Daily Archives: July 16, 2008
[Source: Teresa Brice, Local Initiatives Service Corp.] — With the fall 2008 Arizona Town Hall focusing on Arizona’s housing woes, housing advocates are busy compiling background data and information to help bring participants “up to speed” on the issue before the town hall is held. Regarding affordable housing in and around downtown Phoenix, here are two important recent documents:
- October 2007 downtown Phoenix housing market study by Crystal & Company of Scottsdale.
- June 2008 City of Phoenix staff report (in response to a proposal from LISC, ASU Stardust Center, and Downtown Phoenix CDC).
[Source: Laurie Roberts, Arizona Republic] — Interesting phenomenon I’ve noticed over the past few days. A lot of people seem to think Phoenix is a lovely place to live. They’re giving me a hard time for giving the mayor a hard time for the shabby state of Tom Alexander’s neighborhood. But here’s the thing I’ve noticed, as they spring to the defense of Phil Gordon and Phoenix in the wake of my Saturday column: Most of them live in Surprise or Chandler or some place other than Phoenix. Here’s Jim: “Are you actually shocked that this gentleman’s street is not like it once was or as he had hoped it would be 35 years later?”
No, not shocked, but saddened that a guy like Alexander, a man who went to war for his country and worked hard all his life, must now be ashamed of the street where he lives. Saddened and surprised that such a thing would occur in the city run by North America’s best mayor. Surely the pride of the continent would notice that his city has a problem. And put up a fight.
While it’s great to work on boosting downtown, most people’s views of their city come from the place they live. Their street. Their neighborhood. And frankly, the view isn’t so good in whole sections of this town. [Note: To read the full article, click here.]
[Source: J. Craig Anderson, Arizona Republic] — Valley home prices continued their year-over-year plunge in April, dropping a record 18% as the impact of foreclosures and other economic factors exerted even greater influence, according to an ASU report issued Tuesday. The Arizona State University Repeat Sales Index, which tracks repeat same-home sales, reported an “off-the-cliff drop” in home prices because, in large part, of foreclosures, which made up 20% to 30% of all April home sales. ASU real-estate Professor Karl Guntermann, who compiled the report, said the continued rise in foreclosures was significant, but that gas prices, interest rates, tougher lending standards, and buyer psychology also took their toll. “It’s not just one thing,” he said. “That’s what’s so depressing, in a way.”
For March, ASU reported a 13% drop in year-over-year home prices for the Phoenix metropolitan area, at that time the largest decline ever recorded:
- Northeast region, which includes north Phoenix, Paradise Valley, and Scottsdale, saw its first-ever double-digit drop in home prices, down 10.2% from the previous April. Its year-over-year decline in March was just 4.3%.
- Southwest region, which includes Avondale, Buckeye, and Goodyear, had the worst year-over-year slide, as home prices plummeted 30.6% from a year earlier, falling even further from March’s 12-month decline of 22.9%.
- Central region, which takes up most of Phoenix, saw an additional decline of 4% compared with the previous month, bringing the total year-over-year price dip in April to 18.4%.
- Southeast and Northwest Valley regions each fell another 4% from the 12-month drops they had seen in March, bringing their April price decreases to 17.8% and 23%, respectively. The only positive surprise was in Sun City and Sun City West communities, where home prices were down just 14.2% from April 2007, a slight recovery after six months of being among the hardest-hit areas.
[Source: Jonathan Karp, “Real-Estate Financier’s Death Hints At Trouble for Lenders,” Wall Street Journal] — Flamboyant real-estate financier Scott Coles penned a farewell letter, put on a tuxedo, and climbed into bed, where he was later found dead in what police believe was a suicide. The tragedy last month is drawing attention to the condition of the nation’s commercial real-estate market, which is beginning to show mounting signs of distress.
Mr. Coles, who was 48 years old, had built his company, Mortgages Ltd., into one of Arizona’s biggest private lenders during the real-estate boom. It specialized in short-term, high-interest-rate loans to commercial developers — builders of malls, office parks, condominiums and other projects — who either had bad credit or a need for quick cash with no red tape. But he overreached, and the debacle that has devastated the U.S. housing market the past year is now squeezing Mortgages Ltd.
To keep growing and outrun the problems, Mr. Coles leaned increasingly on loans — totaling roughly $200 million — from an obscure company, Radical Bunny LLC, run by his accountant. He also sought to raise new money on terms that undermined his existing investors. These moves triggered the departure of several senior managers at the firm in recent months.
So far, the commercial-property market has been spared the devastating losses felt in the housing market because there wasn’t flagrant overbuilding. But declining property values and a weakening U.S. economy are starting to bite: Mortgages Ltd. and other lenders are reporting a significant jump in loan defaults. That’s placing enormous new pressure on the lenders, which have bet billions of dollars on new construction of commercial properties. [Note: To read the full article, click here.]
With public art being in the news lately — with lots of follow-up blogging and letters to the editor — Melinda Alexander, a PhD student in the School of Geographical Sciences at Arizona State University, is conducting a survey of the public’s perception of transportation-related art in Phoenix.
The online survey takes less than 15 minutes to complete. Participation is voluntary. You can skip questions if you wish. If you choose not to participate or to withdraw from the study at any time, there is no penalty. Your responses will be anonymous. The results of this study may be used in reports, presentations, or publications but your name will not be known. Completing the questionnaire will be considered your consent to participate. Care to complete? Click here to begin!