The Scottsdale Blog

787,000 New Residents in the Valley

by John O'Leary

In the time period between 2000 and 2006, over 787,000 residents were added to the Valley (Phoenix and vicinity).  In the United States that represented the fourth-largest gain of any metro area.  The growth was roughly a 24 percent jump in population.

Atlanta, Dallas and Houston were the overall top three metropolitan areas experiencing tremendous growth during that time period.  The Phoenix area is now the 13th largest metro area in the country.

There are a tremendous number of reasons people move here, chief among them being climate.  Sure it gets hot, but it's a dry heat...  (no nasty hurricanes like Florida).

88 Valley Homes in Auction Yesterday

by John O'Leary

Some sellers have become so frustrated trying to sell their homes that they have put them on the auction block.  Yesterday there were 88 homes auctioned and half received bids above the seller's minimum prices which were set prior to the auction.

The real winners may have been buyers who were able to get bargain prices when bidders were few on a specific property.  Sellers have the right to refuse the final bids and prices should be known within a week.

Maricopa County Gains Nearly 700,000 Residents

by John O'Leary

Between 2000 and 2006, Maricopa County (the county in which both Scottsdale and Phoenix reside) gained nearly 700,000 residents.  This was the highest population gain for any county in the United States.  The county's population of 3.8 million ranks number 4 in the nation.  Arizona as a state now has approximately 6 million people, whereas in 2000 there were 5.13 million.

Major Retail Centers Coming

by John O'Leary

Three new shopping centers planned for the 101 Freeway corridor that runs through North Scottsdale and Phoenix will add 2.85 million square feet of retail space to the area.  In addition, there will be a large amount of office space and residential development as part of these three projects. 

Development will take place over the next ten years and the area will become a destination shopping experience for not only residents but for the tourists and winter visitors coming to Arizona each year.  The tax revenues for both Phoenix and Scottsdale will be in the millions and, as a result, both cities are competing for key retail tenants in their respective shopping centers.

Arizona now #7 in Mortgage Fraud

by John O'Leary

The Mortgage Asset Research Institute publishes an annual survey which was just released.  The new survey shows that Arizona is now ranked 7th in terms of the amount of mortgage fraud out of the 50 states.  Arizona was 23rd the year before.  Mortgage fraud has typically been in cases where the buyer pays a higher price for the home than it is worth and gets cash back at closing.  It usually requires a combination of unscrupulous buyer, appraiser, mortage company and real estate agent and has an additional impact as it raises the price of homes artificially in the neighborhood where the sale takes place.

Arizona #2 in Subprime Loans

by John O'Leary

Nevada, Arizona and Florida grabbed headlines over the last few years when it came to growth of population and in price escalation of homes.  They also rank numbers 1, 2 and 3 now when it comes to the states with the highest percentage of risky loans.

The key concern is that a number of these loans may eventually default, resulting in foreclosures and the return of the properties back to the housing market at reduced prices.  Additionally, now that lenders are tightening credit standards, there will be a smaller pool of eligible buyers that could reduce the inventory of homes currently on the market.

There is a real blame game going on between various people in the real estate industry over why all these sub prime loans were allowed in the first place.  Concerns are being raised over which group was "allowing" people with bad credit to purchase homes.  Also, concerns are being been raised about why the government didn't have better safeguards in place to prevent the potential negative impact of all this to the nation's economy.  Apparently there will always be people standing ready to help someone spend their money, regardless of that person's credit or long-term ability to pay for it.  Since a vast number of the borrowers were overstating their incomes to the lenders it would seem that a lot of the blame might fall squarely on the borrowers.

We encourage our buyer clients to be realistic in their expectations of future income potential, honest in their conversations with the lender regarding current income and practical in the size of loan they are willing to take on.  The danger is that instead of them owning their possessions, their possessions might be allowed to own them.

Builders Cutting Costs

by John O'Leary

A recent article by Glen Creno in the Arizona Republic highlights the fact that many local builders of new homes are -

"cutting costs and prices as they struggle to attract more buyers and regain their footing in a market flooded with an excess of unsold homes."

The cost-cutting done to decrease the price of the home for first-time buyers is a double-edged sword.  Although there will be more homes available at lower prices, the quality of those homes could be impacted negatively as the builders put pressure on sub-contractors to lower their costs.

As they press subcontractors for lower prices they need to be careful about the old adage "You get what you pay for!"  We encourage the home buyers we represent to buy in established neighborhoods of homes built by reputable builders and to use a professional  home inspector during the due diligence period (ten days after signed contract).  There are certainly home builders that have less than stellar reputations and it helps to work with a Realtor who doesn't represent the builder directly.

Read the article by Glen Creno here »

5 indicted in Arizona real estate fraud case

by John O'Leary

We have been hearing of fraudulent lending practices in the Arizona market for some time and now the following in a report by Catherine Reagor of The Arizona Republic on March 9th:

"A group of former housing counselors, loan officers and an escrow agent has been indicted on fraud and conspiracy charges in one of the biggest real estate fraud cases in Arizona since the housing crash of the late 1980s.

The group is accused of defrauding the Department of Housing and Urban Development of $1.9 million through a pre-foreclosure scam that targeted dozens of first-time homeowners across the Valley from 2001 to 2003, according to a grand-jury indictment filed in federal court late Wednesday."

Our comments:  The impact of the fraudulent activities on Scottsdale's housing market is yet to be seen but we are heartened to see litigation taking place and encourage investigation of any firms suspected of illegal loan activity. 

If you feel that your fair housing rights have been violated, you can file a complaint with the U.S. Department of Housing and Urban Development by calling HUD's national toll-free hotline (1-800-669-9777).

Avoid being a victim of predatory lending.  Contact HUD at 1-800-767-7468 (TDD 1-800-877-8339) for the free publication, Don't Be a Victim of Loan Fraud.
Their website is http://www.hud.gov/offices/fheo/

If you are looking for a highly trusted mortgage source we can make recommendations.  Call us at 480-473-9999 and ask for Mike Bodeen or John O'Leary.

Fastest Growing State

According to a recent announcement from the U.S. Census Bureau, between July 1, 2005, and July 1, 2006, Arizona grew at a 3.6 percent rate. This is higher than the previous leader Nevada, which had a 3.5 percent gain. Idaho was in third place with a growth rate of 2.6 percent. Louisiana, still feeling the affects of Hurricane Katrina, lost close to 5 percent of its population, with almost 220,000 leaving the state. The fact that Arizona does not suffer from hurricanes as does the southeast also is in our favor when companies choose a location to move to their headquarters or when individuals choose to move to a warmer locale.

What does this mean for our real estate market? It means that even though there is a nationwide slowdown in real estate, Arizona will see continued strong growth in population which will have a positive impact on the currently high number of properties for sale. This will also have a positive effect on long-term appreciation in home prices protecting the investment families make in their homes in Arizona.