Urban Life

SRP Economic Summit part 2

Sorry for the delay in offering further comments on SRP Economic Summit held at the Arizona Biltmore on September 11^th. In the last post I discussed global economist Don Reynolds talk. Today I'd like to exchange some of the ideas passed on by Margie Emmerman the Director of the Arizona Department of Tourism.

I felt Ms. Emmerman's speak was largely State of

Arizona

spin. You know how talking heads will try to confuse an audience by delivering machine-gun like data until the listeners grow deaf; then they deliver the real truth know that no one is listening. That's a bit of what I witnessed.

However, there was a fair amount of positive information including:

• We are well positioned for the tourist dollar in 2008

1. Fiesta Bowl
2. Rock n Roll

   Marathon

   ,
3. Barrett/Jackson Auction
4. FDR Open
5. Super Bowl 2008

• Global branded hotels such as “W” are finding

  Arizona

  a place to expand.
• We have a diverse and robust economy.
• The dollar is down compared to the Euro and this makes US travel much more affordable.

We do face image problems however due to the international perception of the war in

Iraq

and the scope of the immigration debate.

Finally she addressed what we can do as individuals to make a positive difference. We can be great hosts. Think about this a moment. When you travel to other countries or talk to others who have, what is the most heartfelt statement made? I believe it is when we comment about the people we met: how friendly, helpful and kind they were. If we want to make

Arizona

a favored tourist destination each of us can make a real difference by being passionate, caring hosts.

GO GREEN

The 10th annual Green Building Expo is coming to the Scottsdale Center for the Arts on October 5th and 6th. If you have been to this event in the past you know it is a fun one and includes a wonderful variety of products, ideas and discourse on Green Living.  Sponsors say there will be lots of workshops and activities designed to make this both fun and educational.  You can learn more by going to greenbuildingexpo.com.

FED UPDATE

The long awaited Fed decision arrived with a bang! The Fed surprised many economists and traders with a half percent cut in both the Fed Funds and Discount Rates. Stocks soared higher and enjoyed their largest gain since 2003.

What does the Fed cut mean? Rates on consumer debt, car loans, and Home Equity lines will all benefit. But because Home Loan rates are tied more closely to inflation, it is not uncommon to see less of a reaction...or even an opposite reaction in mortgage rates.

The Fed cut also hurts rates of return on investments, which gives foreign investors less incentive to invest in US securities. This has sent the Dollar much lower against the currency of most major foreign countries. This makes foreign goods more expensive for us to buy, which adds to inflation pressures.

Overall, the Fed cut is good news for the economy, but may nudge inflation a bit higher.

This Post Provided by
Judy Giel
First Horizon Home Loans

WE ARE THE BEST!!

I must warn you up front. this is a hopeful happy post. With all the doom and gloom in the media I thought I should warn you before you read on.

How can I write an optimistic piece? Simply because life in the greater Phoenix area is darn amazing. We have loads of nifty happenings; our sports teams are entertaining and often thrilling; we are cutting edge in many fields including genetics, technology and medicine; we are also number one.

Yes, number one, numero uno, 頭號, numéro un, Nr. Eine, 第1. At what you ask? We have been named the number one market for job growth in American according to a new Bizjournals study.

We have something to brag about. All of us who live here had the foresight and intelligence to either be born here (suggesting a strangely metaphysical event) or move here. Our actions have placed us in  America's most thriving economy and job market.  Give yourself a pat on the back and a big HipHipHurray.

Gene

 

THE MERCURY DO IT... WNBA CHAMPS

What do you get when put passion, skill and real teamwork together... a National Championship. In Phoenix no less.

Our sister is a BIG Mercury fan and her fervor got Ron and I involved this year. What a pleasure it has been to follow this team and see what can happen when the individual egos take back seat to true teamwork.

Our congrats and thanks go our to the team for providing us with great fun and a fine example of living BIG.

Read the linked article for all the juicy stuff... Gene

ARE YOU CONSIDERING A REMODELING PROJECT?

Just finished reading an interesting piece in the WSJ, Sept. 14, 2007 entitled The Kitchen goes on a Diet.

There were a number of interesting statistics that matched what we've been seeing in the market.  Perhaps the most interesting stat, based on Remodeling Magazine's 19th annual cost verses value report, is that we are not getting as much bang for the buck these days for our over the top remodeling projects... even in the kitchen.

As realtors, we have often suggestted a kitchen remodel as a good place to spend money with respect to payback when you sell. In years past, one could expect to recoup most if not all the expense of a full kitchen remodel when it came time to sell. That's not the case today.

In 2005 one might expect, based on the above Remodeling Magazines survey, to get 91% of our investment back on a full kitchen makeover. (By full I mean cabinets, appliances, countertops, lighting, and flooring.) In 2006 that figure dropped to 80.4%.  If we extrapolate the numbers to 2007-2008 we may be looking at a mear 70% return on investment.

What do you do then.  One option is to scale back. Refacing cabinets, less expensive countertops, retain the existing flooring. Less expensive updates can spruce up the kitchen without breaking the bank.

What ever you do, we STRONGLY encourage you not to use a home equity line or money from a refi to pay for your remodel. If you can't help yourself, make sure and leave a minimum of 25% of your current home value as equity.

Did the red underlined text help make our point? In a falling market it is best for most of us to err on the side of caution.

Until next time... Gene & Ron 

2008 SRP ECONOMIC FORECAST REVIEW... Part 1

Attended the 2008 SRP/Business Journal sponsored Economic

Forecast

today at the Arizona Biltmore Resort.

There were four presenters commenting on different aspects of our economy. In this post we'll look at a few comments made by Don Reynolds, Economist and Futurist. His credentials are startling and his delivery of information infectious.

Reynolds did not paint a rosy picture for our country as a whole and suggested we in

Arizona

would fair only somewhat better than most. The most significant problem, according to Reynolds, is our willingness to dance with the devil and marry his sister... DEBT.

Reynolds said that the average consumer debt-to-income ratio in 1949 was 16% verses today's average of 114%.  8% of consumer spending last year came from people borrowing from their HELOC.  I guess we’ve learned well from our government’s policies.

The ill-effects of our debt burden is magnified when the cost of essential services such as gas and housing rise much faster than income. The rate adjustment of ARM’s is likely to escalate the latter problem.

Is their hope according to Reynolds? Obviously, reduce your debt to income ratio. Stop borrowing from your HELOC. Essentially, give up some of the toys, granite countertops and hunker down.   From a stock market stand point, take advantage of the devaluation of the dollar by investing in American companies, especially agricultural, that export to Europe.

Finally, Reynolds gave us his definition of Politics… POLI (many) TICS (blood sucking insects.)

Gene

 

SHORT SALES AND THE IRS

We’ve talked briefly about short sales and some of the problems that face a homeowner when considering this option. One of the dire issues is the probability of the mortgage holder issuing a 1099 for the difference between what the home sells for and what is owed to the bank.

What does this really mean and why can this be a problem? Let’s look at one scenario.

Based on a professional appraisal, our subject property is worth about $380,000 in today’s market. The homeowner purchased the home two years ago for $420,000 and did so with a 100% loan. They still owe the bank $420,000. The home is sold to a new buyer for $372,000 The bank takes a loss of $48,000 and issue a deficiency judgment and 1099 for that amount. Our unhappy homeowner potentially owes income tax on $48,000. Yikes.

This is only one possibility… other solutions are available to the homeowner. Once again, we say…if someone you know is in trouble, have them contact a seasoned real estate agent, a savvy tax professional and a knowledgeable attorney. All this will be money well spent in the long term.

The Urban Boyz

Urban Life -- Eating in Urbana

As we mentioned in our original post, we want to talk more real estate. We feel our job as "Realtors" is a lot more than finding or selling someone a home. It's about matching the home, neighborhood and such to a person's lifestyle. It's no wonder we like the North Central Phoenix, PV and midtown Scottsdale areas as they offer so many options.

This past Saturday I witnessed the Phoenix Murcury's win the Western Conference Championships of the WNBA. It was quite a game and well fought. Afterwards we went to Marley's followed by the gang heading on to FEZ for food and drink. It was my first time at FEZ and it was classic urban life dining.

The name may suggest the casbah, but Fez actually conjures up a young urban vibe and menu. North of downtown along the Central Corridor, it's worth navigating the light rail construction for Fez's famous pomegranatini. The food is American fare with a Moroccan flair: chicken lettuce wraps with dried fruit; terrific carrot soup accented with cinnamon and cumin.

We tried a few of the appetizers, fully enjoying their Bruschetta plate and the spicy Shrimp, Eggplant, Mushroom Kibis.  We hear the Fez Burger is worth the trip itself.

So... next time you want to experience an upbeat, new-Phoenix eatery try FEZ. As a 25 year resident of the Valley, I found the sights, sounds and experience refreshing and hopeful for the emerging downtown area.

Details: 3815 N. Central Ave., Phoenix. (602) 287-8700.

Gene

Want to Go to Thailand?

We hope you have been to Malee's for some of the best Thai food around town.  They have great Pad Thai and the Tom Ka Gai soup will wake up your senses.  They have been in Old Town Scottsdale for twenty years... I guess you have to be doing something right to last that long.

The fun newz is that Deirdre Pain, the owner, is raffling off a trip to Thailand. We understand you simply need to take a trip to either the original location in Old Town or the newer one at Desert Ridge to enter. (Gene prefers the original one)  This must be done from now until October 31st. They'll give you the rest of the details when you dine.

Happy Labor Day Weekend