With ASU’s 2^nd annual Phoenix Urban Design Week just three weeks away (April 4^th and 5^th), the Feast on the Street Saturday, April 13^th, bringing together people around a half-mile long dining table in downtown Phoenix, historic preservation a constant need (last year’s coffee-table book showcases the importance of preserving Midcentury modern buildings), and the need for more sustainable green practices, I got to thinking:

What are some of the most important steps a person should take if they’re thinking of buying a home in the urban revitalization we’re witnessing in downtown Phoenix?

Step 1:   Get involved with groups like Local First AZ, Roosevelt Row, Get Your PHX, and Phoenix Spokes People (urban bicycle action group with 450+ members, intent on making our streets safer for bicyclists).

Step 2:  Condo or House? I wrote about this in August last year and it’s just as relevant today.

Step 3:  Take a walk, ride, or bike through our Historic Districts.

Step 4:  Familiarize yourself with the schools. This handy link lets you search by closest intersection.

Step 5:  Where are the best coffee houses? Which ones have wi-fi? Arizona Coffee has a great city-wide list with links, reviews, interviews, etc. My office is conveniently located in monOrchid, right next to Songbird café, which I highly recommend.

When you stop by, poke your head into my office not 10 feet away and say hello! I’d love to share some more urban tips with you about finding a home in downtown or central Phoenix.

Ken Clark, Realtor
602-456-9388

Last week, we saw how understanding relevant data is vital to how I inform my gut instincts as an agent.

This week, let’s look at how data on historic neighborhoods informs my gut and how what I’m seeing in several “overflow areas” plays into it. Homes in historic neighborhoods are getting more and more expensive, and they will continue to do so as people who value those homes will continue to buy just outside the historic areas. Why? Simply because there is a finite number of them and more people want homes with that character.

So, over-time more people have renovated historic neighborhoods that neighbor the original historic neighborhoods. The supply increases.

This “spillover” dynamic has given us our 35 historic neighborhoods. Specifically, neighborhoods that were seen as “not ready for prime time” are improving right next to the current neighborhoods.

The first historic neighborhood in Phoenix was Roosevelt. Garfield, FQ Story, Willow, Encanto, Palmcroft, and others followed. People around them started saying:

Wait, we have older homes. We either don’t want to or we can’t afford to buy in the historic districts. Or, we believe our neighborhood is unique historically. Let’s apply for historic designation here.

The number of neighborhoods with historic designation has been increasing over the last 30 years, and very dramatically over the last 10 years. Because of my expertise, immersion in the data, and instincts, I know where the spillover is going to happen next. I’m seeing a lot of renovation in areas which you should not pass over for consideration when looking for a home.

Another thing to look for are the “historic-adjacent” neighborhoods. These may never get historic designation, but they benefit from their proximity to historic neighborhoods.

Example: the Woodlea and Melrose districts at 7^th avenue.

The northern of Woodlea is Glenrosa Ave. Technically, north of Glenrosa is not historic because not enough people maintained the original condition of their homes there and not enough people wanted it to be historic.  Homes in the non-historic neighborhood, are much more expensive and enjoy greater stability than they woiuld if they weren’t right next to the historic neighborhood of Woodlea.

What about the east side of 7^th AVe where the houses are very similar to the ones on 7^th Avenue? Unfortunately, they don’t have that historic designation to benefit from.

I’m seeing neighborhoods that were formerly avoided to some degree by agents, but we’re starting to see some good renovations.

Specifically, I’m seeing a lot of renovations in the listings west of 19^th avenue, south of Indian School, and as far south as Encanto. These have a lot of navy brick homes, which are hard to find and very sturdy. New home construction is too expensive and almost never brick. Brick is more stable, better for deterring termites. These were homes built in the 1940’s and 1950’s for the most parts.

I’m also seeing some nice renovations in the area of 24^th street and Thomas; also brick homes. In some areas it’s street by street, where one street is great—with a lot of renovations—and the next street isn’t so good. Another area where I’m seeing a lot of renovation is east of 16^th street, west of the 51 freeway, and south of Indian School. Even compared to a year ago, it’s improved noticeably. It’s happening in that area because it’s spilling over from the Coronado historic neighborhood (which is getting oversold: too many buyers, not enough houses), so people that aren’t finding things under $200,000 are pushing over to the 16^th street areas.

That area has been a little rough in past years, but you’re going to start seeing more and more renovations just outside of the traditional historic neighborhoods, because the historic neighborhoods are pricing higher. Classic supply and demand. You might consider looking into these 16^th street areas because of the action that’s going on there.

There are other neighborhoods further to the east that are going up in price as well, on the other side of the 51, going all the way over to Scottsdale. Give me a call if you’re curious about that.

Shoot, give me a call if you’re curious about other historic spillover areas you’ve got on your mind as well.

I look forward to talking with you. I can be reached at 602-456-9388

This week I want to talk about how data informs my gut sense. What does it mean when I talk about different types of ‘data’ in my posts? A hugely reliable source of my data comes from The Cromford Report.  The Cromford Report takes data directly from the Multi-Listing Service, which is the most accurate report of sales in Arizona. In this next graphic, you’ll see what the Cromford Index does. Two things you need to know about this chart on Phoenix for the last 30 days:  Above 100 and below 100.

Look at the two gauges on the left and right sides. Anything over 100 is a seller’s market. If the arrow is in the green, it’s good for sellers; red, it’s good for buyers. As you can see from the 30-day chart at the bottom of the graphic, the supply is really flat right now. That’s because we’re not getting a new supply of homes into the available inventory, which means it’s a seller market. Between buyers (the Supply Index gauge on the left) and sellers (Demand Index gauge on the right) you’ll see demand is pretty flat (in the yellow zone). In an ideal world, buyers and sellers are equal in getting what they want.

 Macro

This chart below is for Phoenix, for the last couple years.

You can see here, in the pink, that it became better for sellers in 2011. It’s at over 100, so it’s better for sellers. Since 2011, it’s been increasingly better for sellers, there was a little drop off at Christmas 2012, but then it’s popping up again. The long-term Crawford Index tells us that things have been getting better for sellers for a while –for much longer than the media was reporting.

Can I get any worthwhile information on just a month worth of data, or must I have a year’s worth of data to be able to offer any real value?

With the Crawford stuff, you have to look at the micro and the macro, balance them out, and end up with the gut feeling (many authors on decision making whom I’ve read say that the gut reaction is the more accurate than we might think). You have to be in the business and see lots of data to get that gut sense.

Micro micro

Check this out, we can look at zip codes also in The Cromford Index.  Isn’t that cool? This is a micro-micro example of using data. This data shown in the chart below is for $100,000 to $250,000 on Phoenix zip codes for 85003, 85004, 85005, 85012, 85013, 85015. This is SFR in Maricopa county. It’s a 6-months moving sales, and it’s really janky because there aren’t that many homes in that price range.  It’s a pretty small area for home prices.

I have used this kind of data in the past (3/26/10 – “Data is right. Media is wrong” and 8/25/09 – “Can I Say I Told You So?” to make my cases about I saw (based on the data) and felt (based on my gut instincts) was going to occur.

Was I right just because of the data?

Not at all. I took the data and used it to get the gut instinct. You’ve seen me put up images of supply, inventory, and demand, on this posts and in the past, and you’ll see them in posts to come, but what I’ve found is you use the macro and the micro data, but in the end you have to go with your gut.

Next week, we’re going to talk about data as it relates to up and coming areas. I can tell you now what my gut instincts tells me:

The micro data shows price increases, but I also know that people are getting priced out of historic neighborhoods, so they’re going next door. I know those neighborhoods. And not just from an aesthetic perspective, but from gut instinct.

Give me a call, buy or sell.  Go with your gut.

In part four, we discussed the different local credit unions and how their Health Savings Accounts work. Now, we’ll discuss how to select the best credit union based on brokerage account services.

A brokerage account is like a money market account, but from it you can buy stocks, sell stocks or buy mutual funds.So it’s like a health savings account except the money is for investment or portfolio items. Like an HSA, there’s a firewall. The reason – credit and the bank should remain separate.

For example, if you are on your  JPWellsComeriBank account online and want to look at your brokerage account, the website will open a new window and take you to that separate brokerage website. With Desert Schools Credit Union, they will personally connect you with a financial services company who will set up your account services, etc. You can set up your account on Desert Schools to make automatic bill pays to your brokerage account, as well. Though you still must login to the brokerage accounts from a different website than your Desert Schools website. The two businesses are separate, but they are more integrated on a personal level.

When I called Desert Schools Credit Union, I was directed to financial services, and spoke with a representative immediately. He told me about what they had, that he’d look at my portfolio, and help me get the changes set up from my national bank. Now, when I did this over at Arizona Federal Credit Union, they directed me to a woman named Stephanie. I left my number for her, but she never called.

From the perspective of a small business owner, credit unions are all  basically the same. They have the same fee structure and basically the same offerings. The thing that really differentiates one credit union from another one is customer service. If I own a business, I want my banker to be on the phone and someone who knows me. Why am I leaving JPWellsComeriBank? Because they’re a big anonymous bank. While the fee structure among different credit unions are nice, as well as the integration of health savings account, they’re not critical. The bottom line for me: What was their customer service like?

In wrapping up this series on credit unions, we’ve taken a close look at the difference, we’ve examinatined them in person, we’ve compared the pros and cons. I can sum up the most satisfying part of this process in one example which really captures the essesnce of why I left a big national bank for a local credit union.

The story goes like this:

I went into Wells Fargo to take out my money for the last time and the woman assisting me asked, “Why are you leaving us?”

“Two reasons:” I told her. “I’ve waited too long to put my money where my mouth is and I’m finally going to support a locally owned bank. When I use my money at locally owned businesses, 30% of my money stays in the local economy.”

“But Desert Schools doesn’t have very many ATMs …”

“Are you really playing the ATM card card?”, I asked her, “You know that doesn’t matter. I can just take money out from a cash advance at the grocery store.”

Her response?

“Oh, yeah, I guess so.”

So, there we have it. I thought this process would be longer and more difficult. In some ways it was, but in most ways it is really easy to mover your money to a locally-owned credit union and keep your money where your state is, so to speak.

Good hunting!

Part 3 ended with the big question, “What are the home builders doing?” I’m going to end my four-part market analysis with this answer and what they tells us as we’ve crossed into 2013 and heading into February already.

At the same conference that was put on for realtors by old Republic, where Mike Orr spoke, the home builders got up on stage. There were five of them and they had this total love-fest among themselves talking about how proud they were, “We’ve got this land out by the San Tans and were going to put like 8,000 homes on it!” And “yeah that’s right! And every one of them is going to have a pool!” They were really proud of themselves because they’re really starting to build 424 a month, 704 per month, 805 a month and they just saw a great future for themselves.

This is where they used to be. And this is where they are now…

Back when I was working for the State Energy Office. We were trying to convince home builders to put energy efficiency improvements in their homes and they were like, “Don’t bother us. We’re too busy.”

This is where they were in 2006. They built 60,000 homes in a year. Way too many for us to absorb.

I think what these guys are going to find, in the next two or three years is that they will never reach that old demand for “sprawl” housing.

Bear with me. I’m going to pontificate a little bit here. As the United States gears up its economy,

and China gears up its economy,

and Europe gears up its economy,

the price for auto fuel is going to go up. I think, it will reach over $5 per gallon, and that is going to affect home buying decisions.

One of the things I learned back at the energy office when I was there is that the price per barrel to get oil out of the ground has only gone up year after year. You may be fracking for natural gas and all that, but you don’t drive a natural gas car, typically, from Ahwatukee to downtown Phoenix, or from Avondale or the San Tans to your job.

So these guys are going to continue building out in the ‘burbs, but they’re going to find, as I have found, that people are less and less enthralled with the idea of living so far out.

So what will that do to home buying decisions?

I think you’re going to see those zip codes that we talked about before continue with an even greater price pressure upward. I think you’re going to see more desire for infill. Unfortunately,  the big developers sitting on the stands, congratulating themselves only want to do 1000+ homes. They’re not interested in doing a little infill project with six homes (which is about the best you can do in central Phoenix). They’re going to have a really hard time putting in new condos until we can continue selling off the ones we built at like $500 per square foot back in the peak of all this.

That’s going to make central Phoenix even more interesting to people.

This is the outlook that Mike Orr presented:

…Because more folks are finding reasons to sell to folks who bought before 2003 and they feel safe to put it back on the market. They’re going to add to the inventory…

…‘Cap Rates’ are their ability to make money off of these investments. So the investors will slow down as those Cap Rates fall. You have to ask yourself, is that going to put me in a situation where we are going to have less and less of a possibility for renters to find a place? We’ll talk about that, shortly…

…and they’ll do it…

Now this is my speculation, which I’m going to separate to make it even clearer that I don’t represent what Mike Orr has to say here.

I think that as you watch those historic neighborhoods that are a walking distance to the light rail (typically considered as between the 7’s; Seventh Avenue and Seventh Street), you’re going to see those prices continue to go up. That’s because builders are in the ‘burbs, not in central Phoenix and the inventory downtown is limited. Like Tempe, it’s landlocked. I think we’re going to see more of that.

Investors: the Cap Rates are going down, so if you’re thinking of investing, I think the window is closing for your potential to get an investment.

Home buyers: the prices will continue to go up, though we don’t know where the interest rates are going to be.

Home sellers: when you look at the charts above, and you think, “Great! The prices are going to continue to go up!” But we think that interest rates are going to stay low for another year, but if you are a home seller and home buyers interest rates go up, their ability to buy your house goes down. You have to keep an eye on that. In other words, this might be a good time for you to sell if you’ve been waiting.

Mike Orr also said that we can expect a rush this month (January 2013). I want to say something about that. Typically, if agents don’t get their sales completed by August, September, or October, they’re going to have a really bad Christmas/Hanukkah. The reason is because it’s slow during the holidays. The last two years, I have hardly had a day off during the holidays because it’s just been so busy. I think Mike could tell you that we don’t expect to have a whole lot of free time, because it is going to stay busy during Christmas.

Having said that, what always happens is that people finally shake off the left over Christmas tinsel at the end of January and say, “Oh, yeah, weren’t we talking about buying a house back in October? Must’ve forgotten about it because of how Halloween and all those other goings on.” And then you get that big rush of buyers. I think that this drastic upward momentum they receive is going to continue until the end of January 2013.

Moving forward

I would love to see my friends and my clients and the folks who are supporting downtown and central Phoenix getting some good information. I have access to all of this data from Mike Orr’s Cromford Report and it can reveal so much.

Please tell me, how helpful you folks think this market analysis series has been to you? What areas would you like me to zero in on?  Are there listing conditions you’d like me to do some research on?

If you have questions about buying or selling your home, please call me at 602-456-9388. I can help.

Last week, I shared details of the actual percentage of the increasing value of homes in the downtown Phoenix historic districts between January 2011 and October 2012. This week, I’ll open it up to CenPho, still focusing on the historic neighborhoods. You’ll find this very interesting and informative…

The bold numbers are the percecentage of change in those areas that follow:

No Change

I believe that we have not seen much change in these historic neighborhoods because they are so small and unique. We just have not seen much turnover in homes here.

Ashland Place Historic District
Hoover, Vernon and Ashland Avenues between Central Avenue and Third Street

Alvarado Historic District
Central Avenue, Oak Street, 3rd Street and Palm Lane in Phoenix
Note: I have a great listing at 140 E Coronado, directly behind the Phoenix art museum. This is a great, stable neighborhood.

East Alvarado Historic District
Central Ave., 3rd St., Oak St. and Roanoke Ave.,

East Evergreen Historic District
McDowell and Fillmore Sts., Central and 7th St.,

Up to 15% increase
This is generally the same as those areas noted above. This is a relatively small area and there is not a lot of turn-over.

La Hacienda Historic District
Thomas Rd. and Earll Dr. between 3rd St. and 7th St.

15% – 24.9% increase
The change in these areas is a result of some really nice renovations of historic homes. You are not seeing the huge increase in prices, as with those areas further down in this post because these areas remained surprisingly stable throughout the recession –at least by comparison. These areas prove my premise: that historic neighborhoods survive shocks better than other neighborhoods.

Campus Vista Historic District
Osborn to Thomas, 7th Avenue to 15th Avenue.

Cheery Lynn Historic District
Flower St, Earll Drive, Randolph Road, and 16th Street.

Country Club Manor
7th St. Osborn Rd and Thomas Rd

Del Norte Historic District
Virginia Avenue to Encanto Blvd, 17th Avenue to 15th Avenue

Encanto-Palmcroft Historic District
Encanto Bvd, McDowell Rd., 7th Ave. and 15th Ave.,

Encanto Vista Historic District
Encanto Bvd, Thomas Rd., 7th Ave. and 15th Ave.,

Fairview Place Historic District
15th Ave., McDowell Rd., 18th Ave., and Encanto Blvd

F.Q. Story Historic District
McDowell Rd., 7th Ave., Roosevelt St. and 17th Ave.,

Idylwilde Park Historic District
11th St and 12th St. Weldon Ave. and Fairmount Ave.

Margarita Place Historic District
15th Ave and 16th Ave along Edgemont Ave.

Medlock Place Historic District
Missouri and Camelback Rds. Central and 7th Aves.

Melrose-Woodlea Historic Neighborhood
15th ave to 7th ave and Indian School to the canal

Oakland Historic District
Van Buren and Jefferson Sts. 7th and 15th Aves.

Pierson Place Historic District
Camelback and the Grand Canal Central and 7th Aves.

Woodland Historic District
Grand and 19th Aves. and Van Buren and Fillmore St

Yaple Park Historic District
The Canal and Indian School Rd., 7th and 15th Aves.

25% – 34.9%
Willo saw some terrible price drops, but really started coming back in 2011. I believe a lot of this prices increases in Willo became apparent earlier than those shown far below.

Los Olivos Historic District
Located along Monte Vista Road between Third and Seventh streets

Roosevelt Historic District
McDowell Rd and Fillmore St. Central Ave. and 7th Ave.

Willo Historic District
Central and 7th Aves. McDowell and Thomas Rds.

35% or more increase
These areas really saw a huge dump in prices during the recession. The Coronado neighborhood, for example, was priced incredibly high on a per foot basis before the drop and they saw a huge downturn. Garfield neighborhood is increasing for other reasons –can you say “ASU expansion?” Garfield is going to be an important downtown neighborhood in the coming years and everybody is jumping in on it. I just hope that those who are jumping in are actually renovating the homes and not just acting as absentee landlords.

Brentwood Historic District
McDowell to the I-10, 16th Street to the 51

Coronado Historic District
Virginia Avenue to Coronado Road, 8th Street to 14th Street

Country Club Park Historic District
Thomas Road to Virginia Avenue, 8th Street to Dayton Street.

Earll Place Historic District
Earll Drive and the north side of Pinchot Ave between 16th and 18th st.

Garfield Historic District
7th St. 16th St. VanBuren St. and I-10

North Encanto Historic District
Osborn and Thomas Rds. 15th and 19th Aves.

Windsor Square Historic District
Missouri and Camelback Rds. Central Ave. and 7th St.

Let’s talk about home sales trends, shall we? I hate to say I told you so (okay, maybe I don’t…), but According to Data Reporters Ryan Konig and Matt Dempsey at The Arizona Republic, the downtown Phoenix historic districts in 2012 saw a significant increase in median sales prices for single-family houses.

Which downtown Phoenix historic district areas  have seen the greatest increase between 2011 and 2012?

The Roosevelt District
Roughly surrounded by McDowell Rd and Fillmore St. Central Ave. and 7th Ave. in Phoenix. The shape of this district is like a perfect box.

Los Olivos Historic District
Located along Monte Vista Road between Third and Seventh streets

Villa Verde Historic District
Grand and 19th Aves. Encanto Blvd. and Monte Vista

Willo Neighborhood
This historic distric is located direct above the Roosevel Historic District. It’s roughly surrounded by Central and 7th Aves. McDowell and Thomas Rd.

So check this out. Those four histroic neighborhoods have seen a 25% to 34.9% increase in the median housing prices since 2011! Meanwhile, the east side of central, literally across the street, has seen how much incrase in home prices since 2011? Try zero.

The orange area is the sweet spot of this increase in prices for three of the historic neighborhoods: Willo, Los Olivos, and Roosevelt. Villa Verde is at the NW corner 19th ave/Grand ave.  It’s the same area I’ve been telling people for some time now not to ignore–“because there’s some good stuff going on there, stuff that’s going to explode in 2012″. Of course, I’ve been saying since late 2009 that CenPho is gearing up for a serious rebound.

So, I can’t read the future or anything. Don’t come asking me about which boxer to bet on. But I have a really good nose for where things are going in CenPho.

If you’re a buyer who wants to know about those cool little hidden places that my expertise tells me are going to do well, come talk to me. If you’re a seller, now is the time to think seriously about selling.

In future posts coming down the Get Your PHX pipline in 2013, I’m going to be tracking certain areas in Central Phoenix for you; for example, historic light-rail adjacent areas, and let you in on what’s happening to median home values  in these areas. It’s going to be an exciting year, 2013. Keep your ear to Get Your PHX and I’ll do my best to keep you in the know.

Kenneth “Ken” Clark
REALTOR(r)
At Your Service!
HomeSmart
(602) 456-9388
Ken@GetYourPHX.com

We were not certain that The Mortgage Forgiveness Debt Relief Act of 2007 was going to survive into 2013, regardless of the much ballyhooed fiscal cliff. The Debt Relief Act simply says that you will not pay taxes on the amount of debt you are forgiven if you short sell or foreclose on a home. 

The 11th hour congressional extension means homeowners will not have to pay taxes on forgiven mortgage debt from short sales or loan modifications until 2014. The Relief Act was set to expire December 31, 2012.

Without the tax break, a homeowners forgiven debt could be considered taxable income.

“Housing advocates and lawmakers [were] worried that the exemption [would] disappear just as thousands of homeowners [were] receiving large amounts of mortgage debt relief from the nation’s five largest banks as part of a national settlement of foreclosure abuse investigations.” ~ Jim Puzzanghera, Chicago Tribune

The five big banks the reporter for the Tribune is referring to are Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. As of September 20 last year, the article goes on to say, “Nearly 140,000 homeowners received some type of relief under the settlement, averaging about $76,615 each.”

As we are all well aware, homes today are worth much less than what they were purchased for in the housing bubble. By reducing the value of a troubled mortgage to the current value of a house, banks are frequently able to save themselves money. If the tax break had not been extended, any mortgage debts a bank forgave would then be counted as taxable income. In other words, if a $350,000 mortgage were reduced by the bank to a then current value of $250,000, the happy homeowner would suddenly become the proud owner of a $100,000 income tax bill.

“As a result, a homeowner struggling to pay the bills would be faced with tens of thousands of dollars in taxes. That would destroy any hope of establishing future mortgage debt relief for troubled homeowners, as any bank leniency would result in heavy tax trauma for borrowers.” ~ Zach Carter, The Huggington Post

According to CNN/Money, over 50,000 families lose their homes to foreclosure every month.

A sigh of relief is in order. Whew.

Here is the important take-away: Take advantage of this fiscal-cliff debt relief tax extension…now…while the next 12 months are still in play. Give me a call or drop me an email. I will absolutely sell your home, even if it is short sale.

Choosing an agent is a very personal decision. 

Let’s grab a cup-o-coffee, I’ll explain the Get Your PHX Method and you can see if I’m the right agent for you. Try before you buy!

In part 3, I shared my experiences with my physical visit to Desert Schools Federal Credit Union. I ended just when I was about to talk about their Health Savings Account. As both Desert Schools and Arizona Federal Credit Union offer this package, I thought I’d size up the two choices on this note, follow it with my review of Arizona Federal, then see if you would choose the same one I will.

Health Savings Account. These types of accounts came into effect under George Bush II, in what I see as an ineffective attempt to control health costs. The way it works is if you self-insure (a lot of small businesses, for example, get their own insurance), you can open a Health Savings Account. By doing this, you’re in insurance rates are lower, your deductibles are higher, but you’re allowed to open a savings account that earns money tax-free. When you spend money on your healthcare out of that account, you get to deduct it on your taxes. If you are self-insured under the Health Savings Plan, you have to have a Health Savings Account to go with it.

With the national banks, you can’t toggle from your online account over to your health savings account, without going through a third-party “firewall” of sorts, a completely different site where you must login from there. They keep the Health Savings Account very separate from your other accounts.

At both of these credit unions, your Health Savings Accounts are integrated. This makes it so much easier. Part of the reason for having health savings account, is that you want to be putting money aside every month into the account. Because the credit unions make that easier to do, I’m much more likely to set aside money for that purpose. Any financial advisor will tell you that you need to be socking away money every month that goes somewhere that you don’t touch specifically for the kind of health emergencies one doesn’t anticipate.

For Desert Schools Federal Credit Union’s local investment, they were good. They had a nice long list of groups they give money to that are Arizona-based. That’s very good. For example, they support United Way and BALST School District (one of the underprivileged school districts where we need to get kids into a better situation).

Arizona Central Credit Union

They have 50 valley locations. I went to the branch on Central Avenue and Palm Lane. They do have a drive-up ATM there, but no teller window. I didn’t get a chance to look at their online demo, because, like Desert Schools, they don’t have one– and because no one offered me a peek at their own personal account. Of course, I didn’t ask. I did ask if they had an online demo and they said, “No. For one, we just updated our system, but also, nobody ever really asks about that.”

Bill pay for them is not always free. I don’t remember the conditions under which that’s the case, but I think it’s related to account balances. For security, they use Alert Me Credit Monitoring Service.

I was less impressed with their customer service. My hold time on the phone, just waiting for someone to pick up at the branch, was 15 minutes. The next day, I physically went into the branch, not so much because I was ready to do that, but because I didn’t get anywhere on the phone. So I walked into the Arizona Central Credit Union (ACCU), kind of just waited around for a while, and then someone said, “If you just have a seat over there somewhere, someone will be over to help you.” It felt to me like they didn’t really care that I was there.

That’s two red flags. One on the phone. One in person. If it weren’t for the fact that I was also planning to write this post, I’d have bailed on Arizona Central Credit Union right there. If I were to treat my perspective clients like that, I’d never sell any homes. I expect the same level of service from people who want to hold on to my money.

Again, from the perspective of the small business (and the biggest selling point that credit unions should have over mega-banks), I’m making this shift for the personal touches of knowing consistently who I’m talking with at the bank. ACCU failed on this point.

Their personal accounts were pretty much the same as Desert Schools Federal Credit Union. I was not impressed by what had to be done in order to get free checking, though. Their minimum balances seemed really high to me. It just bugs the Dickens out of me that people want to hold on to my money (to earn interest on it) and they’re still charging me fees. Their fee structure for business accounts was a minimum of $1500. This was the same at Desert Schools. Nothing significant was different in the way they structure savings accounts as well. They also have the Health Savings Account, with no monthly fees, and it’s integrated into their website. Local Investment for them was also a healthy list. One of them was International Rescue Committee, which I like.

The last thing I want to review for Desert Schools and Arizona Federal Credit Union, before I make a decision between the the two, is Brokerage Accounts. That’s the first thing I’ll talk about in the next installment of my six-part series on the process of selecting a credit union. Until then!

Welcome to part 3 of my investigation into the wisdom and practicality of making the switch to credit unions from my current national bank at JPWellsComeriBank.

In part 2, I narrowed it down from 10 to two Credit Unions worth serious consideration:

Desert Schools Federal Credit Union and Arizona Central Credit Union.

I’m starting with Desert Schools Federal Credit Union, but there is a significant amount of overlapping, so you’ll want to read this first one, first, or you’ll miss out on a good portion of both reviews.

Desert Schools Federal Credit Union

They have 56 valley locations. I went to the one on Missouri and 7th Street, by the Buffalo Exchange. They were very nice. I asked if they had a demo of their online system. They did not have one. A woman at another desk said, “You can look at my account”. I was surprised that she was willing to share her personal information and resisted at first, but I saw that it works about the same as the accounts at my current national bank, though it’s not as pretty or intuitive. JPWellsComeriBank spends a lot more money on their customer website account interface.

Both Desert Schools Federal Credit Union and Arizona Central Credit Union have mobile apps, but neither of them have the app feature where you can take a picture of your check and deposit it through your phone. Now, that’s not something I need at present, but it’s worth knowing. Because as soon as they do come out with that feature, you better believe I’ll take advantage of it, especially given the small number of physical locations compared to the larger, national banks.

Bill Pay, for all of their different checking account types, except for one that is set up for kids, is always free with Desert Schools Federal Credit Union. I was impressed with that. You can also see copies of your checks for free. The national banks charge for that. This credit union also interfaces with Quicken.

This part is the most important for a small business like mine, and in fact, it was one of the reasons I hesitated moving away from the megabank I’ve been with. In the end, I’ve seen that I really had nothing to worry about. I’m sure the megabanks are happy to feed the fear that credit unions won’t be able to provide the same on-line services.

Withdrawals from non-credit union banks are free for the first four and $2 after that. But there is a workaround to those non-specific-institution charges; one that is often utilized by people, but never openly promoted (and for obvious reasons): make a cash withdrawal when making a purchase at a supermarket. This method also suggests a way around any maximum per day ATM withdrawal amount.

For security on their credit/debit cards, they use Visa Fraud Monitoring. That seems pretty good to me. The woman I spoke with at the bank said that Desert Schools Federal Credit Union has never had their information hacked or stolen.

Regarding their customer service:  when I first walked into the bank, I was greeted after a couple of minutes and the woman who assisted me was very helpful. I didn’t tell her that I was preparing to write this blog post, but she was very surprised at the number of questions I asked.

What I noticed at both of these credit unions, if you wanted to have both free checking and a minimum balance, they required you to do a certain number of credit charges. What they mean by “credit charges” is that they require a certain number of charges to be run as credit, as opposed to running them as debit. I thought that was really interesting. I had never seen that before. I later talked to a local merchant who explained that banks get a higer percentage per charge if it’s run as credit, as apposed to debit. In the end, it doesn’t really matter to me whether I sign for it as a “credit” charge or use my pin as a “debit”. The money comes out of my account the same way.

$7 dollars a month is what you pay for their personal checking account, unless you have a balance over $1500, in which case it’s free. With both credit unions, you must have a savings account (with a minimum $25 balance) along with your checking account. This is their gateway to becoming a member of the credit union. That makes sense, because then you have voting rights as a member (remember, Credit Unions are, by definition, member-based institutions). Also, both credit unions do not require automatic savings withdrawals every month, unlike the national banks all do. This is great.

In next week’s post, I’ll cover Health Savings Accounts at Desert Schools Federal Credit Union and share my experiences at Arizona Federal Credit Union. I’ll then chose one and see if you can figure out why I chose it.

To see the next installment, click here.