The Sedona Verde Valley real estate market, which can usually rely on robust spring sales, failed to perform in the first quarter.  The first quarter of 2008 saw lackluster sales throughout the entire Verde Valley.  Even though a visible up tick in buyer traffic has been noted and commented on by agents throughout the area, only 203 properties closed escrow during the first quarter.  The last quarter of 2007 saw 234 closed sales, which represents an overall 15% drop in activity, quarter to quarter.  But it is always darkest just before dawn.

    As of April 9, there are 3093 available listings in Sedona and the Verde Valley and 169 properties under contract.  We can safely assume that roughly 80% (135) of these contracts will successfully close in this quarter, and certainly more properties will go to contract and close during this quarter. After all, we have 81 more days!  We have also seen inventory drop approx 5 % over the past few months and the first 18 days of the second quarter of 2008 already saw 43 recorded sales.  
    I am going to go out on a big limb here and say that the first quarter of 2008 just may register as the bottom of the market in the Verde Valley in terms of sales activity, provided there are no more major disruptions to the national economy.  
    Pricing is another story.  While prices have already adjusted 20-30% in some areas of the Verde Valley, foreclosures in the area continue to present stiff competition for anyone trying to sell area real estate.  Couple this with a huge tightening of lending standards, continued foreclosure inventory and lackluster economies in real estate markets where our buyers are relocating from, we have a recipe for a continuing buyers market for several more months.  
    Here is what the last few years look like by quarterly recorded sales data in the Sedona Verde Valley Multiple Listing Service:

1st quarter  2005            727 closed sales
2nd quarter 2005            966 closed sales
3rd quarter  2005            786 closed sales
4th quarter  2005            591 closed sales
1st quarter  2006            567 closed sales
2nd quarter 2006            570 closed sales
3rd quarter  2006            561 closed sales
4th quarter  2006            358 closed sales
1st quarter  2007            314 closed sales
2nd quarter 2007            406 closed sales
3rd quarter  2007            304 closed sales
4th quarter  2007            234 closed sales
1st quarter  2008            203 closed sales

    The second quarter of 2007 is when investors of mortgage securities began to become aware of the existence of "risk" in their mortgage portfolios, and subsequently lead to what the press has termed the mortgage meltdown....and it has had an enormous effect on the number of sales in our local market, and will continue to provide us with a lackluster market unless the Federal governments 400 billion dollar bailout unclogs the credit system and money starts to flow freely once again.
    What exactly happened in the "mortgage meltdown?"  It's pretty simple.  Money was flowing freely in the economy and it was very inexpensive for banks to obtain it to loan it to you and I.  Banks made loans like crazy and kept relaxing their lending standards.  The banks then packaged up hundreds of these loans together into mortgage securities and the like, and sold them to portfolio investors all over the world.  The unprecedented amount of mortgage money pumped into the economy, and the extreme ease of obtaining it, lead to a national frenzy of real estate sales, which drove prices up artificially in many locations.  When the pricing in a given market reached a point that the market could no longer bear, a cooling became inevitable in super hot markets, and the disturbance was just like a cold front plundering through Kansas on a hot summer day.....dark storm clouds slowly gathered and then sent tornadoes rippling through the financial markets of the entire world. 
    What is THE pricing point that lead to the contraction in home values?  It is generally a combination of factors depending on the market.  In some markets the average price of the average home simply exceeded what the average person could buy.  In other words, average incomes in the area no longer supported the purchase of the average house.  In other markets, the pricing point may have been a matter of average purchase price vs. average rents.  If the rent will no longer cover the house payment, smart investors look to locations where rents can and will cover the payments.  Suddenly, fewer sales will occur and prices will be lowered a little bit to entice buyers.  Homes that cannot be rented for the amount of the mortgage payment and are taking longer to sell begin to put pressure on builders and investors and those who just need to move.  Prices go down a little more.  Breaking point is reached and foreclosures begin to occur.  Banks, seeing the foreclosures, begin to tighten lending standards, again reducing the pool of available buyers.
    Investors, who bought the loans that are now foreclosing, become scared, and no longer want to buy the loans the banks are selling.  Banks, no longer able to sell the bulk of their loans, can't get new funds to loan to you and I, and they tighten their standards even further, or, close their doors.  When REALLY big banks, such as Bear Stearns begin to fall, the Federal government comes to the rescue....
    Storms only last so long.  Soon people begin to realize that the BEST conditions for buying real estate in well over 35 years exist right now.  The media follows the philosophy of ,"If it bleeds, it reads."  Here are a few facts nightly news reports typically neglect to mention.

2008 is the best year to buy a home in 35 years. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades! six million Americans are expected to buy a home this year. Six million people in the game make up a pretty big game. That’s a level of sales equal to the one we experienced in 1998—which was by all accounts, a pretty good year. There is still over $23 trillion of value in US housing stock. Home ownership continues to be the basis of our wealth in this country. The housing market cannot help but grow. Our country’s tremendous wealth, liquidity, entrepreneurship and population growth will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years and approx one million new "households" are formed each year. Real estate is cyclical. The biggest fear in good times is that the fair weather won’t last forever—because it doesn't’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. People are still buying and selling homes. The markets will stabilize. First-time buyers have a real advantage in today’s market. First-time buyers can buy at a reduced price without having to sell at a reduced price. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive. First-time buyers lose money while they wait on the sidelines. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will). Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.

    So what the heck are you waiting for?  You cannot ask for better conditions to buy Sedona real estate or Verde Valley real estate, and we are already on track to have significantly higher sales than the last two quarters.  While this does not mean that prices will begin to skyrocket by any means, it does mean they will likely stabilize in the very near future, if they haven't already.

    So if your are in the market to purchase or sell Sedona real estate, Cottonwood real estate, Camp Verde Real Estate or a home or land in any other Verde Valley community, I invite you to call on our expertise to help you find and negotiate the best deal possible.  My husband and I have over 15 years combined experience buying, selling and investing in Verde Valley real estate and we welcome the opportunity to help you weather the storm successfully!


Sunset over the Kona Coast, Hawaii

        

These may have been put out by Proctor and Gamble, maybe Johnson and Johnson....which ever is the conglomerate that makes all of these fine products.  If you know of these to work or not, let us know by posting comments to this article!

Drinking two glasses of Gatorade can  relieve  headache  pain almost immediately--without the unpleasant side effects caused  by  traditional pain "reliever.”

Did you know that Colgate toothpaste makes an excellent salve for burns?

Before you head to the store for a high-priced inhaler  filled with mysterious chemicals, try chewing on a couple of  curiously strong Altoids peppermints.  They'll clear up your stuffed nose.

Achy muscles from a bout with the flu?  Mix 1 Tablespoon of horseradish in ½ cup of olive oil.  Let stand 30 minutes, then apply it as a  massage oil, for instant relief for aching  muscles.

Sore Throat??  Just mix 1/4 cup of vinegar with 1/4 cup  of honey and take 1 Tablespoon six times a day.  The vinegar kills  the  bacteria.

Cure urinary tract infections with Alka-Seltzer. Just dissolve two tablets in a glass of water and drink it at the onset of  the  symptoms.  Alka-Seltzer begins eliminating urinary tract infections almost  instantly--even though the product was never been advertised for this use.

Eliminate puffiness under your eyes.....All you  need is  a dab of Preparation H, carefully rubbed into the skin, avoiding the  eyes.  The hemorrhoid ointment acts as a vasoconstrictor, relieving the swelling  instantly.

Honey remedy for skin blemishes......Cover the blemish with a dab of honey and place a band-aid over it.  Honey kills the  bacteria,  keeps the skin sterile and speeds healing. Works overnight.

Listerine therapy for toenail fungus....Get rid of unsightly toenail fungus by soaking your toes in Listerine mouthwash.  The powerful antiseptic leaves your toenails looking healthy again.

Easy eyeglass protection....To prevent the screws  in  eyeglasses from loosening, apply a small drop of Clear nail polish to the threads of the screws before tightening them.

Balm for broken blisters.....To disinfect a broken  blister, dab on a few drops of Listerine.....a powerful antiseptic.
 
Coca-Cola cure for rust.  Forget rust  removers.  Just saturate an abrasive sponge with Coca Cola & scrub the rust.  Phosphoric acid is what gets the job done.

Cleaning liquid doubles as bug killer....If bees, wasps, hornets or yellow jackets get in your home and you can't find the insecticide, try a spray of Formula  409.  Insects drop to the ground instantly.

Smart splinter remover.....just pour a drop of  Elmer’s Glue all over the splinter, let dry, and peel the dried glue off the skin.  The splinter sticks to the dried glue.

Hunt's tomato paste boil cure....cover the boil with Hunt's tomato paste as a compress. The acid in the tomatoes will soothe the pain and bring the boil to a head.

Use Heinz vinegar to heal bruises...Soak a cotton  ball  in white vinegar and apply it to the bruise for 1 hour.  The vinegar  reduces  the blueness and speeds up the healing process.

Kill fleas instantly.  Dawn dish washing liquid  does the trick.  Add a few drops to your dog's bath and shampoo the animal  thoroughly.  Rinse well to avoid skin irritations. Goodbye fleas…

Rainy day cure for dog odor...Next time your dog  comes  in from the rain, simply wipe down the animal with any dryer  sheet, instantly making your dog smell springtime fresh.

Eliminate ear mites....All it takes is a few drops of  Wesson corn oil in your cat's ear. Massage it in, then clean with a cotton ball.  Repeat daily for 3 days.  The oil soothes the cat's skin, smothers the mites, and accelerates healing.

Vaseline cure for hair balls.. To prevent hair balls, apply a dollop of Vaseline petroleum jelly to your cat's nose. The cat will lick off the jelly, lubricating any hair in its stomach so it can pass easily through the digestive system.

Quaker Oats for fast pain relief....It's not for breakfast anymore!  Mix 2 cups of Quaker Oats and 1 cup of water in a  bowl and warm in the microwave for 1 minute, cool slightly, and apply the  mixture  to your hands for soothing relief from arthritis pain.

        

    
                                       Mountain Goat, British Columbia, Canada
                                                                 
    Have you ever said to yourself or maybe someone else, " I could of bought that for a fraction of what it sells for today......."  
    Well, guess what?  Now is one of those times when your going to wish you had bought real estate, mark my words.  If you don't, several years from now you may well kick yourself for not getting off your duff.

    Apparently, I am not the only who thinks this is going to be an incredible year to buy real estate.  Check out this Recent Article from Realty Times.  Though this article is geared towards investors looking for rental property, anyone in the market to buy property should wake up to the opportunities that exist in many markets across the nation, and Arizona is definitely no exception.  An oversupply of inventory, low prices ( in some areas in the Verde Valley, land is 30% or more below the 2005 highs), coupled with low interest rates, have created a unprecedented buyers market, where countless opportunities exist to obtain a great house for a great price, with excellent financing options.  
    Yes, lending standards have tightened considerably, and lenders are currently operating with an overabundance of caution.   But lenders were more or less giving loans to anyone who could fog a mirror, in the midst of the boom years.  Some of the old rules apply once again, such as decent credit, a down payment of some sort and verifiable income.  You need to have at least one of these 3 items in order to qualify for a home loan and lenders are putting a lot of weight on a consumers credit score.  
    Contrary to popular belief, zero down, 3% down and 5% down loans still exist.  Ken and I recently closed a zero down loan on a condominium in Sawmill Cove.  FHA is also talking of reducing the 3% required down payment to 1.5%.  This will help many cash strapped households achieve homeownership.  FHA loan limits in Yavapai County have also just been raised from 295,830 to 390,000, which will allow 3% down loans on homes in this price range and buyers will also be able to carry more debt with an FHA loan as opposed to a conventional loan.
    Currently, mortgage rates are anything but stable.  A few weeks ago rates bottomed out in the mid 5's, bounced into the mid 6's a few weeks later, and are currently around 5.8%...that could change within the hour as the financial world shutters and coughs in reaction to the volatility on the Stock Market.    In recent weeks interest rates have literally been changing a few times a day, as investors react to market conditions and economic reports.  Some economists are theorizing that rates could be going up substantially in the future, others forecast a return to rates in the 5's again.  One thing is certain, lending standards will not be loosening in the immediate future.
    No one can pinpoint when the best time to buy is.   What we can tell you is that incredible conditions exist right now for buyers, and an oversupply of homes and land in the Verde Valley and Sedona ensures buyers will find great buys on Sedona Real estate and Verde Valley real estate.  If you are one of those people who have been sitting on the sidelines waiting to see what is going to happen, realize that Market Timers Often Fail, and the reality is that in 2007, more than 5 million homes exchanged hands across the nation.       
    If you have any questions about Sedona / Verde Valley real estate, please e-mail us at hollywoodaz@commspeed.net  or visit our website.  If you are reading this article in print, and wish to read the articles referenced here, please go to: HTTP://blog.verdevalleyrealestate.com/2008/02/28/prices-might-go-down-a-little-more-but-interest-rates-may-rise-significantly.aspx.  
    Remember, all current issues of the real estate insider are now on-line and you can now receive the real estate insider as a monthly e-mail, photos and all!  You can also post comments and vote for your favorite articles.  So help us save a few trees, and sign up to receive our electronic version.  Please drop us a quick e-mail to let us know you have subscribed to blog.verdevalleyrealestate.com, so we can remove you from the print mailing list.  We look forward to your questions and comments on line!
    Next month we will give you a report on how our local real estate market faired in the first quarter of 08.  See you then! 


Homer, Alaska, resident
   
    

        

        

Grizzly Cub, Yukon Territory This is a copy of an email I received several years ago from a customer.  Supposedly, A group of professional people posed the question "What does love mean?" to a group of kindergarteners and elementary school kids.  The answers they got were insightful, to say the least! "When my grandmother got arthritis, she couldn't bend over and paint her toenails anymore. So my grandfather does it for her all the time, even when his hands got arthritis too.  That's love."  Rebecca - age 8 When someone loves you, the way they say your name is different. You know that your name is safe in their mouth."  Billy - age 4 "Love is when a girl puts on perfume and a boy puts on shaving cologne and they go out and smell each other."  Karl - age 5 "Love is when you go out to eat and give somebody most of your French Fries without making them give you any of theirs."  Chrissy - age 6 "Love is what makes you smile when you're tired."  Terri - age 4 Love is when my mommy makes coffee for my daddy and she takes a sip before giving it to him, to make sure the taste is OK." Danny - age 7 "Love is when you kiss all the time. Then when you get tired of kissing, you still want to be together and you talk more. My Mommy and Daddy are like that. They look gross when they kiss" Emily - age 8 "Love is what's in the room with you at Christmas if you stop opening presents and listen,"  Bobby - age 7 (Wow!) "If you want to learn to love better, you should start with a friend who you hate,"  Nikka - age 6 "There are two kinds of love. Our love. God's love. But God makes both kinds of them."  Jenny - age 8 "Love is when you tell a guy you like his shirt, then he wears it everyday."  Noelle - age 7 "Love is like a little old woman and a little old man who are still friends even after they know each other so well."  Tommy - age 6 "During my piano recital, I was on a stage and I was scared. I looked at all the people watching me and saw my daddy waving and smiling. He was the only one doing that. I wasn't scared anymore,"  Cindy - age 8 "My mommy loves me more than anybody. You don't see anyone else kissing me to sleep at night."  Clare - age 6 Love is when Mommy gives Daddy the best piece of chicken."  Elaine-age 5 "Love is when Mommy sees Daddy smelly and sweaty and still says he is handsomer than Robert Redford."  Chris - age 7 "Love is when your puppy licks your face even after you left him alone all day."  Mary Ann - age 4 "I know my older sister loves me because she gives me all her old clothes and has to go out and buy new ones."  Lauren - age 4 "When you love somebody, your eyelashes go up and down and little stars come out of you."  Karen - age 7 "Love is when Mommy sees Daddy on the toilet and she doesn't think it's gross."  Mark - age 6 "You really shouldn't say 'I love you' unless you mean it. But if you mean it, you should say it a lot. People forget,"  Jessica - age 8

        

    As I had said in the 2008 Sedona Verde Valley Market Forecast, 2008 will be an amazing year for real estate buyers, and that buyers should look to areas and communities approaching build out.  Sedona, AZ is one of those communities buyers and long term real estate investors should be studying right now.  Sedona, Arizona currently has about a 6 year supply of vacant land on the market and offered for sale today, given the current rate of absorption.  Sedona also has only about 2-3% of bare land inventory left.  

    Many of the other communities in the Verde Valley have a little more land left, but not much more.  About five years ago a study was done in the area and indicated the entire Verde Valley had only about a twenty year supply of vacant land for development.  Currently, the Verde Valley communities have a 10-12 year supply of vacant land on the market RIGHT NOW, given the current rate of absorption.  While this is not news land sellers want to hear in 2008, buyers should open their eyes to the tremendous potential of these combined factors, coupled with one of the tried and true tenets of real estate investing....Time.

    I am not the only one who thinks 2008 will be a great year to buy...here are a few articles that present some very compelling reasons to buy real estate in 2008.

Buying a Home isn't Stupid...  Get a different perspective on the "real estate and mortgage meltdown" hype by the sky is falling media.  The fact is, most Americans lost more money on the car parked in the garage in 2007 than they lost through declining real estate values.

Could Current Conditions Mean Another Boom is on the Horizon?  National Sales were up in the month of November and interests rates are around 5.5% for a 30 year fixed mortgage.  Are buyers beginning to see the opportunities in the real estate market?

Its a Great Time to Buy Arizona Real Estate!  Top ten reasons why now is an excellent time to buy real estate in Arizona.

The Ugly House People Place a Big, Fat, BUY Recommendation on Phoenix Arizona  Homevestors has announced its top ten markets to buy in for 2008 as they are showing signs of turning around.  Phoenix, Arizona is on the list.

Real estate continues to be an amazing long-term investment, especially when comparing homeowners versus renters. The Federal Reserve reported that wealth accumulation for renters from 1995–2004 was $4,000, but for homeowners it was $184,000 for the same time period.  Homeowners had immense gains during this time, and most will weather a small equity loss just fine!

So if you are waiting to buy Arizona real estate, don't.  We have an amazing buyers market right now, and no one knows how long it will last!

        

    Back in late November, Ken and I attended a economic forum whose sole purpose is attempting to forecast the climate of the Phoenix and Arizona housing market  for the coming year.   Lead by Elliott Pollack, a nationally renowned economist who resides in the Phoenix area and currently serves as the economics department for Maricopa County, the forum also contained speakers from some of the leaders in the industry such as Cushman and Wakefield, Capital Pacific Homes, Grubb & Ellis, Land Advisors, The Alter Group and CB Richard Ellis.  To follow is a synopsis of their thoughts for the Phoenix housing market and the national economy in 2008.

      2008 is expected to be a tough year for the American consumer, though Phoenix and Arizona are in a relatively good position and will again outperform the nation in job growth and will continue to lead the states in population growth.  Because 2008 is expected to be a tough year for the American consumer, it will also be a tough year for the American economy.  While troubles in the housing sector will spill over into other sectors of the economy, the psychology of our nation as a whole will have a huge effect this coming year, and will probably have a larger effect than the true fundamentals of the underlying economy.  

    So how does your and your neighbors "mood" effect the economy?  For the plain simplistic reason that you may not be feeling as wealthy as you have in the past few years, and that may make you less likely to spend your money on big ticket items and luxuries.   Shrinking real estate prices in many locations across the country equates to many as a reduction in net worth, which translates into a reduction in spending and holding off on major purchases.   

    So what...big deal, right?   Absolutely.  In 2006, one out of every seven dollars floating about in the American economy was a equity dollar, spent by a consumer who took it out of their home in the form of an equity line or other refinancing product.  The slowing or dead stop of appreciation and tighter lending guidelines in many parts of the country have officially turned off the lights and cut the power to the music of the great refinancing party.  The boom those dollars added to our economy are now gone, and when we remember the fact that approximately 70% of our American economy is based on the daily activities of each and every American, we have a recipe for a slow, stagnant year for the economy.  In our economy, it truly is a matter of buy or die.

    The chance of a recession in 2008 is about 50-50.....So go out today and buy yourself a ridiculously high priced cup of coffee, see a movie and order out for dinner.  Buy yourself a new stove, car or....a nice new house!  The American economy is counting on you!

    Arizona's peak housing market, in terms of sales and prices occurred July 2005- January of 2006 (about the same for the Verde Valley).  A normal supply for the Phoenix area is about 30,000 homes.  Currently, there are about 55,000 homes on the market in the phoenix area, 20,000 of which are currently vacant and unoccupied.  Pricing has cooled substantially in some areas, while going up 2-3% in select zip codes.  Pollack estimates that currently, 106,000 homeowners and investors in the phoenix area are upside down in their homes, owing more on them than they are currently worth.

    There is only one factor which will matter in the 2008 Phoenix real estate market, Inventory and how much additional inventory debuts on the market in the coming year.  It all boils down to supply and demand.  The same can be said for the Sedona / Verde Valley real estate market.

    Due to the great amount of speculation which occurred during the boom years, additional inventory for Phoenix in 2008 is a completely unknown amount.  Pollack estimates that the Phoenix area in 2008 could have anywhere from 30-50,000 extra housing units floating about in the market, which will certainly mean hard times for many small scale builders in the area.   Currently, the Phoenix Metro area has a 14 month supply of homes, which means it will take a over a year to sell all the homes currently on the market today (Sedona and the Verde Valley currently have a 23 month supply).   The peripheries of Phoenix have been hit the hardest, both with substantial reductions in pricing and lots of excess inventory currently available.  These are the areas in Phoenix where vast amounts of speculation and new construction took place during the boom years.  In other words, buyers should look for and will find a lot of incredible bargains in areas where a lot of new construction exists, which is mostly on the peripheries of the Phoenix Metro area.
    
    Residential raw land prices have plunged on the peripheries of Phoenix.  In fact, a few of the panel members said their companies were valuing some of their raw land holdings at zero dollars...because it will cost more dollars to develop the raw land than the individual lots can be sold for.

    Pollack and other panel members agreed that it will be 3-6 years before the Phoenix housing market begins to once again resemble a normal market.  Buyers will continue to be in the drivers seat, and call all the shots.

    Pollack and other panel members offered advice to home builders, speculators and investors who purchased at the height of the market in 2005 and the beginning of 2006.  Forget your profit....it does not exist.  Forget recouping your interest.  The only thing you should be concentrating on is the preservation of capital.  Period.  Pollack said, "Ask yourself if you want to swallow a moth ball, or a basket ball, and then make your decisions accordingly."

    Builders in the area have already heeded the advice.  $50-70,000 discounts on newly constructed homes as well as 20% commissions to brokers are occurring in some areas.  Some builders are selling homes below replacement cost, and turning little to no profit.
    
    Harsh words, but very sound advice, given the current conditions.  Panel members also recommended builders cut production of new units in the coming year.  New permits in the Phoenix area for 2004 and 2005 were 65,000 each year, and only 45,000 new units were needed.  The first 6 months of 2007, the phoenix area saw more new home permits, than home sales.

     Advice to listing brokers of Arizona real estate was  "Ask your sellers if they want a 90 day list price or a one year list price, and if they insist on listing higher than those numbers, ask for a 3-5 year listing."  In other words, sellers will need to price their home very competitively, if they haven't already.

     Buyers and savvy investors of Arizona real estate get a big green light in 2008, and will find some amazing bargains.  While it is impossible for anyone to determine exactly where we are in the "U" of a down market,  Pollack said point blank that "fortunes, absolute fortunes will be made by real estate investors buying in Arizona in 2008, 2009 and 2010....fortunes will be made.  Market timers looking for the absolute bottom always fail, incredible opportunities exist for real estate buyers and investors right now..... Interest rates are low, plenty of money is available..... financing may tighten considerably in the coming years."

    Arizona received 170,000 NET new residents in 2007, the majority of which settled in the Phoenix Metro area.   Though that number is expected to shrink in 2008 as stalled housing markets in other parts of the country will slow the wave of incoming residents, the valley of the sun still will need to add an average of 45,000 new housing units in the metro area to house all of our new residents. In other words, A whole lot of homes will still be bought and sold in Arizona and the Phoenix area in 2008.  Sellers will just have to woo buyers more with upgrades, concessions and, of course, the best trick in any sellers bag....a good, fair price!  Internet marketing will also be crucial to a sellers success, as many of Arizona's 2008 real estate buyers are currently freezing, shoveling snow and scraping ice off the windshield in another state.
    
    Arizona real estate buyers will find their best deals on existing resale homes, because many of them can be bought below replacement cost.  That will be the key to finding a good value for home buyers in 2008.  If you can buy it for less than it would cost to build today, you will weather the market just fine.  Buyers who prefer new construction will find subdivision reps. bending over backwards with enticing concessions, upgrades and deep discounts.   
  
    Traditional, longer term investors will find incredible opportunities:   once again you can find rentals that cash flow, a few well priced foreclosures and fixer-uppers and raw land at an extreme discount.  Arizona investors should look to the peripheries of the metro areas for bargains on land,  in areas that are close to being built out and have a relatively small amount of vacant land left available for development (like Sedona and many pockets of the Verde Valley).   Pollack and other panel members expect builders to be dumping land inventories in the next 24 months.  Although there is a huge oversupply of vacant land in the entire state of Arizona, Northern Arizona is expected to fair better than the metro areas, as many Northern Arizona communities are approaching build out.

    And by the way, interest rates as of today on a 30 yr fixed rate loan just dropped to 5.5%  WOW!  Buyers! This is no longer a market to be scared of, this is a market to take advantage of!  Give Ken and I a call or send us an e-mail a call to help you find some exceptional deals here in Sedona and the Verde Valley!

    

        

                                        Sunset over Mingus Mountain from Cornville

A Christmas Closing Story
'Twas an hour before closing and the agents were tense,
to close Christmas Eve just didn't make sense.
But the seller was booked on the 6 o'clock flight
and warned everyone  "THERE WILL BE A CLOSING TONIGHT!"

The agents agreed because business was dead,
and visions of commission checks danced in their heads.
The loan was approved by the lender's good grace,
Everyone knew 'twas a borderline case.

The buyers divorced, remarried again,
Divorced once more, and now were just friends.
The loan package complete to the closer was carried,
With instructions to close before they remarried.

The title policy arrived via UPS,
From page One through Sixteen, a terrible MESS!
An improper legal, 3 judgments, a lien,
But a few lines on page seven,
looked pretty clean.

The title was cleared and the closing was set,
But to finish today was not a sure bet.
The closer dashed in waving her HUD,
It was covered with whiteout, coffee and crud.

But down in the corner you barely could see,
that the buyer still owed a buck thirty-three.
So the closer extracted a bill from her compact,
And the agents agreed to the rest on the contract.

To add some interest, the seller revealed,
to everyone's horror - the well wasn't sealed.
And oh yes, he wanted to change the disclosure,
His mother just died of RADON EXPOSURE!

Everything else in his house was O.K,
(his cracked floors and walls were always that way)
About that time the buyer chimed in,
"we'd like to continue, but before we begin,

I noticed these papers - I'm likely to blame,
But I gave my agents the wrong legal name,
And one more thing I had hoped to avoid,
Does it really matter if I'm self-employed?"

About this time the closer exploded. 
She pulled out a gun and said it was loaded.
Everyone froze and sat there amazed, 
She frothed at the mouth and her eyes were both glazed.

More rapid than eagles, her curses they came;
she bristled and spouted and called them BAD names.

"THE CLOSING IS OFF, DO I MAKE MYSELF CLEAR??
MERRY CHRISTMAS TO ALL - NOW GET OUT OF HERE!"


                     Near the Confluence of the Verde River and Oak Creek


15 Things to spice up your visit your local Wal-Mart next time you go shopping:

        

  Fall Foliage on Mingus Mountain

I really did not want to write another issue about our area real estate market, but I wanted to let you all know that we are actually seeing the very first signs of a recovery in our area.  Now, before I go and get everyone excited, allow me to say this:   the recent changes may just be a fluke, an aberration and may simply be attributed to the time of year (winter visitors, holidays), but whatever the reason, real estate sales activity is FINALLY picking up.

Just how bad was this past year?  Ask just about any agent in our area!  In 2005, at the height of our market, there were 977 agents in our local association.  We are now at 834 agents. 143 agents have left this business since the height of our real estate market.  Sedona Verde Valley Association of Realtors sales statistics for agents in our area look something like this for 2007, year to date.

# of agents who have not had a single sale ALL YEAR in our MLS in 2007, YTD-  306 
# of agents who have sold only 1 property this year-  112
# of agents who have only sold 2 properties this year- 104
# of agents who have only sold 3 properties this year- 60
# of agents who have only sold 6 or less properties this year - 705
# of agents that sold less than 1 million in total transactions so far this year- 583
# of agents that have sold less than 2 million in total transactions this year- 709
# of agents who have sold 11 or more properties this year- 63
# of agents who have sold 20 or more properties this year- 11.  Fortunately, this is the category Ken and I fall into for this year...but we had to work 3 times as hard to make it happen.  So if we look dog tired...we are!

If we figure that the average commission paid was 3% per agent and that the typical split with their broker was 80%, well over half of the agents in our association have made less than 24,000 this year selling real estate, BEFORE EXPENSES!  Certainly doesn't seem like a very glamorous business, does it?  We can certainly expect that many more agents will be getting out of the business...if they can make more money at Home Depot, why wouldn't they? 

I have heard a rumor that our association is already planning our 2008 budget to have 150 or so less agents.  I have a feeling that number may be much higher if a shift in activity does not occur VERY soon.  And unfortunately, we are already losing GOOD reputable agents...either via economic forces or as a result of overall negativity in the market.  I had told someone over the summer that I was surprised I am not wearing much smaller pants this year, after all the various people who have taken a chunk out of my posterior this year! Buyers are unhappy because they wonder if they paid too much... and sellers are unhappy because they could of gotten so much more.... Agents are the messengers of market conditions....And we all know who is the first to get shot!  It has been really, really ugly out there overall.

        

I highly doubt this was the intended purpose for this power chair!

    Last month I had mentioned our new blog and how we would be posting all of our newsletter issues there, from now on.  What I probably should of done, was give you directions on how to subscribe, and then, BE SURE, I GIVE YOU THE CORRECT ADDRESS!  Put a big fat L on my forehead!  OK-  here goes! 

1.  Go to http://blog.verdevalleyrealestate.com   No WWW needed, oops!  You will not be able to access the site with www.  Sigh, like I said, we are determined to stay on top of current trends....I didn't say we WERE on top of them....but we are working on that! 
2.  On the left side of the screen you will see a box under the word SUBSCRIBE, enter your email address.
3.  Click the checkbox next to the word blog, if you want to be notified whenever a new newsletter or other articles are posted.
4.  Click subscribe and your almost done!
5.  You will get a generic e-mail asking you to confirm your subscription.  Click to confirm.
6.  Another window will open up confirming your subscription.  If you click to continue, you will be brought right back to the blog....Enjoy!

I sincerely hope you will subscribe and post comments or questions from time to time....one of the wonderful things about blogs is that you can start an on-line community and create a wealth of local knowledge all people can benefit from.  Please log on and fire over your real estate questions and thoughts...share a rumor about a new franchise coming to town.  Feel free to post community events as well!  This blog is for you..please use it!  At least drop in and say Hi once in awhile!