHA-backed loans accounted for 28% versus 64% for conventional. A typical loan regardless of its purpose took 42 days to close in March, about the same as in February but down three to five days from December. The majority of loans that went through Ellie Mae were 30-year fixed-rate loans but 20% were 15 year and about 4% were ARMs.

(2) In a stat of great interest to secondary marketing folks, Ellie Mae calculated a “pull-through” rate for a sampling of loans for which applications had been submitted 90 days earlier. The pull through for March was 47%: 56% for purchases and 42% for refi’s. The average loan closed in March had a FICO score of 749, an LTV of 77% and a DTI of 23/35. (Loans that were denied had an average FICO of 699, 85% LTV, and a DTI of 27/43.)

(3) According to NAR, investors purchased 1.23m existing and new homes, an increase of 64.5% from 2010, and investment home sales comprised 27% of all activity, an increase of 17%. Nearly half of investor purchases were made in cash, and half were distressed homes. The regions that saw the most activity were the South (41%) and West (23%), while purchases in the Midwest and Northeast made up 17% and 15% of the total, respectively.

(4) A recent study conducted by TransUnion has revealed that, when faced with credit card, auto loan, and mortgage debt, the typical troubled borrower is most likely to let their mortgage payments slip. Four million indebted borrowers were surveyed and a mere 9.5% of those were delinquent on auto loans, while 17.3% were delinquent on credit card payments. Nearly 40% of the borrowers polled were behind on their mortgage, opting instead to pay auto and credit card loans.

(5) January saw more short sales close nationally than foreclosures for the first time, meaning that banks were agreeing to more deals. Short sales accounted for almost 24% of home purchases in January versus about 20% for sales of foreclosed homes. (In January 2011 it was 16 and 23%, respectively.) Depository banks were never designed to be landlords, hold real estate, or voluntarily swallow losses on thousands or millions of homes. But they can process short sales in less time and at significantly less cost than foreclosures, leading to fewer foreclosures on the market, leading to fewer distressed properties on the market.

by Rob chrisman Apr 24, 2012

Borrower Behavior & Loan Stats Of Interest | The Basis Point

Tuesday, April 24, 2012

California Bay Area home sales hit 5-year high | HousingWire

March home sales in California’s Bay Area reached their highest level for the month in five years, the result of lower prices, low interest rates and an improving economy.

About 7,700 new and resale houses and condos sold in the nine-county Bay Area in March, up 34.9% from 5,702 in February, and up 9.1% from 7,051 a year earlier, according to San Diego-based DataQuick.

The February to March sales jump is normal for the season, but the latter’s sales count was the highest for the month since 8,317 homes were sold in 2007. Since 1988, March sales have ranged from 4,898 in 2008 to 12,645 in 2004, with an average of 8,812.

“This is the time of year when buying patterns usually start to normalize,” said DataQuick President John Walsh. “And while the changes we’re seeing are incremental, they’re incremental in a positive direction. That said, there’s a long way to go.”

The median price paid for all new and resale houses and condos sold in the Bay Area in March totaled $358,000, a 10.2% increase from $325,000 in February, but down 0.6% from $360,000 in March 2011.

To put these figures in perspective, the low point of the current real estate cycle fell to $290,000 in March 2009, while the peak rose to $665,000 in June/July 2007.

Statewide median home prices posted their first year-over-year increase in 16 months. The California Association of Realtors members said tight inventory (4.1 months) throughout the state and particularly robust sales in the San Francisco Bay area helped fuel the price increase.

“Two of the big issues to watch closely are how fast distressed properties are being put on the market, and the availability of, or lack of availability of, mortgage financing,” DataQuick's Walsh said.

Distressed property sales, according to the firm, made up 44.3% of the resale market, down from 48.8% in February and 48.2% a year earlier.

Foreclosure resales accounted for 24.9% of resales in March, falling from 26.4% in February, and down from 31.5% in the year-ago period. Foreclosure resales averaged about 10% over the past 17 years.

Short sales made up 19.4% of Bay Area resales in the month, down from 22.4% in the previous month and up from 16.7% a year earlier.

by Justin T Hilley Housingwire Apr 20, 2012

California Bay Area home sales hit 5-year high | HousingWire

Illinois home prices halt 20-month price descent | HousingWire

Median home prices in Illinois snapped a 20-month streak of price declines in March, a turnaround coinciding with the start of the spring selling season.

The statewide median price in March came in at $130,000, even with March 2011, according to the Illinois Association of Realtors. It’s the first time the state’s median price hasn’t decreased since June 2010.

“There’s no doubt that these are strong numbers to open the spring selling season,” said IAR President Loretta Alonzo. “To see such good sales numbers, coupled with a measure of price stability is encouraging news no matter what side of a real estate transaction you happen to be on.”

Illinois home sales posted the best March sales numbers since 2007. Home sales (including single-family homes and condominiums) in the month totaled 9,575, expanding 21.1% from 7,904 home sales a year earlier.

In the nine-county Chicago Primary Metropolitan Statistical Area, 6,590 homes were sold in March, up 23.8% from March 2011 sales of 5,323 homes. The median price in March was $151,850 in the Chicago PMSA, down 3.9% compared to a year earlier when it was $158,000.

“Sales volumes are up, time-on-the-market levels are down significantly from a year ago and prices appear to be stabilizing in Illinois although continuing to fall in Chicago,” said Geoffrey Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois.

“Further, in the last month there was a more even spread of sales prices compared to previous months where homes sold for less than $200,000 dominated the market,” Hewings added.

by Justin T Hilley Housingwire Apr 20, 2012

Illinois home prices halt 20-month price descent | HousingWire

Prices Surge for Miami Homes, Condos

For the fourth consecutive month, Miami home prices posted strong gains in March with the median sales price of condominiums surging 46% compared to a year earlier, according to the latest figures from the Miami Association of Realtors.

The median condo price reached $141,700 in March while the median sales price of single family homes rose 13% to $180,000.
‘The fact that Miami home prices have significantly increased for four consecutive months indicates prices have bottomed and have caught up with sales levels,’ said Martha Pomares, 2012 chairman of the board of the Miami Association of Realtors.

‘We expect this trend to continue, as Miami increasingly attracts international buyers and investors, second and vacation home buyers, and migrating US residents,’ she added.

Statewide median sales prices in March increased 20.8% to $105,000 for condominiums and 10.3% to $139,000 for single family homes, according to the Florida Realtors Industry Data and Analysis department. The national median existing-home price for all housing types was $163,800 in March, a 2.5% increase from March 2011.

In March, the average sales price for single family homes in Miami-Dade County increased 21.8% from $279,608 in 2011 to $340,634 in 2012. The average sales prices for condominiums jumped 23% from $212,616 to $261,523.

Sales of existing homes decreased but remain at historically high levels. The sales of existing single family homes in Miami-Dade decreased 12% in March, from 1,039 to 919, compared to record sales levels March 2011. Sales of condominiums were down 10.1% from 1,542 to 1,387, compared to March 2011.

Statewide sales of existing single family homes totalled 18,370 in March 2012, down 5.7% compared to a year ago. Statewide condominium sales totalled 10,012, down 12% from those sold in March 2011.

Nationally, sales of existing single family homes, town homes, condominiums, and co-ops decreased 2.6% from February but were 5.2% higher than they were in March 2011, according to the National Association of Realtors (NAR).

‘The Miami residential real estate market saw record demand that resulted in an all-time record for home sales. This consistent demand coupled with fewer distressed properties being transacted has logically resulted in notable price appreciation unlike anywhere else in the US,’ said Miami Association of Realtors residential president Patricia Delinois.

From March 2011, the inventory of residential listings in Miami-Dade County has decreased 34% from 18,883 to 12,379 in March 2012. Compared to the previous month, the total inventory of homes dropped 5.1%. Total housing inventory nationally declined 1.3% at the end of March but is 21.8% below a year ago.

Strong demand for bank owned (REO) properties and improved processing of short sales has resulted in rapid absorption of distressed listings and contributed to price appreciation. In March, 49% of all closed residential sales in Miami-Dade County were distressed, including REOs and short sales, compared to 52% in March 2011 and 54% the previous month. Contrary to a year ago, there are now more short sales being transacted than REOs.

In Miami-Dade County, 65% of total closed sales in March were all cash sales, compared to 66% a year earlier. Cash sales accounted for 47% of single family sales and 79% of condominium closings. Nearly 90% of international buyers in Florida purchase properties all cash.

Nationally, all cash sales were 32% of transactions in March, reflecting the stronger presence of international buyers in the Miami real estate market.

by Propertywire Apr 23, 2012

Prices Surge for Miami Homes, Condos

Moody's predicts tougher times for some homebuilders | HousingWire

Homebuilders with good liquidity can expect double-digit growth rates in 2012.

Not that the housing market is particularly robust, but larger companies are taking market share from less-prepared homebuilders, according to a report from Moody's Investors Service.

Homebuilders MDC Holdings ($26.07 0.43%), Toll Brothers ($23.50 0.44%), D.R. Horton ($15.66 0.6%) and Lennar ($25.55 0.83%) will likely grow at a rate above the 7% expectation Moody's holds for the industry. Hovnanian Enterprises ($1.92 0.0405%), Beazer Homes ($2.79 0.06%) and Orleans Homebuilders could struggle, the report states.

"Given recent builder commentary, we believe builders implementing pricing actions through a combination of price increases and incentive reductions can emerge as one of the single most important trends this earnings season," said Stephen Kim, homebuilder analyst at Barclays Capital.

The outlook for homebuilding remains stable, with revenue set to continue to grow on stronger deliveries during the next 12 to 18 months. Increased foreclosure rates will grow supply and depress home prices, on the downside.

"Although homebuilder revenues are expected to rise by more than 10% in 2012 on the back of bigger volumes, Moody's still maintains a stable outlook," said Moody's Credit Analyst Joseph Snider. "Pressures from a rise in foreclosures and declining house prices will dampen homebuilder operating profits even as homebuilders sell more units."

Housing starts dropped 5.8% in March from February, according to the Commerce Department, but rose 10.3% from a year earlier. Building permits also jumped 4.5% month-to-month.

by Jacob Gaffney Housingwire Apr 20, 2012

Moody's predicts tougher times for some homebuilders | HousingWire

Friday, April 20, 2012

Pace of short sales increases

Short sales outnumbered foreclosure sales in 12 states in January, indicating that more homeowners are finding an easier way out of a distressed home loan.

Short sales -- which occur when a lender agrees to a home sale for less than what's owed -- were up 33(PERCENT) in January year-over-year, and preliminary February numbers also look strong, according to market researcher RealtyTrac.

Its data underscore lenders' increased willingness to do short sales, which tend to harm neighborhoods less than foreclosures. Homeowners also may regain eligibility for a new mortgage sooner than those who go through foreclosure.

More short sales "is mostly a good thing," says Ira Rheingold, of the National Association of Consumer Advocates. One concern is that homeowners may have to short sell after being denied loan modifications that would have enabled them to stay in homes, he says.

RealtyTrac says foreclosure sales, which occur after a bank has repossessed a property, still outnumber short sales nationwide but the gap is closing.

Earlier this week, Bloomberg News reported that data from mortgage tracker Lender Processing Services show short sales surpassed foreclosures in January for the first time.

RealtyTrac's data shows that occurred in key states at the forefront of the housing downturn, including California, Arizona, Florida and nine others.

Lenders are pricing short sales more aggressively, RealtyTrac adds. In January, the average short sale price was 10(PERCENT) lower than a year earlier, exceeding the drop in U.S. home prices.

Some mortgage servicers started pursuing short sales more aggressively months ago. Bank of America says it did 107,000 short sales last year, up from 92,000 in 2010 and double the 2009 volume.

New measures are also likely to boost short sales.

Freddie Mac and Fannie Mae, which own or guarantee 60(PERCENT) of home loans, will soon require lenders to decide short sale offers within 60 days. Realtors have complained that short sale offers often linger. The recent $25 billion mortgage settlement also encourages short sales.

New rules have slowed foreclosures in many states, increasing short sales, says Florida foreclosure defense attorney Roy Oppenheim.

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

Pace of short sales increases

Proposed Solis property slated for trustee sale

Solis project
The proposed Solis project (formerly Waterview) on Camelback Road east of Scottsdale Road.

A vacant downtown Scottsdale property that was cleared for a luxury hotel and condominiums is scheduled for a trustee sale next week.

A development group headed by Mark Madkour of Scottsdale Canal Development had plans to build the 240-room Solis Scottsdale hotel and 140 condominiums on the 10.57-acre property.

But the lender foreclosed on the property and Scottsdale Canal Development filed for Chapter 11 bankruptcy last fall.

The site northeast of Scottsdale and Camelback roads and east of the Arizona Canal has been vacant for nearly three years. Madkour's group tore down aging apartments along 73rd Street to prepare the property for development.

Madkour said Scottsdale Canal Development might bid at the trustee sale.

"We still feel we are the best one to move forward with this project," he said. "There's been interest in the northern portion for multifamily development but that doesn't help the situation."

Scottsdale Canal Development had an ambitious $600 million project pegged for the site with a 72-foot hotel, underground parking, six condo buildings, walking paths and two bridges over the canal. The company also planned to move a Salt River Project electrical substation from the site to a spot northeast of 68th Street and Indian School Road.

Most of the opposition centered on relocation of the substation.

Vacant site an eyesore

Tony Viti, who lives north of the site in Villa Monterey Unit 1, said he hopes the property gets developed but he is not sure he will ever see it.

"It doesn't look good," he said. "It's just sitting there with some graffiti on the fences."

Still, the vacant property is an improvement over the apartments that had been on the site, said Viti, who is vice president of the Villa Monterey Unit 1 homeowners association.

"We had all kinds of people walking through our neighborhood," Viti said. "We had guys sleeping back by the canal."

Investors hesitant to buy in

Scottsdale Canal Development defaulted on a series of loans for the project.

Boulder Capital is owed more than $12 million, according to U.S. Bankruptcy Court records.

Madkour said he is trying to line up other investors for the project.

"We have three strong candidates that could come in and help us with a joint venture," he said.

"It's been extremely challenging," Madkour said. "We didn't walk away because we really believe in the project...I firmly believe in the location."

Madkour said he has been trying to lure investors over the past two years but they are hesitant.

"Arizona is just so tarnished by this imploded real-estate market," he said. "It really is on a black list for some people."

by Peter Corbett - Apr. 19, 2012 12:29 PM The Republic |

Proposed Solis property slated for trustee sale

Apartments to replace vacant medical offices in Scottsdale

A vacant medical plaza is set to be demolished to make way for a 264-unit apartment complex northwest of Scottsdale Road and Lincoln Drive.

In January, the Scottsdale City Council approved a zoning change to allow the mixed-use development, named Broadstone on Lincoln. The Development Review Board this month approved the site plan, architecture and design of the complex.

Bryan Cluff, project coordinator for the city, said this will be one of the first multifamily complexes under construction in Scottsdale.

"The only other one I think may be ahead of it would be Optima Sonoran Village on Camelback Road," he said. "They're moving forward as well. Optima Sonoran Village does have (construction) permits for Phase 1 and that portion of the project is under construction."

Broadstone on Lincoln is among 18 apartment projects that would add about 5,700 apartments citywide.

The property is owned by Cam-8 LLC and the developer is Alliance Residential Holdings. The plan calls for multilevel apartment buildings and one story of retail along Scottsdale Road.

The apartment complex includes six buildings totaling 225,562 square feet on 5.3 acres. The overall project is 7.5 acres. The site of the future Ritz-Carlton is just west of the property in Paradise Valley.

The development excludes the 48,000-square-foot lot at Scottsdale and Lincoln, which houses two separate commercial office buildings.

The property was zoned for commercial use in the early 1970s and was developed with multiple office buildings, which now are vacant and deteriorating.

The developer hasn't yet submitted construction documents to obtain construction permits for the apartment complex, Cluff said.

Once the existing buildings have been demolished, construction will begin on the new apartment buildings, said Jason Morris, a zoning attorney representing the project.

"We're moving on to construction drawings and we're doing that right now," he said. "Construction is to begin later this year. It will be built all at once. We will open while construction is still occurring. All of the units will be phased in."

The apartment complex will be set back from Scottsdale Road,

The first units should be ready for occupancy in either the first or second quarter of 2013, Morris said. The complex will have luxury units supported by an underground parking structure, he said.

Building heights will be greater just west of Scottsdale Road, while heights will be lowest on the north side of the property, according to the Development Review Board application. The maximum building height will be 48 feet.

This will be the first multifamily residential development in the immediate area, Morris said. The location is intended to attract a "social" resident who frequents area retail, restaurants and other development.

The retail portion of the project, two one-story buildings along Scottsdale Road, will be under a separate Development Review Board application, he said.

"The retail won't take as long to build as the residential, so it's very possible that it could come out of the ground together with the residential," Morris said.

Nearby residents expressed concern to the council about the complex this year, saying it was too dense and would increase traffic congestion in the area.

"I think we're able to communicate answers to the majority of their concerns," Morris said.

by Edward Gately - Apr. 20, 2012 09:44 AM The Republic |

Apartments to replace vacant medical offices in Scottsdale

Scottsdale City Council clears way for beach club

Aerial view of Triyar Entertainment's Scottsdale Beach Club.
Triyar Entertainment Aerial view of Triyar Entertainment's Scottsdale Beach Club.

The Scottsdale City Council this week cleared the way for development of a new beach club in the city's entertainment district.

Two applications related to the proposal submitted by property owner Shawn Yari gained council approval Tuesday despite initial objections from other businesses in the area.

Two nearby property owners -- PS Investment LLC and Shoeman LLC -- had filed legal protests to force a 6-1 supermajority council vote for approval of the applications.

However, both protests were dropped before the council's meeting, which meant the council could approve the applications with a simple majority.

"Shoeman rescinded their protest," said Tim Curtis, city planning director. "They said they spoke with the applicant and were convinced that this was a good project. PS didn't meet the land area and location requirements for a legal protest."

Yari plans to develop Scottsdale Retail Plaza on the block that now houses Myst nightclub on Shoeman Lane and Suede restaurant/bar on Indian Plaza.

The council approved applications to rezone two strips of land within the site from parking to commercial use, and to abandon a public alley right-of-way to remove one of two alleys on the site.

Demolition of the existing buildings, including Myst and Suede nightclubs, could begin within a few weeks, said David Leibowitz,Yari's spokesman.

"We're trying to meet an end-of-the-year deadline (for completion)," he said.

The complex will include an indoor/outdoor pool club in the center, a separate building with restaurant and bar space on the western side, and a three-tenant building intended for restaurant and bar use on the eastern side. The complex also could include some retail space.

The complex will encompass an entire block with the exception of the southwestern corner, which now houses the Swiss Consulate.

Councilman Bob Littlefield was the only council member to vote against the applications. Councilman Ron McCullagh was absent.

Adding more bars to an already crowded bar district doesn't qualify as economic development, Littlefield said.

"How about we crack down on the problem bars and get rid of them?" he said.

Mayor Jim Lane and all other council members said the project will be positive for the entertainment district and downtown.

Vice Mayor Linda Milhaven said she's "thrilled" about the project, that it will be better than what's there now and that it will attract a different clientele.

Jason Morris, a zoning attorney representing Yari's Triyar Entertainment, said the complex will be a "better version of what exists today" and will attract Scottsdale's "premiere clientele."

No other zoning change is required because all of the proposed uses already are permitted on the site, he said.

"We are not talking, despite all the rhetoric, about some vast change," he said.

But critics of the area's bar scene and problems associated with weekend crowds said the project will only aggravate the situation.

Bill Crawford, president of the Association to Preserve Downtown Scottsdale's Quality of Life, said this project will "smash" any hope that nearby residents will have any peace and quiet. He has been an outspoken critic of Yari and his developments.

"Why won't this council listen to the voters and protect our quality of life?" he said. "This is the deal that's going to change everything. It's going to increase our parking problem, it's going to punish the neighbors with noise and it's going to increase crime."

However, Casey Cutter, who also lives nearby, said the entertainment district is important to the city because it "brings in young professionals." He said noise emanating from the district is not an issue for him.

"I sleep very soundly at night," he said.

by Edward Gately - Apr. 19, 2012 08:27 AM The Republic |

Scottsdale City Council clears way for beach club

Thursday, April 19, 2012

U.S. housing market boosted by jobs, higher rents

WASHINGTON - It's been a long time since the market for new homes has looked this good.

Rising rents and a healthier job market are inspiring more Americans to consider buying.

Builders are responding to the demand by laying plans for more homes this year than at any other point in past 3 1 / 2years.

And banks are helping both by approving more loans.

All that points to a better year for the housing market, though a full recovery could take several years.

"We're doing so much more business than we have in years," said Ed Kopal, who runs a construction company in East Texas and has seen his business more than double this year compared with 2011.

Others, too, foresee more enthusiasm among buyers after four sluggish years.

Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday. The pace hasn't been that high since September 2008.

Of those requested, 462,000 permits were to build single-family homes. That's 12 percent more than just six months ago. Still, the figure remains far below the 800,000 permits a year that signify a stable new-home market.

Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent, to 285,000 permits. A healthy number is closer to 400,000 a year.

Rents are rising, which has spurred construction for both kinds of homes.

In Philadelphia, rents have increased nearly 15 percent over the past year through February, while home values have dropped 5.4 percent, according to real estate website Zillow.

Minneapolis rents are up nearly 10 percent; home prices are down nearly 7 percent. Baltimore has seen rents rise 8.6 percent and home values drop 4 percent.

In Chicago, median rents in the past 12 months have risen 8.6 percent, or more than $100 a month. In the same period, the median home price has fallen 11 percent, to just $154,600.

So while apartment developers are chasing higher rents, renters are seeing more incentive to buy homes. A survey of homebuilders has shown an increasing amount of foot traffic at open houses across the country since September.

Kennon Reinard and her husband were among those who felt the time was right. The couple has rented a two-bedroom apartment in Chicago for the past six years. Over the past month, they looked at 14 houses before making an offer of nearly $260,000 on a four-bedroom home on the Northwest side of the city.

"We've always wanted a house, but we never thought we could afford one," said Kennon Reinard, 33. "But we started noticing friends buying houses last summer and, when we checked it out, we realized we could own a whole home with a backyard without paying that much more than what we're paying in rent."

The Reinards and other potential homebuyers have another reason to feel good about trading rent payments for a mortgage: The job market has strengthened since last summer.

The unemployment rate has fallen from 9.1 percent in August to 8.2 percent last month. Employers have added an average of 212,000 a month from January through March.

More jobs and a better outlook among buyers could also make 2012 the first year since the housing bubble began to burst in 2006 that construction adds to growth -- rather than detracts.

Record-low mortgage rates have helped persuade buyers. The average rate on a 30-year fixed-rate loan is just above the 3.87 percent level reached in February -- the lowest since long-term mortgages were first offered in the 1950s.

Banks are also seeing more qualified buyers apply for loans. Two of the nation's biggest banks -- JPMorgan Chase and Wells Fargo -- approved more mortgage applications in the first-quarter, based on their recent earnings reports.

"The ones buying now are older, they've saved up for a while, they have good jobs, they are not risky," said Karen Mayfield, senior vice president of Bank of the West, a national bank lender based in San Francisco.

Among the most basic requirements needed for homebuyers: good FICO credit scores typically above 700, substantial down payments, stable job histories and thorough documentation.

The Reinards had been socking away a portion of their paychecks for all the years they rented and both have solid credit histories. They are coming to their closing in May with a down payment of more than $25,000.

"We feel very safe in our jobs," Reinard said. "We've been pretty financially responsible so we got thumbs up after all the checks."

by Derek Kravitz - Apr. 17, 2012 01:55 PM AP Economics Writer

U.S. housing market boosted by jobs, higher rents

Phoenix Housing Market Rising

Saturday, April 14, 2012

Homebuilders busy again in corners of metro Phoenix

Homebuilding, metro Phoenix's biggest industry before the housing crash, is on the rise again.

Unlike in the past, this burst in the region's homebuilding isn't being driven by buyers going farther and farther out to find a house they can afford or investors looking for bargains.

In some areas of metro Phoenix, including Chandler and Gilbert in the southeast and Peoria and Surprise in the northwest, short-sale home prices are climbing so high due to multiple offers that resale home prices are rivaling new-home costs.

At the same time, builders are able to put up new houses for costs that let them compete with foreclosure-home prices. Many picked up empty lots in prime locations for bargain prices during the crash and can keep construction costs low.

The results: Among buyers, a growing number who have been outbid multiple times on short sales and foreclosures are opting to purchase new houses instead. And among builders, who have seen several dismal years of slow sales and deep losses, some are now reporting profits or at least their highest monthly sales in years.

Amy Baum had been outbid on seven short sales on homes in Chandler and Gilbert when her real-estate agent persuaded her to look at new homes in Gilbert.

Baum, an occupational nurse who treats employees at Intel, wanted to be near her job and her parents, who live in the southeast Valley.

"The prices on short sales were being bid up so high, I would have ended up paying $215,000 for a home that would take another $15,000 to fix up," said Baum. "I could get a new house for $215,000 and not have to worry about fighting some other buyer for it or renovating it."

New-home recovery

New-home sales and permits to build homes are up significantly in metro Phoenix from last year, due mostly to buyers like Baum.

"There's no question the new home market is finally on its way back," said RL Brown, publisher of the "Phoenix Housing Market Letter," a monthly newsletter tracking homebuilding. "But no one knows whether it will come back rip-roaring like the boom of 2006 or a more normal market like 2003."

For the first two months of this year, new home permits are up 84 percent compared with the same period in 2011, but the overall numbers are still low by metro Phoenix standards.

In January and February, there were 1,460 single-family permits issued in the region. In 2003, there were about 2,500 permits issued a month. In 2006, new homes went up at an average rate of 5,300 a month.

New-home sales are up 34 percent, but again, there were only 1,099 during the first two months of the year.

Several builders are reporting March was their best month for sales in years, and the uptick in the new-home market is likely to continue for at least a few more months.

Homebuilder Taylor Morrison sold more than 100 metro Phoenix houses in three weeks, making March its best year for sales in four years, said Pierrette Tierney, the company's vice president of sales and marketing.

She said buyers who have lost bidding wars on short-sale and foreclosure homes are Taylor Morrison's biggest group of buyers now.

"People call after looking at one of our houses and say, "If I write you a deposit check right now, can I get that lot?' " Tierney said.

"They are so happy when we tell them yes because they have been turned down so many times trying to buy existing houses. Of course, we are thrilled, too."

Location, location

Not all areas of metro Phoenix's new-home market are drawing buyers. The areas with the most homes being built are also the areas with the fewest existing homes for sale. The fringe parts of the Valley, the communities farthest out, continue to struggle.

"Real-estate agents are beginning to steer clients to new homes again because, in certain areas, it's the only option for their buyers," said Marcie Jarnagin-Beckham, a sales associate with Meritage's Villages at Val Vista in Gilbert, where Baum purchased her home.

The majority of new homes sold in metro Phoenix during the past year have been in Gilbert and Chandler. Buyers are drawn to those areas for the schools, jobs and shopping.

Other popular areas are Peoria and Surprise in the northwest. Several large employers have moved into the areas, and the expansion of Loop 303 has made commutes easier.

"It's all about location for homebuyers now," said Brown. "People will no longer drive until they qualify to buy a house."

Perry Dion has been trying to buy a house in Peoria for the past year. He has bid on dozens of short sales and even gone to the foreclosure auctions in front of the Maricopa County Courthouse.

"I have been going month-to-month on my apartment paying more because I kept thinking one of my offers would be accepted," he said. "But recently, I realized I have saved enough money that I can buy a new home in the area."

He's been checking out new subdivisions in Peoria and north Phoenix for the past few weekends and hopes to sign a contract this month.

Dion wants to sign a deal soon because he is already seeing some slight increases in the prices of the new homes he's checked out.

Market conditions

There's a shortage of home lots in the areas of the Valley where most new houses are being built. That, along with demand for more buyers, could push up overall new home prices this year, say real-estate analysts.

"I don't think any homebuilders are jumping up and down yet, but it feels good to be selling homes again," said Carl Mulac, president of AV Homes and chairman of the Home Builders Association of Central Arizona. "I am just concerned about how long this window of opportunity will last."

Some builders are expected to try to draw buyers in other parts of the Valley where they still have inexpensive lots. But there's no guarantee that strategy will work.

Building costs could rise if new-home demand continues to increase.

Subcontractors had to cut what they charged builders to survive the downturn, and most are ready to raise their fees as soon as they can, said Brown. Those higher fees will push up new-home prices.

And bargains on empty lots in foreclosure are mostly gone, so builders' land costs will continue to rise.

"My biggest concern for the market," Mulac said, "is whether the price appreciation of new homes can outpace the cost appreciation builders will soon be facing."


Single-family permits issued in metro Phoenix

1,460In January and February

2,500Per month in 2003

5,300Per month in 2006

by Catherine Reagor - Apr. 13, 2012 11:07 PM The Republic |

Homebuilders busy again in corners of metro Phoenix

Westcor payment on lease due soon

Westcor is facing a payment deadline of April 30 on its lease of state trust land for a long-planned shopping mall at Scottsdale Road and Loop 101.

The Valley mall developer has deferred lease payments to the Arizona State Land Department for the 112-acre mall site.

Westcor owes $2.2 million to the state agency by April 30 on lease payments for last year and this year, said Vanessa Hickman, deputy state land commissioner.

The company was under extension last year until Dec. 30 and was granted another four-month extension.

Westcor officials did not return calls seeking comment.

Late last year, Scott Nelson, Westcor vice president of development, said the company was evaluating whether to retain a 99-year lease for the site northwest of the freeway interchange in Phoenix.

Westcor was the winning bidder for the land lease in April 2008, agreeing to pay $32 million for use of the land and invest $67 million for improvements of utilities, roads and drainage.

Westcor made $1.26 million in lease payments through 2010 and deferred its January 2011 payment of $960,000 to Dec. 30. With interest, that payment is $1.1 million. This year's payment is $1.04 million.

Last spring, Macerich, the parent company of Westcor, announced a partnership with AWE Talisman Co., of Coral Gables, Fla., to build the Fashion Outlets of Scottsdale at Loop 101 and Scottsdale Road.

But two other Valley outlet shopping centers have been launched since then.

Tanger, of Greensboro, N.C., broke ground a month ago on an outlet mall at Glendale's Westgate City Center.

Plus, the Indianapolis-based Simon Property Group on March 28 started building an outlet mall at the Gila River Indian Community's Wild Horse Pass development near Interstate 10.

The Arizona State Land Department has taken back a dozen parcels of land since the real-estate market cratered in 2008.

by Peter Corbett - Apr. 13, 2012 07:19 PM The Republic |

Westcor payment on lease due soon

Reagor: New DMB head rosy on housing

DMB Associates promoted Charley Freericks to president this week. Here are some of the Arizona real-estate veteran's opinions on the housing market and DMB's future.

Question: How would you describe metro Phoenix's current housing market? Economy?

Answer: There is significant anecdotal evidence for the beginning of a recovery. In housing, in retail, office and in employment. I look for it in discretionary-spending places -- if restaurants have wait lists, if at sporting events seats are filled and there are lines at concessions. DMB's communities and commercial centers tell the same story: Month to month and year over year, the negative trends have reversed, and the numbers are going the right direction. Consumer confidence is returning, and that is when recoveries get traction.

Q: What will Eastmark do for Mesa? Verrado for West Valley?

A: Eastmark is something very special. This new DMB community will help redefine the Gateway area. In the past, we have been market- and place-makers with communities such as DC Ranch, Superstition Springs and Verrado. But with Eastmark, we are reshaping and enhancing an already established area and serving as a catalyst for new activity in this center of regional importance.

Remember, this area was formerly Williams Air Force Base, and following its closure, it was repurposed as the regional reliever Phoenix-Mesa Gateway Airport. The combination of ASU Polytechnic, the aerospace-aviation employers and the airport itself has produced a significant, and emerging, center of commerce.

Verrado, another former desert proving ground, continues to evolve and grow as our long-term vision is realized. Banner has their new medical facility under construction, retail and offices are filled, and housing is in recovery. Verrado has performed better than many areas in the West Valley. It's a testament to DMB's community life and neighbor engagement. Homebuyers in this market want a place to call home and invest in their community. We are also under way on attracting employers to the region so the vision for a true live-work-educate-play community can be realized.

Q: What's next for development in Arizona for DMB?

A: Today, we have one of the finest portfolios of large-scale communities and mixed-use commercial properties in the West. DMB is fortunate to have great sponsorship and commitment for the long term. We have been selective in order to achieve our goal of creating the country's finest living environments. For now, we are working to capture every housing and employment opportunity that will help us achieve the vision for our communities.

Q: When do you think metro Phoenix's homebuilding market will recover?

A: The recovery is starting here now. It's tempting, but impossible, to forecast the bottom or top of a market. But here is what I know about recoveries: First you crawl, then you walk, then you run. While we may not be running right away, we are in recovery.

One of our primary differentiators is thinking about how people will live in our communities, and we make every effort to create places that will live well over time. As we move forward, buyers are again looking for how they want to live and where they can be proud of their home, neighborhood and community. People want to live where they can be engaged, involved and connected. Our communities are recovering faster because people value places with stability and engagement.

Q: And how often do people misspell or mispronounce your last name?

A: Wow! Both my first name and last name are hard to spell, so one or the other is always wrong. "Freericks" came over from Germany unchanged at Ellis Island. The only benefit is I can tell right away if I know the person addressing me.

by Catherine Reagor - Apr. 13, 2012 04:11 PM The Arizona Republic |

Reagor: New DMB head rosy on housing

Thursday, April 12, 2012

Westcor's parent sells its stakes in 3 centers

Macerich Co., the parent of Phoenix-area mall developer Westcor, has sold its stakes in three East Valley power centers in transactions valued at more than $100 million.

Cole Real Estate Investments, a Phoenix-based real-estate investment trust, paid $54.8 million for Macerich's wholly owned 284,500-square-foot SanTan Marketplace power center in Gilbert.

Cole also teamed with RED Development to buy Macerich's 50 percent stakes in the Chandler Festival and Chandler Village Center power centers for $31 million and $14.8 million, respectively.

The remaining 50 percent of the two Chandler centers is held by the East Valley's Propstra family.

Chandler Festival contains 365,000 square feet of retail space and Chandler Village Center, 130,000 square feet.

Santa Monica, Calif.-based Macerich, a REIT that acquired the Valley's dominant mall developer, Westcor, in 2002, has been selling off non-core shopping centers to concentrate on its regional malls. Borgata of Scottsdale and Hilton Village in Scottsdale are among other Macerich shopping centers thought to be on the market.

RED Development Managing Partner Mike Ebert said the Chandler acquisitions were the first under a Cole/RED joint venture formed last year to take advantage of opportunities in the retail real-estate market. He said the venture has another property under contract but declined to give its name.

"We feel it's perfect time to buy," Ebert said. "Interest rates are low, prices are pretty good, and we are at the beginning of economic recovery."

Cole Executive Vice President Thomas Roberts said all three centers are anchored by nationally recognized retailers and benefit from traffic from nearby regional malls.

"These power centers are all primary retail destinations in the southeast Phoenix trade area," he said.

RED Development, based in Phoenix, will handle leasing at all three properties.

In the past year, RED, which is developing the 1.1 million-square-foot CityScape in downtown Phoenix, has acquired the Aspen Place at the Sawmill retail enter in Flagstaff and the Shops at Prescott Gateway development in Prescott. The company also has acquired an interest in the Town & Country shopping center in central Phoenix and took over management of the CityCenter of CityNorth development in north Phoenix.

"We are trying to move up our growth through acquisitions," Ebert said.

Cole, which holds more than $10 billion in commercial real estate in six non-traded public real-estate investment trusts, also has been in an acquisition mode. The 33-year-old company bought $2.5 billion in real estate in 2011 and plans to spend $3 billion on properties in 2012.

Recent acquisitions include the Greenway Commons power center in Houston and the Fairlane Green power center in Detroit.

by Max Jarman - Apr. 11, 2012 06:25 PM The Republic |

Westcor's parent sells its stakes in 3 centers

Wednesday, April 11, 2012

Scottsdale's SkySong set to lease two new buildings

ASU Scottsdale Innovation Center.
The Skysong shade structure covers the central plaza at SkySong, the ASU Scottsdale Innovation Center.

SkySong, the Arizona State University Scottsdale Innovation Center, this week kicks off pre-leasing for two office buildings that will be the only sizable office construction this year in south Scottsdale.

SkySong now includes two multistory office buildings totaling about 300,000 square feet. The buildings are about 98 percent occupied and house a workforce of more than 1,000 people.

Two new office buildings, totaling about 290,000 square feet, are being planned west of the existing buildings and east of Scottsdale Road. The construction cost of the four-story buildings, SkySong III and IV, is $60 million.

The mission of the mixed-use, 42-acre development, at the southeastern corner of Scottsdale and McDowell roads, is to be a job creator and entrepreneurial hub. Plaza Cos. is the developer of the project in partnership with the ASU Foundation and USAA Real Estate Co.

"With that kind of focus, this project has experienced an above-market leasing velocity because this is where we believe companies want to come," said Sharon Harper, president and CEO of Plaza Cos. "We want to continue the development of the project in a reasonable fashion."

Scottsdale's Development Review Board is expected to consider the project at its May 17 meeting. Construction could begin on the first building when enough space has been pre-leased, she said. The financing is in place, she said.

"We're still in a very slow economic environment in Arizona, although we believe there are some markers for change, but they will come slowly and we will be cautious," Harper said.

The partners stand ready to respond with still more buildings for firms looking for 500,000 square feet or more to locate in Scottsdale, she said. The foundation has agreed to build 1.2 million square feet of office space in phases over 24 years.

"We're competing with Austin, Texas, and San Francisco, and some of the cities that are considered the major tech centers," said Nate Summer, ASU's assistant vice president of real-estate and development. "We have now an offering that's comparable or exceeds anything that they can put forward, and that's a really unique and special capacity for the city of Scottsdale to have."

The Valley's office market, including Scottsdale, still is suffering from the recession, with about 25 percent of office space vacant, said Craig Coppola, founding principal of Lee & Associates Arizona. The firm handles leasing for SkySong.

The office market literally "fell off a cliff" in 2008 and has shown very little improvement, he said. However, SkySong has bucked the trend by continuing to lease space despite the sluggish market, he said.

Before the recession, the office market was gaining more than 1 million square feet of office occupancy each year, Coppola said. The market was at a standstill last year after losing 1.2 million square feet of occupied space in 2010, he said.

"From our perspective, the value proposition of SkySong is obviously very successful," Coppola said. "The environment at SkySong is completely unique to the traditional office market with the ASU relationship, and so tenants have obviously leased more space there."

More than 70 companies are housed at SkySong and the ASU SkySong incubator. Those include high-tech and non-high-tech companies, and the complex has become a magnet for education-related firms, Coppola said.

One company has signed a lease to occupy one floor of the first new building, and "we need one more floor" leased to begin construction, he said.

"We have some activity in place, a short list of highly interested tenants," Coppola said. "But unfortunately we do need pre-leasing like everybody else in town, and we're looking for somebody to sign on the dotted line and then we can get going."

Jerry Noble, of CBRE Brokerage Service, said demand is growing for larger office space, as much as 50,000 square feet. Most of the vacancies are in smaller spaces. That could help new complexes that get financing to start construction, he said.

"For the first time in several years, users are looking for 50,000 square feet or more ... on the east side of (the Valley)," he said. "They don't have as many options as they once had and that trend is going to continue."

Overall, the office market is picking up, with more leasing activity taking place, Noble said. Also, rents are starting to increase, particularly in south Scottsdale, because of constraints on bigger and better office space, he said.

Beyond its 1,000-plus workforce, SkySong continues to bring in people from around the world, Summer said. Next week, SkySong is hosting the Education Innovation Summit, he said.

"We are bringing in 500 people who are CEOs and senior leadership from well over 100 very significant education-technology companies," he said. "These are international companies, companies from all over the country and local companies. It puts Scottsdale on the map, at the nexus of education and educational technologies."

During the recession, when other companies were contracting and disbanding, companies at SkySong were growing and the trend continues today, Summer said.

"We've had companies start with one person and be at 13,000 square feet of space with 45 people here and 100 people in the United States," he said. "We're able to leverage that and talk to more companies and attract more students to the project. It's attracting the kind of technology-development companies ... that might otherwise have not paid attention to ASU and Arizona."

SkySong has become the destination for many events. About 5,000 visitors use space at the complex for events every month, Summer said.

by Edward Gately - Apr. 11, 2012 08:51 AM The Republic |

Scottsdale's SkySong set to lease two new buildings

US gov't proposes new mortgage lending rules

WASHINGTON - The federal government proposed new rules on Tuesday that will give homeowners more ways to avoid foreclosure and get an accurate accounting of their monthly mortgage payments.

Congress mandated changes in the rules covering the mortgage servicing industry in the wake of the 2008 financial crisis.

The Consumer Financial Protection Bureau's proposed rules would require mortgage servicers to give all borrowers standardized monthly statements and warn borrowers about interest rate or insurance change.

The mortgage servicers would also be required to make "good-faith efforts" to contact borrowers at risk of foreclosure and give them options to avoid losing their homes. There are also stipulations for improving record-keeping and providing foreclosure counseling to those who need it.

The agency said it will formally propose the rules this summer and finalize them by January 2013.

"By fixing these root causes of mortgage servicing problems -- and securing transparency and accountability for borrowers -- consumers would have clearer information about their options to keep their homes and would be in a better position to hold servicers accountable for their decisions," Richard Cordray, the agency's director, said during a speech in Washington on Tuesday.

The Consumer Financial Protection Bureau supervises U.S. payday lenders, mortgage companies and private student lenders. It also can write rules to supervise big lending companies and institute fines. Cordray said Tuesday the new rules would be backed up with "sharp teeth."

Nearly 8 million Americans have faced foreclosure since the housing bubble burst in late 2006. Many homeowners have said companies that process mortgages failed to verify information on foreclosure documents. The worst practices, known collectively as "robo-signing," included employees signing documents they hadn't read or using fake signatures to approve foreclosures.

In February, the nation's five largest mortgage lenders agreed to overhaul their mortgage servicing practices and pay $25 billion to U.S. states to help those who lost their homes or face foreclosure.

A mortgage servicer collects payments from the borrower on behalf of a loan's owner and typically handles customer service, escrow accounts, collections, loan modifications and foreclosures. Most borrowers do not choose their mortgage servicers. The owner of a loan frequently is not the original lender, even when the original lender is the servicer.

by DEREK KRAVITZ - Apr. 10, 2012 09:58 AM AP Economics Writer

US gov't proposes new mortgage lending rules

Principal forgiveness gains appeal

Fannie Mae and Freddie Mac could save $1.7 billion if they forgave principal on some distressed mortgages, new analysis show.

The Federal Housing Finance Agency-- which regulates the mortgage giants -- may decide in the next few weeks about whether to use principal forgiveness as a foreclosure prevention tactic, said Edward DeMarco, acting director of the FHFA while speaking Tuesday at the Brookings Institution.

The FHFA, and DeMarco, have come under pressure to allow Freddie and Fannie, which own or guarantee 60% of all home loans, to do principal forgiveness.

FHFA's previous analysis has shown that forgiving mortgage debt is no more effective than other loan modification efforts at reducing home loan defaults -- and could cost taxpayers more money since Freddie and Fannie were placed under government control in 2008.

But new incentives from the Treasury Department may change that, FHFA's preliminary assessment shows. With those, Freddie and Fannie could curb losses by $9.9 billion if almost 700,000 homeowners received a mortgage reduction, FHFA says. That's $1.7 billion more than if those homeowners received principal forbearance -- which means they defer payment on a portion of their loan.

DeMarco cautioned that any principal forgiveness would only help the U.S. housing crisis at the "margin," given that 11 million homeowners owe more on their homes than they're worth, based on CoreLogic estimates.

He also warned that some homeowners may stop paying their mortgages to try get a principal reduction. That could wipe out benefits to Freddie and Fannie. Also, Treasury incentives come from taxpayer funds so they'll still be "on the hook," says Anthony Sanders, real estate finance professor at George Mason University.

Principal reduction "is clearly getting more traction" as a foreclosure prevention tactic, says Laurie Goodman, senior managing director of Amherst Securities. The recent $25 billion mortgage settlement requires loan servicers to do at least $10 billion in principal reduction. That doesn't cover Freddie or Fannie loans.

Principal forgiveness supporters say it'll lead to fewer foreclosures and help stabilize housing prices. FHFA's new analysis -- and DeMarco's discussion of it -- signals that a change is likely, says Ira Rheingold of the National Association of Consumer Advocates.

DeMarco is "under enormous heat from the Obama administration" to do so, Rheingold says.

by Julie Schmit - Apr. 11, 2012 08:08 AM USA Today

Principal forgiveness gains appeal

Monday, April 9, 2012

Restoration plan for Paradise Valley hotel stalls again

Efforts to restore the iconic Mountain Shadows resort in Paradise Valley have stalled once again.

Mountain Shadows has been shuttered since 2004, but hope came to the town in December when a high-profile company made plans for its redevelopment.

Phoenix-based JDM Partners LLC and California-based Crown Realty & Development Inc., developer of the resort, entered into a purchase agreement that month for the property, which is at 56th Street and Lincoln Drive.

However, JDM Partners announced Wednesday -- the day the deal expired -- that it was unable to reach a final agreement with Crown Realty and is no longer under contract for the property.

The company had been in the process of finalizing a conceptual plan to redevelop the resort.

Tom O'Malley, chief operating officer for JDM Partners, said the company had every intention of getting an extension for the purchase agreement and acquiring the property.

He said the town's efforts had nothing to do with the contractual breakdown, but he gave few other details, citing a confidentiality provision in the purchase agreement.

"We worked hard with the seller and did everything we could," he said. "We were really excited about the prospects, but if the opportunity presents itself in the future, we will take a look at it."

Rick Carpinelli, senior vice president of acquisitions and development for Crown Realty, said company officials will meet with the town to discuss redeveloping the property.

Thoughts of the resort's redevelopment had brought high hopes to town officials and residents expecting the rebirth of the beloved Paradise Valley landmark.

Those hopes hinged on the reputation of JDM Partners, co-owned by sports mogul Jerry Colangelo.

JDM's projects include Chase Field, US Airways Center, Comerica Theatre and the remodel of the Wigwam resort in Litchfield Park, which represented the company's first foray into the hospitality industry.

Town Manager Jim Bacon said he is disappointed that JDM wasn't able to complete the purchase, but Bacon is optimistic that Crown Realty will submit a special-use permit to redevelop Mountain Shadows.

"They told us they plan to submit an application," Bacon said.

by Philip Haldiman - Apr. 8, 2012 09:55 PM The Republic |

Restoration plan for Paradise Valley hotel stalls again

Sunday, April 8, 2012

Industrial-property leasing in Valley cools

Following three consecutive quarters in which commercial tenants leased a net total of 6.2 million square feet of warehouse, manufacturing and distribution-center space, leasing activity nearly ground to a halt in the first quarter, according to senior research analyst Pete O'Neil at commercial real-estate firm Colliers International in Phoenix.

Various commercial real-estate firms use slightly different criteria to measure quarterly net absorption, the total leasable space occupied or vacated in a given quarter.

According to Colliers' measurements, just 89,000 square feet of industrial space was absorbed in the first quarter, a far cry from the several millions of square feet absorbed during the previous nine months.

Commercial real-estate firm Lee & Associates in Phoenix also issued a report this week on industrial leasing activity in the first quarter that measured the total net absorption as slightly higher, at about 113,000 square feet.

Still, it was miniscule compared with previous quarters.

Lee & Associates senior research analyst Matt DePinto said talk of speculative development happening this year in the industrial real-estate sector continues despite the relatively slow first-quarter results. Still, it will depend largely on whether leasing activity picks up again over the next few months, he said.

"Right now there are several developers with site plans and fliers, but it's mostly posturing," DePinto said. "We're kind of at the cusp of spec buildings coming back, but it's still iffy."

Colliers analyst O'Neil said it is important to note that net absorption of industrial space has been positive for eight consecutive quarters. Tenants are forecast to become more active during the remainder of the year, he said, just as the pace of absorption accelerated in the last nine months of 2011.

Industrial development has been a bright spot in metro Phoenix's otherwise dismal construction industry during the past two years. Other than industrial projects such as warehouses and distribution centers, only the construction of multifamily housing has seen a significant increase.

More than 3.1 million square feet of industrial-building space was under construction in the first quarter in metro Phoenix, and about 560,000 square feet of new space was completed, according to the Lee & Associates report.

by J. Craig Anderson - Apr. 6, 2012 02:18 PM The Republic |

Industrial-property leasing in Valley cools

Housing takes a few baby steps forward

Naysayers of metro Phoenix's housing-market recovery might be swayed by this:

The median price of an existing home in the region climbed 7 percent during March.

Last month, the median price of a Phoenix-area used home reached $131,000, according the real-estate firm AZBidder.

That's the highest the median for the area has been since June 2010.

A little more positive data. In March, 9,587 houses were sold across the region. That's the highest level since June 2009.

The number of homes for sale continues to shrink.

There are 21,750 houses on the market Valley-wide, according to the Cromford Report.

But that figure includes 7,700 homes that are already under contract for a sale.

Minority bias alleged

The National Fair Housing Alliance investigated nine metro areas, including metro Phoenix, to determine if foreclosure properties in Black and Latino neighborhoods were being maintained and marketed by lenders as well as foreclosures in predominately White neighborhoods. Its report was released earlier this week.

In the Valley, the housing group compared fewer than 200 foreclosure homes in Glendale and Maryvale. The investigation found 40 percent of the bank-owned homes in Maryvale, which it considered predominately Latino, had broken doors.

Only 6 percent of the bank-owned houses that the group checked out in the neighborhood in Glendale, which it considered predominately a White community, had broken doors.

About 73 percent of the foreclosure homes in the west Phoenix community didn't have "for sale" signs.

And 11 percent of those Glendale foreclosure home were missing those signs.

The investigation was a random sampling, and the Housing Alliance would not disclose what ZIP codes the homes it tracked were in or which lenders were the worst offenders.

But the report does address a problem for most major cities with higher foreclosure rates.

The Housing Alliance plans to file complaints with the U.S. Department of Housing and Urban Development in the next week accusing the lenders of violating the nation's Fair Housing Act.

by Catherine Reagor - Apr. 6, 2012 03:31 PM The Republic |

Housing takes a few baby steps forward

Friday, April 6, 2012

Developer seeking state land for 2 Scottsdale auto lots

A developer hopes to acquire more than 29 acres of state trust land for two car dealerships on Scottsdale Road just south of Loop 101.

Diversified Partners of Scottsdale submitted preliminary plans to the city last week for two car lots, with one dealership housed in a 90,000-square-foot, two-story building. A second building is not mentioned in the plans.

The 29.37-acre site southeast of Scottsdale Road and Union Hills Drive is scheduled to be sold at auction at 10:30 a.m. May 15 at the Arizona State Land Department.

The minimum bid is $10.2 million, or $348,051 per acre.

Walt Brown Jr., Diversified Partners CEO, said he expects other bidders for the state land.

"We have been talking to banks, talking to hotels that want to be there," Brown said. "We are trying to work our way through it."

No specific car brand has been identified for the development, he said.

But Diversified's plans submitted to the city include architectural drawings labeled Lexus Scottsdale.

The site is one of the first targeted for development within an area of state trust land called Crossroads East. It includes about 1,000 acres between Scottsdale and Hayden roads from Princess Drive north to the southern edge of Grayhawk.

"If we're successful, we plan to put it in production within a year or year and a half," Brown said. "It sure is great real estate."

The site's proximity to the Loop 101 and nearby shopping centers with great tenants make it an ideal location, he said.

Development will require some major drainage improvements including a channel for storm water set back at least 50 feet from Scottsdale Road, Brown said, adding that its unclear how much the work will cost.

It will be similar to a drainage channel on the west side of Scottsdale Road for a series of car dealerships in Phoenix.

Cadillac dealer owns nearby site

A Lund Cadillac dealership was approved in 2002 for a site northeast of Scottsdale Road and Union Hills Drive.

Lund still owns the land, but its plans, approved by the Scottsdale Development Review Board in 2003, have expired, said Greg Bloemberg, a city planner.

Lund Cadillac did not return calls seeking comment about its plan for the site.

Apartment plans advance
TDI Real Estate Holdings, of Irving, Texas, has submitted plans to the Scottsdale Development Review Board for the second phase of its apartment project at One Scottsdale, northeast of Scottsdale Road and Loop 101.

The project, which surfaced in October, would include 677 apartments on 24 acres at the northeastern edge of the 120-acre One Scottsdale site.

The Henkel North America headquarters, formerly Dial, is the only existing building on the northeastern corner. It was completed in December 2008.

The apartments would be developed in two phases with 388 units in the first phase and 289 in the second phase.

Apartments would range in size from 748 to 1,280 square feet.

TDI previously estimated development costs for the first phase at $65 million.

by Peter Corbett - Apr. 6, 2012 08:48 AM The Republic |

Developer seeking state land for 2 Scottsdale auto lots

Phoenix bankruptcy filings still declining

Metro Phoenix bankruptcies continued their downward trend in March, with the number of filings dropping 26 percent from the same month in 2011. The decline corresponds with an easing of consumer debt pressures nationally, according to a new report.

The 2,074 filings were the highest total so far this year, but March tends to be a busy month, as people use their income-tax refunds to pay attorney fees. The latest tally was well below the 2,813 filings in March 2011 and the 3,063 in March 2010.

Valley bankruptcies have declined, on a year-over-year basis, for 14 consecutive months.

For all of Arizona, filings were down 28 percent from a year earlier and also have decreased for 14 straight months on a year-over-year basis.

Nationally, the 122,118 filings in March were down 17 percent from a year earlier, reported the American Bankruptcy Institute and Eqip Systems.

"With the economic recovery weighed down by the distressed housing market and high unemployment, consumers and business are continuing to cut their debt burdens," ABI executive director Samuel Gerdano said in a statement.

Consumer-debt problems eased across the board in last year's fourth quarter, according to a report released Thursday by the American Bankers Association. Past-due loans fell in all 11 categories tracked by the association, highlighted by a decrease in credit-card delinquencies. Some 3.17 percent of card accounts were 30 days or more overdue, down from 3.25 percent in the third quarter of 2011.

The overall delinquency total for the 11 categories dropped to its lowest level since 2008.

"You can't get a better consumer-credit report card than this," said James Chessen, the ABA's chief economist, in a statement. The last time delinquencies dropped in all 11 categories was the fourth quarter of 2004, Chessen said, though he cautioned that housing-related problems are keeping overall past-due rates elevated. For example, home-equity-loan delinquencies eased just slightly, to 4.08 percent from 4.12 percent.

Mark Winsor, an attorney at the Winsor Law Group in Mesa, said he thinks local bankruptcy filings will remain elevated due to lingering housing pressures. In particular, a lot of borrowers continue to owe money on second mortgages on homes they short sold, yet lenders still have six years to collect on those deficiencies, from the time a loan first went delinquent, he said.

"Some of those lenders might be waiting on the sideline for borrowers to get back onto their feet" before demanding payments, Winsor said.

Also, he said the decrease in local housing inventory means real-estate agents are having a tougher time generating sales, and for that reason more people in that profession might seek bankruptcy protection.

by Russ Wiles - Apr. 5, 2012 06:24 PM The Republic |

Phoenix bankruptcy filings still declining

Huge warehouse planned in Avondale

A large real-estate developer and investment manager are teaming up to build a sprawling, 1 million-square-foot speculative warehouse complex in the West Valley.

The Dallas-based Trammell Crow Co., one of the country's largest commercial-real-estate developers, and Clarion Partners LLC, a New York-based real-estate-investment manager, said they have formed a joint venture to develop the Coldwater Depot Logistics Center at Interstate 10 and 127th Avenue in Avondale. Construction is scheduled to begin this summer, company officials said. They did not provide an estimated cost or completion date, saying the specific plan could change if a large tenant is signed before construction.

The project is further proof that the West Valley has become one of the hottest areas in the Southwest for the development of large warehouse facilities to store, package and ship consumer goods ordered via catalog, phone and the Internet.

Local real-estate analysts said the announcement is significant because Coldwater Depot is a speculative project -- a project for which no tenants have been signed up in advance.

Matt DePinto, senior research analyst at commercial-real-estate firm Lee & Associates in Phoenix, said no developer has committed to building a speculative warehouse and distribution-center project in metro Phoenix since the recession hit hard in 2008.

Other warehouses and distribution centers have been built since then, he said, but only for occupants that had signed long-term lease contracts in advance. Such projects are known as "build to suit."

Speculative development is more risky, DePinto said, because the developer is gambling it will find tenants during or after construction of the facility.

"We're close to being able to take that gamble for the first time in years," he said. "That's huge."

According to the Coldwater Depot developers, an initial phase consisting of 600,000 square feet will be developed, with the capability to expand the building in later phases to 1 million square feet.

The 56-acre site is the only "shovel-ready" industrial-development site available in the Southwest Valley along a major West Coast-East Coast transportation route, the developer said.

The project is ideal for all types of distribution, including warehouse and fulfillment centers, said Jim Mahoney, senior managing director of Trammell Crow's Phoenix office.

"We believe there is opportunity to deliver a product that is geared toward the big-box distribution market, and we look forward to partnering with the city of Avondale to attract corporate and commercial users," Mahoney said.

Industrial development has been a bright spot in metro Phoenix's otherwise dismal construction industry during the past two years. Other than industrial projects such as warehouses and distribution centers, only the construction of multifamily housing has seen a significant increase.

A Lee & Associates report on industrial real-estate market activity in the first quarter shows that the pace of recovery has slowed somewhat but that the vacancy rate for industrial properties in metro Phoenix remains just under 14 percent -- about half the office market's vacancy rate. More than 3.1 million square feet of industrial-building space was under construction in the first quarter in metro Phoenix, and about 560,000 square feet of new space was completed, according to the report.

Clarion Partners asset manager Ryan Collins said his company was emboldened by the fact that companies have absorbed millions of square feet of available warehouse space in metro Phoenix in the past two years.

"With positive net absorption experienced in the metropolitan Phoenix industrial market in 2010 and 2011, and the interest by a number of companies seeking locations in southwest Phoenix, we believe the time is right for the next large distribution development," Collins said.

by J. Craig Anderson - Apr. 5, 2012 06:37 PM The Republic |

Huge warehouse planned in Avondale

Americans Brace for Next Foreclosure Wave - US Business News - CNBC


Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end.

Housing experts say warning signs of a new wave of foreclosures are likely to be replicated across much of the country.

House sales are picking up across most of the country, the plunge in prices is slowing, and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

"We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010," said Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio.

"Last year was an anomaly, and not in a good way," he said.

In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

More conclusive national data is not yet available. But watchdog group, which helped uncover the "robo-signing" scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash.

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America [BAC 9.23 0.03 (+0.33%) ] said it does not comment on data provided by other sources. Wells Fargo [WFC 33.73 -0.15 (-0.44%) ] and Deutsche Bank did not comment.

Housing experts say localized warning signs of a new wave of foreclosures are likely to be replicated across much of the United States.

Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).

RealtyTrac CEO Brandon Moore said the "numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed".

One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products — with high interest rates where banks asked for no money down or no proof of income — is that today it's mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.

"The subprime stuff is long gone," said Michael Redman, founder of "Now the folks being affected are hardworking, everyday Americans struggling because of the economy."

"Hard to Catch Up"

Until December 2010, Daniel Burns, 52, had spent his working life in the trucking industry as a long-haul driver and manager. When daily loads at the small family business where he worked tailed off, he lost his job.

Unable to cover his mortgage, Burns received a grant from a government fund using money repaid from the 2008 bank bailout. That grant is due to expire in early 2013 and Burns is holding out on hopeful comments from his former employer that he might get his job back if the economy recovers.

"If things don't pick up, I will be out on the street," he said, staring from his living room window at two abandoned houses over the road in the middle-class Cleveland suburb of Garfield Heights, the noise of traffic from a nearby Interstate highway filling the street.

Have Refis Run Out?Slideshow: Cities With the Most Underwater MortgagesAs Foreclosure Problems Persist, Fed Seeks More FinesJPMorgan's Dimon: Mortgage Woes Still Hit Earnings
Underscoring the uncertainty of his situation, Burns' cell phone rings and a pre-recorded message announces that his unemployment benefits are due to be cut off in April.

A bit further up the shore of Lake Erie, Cristal Fell, who works night shifts entering data for a trucking company in Toledo, has fallen behind on her mortgage a second time because her ex-husband lost his job and her overtime was cut.

"Once you get behind it's so hard to catch up," she said.

Fell, a mother of four, hopes the economy will gather enough speed to help her avoid any risk of losing her home. Her ex-husband has found a new job and she is getting more overtime, so she hopes she can catch up on her mortgage by the fall.

Burns and Fell are the new face of the U.S. housing crisis: Middle class, suburban or rural with a conventional 30-year fixed mortgage at a reasonable interest rate, but unemployed or underemployed. Although the national unemployment rate has fallen to 8.3 percent from its peak of 10 percent in October 2009, nearly 13 million Americans remain jobless, meaning many are struggling to keep up with their mortgage payments.

Real estate company Zillow [Z 37.08 -0.59 (-1.57%) ] says more than one in four American homeowners were "under water" or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.

"We're seeing more people coming through who have good loans with reasonable interest rates," said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago, which provides foreclosure counseling. "But in many households only one person works now instead of two, or they had their hours cut."

"The answer to the housing crisis now is job creation."

Early Signs of Uptick?

Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.

"The hangover from this crisis will far outlast the party of the boom years," said Zillow chief economist Stan Humphries.

Getting through the remaining foreclosures and dealing with the resulting flood of homes on the market in the wake of the bank settlement is a necessary part of the healing process for the U.S. housing market, he added.

According to leading broker dealer Amherst Securities, some 9.5 million homes are still at risk of default and in February it said it expected to see the uptick in foreclosures start to hit in March and April.

There is other evidence that many of the foreclosures that did not happen in 2011 will happen this year.

A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

"Now the banks have a settlement, foreclosure numbers for 2012 are going to be high," said NEDAP co-director Josh Zinner.

A recent survey by the California Reinvestment Coalition, an umbrella group of nearly 300 non-profit groups in the state, of member agencies found 75 percent of respondents expected increased demand for their foreclosure prevention services in 2012 but more than a third had to scale back services because of funding cuts.

"Funding is a major concern given what our members expect for this year," said associate director Kevin Stein.

All this has non-profits intensifying calls for the Federal Housing Finance Agency to drop its opposition to allowing the government-backed mortgage giants Fannie Mae and Freddie Mac it regulates to reduce principal for underwater homeowners.

Principal reduction involves reducing the amount borrowers owe in order to make a loan modification affordable for struggling homeowners. Republicans and the FHFA oppose principal reduction because of the risk of "moral hazard" — that homeowners who do not need help will seek to abuse largesse and have their mortgages reduced too.

ESOP in Ohio engages in "hits" on Chase branches — they say Chase [JPM 44.34 -0.07 (-0.16%) ] is the least accommodating major bank when it comes to working with struggling homeowners — where they try to hand letters to bank mangers calling on chief executive Jamie Dimon to lobby FHFA head Edward DeMarco for principal reductions. A Chase spokeswoman said the bank has made "extensive efforts" to work with homeowners, helping 775,000 borrowers stay in their homes since early 2009, avoiding foreclosure "more than twice as often as we have had to foreclose." Housing groups like ESOP maintain, as they have throughout the housing crisis, that unless the FHFA embraces widespread principal reduction, many more under water borrowers face losing their homes.

"Until banks engage in meaningful principal reduction as a matter of course," ESOP's Seifert said after a recent protest at a Chase branch in Cleveland, "this crisis will not end."

by Reuters Apr 5, 2012

Americans Brace for Next Foreclosure Wave - US Business News - CNBC

Thursday, April 5, 2012

Homebuilder Sector Up 28%

Home investors bought 1.23 million homes in 2011, a 65 percent jump from 2010. 50 percent of those purchases were either foreclosures or short sales. Lawrence Yun, National Association of Realtors chief economist; Gary Beasley, Wayport Real Estate Group managing director; and CNBC's Courtney Reagan offer insight.

Homebuilder Sector Up 28%

Phoenix-area office market shows life with new projects

Although the metro Phoenix office market continues to struggle, it performed well enough during the first quarter to prompt a handful of office developers to announce plans for new projects, commercial real-estate analysts said.

Overall, the office-leasing market fared better in the first quarter than it had during the same period since 2007, said Chris Jantz, vice president of research at Cassidy Turley BRE Commercial in Phoenix.

It was also the first quarter in years in which a handful of office developers announced new projects, including Hayden Ferry Lakeside III in Tempe and SkySong III in Scottsdale.

Jantz said the Phoenix area's overall office-vacancy rate is still uncomfortably high at 28.2 percent for privately owned, multi-tenant office properties of at least 20,000 square feet.

That's down just a hair from the 28.3 percent vacancy rate reported for the same properties in the first quarter of 2011, he said.

The biggest difference was that overall net absorption -- the total amount of previously vacant space that became occupied by tenants -- was a positive number in the first quarter for the first time in five years, Jantz said.

Still, the total net absorption was only about 91,000 square feet, a relatively small amount compared with the local office market's total vacant space of about 19.2 million square feet.

"Things are certainly improving, but we'll need to see a lot more activity for the vacancy rate to go down significantly," Jantz said.

Commercial-real-estate brokers and analysts generally break down office properties into three categories based on location, age and quality. The categories are, from best to worst, Class A, Class B and Class C.

A Cassidy Turley report issued this week showed that Class A properties had positive absorption of about 132,000 square feet in the first quarter, while Class B properties had negative absorption of nearly 37,000 square feet.

That means Class B properties actually lost tenants overall in the first quarter. Class C office properties also lost overall, about 4,300 square feet.

Jantz said those numbers are further evidence of a trend that has been occurring for the past few years, in which office tenants move from lower-quality properties to nicer and newer ones because prices are so low.

Brokers call it the "flight to quality," he said.

The average asking rent for office properties of all classes was down in the first quarter compared with a year earlier, according to the report.

In the first quarter, the average asking rent was $20.84 per square foot annually, compared with $21.62 per square foot annually in the first quarter of 2011.

Jantz said asking rents are expected to remain flat throughout 2012.

by J. Craig Anderson - Apr. 4, 2012 06:35 PM The Republic |

Phoenix-area office market shows life with new projects

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