BlogArizona Category: Arizona Business & EconomyThis page contains all BlogArizona posts related to Arizona Business & Economy. Read a specific post by clicking on a title below, or scroll further down the page to read through all posts in this category.Monday, April 14, 2008Sheriff Joe Enforces Immigration Law, Phoenix Mayor UpsetNormally, I don't post on such political topics. But this Arizona Republic article was so one-sided, I had to blog about it just to mention the part of the story the AZ Republic blindly disregarded. Phoenix Mayor Phil Gordon is asking the FBI to investigate Sheriff Joe Arpaio for alleged civil rights violations. The Mayor is complaining about Sheriff Joe's recent illegal immigrant raids because Mayor Gordon claims Sheriff Joe is using racial profiling. In short, the Mayor is complaining that Sheriff Joe is enforcing the law. I just wonder...is this the same Mayor Phil Gordon who recently gave press conferences about how he was going to end Phoenix's sanctuary city policy after a Phoenix police officer was needlessly shot and killed by an illegal alien? I guess that was just for the news cameras. When it comes to actually following through, perhaps a few more officers will have to be killed first. And don't you love the way the Arizona Republic article mentions (more than once) that Mayor Gordon recently "called on Phoenix police to play a more active role in enforcing immigration laws". But nowhere in the article does it mention that Mayor Gordon took that stance after a Phoenix police officer was needlessly shot in the face and killed by an illegal immigrant, in cold blood. And this was an illegal immigrant who had previously been arrested for less serious charges and deported. But apparently, anybody who wants to walk across our border and kill our citizens is free to do so (thank you for trying to keep it that way Mayor Gordon). Mayor Gordon says Sheriff Joe should focus on real criminals. Last I heard, being here illegally is illegal. And when someone is killed needlessly by an illegal immigrant, doesn't it usually turn out that the killer was previously arrested for less serious crimes? If authorities had only deported the person and meant it the first time, maybe we'd have one less dead Phoenix police officer. I realize all illegal immigrants are not criminals, but as long as our borders are wide open, the bad guys are coming across too. In my opinion, people like Mayor Gordon who scream 'racist' everytime someone tries to actually deal with the problem need to wipe the blood off their hands and face reality. How many people have to be killed and how many children have to be molested before we finally decide to enforce our laws...and mean it. We need to get past the politics and secure our borders... for real this time. Until that happens, I say go Sheriff Joe!
Posted by Shannon Hubbard, Arizona Real Estate Agent on April 14, 2008 | Permalink | Comments (7) | TrackBack Tuesday, March 11, 2008Foreclosure Rates and Neighborhood CrimeHere's an interesting statistic: For every 1% increase in a neighborhood's foreclosures, violent crime increases 2.33%.
Posted by Shannon Hubbard, Arizona Real Estate Agent on March 11, 2008 | Permalink | Comments (7) | TrackBack Saturday, March 08, 2008Recent Changes to the FHA Loan ProgramIt seems like the FHA Loan program is being looked to by government leaders, consumers, lenders and anyone in between to save the housing market. As a result there has been a lot of changes to this program within the past few months. 1. FHA Loan Limits Increased: The loan limit has been raised across the entire country. For Maricopa and Pinal County (which includes all the major cities in the Phoenix Metro area) the new limits are as follows:
2. Down payment Assistance Programs: While this is not a direct FHA feature, one of the major reasons to use the FHA program is because it allows third-parties to contribute towards a buyer’s down payment. The FHA loan limit is 97% of the value of the property but it allows the remaining 3% to be gifted from such non-profits as AmeriDream, Nehemiah etc. Recently HUD (which oversees FHA) challenged the legality of such gifts and threatened to shut them down. The down-payment programs fought back and recently won in court. 3. FHA Secure: This was an initiate from the White House designed to help subprime borrowers refinance into a FHA loan program. It is targeted to those on adjustable rate mortgages facing abrupt increases to their monthly housing payment. The HUD website has addition information, but here are some high points on how you may qualify for FHASecure:
There are further changes coming to the FHA program. Congress is working on a FHA Modernization bill which will decrease the down payment requirement but add risk based insurance (higher insurance for lower credit scores). So, stay tuned, nothing stays the same in today’s mortgage market.
Posted by Shailesh Ghimire, AZ Mortgage Guru on March 8, 2008 | Permalink | Comments (2) | TrackBack Monday, February 25, 2008AZ Home Inspector Licensing Board going away?Arizona Home Inspectors need your help! Arizona's home inspector licensing agency, the AZ Board of Technical Registration (BTR) is inefficient, expensive and allegedly corrupt. In fact, Arizona lawmakers are thinking about eliminating the BTR altogether (SB1171), and moving home inspector licensing to the Registrar of Contractors (ROC). As most of my readers already know, I'm co-owner of Homewerx Home Inspections, one of the Valley's leading home inspection companies since 1999. As such, I sincerely appreciate your support on this matter. While I do NOT support eliminating the BTR, it definitely needs some change - starting at the top with the guy in charge. It's unfortunate, but AZ home inspector licensing seems to be alot more about money and power and industry organizations than it is about quality home inspections. There are some real problems and conflicts of interest that have just been ignored at the BTR, and we all know that problems don't just go away when they're ignored...they get worse! Now, the BTR is so inefficient and lacking accountability that I think the whole idea of protecting homebuyers got lost somewhere along the line. Home Inspectors don't trust the BTR, consumers kind of laugh at them. And the cost of inefficient government regulation is real... look at how much it costs to be a home inspector in Arizona compared to other professionals licensed by the same agency. And look at how much Arizona home inspectors pay compared to home inspectors in other states. "Wow" is all I can say! Home Inspection companies inevitably pass these ridiculous costs onto the homebuying consumer, who is already strapped for cash in case the BTR hasn't heard. And a home inspection is an out-of-pocket expense - those are the ones that really hurt and will be a deal-breaker alot quicker than borrowed money will. So please Help support the 'little guy', and you will help keep Arizona home inspection prices down plus eliminate government incompetence at the same time. Thank you again for your support!
Posted by Shannon Hubbard, Arizona Real Estate Agent on February 25, 2008 | Permalink | Comments (2) | TrackBack Tuesday, January 22, 2008Subprime Mortgage Problem Goes Global: Federal Reserve Makes 'Emergency' Interest Rate CutBen Bernanke and the Federal Reserve made an 'emergency' rate cut to the key interest rate this morning, rather than waiting until their next planned meeting at the end of January. The .75 basis point reduction in interest rates comes amid global economic fears. The Asian markets have been down sharply in recent days, and European markets have followed (although they're not down as much as the Asian markets). The fear is that America's subprime mortgage problem is now damaging the global economy. Fortunately, the US stock markets were not trading yesterday due to the Martin Luther King holiday. But DOW futures were down over 500 points until the announcement of the Fed's rate cut early this morning. The DOW (futures) has since recovered by a couple hundred points, but it still looks like today will be a bad day for the stock market (which is already down for the year). I guess we'll see when the markets open in a few minutes. Just remember, it's only a paper loss until you cash out!
Posted by Shannon Hubbard, Arizona Real Estate Agent on January 22, 2008 | Permalink | Comments (6) | TrackBack Friday, January 18, 2008AZ Termite Inspector Licensing Agency Going Away
Amid allegations of "cronyism, inefficiency, overregulation and instability", the executive director was recently fired by the seven member Commission. In protest, the 3 Commission members who voted against firing the executive director have resigned. A committee of Arizona lawmakers have since voted in favor of, and are introducing a bill to disband the SPCC altogether. Under the new bill, regulation & licensing of pest control professionals, including termite inspectors, will be transferred to the AZ Department of Agriculture. Arizona lawmakers also considered transferring the SPCC's duties to the AZ Registrar of Contractors (ROC) or the AZ Board of Technical Registration (BTR). However, agricultural pest control is already regulated by the AZ Dept. of Agriculture, so they are the most logical choice. Last I heard, the bill was supposed to be introduced in early January when the AZ Legislature reconvened. While I have not officially seen anything stating the bill has been introduced or approved, I was told by one of my State Representatives in early January that the SPCC's duties will be transferring to the AZ Department of Agriculture. I think he told me a time frame, but I don't remember what it was. So it sounds like a pretty done deal, even if it has not been officially approved. AZ Governor Napolitano mentioned late last year that she would consider the recommendation to get rid of the SPCC, and the State Representative I spoke with did not say the SPCC might go away, he said it was going away. Additionally, the SPCC (like all such agencies) is subject to review every ten years. I believe the SPCC's sunset review is due in June of this year, and even in the absence of other legislation, I don't think the SPCC is expected to be re-authorized or renewed. So, the "good ole boy network" at an Arizona licensing agency...could it really happen? Of course, I'm being sarcastic - yes, it really happens and probably more than you'd ever believe. I have personally witnessed the type of abuse of power alleged here at another AZ licensing agency. Luckily, it was not not directed at me personally. However, I would bet that it's much more widespread than the public really knows. That's a real shame since these licensing agencies are intended to protect the public. But when the agency is corrupt, it doesn't protect anybody - it just raises the cost of doing business. And that cost is ultimately passed on to the consumer, which means the licensing agency ends up hurting the very consumers it was supposed to protect. By the way, I want to apologize to my loyal readers for my recent "vacation" from blogging. Between the holidays, visiting relatives and another project I've been working on, the time has just gotten away from me. But I promise to post again soon. In fact, my friend the AZ Mortgage Guru recently sent me a very interesting article, which got me doing some research on another Arizona licensing agency. And what I found is definitely worth coming back to read. So be sure to check back in a few days and read all about it! Related articles:
Posted by Shannon Hubbard, Arizona Real Estate Agent on January 18, 2008 | Permalink | Comments (2) | TrackBack Wednesday, December 12, 2007Fed Lowers Interest Rates Again - Investors UpsetThe Federal Reserve met yesterday and lowered its benchmark interest rate again, in hopes of alleviating some of the economic pain caused by the current mortgage crisis and slow housing market. The federal funds rate was lowered by a quarter point (to 4.25%), and the discount rate was also cut by a quarter point (to 4.75%). The discount rate is the cost of direct loans from the central bank. The federal funds rate is now at its lowest level since January 2006. But apparently the rate cut was not enough to satisfy some Wall Street investors. Since most stock market investors had hoped for a .50% rate cut, many were disappointed by the .25% rate cut. As a result, the Dow Jones dropped about 300 points after the rate cut was announced. Today however, investors seem to have gotten over it since the Dow, NASDAQ and S&P500 are all up quite a bit (so far). Perhaps investors are comforted by the fact that the Fed also indicated a willingness to make additional future rate cuts if necessary. I think Bernanke is just being cautious after seeing his predecessor, Alan Greenspan, criticized for dropping rates too much, too fast. Besides, the most immediate positive effect of a rate cut is not lower mortgage rates, it's the boost it gives to consumer confidence. Therefore, maybe making smaller rate cuts more frequently is a better strategy than making bigger rate cuts all at once. Only time will tell!
Related articles: Posted by Shannon Hubbard, Arizona Real Estate Agent on December 12, 2007 | Permalink | Comments (2) | TrackBack Tuesday, November 06, 2007Vote Yes on Prop 300 - Bring the Waveyard to Mesa!Today is Special Election day around the Valley - various cities including Mesa, Gilbert and Queen Creek Mesa's Proposition 300 is about bringing the Waveyard to Mesa. Most Mesa residents have probably seen the commercials or received mailings regarding the Waveyard by now. If approved, the Waveyard will be a world class resort which emphasizes water sports. It will be perfectly located in northwest Mesa, close to the airport, Phoenix and ASU. Voters are being asked to approve the sale of Riverview golf course and four nearby softball fields, to the Waveyard developers. The Waveyard developers would pay $30 million for the land - $10 million up front in cash and the remaining $20 million will be paid over 24 years, with interest, in the form of tax receipts from the property. Additionally, Mesa would reimburse the Waveyard developers for up to $1.5 million in public infrastructure costs. Earlier this year, I was invited to an informational event where Mesa city officials and the people behind Waveyard briefed the real estate community on what Waveyard is about. It's not just another water park at all. It's going to have a whitewater rafting river, a king size wave pool, a deep scuba lagoon and other sports venues. The wave pool is not what you think of when you think of Big Surf or other Valley water parks. This is a serious wave pool, with huge surf-able waves.
Officially, everybody seems to be supporting the Waveyard. I haven't really seen any organized opposition to Proposition 300, but there are people out there who are against it. Here are some of the arguments I've heard against the Waveyard:
As a city in financial crisis, Mesa NEEDS the Waveyard. I personally can't see why any Mesa resident would vote no on Proposition 300. VOTE YES ON PROPOSITION 300 and BRING THE WAVEYARD TO MESA! 11/7/06 UPDATE: Looks like Mesa has approved the Waveyard!! All three of Gilbert's propositions were also passed by Gilbert residents. Here are the election results.
Posted by Shannon Hubbard, Arizona Real Estate Agent on November 6, 2007 | Permalink | Comments (1) | TrackBack Tuesday, October 30, 2007Low Interest Rates + Lower Prices + High Inventory = Time to Buy Arizona Real EstateMany are waiting with anticipation as the Federal Reserve meets (today and tomorrow) to discuss a A lower Federal funds rate won't immediately affect mortgage rates, but it will (almost) immediately boost consumer confidence, and eventually it will lower mortgage rates. Those homeowners with Adjustable Rate Mortgages (ARMs) will get some relief as their interest rates adjust, hopefully preventing some foreclosures. We're nearing the bottom of a slow real estate market, with high inventory (supply) and lower than normal demand. While some people are scared by the current real estate market, it's actually an incredible buyer's market with great deals just waiting to be made. If you're thinking of buying real estate, the rest of this year is going to be perfect buying time - crazy deals and incentives are being offered. After mortgage interest rates have decreased and the real estate market begins its recovery is NOT the time you can make your best deals. If you're buying for the long term (3 or more years), you really don't need to worry about buying at the very bottom of the market. But you do want to buy before the market starts to recover since that's when the best deals can be negotiated. The real estate market is cyclic - it goes up and down. Here's why you should buy real estate before the market starts to recover (I stole this explanation from my friend and fellow Arizona Realtor, David Thomas, who read it on a blog!). Think of the real estate market as a "V", the current trend is definitely downward, toward the bottom of the "V". We don't know exactly how close we are to the bottom of the "V" right now, but most think we're pretty close. As we approach the bottom, inventory is at its highest and sellers are most willing to negotiate. But once the market reaches the bottom and the upward trend begins, deals begin to diminish. Inventory (choice) decreases, prices begin to increase and incentives go away. As the market recovers, interest rates are also likely to increase which will make it even more expensive to buy a home. So when do you want to buy - near (but before) the bottom? Or do you try to wait until the very bottom and take a chance that you'll catch the upward trend instead? It's impossible to know exactly where the bottom of that trend is, until after the upward trend begins. So if you wait, you might wait too long. By the way, don't believe anybody that claims to know exactly where the bottom of that "V" is!
Posted by Shannon Hubbard, Arizona Real Estate Agent on October 30, 2007 | Permalink | Comments (4) | TrackBack Friday, August 31, 2007President Says Reform FHA & Fannie Mae - Is there a Mortgage Bailout Coming?Most investors and analysts have been predicting the Fed will lower interest rates next week in an effort to revive the mortgage and housing sectors. But this morning, some of those hopes faded a little as President Bush announced his plan to deal with the current mortgage crisis. And now, some investors are worried the Fed may not lower interest rates as most were expecting, or may not lower rates as much. The President didn't really give many details and he didn't take any questions about his plan. He did say that his solution includes reforming FHA, Fannie Mae, etc, thus making it easier for borrowers who are in trouble to re-finance their mortgages. But wait just a minute...isn't that what got us into this mess - easy loans for people who really can't afford them? And assuming the President can get his plan passed through Congress, I really don't understand how reforming FHA will help subprime lenders and borrowers. In fact, this 'FHA reform' isn't really in response to the mortgage crisis at all. This FHA reform is actually something the President started pushing for over a year ago. The President also mentioned making the mortgage industry more transparent in order to prevent future problems. I agree that borrowers should be informed and understand the terms of their loan before signing on the dotted line. But I don't totally buy into the victim mentality. While there's plenty of sleazy mortgage companies out there taking advantage of the proverbial 'little guy', I think the little guy has to take some responsibility too. If your loan officer asks you to sign an application that says your income is twice what it really is, and you sign it because he says nobody's going to check and it's the only way you'll be approved for the loan, yes the lender is wrong. But so is the borrower. And both the lender and the borrower should suffer the consequences for their bad decisions. That suffering is what will teach them both NOT to make the same bad decision again. In the absence of consequences, neither will change their behavior in the future. While I don't believe there should be a bailout for the greedy mortgage company when this borrower defaults, I don't believe there should be a bailout for the borrower who lied either. While there are truly some borrowers who didn't understand the terms of their mortgage, they shouldn't have signed something they didn't understand. It may be a tough lesson, but it's one that needs to be learned. Yes, it's nice to have someone else to blame and it's always easy to blame big business. But it's ultimately my responsibility to decide how much house I can afford. And if I get in over my head, I have nobody to blame but myself. By the way, 98.7% of American homes are NOT in foreclosure right now. So why should 98.7% of us have to pay to bail out the 1.3% who made bad decisions? As an American who makes a living in the real estate industry, I definitely want to support the President in any effort he makes to improve the housing market. But helping those in trouble to re-finance loans they couldn't afford to begin with just seems silly to me. I personally think it's more likely to prolong the agony than to resolve any problems. READ UPDATE to "President Says Reform FHA & Fannie Mae - Is there a Mortgage Bailout Coming?"
Posted by Shannon Hubbard, Arizona Real Estate Agent on August 31, 2007 | Permalink | Comments (7) | TrackBack Friday, August 17, 2007Sub-Prime Mortgage Crisis Causes Fed to Lower Discount Rate
As a Realtor®, lower interest rates would obviously make me happy. Lower rates will decrease a buyer's monthly mortgage payment, therefore enabling more people to qualify and buy real estate. But will lower interest rates really help solve the mortgage problem, or will it just create more inflationary worries? And as mortgage companies tighten lending standards, will new buyers who qualify due to lower interest rates even be enough to offset those buyers who no longer qualify due to tighter lending requirements? It's not that lenders don't want to lend - trust me, they WANT to make loans available. But the loans have to meet certain requirements or the mortgage company cannot sell them and free up money to lend to the next borrower. So mortgage lenders are faced with a choice:
As more and more of these risky loans go into default, there are less people willing to buy them. Investors are pretty scared right now, as indicated by the big sell-offs on Wall Street over the past few weeks. While there are definitely reasons to be concerned, I personally feel the media attention has made this problem out to be much worse than |
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If you haven't already heard, the licensing agency for 
possible cut in interest rates. After lowering rates a half a point in September, the Fed is still concerned about the 'credit crunch' and a slower than normal housing market. However, with extremely high oil prices, the Fed is also concerned about inflation (which could prevent them from lowering interest rates). But most analysts think the slow housing market and lending problems are currently a bigger concern than inflation, and most are predicting a quarter (.25) point reduction in interest rates tomorrow.
The Federal Reserve just lowered its discount rate by a half a point to 5.25% after continuous bad news from the mortgage industry and Wall Street. The discount rate is the rate the Federal Reserve charges qualified lenders, usually banks, for temporary loans. This move is mostly symbolic, as the Fed did NOT lower the federal funds rate as many expect will happen in September, and perhaps again in October (the federal funds rate is the more closely watched 'interest rate' which affects credit cards, home equity lines of credit, car loans, other consumer loans and eventually mortgage rates). But obviously, the Fed is now MUCH more worried about the credit crunch than about inflation. What started as a subprime mortgage problem is now wreaking havoc on Wall Street and the economy as a whole.