Congratulations to our friends Abraham James and Patrick Hallman at C&H and Associates are announcing that they received a $35,000 Community Development Block Grant for the third year in a row.

This is a grant that is awarded to architectural firm so that they can provide architectural services to small businesses. This could be somebody who wants to open up a restaurant, coffee shop or retail space.

The funds come from Housing and Urban Development, through the City of Phoenix. If the architectural project goes well, the owner of the business must two hire employees. In this way, the grant supports economic development.

Some examples of previous grants that worked with C&H and Associates include JoBot Coffee, Core Crossfit, Karl’s Bakery, the Canvass corner at 3rd St. and Roosevelt.

If you own a business, or if you are starting a business that might benefit from these services, please call Abraham James at 602-275-1377 for more information.

Congratulations, Abraham and Patrick!

Here’s something new for you in Downtown Phoenix: Milk Bar. Remember that cream colored building on the corner of McKinley and 3^rd St.? The one that sat empty for so long?

Well Darek Pasieka has redeveloped the space into an incredible bar and restaurant celebrating Polish culture with a modern twist.

Built in 1909, the Western colonial/modern style house, (historically named the Marsh Arnott House), has changed over the years, a reflection of its diverse tenants. The structure has served as a residence, law office, art space, and hair salon before becoming a European bar.

When Pasieka’s company, Studio Darek, took on the adaptive reuse project, there was a lot of speculation from the neighborhood about what was in the works. Some thought a cult while others thought it a tribute to Anthony Burgess’ Clockwork Orange. Alas, neither is true. But Darek’s a good sport and has added a drink onto the menu called Clockwork, which is made with Zolta Gorbka Orange and Clove Vodka and is utterly delicious.

Since 1896, Milk Bars, or Bar Mleczny, have been a staple of Poland and Eastern Europe, especially for the working class during the Soviet Era. As the name entails, it was here that traditional milk-based dishes were served at a reasonable cost. After communism fell, Milk Bars remained popular hangouts because of the warm and welcoming atmosphere.

“These Milk Bars – known for affordable food but high quality—would survive as nostalgic relics. Milk Bars to this day have stayed popular as a meeting place for people of all walks of life,” says Darek.

At Milk Bar, the potato is king. Lining the menu are euro posh vodka drinks and pierogi stuffed with combinations of cheese, spinach, mushroom, and meat.

As an accomplished architect, and now restaurant/bar owner, Darek Pasieka continues to turn heads with his ‘past meets present’ ideas. As he puts it, “Respecting the past, celebrating the present, and looking into the future. This is my architecture.”

Join us this month for an unforgettable Get Your PHX as we head to Phoenix’s Milk Bar. Pierogi provided courtesy of our host, Darek Pasieka, and cash bar for drinks. Bonus points for anyone that dons a bowler hat, eyelash embellishment or white suit!

As always, please RSVP below. “Na zdrowie!”
                                                           (Cheers!)

Where: Milk Bar: 801 N. 3^rd St.
Date: Thursday, April 23^rd
Time: 6:00PM – 8:00PM
Bonus: Pierogi and prizes! Don’t forget your raffle ticket at the door!
RSVP: April Get Your PHX: Milk Bar

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I’m sure you’ve heard of home buyer programs over the years, programs that are funded by cities or counties and which help you buy your first home, if you qualify.

Folks ask me about them from time to time. And, while I’ve sold homes on these programs, I usually refer them to one of our mortgage broker friends for the latest updates. 

The reason is that the programs come and go faster than child stars on the Disney Channel.

Just this month, a new program was announced that would loan qualified home buyers up to $25,000 to be used as a down payment on a new home. This one is not run by the cities or counties, but by the private non-profit that has set aside $1 million to help low and moderate income families get in to a home.

NOTE: these are not grants, they are loans. So, in addition to the loan on the home, you will have to pay off the down payment loan over 15 years. To qualify – a family of four must make less than $51,000, and a single person make less than $35,850.

Two more notes of caution. First, be careful of anybody who offers you a loan on top of a loan. This organization seems to be a non-profit group that seems to be saying the right things. But, you should always look closely at all materials. Second, it may not be advisable to buy a home with little or no down payment. It is important to have “skin in the game.”

If you want to see a nice list of buyer assistance programs, check out Community Housing Resources of Arizona’s website. This may not be all of the options out there and I don’t personally endorse any in particular. But, they are out there. If you are willing to participate in the program, you may save a lot of money on your first home.

Please give me a call at 602-456-9388 for more information.

The following is an excerpt from the Cromford Report’s comments from March 30th on the state of rentals in the Valley.

• The situation with single family rentals continues to get even more extreme. Today there are just 1,763 active listings on ARMLS, down another 15% since the beginning of the month and down 25% from this time last year. This is 24 days of supply.
• The average lease rate is up to $2,106 per month (up 41% from $1,710 last year). The average days on market is down to 33 (it was 40 last year).
• There are 988 condo rentals active, down from 1,347 at the same time last year, which is a drop of 27%. This is 54 days of supply.
• The average lease rate is up to $1,655 per month (up 13% from $1,461 last year). The average days on market is down to 39 (it was 45 last year).
• Affordable homes to rent or buy are both becoming much harder to find. However there is still plenty of choice in the upper price ranges for both lease and purchase.

Now, the MLS is very powerful as a source of data for sales, but not so much for rentals. I’ve heard told that only about 50% of all rentals are represented on the MLS. Those tend to be the higher priced ones; not the ones that list on Craigslist.com.

Here’s a little more on the topic from an AZCentral.com article.

Still, this an alarming pattern. It means that there are a shrinking number of rental properties for families and individuals. This is also why cities are encouraging the building of new rental projects. See this post from last week, at least as pertains to downtown Phoenix.

Every problem presents an opportunity, however. If you are thinking of getting in to the investment market for rentals, now is the time to do it.

Please give me a call at 602-456-9388 if you’d like to build a strategy.

For those of you who are long-time readers, you know that I’m a fan of the Cromford Index. The index not only tells you whether we are in a seller’s market or a buyer’s market, but also by how much we are going one way or another.

If you are buying a home, you’ll want to watch this trend. If the Cromford Index is moving upward, you need to move before it goes too far in to the seller’s advantage.

If you are selling a home, you need to watch out for the opposite trend. If you see the index moving downward, then you want to be more aggressive in your pricing –get out ahead of the market so you are not chasing it downward.

So, where are we now? Check this out.

Remember, 100 is a balanced market. Over 100 is a seller’s market and under is a buyer’s market.

See how much of a buyer’s market it was during the Great Recession? Then see how the seller’s took over from 2010 to 2014? Those were the people who bought during the lowest of the crash and then sold once we started to recover.

Notice also that we’ve been mostly riding 100 for a little while. Well, it looks like we are moving up towards a seller’s market once again. What does that mean? It means that sellers have an advantage — no seller-paid closing costs, prices will go up if supply stays low.

Combine this with the possibility that interest rates may go up later this year and you will want to get on in to the hunt today if you are a buyer.

If you are a seller, those interest rates are mixed news. Yep, the market seems to favor you, but an increase in interest rates may deter buyers. Or, it may encourage buyers to get in the market. We will see.

Check out this chart over just the last month. This market is definitely heating up. Just in the last month, the index for Phoenix has moved upward 14%. Only Tempe dropped.

What this means for you also depends on your specific situation and the neighborhood in which you live.

No doubt, this is a shifting market.

If you need help navigating it, please give me a call at 602-456-9388 and let’s assess the situation.

You’ve probably heard me lament about the fact that Generation Y home buyers are not coming in to the housing market as quickly as we had hoped.

The Cromford Report has addressed several times about the fact that Gen Y-ers are less likely to purchase homes right now –being saddled with an average of $25,000 of debt for an undergraduate education and having seen their parents lose homes in the Great Recession. In fact, much of  last year’s dip in first time homebuyer purchases (sub $200k) was attributed to sluggish Gen Y home purchases.

Well, I thought you’d find this report interesting. Basically, we are finding that the sheer size of the Gen Y generation may compensate for the fact that some are unable or unwilling to purchase a home right now.

Some other highlights:

• Gen Y comprises the largest share of home buyers at 32 percent, which is larger than all Baby Boomers combined.
• Gen Y also has the largest share of first-time buyers at 68 percent.
• Thirteen percent of all buyers purchased a multi-generational home, one in which the home consists of adult children over the age of 18, and/or grandparents residing in the home
• Among all generations of home buyers, the first step in the home buying process is looking online for properties for sale.

Just food for thought. If you are reading this post on your smart phone while simultaneously texting your friends and flipping between vines, this data might impact you more.

Getting the right house the first time you buy a home will set you on the right path for the rest of your life.

I can help. Call me at 602-456-9388.

I don’t want to give you heart palpitations, but if you are planning to purchase a home, you might want to do it sooner this year, rather than later.

The Federal Reserve Bank signaled this week that it will begin raising interest rates as soon as June, but they promise not to jack them up.

I’m pretty certain that “jack them up” is a term of art around the Fed.  

So, given the impending rate increases, let’s review how interest rates impact the price of your home. 

Let’s start with where we are now. Interest rates for most lenders for FHA and conventional loans are hovering around 4.0% APR. 

If, as a result of the Fed’s increase, we go to 5% (it probably won’t go that quickly, but its hard to say), then here is the difference:

$200,000 home at 4% APR, with 5% down payment on a 30-year fixed loan = $907, principle and interest only.

$200,000 home at 5% APR, with 5% down payment on a 30-year fixed loan = $1,019, principle and interest only.

That extra $112 per month is $1,344 per year or $40,320 over the life of the loan!

Another way to look at it: At 5%, paying $907 per month, you would only be able to afford a $178,000 home. 

Here’s the double whammy: Home prices are increasing at about 3% per year right now in Phoenix. Add that to your interest rate increase.

A year from now, that $200,000 home might be on the market for $206,000. 

And the beat goes on….

So, what does this mean? It means that you want to consider getting in to the market before interest rates go up.

 Give me a call. I’m more than happy to help you navigate the market: 602-456-9388.

Thank you Tracy Perkins of Strawberry Hedgehog for hosting February’s Get Your PHX, and our friends at Mother Bunch Brewing for supplying some tasty brews. I got to meet some fun folks and support on of our long-time friends. 

In March, Get Your PHX is celebrating a milestone with our good friends at Co-Working on 15th Ave: a one-year anniversary! Join us this month for craft beer, food and an exclusive look at the new way to do business.

Seven rooms with twenty desks fill the adaptive reuse building, which was transformed from a home into a co-working space for business owners looking to meet somewhere a lot more professional than a Starbucks.  

Also, you’ll save money and skip the guilty feelings that force you to purchase five cups of coffee just to keep the barista from glaring at you.

We chose Co-working on 15th Ave because of the price. You won’t have to break the bank with daily pricing starting as low as $15 or even when opting for monthly membership, which peaks at an incredibly reasonable rate of $250.   

Second, a co-working environment naturally generates a more relaxed setting, which means better networking. Forget the stuffiness of elevator speeches and hustling business cards. Here you’ll find an array of industries ranging from United Cerebral Palsy to Fountain Honey Media to Sacred Brewing Co.,  which will afford you networking opportunities without even trying.

Third, Co-working on 15th Ave keeps you in the business world with suggested outside events as well as  co-op-hosted educational events and mixers. Most recently, the National Society of Hispanic MBA’s (NSHMBA) celebrated its Phoenix Chapter launch with Collectivo.

The space also provides members with access to a full kitchen, relaxing back patio, parking space and more all included in the price and is conveniently located in downtown Phoenix, right on the 15th Ave bike path. “Co-working on 15th Ave was created for hardworking people to get the job done without having to miss out on social interaction.”

Check out downtown’s premier co-working spot for yourself this March with Get Your PHX and enjoy local craft brews, complimentary appetizers and great conversation. As always, please RSVP using the link below.

 Also, please RSVP here. 

 And check us out on Facebook. 

Where:
Co-Working on 15th Ave
3428 N 15th Ave
Phoenix, 85015 (Map it)
When: Thursday, March 19th, 5:30 p.m. – 7:30 p.m.
Don’t forget: Free raffle ticket, complimentary food and drinks

Here are some graphs that tell me so much about where the market is right now, and where we can expect it to be for the next year. Thanks to my friends at the Cromford Report for this illuminating analysis. Click on each chart for a larger view.

1) Annual Sales Rates — This chart tells the story of where this market has come from and where it is now. Notice that the number of sales per year peaked just before the Great Recession, crashed during the recession and climbed back over 2011 to late 2013. Most interesting, look at where it is now. We hit this point and now we are at a plateau. Is that bad? Nope. See the next chart.

2) Cromford Index Over the Long Term — This tells you where we are: equilibrium. If you look back at older posts, you will see that I talk a lot about the Cromford Index. This tells you not only whether we are in a buyer’s market or a seller’s market, but by how much.  If we are over 100, it is a seller’s market. If we are under 100, it is a buyer’s market. Notice that we are hovering just under 100, but just within reach. Notice also that it seems to be staying there, at just about the same time in history that is shown as that plateau in the chart above. So, what this means is that buyers and sellers have roughly the same amount of leverage. This means that we homes are selling, but not there is neither a rush to cash out nor a rush to hold. That’s a healthy market.

3) Price vs. Payment — So, why is this? Well, despite the lowering real income over time of the American family, the super-low interest rates are helping drive the real estate market. When you look at this chart, you can see that your monthly payment will get you much more house than it would back in 2008. So, affordability is much better right now. This, friends is the actual impact of low interest rates –in action. Yep. Its like an action movie.

4) Long-term Price Per Square Foot. — So, where are we going? As I’ve been telling clients, we are in a slow, healthy upward climb in home prices. If you look at this chart, you will see the 2% to 3% range of long-term growth in prices, shown in the grey shaded area. Notice that, after the recovery of 2011 to 2013, prices are skirting the lower range of that shaded area. So, no bubbles and no drops.

 What does this mean? It means that if you are buying, prices are sliding slowing upward, but your buying power is strong. If you are thinking about selling, you might as well do it now while buyers have more purchasing power. If you wait a year, the most you will gain on your sale (unless you do major renovations) will probably be about 2%. In other words, sell based on need, not on a desire to play the market.

As usual, I can help you make the right decision. Give me a call at 602-456-9388.

 I got a peek recently at a list of multi-family projects that are in “pre-development” or current development stages in downtown Phoenix.

It was an interesting thing to see that the list accounted for about 2,000 rental units that should be completed in downtown by the end of 2016, but only about 360 owner-occupied units, to be completed in the same time period.

There is a rough proportion of rentals to owner-occupied units that one would expect in any area, but I was surprised to see the proportion at about 6 rental units for every 1 owner-occupied unit.

There ares several dynamics here.

First, the city of Phoenix is very eager to get “rooftops” built downtown as an economic development tool. They seem to want to provide housing for rent in order to provide for the growing student population, more than they are driven by owner-occupied units.

Second, “millennials” seem to be less inclined to purchase home. After all, they saw their parents and family lose homes during the Great Recession. Who need that, right? Further, with an average of $24,000 of debt coming out of Arizona undergraduate institutions alone, these folks don’t have the borrowing capacity.

Third, we still have some properties (I’m looking at you 44 Monroe) that were once owner-occupied, but which are now rentals. Maybe they will come back to owner-occupied in the future.

I get all of this, but there is a part of me that is concerned. You don’t have to buy in to the “great American real estate” dream that your home is an investment to know that you need a good mix of owner-occupied in any community. Owning a home means that the occupants are more likely to feel a connection to the neighborhood, to get involved in block watch and neighborhood associations.

Don’t get me wrong. I don’t think that renters are too transient to care about their neighborhoods, as some do.

But, color me a little skeptical that it is a good idea over the long term to have six times as many rental units as there will be owner-occupied units downtown.

That is all. Talk among yourselves. I’d be interested to hear your thoughts.