My colleague, Leif Swanson, publishes market stats for the Phoenix metro area once per month. Have a look here to see them thar updates.

Here is the Cliff’s Notes Version:

1) It is now a seller’s market in Phoenix! The inventory of homes in July 2009 was 4.2 months.  It was much better than July 2008’s absorption rate of 9.1 months, but a small bit higher than June 2009’s 4.1 months.  (Absorption rate = the # of months’ inventory available for sale.) A balanced buyer-seller market is six months.  The absorption rate in July 2009: 3.8 months for homes, 6.7 months for condos, and almost 14 months for manufactured homes.  Therefore, it is now a seller’s market for homes in the Phoenix metropolitan area.

2) Sales of homes in July did not go up from June. However, both months saw a 52% increase of home sales (about 9,000 homes) over last year (about 5,900 homes).

3)  Bank-owned foreclosure properties accounted for 53.3% of the sales in July 2009 down from June 2009’s 57.4% and May 2009’s 63.1%.  More and more buyers are purchasing homes from regular sellers.  While nearly 36% of the total sales in July 2009 were cash, 33% of the sales were with FHA or VA financing.

4) The average sales price in July 2009 increased for the FOURTH CONSECUTIVE MONTH to $175,345.

There is plenty more to geek out on in Leif’s report. He always does a thorough job in his report.

Beatrice Moore, one of our great arts leaders downtown, sent me this call for entries for the Trashy Sculpture Show.

This show will be hosted in the main room of the Bragg’s Pie Factory on Grand during the September 26th Grand Ave. Festival.

Works can hang from the rafters, be free standing, be attached to the walls, be attached to the parking lot fence or be hung from the trees in front of the building.  Work must be made primarily from trash or recycled materials.  Work will be exhibited through October.

I was thinking of submitting my 20-year old collection of used toothpaste tubes. They are my pride and joy.

This is going to be a great festival and a fun community-based show. I really look forward to it.

Here’s the document: Trashy Sculpture Show

I want to give a little shout-out to Tazmine and Paul over at Blooming Rock Developments. Have a look at this post about a renovation project that they did earlier this year. It demonstrates that even the most drab and uninspiring structures can be sharp, fresh and unique. Their project, 3 Palms, is over on Cheery Lynn, east of 16th St. They are in a great place to serve as a catalyst to residential property redevelopment.

I’m waiting for more photos of the work they did inside and some information on the costs and lessons from the project. I’ve seen inside, but you should, too. They did a great job of balancing modern and warm.

There is an intriguing situation playing out at the legislature, and I’m not talking about the budget.

A little background: In AZ, if you go in to foreclosure,  the bank takes back your property and sells it at a loss, they can’t come after you for the difference. The act of coming after you for the difference is called “deficiency.” Therefore, Arizona is an “anti-deficiency” state.

In other words, let’s say you bought a house for $200,000, but could not make the payments and the bank forecloses. They can only sell it for $150,000. They can’t come after you for the balance of $50,000.

That is why Arizona is such a great place to get a fresh start. We’ve been that way for a while. Banks don’t like it, but people do.

So, along comes freshman Republican Senator Steve Pierce, R-Prescott. He passes a bill that makes Arizona a deficiency state, so that banks can come get the balance from people. Well, actually, the bill allows deficiency only in those cases where the owner has owned the property for less than 6 months. He was trying to target people who flip houses.

Well, the bill has caused quite a few problems. Most importantly, it will encourage more foreclosures and bankruptcies. Here is why: Arizona has a relatively short foreclosure period (90 days). If banks know that all they have to do is wait out an owner in order to foreclose and still be able to go after the deficiency, then they are more likely to do that. This will impact more than just people who are flipping homes. This could impact all kinds of buyers, not just “flippers.”

So, the Arizona Association of Realtors (AAR), who did not see the implications when the bill first passed, have jumped in to action. They asked the governor to put the topic in the call for special session (which we are in now). They also convinced the original bill sponsor to advocate for the repeal of his own bill –a pretty impressive feat, if you ask me.  See the letter to the governor here.

So, now we are in a real pickle. The original bill goes in to effect on Sept. 30th of this year. Yet, despite several attempts, the AAR has not been able to get the repeal through the legislature. See the Arizona Republic article here.

What does this mean for you? Well, if the repeal does not go through, watch for more foreclosures starting in about December. I don’t expect a dramatic increase in foreclosures, but this will add to the mix. There will also be a suppression of investment purchases.

In my opinion, we’ve done well with anti-deficiency in Arizona. Sure, there are folks who should not be lending money. But, perhaps the banks should look inward to consider why they keep lending to people who default within six months of purchasing a property.

I encourage you to call your legislator and ask them to support a return to our traditional anti-deficiency status.

Stay tuned.

The folks over at Downtown Voices Coalition posted this yesterday.

Last month videographer Efrain Robles shot this time lapse video of downtown Phoenix as the sun sets and the traffic is heavy.

Phoenix Sunset from Efrain Robles on Vimeo.

Hey all,

I just wanted to give a quick shout-out to some folks who help get the word out about the Get Your PHX monthly mixers.

The ladies at www.NetworkingPhoenix.com are really great about posting Get Your PHX. I like to think of the event as more of a downtown civic support group than straight “here’s my card, where’s yours?” networking. But there is also more to www.NetworkingPhoenix.com than just that. So, have a look.

Also check out www.eventification.com. This one is more specifically tailored to CenPho. If you are looking for a good list of industry-related networking events, this is a good rolling list. Thanks to Brian Shaler for this one.

The City of Phoenix today announced that Entrepreneur.com named out little town as one of the top ten best places in America to start a new business.

Like Las Vegas, some of this has to do with the very cheap rents that resulted from the commercial real estate market crash and the very low home ownership costs right now. See the article here.

But in poking around on that article, they had a very nice series on how to start your own business. This would have come in handy! Why didn’t anybody tell me that I should have done a logo first, before I started selling homes?

Still, useful…

You might recall last week’s post about new FHA guidelines, which could undermine the condo market.

A mortgage broker in Chicago, Illinois views these new FHA condo project approval rules as positive for Chicago.  He predicts an uptick in FHA condo financing after October 1st.  Check out his blog post.

Leif Swanson and I were talking about this over the weekend. Here in Phoenix, Arizona, we have a different opinion.  We’re seeing these new FHA condo approval rules as a death toll to condo sales:

1.  Many of the smaller condo projects cannot afford the estimated $10,000+ FHA project approval fee (it’s not worth it to them just to be nice and expand financing options for buyers) so they are not seeking FHA approval.  This is where Spot Approvals came in handy.  But after October 1st, no more spot approvals.  This means it is highly unlikely buyers can get FHA financing for smaller condo projects.  Under 100 units?  And how many of the larger projects can afford the application fee?  Or have the staff to fill out the application?

2.  There were a lot of condo conversions in the Phoenix area in the past 4 years.  Many of those did not sell out 100% so they are renting the remaining unsold units.  The new FHA guidelines will prevent these complexes from getting approval if more than 10% of the units are being leased.

3.  These same condo conversions were purchased mainly from investors.  This tips the balance toward rental units versus owner-occupied units, thus preventing FHA condo project approval.

4.  There are a lot of foreclosure & bank-owned condos in the Phoenix area.  That means HOA dues are not being paid.  The new FHA guidelines will prohibit approval of a condo complex if 15% of the units are behind in HOA payments.

5.  After October 1st, 2009, all condo projects (unless approved since October 1, 2008) must be approved from scratch.  This means the condo project’s HOA reserves and budget must be reviewed by an FHA employee.  How many condo projects are there across the country?  How long will that take?  Months?  Years?  In the meantime, buyers cannot use FHA financing until approval.  And then the condo project must re-apply for approval every two years henceforth.

There is little to get excited about these new regulations.

Check out this handy one-pager that gives you seven reasons to buy today. This is valuable information, from tax implications to interest rate increases. Click here.

Also, have a look at this article about the family that had to make 15 offers on homes before they were able to get just the one they wanted in the Phoenix market!

The Advocacy Institute for Behavioral Health is accepting applications for the 2009 Eric Gilbertson Advocacy Institute for Behavioral Health.

The Training can help you broaden your skills in the area of behavioral health advocacy. There are 6 training days starting in September.

Learn more at the Foundation’s Website.