Travelers Vote With Their Dollars and Scottsdale Wins!

With hotel capacity near 95 percent, this spring's tourism season in Scottsdale set records.  A single day attendance record was set for the Arabian Horse Show, near record attendance at the Barrett-Jackson auto auction occurred, records for area Cactus League baseball attendance were shattered, and the rowdy crowds at the Waste Management Open enjoyed some of the best weather in years.  There were as many in attendance for the golf tournament on Saturday as most tournaments get in four days. 

Hopefully, this is yet another sign of life in an economy battered by issue after issue over the past five years.  Certainly the Chamber of Commerce weather did not hurt!

For help with the purchase or sale of a property in the Scottsdale/Phoenix market.  Please contact Christopher Cole by visiting DiscoveringScottsdale.com.

Mythbuster: Multitasking

Recent research at the University of California San Francisco has punched a rather large hole into the notion of Multitasking.  According to their research only 2.5% of us can multi-task efficiently while many of us only think we can.  This is how they found out.

By using the cocktail-party effect, they found that we can focus on one conversation at a time due to the auditory cortex boosting some sounds and tuning down others so we can hone in on what we want to hear.  It is the same for our visual cortex. 

Those of us who only think we can multitask are shifting their attention between the tasks rapidly not truly multitasking and not getting the full effect of any of the tasks. 

Does texting and driving come to mind? 

One fun (or not so funny) test of this effect is to have a husband and wife try to have a conversation during a football game.....

It should be noted that this writer does not accept responsibility of the result....

Source material from Wall Street Journal, Elizabeth Bernstein

Phoenix Housing Rising Like a Phoenix

One of the first real estate markets in the nation to fall from its heights is leading the nation back.  After falling 55 percent from its heights in late 2005 thru the end of 2011, Phoenix area home prices are increasing and leading a housing recovery.  The recovery appears to be broad with only the million plus market lagging.  Low prices have been attracting investors for several years now.  Half of Canada owns property here now!  Just kidding.  However, several large investment funds have set up shop over the past several years now that the market has bottomed, more are showing up every day.  They are going to have a hard time though because inventory has collapsed and multiple offers are occurring for most well priced properties under $500,000.  Forget trying to find something under $100,000.....individual investors are playing along with the investment groups in this price range and they are being snatched up as quickly as they hit the market.  Prices at the courthouse steps are being bid up to retail or better and the fix and flip crowd has been squeezed out for the most part. 

No one here sees this ending anytime real soon barring another major financial crisis, but even then, the word has gotten out on both affordability and rental returns and until this dynamic changes, the froth will continue.

Owning a Home is Gaining in Appeal as Rents Head Higher

The Wall Street Journal recently had an article indicating that rent increases are making home ownership more appealing day by day.  In 2011 alone, the number of investor owned homes increased by 65 percent during 2011 and represented 27 percent of all sales.  This number is certanily higher in investor markets like Phoenix.  With returns on more traditional investments very low compared to risks associated with them, more and more people are turning to the rental market as a way to develope a nest egg.  With returns of 6-12 percent and the good possibility of future price increases, it makes a lot of sense to this. 

However, if one compares rents to house payments in many markets, ownership makes more sense as affordability reaches heights not seen in decades.  Apparently, many are making this assessment and are pouring back into the market helping tamp down inventory to even lower levels.

Phoenix Leads Home Price Increases

In a recent article in the Phoenix Business Journal, it was reported that home values in both the metro Phoenix and Arizona markets eclipsed the rest of the nation once again in June......by a long shot. 

Core Logic reported on August 7 that Phoenix area home values, including distressed sales, surged nearly 17 percent year-over-year in June----the highest percentage of any metropolitan area in the nation.  In second place was Houston at 4.5% and then Washington DC Market at 3.3%. 

Statewide, the number was 13.8% eclipsing Idaho at 10.4% and South Dakota at 10.1%.  This compares to Nationwide numbers of 2.5% year over year and 1.3% up from May.  The good news is that only 4 states showed year over year declines.

More and more evidence is pointing to a sustainable housing recovery. 

Phoenix Number 5 For Income Growth

On Numbers published a new study recently that shows that only four regions experienced greater income growth from 1970 to 2010.  Personal income in the area was $4.3b in 1970 ad $152.8b in 2010.  That is an annual growth rate of 9.35%.

We The Taxpayer Made a Profit on Mortgage Debt

Will miracles never cease?  In a surprising announcement, the Treasury Department recently reported a 25 billion dollar profit on the mortgage bonds purchased at the height of the financial meltdown.  Treasury had spent $225 billion on purchase over 16 months before it began selling the securities last year.  While this may be bad news for purists, it would suggest the government can unwind a rescue package without roiling the markets.  I think that no matter where your philosophy is on this matter, we all pray we do not have to ever see this tool being used again in the future.  However, it appears to be another arrow in the quiver should the need arise.  Now if Fannie and Freddie can ever get us paid back that would be even better news!

Phoenix Prices Gain as Foreclosure Resales Dwindle: DataQuick by Esther Cho

The following article is by Esther Cho regarding the Phoenix real estate market.

After being known as one of the hardest-hit cities, Phoenix has been gaining recognition for its rapidly rising prices.

Dataquick reported the median sale price of a home in the Phoenix metro area in June rose for the seventh month in a row to $152,000, the highest level since late 2008. The figure is a 23.1 percent yearly increase from $123,500 in June 2011. In May 2012, the median sale price was $150,000.

DataQuick, which tracks real estate trends nationally via public property records, still found that June’s median sale price was 42.4 percent below the all-time peak of $264,100 in June 2006, but 28.4 percent higher than the median’s post-peak low of $118,347 in August 2011.

DataQuick explained one of the reasons behind the boost in the median sale price is the area’s mid- to high-end markets have represented a larger share of total sales.

In June, 34.1 percent of all sales were for homes priced above $200,000, compared with 25.6 percent a year ago.

Additionally, the portion of foreclosure sales has been diminishing. According to DataQuick, foreclosure resales, defined as homes that were foreclosed on in the prior 12 months, fell to 21.2 percent of the resale market in June. The figure is the lowest level since January 2008, when foreclosure resales accounted for 18.6 percent of the resale market.

In May, the foreclosure resale level was 24.3 percent and 49.6 percent a year ago. In March 2009, foreclosure resales hit a high-point at 66.2 percent.

The Phoenix area lost 2,087 properties in June to foreclosure, which is a 13.6 percent decrease from May and a 56.5 percent drop from a year ago.

The number of homes lost to foreclosure between January and June numbered 14,591, down 54.1 percent from the same period in 2011.

While the metro has taken a break from foreclosures, downward pressure on home prices is inevitable if the backlog of foreclosures held by lenders are released into the market.

Short sales increased month-over-month, accounting for 13.7 percent of resale activity compared to 12.6 percent in May. Short sales were down compared to last year’s 14.2 percent.

With 9,556 properties (home and condos) sold in June, Phoenix experienced a decline in sales activity from the month and year before, when properties sold numbered 9,896 and 10,425, respectively.

Phoenix Employeers Are Lootking to Hire

It seems like news is released every day on the recovery here in the greater Phoenix/Scottsdale market. 

A recent Manpower Employment Outlook Survey indicated that 20 percent or 1 out of five employers were planing to hire in the second quarter.  This is up from 17 percent a year ago.

Mortgage Banking Revenues On the Rise

First quarter results are in and banks saw big gains in mortgage banking revenues and profits on the back of strong refinancing activity.  Part of this is due to the spreads between the mortgage rates and mortgage backed securities being twice their normal.  This is good for the banks to help them get on more sound financial footing but some would argue that mortgage rates, already below 4%, should fall even more.  With rates so low as they are, most would prefer the financial system get on more sound footing rather than have lower borrower rates which would have minimal effect on the monthly payment.

Arizona Top State for Startups

A recent Phoenix Business Journal Article revealed that Arizona is rated as the top state for entrepreneurial activity and Phoenix was rated as the third highest city in the nation.  This is according to the Kauffman Foundation research.

It revealed that 520 of every 100,000 adults stared new businesses last year, well above the 320 per 100,000 national average.

Vacation Home Sales On The Rise

According to the Wall Street Journal, sales of vacation homes are back on the rise.  After a decline of 56 percent between 2006 and 2010, sales were up 7 percent in 2011.  This is good news especially for the Arizona and Florida markets.