It’s been a few months since I’ve just laid out the market conditions in the Phoenix market.

Overall:

1) Prices are still slowly increasing, probably because the tax credit was extended.

2) Sales volume is still high, even though volume typically falls off around the holidays.

3) Watch for prices to climb upward faster starting in January as people start looking in greater numbers.

Conclusion: Prices are going up, but we are still at the lowest point for picking up a property. If you are looking to sell, wait just a little longer or expect to price aggressively.

Exhibit A: Monthly average sales prices have been going up since April. We are now above the lowest point from 2008. While that was a harrowing year and nobody wants to be compared to it, we can at least feel like we are going the right direction. Prices will continue to climb as people take advantage of the extended tax credit.

Exhibit B: Months Supply. This is a measure of how long it would take to sell the current homes on the market today at current monthly sales rates. This is very interesting. The months supply decreased near the beginning of the year as people started to scramble for the cheapest prices ever (April). But it has not gone down any further, I suspect because the banks have figured out how to slowly and methodically release foreclosed homes so that they don’t flood the market. I suspect that this will stay relatively the same through next summer.

Exhibit C: Sales Per Month. Notice how the sales per month are higher than the last two years, still. So, fears that the market would be flooded with more foreclosures never materialized and we just keep selling at a good clip. Check out how sales volume goes up after October, when volume usually slows, thanks to the tax  credit and low prices. Add to this that banks are getting better at processing short sales and people are closing quicker.

Maybe you are sitting around, bored, and thinking “Just what disease or issue should I be aware of this month?”

Well here is your answer in a handy-dandy list!

Now, don’t be sad if you missed national “Library Card Sign-Up Month” in September, or “Go Hog Wild–Eat Country Ham Month” in October.

I think if I tried to be aware of all of these things my brain would open up my skull from the inside, step out of my head and move to Wasilla, Alaska.

On the other hand, you know what they say. Knowledge is power.

In polite cocktail party chatter, after people ask why we don’t have more solar in Arizona, they often bemoan the fact that why we don’t have a high speed rail line between Phoenix or Tucson, etc.

After all, there are only so many times you can get pinned between two 18-wheelers and a 20-year old in a Hummer with spinney wheels on I-10 before you start to wonder if there is isn’t better way.

The only answer I got when I asked was that there was not sufficient capacity on the rail line next to I-10 between Phoenix and Tucson.

The issue came front and center when Amy and I were in New Mexico in October, riding that state’s spankin’ new Rail Runner between Albuquerque and Santa Fe.

I gotta say, I was a little embarrassed that New Mexico was kicking our collective petooty in the high speed rail department. This thing was pretty swanky, in all it’s double-decker, panoramic windowed glory. Kinda like pimp my ride meets the Santa Fe Super Chief.

Well, it just so happens that one of my real estate clients helped plan and install the high speed rail servicing Washington, DC. So, he pointed me to people who could get me some answers as to why we don’t have this basic necessity  and what it would take to get it.

He pointed me first to Chris Blewett, the project manager behind New Mexico’s Rail Runner. This soft-spoken public servant seemed almost underwhelmed by his own accomplishments. At a total cost of $400 million (via state bond), they had phase one of the rail line completed in about 2 years, from conception to operation. That was 45 miles of upgraded track, plus trains. Phase 2, the next 100 miles, was completed about 2 years later.

In government time, that’s like doing the 100 meter dash in 5 seconds.

So certainly, you’d think, it can’t be that bad. Absent our budget morass, we could pull that off, right? Heck, Civic Plaza cost over $500 million.

Well, the reasons it worked so easily was that there was under-used Burlington Northern Santa Fe (BNSF) line between the two cities. All the state had to do was kinda spruce it up with new ties and some new track, according to Blewett.

What made the rail line necessary, however, was not so much the traffic but the Native American communities that dot the land on either side of the existing I-25. The freeway simply can’t grow outward any further without encroaching on tribal land. This problem won’t be apparent tomorrow, but it would bottleneck the entire state in the next decade if alternatives were not created.

The rail line, on the other hand, offered an actual solution and that is where we need to learn to make better arguments.

According to Blewett, when answering the “why not here” question, you have to look more broadly. You have to answer the question: what can commuter rail help with beyond the old standard “traffic and air quality” issues?

It creates an alternative and markets like alternatives. It allows you to build affordable housing closer to work. Money put in to rail goes further per mile than money put in to widening freeways.

If it were all that simple, then we would have it in Arizona, right?

That is when I turned to Mark Pearsall, a rail transit planner with the Maricopa Association of Governments (MAG). The first thing he did was clarify for me that we are really talking about two different things: commuter rail and passenger rail.

1) The commuter rail is in the metro area, it travels long distances (say from Wickenberg to Gilbert), but it makes frequent stops. It is an elevated train, so it is not light rail. But it is not a connector for major metro areas. This needs rail lines capable of speeds up to 79 miles per hour.

There are several options for commuter rail in Phoenix: BNSF owns track from Wickenberg, down Grand Ave. to Central Phoenix. A commuter could get from Surprise to downtown Phoenix is 30 minutes. (You think the wait is long at Matt’s Big Breakfast now? Just wait.)

In order to make that happen, we would have to lay parallel track on the Grand Ave. corridor, do some signal upgrades and build a few bridges. Pearsall estimates this would average 5,000 riders per day.

There is also a Union Pacific track that could connect Buckeye to Phoenix. They would actually have to lay more main-line track in that case. Finally, there is a southeast line that could connect Phoenix, Tempe, Gilbert and Queen Creek.

According to Pearsall, this entire network would move 17,000 riders per day.

This is where money is not the only problem. Have a look at the map above. In order to see all of those connections, you would have to find a way to connect a number of those track lines that are not already connected. The map makes it look easy, but it is a spaghetti junction of rules, ownership and rights of way.

Further, you’d need to get agreement from BNSF about dedicating valuable track space and time to passenger rail. While not using all of the track space now, BNSF fears that they might in the near future.

MAG is going to come out with the results of a study in the spring, the most serious in 30 years, with conclusions about which of these lines are the most feasible. Click on the photo, above to download a copy of a recent system analysis. You will be able to get the major study at the same website in the spring.

This is where it comes down to money again. The next time the existing transportation sales tax is up for renewal is 2026, and I don’t see the voters going for another tax on top of our existing one any time soon.

So, no! No twain for Chwistmas until 2026, little Johnny!

2) Passenger rail is what we think of when we talk about Phoenix to Tucson or L.A. to Phoenix.

The problems of using existing track and laying new main lines is the same as with commuter rail, but the costs for completing the projects are much higher. However, whereas you can share rail corridors between commuter and freight rail in many cases in Maricopa County, Union Pacific tells us that we would have to build our own corridor for passenger rail between Tucson and Phoenix.

That’s big money, folks.

This is where Pearsall has hope for an ADOT study, under way now. That study will identify the top 8 corridors of possible service between Phoenix and Tucson in which you could average 70 to 100 mph. This “alternatives analysis” is meant to start the discussion of getting federal dollars to lay the track.

You know, “baby steps.”

This is also where MAG and ADOT will be coordinating efforts. They will want to locate commuter rail line next to passenger rail line in some cases to maximize efficiency and make a seamless system.

Pearsall is confident that all of these details could and would be worked out once there is money in the pot. Railroads would change their tune and track could be laid.

Just drop $2billion in the tip jar on the way out, thanks.

But, you could envision it one day. Just close your eyes and let’s imagine together: hiking in the mountains around Wickenberg, stopping off for lunch in downtown Phoenix and having a nice evening out in Tucson, without ever setting foot on a gas pedal.

Or, more seriously, you could actually save money over building new, congested freeways. (gasp!)

However you want to look at it, I think it is a goal we should have.

Postscript: It looks like the AZ Republic was doing a story on this issue as I was writing this. So, learn more here.

5341 N. Seventh Ave.
Phoenix, AZ 85013
(602) 265-3604

Several months ago we tried Two Hippies tacos and dug it. The amount of food for the price was great, and the same is almost much true for the pizzeria they opened up on 7th Ave.  For less than $8 you can get a decent sized pie that is made fresh in about ten minutes.  Given my recent re-conversion to vegetarianism, I went with the white pizza that had only vegetables and cheese while my companion tried something with meat.  Her feelings were as mixed as mine.

This is more like a Chicago-style pizza, rather than a Sicilian –more dough, more cheese.  The dough was a little doughy, but not enough to prevent me from eating it.  Holy Toledo was there a lot of cheese, though.  Who doesn’t love cheese?

The décor and style is in keeping with the other spots, including limited outdoor space consisting of a couple of bar stools.  The gentleman behind the counter was pleasant but a bit spacey.  That seems par for the course for Two Hippies, and maybe even part of the employee training.

The Good: A lot of food delivered quickly and cheaply

The Bad: Order it to go unless you plan to stand and eat over your hand like as if you’re at an awkward break-room party for a coworker’s birthday.

The Ugly: They can’t make room for tables or chairs, but they manage to squeeze an ATM into the tiny reception area?  Cash only!  Really, Two Hippies?  REALLY?  This is America.  We buy M&M’s on credit, for crying out loud!

I’m all giddy to tell you about these two homes for rent in Garfield. In both cases, the owners have improved the properties and will maintain a close relationship with the neighborhood as we transition in to a renaissance of renovation in downtown neighborhoods.

Folks are buying foreclosed homes in historic neighborhoods at historically low prices and are doing an incredible job bringing them back to their former glory

First, 916 E. Taylor is just about the finest example I’ve seen recently of how an old property should be renovated and improved in an historic neighborhood downtown.

This is a property with two small houses on it, each about 800 square feet. They are perfect for the downtown and/or ASU lifestyle, with everything updated, security and a beautiful courtyard between the homes. You can walk to First Friday in about 10 minutes from here.

I was the buyer’s agent for this property. The listing agent was Sherry Rampy and the man responsible for the renovation is Kurt Krutak, who has done a number of similarly meticulous transformations. According to Rampy, “This property stands as an example of what is possible in Garfield and it is right next to everything going on downtown.”

This is how the property used to look.

This property is the new gold standard for how homes should be renovated and the potential we have in the Garfield neighborhood.

Both units are for rent right away. Please contact Ruben at rubenx02@yahoo.com or 602-368-6832.

Second, 747 E. McKinley is a 1925 bungalow, renovated in 2006 with a new bathroom, new kitchen, laundry, security, all new landscaping and an inviting updated front porch. I even renovated most of the old double-hung sash windows so you can open the place up the way it was meant to be. It is about 1,100 square feet with 3 bedrooms and 1 bath.

Here is they way it looked when I bought it in 2005.

You can walk from the front porch to the center of First Friday activities in about 5 minutes. I know. I timed it. I live here. I’m moving up the street to my old stomping grounds, but I will leave my heart in Garfield!

This property will come open in January. Please contact me at clarkreport@kenclarkforaz.com for inquiries.

Every 10 years we redraw the legislative and congressional line, usually poorly.

Watch for two issues next year to be at the forefront: whether we should ask people their immigration status when we count them and what impact the foreclosure crisis will have on where people live. Congressional Quarterly does a good primer on this issue.

The immigration is a non-issue that some on the right will howl about. They will say that we favoring states with high illegal immigration. Its a bit of an issue de jour. I don’t remember this being such a do or die issue in 2002 or 1992.  We’ve always counted everybody, regardless of where they are from. That does not  mean that the illegal immigrants will control our government. At least, if history is to be a lesson.

As for foreclosures, that might be one reason that Arizona will only get one new member of congress, and not two. Projections in 2007 and 2008 when I was working on the issue were that we would get two new congressional seats. Stand back and watch in 2011 as politicians in Maricopa county fight to get that new district laid out to favor their races.

I know it is unpopular to “increase the size of government”, but perhaps we might look at having more than 435 members of Congress for 235 million Americans. Something about better representation when your member of congress does not have to attend to over 500,000 constituents all at once.

Call me crazy.

The City of Phoenix announced a couple weeks ago that it will now take all numbers of plastic in recycling, except #6, which is styrofoam.

This, despite hand wringing from certain quarters that cities can’t afford to recycle because there is less demand for recycled products.

Kudos to the City of Phoenix for moving forward on this.  I look forward the day when the city or somebody finds a way to pick up compostable stuff from your house and deliver nutrient-rich composted mulch for your house, if you want it.

It boggles my mind the volume of nutrients we just bury in the ground, where they do no good for anybody, while we struggle to use chemicals to feed the plants and grass in our yards. We can do much better.

Dare I cite San Fransisco’s effort to reduce its waste stream by 90% over the next few years? That bastion of nutty reasoned thinking and common sense (sometimes).

Here are three articles that, together, point to the trend downtown.

1) Downtown is the Real Deal. OK. This is an opinion piece, but it really speaks to the fact that there is a general perception of progress, despite the economic downturn. Oh, and they mention the Urban Grocery and Wine bar of which I am a fan!

2) New Nursing College Building Opens in Downtown Phoenix. A new 84,000 square foot building in downtown, serving thousands of students means that ASU is progressing on plans that they set in motion before the economic crash.

3) More Students are Flooding in to Downtown. Slightly more than 7,000 students took at least one class downtown this fall, up from 4,963 in fall 2008.

So, if you are thinking about investing in real estate for a business or a home, CenPho, in my opinion is the safest place to be in Arizona. It is beyond safe with prices this low. It is a smart move.

But, beyond the real estate side of things. Feel free to invest in the human capitol, as well. We aren’t going anywhere!

I want to share this great post with you (especially all of you who tell me that prices are still going down). This is unashamedly lifted directly from the John Hall web site because I think they explain it best:

How can some experts say Phoenix home values are going up and others say they are going down?

Don’t answer that…yet.  First we need to remove some variables.

Let’s pull out the possibility that we’re talking about two different markets – like nationally vs locally.  For this question we’ll only analyze the Greater Phoenix real estate market.

We also need to remove the possibility that we’re looking at different data sets – like townhouses vs single family homes.  So let’s look at the exact same data – from the exact same system – filtered almost identically.

Next we want to make sure both statements are from similarly educated individuals.  I tell you what, to remove all doubt – I’ll say them both.  Home values in Phoenix are going up.  Home values in Phoenix are going down.

Now that we’ve removed said variables – which statement is more correct?

Uno momento – real quick let me show you a couple of charts from the Cromford Report to help you get the more correct answer.

Here is a chart showing the annual median price of homes sold in greater Phoenix.

Prices are going down-right?  This next chart is showing the monthly median price of homes sold in greater Phoenix.

Prices are going up!!  It’s hard to see the exact numbers, but hopefully you can make out the trends.  If you only look at the top chart (Annual Median) it would be correct to say values are coming down.

However, if you look at the second chart (aka monthly median).  You can see that values bottomed in April and have been bumping along since.

My friend Tazmine Loomans has a great website that I look at when thinking about where to eat.

She has done a great review of Sapna, on Grand. I did a review a few months ago, but this one goes in to much greater detail.

It is worth a look. Sapna is also worth trying out, especially now that it is cool outside and they don’t have a problem cooling the place.