Globally Acclaimed Event Makes its Phoenix Debut at Downtown’s Historic Icehouse

SATURDAY, APRIL 30, 2011

THE ICEHOUSE  |  429 W JACKSON ST,  PHOENIX AZ 85007

7pm Potluck  |  9pm Slideshow

FOR IMMEDIATE RELEASE Phoenix, AZ (March 24, 2011) Slideluck Potshow’s singular mashup of art and food makes its Phoenix debut with a twist … a farmers market collaboration with the Phoenix Public Market. PHOENIX PUBLIC MARKET is a program of Community Food Connections (CFC), a non-profit that provides fresh, locally grown produce and foods at downtown’s Urban Grocery and Wine Bar and Wednesday/Saturday open air farmers’ market at Central Avenue and Pierce Street.

SLIDELUCK POTSHOW, a New York City-based non-profit arts organization, brings together arts-appreciators and foodies for an unforgettable evening. Phoenix co-producer Kristin Altman explained, “The event began in a Seattle backyard ten years ago and now spans the globe to cities including London, São Paolo, Milan, L.A., Barcelona, Chicago, Mexico City, Stockholm, Rome, Washington DC, New Orleans, San Francisco, Madrid, Berlin, New York, Paris, and more.  As a Phoenix native, I’m excited to make our mark.”

The night begins with mingling and dining on the home-cooked dishes of attendees. Then the lights go down, the crowd is hushed, and a stunning slideshow begins. Attendees are encouraged to use ingredients from the Phoenix Public Market … pick up some vegetables, fruits, meats, breads, cheeses, pastas, or other goods at the farmers’ market or Urban Grocery and Wine Bar the week of the event and use it in your potluck dish … doing so gets you $5 back at the door.

CFC’s executive director Cindy Gentry and her supporters have made it their mission to increase access to fresh, nutritious food in underserved areas, promote economic development opportunities for farmers and micro-businesses, and provide a community gathering space that celebrates Phoenix’s cultural diversity. Dispelling the notion that fresh food is a luxury, Gentry keeps prices low and has empowered customers to use food stamps. A champion of all things local, her work is a testament to the values of simplicity, value, and community. “We’re excited about tying food and art together at this event,” Gentry said. “People who appreciate the art of a good, hearty meal often find pleasure in the visual arts as well. This event is about exploring all those senses. It fits with the food movement. It’s a sign of our times.”

Davin Lavikka, owner of Method Art gallery in the Scottsdale Arts District, and Wayne Rainey, owner-partner of Bokeh Gallery downtown Phoenix, are curating the art submissions. Artists featured will be a captivating mix of the accomplished and the up-and-coming. Lavikka enthused, “I’m thrilled to be part of this. We’ll be bringing all types together – supporters of the arts, food enthusiasts, students, people eager for a different kind of night out. Sitting at the historic Icehouse surrounded by friends, in front of the glowing screen, taking it all in – this is what the arts are all about.”

CONTACT:  Kristin Altman 323 807 8430 & Richard Ross 773 343 5696  /  slpsphoenix@gmail.com

I can’t let this article go by. Fortune Magazine says that it is time to get bullish about the housing market again. Read the entire thing here. It is worth a read!

Here is a summary of their arguments:

1) The historic drop in construction is leaving a void. People still need houses and they have not been built. Further, the steep decline in prices from 2006 (from 30% to 55%) has created an affordability that will bring buyers back in to the market.

2) It is cheaper to buy than to rent. Plus the portion of income devoted to buying a house is down to 9.8% from 17.2% in 2007.

3) Even in distressed areas like Phoenix, there are so few new construction homes entering the market that the former glut of foreclosures is getting eaten up.

The article likens the increase in demand to raising cattle: the increased demand will not be met immediately by new construction. In other words, prices will start going up again.

I’m glad that somebody is out there countering the constant doom and gloom of the Arizona Republic. For me, the proof has always been in the data. See this chart, below, from the Cromford Report. This comes directly from the MLS data. Phoenix has seen a decrease in foreclosed properties (REO) and short sale properties week over week since December.

I think Fortune Magazine is correct. It is time to reconsider the market!

If you’ve read my blog much you’ve seen that I have a more positive view of where the market is going than, say, the Arizona Republic.

You may be asking, “When is a good time to buy in Phoenix?”

Well, pretty much any time now. Below are some data-based reasons why you should feel comfortable buying a house this year. This information is based on The Cromford Report, which is data aggregated directly from the Multi-Listing Service, the most accurate account of sales in the market.

1) Combating the myth: “The Wave of Foreclosures”

A whole army of chicken littles out there like to tell you that there is a “wave of foreclosures” coming down the pipe. This chart should tell you just how wrong that prediction is. You can see how the general trend has been downward since 2009. It is important to note that it is not in the banks’ interest to allow too many foreclosures on the market all at once. That would depress prices and mean fewer golf trips for the bank executives.

2) Pending Foreclosures

“But aren’t there a bunch of people who are likely to foreclose soon?” Well, fewer now than any time since March of 2009, actually. Further, as the economy slowly improves fewer people will foreclose on their homes. See below how the number of pending foreclosures is going down quite dramatically now.

3) Myth #2: “Prices are going to drop again.”

So, knowing what you see above, it makes sense when you see that prices are higher now than the lowest point in the market, back in April of 2009, and are edging toward the 2010 averages. HINT: The high buying season in Phoenix is always the summer. So, watch for prices to keep going up. Further, people are saving an average of 6% of their monthly income (compared to about 1% a few years ago). Once they hear enough good economic news, they are going to start spending that pent-up money on big-ticket items (read: “houses”).

4) Days Inventory

How am I sure prices will go up? Well, when inventory goes down, prices go up. Its Econ 101. Here’s the trend! Inventory is going down! “Days Inventory” means how long would it take to exhaust all of the inventory of houses at the current rate of sales in Phoenix. We are at about 140 days right now.

5) Sales per Month

Want another reason? The sales per month are going up. So, when inventory goes down and sales go up what happens? Prices go up. I said it here! It won’t be dramatic, but prices will go up. Interest rates are going up now, too (over a point in the last 2 months). If you want to grab something before both interest rates and prices go up, now is the time to make it happen!

Is is time to buy in Phoenix yet? The answer is “yes”, you can feel safe making that decision. We can watch the market together. Call me at 602-456-9388.

I was reading this hilarious post today by an agent sharing the ABCs of what she’s learned over the years. It’s probably funnier if you are an agent or if you’ve bought a house.

But the blogger mentioned how Zillow and real estate sites like them generate home price estimates, which are most often incorrect, but which many people take as gospel.

This is particularly important when buying or selling home in Phoenix. The market changes so rapidly that you don’t want to get the wrong information about home prices.

The CEO of Zillow was smart enough to respond to this agent’s post and pointed people to a page where they declare how accurate they are. He also said clearly that “agents or appraisers will always be more accurate than a computer model.”

See an image from that page, below.

You can see that in Maricopa county only 20% of Zestimates are within 5% of sales price. The median error is about 14%. So, a house worth $200,000 could show up on their system as $228,000 or as low as $172,000. That is a huge difference!

Lesson: if you want to buy or sell a home, get an agent who will get you on the Multi-Listing Service where the sales numbers are more accurate than any other option. I can help you by calling me at 602-456-9388.

This data comes from my friends at Old Republic Title and Escrow and pertains only to the single family detached market (i.e. not condos, patio homes or townhomes).

In short, homes below $100,000 are moving very quickly, but they are so competitive that the low prices are skewing all of the data to obscure the fact that higher priced homes are actually moving upward.

February saw the highest sales volume in recorded history.

Market Headlines

• We see falling supply and improved demand, especially at the low end.
• Below $100,000 demand is now exceptionally strong.
• High activity at the bottom of the market is dragging the overall sales price average $/SF down
• This is especially true of the median sales price which is misleadingly low due to the sales mix.
• Sales prices are stabilizing, though the monthly median may still fall if the mix continues to favor the low end.
• Statistics suggest a very busy spring season especially for price ranges under $200,000.

Overview
The new trends that started in December continue to strengthen. Active listing counts are moving down while sales and pending sales increase rapidly. Sales volumes through ARMLS are at their highest level ever for February.

Average sales pricing reached a new low point in January and has moved sideways since, but there is now a confirmed and significant improvement in the overall market dynamics. The drop in average and (especially) median pricing is NOT across the board but is caused by an unusual spike in the volume of sales at the bottom end of the market.

This improved demand for the cheapest homes is a welcome, but we must remember that it makes the median price numbers look artificially bad.

For the first time for many months we can report a fall in supply at the low end, and above $100,000 supply has been falling for some time. In the mid and upper ranges we see strong evidence of sales price stability and inventory is in a slow decline even though demand is quite modest.

If you think ol’ Ken Clark is just unrealistically optimistic about the market, check out this very interesting article in the Wall Street Journal.

In Brief: 2011 will most likely be the turn-around point for the residential housing market.

Exhibit A: “Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years.” This market will recover when people can start buying houses again. Given that there is  pent-up savings in America right now, and people are increasingly confident that they will keep or regain a job, they are more likely to get out and take advantage of the low prices.

Exhibit B: “Investors have started to buy up houses and condos, in some instances paying entirely in cash.” Well, we’ve seen that for a while here in Phoenix. I’ve been helping folks buy houses to use as investments or as second homes. The key here is that investors are betting on a rebound, and unlike 2006, they are doing it without debt. You can’t default on something you own outright. So, this recovery has a chance to be much more stable.

The WSJ advice? Buy and hold. the housing market is not the stock market. Buy because you need a place to live (and don’t want to pay rent anymore), or buy with a long-term investment strategy.

Give me a call at 602-456-9388 and I’ll help you put together your plan to take advantage of this market.

Last week I posted market data which showed that there was shrinking inventory and that homes were staying on the market for less time.

I want to tell you this week about interest rates. You’ve probably heard that interest rates are climbing again. In just the last two months, they have gone up from about 5% to 5.25%. At their lowest point last year they were at about 4.25%.

This is huge. While interest rates are at their lowest point in centuries (really), every incremental change increases the cost of owning a home. We have every indication that rates are going to keep moving upward.

For instance, if you buy a $100,000 house at 5.5% interest, your monthly payment (before taxes and insurance) would be $568. The same house at 6% interest would cost $600 per month.

That extra $32 per month is $384 per year or $11,520 over the life of the loan!

Another way to look at it is that in order to have the same payment every month that you had at 5.5% interest, you could only afford a house that costs $95,000 at 6% interest.

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

It also means that you probably want to act before both prices and interest rates go up. That is to be avoided!

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

NEWS FLASH

For the longest time you could not get a loan on about 90% of the condos out there.

It looks like that is about to change, at least for the condos here where I live.

Check this out. You could get a 2br/1.75 bath, totally renovated condo here for a principle and interest payment for under $300 per month (assuming 5% loan). There is one on the market right now. Click here to see what’s available.

Naturally, you will have HOA fees and insurance on top of that, but you are still living large for under $600 per month.

I met a woman who bought one of the condos here with a normal good old fashioned loan. I spoke to her lender and we think we could do it again, due to changes in the way FHA views some condos now.

This is a HUGE development.

If you want to find out more, please call me at 602-456-9388.

Remember Econ 101?

When the supply of something goes down, prices go up.

So we are sitting on the crest of a wave. It won’t be a massive wave, but this is where it turns around. Those who are fully employed are sitting on more savings than they have had in decades (about 6% versus 1%, usually). They are not spending because they are watching for good economic news, which is starting to trickle in.

These people have been very attracted to the market (lowest prices in decades and lowest interest rates in centuries), but they are just waiting for good news. Then they will act and act quickly.

The following is the news they are waiting for. Watch as people trying to get the best deals before prices go up actually help drive prices up.

1) Days on Market.  You are seeing here that homes are not staying on the market quite as long. In fact, quite dramatically. Just look at the drop since December. Simply put, as soon as the good homes come on, they are getting snapped up! The properties that need a little work or that are not priced right will stay on a little longer. This will drive down inventory.

2) Active listings –watch that pink line! What you are seeing here is the number of active listings starting to shrink again. Two reasons, (1) people are already starting to snap up the best homes and (2) the foreclosures and short sales are going away. It won’t happen over night and it won’t be extreme. But prices will increase. An increase in prices by 10% combined with increased interest rates can mean over $100 per month more on a $150,000 home.

My colleague Leif Swanson came out with his annual Good News Bad News analysis for the 2010 real estate market.

The take-away:

Good — The media only reports on the low prices. They don’t tell you that sales are at an all-time high. That means other people are scooping up the great deals! See below.

Bad — Homes priced above $350,000 remained hard to sell.

Call me today if you want to grab the deals before they are gone.

——————-

The Good News:

• Property prices overall for Maricopa County went UP just a tiny bit higher than 2009 (by less than $600).  Some cities had increases in average sold prices in 2010 while others still suffered.  See the attached “MLS Sales Per City 2009-2010” sheet to see how your city performed.
• 2010 was the 4th best sales year ever.  Almost 90,500 were sold in 2010.
• December 2010 had the most sales of any December in history:  8,435.
• April 29, 2010 had the all-time highest number of properties under contract:  23,630!
• Interest rates dropped below 5% for most of 2010.  I had a client get 4.33%!
• Low property prices combined with low interest rates make this an incredible time to buy.
• Investors gobbled up bank-owned foreclosure properties.  Over 40% of all sales in 2010 were cash sales.  Two years ago people were asking about the second wave of foreclosures (aka shadow inventory); it never happened.  Nearly 53,000 active listings in January 2009, but less than 40,000 active listings at 2010’s peak in November 2010.  We’re down to 37,350 active listings in January ’11.  This is the lowest level of inventory since 2005.  Over 4,000 bank-owned properties were sold in December 2010; thank goodness for investors.
• Hardly any new homes were built in 2010, which helps keep inventory down.

The Bad News:

• April 2009 was the bottom of the current bad real estate market or so we thought.  After the first-time homebuyer tax credit program expired this summer, sales dropped off significantly for “regular” buyers (investors carried the load for the rest of the year).  Because cash investors replaced regular buyers, the average and median sales prices dropped.  We hit bottom in November 2010 with average sales price and price per square foot.  We hit bottom with median sales price in December 2010.
• Foreclosures dominated the real estate market, accounting for 41% of 2010, but down from 55% of 2009’s sales.  Short sales accounted for 21% of all sales in 2010.  Combined, bank-owned and short sales were 62% of all sales.
• Homes priced above $350,000 remained hard to sell.
• Vacant properties accounted for 76% of all sales in 2010.
• Loan modification programs failed to help struggling homeowners.
• Job loss and job fears are keeping people from buying despite low prices & interest rates.
• People can’t sell their homes in other states in order to move here.
• Short sales did better in 2010 as banks increased staffing.  However, there are still fears of banks coming after “forgiven” loans.  If you are considering doing a short sale or foreclosure, please check out the Short Sale Advisory at www.AARonline.com (the AZ Assoc. of Realtor’s website).