Saturday, June 15, 2013

Housing market heading toward rebound or bust? | Phoenix

PHOENIX -- Good news for Valley homeowners. Prices are climbing big time. But could that mean we’re heading toward another housing bubble bust?

“Prices are still moving up,” said Michael Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University. “They aren’t climbing as fast as last year but still at a ridiculously fast pace.”

According to Orr, the median home price is up 29 percent in the last year and up 40 percent from when we hit rock bottom.

Read more: Housing market heading toward rebound or bust? | Phoenix

New Lennar subdivision under construction in Foothills: Homes available for purchase before models are built - Ahwatukee Foothills News: Real Estate

Construction is under way at the new Lennar Homes subdivision near Desert Vista High School in Ahwatukee Foothills and because of a significant amount of interest, the company is allowing people to purchase homes before the models are even built.

There are five plans that will be available in Discovery at Desert Vistas near the northeast corner of 29th Place and Glenhaven Drive. The homes will vary from three bedrooms to five bedrooms, and the square footage ranges from 1,640 to 2,900. Lennar plans to build 49 homes in the subdivision.

Read more: New Lennar subdivision under construction in Foothills: Homes available for purchase before models are built - Ahwatukee Foothills News: Real Estate

Lennar’s New Multifamily Unit to Build First Complex on the Lake | Arizona Builders Exchange

The red hot rental housing market in the Valley has caused many investors and developers to want to get in on the action. The newly-formed Lennar Multifamily Investors LLC plans to build 328 units in Tempe in what will be the company’s initial foray into the apartment development and rental business.

Lennar Multifamily paid $13.5M ($2.5M/acre) to purchase a 5.3-acre parcel along the south side of the Tempe Town Lake at 601 W. Rio Salado Parkway. The seller was Evergreen Devco Inc., Phoenix. The prime land is west of Mill Avenue, immediately south of the Tempe Center for the Arts, adjacent to the Tempe Beach Park. The total land and development cost is estimated at $60M ($183K/unit). Read more: Lennar’s New Multifamily Unit to Build First Complex on the Lake | Arizona Builders Exchange

Glendale's Westgate sees influx of bars, eateries

The Westgate Entertainment District area hasn’t seen such an influx of new businesses since shortly after opening seven years ago.

Westgate officials this week announced that Whiskey Rose Saloon, a bar, restaurant and music venue dressed in Southern flair, will open by July. That follows last month’s news that Buffalo Wild Wings will open by football season.

Across 95th Avenue, just outside Westgate proper, the area recently got its first coffee shop, Flora House Cafe, since Tulley’s Coffee closed a year ago. And next door sits the newly opened Majestic Sports and Grill, which is geared toward a Latino crowd with Mexican food and international soccer games on the TVs.

Read more: Glendale's Westgate sees influx of bars, eateries

2 Valley REITs refocus from buying to selling

Two of metro Phoenix’s biggest housing investors are more concerned with selling than buying right now.

Scottsdale-based American Residential Properties raised $287.7 million in an initial public offering last month. The real-estate investment trust sold 13.7 million shares of stock at $21 each.

Scottsdale-based Colony American Homes had planned to raise $260 million through an IPO on Wednesday but postponed it because of falling REIT prices. REIT share prices have fallen more than 10 percent since mid-May.

There is no word yet on when the division of Santa Monica, Calif.-based Colony Capital plans to reschedule its public offering. Colony had expected to sell 20 million shares Wednesday.

Read more: 2 Valley REITs refocus from buying to selling

Beach-club developer Yari acquiring downtown Galleria

The developer of downtown Scottsdale’s new beach-club-anchored entertainment complex is purchasing the Galleria Corporate Centre.

Shawn Yari, owner of Triyar Cos., is acquiring the property, his spokesman, David Leibowitz, said. The property has been owned by JEMB Realty since 2000.

The sprawling, three-story commercial complex, on the northeastern corner of Scottsdale Road and Fifth Avenue, is home to Le Cordon Bleu College of Culinary Arts and Yelp, SAP, McKesson and CareerBuilder.

Leibowitz would not provide any additional information. JEMB could not be reached for comment.

The Galleria houses a workforce of nearly 2,000 people, said Ben Moriarity, Scottsdale’s downtown business specialist.

Read more: Beach-club developer Yari acquiring downtown Galleria

Lowdown on Elevation Chandler: Sale in works

Elevation Chandler is under contract to a potential buyer who wants to build about 330 rental units on the site, but the plans for multifamily housing aren’t a sure thing. City Council members have the final say on the site’s development, and they want something special on the prime spot near Loops 101 and 202.

The abandoned project, an eyesore that has stood on 10.5 acres for seven years as a testament to ego, financial mismanagement and a destructive economy, is under contract to Houston-based Hines, a worldwide developer for a sale price of $8,250,000.

Read more: Lowdown on Elevation Chandler: Sale in works

Scottsdale council ends discussion of Blue Sky’s construction start

The Scottsdale City Council on Tuesday ended any further questioning of whether Gray Development Group met a deadline to start construction on its high-profile Blue Sky apartment complex.

Last month, the council voted 5-2 to take no action on a citizen petition asking it to reconsider acting City Manager Dan Worth’s determination that Blue Sky met the stipulation that it be under construction within 24 months of council approval in April 2011.

However, Worth said he would report back to the council after investigating whether the developer complied with all of the stipulations for council approval of the project. The petition was submitted by residents of Safari Drive, a condominium complex next to Blue Sky, east of Scottsdale Fashion Square.

Read more: Scottsdale council ends discussion of Blue Sky’s construction start

Construction expected to start on industrial park near Sky Harbor

Construction is expected to begin this summer on the first phase of a 900,000-square-foot industrial park near Phoenix’s Sky Harbor International Airport.

 A partnership between Phoenix-based Wentworth Property Co. and New York-based Clarion Partners is developing the $60 million project.

The group recently paid $9.3 million for the 60-acre site on the northwest corner of 24th Street and the Salt River, one of the last big parcels that can be developed in the area. The first phase of the yet-to-be named industrial park will include three speculative buildings with 600,000 square feet of space.

“The Sky Harbor area is one of the most sought-after, yet most land constrained, industrial markets in Greater Phoenix,” said James Wentworth Jr., a company principal.

Read more: Construction expected to start on industrial park near Sky Harbor

The Dodd-Frank mortgage shift: From pre-qualify to pre-approval | REwired

The Dodd-Frank Consumer Protection Act, which was signed into law in July 2010, forever changed the housing market landscape. Designed to restore consumer confidence in the housing industry, the law has created strict regulatory mandates, the impact of which are being felt by both mortgage lenders and mortgage seekers.

Potential homebuyers are unlikely to be aware of these nuances, and that's fine, but loan officers could use a few strategies to help them walk their clients through the pre-approval process.

One specific area where the changes are being felt is in the pre-approval process. Previously, at the start of the homebuying process, it was customary to obtain a pre-qualification, which essentially meant that a buyer “could” qualify if they found a home, but it wasn’t a guarantee. These new regulations are making sellers leery of pre-qualifications and are causing them to demand pre-approvals, an actual credit approval decision, instead.

Pre-approval actually has a positive outcome for some buyers. With the speed at which homes are now moving, buyers with a pre-approval attached to their bid are more likely to be considered than those without one. The pre-approved buyer is the next best option to an “all cash” buyer who requires no financing at all. So what all goes into the pre-approval process?

Read more: The Dodd-Frank mortgage shift: From pre-qualify to pre-approval | REwired

Feds crack down on foreclosure auction scams

SAN FRANCISCO (AP) — At the height of the financial crisis, bargain hunters would gather each week on county courthouse steps to bid on foreclosed properties throughout Northern and Central California. The inventory lists were long, especially in hard-hit areas such as Sacramento and Stockton. But the auctions were generally short affairs — often because real estate speculators were illegally fixing the bidding process.

In the past three years, federal prosecutors have charged 54 people and two companies in three states for bid-rigging during courthouse auctions of foreclosed properties. Most cases originated in California, the state with the highest foreclosure rate during the financial crisis. Nearly identical rings were also broken up in Raleigh, N.C., and Mobile, Ala.

Read more: Feds crack down on foreclosure auction scams

Thursday, June 13, 2013

Reports Show No Phoenix Housing Bubble

The U.S. housing market's ever-increasing strength and momentum has many real estate experts worried that bubbles may start forming in areas that are performing particularly well, but one report from Arizona State University claims that, at least in the Phoenix's case, the worries are overblown. Analysts say home prices are unlikely to drop in the Phoenix area and instead will probably continue to rise for some time to come because demand is now outstripping supply. The area's population is now growing faster than available home inventory, largely because many people still can't afford to sell and construction has not caught up with the recovery. For more on this continue reading the following article from TheStreet.  

Tuesday, June 11, 2013

Fed Mortgage Stockpile Seen Cushioning Pullback: Credit Markets - Bloomberg

The $1.2 trillion of mortgage-backed securities the Federal Reserve has amassed to stoke economic growth is creating a potential firewall that dealers say is shielding the bond market from a rapid decline as policy makers debate scaling back debt purchases.
The stockpile, which has made the Fed the biggest holder of government-backed mortgage bonds, is cutting the risk that a sudden jump in Treasury yields will lead to an even bigger surge as investors place bearish bets to protect against housing-debt losses triggered by rising rates, a practice known as convexity hedging, according to dealers from Deutsche Bank AG to Barclays Plc. The Fed, which doesn't hedge, owns about 21 percent of agency mortgage bonds, up from zero a decade ago. The share owned by investors that typically hedge has dropped.  

Firm Forecasts 8% Increase in Prices, Decrease in Mortgage Rates

The pace at which home prices are rising should moderate later this year, with home prices forecast to rise by 8 percent this year then increase by another 4 percent in 2014, according to an analysis from Capital Economics. Although the research firm agrees with analysts who have warned recent home price gains are not sustainable, housing bubble concerns were described as "premature." Unlike other projections, the firm also doesn't expect to see a swift increase in mortgage rates over the next year.   

Fannie Mae: Confidence in Home Price Gains Reaches Record Levels

Reports of strong home price gains drove confidence in the housing market up to record levels in May, Fannie Mae reported. According to the GSE's May 2013 National Housing Survey, Americans expressed record confidence in price gains, with 55 percent--a survey high--saying they believe prices will go up in the next year. In addition, the average 12-month home price change expectation was 3.9 percent, the highest level in the survey's history and a leap over April's 2.7 percent forecast. 

Monday, June 10, 2013

Big Banks Bet on Jumbo Mortgages Again - CNBC

As home prices rise, demand for jumbo mortgages is rising too. And as investors look for new ways to cash in on the housing recovery, these mortgages are starting to look more attractive.
Since the housing crash began, the market for jumbo mortgage-backed securities, pools of these loans sold to investors, has been close to nothing. Banks still make the loans, but hold them on their books. Now that is beginning to change.
While the number of jumbo loans originated in the first quarter of this year was up 15 percent from a year ago, the number of those loans securitized and sold by lenders was up 400 percent, according to Inside Mortgage Finance. Four billion worth of jumbo loans were sold to investors, more than the $3.5 billion in jumbos originated in all of 2012.

Read more....

Housing Improves in Key Areas, but Homeowners Still Need Assistance

In the Obama administration's overall assessment on housing, the market was described as showing "important progress across many key indicators" but the millions of underwater homeowners still call for a need to provide homeowner assistance, according to the May housing scorecard released jointly by Treasury and HUD. For example, homeowners' equity grew by more than $815 billion in the first quarter of 2013. "Despite the positive news, we have important work ahead since there are so many families and individuals still 'underwater' with mortgage balances higher than their home's value," said Kurt Usowski, HUD deputy assistant secretary for economic affairs.


Friday, June 7, 2013

Foreclosure sales rate in judicial states shoots up 17% | HousingWire

New data from Lender Processing Services challenges the notion that judicial foreclosure states are seeing little improvement in the movement of distressed properties.

In fact, the month of April was a bright spot with the foreclosure sales rate in judicial foreclosure states growing nearly 17% from March to April – the highest sales rate since the foreclosure moratoria hit in the fall of 2010 due to concerns over robo-signing, LPS said in its April Mortgage Monitor.  

Qualify for a mortgage? Maybe not for long | REwired

The Dodd-Frank Consumer Protection Act, signed into law in July 2010, forever changed the face of the housing market.

Although, in part, designed to restore consumer confidence in the housing industry, the law created strict regulatory mandates — the impact of which are being felt by both mortgage lenders and mortgage seekers, thereby redefining the core of mortgage lending.  

Sunday, June 2, 2013

Heritage Marketplace in downtown Gilbert picking up steam

After years of recession-induced delay, Heritage Marketplace in downtown Gilbert is quickly moving toward reality as design plans went before the Redevelopment Commission on Wednesday.

The mixed-use development promises to bring new office and retail space and at least three restaurants to a 2.7-acre parcel on the northwestern corner of Gilbert Road and Vaughn Avenue in the heart of the historical Heritage District.

Phoenix developer LGE Design Build has until the end of 2013 to start construction, according to a development agreement with the town. On Wednesday, the company brought revised drawings before the Redevelopment Commission depicting the project’s first phase.

LGE will initially construct three buildings along Gilbert Road, including a two-story office and retail building flanked by single-story restaurants to the north and south.

Read more: Heritage Marketplace in downtown Gilbert picking up steam

$800K entertainment-center investment worth it, Avondale says

Avondale has offered a developer $800,000 in incentives to build a giant entertainment center that includes bowling, billiards, an arcade, laser tag, a ropes course and a restaurant.

Avondale officials say the center is worth the investment because it will increase revenues and property values, spur further development on the site and create 100 to 125 full- and part-time jobs after it is completed.

While city leaders say the center would not be built without the incentives, other metro Phoenix cities with similar projects paid either no incentives or considerably less than Avondale. An expert says that the incentives may be high but that the city has some protection if the developer doesn’t perform as promised.

The 58,000-square-foot, $7 million Main Event Family Entertainment Center will anchor a 40-acre development between 103rd and 107th avenues south of McDowell Road and directly north of Interstate 10.

Read more: $800K entertainment-center investment worth it, Avondale says

State lacks affordable rental housing

Arizona’s poorest households face a serious shortage of affordable rental housing, with a study by the Arizona

Housing Alliance showing more than 200,000 residents are paying more than 78 percent of their income toward rent. Housing advocates recommend people pay no more than 30 percent of their income to put a roof over their heads.

During the housing crash, it was a bit easier for the state’s renters to find homes, since nearly 85 percent of all apartments were offering concessions.

The Arizona Housing Alliance recommends in its new 2013 report, “Home Matters,” that the state put more money into its housing trust fund, set up by the Legislature in 1988 to fund affordable housing mostly through the proceeds from unclaimed property. The report also recommends municipalities and state and local groups do more to create rental homes for low-income families.

Read more: State lacks affordable rental housing

Work Could Resume Soon On $1M Venue Expansion | Arizona Builders Exchange

After a long delay, construction could resume soon on the $1M-plus expansion of the Venue Scottsdale event complex at Third Avenue and Craftsman Court.

In May 2011, the city’s Development Review Board approved the site plan and building elevations for the planned expansion into an adjacent two-story retail space, with new outdoor patios and the addition of a rooftop patio, all within a 34KSF building on about one acre. Construction was slated for Summer 2011.

The demolition portion of the project has been completed. A portion of the rooftop patio had to be redesigned, however, and the changes had to be submitted to the city for approval, said David Twigger, director of sales and marketing.

The Venue Scottsdale includes the Comedy Spot and a multilevel special-event and live-concert facility. It also hosts corporate events.

Read more: Work Could Resume Soon On $1M Venue Expansion | Arizona Builders Exchange

West Valley cities easing building-permit process

Few people likely consider how long it takes to get a building permit in their city until they go to put in a backyard pool or build an addition to their home.

But beyond permits for individual homeowners, there’s a reason to pay attention.

West Valley cities court developers to bring in more jobs and revenue, and builders say one of the key variables is being able to easily maneuver through local bureaucracy.

Building permits can come in a variety of shapes and sizes and are a key hurdle for anyone starting a construction project. Developers need them for new housing developments and tenant improvements. Residents or contractors need them for projects such as pool installations or new electrical work that needs to comply with city building codes.

Time is money when builders wait for city staff to approve their projects. If a builder can get fast approval to start on a custom home, it makes it easier to line up subcontractors and ultimately get a new resident in that home, for instance.

Glendale, Peoria and Surprise say they fall within national standards, but Surprise was the only one that provided data to back it up.

Read more: West Valley cities easing building-permit process

Plans for a big Gaylord resort in Mesa may be revived

A year ago, the idea of a mega-resort in southeast Mesa looked deader than Lazarus.

The company that had aimed to build it was no longer developing resorts, the travel economy was still in the pits and four years’ worth of dust had settled on the ambitious plan.

Now, there are stirrings of a resurrection.

The 1,250-room resort, with a conference center of at least 200,000 square feet, was to have been built by Gaylord Entertainment Co. of Nashville on the north end of the former General Motors Desert Proving Ground.

Five square miles of the GM site are being redeveloped by DMB Associates of Scottsdale, which bought the land in 2006 and immediately began laying plans for a mixed-use, master-planned community.

The grand kickoff for the upscale development was supposed to have been the Gaylord. Plans for the hotel, a second high-end resort and other amenities were announced during a glitzy news conference in early September 2008 at the Mesa Arts Center. The overall price tag was pegged at $1 billion or more.

Read more: Plans for a big Gaylord resort in Mesa may be revived

Metro Phoenix new-home permits up in April

New-home permits climbed in metro Phoenix during April, but new-home sales fell, according to the latest RL Brown report.

The decline in sales isn’t due to a drop in demand, though, according to housing analysts RL Brown and Greg Burger. They concluded fewer homes sold last month than in March because there were fewer built and ready for buyers to close on them. Last month, 1,290 single-family permits were issued, up from 1,258 in March.

New-home sales in April fell to 860, compared with 1,020 in March. The top spots for new-home sales in April: Gilbert, Queen Creek, the southwest Valley next to Interstate 10 and Vistancia in the northwest Valley, as well as other areas close to the Loop 303.

Median new-home prices in Maricopa County have been climbing since September and recently topped $280,000, according to Brown’s April Phoenix Housing Market Letter. In Pinal County, the median price is almost $189,000.

Read more: Metro Phoenix new-home permits up in April

Vestar secures $63.5 million loan for refinancing of Queen Creek Marketplace | Business | Queen Creek Report

Vestar, one of the largest privately held retail real estate companies in the western United States, has secured a seven-year permanent loan totaling $63.5 million for the refinancing of Queen Creek Marketplace, a 686,000-square-foot power center located at the Southwest corner of Ellsworth Loop Road and Rittenhouse Road in Queen Creek, Ariz.. The loan was provided by Bank of America in Phoenix.

Developed in 2008, Queen Creek Marketplace is the main shopping destination for the residents of the Queen Creek market area. The project features a tenant mix of more than 40 national and regional retailers, including Super Target (not a part of the loan), Kohl’s, Ross Dress for Less, Sport Chalet, Bed Bath & Beyond. A Harkins Theatre has plans to develop a 14 screen megaplex at the center which is anticipated to open in late 2014. The asset is currently 92 percent occupied.

“The current state of the finance market and our strong position in the marketplace provided us an opportunity to secure long-term fixed rate financing at a historically low interest rate,” said Ed Reading, Vice President of Finance at Vestar.

Read more: Vestar secures $63.5 million loan for refinancing of Queen Creek Marketplace | Business | Queen Creek Report

PV’s Mountain Shadows moves step closer to redevelopment

There will be no referendum opposing Paradise Valley’s approval of redeveloping the long-shuttered Mountain Shadows resort.

It has been more than 30 days since the Town Council approved several documents inducing the special-use permits and development agreements, clearing the path toward the property’s revitalization.

Town Attorney Andrew Miller said the deadline to file a referendum petition was this past Monday.

Mayor Scott LeMarr said a failed referendum opposing a special-use permit approved by the council five years ago to build a Ritz-Carlton might have dissuaded residents this time around.

The development of the Ritz-Carlton has since stalled.

“I'm not surprised that no referendum materialized because past history demonstrates that it would be a costly campaign that would fail,” he said.

Agreements between the town and owners MTS Land LLC and MTS Golf LLC include plans to bring at least a 100-room boutique resort to the 68-acre property, and to retain its golf course and driving range, which have remained open.

Read more: PV’s Mountain Shadows moves step closer to redevelopment

Agencies team up to aid thousands of homeless vets | HousingWire

The Department of Housing and Urban Development teamed up with the Department of Veteran Affairs to provide 9,000 homeless veterans a permanent place to call home.

The supportive housing assistance announced will provide $60 million to local public housing agencies across the country to provide permanent supportive housing to homeless veterans.

The HUD-Veterans Affairs Supportive Housing (HUD-VASH) program combines rental assistance from HUD with case management and clinical services provided by the VA.

HUD-VASH is a critical component of the Obama Administration’s commitment to end veteran and long-term chronic homelessness by 2015.

Shaun Donovan, secretary of HUD, and VA Secretary Eric Shinseki announced this additional support for homeless veterans in an address to the National Coalition for Homeless Veterans Annual Conference Wednesday in Washington.

Read more: Agencies team up to aid thousands of homeless vets | HousingWire

Mortgage broker sentenced in fraud

Jerry Craig Sr., the former owner of Phoenix-based Spectrum Financial, has pleaded guilty to one count of conspiracy to commit wire fraud for residential deals involving mortgage fraud, straw buyers and lying to lenders.

He was sentenced to one year in prison and ordered to pay $2.4 million in restitution to First Fidelity Bank.

U.S. District Judge Roslyn O. Silver on Wednesday approved the plea deal, which was reached in late February.

Craig is well-known in Arizona’s mortgage industry. He was the 2006 president of the Arizona Association of Mortgage Brokers.

The plea deal comes after a 2011 federal grand jury indictment against Craig Sr. and son Jerry Craig Jr. on 16 counts of wire fraud and three counts of false statements to a federally insured lender.

They were accused of lying to lenders about mortgage information, including who owned homes and who was the borrower on loans. Spectrum Financial filed for bankruptcy in 2007 and is no longer in business. 
Read more:  Mortgage broker sentenced in fraud

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