TheTucsonFoothills

follow up on dueling sales numbers...

The other day I did a post titled dueling sales numbers for Tucson.
In it I quoted a couple of local experts on the state of the real estate market in the greater Tucson metro area, and compared it to what's happening in the Tucson Foothills area. In doing so, I made the case that because the Foothills does not have any large scale new home building, that it has been, and will continue to be, less susceptible to the market deterioration that is taking place in other areas of Tucson. Coincidentally, the next day the Arizona Daily Star ran this story
New-home market flooded on outskirts as builders, owners compete
This piece fleshes out what I alluded to, and illustrates how the actions of big builders are contributing to the deteriorating real estate market in other areas of Tucson.
"The builders, they just flooded this market with inventory," said Melinda Turner, who put her Sahuarita home on the market about a year ago without success. "And the rest of us, the previous customers, got really screwed."

making loans, moving forward

I have it on very good authority that Long mortgage has been seamlessly processing mortgages, accepting applications for new mortgages and delivering loan docs to title for ontime closings.
This, despite the fact that a number of other mortgage companies have been frozen in their tracks and unable to move forward.
In some cases Long mortgage has had to pick up the pieces from these other mortgage companies, and put them back together, quickly, so that buyers and sellers could close as originally planned.
As an added bonus, and a pretty extraordinary one at that, considering what's happening elsewhere in the mortgage marketplace, Long mortgage continues to offer the 1% off Real Deal. Simply put, a buyer using Long Realty and Long Mortgage gets 1% off their interest rate for the first year of the mortgage. On a $400,000 mortgage, that's a savings of $3084.00 over that first year.
That kind of reassurance and standout performance should be a comfort to buyers and sellers who are active in the Tucson home market right now.

Tucson - Long Mortgage steps in as others falter

Within hours of the news that Tucson-based First Magnus Financial Corp had halted all loan activity, Rosey Koberlein, CEO of Long Companies provided some much needed reassurance to the local market by announcing, "Long Mortgage Company has responded to the situation at First Magnus by working closely with its parent company, HomeServices of America, an affiliate of Berkshire Hathaway, to promptly arrange alternative funding sources to fund loans currently in the pipeline and to continue accepting loan applications for any Long Realty business."
Here's the full text of the announcement:

RE: LONG MORTGAGE CONTINUES TO FUND LOANS

Our thoughts and good wishes go out to our colleagues at First Magnus Financial, which announced today that it would stop writing and funding real estate loans, effective immediately. We know the shut down will affect not only First Magnus employees but their many families, as well. We will be hoping for the best for them!

Long Mortgage Company has responded to the situation at First Magnus by working closely with its parent company, HomeServices of America, an affiliate of Berkshire Hathaway, to promptly arrange alternative funding sources to fund loans currently in the pipeline and to continue accepting loan applications for any Long Realty business.

Here are the steps we have taken today:

1. Loans that are set to close within the next 48 hours will be our highest priority. Such loans will be funded through our alternative funding sources.
2. Our alternative funding sources will also honor all current loan commitments and terms for our client's loans now in the pipeline.
3. We are reaching out to other brokers with buyers of Long Realty listings, offering to process their clients' loans with the same care and concern as for our own buyers, if their buyers' loans are in jeopardy.
4. We are contacting other real estate companies to assure them that our own real estate transactions on their listed properties will close in a timely manner.
5. Finally, we have secured a commitment from our funding sources to continue with Long Mortgage's Real Deal 1% Off Program.

We believe taking these important steps will add much needed calm and stability to the local market.

Long Mortgage and Long Realty are very fortunate to have the strong backing and support of HomeSevices of America during this difficult period. As you may know, HomeServices is the second largest, full service independently owned residential real estate company in the nation. Rest assured, Long Mortgage will continue to provide loan services to southern Arizonans seeking to fulfill the dream of homeownership. 

I will also continue to monitor the situation locally and keep you informed in the days ahead. Thank you all for your patience and outstanding professionalism.

Sincerely,

Rosey Koberlein, CRB

CEO Long Companies

Tucson - mortgage meltdown hits home

From an online article in today's Arizona Daily Star.
Tucson based First Magnus Financial Corp announced that it has stopped writing loans, stopped accepting applications for loans and halted funding for loans previously originated but not yet funded.
First Magnus announces layoffs, halts new loan activity

1500 homes to breath life into Biosphere

Biosphere 2, the self-contained, self-sustaining world-in-a-bubble built to support ecological research has been sold for $50 million to CDO Ranching & Development along with the 1658 surrounding acres.
Biosphere 2 in Pinal County north or Tucson failed to generate the level of interest necessary to sustain it on it's own.
The plan is to build 1500 homes and a resort hotel on the property.
Read it HERE and HERE and HERE

everything's coming up green

look out, home builders are turning green, or so they say. environmentally friendly housing developments are coming your way,

builder goes bankrupt

There's a story in the AZ Daily Star about a Tucson builder who apparently got in over his head and is filing for Chapter 11 bankruptcy. I'm sure this is not the first and it won't be the last builder who gets into a tight spot before things even out in the latest real estate boom and bust cycle. But the thing that stands out is that all the people interviewed for the article are people who are either owed money by this builder or who are in the midst of having a home built by them. And all of them have more or less had the rug pulled out from under them, but despite that, they all have nothing but good things to say about this builder, AmericaBuilt Construction.That's quite a tribute. Tucson Home Firm files for Chapter 11
I wish them luck getting it together.

Tucson Agents gauge the market

Each month I participate in a Real Estate Agent survey conducted by the securities department of Bank of America. They survey about 2600 agents in the top 39 markets.
In the introduction to the survey B of A says "We survey real estate agents, as we believe that agents will provide an accurate assessment of housing market trends in both the new and existing home markets. Even though homebuilders sell new homes, we believe that it is crucial to have an understanding of the existing home market as the existing home market is substantially larger than the new home market (approximately 85%/15%) and trends in the existing home market dictate trends in the new home market."
Following are the survey findings for all of Tucson, not just the Tucson Foothills,
Tucson, AZ
(11,006 single-family permits in 2005, 33rd largest market in the country)
Traffic still below expectations. Our traffic index was unchanged at 34.4 in January from 34.6 in December, indicating traffic was below agents’ expectations (a reading of 50 suggests traffic in-line with expectations). 44% of agents said traffic was below expectations, 44% said it met expectations and 12% said it exceeded expectations.
Pricing and incentives deteriorate. Our price index measured 30.0 in January,
unchanged from 32.4 in December, as 51% of agents said prices declined from last month, 38% said prices were flat, and 11% said prices increased. Our incentive index came in at 30.7 in January, indicating higher incentives as 52% of agents said incentives increased, 34% said they were unchanged, and 14% said incentives were decreased.
Time needed to sell lengthens again – a negative indicator of future pricing. Our time to sell index fell to 12.0 in January from 16.2 in December, as 78% of agents said it is taking longer to sell, 20% said it is taking the same length of time, and 2% said it is taking less time to sell a home.
Comments from real estate agents:
“Buyers feel the market has yet to reach its lowest point.”
  “Buyers remain cautious as prices continue to fall.”

Tucson, one of the hottest markets

Kendra Todd says that Tucson 'is one of the most promising places to buy a home in the U.S.', and that it is 'poised to take off in the next two to three years', and that, 'Tucson will be one of the hottest markets in the next five years'
Don't know who Kendra Todd is; 'Kendra Todd is the first and only woman to win Donald Trump's smash hit NBC show, "The Apprentice" on NBC. Additionally, she is Broker of Florida-based MyHouseRE.com, host of the popular HGTV Show "My House Is Worth What?" and a regular real estate contributor on Fox News Live. Her first book "Risk and Grow Rich: How to Make Millions in Real Estate" has been an instant success'.
According to Kendra, Tucson, the largest city on her list of Best Places in The U.S. To Buy A Home, shares these key attributes with her other top picks; A strong trend toward appreciation, A strong local economy, A "wow" factor that attracts people, and Solid in-migration to the area.
Read Best Places in The U.S. To Buy a Home, then give me a call. Hey, I just bought a home in Tucson, and I hadn't even read Kendra's report yet.

Joeslers' in Tucson

'When asked to name Tucson's most recognized architect, the first name that comes to most people's minds is Josias Joesler.'
From Josias Joesler:an Architectural Eclectic

If I had to pick my favorite architect, builder and style of home in Tucson, my answer to all three would be the same - Joesler. From the 1920's to the 50's Josias Joesler built homes in Tucson that not only endure to this day but are the prized possession of their lucky owners, and coveted by many others.
While Joesler built homes, churches and other public buildings throughout Tucson, I'm most familiar with the homes that he built in the Catalina Foothills Estates area. This area, bordered by Skyline Dr on the north, River Rd on the south and bisected by Campbell Ave is prime Joesler turf.
Many of these homes, originally built as winter residences for wealthy easterners, have been carefully renovated and now serve as full or part time homes for a lucky few.
Rich in architectural style and detail, Joesler also knew how to build a home that was at home in the desert. He used thick adobe walls, clay tile roofs with wide over-hangs and deeply set windows. His homes were sited to capture the views, offer shaded outdoor living areas and maximize protection from the sun.
Not without their idiosyncrasies, Joeslers’ are non-the-less much admired for their timeless architecture and great bones.
When you enter a Joesler, you feel that it was built to withstand time, not just as in durable and 'built to last', but in the sense that the style will endure and never be out of style.

Tucson condo market cools off

The Arizona Daily Star reported today on the front page that the Tucson Condo market has cooled off. See Star Story by Joseph Barrios
For sure this is true, but it's not new news, this has been going on for months. In the Foothills at least, it seems that these condo conversions were announced or came on line within a few months of each other, creating an almost instant glut. Within an 1/8th of a mile of the intersection of Kolb & Sunrise three rental complexes, Veranda, Pinnacle and The Greens converted to Condos, each of them with more than 200 units for sale.
This is a very popular area of the Foothills and until recently the only Condos were at Canyon View at Ventana, where it often seemed that you had to have a connection with someone 'in the know' in order to buy one of the few units that became available. But popularity has it's limits, and in the short term there's no way the market could absorb 600 or so new condo units hitting the market. It will take some time. The Tucson Association of Realtors MLS lists 331 condos for sale in the Foothills, not including the units at The Greens which is currently selling thru their on-site sales office only.

Recent Forbes Magazine article calling Tucson one of the most over-priced markets in the country.

The following is a response by Rosey Koberlein CEO of Long Companies of Tucson AZ (Long Realty, Long Mortgage, Long Title & Long Insurance) to the above-mentioned article.

The Forbes magazine article is a reflection of the abiding interest that readers have in understanding real estate markets. However, only accurate information provides real insight. The use of a $248,000 median sales price is incorrect.
Published MLS data verify that our median sales price in May was $221,250 and it has been within a few thousand dollars of that number for the previous twelve months.

According to Moody’sEconomy.com, our Tucson market had an affordability index of 99 (meaning that a family earning a median income can afford to buy 99% of a median priced home) at the end of 2005. Median home prices are virtually unchanged since then.

All markets are a dialogue between buyer and seller, revolving around issues of price and value. In our own market, we see very active engagement on both sides of the table.
Over 1,800 sellers elected to reduce the listed prices of their property in the month of June. These sellers are genuinely interested in selling and are demonstrating that they mean to get the job done. The resulting sales indicate that buyers agree that “the price is right”.

For the month of June, the MLS averaged around 430 sales per week. This pace is completely typical for this time of year, and means that buyers are still in the market in substantial numbers.

In the combination of both price reductions and continuing healthy sales, we see that our market is adjusting to current circumstances with vigor and enthusiasm. It seems very clear that Tucson buyers and sellers have their own definition of value: Tucson is a wonderful place to live and a desirable place to own a home.

Rosey Koberlein
Chief Executive Officer
Long Companies

Tucson in Top 10

I've been toying with the idea of starting this blog for a while now, and when I saw the front page of todays Arizona Daily Star it seemed the perfect entry point.

The AZ Daily Star reported today on the front page that Tucson has made Forbes list of the Top 10 most overvalued cities. "Tucson is keeping big-name company with New York City, Los Angeles and San Francisco in an unfortunate Top-10 list: It puts us among the country's most overpriced places."

Hard to believe that Tucson would make this list, even given the big run-up in home prices during the last few years. It wasn't long ago that Tucson caught the attention of the media because many surveys
(The next hot housing markets) - (are you living in a bubble) rated Tucson a relative bargain in terms of home prices compared to other hot markets.Forbes notes that the median home price in Tucson is currently $248,600. That is incorrect. According to the Tucson Association of Realtors MLS the median home price in Tucson is currently $221,250. (see MLS sales data above) Forbes figure is off by 12.36%.

Forbes' top 10 overvalued cities
● The 10 most overpriced places in the United States and their median home prices, according to a Forbes.com ranking that considered cost of living, job growth, housing affordability and salaries.
1. Essex County, Mass.: $373,750
2. San Francisco: $720,400
3. San Jose, Calif.: $746,800
4. Honolulu: $625,000
5. Cambridge, Mass.: $390,400
6. New York: $528,700
7. Tucson: $248,600
8. Oakland, Calif.: $720,400
9. Boston: $390,400
10. Los Angeles: $563,900

$221,250 is low compared to the other cities on the Top 10 list & probably compared to a lot of cities not on the list. (By the way, The National median existing single-family home price was $229,700 in May, up 6.4 percent from a year ago)
But for the moment, the inaccuracy aside, when Forbes says overvalued, they are saying overvalued in relation to cost of living, job growth & salaries. That works in most places. But in Tucson there is another component, and it's a big one, that drives the local economy and the cost of housing. And that is, that a large part of Tucsons' economy is fueled by tourism, retirees and seasonal visitors, people who come here to get away from where they live or used to live, and not for jobs, but for pleasure. Just like Honolulu, # 4 on Forbes list.
And, like it or not, a lot of the value in Tucson home prices is driven by demand for second homes and retirement homes. These people come here because they want to, because Tucson is beautiful, has a great climate and an easy lifestyle. And none of it has to do with jobs & salaries. So when Forbes says that Tucson is overvalued they have not taken into account a big chunk of what our economy is about. Does anyone buy a second home or retirement home in Gary, Indiana or Hoboken, New Jersey?