Sedona’s Airport: “America’s Most Scenic Airport”

SedonaFacts just published a great article on Sedona’s Airport.

It’s a small, private airport that does not even have a control tower, but it has a great safety record and history that makes it a favorite place for tourists to start their vacations.  The views are absolutely majestic.

The article provides links to videos and maps.

If you are purchasing property in Sedona be sure to check on the noise factor before you purchase.  The airport serves small planes, small jets, bi-planes and helicopters.  It may influence where you decide to purchase. 

Sedona is such a very special place.  Join our community.  Enjoy the history.

Kathy Howe, owner/broker

Commercial Real Estate: Outlook 2010

Though how2arizona real estate does not specialize in commercial properties, we do keep abreast of the market.

Commercial property movement is directly related to the job market.  Jobs in great supply:  commercial is robust.  Job market down:  commercial properties vacant.

Small businesses drive commercial real estate.  Those offices, shops, restaurants, stores…mostly entrepaneurs who risk their savings, hope for lines of credit, and dream big dreams.  When lines of credit are taken away from them by the lenders (like now), these people have trouble meeting payroll.  They have to do it with cash-on-hand or credit cards.  With credit card interest rates as high as 30%…

The Wall Street Journal has a great read on the industry outlook for 2010.

This is the article information:  Real Estate Faces Tough Recovery Slog.

Understand that the commercial market lags the residential market by at least 2 years.  You have to shore up the jobs market before you can expect to see an upswing in the commercial market.

If you are considering the  purchase of a commercial property, you may want to sit back and watch, for now.  The snowball is only half-way down the hill, and it’s gaining momentum.

Kathy Howe

Have a great twenty-ten!

Kathy Howe, Designated Broker

Twitter Me:  SedonaKathy

Email Me: Kathy Howe

Is Obama’s Loan Modification Program Working?

The New York Times has an article questioning Obama’s Loan Modification program.  It questions the goals.  Due to the fact that the program moves at a snail’s pace (this author’s opinion), one could conclude that government should not be in the loan business.

Real estate agents and brokers can tell you about the frustration of working with owners who have found their home values upside down with their mortgage balances; but,most  real estate licensees are not experts in finance and only attorneys, financial planners, or CPA’s should give advice about the direction an owner should take when trying to find a solution to their financial woes.  Many people simply need to declare bankruptcy and move on.  Others have legal options open to them that require special advisors.

Loan modification… wishful thinking.  This program has been underproducing results since its inception.  Most lenders made the loans, sold them, and may only have a servicing interest left in them.  That means that the entity who bought the loan has to decide to modify the loan.  What is the motivation for the investor to modify the loan?

Read the New York Times article.  It’s food for thought.  Click here.

Many of us who went through the last downturn would have been happy to have a system like the RTC in place again… too bad.

Kathy Howe, Designated Broker

Ringing in the New Year…

We start the new year with the following information about the Uptown/Sedona area MLS properties:

32 Active Listings ranging from $1,795,000 to $297,000

2 listings are under contract – with contingencies (one listed at $999,000 and the other at $360,000 (not sales prices)

3 listings are pending – contingencies removed (one listed at $679,000, one at $675,000, and one at $449,000 (not sales prices)

Over the past 6 months, their have been 19 sales.  The high:  $3,000,000 (listed at $3,750,000); the low:  $172,000 (listed at $199,000).  The median sale was:  $546,000.  The highest sale had been on the market for over 3 years. 

In West Sedona the following information about properties from MLS:

122 active listings (high:  $15,000,000, and low:  $159,000)

14 have contingent contracts (high:  $845,000 – not sale price; low:  $195,000 – not sale price)

10 pendings, taking back-ups (high:  $849,000 – not sale price; low:  $245,000 – not sale price)

Sales over the last 6 months:  60 (high:  $1,550,000 – sales price; low:  $122,000 – sales price.  Median price:  $370,000)  Only 3 properties sold over 1M.

The upper market is not moving well.  There are a total of 42 properties listed 1M and above.  83 listings are currently priced between $400K – $999K.  28 properties listed below $400K.

Those working with lenders on short sales have found them to take 3-6 months to complete…one of our buyer-clients has been waiting for B of A to assign a negotiator for 2.5 months.  Limbo is hard on everyone and the lack of attention by the lenders does not move the market.  It’s the short sale that brings in more money than a foreclosure…seems the lenders should be doing cartwheels…

Many of us in the real estate indurstry will be happy to see the demise of 2009, and we have great hope for 2010.   We will have to wait and see how the raising of interest rates affects Sedona’s already fragile market.

Let’s get those St. Joseph statues out…

Kathy Howe

Kathy Howe, Designated Broker

Arizona’s Volatility Index…from U of A’s Eller Mangement College

By all reports, Arizona ranks in the top 2 of all states for economic volatility.

Exhibit 1
Volatility Index, 10 Most Volatile State Economies

Rank	State	Index*
1	Nevada	130.6
2	Arizona	119.5
3	Florida	113.7
4	Colorado	112.2
5	Utah	111.1
6	Georgia	110.8
7	Texas	110.5
8	Washington	107.8
9	Idaho	107.6
10	North Carolina	107.5

This is an excellent article about Arizona’s economy.  The growth factor is, of course, much of what fuels the volatility, with revenues surging during good years,; but, Arizona’s general fund becomes a wasteland during the down times.

Many Arizonans continue to ask why the Legislature funded so much legislation, even when the signs of a downturn were apparent. ..as in 2005 & 2006 & even 2007.  We can all play the “blame game” but it is best if we can look for a solution so Legislatures of the future will take the downturns seriously enough to limit their spending.

Kathy Howe

Kathy Howe, Designated Broker, how2arizona real estate

Recession Sees Arizonans Staying Put…

The Wall Street Journal is always a great resourse for information about national real estate and the online article, “Recession Alters Migration Patterns in US” by Mark Whitehouse, is no exception.

Where are people going?

What states have the largest influx of people for 2009?  Texas and North Carolina. 

What states are losing the largest number of people?  California, Michigan, and New York.

Texas is attracting people due to no state income taxes and relatively low housing costs.

Arizona.  People seem to be staying put.

But, you need to read this very informative article for the full sense of what people are thinking when contemplating a move.

Kathy Howe, Designated Broker, how2arizona real estate

Commercial Real Estate Outlook for 2010…

In the residential market we are seeing the “flippers” return.  With trust sales and foreclosure properties (REOs = Real Estate Owned) hitting all time lows, investers have returned to the market.

One “flipper” told me that he spends his days pouring over the foreclosure lists and the trustee sale notices… they keep changing as the lenders choose not to do a short sale with an upside-down owner.  In Arizona, most of our loans are made with a promissory note and a Deed of Trust.  Foreclosure is done by posting a notice and taking the property to sale 90 days later.

But most information about commercial real estate has been really dismal, until this report came out.  The publication is the National Real Estate Investor.  Right or wrong, it’s certainly good to get some “up” news.

From the Philip Blumberg blog:

Even commercial transactions need funds…

Kathy Howe, Designated Broker, how2arizona real estate

NAR’s introducing RPR and HouseLogic/Cyberhomes as Ancillary REALTOR.com Sites for Consumers

http://www.realtown.com/articles/view/why-a-national-database-is-too-little-too-late  Matt Ferrara chimes in…

 

For years many of us asked for a national site that would expose all of our listings to the world.  No one home at NAR. We got “Real estate is local”.

 

Matt talks about the low quality of information on REALTOR.com.  Most of us agree.  We are limited by Move.com and our local Associations as to what is put on the site. 

 

Now NAR has come to the party with RPR and House Logic = Cyberhomes. Is it too late?  Google has let us know they are going to be a player.  Coldwell Banker has released a whole new search method.  The others will follow.  Zillow and Trulia were the first “new” formatted sites.

 

Another blog site, AgentGenius, appears more positive about RPR and the whole concept is succinctly explained, along with comments.  Click here for the whole article. 

From AgentGenius:

 

What about Zillow and Trulia?  Their information on Zestimates, etc., in many locations is so off-base that it begs a laugh.  Their information comes only from public records and owner input… neither can be considered accurate, unbiased input.  Their model is Purchase Price divided by square feet.

 

RPR?  HouseLogic?  CyberHomes?  REALTOR.com?  We live in interesting times…

Kathy Howe

 

Kathy Howe

How Is Commercial Real Estate Faring In Today’s Market?

This is the 3rd downturn during my 23 years of practicing both Residential and Commercial real estate, in Arizona and Hawaii.  No, I do not have a crystal ball and neither do I know when this one is going to end.  What I do know is that Commercial real estate lags residential, sometimes by as much as 2 years.

This is an interesting read from an NAR research economist about the plight of the Commercial real estate market:

“…Demand for commercial properties continued on a downward path, adding pressure on prices and rents…a positive shift in employment and financing activity are both needed to place commercial real estate on solid ground.”

We have included one of the graphs from the NAR article… you will find 2 or 3 more that will help give you a glimse of how the variables stack up to make a prediction for the Commercial real estate market recovery.

Kathy Howe, Designated Broker

how2arizona real estate, Sedona, AZ 86336

House Flippers Are Back…

According to Laurence Yuan, NAR’s chief economist, the House Flippers are back…

Are they good or bad for a recovery?

“House Flippers

• According to today’s article in the Wall Street Journal, there is growing incidence of house flippers. Buy cheap and flip in few months. One example in the story was of a person buying a home in Arizona for $486,300 at an auction (which had $1.3 million mortgage) and then re-selling it for $690,000 in 3 months.
• Flipping was a common occurrence during the bubble years, particularly in places like Arizona where prices shot up sky high very quickly – before crash landing few years later. So is the current flipping activity another early sign of a bubble developing?
• A major difference between the bubble years and today is the credit availability. Back in the bubble years, credit was too easy with just about anyone able to get a mortgage. Today, credit is exceptionally tight. For primary occupant homebuyers, mortgage rates are at record lows, but that is not the case for investor purchasers. So the flippers today are mostly all-cash and taking on the total risk of success or failure. It also means that a chance of a similar bubble as in 2005 is not developing simply because the banking system and leveraging are not involved.
• In a rising market, investors can be a source of problem of excessively pumping up the market. But in a down market, investors are part of the solution to help clear off inventory and stabilize home values.”

Yes, Sedonans, it is even happening in the Sedona-Verde Valley market. 

Let’s clear out the inventory and get back to a 90-day inventory level.

Kathy Howe, Designated Broker, how2arizona real estate