The January Market Report comes at a time when we don’t expect to see any change in the upward march in prices.

As I presented last month, the folks at the Cromford Report don’t see an end in sight to the shortage of homes.

They expect we will need about 270,000 more homes over the next decade. Unless investors are forced to sell the homes they scooped up to turn in to rentals; unless people sell off thousands of short term rentals, unless we find a path to citizenship so that home builders can hire more workers; and unless fewer people move to Arizona, there will continue to be a shortage.

But, then again, nobody every sees a market correction until it happens. Who knows what could catalyze the next downturn. The only thing I can see is that Arizona still does not take water conservation seriously enough.

Here is what the Cromford Report said about December:

“Each month about this time we look back at the previous month, analyze how pricing has behaved and report on how well our forecasting techniques performed. We also give a forecast for how pricing will move over the next month.

For the monthly period ending December 15, we are currently recording a sales $/SF of $264.00 averaged for all areas and types across the ARMLS database. This is down 0.3% from the $264.70 we now measure for November 15. Our forecast range mid-point was $266.85, so we were expecting a 0.7% rise and saw instead a 0.3% fall. However the result was still within our 90% confidence window. The monthly average $/SF can often vary by as much as 1% from day to day, so there is little significance to these numbers.

On December 15 the pending listings for all areas & types show an average list $/SF of $274.41, up 3.0% from the reading for November 15. Among those pending listings we have 99.5% normal, 0.2% in REOs and 0.3% in short sales and pre-foreclosures. The short sale and pre-foreclosure percentages remain extremely low and are having no impact whatsoever on market pricing.

Our mid-point forecast for the average monthly sales $/SF on January 15 is $273.21, which is 3.2% above the December 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $267.75 to $279.67.

Prices had been pretty flat for 4 months, then rose dramatically between October and November, only for them to stay flat again over the last month. We remain convinced that prices will rise again over the the next month and unless the situation changes significantly the same can probably be said for at least the next 6 months.

The Arizona Independent Redistricting Commission (AIRC) has done a much better job since its creation in 2000 than the previous set-up, allowing the Arizona Legislature to create district lines for itself.

However, we need to make two crucial reforms to the system of choosing commissioners if we want to avoid the political political tampering that happens increasingly with each passing decade.

On December 22nd the five-member AIRC passed its final legislative and congressional maps, which will define our political landscape for the next 10 years.

Predictably, as a result of political tampering, the maps have shifted dramatically from the 2011 redistricting to favor Republican candidates in both the Legislature in Congress.

How we got here and how we fix it requires a brief look back.

A Little History

In 2011 the Republican Party in Arizona was convinced that the Democrats had rigged the decennial redistricting process.

Today the Democratic Party in Arizona is convinced that the Republicans have rigged the redistricting process.

Now both parties, and especially Independent voters, have an undeniable reason to enact two key reforms to the redistricting process: the two biggest weaknesses in the redistricting process could be exploited by either political party in the next round of redistricting in 2030.

The reforms I suggest also address the specific complaints that both parties, and independents, have had over the last two decades.

Increase the Number of Commissioners

First, we should increase the number of commissioners from 5 to 9, seating 3 Independents, 3 Republicans and 3 Democrats. The chair will still be an Independent chosen by the other commissioners.

However, having three Independents will virtually eliminate the incredible pressure of the political parties to find one linchpin Independent commissioner who will favor one side over another, as is the case now with only 5 commissioners.

Having a greater number of independents has worked better in other states, such as Michigan. That commission has 13 commissioners, 5 of which are Independents with 4 each from each major party.  

It is also fundamentally fairer to the increasing number of Independents in Arizona.

Restrict the Role of the CACA

Second, the role of the Commission on Appellate Court Appointments (CACA) should be restricted only to vetting the AIRC applicants to assure that they meet the requirements of the constitution.

For context, here is how it works now: people who would like to be AIRC commissioners must meet basic requirements. They submit their names to the CACA, which checks that they meet those requirements. Currently, the CACA then chooses a smaller number of applicants to forward to the leaders of both parties of the House and Senate for final appointment.

In my suggested reform, the applicant names that would be sent to the legislature for appointment should be drawn at random from the pool of vetted applicants. The legislative leaders would still have several applicants to choose from, as they have now. But the their choices will not have been unfairly restricted by a biased (and politically packed) CACA.

This reform eliminates the incentive for a partisan governor to stack the AIRC via the CACA. Whether you believe that the GOP did that in this round of redistricting or not, it is clear that the cat is out of the bag and the opportunity should be eliminated in the future so that neither party can do it.

While it seems quixotic to think that politicians, famous for waiting until the last minute to do anything, will act a decade ahead of the next redistricting, it is important to note that in each of the last two decades both parties actually did plan very far ahead in order to try to gain the upper hand in the up-coming process.

After feeling that they lost ground in the 2001 redistricting process, Democrats put a lot of energy in to preparing for the 2011 process, searching for commission candidates that would not make the same choices that were made in 2001.

After being convinced of the unfairness of the 2011 process, the GOP made it a priority to position allies on the CACA so that they could influence who would likely be the Independent commission chair.

In short, the aggrieved party will harness their resentment and direct it to the next round of redistricting. The biggest losers will always be Arizona voters who have always wanted a process that minimizes political games.

It is a truism in any political system that the longer that system is in place without necessary reforms, the greater the opportunity for politicians to rig it. These two simple reforms will go a long way to make a more tamper-proof redistricting process.

A Comment on Competitiveness

Those of you who know me know that I worked for many hears to require the commission to make a greater number of competitive districts. Philosophically, I believe that we all do better when there are more competitive districts, once we meet the requirements of the Voting Rights Act.

I could speak for an hour on why and how we could do that. However, I’m practical. It is more likely that a compromise, like I recommend above, could be referred to the ballot by the Legislature, and is not likely to be successful as an initiative.

I know. I tried in 2008.

As such, I think that the most likely scenario would be a referendum to close the existing loopholes from the very political parties that I hope will see this as their best interest.

Don’t get me wrong. If you know any billionaires who are willing to drop about $10 million on a ballot measure, please send them my way.

Until then, we can still do better.

Here’s our curated list of December Happenings. Well, other than Phoestivus, that is. I mean, really. That may just be the most important December Happening on Phoenix.

Not biased at all.

Letterpress Workshops. Local artisan print house Hazel and Violet is offering letterpress workshops on Dec. 5th and 12th. Learn about how do do your own unique letter press printing. This is a unique and rare art form that produces beautiful, textured cards and artwork. Having been there, I can tell you that the massive letter press machines are impressive to see in action.

Artlink Call for Artists. The Artlink Artist Council has announced a call for artists to participate in the 9th Annual Art d’Core Gala exhibition on March 11, 2022.  The Gala is the signature event of Art Detour 34, and it returns with the theme Forces of Attraction, that invites those who contribute to and support the arts – including artists, collectors, philanthropists and community partners – to come together in celebration of the massive growth of Arizona’s art community in recent years. Artists who work in a variety of mediums are welcome to submit to this call. Wednesday, December 8, 2021 @ 5pm.

What is Gentle Density? Nope. It’s not a way to kindly say that a person is not very smart. In actuality, it is an effort to find ways to allow guest houses (“Accessory Dwelling Units” or “ADUs”) to be built in historic neighborhoods, without doing damage to historic homes or neighborhoods. This could be a crucial way to alleviate the housing shortage. Per this release from the Arizona Preservation Foundation, “The Downtown Voices Coalition Homelessness & Affordability Subcommittee and with the financial support of the National Trust for Historic Preservation and Arizona Preservation Foundation, will develop replicable strategies to allow gentle density on properties in historic areas without rezoning. Watch for news about up-coming meetings.

The Moth Phoenix Story Slam. I used to listen to The Moth podcast religiously. Then the world filled up with about 1 million new and interesting podcasts and I lost touch with this gem. So, it has been great to see that The Moth has a presence in Phoenix. They did not for many years. So, on December 8th, check out their event at the Crescent Ballroom on Dec 8th. See people tell true stories, live in front on an audience. No notes. Real depth and human dimensions.

Chanoyu. Chado, also known as chanoyu is often referred to as the Japanese Tea Ceremony in English. Cultural, contemplative and communal, this art form is based on hundreds of years of perfecting the bodily movements and mental disciplines involved in each tea gathering. $65. Seating times are 9:00 AM, 10:00 AM, 12:00 PM, and 1:00 PM at the Japanese Friendship Garden.

Intro To Permaculture Webinar. Greg Peterson, of The Urban Farm fame, and Don Titmus will co-host this class designed to help explain some of the new terms and concepts that are the foundation of permaculture. What is ‘Permaculture’ and where this idea came from. Why permaculture can make a difference in our daily lives. How permaculture affects not just our outdoor spaces, but how it can improve our home space and our communities too. Learn what steps to take to start introducing permaculture into your life. Find out about other Permaculture training options.

Donna Reiner, has written many articles over the years for the Arizona Republic and others about Phoenix history and memorials.  She is a regular contributor to our newsletter. This month, Donna tells us about the Knickerbocker Apartments at 2nd Ave and Roosevelt.

A few weeks ago, a neighbor asked if I knew anything about a cute old apartment building on Second Avenue in the Roosevelt Historic District which she often passed while out walking. I quickly googled the site and realized that no, I didn’t know anything about the building. However, I told her to give me a week and I would see what I could find. And herein lies the story of The Knickerbocker Apartments and its two neighbors: The Westminster and the Buntman/Cathedral.

Surely the inventory report found in the Roosevelt Historic District National Register for Historic Places nomination would offer some clues. Initially it did not; but later as the pieces of the puzzle began to materialize, they were there, staring me in the face. Off to search the newspapers online, first using the address and then using the name of the building. What seemed like hours later and hundreds and hundreds of articles which contained the word “Knickerbocker,” the key piece to the puzzle arose to the surface.

An obit for Philip Buntman in 1943, credited him as the person responsible for the building of not only the Knickerbocker, but also the Westminster and the Cathedral (formerly the Buntman). Apparently he had also built another complex, the Maryland Terrace Apartments just west of the capitol on 18^th Avenue and Washington. You would correctly assume that that one is no longer there. Today, sadly, it’s a surface parking lot.

In order to adequately answer my neighbor’s question though, I continued to pore through more newspaper articles and ancestry.com which gave me access to city directories.

Buntman was born in Edinburgh, Scotland in 1875, and came to the US before 1900. He resided in Chicago for a time where he met and married his wife Ida. They came to Phoenix shortly after 1910, with their daughter Gertrude who married Chester Goldberg in 1923.

Buntman quickly became involved in real estate development and sales, plus mining. He also saw the opportunity to offer a commodity, luxury apartments, to Phoenicians and visitors to Phoenix.

First, he built the two-story Buntman in 1913, where he and his family resided. Advertised as the “finest and most complete’ in Phoenix, the apartments had sleeping porches, built-ins, a gas log fireplace and many other accoutrements. A later remodel to the exterior, and the filling in of the porches in c. 1924, changed the look of the building.

The next, and largest of the three apartment complexes was the two-story Westminster on the corner of Second Avenue and Roosevelt built in 1914. Furnished and complete with telephone, maid, and janitor service, the Buntmans moved in. It too had sleeping porches that were later enclosed. The Maryland Terrace Apartments was also completed in 1914, but was only a one-story complex with six apartments.

Mr. Buntman was in the mood to build his last set of apartments in 1919, and that was the Knickerbocker. Another two-story luxury apartment complex, it boasted of being “strictly modern in every respect.” Furnished and providing maid service, the Knickerbocker was a testament to Buntman’s success.

All three of these apartment buildings on Second Avenue were home to many of Phoenix’s successful businessmen.

I contacted my neighbor and thanked her for the “hunt” and that I found enough to write an article.

For this December market report, I want to share observations from a webinar put on by the Cromford Report‘s Tina Tamboer.

She addresses some questions that she’s been getting about the market.

“When will we see prices go down?”

Tina says, “not any time soon.”

She shared this slide, which shows a long-term perspective of how the Cromford Index relates to supply. If you look at this slide, you might think that we are overdue for a crash and a switch from seller’s market to buyer’s market.

After all, the faint Cromford Index line is high, just like it was at the market crash in 2006.

See that red circle?

That represents the time that the Cromford Index hit a historic high — at least for as long as they had been tracking at that time.

But that index dropped, not because it hit a magical button in the sky, but because there had been a historic over-building of homes in the years prior to the crash.

People like to blame the Great Recession on either loosening of lending standards (which was definitely a problem) or government trying to get everyone in a house (which is a political talking point, really).

But another major driver that people tend to ignore was the over-building of homes prior to this time. People were buying homes in hopes to re-sell them at a profit. But the demand was simply not there and prices fell, causing people to lose their shirts and triggering all those questionable mortgage-backed securities to fail.

So, what’s happening today? Well, there is a huge demand and not enough homes. Kind of the opposite of backthen.

As Tina says, until that supply and demand meet again, the Cromford Index will stay high and there will be an upward pressure on prices.

To be sure, there is a lot of uncertainty and many differing opinions about where this could go.

And that will stay the same until we build many, many more units –as many as 270,000 over the next 10 years, by some estimates. Not that it will take 10 years for prices to come down. But, we need more units.

“Why do we still have a housing shortage?”

Well, look back at those last 10 years of under-building. Add to that the senseless purchasing of residential homes by investment companies like Zillow, and short-term rental investors., which sapped tens of thousands of homes out of the available pool of homes.

Developers have not been building as quickly as they would have liked, in part due to labor shortages. Those shortages came from the fact that we don’t have a path to immigration for many foreign workers. More recently, it comes from COVID and supply chain disruptions.

“Will houses get more or less affordable in 2022?”

So long as we don’t have more supply and people continue to move in to AZ as quickly as they have, affordability will be a problem.

Add to that the possibility that interest rates will have to go up at some time –certainly they will if there are fears of inflation on the horizon.

Have a look at this chart. Interest rates have gone up from 2.77% to 3.10% over that last year. That 31% increase in interest rates equates to a 40% increase in mortgage payments on a median-priced home.

The best thing that could happen is that prices could come down on homes. Barring an unforeseen crisis, like water shortages (like I’ve written about in the past), this is not likely. Based on incoming population and the foreseeable shortage in homes, you can feel relatively safe that a home you buy now (even if it is more than you want to pay) will hold its value.

“Should I buy now?”

As we often tell people, the real estate market is not the stock market (and shame on companies like Zillow and others that treat it as if it is). Buy a home if you need it and if you can afford it. In fact, buy a home that is cheaper than you can afford and pay down that debt aggressively. You should be okay.

“Should I sell now?”

If you need to, and if you bought more than a couple years ago, sure. If you own a home that you’ve been using as a short-term rental, I’d almost beg you to sell. Families need places to live more than vacationers need a place to stay.

Contact us if you’d like to dig deeper in to your particular situation at 602-456-9388.

For now, you might find this summary slide from the Cromford webinar to be a great summary.

Donna Reiner, has written many articles over the years for the Arizona Republic and others about Phoenix history and memorials.  She is a regular contributor to our newsletter. This month, Donna tells us about the Phoenix city flag, which turns 100-years old this month.

Get a group of historians and history buffs together to look at old Phoenix pictures and then try to outwit each other with trivia questions, one is apt to come away with a few story ideas. This is one of those stories.

There had been talk by the state historian, James McClintock, about a flag for the city of Phoenix. And a tourist even remarked that the motto should be “The Miracle City” rather than “Phoenix Rises.” That tourist thought Phoenicians simply did not appreciate their ability to create a Garden of Eden in the desert.

One hundred years ago this month, a group of women members of the chamber of commerce, led by Maie Heard, took the idea of having a Phoenix city flag to the next step. No more talking or discussion. Instead, these women instituted a competition for the design. While there were purported to be guidelines, none were discovered except for the recommendation that “the colors of the flag harmonize with those of the national emblem.” Maie Heard offered a prize of $25 for the winning entry.

A popular contest, the chamber of commerce received hundreds of entries and finally selected one. Frederick C. Green, Sr., a mining engineer was declared the winner since the first place drawing was too elaborate.

In order to become “official,” the Commission of the City of Phoenix needed to approve an ordinance making it so. Ordinance #544 described the flag as a “Phoenix Bird in grey on Gold Sunburst Background on a Blue Ground. [A] White Ribbon Scroll along [the] lower part of [the] Flag on which is the following legend in Gold: ‘CITY OF PHOENIX, ARIZONA.’” The 48 rays of the sun represent the 48 states (some rays are hidden by the Phoenix’s wings) and gold fringe trimmed three border sides.

The ordinance was unanimously approved November 23, 1921. Mayor Willis Plunkett also mentioned that the flag would cost $175, and all the commissioners approved the expenditure.

On November 11, 1921, the silk taffeta flag was exhibited for the first time as part of the Armistice Day parade. And then……no mention is made of the flag until 1929, after the city had moved into the new city hall (now Historic City Hall).

The flag, having been “hidden in a musty vault at the old city hall,” was “rescued from oblivion” and prominently displayed in the commission chambers. For some Phoenicians, it was the first time they had seen it or even knew that such a flag existed. But times changed, and once again the flag disappeared from public view.

Out of sight, out of mind. A piece of Phoenix history was hidden again. However, a new flag design was adopted in 1990.

Coincidentally, that original flag was discovered by one of those history buffs in the city clerk’s vault in the current city hall. While not being stored up to museum standards, especially considering its age, the flag is a gem. Perhaps we can persuade the mayor and city council to put it back on display, at least for its 100^th birthday in November.

Here’s our curated list of November happenings. It’s not everything, of course. But we think these things are particularly notable.

But, it’s beautiful outside! It’s that time of year that you think to yourself, “should I wear long sleeves?” then find out an hour later that you should not have. It’s that kind of warm, but not quite warm.

Ranked Choice Voting, with Andrew Yang. Y’all may know that I’m a fan of ranked choice voting (RCV), with which you can rank candidates in the order you’d like to see them win. I serve on the board of Voter Choice Arizona. While I was not a Yang supporter, I truly appreciated that he supported RCV, even when he ran for mayor of New York and the system probably disadvantaged his candidacy. In any case, join our November 17th state-wide meeting with Yang as a special guest. Get details and sign up here.

Tiny Flea Market. By which they don’t mean tiny fleas, but just a tiny flea. Know what I’m sayin’? It’s at Antique Sugar at 801 N 2nd St on November 6th from 8am to 2pm. The best little flea market in Downtown Phoenix is chock full of weird, wonderful, cheap old stuff. It’s true vintage flea market with authentic flea market prices. Cheap is kind of the whole shtick. Come ready to dig for your hidden treasures. Expect to find vintage clothing, housewares, knick-knacks, collectibles and miscellaneous cool old junk.

Wabi Sabi Pottery with Ping Wei. Try some pottery at the Japanese Friendship Garden on November 6th at 9am, where your instructor will demonstrate the process of making pinched bowls first. After the lecture, he will guide participants as you use the techniques yourselves to make your own tea cup and tea bowl. All materials needed for the items are included. After the workshop, Ping Wei will have your pieces fired and ready for you to pick up in three weeks at the Garden. $65.

Grand Unification. Grand Unification, hosted by Snood City at the Bragg’s Vendor Market, will take place along Historic Grand Avenue. Join the small business community along this unique downtown street while celebrating the arts, local businesses, and the historic neighborhood. Free admission. Let’s face it, as Roosevelt and 3rd St have been buried by apartment buildings and turned in to a deep canyon over the last ten years, Grand Ave is the place to go to see original art and creativity.

This Week Tonight Sucks. Phoenix’s Best Comedy Show (2018 Phoenix New Times) is now at Stand Up Live every Thursday. Join hosts Anwar Newton & Michael Turner as they irreverently round up the week in news in an outrageous late night setting. Comedians who join them get roasted and ripped apart if they don’t deliver the funny or treated like royalty if they bring the heat. There’s never a dull moment! Anwar and Mike will keep you up to speed on what’s going on in the horrible world around you! $20.

Small Business Advocacy Workshop. This event is hosted by the folks at Local First Arizona, of which we are members. There are a wide variety of policies that impact small businesses every day. From understanding zoning policy that impacts your business in your neighborhood, to state and federal policy that may impact the long term sustainability of your business. It’s important that business owners understand the effective ways to elevate their voice to officials molding policy in different ways. Attend this workshop to learn best practices to build relationships with officials, stay in tune with policy that may impact you, and how to best advocate for your small business.

There. I said it. Gas Stoves are Dangerous.

It is a heretical thing for a realtor to say, especially knowing that so many of our clients want them.

Heck, I have one in my home!

But with more information coming out about how dangerous they can be, particularly for children, I’m considering switching out to a induction stove.

There are two major reasons that we all need to consider removing gas stoves from our homes. The first is personal lung health. The second is about climate change.

Gas Stoves are Bad for Your Lungs

Let’s start by addressing the idea that fossil gas, or what the industry likes to call “clean natural” gas for marketing purposes, is not really as clean… especially when it is in your home.

Gas in home use releases dangerous levels of nitrogen dioxide (NO2) and formaldehyde; levels that the EPA considers dangerous for even outdoor exposure. This can trigger breathing problems for people with asthma, particularly kids.

And, let’s face it, how often do you remember to turn on the fan above your stove? As a realtor, I’ve seen homes where there is only an interior fan over a gas stove –meaning it just recirculates carbon monoxide and other poisons inside the kitchen. The inspector usually points it out, but the buyers move ahead because they’ve been lead to believe that gas is clean-burning.

The multi-billion dollar, multi-decade, “cooking with gas” campaign from the gas industry has mislead people.

Gas is a Huge Contributor to Climate Change

The gas industry spends incredible amounts of money to tell us, for instance, that burning gas is better than burning coal. They also spend incredible amounts convincing lawmakers of the same.

Coal fire power plants are terrible and need to go away. But the idea that methane gas is a good alternative, or “bridge fuel” is very mistaken.

According to National Geographic, “On a 20-year timescale, a methane molecule is roughly 90 times more effective at trapping heat in the atmosphere than a molecule of carbon dioxide, the greenhouse gas that wields the most control over Earth’s future warming in the long-term.” (emphasis added)

Furthermore, unlike coal, we have millions of miles of pipes all over the earth that deliver gas to homes, or from refineries, or from gas fields… and they all leak at rates we vastly under-estimated.

As such, we learn more and we know more. We need to move even more quickly as individuals and as governments to transition away from gas.

Can You Be Blamed for Not Knowing?

I don’t think so. The challenge is that the information has been evolving. For instance, back when I was the director of the state’s energy office in 2005-06, the common thinking was that it was better for the environment to have a gas water heater. That was because it took 60 gallons of water to generate the energy at a coal-fired power plant 300 miles away just to heat one gallon of water at your house.

So, of course it was better to heat that gallon of water with a flame in your home.

But, the calculation is changing. As we have shut down more coal fire power plants and more renewables have come on line, it is increasingly better every year for you to use electric to heat water, heat your home and cook your food.

Furthermore, the more we learn about the huge problems with leaks (and explosions) throughout the system, the more it makes sense to move to electricity.

Heck, I wish I would have thought of that before I installed a gas-fired tankless water heater back in 2014. So, we are all learning.

What Can Be Done?

1. Rebates for electric appliances. We need to demand from our policy makers and our utilities that they provide rebates for moving from gas stoves, gas water heaters and gas home heating. We did it with great success when we moved from incandescent light bulbs to CFLs and then LEDs.

2. If you can make the shift now, consider doing it. Perhaps your water heater is getting old, consider making the shift. I am.

3. Look in to cooking with induction stove tops. As a realtor, many people I talk to wants a gas range. But many folks don’t know that you can brown those potatoes just as well with an induction stove top. Plus it cleans up better! There are a bunch of YouTube videos out there of professional chefs debunking gas industry myths.

As with everything in this realm, cleaner energy is a combination of personal change and political change. We need both.

Phoestivus 2021 is happening this year and there are a lot of things that you need to know. Be sure to follow us on Instagram for updates.

1. Phoestivus 2021 is, for the first time, two nights in a row. — December 15th and 16th, from 5pm to 10pm. So, please mark your calendars! This change has been coming for a long time and it allows us to save money on infrastructure so that we can bring you a better experience, and so that more of what we raise goes to the weekly downtown farmer’s market.

2. Vendors are Central to Our Mission. — Our vendors are still locally-owned and create locally-made goods. We just stopped taking applications for vendors, and we are still sorting out exactly how many there will be. But expect well over 150.

3. Our Footprint is Expanding. — To assure that we can have more socially-distant shopping space, we are expanding over to 1st Street. So, that means there will be shopping, food and drinks on the normal Public Market footprint, but also on McKinley, Pierce and 1st St.

4. Your Old Favorites are Here Again. — Phredie the Yeti, Hipster Santa as well as Phoestivus traditions like the Phoestivus Pole, Pheats of Strength, and the Airing of Grievances are also making their triumphant return to Phoestivus.

5. We have some surprises. We can’t say yet, but it involved Phoestivus Ale, some other new ale houses and some new traditions around local music. Stay tuned!

As the founder of Phoestivus, I’m thrilled that the event is back. We’ve been hearing from fans just how excited they are. So, expect a lot of people to be out and about on those two nights.

Here are some comments from a couple very important people to the Phoestivus 2021 event:

“Phoenix loves Phoestivus and it has grown into a special annual event that people look forward to every year, so we’re extremely excited to bring everyone back together to host this collaborative community celebration,“ said Phoenix Mayor Kate Gallego

“The effects of the pandemic have been challenging for, well, everyone but especially small businesses. This event provides a needed platform for guests to support local businesses and entrepreneurs, which is critical now more than ever, in a fun, fanciful and festive environment that’s unique to Phoestivus.”  said Tanya Chakravarty Executive Director of Community Food Connections.

In this November Shortage Report, I want to explore why we still have this shortage, and why it might be going away soon. I do that in this short video on Facebook.

First, you’ve heard me raise alarms about ibuyers and short term rentals (STRs) in the past, here and here. Those can be institutional investors, or even massive real estate “brokerages” that use meta-data about the market to play the market for their own multi-billion dollar profits.

The Arizona Republic published a must-read article this last week about the tactics that ibuyers have used to shut out first-time home buyers. The take-away: as I’ve said for years, ibuyers have bought up inventory so that there is less for everyone else, leading to price increases.

Frankly, I think its ethically criminal and the sale of residential homes to institutional investors should be prohibited.

If you want to see a very entertaining and enlightening summation of what ibuyers are doing to play the system, watch this Las Vegas realtor’s TikTok video. He explains just how these massive brokers use the data they collect when people research for homes on their very well-known websites to harm home buyers.

As I see it, every realtor has a fiduciary responsibility to their clients. When ibuyers are more interested in playing the market, they are failing this very basic legal requirement. Unfortunately, our real estate commissioner (as least in this state) has not taken that position.

So, here’s the possible silver lining. According to the Republic and other sources, at lease Zillow and possibly other massive buyers are going to stop buying up properties and they are looking at selling off their massive inventory of homes, which are just sitting there.

I don’t know if they expect to sell them at a loss, but we will see what happens if prices begin to flatten or fall.

One of the problems we have as we consider the November shortage report is that we don’t have accurate data about how many homes are being used as investment properties, particularly short-term rentals. The county requires you to register if your home is being used as a rental property. But we don’t require that of short term rentals. We should.

The Republic article mentioned that 26% of all home sales has been investor buyers in the past year, way up from 10% in the summer 2020.

Similarly, but causing the same shortage problem, a report to the Maricopa Association of Governments, data analyst AirDNA presented the following slide, which showed in some cases hundreds of STRs per one census block.

However the staff at the Cromford Report cautioned when I asked about what data they have, that numbers in all reports are really just guesses, based on the name of the owner in the MLS.

In other words, this is a reasonable cause for the county or the state to require STR and investor buyers to at the very least register when they purchase a residential home for investment purposes.

Again, that is the very least. We need to seriously consider restricting all of this activity.

The fact is that these residential neighborhoods were never designed to be investor markets for billionaires.

They were meant to be safe neighborhoods and places where people could find affordable housing while they save for their future.