At the $300 million CityNorth development in northeast
On a recent weekday, a handful of shoppers strolled sidewalks of the four-block-long thoroughfare, meandering in and out of the 14 stores that remain open. more…
Tom Bour stood on the roof of the
The hospital’s top administrator looked past the dozens of parking spaces and out to the east, to undeveloped acres of brush and dirt. Bour smiled and spoke of the hope for the medical buildings that may come as the hospital begins its 12th year. more…
CityNorth’s High Street, one of the most high-profile new developments in Phoenix, is facing foreclosure.
Last week, Chicago-based Capmark Finance filed to foreclose on the first and only phase of the 144-acre development to be built so far. Known as High Street, the project at
A year ago,
That was the assessment of the S&P/Case Shiller Home Price Indices in December 2008. Then in early summer 2009, the Arizona State University-Repeat Sales Index showed that the median price for a home in the
Prospects didn’t look good for a housing recovery, and yet the
Despite several months of small improvements — including increased transactions, higher prices and declining foreclosure sales — local experts disagree as to whether the new year bodes well for residential real estate in
At December’s 2010
“I’m very optimistic about where we are and where we’re going … next year will be a heck of a lot less painful,” said presenter Jim Belfiore, founder of Phoenix-based
While
“I’m not sure there is going to be any great increase in activity in the first quarter,” Owens said.
Ongoing high unemployment and dubious consumer confidence may limit the stimulus potential of the tax credit, he said.
Steve Hilton, chairman and CEO of Scottsdale-based Meritage Homes Corp., sees some light at the end of the tunnel. Unlike many home builders locally and nationally, Meritage has been able to weather the storm and strengthen its bottom line. While Meritage posted a loss of $17.8 million in the third quarter, that’s a sizable improvement from the same period in 2008 when losses were $144 million. Its stock price, after dropping to a 52-week low of $8.40, is hovering around $19, and at one point last year reached $24.35 per share.
By dramatically trimming overhead, Meritage has increased cash flow by $247 million during the past 15 months, leading some stock analysts to pick it as the best buy among public home builders. In recent weeks, Citigroup, Goldman Sachs and Morningstar have given Meritage a cautious thumbs up.
“I think 2010 will be a little better than 2009. I’m not all that excited, but we do expect to make money,” Hilton said.
Through fourth-quarter 2008 and all of 2009, Meritage purchased about 4,000 finished lots in Maricopa and Pinal counties at sharply discounted prices after banks took back the land from troubled builders.
Many publicly held home builders have the financial wherewithal to take advantage of the misfortunes of smaller, less capitalized builders. But Hilton says Meritage has been very strategic about where to buy lots and for what purpose. The company, which has built its business model around move-up, more upscale homes, is not afraid to reinvent itself to survive.
“We’re more focused on the
Survival has been on the mind of John Vatistas, co-owner of Russ Lyon Sotheby’s International Realty, one of the largest residential brokerages in the state. That company, which was created by the May 2008 merger of Equitable Sotheby’s International Realty and Russ Lyon Realty Co., built its brand around the luxury-home market. Some market research indicates that it could take between five and seven years for the inventory of luxury homes in the northeast Valley alone to be absorbed.
Though Vatistas isn’t about to change the company’s focus despite the lagging luxury market, he has made dramatic changes elsewhere.
“When we bought Russ Lyon, we immediately took a guillotine to every single expense line item in the company. We were incredibly disciplined. Nothing was sacred,” Vatistas said.
Aside from cutting overhead, Vatistas cut some agents, a move that he grants is not popular.
“With us it’s all about quality agents not quantity. There are many agents who simply don’t fit the Sotheby’s mold. If they figure it out, they leave. If we figure it out, we politely ask them to leave,” Vatistas said.
For now, wealthy foreign buyers are taking advantage of lower prices in the million-dollar home market.
“Canadians are an especially big source of buyers for Russ Lyon. Furthermore, our Canadian clients aren’t just buying homes, but large, failed projects and notes in distress from both local and out-of-state banks,” Vatistas said.
Get Connected
Frank Owens Ltd.: www.frankowensltd.com
Russ Lyon Sotheby’s International Realty: www.russlyon.com
Belfiore Real Estate Consulting: www.belfioreconsulting.com
Trends to Watch
1) Extended and expanded homebuyers’ tax credits passed by Congress may not maintain the momentum that had been achieved
2) Publicly held home builders will have the financial wherewithal to take advantage of the misfortunes of smaller, less capitalized builders
3) Look for wealthy foreign buyers to take advantage of much lower prices in the million-dollar home market
Dr. Ellie Izzo was the guest last week on Live Talk, discussing New Year’s resolutions.
Here are excerpts from the interview, which can be found in its entirety at aztalk.azcentral.com.Izzo, of
I once heard a high-school math instructor issue this challenge at a school assembly: “I hope you all fail,” he said to an audience of high-school seniors eager to go out and conquer the world. “Because, if you don’t, you haven’t set your goals high enough.” more…
Construction cranes are towering over Desert Ridge again.
The northeast Phoenix master-planned community has been especially hard-hit by the recession, with construction taking place only when a sale occurs in two single-family-home developments.
But now Toscana of Desert Ridge is building again. more…
Ever wonder if the stock market performs better with a Republican or a Democrat in the White House?
Don Luskin makes the case that the economy and stock market prosper with a divided government.
“If the electorate were really smart, it would elect a Democratic president and a Republican Congress,” he says. “Under that deal, stocks have averaged a 20.2 percent total rturn, and real GDP averaged 4 percent. That tells us that economic and stock-market success isn’t really about partisan politics at all.”
But analysis of this type omits time lags. When a president takes oath in January 20, his policies can’t have an immediate impact on the economy and the stock market. The same holds true for a new Congress. New policies don’t impact things for six to 12 months after an election.
–Investors Guide
As
Despite its increasing diversification,