AZ Central – Piecing together a No. 1 home builder

by J. Craig Anderson – Aug. 19, 2009 12:00 AM
The Arizona Republic

Shareholders of Pulte Homes Inc. and Centex Corp. on Tuesday approved a $3.1 billion merger of the two companies, which Pulte officials said creates a new local and national market leader in home sales.

The merger will extend Pulte’s reach to first-time home buyers – the target market for Centex – while allowing Centex to benefit from Pulte’s upscale image, company officials said. Both firms’ shareholders approved the deal by an overwhelming majority.

While the combined company will retain the two distinct brands, it will be called Pulte Homes and will be based at Pulte’s existing headquarters in Bloomfield Hills, MichThe two companies hold a combined 16 percent share of the Phoenix-area market based on new-home sales closed through June 9, larger than any other builder, Pulte spokeswoman Jacque Petroulakis said.

The next-biggest Valley market-share holder is D.R. Horton Inc., the former local and national leader, with an 11 percent share, she said.

Previously, Pulte was the second-largest home builder in the Valley and nation, and Centex was No. 3.

The combined company will be better able to endure the current economic slump by consolidating operational expenses, Pulte Southwest area president John Chadwick said.

“There is tremendous value in fully leveraging our brands across all buyer segments so we can drive better results in traffic, sales and profitability,” Chadwick said via e-mail. “With the addition of the Centex brand, our brand portfolio is more balanced across all consumer segments, without leaning heavily toward one consumer segment over another.”

First-time homebuyers make up the largest share of the home-buying market – about 41 percent, up from 39 percent a year ago, according to a recent National Association of Realtors study.

The merger is a stock-only deal that leaves Pulte shareholders with 68 percent of the stock.

The new firm will trade on the New York Stock Exchange under the symbol “PHM.” The New York Stock Exchange symbol for Dallas-based Centex, “CTX,” will be retired.

Nether company’s stock saw much movement Tuesday, but both builders’ stock prices increased significantly during the past month on investor optimism that the struggling new-home industry was showing signs of recovery, Wall Street analysts said.

Pulte also owns Phoenix-based Del Webb Corp., developer of the Sun City adults-only communities and the all-ages Anthem communities.

Like most home builders, Pulte and Centex have reported huge revenue decreases in recent quarters, although Centex turned a net profit of $85.1 in its most recent quarter thanks to a $407.3 million income-tax benefit, up from a quarterly loss of $150.1 million a year earlier.

Pulte reported a second-quarter net loss of $189.5 million, compared with a $158.4 million loss a year earlier.

“This combination puts us in an excellent position to navigate through the current local and national housing downturn and accelerate our return to profitability,” Chadwick said.

AZ Central – After 27-month slide, Valley home prices holding steady

by J. Craig Anderson – Aug. 20, 2009 12:00 AM
The Arizona Republic

After a record-breaking 27 months of decline in the Valley’s median home price, some of the most influential local real-estate analysts predict that home values finally have hit the bottom of the slide.

Arizona State University Professor Karl Guntermann reported Wednesday that the median price has held steady long enough to cautiously predict a coming period of relative price stability.

That doesn’t mean all home prices will start to increase in the near future. Some houses, particularly the more expensive ones, should continue to decrease in value gradually, while less-expensive homes could hold steady or see moderate gains in value, Guntermann and other experts said.

Nor does it mean recent sellers are feeling any better about the amount they got for their homes. One couple who moved to Anthem recently liked the bargain they got here but still lamented the loss they took on a home in Washington state. Many sellers in the Valley felt the same pain.

“I lost $300,000 in equity on that home,” 68-year-old Steve Trover said. “I got a great deal (on the Anthem home), but I’m not going to forget that $300,000.”

Still, the overall rate of decline tracked by Guntermann’s ASU Repeat Sales Index is finally showing improvement rather than deterioration.

“Clearly, the rate of decline has bottomed out and appears to be moving in the right direction,” he said.

Caution is the guiding principle behind Guntermann’s research. He doesn’t call a trend a trend unless it has repeated itself at least three months in a row.

The positive trend first emerged in April and has remained consistent since, he said.

Guntermann tracks a sampling of homes that have sold multiple times in recent years, and he compares repeat sales of each home for changes in price.

In April, the median repeat home-sale price was 35 percent lower than it had been a year earlier. In May, the year-over-year difference decreased to 33 percent, and it has narrowed by an additional 2 percentage points each month since.

The actual median sale price has bobbed up and down slightly since April but has shown no major changes since then, Guntermann said. The median was $117,500 in April, and preliminary data show it was $119,000 in July, he added.

The median home prices peaked at $266,523 in June 2006, according to Phoenix-based Information Market.

Calling the bottom has been a subject of intense interest in metro Phoenix because much of the economy is tied to population growth and the building that springs from it.

Analyst Tom Ruff of Information Market said the ASU report validates a pronouncement he and colleague Mike Orr had made in April that home prices had hit bottom. “Lately, the news and the forecasts from leading economists have been much more positive, just as we said they would,” Ruff said.

Still, he and Orr said the housing market entered a new, less encouraging phase in July. The number of foreclosures hit a new all-time high of about 5,300, and the median home price slipped a bit.

“July was unlike the first six months of the year,” Orr said in his latest analysis. “We are now in a period of more uncertainty, with some more mixed signals coming from the data.”

In Guntermann’s preliminary data for June and July, the median price reached $120,000 in June and then decreased by $1,000 the following month.

Another issue on the horizon that could trigger a dip in home prices is an expected increase in home foreclosures in the coming months, according to leading auctioneers of bank-owned homes.

All of the local analysts interviewed said they expect the median home price to fall slightly in the coming months.

But housing analyst RL Brown and others noted that the Valley housing market always lags during the latter half of the year, and they advised homeowners not to panic.

Overall, Brown said he continues to be optimistic about the Valley’s long-term prospects, even though he recognizes that economic factors such as employment and the availability of credit will have a significant influence.

One big improvement from a year ago, he said, is that home builders have sold off much of the excess inventory they had been saddled with when scores of prospective buyers canceled their new-home contracts.

Brown pointed out that despite all the economic hurdles, fears and past mistakes, nearly 10,000 homes have been sold each month in Maricopa County for the past three months.

“The economy is fraught with problems,” he said, “but the fundamentals of this market are, by any reasonable definition, strong.”

AZ Central – The Valley’s priciest home sales in August 2009

Aug. 26, 2009 12:00 AM
The Arizona Republic

The founder of a company that organizes and directs large meetings and conventions, an attorney, a co-founder of an atheltic-apparel chain, a founder of a real-estate company in California, the owner of an interior-decorating company and the former owner of a chain of luxury vehicle franchises are among the buyers and sellers in this week’s priciest home sales.


Robert Madden, as trustee of the DKBK Real Estate Trust paid cash for a 7,486-square-foot home with a pool originally built in 1984 southeast of the Paradise Valley Country Club in Paradise Valley. Madden is a partner at Blank Rome law firm in Washington, D.C. The home was sold by Janice Borovay Montana. Borovay Montana is founder and president of PEP Enterprises, which specializes in organizing and directing large meetings, conventions and motivational programs for domestic and international corporations. She is also president of


Alan and Linda Cohen paid cash for a 4,939-square-foot home with a pool originally built in 1994 east of the Paradise Valley Country Club in Paradise Valley. Alan Cohen is a co-founder of Finish Line Inc. a chain of atheltic-apparel stores. He retired as CEO in 2008, but still serves as chairman of the board. The home was sold by Robert D. Voit, as trustee of the Robert D. Voit Trust. Voit is the founder, president and CEO of Voit Real Estate Services located in California, Las Vegas and Phoenix.


Kerry T. Giovanini, as trustee of the Kerry T. Giovanini Trust and Giovanini Properties, a Wyoming general partnership, paid cash for a new home on the western side of the Silverleaf Club in Scottsdale. Giovanini is owner of American West Interiors. The home was sold by Camelot Homes Inc. of Scottsdale.


Thomas A. Kinnish, as trustee of the Declaration of Trust of Thomas A. Kinnish, purchased an 8,070-square-foot home with a pool originally built in 2008 on Troon North’s Mountain Golf Course in Scottsdale. Kinnish and Richard Cogswell Jr. sold Laurel Motors Automotive Group in Chicago to AutoNation of Fort Lauderdale, Fla. in 2002. The home was sold by L19 Balancing Rock LLC of Phoenix.


Farhad Nabavi bought a 7,284-square-foot home with a 576-square-foot pool originally built in 1980 east of the Paradise Valley Country Club in Paradise Valley. Nabavi is president and CEO of Pakon Engineered Products Inc. of Tempe. The home was sold by Navid and Donya Zamani, as trustees of the Zamani Family Trust. Navid Zamani is a cosmetic dentist in the East Valley.

USA Today – 2 reasons to buy a home now

by Sandra Block – Aug. 25, 2009 08:14 AM
USA Today

Your friend Walter is a real estate agent, and every time you run into him at the grocery store he suggests that this is an excellent time to buy a house. That’s not surprising, because Walter, like most real estate agents, is an eternal optimist. This time, though, he may be on to something.

While some economists believe home prices will remain low for the foreseeable future, other buyer-friendly incentives could disappear soon. If you’ve been on the fence about buying a home, here are some reasons to explore the other side:

•Record low interest rates. The average rate for a 30-year fixed mortgage was 5.12% last week, the lowest level since the end of May, according to mortgage giant Freddie Mac.

The average rate for a 5/1 hybrid adjustable-rate mortgage — which offers a fixed rate for five years and then adjusts — was 4.57%, the lowest since January 2005, according to Freddie Mac.

While the credit crisis exposed the risk of short-term ARMs, a 5/1 hybrid is still a good option for borrowers who don’t expect to stay in their home longer than five years, says Bob Walters, chief economist for Quicken Loans, an online mortgage lender based in Livonia, Mich.

“If you’re a young couple purchasing a home, and in the next five years you’ll need a larger place, or it’s highly likely you’ll be moving, it makes all the sense in the world” to use a five-year hybrid ARM, he says.

These low interest rates are unlikely to last, says Lawrence Yun, chief economist for the National Association of Realtors. Rising budget deficits will likely push rates higher over the next few years, he says.

•The first-time home buyer’s tax credit. The economic stimulus package signed into law provides a tax credit of up to $8,000 for first-time buyers who purchase a home before Dec. 1. Unlike an earlier tax credit, this one doesn’t have to be repaid. The credit phases out for taxpayers whose adjusted gross income exceeds $75,000, or $150,000 for married couples.

The term “first-time home buyer” is a bit of a misnomer. If you haven’t owned a home in the past three years, you qualify. If your spouse has owned a home in the past three years, however, you’re not eligible.

The credit is refundable, which means that even if you owe less than $8,000 when you file your 2009 tax return, you’ll receive a refund for the balance. This feature makes the credit a valuable tax break for middle- or low-income families who pay little or no federal income tax.

To qualify for this tax break, you must close on the home by Dec. 1.

That may seem like a long way away, but the wheels of real estate transactions grind slowly these days, says Steven Fischer, president of the Georgia Association of Realtors.

In the wake of the credit crunch, lenders have tightened lending standards, which means it takes longer to get a loan approved, Fischer says. In addition, “There’s always that chance you will have that extra week or couple of weeks going back and forth trying to get documents at the last minute,” he says.

In the past, home buyers could usually close on the deal within 45 days after signing a contract to buy, Yun says. But these days, buyers should give themselves at least 60 days, he says.

You’ll need to give yourself even more time if you’re interested in buying a home that’s in foreclosure or is a “real estate owned” property (REO) — a home the bank repossessed after failing to sell it at a foreclosure auction.

“The window of opportunity is closing fast unless the tax credit is extended,” Yun says.

The NAR and other real estate trade groups are lobbying hard to get lawmakers to extend the credit into 2010. However, Congress has a busy schedule when it returns from the August recess, so there’s no guarantee the credit will be extended.

One downside to the tax credit is that you can’t claim it until you’ve closed on your home, which means you can’t use the money for your down payment. However, some state housing finance agencies are offering bridge loans to home buyers who qualify for the credit.

Some of these loans are interest-free; others charge a modest interest rate. Borrowers repay the money when they receive the tax credit. Some states require borrowers to contribute some funds toward the down payment.

The National Council of State Housing Agencies offers a list of agencies that offer loans at Click on the link for “HFA First-Time Homebuyer Tax Credit Loan Programs.”

AZ Central – Valley’s commercial real-estate

by J. Craig Anderson – Aug. 26, 2009 12:00 AM
The Arizona Republic

The Valley’s commercial real-estate crisis isn’t just about buildings, it’s about everything and everyone inside.

The impact isn’t as easy to see as the fallout from the home-mortgage mess, with its sea of empty homes and for-sale signs, but it’s likely to become more noticeable to Valley consumers as the commercial crisis worsens this year, predicts Scottsdale consultant Robert Kline.

“It will affect them when they start to see their favorite hotel, restaurant or store go out of business,” said Kline, owner of R.W. Kline LLC. “This is also about jobs.” modifications as it does for home loans, but there is money in the Troubled Asset Relief Program to offset losses from bad commercial loans.

Kline, a former vice president at Pulte Homes, is doing his best to help as many property owners as possible avoid foreclosure. He formed the company in May 2008 to assist commercial-property owners at risk of defaulting on their mortgages and has become a national expert on the subject.

Preventing commercial foreclosure benefits the people and businesses leasing space inside. The foreclosure process takes months and can result in temporary maintenance, security and insurance problems while the property changes hands.

Kline’s firm, which represents more than 300 commercial-property owners nationwide, attempts to negotiate better repayment terms and extend the length of a loan if it makes sense.

The government doesn’t have formal help for commercial-loan

Kline’s company represents 27 Arizona commercial-property owners seeking loan modifications on about $960 million in debt.

Nationally, the country’s total outstanding commercial-mortgage debt exceeds $3.5 trillion, according to the Mortgage Bankers Association.

Two-thirds of the mortgages Kline is attempting to modify had been sold to the investment market as commercial mortgage-backed securities, effectively scattering ownership of those loans to the wind.

Nationally, about 20 percent of commercial mortgages are securitized, the Mortgage Bankers Association said.

“A CMBS loan is a much, much harder type of loan to work out,” Kline said, in part because the negotiator must track down all investors in the loan and get their approval.

An unprecedented number of securitized commercial mortgages will reach maturity in the fourth quarter, Kline said, forcing borrowers to pay off the loans or turn over the properties they bought or built on credit.

When times were good, developers and building owners would refinance or sell, but today many buildings are worth less than the loan balance, and refinancing options are scarce.

The current universe of lending capital only contains 1 dollar for every 3 dollars owed, Kline said, which means two-thirds of securitized mortgages due today have no hope of being repaid in the near term.

Companies like Kline’s are wheeling, dealing and pleading with commercial lenders to negotiate with owners until the economic recovery arrives.

For a commercial-loan modification to work, it must adequately address the problems of affordability, negative equity and maturity, Kline said.

In other words, the monthly payment must be doable, the loan has got to be worth repaying, and there can’t be a balloon payment due within the next three years, during which time the lending situation is not expected to improve.

“The commercial market is going to be on its heels next year, and it’s going to be virtually impossible to get a loan,” he said.

More than anything, Kline said commercial-property owners need to seek help from a commercial-loan negotiator or attorney as soon as they start having financial trouble.

“We’re the lifeguard, and we’ll throw you a life ring,” he said, “but if you’re already 2 feet under water, you’re not going to be able to grab it.”

Bloomberg News – Existing home sales jump to two year high

Bloomberg News

Aug. 21– Sales of existing U.S. homes jumped more than forecast in July to the highest level in almost two years, signaling the housing crisis that crippled the world’s largest economy is easing.

Purchases climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said in Washington. The gain was the biggest since records began in 1999. The median price fell 15 percent.

Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. Ongoing job losses are a reminder that more Americans will probably lose their homes, indicating a rebound will be slow to take hold.

The housing market remains on the road to recovery due to good affordability, Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said before the report. Even so, it’s probably relegated to the slow lane until joblessness and credit standards ease.

Stocks jumped and Treasury securities dropped after the report added to evidence the housing market was turning. The Standard & Poor’s 500 index rose 1.5 percent to 1,022.67 at 10:06 a.m. in New York. The yield on the 10-year note jumped to 3.50 percent from 3.43 percent late yesterday.

Exceeds Forecast

Existing home sales were forecast to rise to a 5 million annual rate, according to the median forecast of 64 economists in a Bloomberg News survey. Estimates ranged from 4.8 million to 5.25 million. Junes pace was unrevised at 4.89 million.

Sales had reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.

Purchases of existing homes increased 5 percent compared with a year earlier. The median price dropped to $178,400 from the $210,100 in July 2008.

The number of previously-owned unsold homes on the market jumped 7.3 percent to 4.09 million in July, a notable increase, according to Lawrence Yun, the Realtors chief economist. At the current sales pace, it would take 9.4 months to sell those houses, the same as in June.

A seven months supply is usually consistent with stabilization in prices, Yun said last month.

Distressed Sales

The share of homes sold as foreclosures or otherwise distressed properties held to 31 percent in July, he said.

Today’s report showed sales of existing single-family homes increased 6.5 percent to an annual rate of 4.61 million. Sales of condominiums and co-operatives climbed 13 percent to a 630,000 rate.

Purchases increased in three of four regions, led by a 13 percent jump in the Northeast.

The figures are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new-home sales, recorded when a contract is signed, a more timely barometer of the market.

The Commerce Department may report next week that purchases of new houses rose in July to the highest level since November, according to the Bloomberg survey.

Home Depot Inc., the largest home-improvement retailer, is among businesses cutting costs to ride out the housing recession. The Atlanta-based company reported second-quarter profit that fell less than analysts estimated and raised its annual earnings forecast after trimming expenses, even as it projected a sales decline for the year.

Better Performance

Performance across most of our regions is better, Chief Executive Officer Frank Blake said on a conference call with analysts on Aug. 18. But caution is still appropriate, and we remain concerned by the high level of foreclosure activity, he said.

About $3.4 trillion worth of houses are at risk of default because the owners owe more than the property is worth, Santa Ana, California-based First American CoreLogic said last week. By putting more homes on the market, foreclosures are keeping inventory higher than levels consistent with stable prices.

Obama administration efforts to revive housing include an $8,000 federal tax credit for first-time buyers who complete the transaction before Dec. 1. The government also is offering lenders incentives to modify the terms of delinquent mortgages, and the Federal Reserve is buying mortgage-backed securities to help reduce borrowing costs.

AZ Central – Condo agents bank on the draw of city life

Aug. 21, 2009 09:13 AM

They arrived late to the real-estate-boom party a few years ago. Now midrise urban condominiums are like the odd guest that everyone is afraid to approach.

Hundreds of pricey condos were built in the past five years, creating an inventory of units primarily in downtown Phoenix, Scottsdale and Tempe, and the Biltmore and Kierland areas. Some developers and investors took a bath as condo prices collapsed and financial troubles cast a shadow on some complexes.

Buyers are carefully weighing a condo investment as they look at what each area has to offer and what they can afford.

Realtors and developers say they are seeing an uptick in interest as prices have fallen.

In Phoenix, condo towers are part of an emerging mid-city renaissance that includes light rail, students, restaurants, galleries and restored housing.

“We might be crawling, but we’re crawling in the right direction,” said Realtor Michael Fitzpatrick of Phoenix Urban Living.

Each downtown and the Biltmore and Kierland areas are developing live-work-play attributes that are central to urban condo lifestyles. Each appeals to a different set of buyers looking for their own urban vibe.

Prices in the midrise condos generally range from $3 million at the penthouse level down to about $250,000 and less for lower-scale complexes.

Big-city vibe

Phoenix is attracting younger buyers, professionals who are interested in a true big-city urban experience with walkable access to theaters, sports venues, retail and restaurants.

Fitzpatrick said he thinks some of the best values in downtown Phoenix are at Portland Place, the Artisan Lofts on Central and the Summit at Copper Square next to Chase Field.

Buyers are interested in being near light rail to cut their transportation costs, he said.

Central Phoenix condo prices are generally lower than downtown Scottsdale, which attracts a more affluent, older crowd of second-home buyers drawn to the area’s shopping, said Dave Roderique, Downtown Phoenix Partnership president.

“If Nordstrom is of greater importance to you than the Herberger Theater, then you’re looking in downtown Scottsdale,” he said.

Nordstrom at Scottsdale Fashion Square is bracketed by a pair of 13-story condos at the Scottsdale Waterfront Residences and Optima Camelview, a seven-story complex with lots of glass and thickly landscaped terraces.

On a recent rainy morning, Camelview residents lounged on their leafy balconies with views of nearby Camelback Mountain. Amenities include three pools, a spacious fitness center and Posh, a fine-dining restaurant.

Catherine Swaback, 24, an advertising account executive, said she chose Camelview after looking at condos at the Waterfront, Third Avenue Lofts, Safari Drive, X Lofts and the Mark.

“Nothing compared to this,” she said of the Camelview amenities. “The look and feel of it is pretty amazing.”

Camelview is a distinctive design by architect David Hovey, who also developed Optima Biltmore, a pair of 15-story condo towers.

Downtown Scottsdale’s other condos are scattered around the area’s entertainment district.

Drawn to Tempe, elsewhere

Some buyers like Scottsdale’s nightlife and others find it pretentious, said Realtor Tom Tokoph of Urban Realty and Development.

They are drawn to downtown Tempe, which is a little “more raw and authentic” with its mix of Arizona State University students, empty nesters and a growing creative class, he said, adding that Mill Avenue has some advantages over other areas in terms of entertainment.

“The Phoenix market prices are right for investors, but for folks who want to live down there, everyone I talk to say they want to be in Tempe,” Tokoph said. “They say Phoenix, it’s just not there yet.”

The Biltmore area, where the midrise-condo market emerged in the early 2000s, has long had a critical mass of shopping, restaurants and offices for residents. It’s close to both downtown Phoenix and Scottsdale but still has the suburban feel of older Phoenix.

The Kierland Commons area in the northeast Valley is a relatively small pocket of condos supported by shops and restaurants at Kierland and the new Scottsdale Quarter across Scottsdale Road.

As elsewhere, prices have fallen at Kierland, but the condo market, like other real estate, will recover, said Buzz Gosnell, president of Woodbine Southwest, which developed the Plaza Lofts at Kierland Commons.

“I think we’ve seen the bottom,” he said, adding that “it will take some time to get the condo inventory off the market.”

AZ Central – Scottsdale eyes 400 acres of state land

by Peter Corbett – Aug. 13, 2009 12:00 AM
Arizona Business Gazette

Scottsdale is moving to acquire about 400 acres of state trust land northeast of DC Ranch for the McDowell Sonoran Preserve.

The city has asked the Arizona State Land Department to put the rugged, mountainous terrain up for auction later this year. It is valued at $6.5 million.

“It has always been contemplated that Scottsdale would benefit from the Arizona Preserve Initiative,” said State Land Commissioner Maria Baier of the 1996 measure to protect scenic state trust land as open space. “This is a realization of that dream.”

Scottsdale still faces hurdles in acquiring the land, but city and state officials do not anticipate any surprises.

The Arizona State Land Department Board of Appeals will consider setting an auction for the 400-acre tract at its meeting today. No date has been set, but it could not occur before October because of requirements for advertising State Land Department auctions.

Bob Cafarella, Scottsdale preservation director, said the 400-acre tract has been sought for the McDowell Sonoran Preserve since the original boundaries were mapped out in 1995.

“One of the (preserve) goals was protecting the scenic views,” he said.

There are no roads or trails into the area, which is adjacent to some of Scottsdale’s most exclusive gated homes at Silverleaf, Lost Canyon and Troon.

The state land is bordered by the alignments of Pinnacle Peak and Deer Valley roads from 112th Street west to 108th Street and a small sliver west to 104th Street.

Scottsdale has acquired about 15,000 acres for the preserve, which is expected to grow to 36,000 acres as funding and the land become available.

The city applied to the Arizona State Parks Board for matching funds to pay for half of the 400 acres of state trust land, said Kroy Ekblaw, Scottsdale executive assistant for strategic projects.

The land is designated for open space so city and state officials think it’s unlikely that a developer will bid on the land. But there will be it is open bidding at the auction.

The trust land includes a lush valley and two unnamed mountains with ridges at about 2,900 feet.

Associated Press – Median home prices rises, as sales pick up

Aug. 12, 2009 11:58 AM
Associated Press

WASHINGTON – A real estate group says home sales and prices posted gains in the second quarter, another sign that the ailing housing market is finally coming to life.

The National Association of Realtors says the median sale price in the quarter was $174,100, up 4% from the first quarter, but still almost 16% below a year ago.

Prices were down from a year ago in 129 of 155 metropolitan areas the group tracks. Thirty-nine states experienced sales increases from the first quarter and nine states were higher than a year ago.

Sales rose to a seasonally adjusted annual rate of 4.76 million, from 4.58 million in the first quarter, but were still about 3% below a year ago.

According to Lawrence Yun, NAR chief economist, the areas with the largest price declines were those with the most foreclosures. The biggest drop, nearly 53%, was in Fort Myers, Fla. Prices also fell 35% or more in Phoenix, Riverside, Calif. and Las Vegas. The biggest price gain, nearly 31%, was in Davenport, Iowa, followed by Cumberland, Md., at nearly 22%.

Yun said the sales gain appears to be sustainable. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” he said.

Yun said on average each home sale pumps an additional $63,000 into the economy because it generates demand for related goods and services.

AZ Central – Denver investor gets bargain with luxury lakeside condos

by J. Craig Anderson – Aug. 12, 2009 12:00 AM
The Arizona Republic

Tempe Town Lake’s Bridgeview Condominiums at Hayden Ferry Lakeside, one of the most highly visible luxury developments built in the recent condo craze, sold Friday to a Colorado investment firm for a fraction of its original market value.

Built by Tempe-based developer SunCor, Bridgeview opened in 2006 at the crest of a decadelong run-up in Valley real-estate prices, when buyers shelled out $800,000 or more for a two-bedroom unit inside the posh 12-story high-rise.

On Friday, the developer, a subsidiary of Arizona Public Service Co. owner Pinnacle West, sold its remaining interest in Bridgeview for an average of about $317,000 per unit.

Pinnacle West spokesman Alan Bunnell said the sale is part of a strategy to sell off the bulk of SunCor’s assets and pay down its $175 million in debt by the end of the year.

“Almost all of our assets at SunCor are on the market,” Bunnell said.

Buyers Peter Wells and Marcel Arsenault, partners in Denver-area investment firm Condo Capital Solutions, said they were pleased with the $20.3 million sale price – paid in cash – for the project’s 64 unsold units, including five luxury penthouses.

“We were able to buy at a fairly significant discount compared with the original construction cost,” Wells said, adding that the savings would be passed on to buyers.

Local real-estate analysts said they were surprised to see Bridgeview sell for such a low price.

“The sale price, well below recent previous SunCor offering prices, is indicative of the challenges luxury-condominium sellers face today,” said Phoenix analyst Jim Belfiore, president of Belfiore Real Estate Consulting.

“The limited homebuyer pool for these units, due to the current available financing and the larger economy, allowed the buyer to purchase A-quality units at a desirable price.”

Wells acknowledged that the sale amount might be a bit painful to Bridgeview investors and residents who had purchased the other 40 condos at the original prices.

An Arizona Republic article published in mid-2006 about the condo project quotes one buyer who had just acquired a 2,000-square-foot, two-bedroom unit for $850,000.

Wells said the building’s 104 condos range in size from 1,500 to 4,500 square feet.

Bunnell said the publicly traded Pinnacle West’s board of directors

would not have approved the sale price had they thought it was a raw deal for investors.

He said minimizing the negative impact of SunCor’s debts on the rest of the company was essential for the company to shed its boom-and-bust baggage and move forward.

SunCor itself is expected to sell nearly all of its assets and shrink from a company of nearly 500 employees to about 20, company executives have said.

Wells said residents interested in an affordable luxury-condo lifestyle can expect to hear from his company soon.

Having specialized in buying distressed condo properties for the past 15 years, Wells said the unfortunate reality is that one person’s loss is the other’s gain.

“Somebody usually ends up taking a hit, and in this case it was SunCor,” he said.