“Whipeeeeeeee!”

              or

“Whoaaaaaaaa!”

Every square in this rainbow slide (not the one on the left, though that does look like fun. I mean every square in the image below) represents a month—January, February, March—all going up.

This covers central phoenix and downtown zip codes, historic and older neighborhoods. One vertical stack of those boxes adds up to one year. See how we’ve dropped quite precipitously:  from 7,500 (in 2010) to 5,800 (March, 2013). In 2008 to 2010 a lot of those were short sales and foreclosures. You can shrink inventory, but the demand is still there and what happens? The price goes up.

Same three-month moving average

In this next slide is the average of all three months going back in time. In this way you keep from getting a bunch of blips that aren’t really accurate. See in those downtown zip codes how we’ve gone from $117 in September 2012 to now at $144 per square foot. Let’s look at year to year. March 2012: $105 to $144. That’s a big jump. Now the three month moving average is going to be more extreme than 12-months, because we’re averaging prices today and 12 months ago. The line is smoother and more conservative.

See from March 2012 it went from $96 to $149 per square foot. This $123 represents the average price for this day and the three months before. So you’re seeing that upward trend. Now, in downtown Scottsdale, we’re starting at higher prices.

Follow me on this:

In March 2004—in the recent comparisons slide, below—the monthly average price per square foot was $115. By the end of 2004 it was $131, a 16% increase. In March 2013, it was at $114, with very similar conditions. We started in January 2013 at $108.

Do we think the price can get to a similar 16% increase point by the end of 2013? This increase from $108 to $114/$116 is a very similar line. So for 2013, yes, I think we’re anywhere in a 16% – 20% price increase, just like 2004. I think we could very easily see average prices by the end of this year, somewhere between $125 and $130.

Now let’s take that same 15% – 20% increase—seen here in this next slide of this more-conservative 12-month moving average price per square foot—and apply it county wide to only Phoenix and Scottsdale, keeping in mind the trend-line I talked about in this post.

Phoenix was on a 12-month moving average in March of this year, sitting at $129 price per square foot (for those same zip codes). If you apply that same 15% – 20% increase, you’re looking at $140 – $146 by the end of this year. Apply that same 15% – 20% increase to the Scottsdale area, starting at $156 for the 12-month moving average, you’re looking at $170 to $175 by year’s end.

I think it’s very reasonable to say that we’re going to be there by the end of 2013.

Let’s compare visually

This here, in this next slide/image is for the whole county and is just by way of an illustration. 2004 (the blue line) and 2012 (the purple line) looked a lot the same in terms of path upward. At the end of March, we were about to surpass the same place we were in 2004.

Attention. Attention. Here ye the Town Criers.

Every few weeks, it seems, we hear a lot in the news about how they’re breaking new ground and there is all these new developments. Each one of those dots in the chart represents a month. In the month of Jan, Feb 2007 we built 4,000 houses. Over the course of over 2006, we built something like 60,000 homes. It was insane. They were crappy, throw-‘em-up houses. And now the news loves to proclaim:

Look! We’re building again!

But the number is tiny. It’s about 250 – 300 homes.

This is important to Central Phoenix for a couple reasons: These new builds are out in the fringes of Phoenix, so you’re not adding to central Phoenix inventory. Also, they’d have to build a lot more of these homes on the fringes for it to have any impact on prices in central Phoenix.

I don’t want to list ‘cause it’s going to be worth so much more a year from now.

But what happens if everyone holds off from selling? People will stop looking and prices go up.

Urban Density: Take away

• Investors –If you want to invest in something, get your mind around the fact that you’re more likely to hold it than flip it and get a better price for it; because the margin’s not there or you’re not going to get cash flow because you paid so much for that thing to begin with and nobody’s going to pay that much rent.

• Sellers –Watch for possible price plateau during the summer. With these price increases, don’t just think I’m gonna hold a year to sell and get this higher price, that’s not necessarily so. Also, with these price increases, people who are thinking this, don’t be so certain, because either people stop buying, or people are prices out of the market, or a lot more people say, “Look the prices are there, go, go, go!” I don’t think you can be that confident for a year or even 9 months from now.

• Urban Cores – are in need of urban infill. Detached residential and condos are coming in the burbs, but we need more rooftops centrally.

• Prices – They’re not necessarily a result of heavy demand, because there’s no inventory coming up the way we thought it would.

Be ye Investor, Seller, Buyer, or Town Crier, give me a call at 602-456-9388 or email me at ken@getyourphx.com. I’ll get it done.

[slide image: Trish_Gee88]

The downtown scene is an eclectic mix of cultures and communities that we’ve grown to know and love. For one important downtown organization, which helps homeless LGBTQ youth get back on their feet, there has been a quiet change in leadership.

1in10 has officially brought Linda Elliot in as the new executive director in July. Linda, a successful business woman, is well known for her work in the Human Rights Campaign. She is an influential person in AZ politics. She, and her partner, Carolyn Lane, a Maricopa Country Constable, are an inspiring couple.

In truth, 1in10 has been around since the early nineties. You may have known them as VOIT and Horizons, both of which specialized in LGBTQ youth. In 2002, these two fantastic organizations joined forces to create 1n10, which supports LGBTQ youth in Arizona as well as nationally through “positive self-acceptance through life enhancing programs.”

One of those programs is the OUTdoors camp which is one of the largest LGBTQ summer programs in the world.

(Does anybody else see the irony of one of the largest summer LGBTQ camps in the world being located in AZ? We should be proud.)

OUTdoors, which 1in10 describes as a youth leadership camp, is like many other summer camps, full of zip lining, horseback riding, and crafts, but works on developing leadership skills, collaboration and communication with campers to help better their community.

Two months into her new position, Linda has been a busy lady pursuing grants and new programs. In addition to the OUTdoors, 1n10 provides weekly group events in the Valley, and hopes to expand with a new leadership and training programs and guest speakers to inspire youth and create a “fun, safe, social space”.  She “hit the ground running,” according to Stacey Jay Cavaliere, Program Coordinator for this weekend’s Sources of Strength Celebration.

The event will be held this First Friday at the Downtown Civic Space Park. 1n10 is raising money to launch a new suicide prevention campaign by showcasing their musical talents, which includes the 1n10 hip hop squad, and youth art, displayed at the Fair Trade Cafe. Their hope is to get people and businesses all over the Valley to attend and show their support.

1n10 continues to reach out to the community for partners to help us in their efforts. If you’re interested in learning more information please visit www.1n10.org

Have a Charity you love. Visit My Charity Refferal Page to find out how you can help your favorite local charity.

Irrigation in place as we moved dirt last Saturday.

Over the course of a weekend a once vacant lot on the corner of 6^th and Garfield became fertile ground for beauty and science. As we mentioned in our post last week, this past weekend volunteers, organizers, and even a couple politicians gathered for the planting of Valley of the Sunflowers.

Not too long ago, Sean Sweat, an Intel employee, met with some friends and discussed the potential for this lot. Luckily, he was talking to the right people. Kenny Barrett and Cindy Dach, of the Roosevelt Row CDC, and Braden Kay of the ASU Global Institute for Sustainability are good friends to have when you’ve got big ideas.

RRCDC is a non-profit downtown which promotes the interests of the downtown community by supporting public events and fostering urban renewal. Kay introduced the project to Bioscience High School, which also overlooks the lot. Bioscience High is currently building a biodiesel car, and was conveniently looking for a source of oil.

With help from the Roosevelt CDC and two start-up grants from Intel, They were able to propose his plans for a temporary sunflower field to the City. The hope of this and many other revitalization efforts is not only too beautiful but bring business downtown.

Of course the City was hesitant at first, but because VOS already had the plans and the money, it didn’t take long for the city to get on board. Because the project was temporary and funded, the city leased the lot to Valley of the

Sunflowers for free, putting it on the fast track to realization.

It was the “temporary” use of the lot made this project possible. The lot is currently allocated to the Arizona Cancer Center, which plans to start construction in the next two years. Until construction begins the two acre lot will be put to good use by VOS. They are planning two grow cycles, keeping stick notes and directions, so this project can be recreated again.

So how can you help? Well they’re still looking for an oil press and a tractor, if you’ve got one lying around. If not you can donate time through the RRCDC website or head to their kick starter page and donate to the cause.