Now is time to stop building freeways

by Aaron Golub - Aug. 22, 2008 12:00 AM
Special for The Republic

This article is one in a series of articles contributed by Arizona State University's Global Institute of Sustainability. The institute advances interdisciplinary research and education on environmental, economic and social sustainability.

The idea of sustainable transportation looms large as gas prices skyrocket and Valley residents must pay up or reduce their travel. Both choices have severe impacts on the economy and livability of our region.

Sustainable transportation is not just about the environment - it's about providing options, options that allow residents to adjust to changing conditions.

Arguably, the Valley of the Sun has forgone sustainable planning solutions for the "one-size-fits-all" model of more freeways, wider arterials, ubiquitous free parking, unwelcoming sidewalks, leapfrogging developments and segregated land uses. All these features have created more dependence on the automobile and fewer choices for our residents. But "free markets" only function when there are choices.

Planners have criticized this model since the 1950s, when freeway planning was moved from local bodies to state departments of transportation with often top-down approaches. Some cities rejected this paradigm, refusing new freeways and funding public transit instead. That means, for them, high gas prices do not translate into mass extortion. Public transit is improving, mind you - especially in Tempe, Mesa and Phoenix - but how do we solve this problem regionally?

To begin, we must ask ourselves tough questions, such as: why continue with our freeway construction programs? Sure, to stop such programs would devalue outlying areas and increase congestion, but even with more freeways, drivers will suffer from high gas prices.

And there are other problems. Maricopa County already has among the dirtiest air in the country, and Arizona is the fifth-worst state in the nation for traffic fatalities.

Most planners agree that new exurban developments consume added freeway capacity even before the freeway opens and adding road capacity to solve congestion is unsustainable. It is like loosening one's belt to solve a weight problem; eventually you run out of belt and you still have the weight. Again: Why not stop now?

Let us concentrate development on urban infill sites and near light rail, express bus and other transit and job centers. We could enact a comprehensive affordable housing policy so families do not have to "drive till they qualify." The hundreds of commercial centers in the region could accommodate housing.

At just moderate densities, the region could continue to grow without expanding horizontally. With more local and express buses, light-rail and bus rapid-transit extensions, and bike lanes and canal paths, we could steer the system in a more sustainable direction. Some outlying areas may be devalued, but that process is happening anyway because of gas prices.

We also need to question our planning policies and public-policy status quo and address the balance between the state DOT and regional and local planning bodies.

Instead of introducing new sales taxes, we should consider raising the gas tax and allowing it to fund public transit. We could rely more on property taxes and impact fees to fund transportation, since much of the value from transportation investments accrues to property.

We should reconsider regional tax policies so cities are not competing for often inefficient development.

We also need to question our air-quality management plans claiming we can nearly double regional automobile travel and still meet standards we already have trouble meeting today.

Our past planning efforts have put us into a deep hole - so why keep digging? At a significant but not (yet) insurmountable cost, we can shift our course in our region and provide more diverse and sustainable living and travel options for a more sustainable future.

More earth fissures plague Q.C., Pinal area

August 22, 2008 - 6:16PM

Sarah J. Boggan, Tribune

More dangerous earth fissures are popping up in the Queen Creek area. So the Arizona Geological Survey has already revised and reissued maps that were released just this past April of the area's dangerous cracks.

SPECIAL REPORT: Buyers beware, does your area have fissures?

SLIDESHOW: Rain aggravates Queen Creek fissures

Assessment shows effects of fissures

The revised maps of the Chandler Heights area, which includes portions of Queen Creek and unincorporated Pinal County, show more fissures have surfaced near the infamous "y-crack" fissure, near Hunt Highway and Sossaman Road, where a horse was swallowed up last summer.

The maps also show new cracks adjacent to Goldmine Equestrian Estates in Queen Creek.

Fissures are cracks in the earth caused by groundwater pumping. Geological survey officials call them "serious geological hazards" and say they are found in the valleys of central and south-central Arizona. Pinal County is home to three-quarters of the state's known earth fissures.

Heavy rains and surface runoff during the monsoon season can turn a barely visible crack in the earth into a 20-foot deep, steep-walled gully that can threaten homes, cut across roadways and endanger humans and animals.

Maps show there are more than 200 earth fissures in the Chandler Heights area.

Mike Conway, with the Arizona Geological Survey, said the new cracks aren't a surprise.

"We suspected there were more fissures there, but they had been covered over by either construction or road grading," he said. "They weren't evident during original mapping, but the monsoon rains caused them to open. We suspected they were there all along."

Local activist Silvia Centoz, who lives in unincorporated Maricopa County just outside Queen Creek, has long told people about the dangerous cracks in the earth and has pushed for mandatory disclosure to protect property owners and homebuyers in the area.

"It's disclosure in the right direction," Centoz said. "I'm just glad that the AZGS is doing everything that they can to bring the maps up to snuff. We still have a few places where we have hidden or buried fissures that are still going to surface. I hope that in time those will get added to map."

As part of the statewide fissure mapping project, Conway said geologists will continue to add fissures to the released maps. This week, the survey released new maps of Mesa and Scottsdale.

Conway said they are planning to release maps of Luke Air Force Base in the West Valley and the Picacho Peak area in Pinal County where the first earth fissure in the state was discovered.

The mapping project was mandated by 2006 legislation as a way to improve disclosure of properties affected by earth fissures.

Arizona Department of Real Estate officials have said the updated information is listed in public reports filed with the agency, and the dangerous cracks can be avoided or mitigated.

As part of the 2006 legislation, people who have fissures on their properties must disclose them.

To view the updated maps and download them for free, visit the geological survey's Fissure Earth Center online at

Foreclosures still hurting resale market

August 20, 2008 - 8:53PM
Edward Gately, Tribune

Foreclosures continued pushing down resale home prices across the Valley last month, with Scottsdale's median price falling below $500,000 for the first time since 2005.

For the traditional sales market, the Valley median price was $200,750, while the foreclosed properties had a median price of $159,205, according to the latest Arizona State University report. That compares with $218,000 and $169,890 last month, and $270,000 and $220,075 in July 2007.

Foreclosure activity represented 3,470, or 42 percent, of the 8,165 transactions that took place last month. Foreclosed transactions are homeowners losing their property to successful individual bidders or the lender of record.

The median price, including foreclosures, in Scottsdale was $450,000, compared to $501,135 in June and $595,500 in July 2007. The prevalence of foreclosures is hurting the market, said Janine Brown, president of the Scottsdale Area Association of Realtors and a real estate agent with John Hall & Associates.

"I don't think that we have seen that type of number for a while," she said. "Even with the tick back in our median price, we had a huge tip up in 2005. It's kind of hard if you have a really nice house and you want $250,000 for it and the guy next door let his go on short sale for $175,000. That's going to affect your home price."

Foreclosures are negatively affecting Scottsdale, and not just through lower home values, she said.

"If you go in and you've got a house that's in foreclosure or bank owned, and the bank's not maintaining the property, that affects your entire neighborhood," Brown said.

The Scottsdale market is gradually showing improvement with more first-time homebuyer activity in central and south Scottsdale, she said.

"And once that market gets a good upward tick, it starts to move the other markets because if you can sell your house for $250,000, it's real possible your next one might be $300,000, and if you can sell your $325,000 house, your next one might be $400,000," she said.

Home prices are being impacted by the large number of vacant homes, said Jay Butler, director of realty studies at ASU's Morrison School of Management and Agribusiness at the Polytechnic campus.

"We keep adding to the (foreclosure) inventory," he said. "The uncertainty of the economy and other things just make buyers reluctant to make any commitment and even those who are willing to make the commitment, tightening underwriting guidelines make it more difficult to borrow."

While foreclosures are hurting the market, one encouraging sign is more buyers are showing an interest because prices have come so far down, said Alicia Conley, a real estate agent at Royalty Real Estate Services in Mesa. Her territories include Chandler, Ahwatukee Foothills and Maricopa.

"It's really nice to see some of the things that were going on in a more neutral market starting up," she said. "You're starting to see people hold open houses. When's the last time you saw an open house sign? Those things are happening."

Real-estate appraisers call for reform after investigation

by Mitch Weiss - Aug. 21, 2008 12:00 AM
Associated Press

CHARLOTTE, N.C. - Four national associations of real-estate appraisers have asked Congress for major regulatory reforms in the wake of an Associated Press investigation that identified key failings within the existing system.

Led by the Chicago-based Appraisal Institute, the groups said Wednesday they want Congress to approve more money so that state appraisal boards can boost enforcement efforts. They also called on lawmakers to increase the oversight authority of the federal agency charged with monitoring the appraisal industry.

"We have been deeply troubled by the lack of responsiveness by some federal and state appraiser regulators in carrying out (the law)," said Bill Garber, the director of governmental and external relations at the Appraisal Institute, the nation's largest association for real-estate appraisers.

The AP's investigation found that since 2005, more than two-dozen states and U.S. territories violated federal rules by failing to investigate and resolve complaints about appraisers within a year. Some complaints sat uninvestigated for as long as four years and as a result, hundreds of appraisers accused of wrongdoing remained in business.

Experts told the AP the failings helped contribute to the current crisis in America's housing market.

"We hope this article proves to be a catalyst for modernizing the existing appraisal regulatory structure and making it more effective," they wrote to the Senate Banking Committee. The other groups signing the letter are the American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers.

Reps. Paul Kanjorski, D-Pa., and Judy Biggert, R-Ill., the co-sponsors of appraisal-reform legislation that passed the House last year, said earlier this week it was unlikely Congress would have time to address the AP's findings before adjourning for the year. But the staff of Sen. Bob Casey, D-Pa., who sponsored similar legislation in that chamber, said he plans a renewed effort to move it forward in the wake of the AP's report.

Under the current regulatory system, created in the wake of the savings and loan crisis in 1989, states license appraisers and discipline those who break the law. An independent federal agency, the Appraisal Subcommittee, is responsible for conducting field reviews and audits of the states, and maintaining a national registry of appraisers.

Traditional home resales still outnumber foreclosures in July

by Kerry Fehr-Snyder - Aug. 20, 2008 11:59 AM
The Arizona Republic

The Valley as a whole ended the traditional home resale season on a low note as foreclosures and depressed home values continued to dominate the landscape, but parts of the Southeast Valley in July bucked that trend.

Valleywide, foreclosures represented 42 percent of the resale market in July. That compares to 14 percent in July 2007. Overall in the Southeast Valley, traditional sales eclipsed foreclosure sales, and the median price on traditional resales topped the median price on foreclosures.

Mesa: 315 foreclosures, $160,000 median price; 485 traditional sales, $179,000 median price.

Chandler: 120 foreclosures, $198,405 median price; 320 traditional sales, $239,750 median price.

Tempe: 15 foreclosures, $213,560 median price; 100 traditional sales, $248,500 median price.

Gilbert: 170 foreclosures, $231,000 median price; 345 traditional sales, $240,000 median price.

Ahwatukee: 15 foreclosures, $238,925 median price; 100 traditional sales, $295,000 median price.

Some parts of the Southeast Valley have seen a more stable market than others in outlying areas like the city of Maricopa and Queen Creek. In cities closer to the urban center like Tempe or Chandler, homes tend to be more expensive and therefore less attractive to investors, said Jay Butler, director of Realty Studies at Arizona State University's Morrison School of Management and Agribusiness at Polytechnic in Mesa.

"The East Valley is not immune but is doing better than other areas," Butler said. "It's more stable, and the university provides some stability too."

Butler said one of the groups hurt most by the current real estate crunch is homeowners who are struggling to make their mortgage payments and maintain their properties while homeowners around them rent their houses or let banks foreclosure on their loans.

"There's a lot of frustration out there right now," Butler said.

Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill

National Association of REALTORS® Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 8/22/08) H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions: GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008). View 2009 FHA and GSE loan limit estimates (PDF) FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008). View 2009 FHA and GSE loan limit estimates (PDF) FHA Reform Chart (PDF) Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 9, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan). First-time homebuyer tax credit chart Frequently asked questions about the first-time homebuyer tax credit Additional Property Tax Deduction – HERA provides a one-year benefit that will be available to all homeowners. Under current law, property taxes are deductible only if an individual itemizes his/her deductions on Schedule A of their tax return. The new provision will permit a deduction of up to $500 ($1000 on a joint return) for all individuals who utilize the standard deduction and do not itemize. Instructions will be provided on the 2008 tax return when it is distributed at year-end. FHA foreclosure rescue – development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008. FHA Foreclosure Rescue Chart Seller-funded downpayment assistance programs – codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008. More about the seller-funded downpayment assistance provision Tips to finding downpayment assistance programs (PDF) VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008. Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009. GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail. Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages. National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing. CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes. More about the CDBG funding provision LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient. Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator. Modification of $250,000/$500,000 Exclusion – The sole real-estated related "pay-for" among the tax incentives modifies the $250,000/$500,000 exclusion of gain on the sale of a principal residence. Beginning in 2009, the exclusion, as it applies to a second home (or rental property) that is converted to a principal residence will be allocated. When the second home is sold, any gain attributable to use as a second home (or rental property) will be taxed at capital gains rates. Any gain attributable to use as a principal residence will remain excludable, up to the $250,000 and $500,000 limits. A formula is provided for computing the proper treatment of these gains. View some examples that illustrate the application of this new rule (PDF)

Delay in Amaranth construction blamed on economy

by Elias C. Arnold - Aug. 20, 2008 12:00 AM
The Arizona Republic

A principal with Montage Holdings said the housing market slowdown has delayed construction at the master-planned Amaranth community in Goodyear's far south, but he still expects the area to meet long-term population projections.

"Long term, we're optimistic. We're just not on as tight a schedule as we were," said Joe Porter, who supervises planning for Amaranth.

Scottsdale-based Montage Holdings owns nearly 10,100 acres in Goodyear's Sonoran Valley area. The project, near the community of Mobile, could turn into 42,000 homes and 20 million square feet of commercial space.

By 2030, the Sonoran Valley, which will include Amaranth, is expected to have more than 50,000 residents, slightly smaller than Goodyear's population today.

But a glut of houses on the market and the nation's credit crunch have slowed the economy, delaying by nearly a year the company's timeline to start selling houses.

Porter said that long-term population projections for the area are still good.

"Everybody, in doing those projections, assumes peaks and valleys," he said.

The company could begin selling houses in early 2010, but it is still a tough projection to make, Porter said.

Defaults on 'Liar Loans' Rise

The next category of mortgages going bad are the so-called “liar loans.” They were approved without the borrower having to prove that they had an income or assets.

Some home owners with these loans are stuck. They can’t refinance because housing prices in the market where they were the most common have declined.

Losses on liar loans could total $100 billion, according to Moody's Economy.com. That's on top of the $400 billion in expected losses from subprime loans. Moody’s warns that these troubled loans could prolong the credit crisis another two years.

Fannie Mae and Freddie Mac, the largest buyers and backers of mortgages, lost a combined $3.1 billion between April and June. Half of their credit losses came from sour "liar loans," or known as Al-A.

News of these losses are driving down stock prices for Fannie Mae and Freddie Mac, making it more likely that the U.S. Treasury Department – and ultimately taxpayers – will have to bailout the quasi-public banks.

Source: The Associated Press, Alan Zibel (08/18/08)

Maricopa County cuts 2008 property tax rate

August 18, 2008 - 8:29PM

Michelle Reese, Tribune

The Maricopa County Board of Supervisors set the tax rate for property owners on Monday, touting it as the lowest rate in 29 years.

The board dropped the rate at which it taxes all property in the county to $9.29 per $100 of assessed value, which is about 10 percent of the market value of a typical home.

The reduction means a savings of about $16.14 on a median-priced house valued at $219,500, according to a news release from the clerk of the Board of Supervisors.

The county-set rates make up about 12 percent of a homeowner's property tax bill. The bulk of the bill comes from school district tax rates. Those rates were projected by the districts in the last few weeks, and are now set for 2008 property tax bills.

While some rates are going down, the tax bill homeowners will receive in a few weeks will be based on a home valuation set nearly two years ago. Tax bills are computed through a formula that uses both the tax rates and the assessed value of a property.

Just six months ago, the Maricopa County Assessor's Office sent out valuations for tax year 2009.

The taxes approved Monday are for tax year 2008.

While more than 90 percent of homeowners saw a decrease in their home valuations for tax year 2009, they won't see that reflected on their bills for another year.

"We are aware of the downturn in the real estate market, and we're acting accordingly," said Paul Peterson, public information officer for the Maricopa County Assessor's Office.

When the new tax bills arrive, homeowners may be surprised, because when the tax year 2008 values were set, the market was different.

"It's a confusing tax system that needs to be changed," Peterson said. "Most people don't understand why their taxes don't go down when their assessments go down."

Some school districts have announced decreases in their taxes for tax year 2008, including Chandler Unified.

The Chandler Unified School District projects that its tax rate will drop by 57 cents to $4.59, which is about half of what it was 10 years ago.

"Our tax rates continue to decline as we've paid off previous bonds," district spokesman Terry Locke said.

While some of that is attributed to the state taking over a bulk of construction costs for schools, Locke said the district is also watchful when it plans budgets.

"We're also being careful not to spike the tax rate. You're not seeing too many bonds sold in a given year. We may have the authorization, but we may spread that out over a five-year process."

The Gilbert Unified School District announced a 16-cent hike in its rate.

The increase is necessary because a new high school is being built in the Gilbert district, said spokeswoman Dianne Bowers. The school district is responsible for the cost of surrounding improvements such as roads, sidewalks and lighting.

The Pinal County Board of Supervisors also set tax rates on Monday. In Apache Junction, the proposed tax rate of $4.75 for the school district reflects a decrease of $1.10 from the previous year, the 12th time in a row the school district's tax rate has dropped.

The J.O. Combs School District's rate is also set by the Pinal board. It is dropping $2.41, to $7.49.

Condo living, light rail set to re-energize Mill Avenue

by William Hermann and Dianna M. Náñez - Aug. 18, 2008 12:00 AM
The Arizona Republic

Tempe's Mill Avenue has been in a state of evolution for more than three decades, going from a dilapidated strip of old buildings to a hip '80s hangout to a '90s college hotspot.

Now hit hard by a tough economy and the opening of a major retail competitor, Tempe Marketplace, the downtown district is facing its latest identity crisis.

This time, community leaders are hanging their hopes on an influx of posh high-rise condos and the December opening of light rail, changes they believe will bring Mill Avenue to a new pinnacle as a center of urban living.

When community activists saved older downtown buildings in the 1970s and early 1980s and some restaurants and shops opened on Mill, it seemed as if the street had a new lease on life.

In 1989, DMB Associates opened Centerpoint, a 21-acre project including offices, restaurants, retail and entertainment on the northwestern corner of Mill Avenue and University Drive. Though restaurants and retail came to Centerpoint and points north on Mill, big, steady crowds never followed.

Ten years later came the opening of Tempe Town Lake. Downtown is home to big nights after football games, a successful New Year's party and crowded art festivals. But consistent crowds of shoppers still are not there.

Residential space in the urban core was the missing ingredient, many say.

About 600 new residences are expected to be completed near Mill Avenue this year.

"We had an 18-hour downtown; we wanted a 24-hour downtown," Neil Calfee said. Formerly a Tempe deputy community development manager, Calfee is now Arizona State University's director of real- estate development.

Chris Wilson, vice president of Downtown Tempe Community, a non-profit organization that provides management services for the area, said residential adds a "constant factor."

"Residential is the holy grail of downtown development," he said. "Most people shop, dine and spend time within 1 or 2 miles of their home, and that gets intensified in an urban setting where they do it within a couple blocks."

City officials, developers and merchants say the fall opening of the Centerpoint Condominiums high-rise in particular will have a significant impact.

Developer Ken Losch said he will open Centerpoint in late October, despite financing complications brought on by the recent bankruptcy of his main financier, Mortgages Ltd.

Losch said several factors are coming into play that will help residential properties on Mill Avenue succeed, including the rising cost of commuting due to high gasoline prices, the opening of light rail through downtown Tempe and Tempe's proximity to jobs and freeways.

Tempe is in what Losch calls the "A Circle" for Valley development. In contrast with "C Circle" areas like east Mesa and Queen Creek, where distances to drive to work are great and house prices have plummeted, he said central Tempe has stronger real-estate values and is becoming a place where people want to live and work.

Losch said that his research shows that within a 1-mile radius of Mill, there are 11,000 jobs; within 2 miles, 20,000 jobs; and 3 miles, 60,000 jobs.

"Mill Avenue is the next spot to be in town," Losch said.

Tempe Mayor Hugh Hallman said the number of developers that are still building in Tempe is symbolic of the advantages Tempe has. The city is a Valley focal point nestled among metropolitan Phoenix, Phoenix Sky Harbor International Airport and the Valley's southeast suburbia.

"Yeah, there's lots of opportunity to look for black clouds in the economy," Hallman said. "(But) if there's anyplace to look for silver linings, it's in Tempe."

Julian Wright, who recently opened LaBocca restaurant and was the originator of The Library bar and Jax Thai Bar, agreed.

"Mill Avenue is slowly growing up," he said. "The type of projects that are being opened are starting to cater to an older, more mature clientele, people who enjoy urbanism."

Tempe realty agent Will Daly, who operates the Web site WeKnowUrban.com, said that downtown Tempe now has the finite geography that large urban areas like Chicago have. Daly said Town Lake and light rail have helped create these artificial boundaries that force cities to build upward and not outward.

"Tempe is vertical, very walkable. Everything is within walking distance," Daly said. "With the light rail, you're adding a 20-mile focal point and providing a boundary, just like the lake. Most urban settings have either a boundary or a focal point. With Mill Avenue, you've got both."

Developer Ross Robb is a veteran of downtown Tempe development. Robb oversaw the financing and administration of Hayden Square, a Mill Avenue residential and commercial center, and the Casa Loma and Andre buildings, with office and retail space.

Robb agrees that high gas prices are convincing people to move closer in, that freeways create a "power center" around Tempe and that light rail will bring people by the thousands to Mill Avenue.

"But a lot depends on the national and local economy," he said. "Whether this perfect storm happens in the next few months or 24 or 48 months, I don't know."

Sellers struggle as Valley home prices down 21%

August 14, 2008 - 10:38AM

Edward Gately, Tribune

It’s all-out war for anyone trying to sell a home in the Valley’s turbulent housing market.

Valley home prices have set a negative record, dropping 21 percent in just one year, according to the latest Arizona State University-Repeat Sales Index, which is based on repeat sales of the same homes as they sell over time. The drop in average home price was from May 2007 to May 2008.

It was even more severe than the 18 percent drop recorded from April 2007 to April 2008, and the first-ever double-digit decline of 13 percent from March 2007 to March 2008.

“Things are going down fast,” said Karl Guntermann, a real estate professor in the W.P. Carey School of Business at ASU. “Obviously it’s a very tough market to sell in. If you aren’t selling, you’re losing equity, but it’s kind of paper equity. A lot of people are losing equity, they don’t feel as wealthy and that does affect people’s spending patterns.”

The declines, while painful to sellers, still haven’t matched the staggering increases in home values that peaked in 2006, he said.

“Basically around mid-2006, the increase varied anywhere from 73 percent to about 80 percent, depending on which city or region,” Guntermann said. “We’re still on average way above where we were at the beginning.”

Among East Valley cities, prices fell 25.1 percent in Mesa, 23.2 percent in Chandler, 16.5 percent in Tempe and 14.2 percent in Scottsdale/Paradise Valley.

“In general, if you don’t have to sell, you probably shouldn’t be selling,” Guntermann said. “You’re competing with banks that are selling foreclosed properties. You’re competing with someone who has a job transfer and has to sell, or maybe they lost their job and they want to relocate to another region, and they need to sell their house.”

If you have to sell your home, the two most important things to keep in mind are that you must price your house aggressively and it must be in “immaculate” condition, said Jay Thompson, a broker with Thompson’s Realty in Gilbert.

“Curb appeal has always worked. It worked 50 years ago, and it works today,” he said. “You want people, when they pull up to the front of the house, to go, ‘Wow, this house looks great,’ and they carry that same feeling through when they walk into the front door. It’s got to look good, it’s got to smell good.”

And if the foreclosure house next door or down the street is selling for less, you need to be able to show why a buyer should pay more for your house, Thompson said.

Buyers are also pickier, and they want to look at a lot more houses before making a decision, Thompson said.

“Buyers are not going to be looking at two or three houses, they’re going to be looking at 20 or 30, or 50 houses,” he said. “So your house better be the best-looking one at the best values.”

Residents working to stop new Wal-Mart at Ariz. and Riggs

by Edythe Jensen - Aug. 15, 2008 09:38 AM
The Arizona Republic

Kirk Sibley, a Chandler resident activist with a four-year history of trying to stop Wal-Mart from coming to a parcel of land at Arizona Avenue and Riggs Road, renewed his push at Thursday's Chandler City Council meeting.

He didn't have to do much persuading. With little discussion and no mention of the giant discount retailer by name, the council voted unanimously to send Diversified Partners' latest plans for the Riggs Gateway shopping center back to the Planning and Zoning Commission for a Sept. 17 hearing. The commission had earlier voted 5-0 in support of the proposal for a 30-acre center anchored by an unspecified large retailer on the northeastern corner.

David Cisiewski, attorney for the developer, said more delays could hurt the project because prospective tenants demand zoning approval before they commit to a location.

Sibley said Diversified has repeatedly declined to name an anchor tenant. However, neighbors are convinced Wal-Mart is in the plans based on information they obtained from a commercial real estate agent, he said.

The protesting residents declared a temporary victory in 2004 when Diversified canceled a former zoning request that included a Wal-Mart Supercenter on the northeastern corner. As the years went by, the neighbors said they were assured the Supercenter was off the table and they didn't renew objections when Diversified submitted a new zoning request with slightly smaller buildings.

But the residents now fear a smaller Wal-Mart will take the Supercenter's place, and that Diversified hasn't been open with their plans, Sibley said. He called for more neighborhood meetings and better communication.

Delia Garcia, a spokeswoman for Wal-Mart, said there are no plans to open a store at the Riggs Gateway site.

Residents are prepared to mobilize again and circulate referendum petitions that could force a public vote if Diversified fails to identify an anchor tenant and the council approves zoning that would allow a Wal-Mart, Sibley said.

"I don't think they want that right now, especially since this is an election year," he said.

Under Chandler's big box ordinance, Diversified would have to identify an anchor tenant if they were occupying more than 150,000 square feet. However, the largest building in the latest Riggs Gateway center plan is 131,000 square feet.

Councilman Bob Caccamo said before the meeting that he was disappointed in the proposed design.

"We were assured it was going to be an upscale retail center and it's not," he said. "It looks like the big, bland generic shopping center with tons of parking in the front and buildings set way back that were built here 20 years ago."

Fannie Mae cuts back after loss of $2.3 bil

Aug. 9, 2008 12:00 AM
Associated Press

Fannie Mae is making bold cutbacks that will send shock waves through the mortgage market, after posting a quarterly loss Friday that was three times larger than Wall Street expected.

To slow its financial decline, the mortgage finance giant slashed its dividend to 5 cents a share from 35 cents a share and said it will eliminate loans for borrowers with solid credit scores, but little proof of income or small or no down payments.

The company also is raising its mortgage fees, which will be passed onto borrowers as higher interest rates or closing costs.

With Fannie Mae and sibling company Freddie Mac becoming more risk-averse, fears are building that mortgage rates will keep climbing, making it harder for people to afford a mortgage or refinance their home, and spur even more foreclosures.

The Washington-based company lost $2.3 billion, or $2.54 a share, for the quarter that ended June 30.

The loss compares with profit of $1.95 billion, or $1.86 a share, in the period last year.

Greenspan: Housing Stabilizing Soon

Former Federal Reserve Chair Alan Greenspan in an interview with the Wall Street Journal this week says he expects U.S. home prices to stabilize in the first half of 2009.

"Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities. We won't really know the market value of the asset side of the banking system's balance sheet – and hence banks' capital – until then," he said.

Greenspan had a one-word description for the government’s response to Fannie Mae and Freddie Mac’s problems – “Bad.”

“[Congress] should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted – with necessary taxpayer support to make them financially viable – as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.

Source: The Wall Street Journal, David Wessel (08/13/08)

Option ARMs a Headache for Lenders

Countrywide Financial Corp. said in a regulatory filing Monday that the average borrower with an option adjustable-rate loan now owes 95 percent of the value of his home, up from 76 percent when the loan was made.

Seventy-two percent are making less than full interest payments and 12.4 percent are at least 90 days delinquent. The average FICO credit score has dropped to 680 from an original 715. The U.S. median is 723.

Bank of America has said about 66 percent of the option ARMs went to California and Florida borrowers.

Bank of America is not the only big lender with option ARM headaches.

Wachovia Corp said borrowers in its $122 billion "Pick-a-Pay" option ARM portfolio owed 85 percent of what their homes were worth on June 30, up from an original 71 percent. In California's Central Valley, the average was 109 percent. The average overall FICO score was down to 661 from 675.

Source: Reuters News, Jonathan Stempel (08/12/2008)