As the real estate market continues to face a variety of challenges, there are individual cities with a lot of growth and cause for optimism. These areas, in contrast to New York or Miami or Los Angeles, may not generate as much media attention, but are worthy of closer inspection. Cities like Phoenix, Arizona, point the way to a real estate recovery.

With a continuing inflow of more families and retirees, the population in Phoenix continues to grow. Combined with the influx of real estate investment by experienced investors, the total number of homes for sale in the Phoenix area has reached all-time lows, spelling the beginning of the area’s real estate comeback. Analyzing these trends is a good way to prepare for similar events in cities throughout the United States, where transactions may increase and the real estate market can once again regain its footing.

A simple review of the data confirms this point: that nearly 30% of all properties sold in the Greater Phoenix went to investors, a statistic with extremely positive implications. This jump in purchases – transactions done by experienced individuals who understand the fundamental economics of this industry – signals the belief that a recovery is underway. And these investors want to be at the front of these events, enjoying significant returns on specific properties.

Also, 40% of single family and condo sales in this area (as of January 2012) are cash transactions, another sign that Phoenix is a source of vibrant economic activity. This figure further underscores the fact that people have confidence in the health of the market. For example: committing such a significant percentage of cash to purchasing a home, regardless of tightened lending policies from local banks, often means that buyers believe in the strength of Phoenix as a hotbed of growth.

Another phenomenon at work in Phoenix involves the migration of people from other states – namely, California – into the area, many of whom want to purchase more affordable housing and enjoy better work opportunities. At the same time, visitors from colder climates continue to flock to the city because of its warm weather, available space and higher quality of life. These factors reverberate, positively, to the real estate market; and this news spells one particularly important good piece of news: recovery.

The challenge for buyers and sellers, in Phoenix and elsewhere, will involve applying insight and wisdom to these circumstances to make sound real estate decisions. For those eager to jump into this situation, it is critical to have an experienced real estate professional guiding this process. And, rather than repeat the mistakes of the last economic cycle, buyers need to partner with real estate professionals who have a track record of proven success.

WASHINGTON (AP) — Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven’t been enough to boost prices.

The Standard & Poor’s/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.

The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas.

The declines partly reflect typical offseason sales. The month-to-month prices aren’t adjusted for seasonal factors.

Still, prices fell in 15 of the 20 cities in February compared with the same month in 2011. That indicates that the housing market remains far from healthy despite the best winter for sales in five years.

The steady price declines have brought the nationwide index to its late 2002 level. Home prices have fallen 35 percent since the housing bust.

Prices in nine cities fell to their lowest levels since the housing bust. The average price in Atlanta fell 17.3 percent in February compared with a year earlier. That’s the biggest annual drop in the history of the index for any city.

Still, there were some positive signs in the report: Phoenix, one of the cities hit hardest by the housing bust, has seen five straight monthly gains. And most cities are reporting smaller annual declines than in previous months.

The S&P/Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.

Stan Humphries, chief economist for housing website Zillow.com, attributed the declines in part to heavy sales of foreclosed homes, which are usually sold at super-low prices. Foreclosures made up about one-fifth of February’s sales.

“We think home sales will continue to trend upward, which ultimately will result in a slower rate of home value depreciation,” Humphries said. “But any housing recovery will be dependent on job growth.”

Job growth has slowed but is still occurring at faster pace than last year. Employers added an average of 212,000 jobs a month from January through March. That helped push down the unemployment rate to 8.2 percent from 9.1 percent last August.

Some recent reports suggest that the housing market is slowly improving.

January and February made up the best winter for sales of previously occupied homes in five years, when the housing crisis began. The 4.63 million annual sales pace in January was the highest since May 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Builders are laying plans to construct more homes in 2012 than at any other point in past 3 1/2 years. More jobs and a better outlook among buyers could also make 2012 the first year since 2008 that construction adds to the U.S. economy.

Phoenix home values will have the largest national gains in 2012, according to a recent forecast by Zillow   Inc., a Seattle-based real estate tracker.

Released Wednesday, Zillow’s report for the first quarter of 2012 predicted Phoenix home appreciation of 6.5 percent between March 2012 and March 2013, the largest growth among the 30 major metros included in the report.

Stan Humphries, Zillow’s chief economist, credits the recent month-to-month performance of Phoenix home values for this forecast.

“In Phoenix, your February-to-March change is 1.4 percent, which is really quite extraordinary,” he said.

Humphries explains that Phoenix has be experiencing “very fast monthly appreciation,” a pattern that has led to the Zillow to forecast this substantial increase in home values in the next year.

“Clearly what’s happening in Phoenix is that demand is outstripping supply,” said Humphries. “Phoenix is seeing a lot of investor demand, a lot of second-home and retiree buyers, and a fair bit of international buyers.”

Ultimately, Humphries describes the Valley’s residential price growth as “surprising.”

“It’s been our thesis that most housing markets would see a period of two to four years of very modest home price appreciation after hitting bottom,” he said, rationalizing that high negative equity and foreclosure rates would keep price appreciation minimal.

Last month, Phoenix foreclosure re-sales made up almost 30 percent of the market. However, this figure is 17 percentage points lower than it was a year ago, and half of what it was at its peak in 2009.

“Phoenix is probably the best example of a hard-hit market that is showing signs of recovery,” said Humphries.

Foreclosure rates in the Phoenix area decreased in February compared with the same month last year, according to new data from CoreLogic .

The rate of Phoenix-Mesa-Glendale-area foreclosures among outstanding mortgage loans was 2.95 percent for the month of February, a decrease of 1.63 percentage points compared with February of 2011, when the rate was 4.58 percent. Foreclosure activity in Phoenix area is lower than the national foreclosure rate, which was 3.41 percent for February 2012.

Also in the Phoenix area, the mortgage delinquency rate has decreased. According to CoreLogic data for February, 7.58 percent of mortgage loans were 90 days or more delinquent, compared with 11.12 percent for the same month last year, representing a decrease of 3.54 percentage points.

Every good buyer knows that once you are truly interested in a home you need to a have a thorough inspection done. This important step can keep you from making a big mistake or on the opposite hand give you some peace of mind about your purchase.

Did you know there are things you can look for, even as a novice, before an inspection, though, that can clue you into the health of a house? It’s true. Here are five things that all home buyers should be on the lookout for when viewing a home.

First, be on the lookout for water damage, leaks, or mold. This isn’t a time to be shy. You are looking to buy what could be one of the most expensive purchases of your life. So, look beneath counters, behind shower curtains, and around sinks. Do you see evidence of leaks or of moisture build-up? Are there tiles rotting off walls or dampness under sink? Don’t forget to use your nose. You can smell moisture as soon as you enter some homes.

This goes double for basements. These spaces are notorious for harboring mold, leaks, and moisture. Be sure to brave the spiders and check out even the most unfinished of basements. This is also a great way to inspect joists for rot or termite damage as well as basement walls for damage, which could indicate foundation issues.

Next, make your way to the opposite end of the house and be sure to always view the attic. You can tell a lot about a house by looking at the attic. Is the house properly insulated? If not, what are the average heating and cooling bills? Does wiring look safely installed?

The third item that novices can look at is the age and state of some of the more costly repairs and replacements. Ask about the functionality and age of appliances, water heaters, siding, and paint. Knowing when you’ll need to replace these items next can help you at the negotiating table.

Fourth, walk around the outside of a house. You want to be able to see the foundation and look for any visible cracks. Another pointer is to look at landscaping and be sure it’s not too close to the house, which can cause moisture issues. Large trees can also cause root issue for both plumbing and foundations. You can also diagnose foundation issues by looking at the inside walls and ceilings of the home. Are there large cracks? Is the house shifting and settling?

Finally, take a good hard look at the neighborhood as you stand outside. What state are these houses in? Many will have been built in the same time-frame as your home. How do they look? Are people taking care of their yards? Is the neighborhood noisy? Does it smell good?

These tips are no substitute for a professional inspection of the property, but they can give you some real clues as to whether this home is what you’re looking for or willing to get into.

By Amy Hoak, Real Estate writer ~ MarketWatch

Real-estate agents are increasingly optimistic about the direction of home prices in the months ahead. But a smaller share of homeowners feels the same, according to a recent survey.

HomeGain’s first-quarter survey found that 37% of real-estate professionals think home values will increase in the next six months. Twenty-five percent of homeowners said the same. More than 400 agents and brokers, and 1,700 homeowners were surveyed.

HomeGain is a website that offers free services to find and compare real-estate agents, research home values and view homes for sale.

“Real-estate professionals have grown more optimistic regarding the direction of home prices, especially in the states that have been hardest hit in the past few years, like Arizona, Nevada and Florida and also in states that have done comparatively well, like Massachusetts and Virginia,” said Louis Cammarosano, general manager of HomeGain, in a news release.

Data released on the housing market this week showed conditions improving on a national basis. Sales of existing homes had their best February in five years, and new home prices jumped. Recent conditions also prompted Bank of America Merrill Lynch to call a bottom in home prices this year.

It’s logical that real-estate professionals are more optimistic about the market than homeowners; a recovery has real meaning for an agent’s paycheck. But with continued news of housing’s improvement, maybe it won’t be long before homeowner optimism catches up.

Arizona Foothills Magazine

The year is off to a great start in both new home and builder spec design.  Erik Peterson AIA says, “As home building springs back, we are seeing some definite trends moving forward”.

Here is PHX Architecture’s 2012 Top Ten Design Trends:

#1 “Right Sizing”. There is no question that homes are smaller, but more importantly people want well designed spaces that get a lot of use.  Gone are spaces that might be used a hand full of times in a year, and in are rooms that multi-task, and feel comfortably sized.

#2 Gen Living.  While families today are as mobile and flexible as ever, there is trend of ‘huddling’ with multiple generations living together.  Unlike before where that might mean a ‘20’ something moving into an old bedroom, todays design includes separate multi-tasking suites with separate entrances and shared kitchen space; Gen Live’rs have privacy and independence, but can mingle with the family too.

#3 LED Light.  Homes are increasingly turning to LED lighting to warm and illuminate a space.  Gone are unflattering fluorescents, and in are LED fixtures that look and feel like the warm glow of home, but last for thousands of hours.  No more ladder gymnastics!

#4 Jack (and Jill) is Back.  Shared kid’s baths are in again. What’s different this time around is no shared sinks, each get their own.  Toilets, tubs, and showers are shared, but there is still some personal space for each child with sinks, mirrors, drawers, and cupboards for each.

#5 Convenience Design.  Why drag laundry from one end of the house to the other when the washer and dryer can be located by kid’s rooms, in master closets, or near the linen closet. Today, more than ever, people are thinking about how they live and designs show that.

#6 Neutral Finishes. Architectural materials and finishes are increasingly neutral with a pop of color in accessories and furnishings.  This allows people to update their home quickly and change the mood and feel with less cost.

#7 Less “Drama”.  The theater room is moving back into the main stream.  People want to experience movies and electronic games as a family, and with today’s technology the theater experience is right in the middle of everything.  Wii anyone?

#8 Love your Bath.  For century’s the free standing tub was it; in the west it was the outdoor metal wash tub with a pair of cowboy boots perched on the rim, in the east it was the cast iron claw foot, and in the far east a wood sided tub with dipping ladle, all replaced by the built-in marble ledge jetted spa tub.  Guess what?  The free standing tub is back, sleeker, jetted, in a range of styles from modern to traditional.

#9 iHome.  Apple products have changed the world and our homes are no different.  In 2012 the IPAD and Apple technology are everywhere in the home changing how we control heat, watch TV, movies, pictures, play games, work, and learn.

#10 Quality not Quantity.  People are looking for smaller homes that are well designed with quality finishes, furnishing, technologies, and accessories.  There is also emphasis on ‘green’ principles which might cost more initially, but work better, are healthier, and sustainable.

The recent unseasonably warm weather in many parts of the country has homeowners already contemplating post-winter home repairs and improvements as they begin their spring cleaning.

Some projects should take top priority: Those that will not only make your home safer, but will save you money down the road. In fact, some improvements even will help you shave some bucks off your home-insurance premiums.

Ideally, homeowners should inspect their houses twice a year, once before heavy spring rains and then again in the fall, said Jim Hunt, owner of Hunt Home Remodeling in Omaha, Neb. That way, they can catch small problems before they become overwhelming. In the springtime, many homeowners also have the advantage of having a fresh tax-refund check in hand, and funding repairs is easier.

It’s not an exhaustive list, but here are seven spring inspections and repairs homeowners should consider in the weeks ahead.

1. Clean and repair gutters

Taking care of a home’s gutters is one of the most requested jobs Hunt’s company handles this time of year. At about $100 to $150 for an average home, it won’t cost that much, he said. But it will prevent plenty of headaches down the road, especially if they weren’t cleaned in the fall.

“It’s not [replacing] the gutter that’s expensive. It’s the water damage” that results from neglected gutters, Hunt said.

When gutters aren’t functioning properly, water may seep into the home’s foundation, for example, and make for costly repair bills. Also look for other areas where water is liable to pool near the foundation.

2. Check the roof

After the winter, it’s a good idea to have your roof checked before spring showers hit, Hunt said. During the inspection, it’s common to find broken shingles that need to be replaced.

Checking it out won’t break the bank: It may cost a couple hundred dollars for a check and minor repairs, he said. Just make sure you’re using a reputable company for the inspection.

An inspection might reveal it’s time to replace the roof. For areas prone to hail, impact-resistant roofing is an option — and may earn homeowners a discount on home insurance. For example, insurer State Farm offers a discount of up to 30% for the upgrade in areas that are prone to hailstorms, said Missy Dundov, a company spokeswoman.

3. Prepare for bad weather

It’s also the time to brace for storms in the months ahead. Making proactive improvements will have an impact on the amount of damage to a home, improving safety and lessening storm repair costs, said Jim Gustin, senior property specialist for Travelers, an insurance firm.

Those in areas prone to damaging winds might consider installing a reinforced garage door or retrofitting an existing one, Gustin said. The garage door is one of a house’s weakest points, and strong winds can blow it in, pressurizing the home and potentially lifting off the roof, he said

Other proactive measures homeowners may consider include installing storm shutters in hurricane-prone areas and a generator in places where homes tend to lose electricity for stretches of time.

Make sure to ask your insurance carrier about discounts that may come with these improvements. Discounts vary by state and by company, said Jeanne Salvatore, spokeswoman for the Insurance Information Institute.

4. Clean out vents

Soffit vents can get clogged with dust and other debris, and can be easily cleaned with a small compressed air can, Hunt said. This will ensure proper ventilation in the attic, and make heating and cooling more efficient.

It’s also a good idea to get your air conditioner serviced now, so it’s running efficiently when you need to run it in the hotter months, he said. Along those same lines, make sure your caulking is in good condition around doors and windows.

5. Repair the deck

Give your deck a good cleaning, and you may stumble across damage that needs to be addressed, Hunt said. Check for loose and rotten boards and get them taken care of before summer, since the deck is often a popular hangout spot during parties and barbecues.

While you’re at it, pay attention for cracked sidewalks that can be a trip hazard, he said. Repairing them often isn’t as expensive as you may think.

6. Improve home security

Many homeowners know to check the batteries in their smoke detector around the time they change the clocks for daylight saving time. But it could pay to take even more steps to improve your home’s security: According to the Insurance Information Institute, it’s not unusual to get discounts of 5% for a smoke detector, burglar alarm or deadbolt locks.

Customers of State Farm award this combination with up to a 2% discount: Deadbolts on your doors, fire extinguishers and updated smoke alarms, Dundov said. The addition of carbon monoxide detectors often don’t come with discounts, but are recommended nonetheless.

For a more sophisticated security system, such as one that alerts a control center of fire or burglary, or a sprinkler system, insurance companies often provide an even bigger discount on insurance premiums.

7. Check appliances

While doing your spring cleaning, take a good look at your appliances. It pays to inspect appliance hoses such as those connected to washing machines, since weaknesses could lead to water damage down the road.

Too often, people discover weak hoses after it’s too late. Homeowners “don’t realize it until something happens and a hose breaks or bursts and they wind up with a lot of water damage in the home,” Gustin said.

Dryers and water heaters also require regular maintenance, he added.

Phoenix Business Journal by Jan Buchholz, Reporter

The market for million-dollar condos has picked up in the past few months, leaving very little inventory for buyers looking to downsize or buy urban-style second homes.

Just 27 condominiums priced at more than $1 million are listed for sale on the Arizona Regional Multiple Listing Service   .

“Inventory is at a record low,” said David Newcombe, an agent with Russ Lyon Sotheby’s International Realty specializing in high-rise properties. “The situation is the opposite of the luxury, single-family home market, which has so many more properties for sale.”

Ironically, three to four years ago, there were so many empty new condo projects that numerous properties went into foreclosure. Many of those have changed hands and have been either sold at deep discounts or converted to high-end rental properties.

The market is extremely competitive now. The second-home market is in its high season, with the number of out-of-state visitors peaking during the winter months, and only a few luxury developments have units to sell. Some of the larger ones are the Plaza Lofts at Kierland Commons, the Landmark at Kierland, the Scottsdale Waterfront Residences and Optima Camelview, all in Scottsdale, and Esplanade Place in Phoenix.

The highest-priced condo sold in the past 12 months went for $2.2 million last May at the Scottsdale Waterfront Residences.

Emily Devlin with Coldwell Banker Success Realty in Phoenix represented the buyers, a couple from Paradise Valley. Both are retired physicians who have lived in the Valley for many years.

“They were moving to Chicago to be with their grandkids, so the family purchased one of the penthouses so they had a place to come when the weather was bad in Chicago,” Devlin said.

They purchased the unit furnished.

Several high-end sales have been recorded just since November.

One of those, a 4,100-square-foot condo at the Landmark at Kierland, was sold for $2.15 million to Oleg Saprykin, a former Phoenix Coyotes   hockey player who now plays in a Russian league. It was the second-most expensive condo to sell in the past year.

“He spends his winters playing hockey and his summers here in Phoenix,” said Ed Lewis, president and CEO of Butte Cos., which developed the Landmark just north of Kierland Commons.

Saprykin had been one of the Landmark’s early buyers, and he wanted to trade up to a larger unit, Lewis said. Like most of the buyers there, he paid cash.

“It’s almost impossible to get a jumbo mortgage,” Lewis said.

Lewis also sold the third-most expensive condo in the past year: a 3,600-square-foot penthouse, for $1.66 million.

“It was an empty-nester couple who sold a big house in North Scottsdale. We’re seeing a lot of downsizing,” he said. “Most of our buyers are coming from the northeast part of the Valley.”

Lewis noted that the price per square foot has been increasing steadily. For the past six months as of Feb. 8, the average was $532. For the six months ended Aug. 12, 2011, the average was $452.

“We’re seeing price recovery in the million-dollar range,” he said.

Still there has been a gap between list prices and actual sale prices.

For instance, the $2.2 million condo that sold last year originally was listed at nearly $2.7 million. The condo that Saprykin purchased for $2.15 million originally had been listed for about $2.5 million.

Scottsdale Classic Real Estate’s Margo Young was the listing agent for the $2.2 million sale in the Scottsdale Waterfront. She has represented numerous sellers at the property and is feeling confident that the condo market is coming back, at least in A-plus locations.

“We’ve had a lot of activity in downtown Scottsdale right off the bat this season,” she said. “So hopefully we’ll see another good year.”

By Julie Schmit, USA TODAY   2/19/2012 5:46 PM

Short sales are when lenders allow borrowers to sell homes for less than their unpaid mortgages. They are an alternative to foreclosures.

Short sales have been increasing for months, but the financial incentives — which Realtors say are random and infrequent — are a newer wrinkle.

Examples:

• JPMorgan Chase went national with short-sale incentive offers last year, paying up to $35,000 in some cases.
• Bank of America is testing incentives from $5,000 to $25,000 in Florida to see if they should be expanded to more states. The Florida program began last fall, spokesman Richard Simon says.
• Wells Fargo’s incentive offers range from less than $3,000 to $20,000, spokesman James Hines says.

Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures.

In states such as Florida where foreclosures go through the courts, 50% of loans in foreclosure are more than two years past due, says a January report by mortgage tracker LPS Applied Analytics.

“It’s a lot cheaper to shell out $10,000 or $20,000 to someone than it is to go through a long foreclosure,” says Jim Gillespie, chief executive of Coldwell Banker.

Banks are more willing to do short sales now than in the past, Gillespie says. Cash incentives appear to be “limited but increasing” in number, he adds.

“When a loan modification isn’t possible, a short sale may be a better and faster solution” than foreclosure, says JPMorgan Chase spokesman Thomas Kelly.

The lenders won’t say how often they extend such incentives.

“If you have two similar sellers, one might get it and another may not,” says Colleen Badagliacco of Altera Real Estate in San Jose. “It’s very random.”

Typically, short sale incentives are more common for loans in states where foreclosures take more time, Hines says.

In November, short sales accounted for more than 9% of single family home sales and were up 32% from the year before, according to CoreLogic.

Market researcher Dataquick also shows short sales increasing from January 2011 through last month throughout California and in Phoenix, Miami and Seattle.

The federal government-run foreclosure prevention program also offers short sale incentives, at least $3,000 for sellers, but far more short sales are being done outside the government program.

Through December, just 26,901 short sales had been completed through the Home Affordable Foreclosure Alternative (HAFA) program.

In contrast, BofA, the largest servicer of home loans, did 107,000 short sales last year. That was up from 92,000 in 2010, which was double the 2009 volume, it says.

“The trend is up,” says Moody’s Investors Service analyst William Fricke