In the last several months, I have had frequent conversations comparing the levels of Southern Arizona home and land prices with those of past years. For example, the other day I asked an agent in my office where she felt home prices were today. She answered that they seemed to be comparable to those in 2002-2003. With small variations for certain neighborhoods and different parts of Tucson, she felt that to be a fair characterization. I’ve felt that land prices have dropped proportionately a little more, so that we were now comparable to 2000-2001 price levels. My sense is that the South, Southeast, Southwest, West and Northwest areas of Tucson have been hit harder and are probably closer to 1999-2000 levels while the North and Northeast areas have fared better and are closer to 2002-2003 levels. In general, it is clear to me that subdivided property has maintained its value more than unsubdivided lots and land. Also, the top tier locations tend to hold proportionate value compared to the lesser locations.

I found it interesting to read an article today in the Arizona Daily Star that July’s median home price of $125,000 was identical to the 2001 median price according to the Tucson Association of Realtors Multiple Listing Service. This confirms my colleagues’ perceptions.

Although many Realtor’s will tell you today that there is heightened sales activity recently, they will also acknowledge this is coupled with continued falling prices. For Tucson homes and Southern Arizona land, it continues to be a buyer’s market that many people are taking advantage of.

I recently read 2 small articles in the Business Briefs section of the Arizona Daily Star that are worth mentioning:

Finally a little bit of good news!  Foreclosure filings nationally, as well as in Pima County, plunged to a near 4 year low. Nationally, 212,764 and in Pima County 666 property owners received default, auction or repossession notices in July 2011. Nationally, this represents a 35% decrease from the previous month, and in Pima the decrease was 40%. This bodes well for the Southern Arizona property market as well as the Tucson land market. Slowly, but steadily, we seem to be selling the distressed housing inventory, while the future number of foreclosures is coming down.

The other positive trend mentioned is the significant decrease in the number of late paying mortgage holders – those who were 60 days or more late. The spring of 2011 marked the sixth straight quarter where this rate declined nationally. No specifics were given for Pima County.

These trends, in combination, are very positive. I know our office is buzzing with business and I am currently working on 3 land transactions personally. The sale volume of Southern Arizona land and homes is definitely picking up. At the same time home prices are still depressed, creating some great buys for consumers. The market trajectory is finally starting to move upwards.

The prestigious Arizona REALTOR® Magazine has just published my latest article, “Shopping for Land on the Internet”.  It is a great honor to be able to share my expertise with Realtors all across the state.  I hope that Realtors and consumers alike will find the article enlightening.

To read the magazine in HTML Format, click here.
To read the magazine in PDF Format, click here.

I am pleased to announce that my latest article, “Shopping for Land on the Internet”, was recently published in the official publication of the Tucson Association of REALTORS®, the Tucson REALTOR® Magazine…

Tucson REALTOR® Magazine ~ July/August 2011

In this issue of the Tucson REALTOR® Magazine learn about an up and coming generation that represents roughly 51.5 million potential first-time homebuyers. Read about Shopping for Land on the Internet and 5 Real Estate Scams you should be aware of. Do you know what it takes to grab the attention of prospective buyers? Take this month’s quiz on property marketing to find out.

To read the Magazine in HTML Format, click here.
To read the Magazine in PDF Format, click here.

I’m anxiously awaiting to see who emerges as the new developer of Saguaro Ranch now that Stephen Phinny has lost the project to his lender through foreclosure proceedings.

No one bid at the trustee sale that was held last week although at least one local and one national group are known to have an interest in the project.

New ownership can’t happen fast enough as this unique and beautiful neighborhood is badly in need of TLC and a major cash infusion. No subdivided lots that I’m aware of have lost so much value since the Developer’s troubles and the real estate recession converged a few years ago. The most recent sales have been under $300,000 on lots originally sold at $1.2 million and above. And despite the problems, this land is gorgeous and features amazing rock out-croppings, great views and privacy.

This subdivision will come back under new ownership, hopefully sooner rather than later. I’m confident there will be some happy (and astute) owners five years from now who buy these lots at today’s distressed prices.

Anyone thinking of buying, selling or representing vacant land in Tucson needs to be aware that local and FEMA floodplain maps have been updated and changed. The new maps have been officially recognized as of June 16, 2011. This will in many cases change the recognized flood prone areas or flood hazard areas on individual parcels. Sometimes expanding the covered areas and sometimes shrinking or eliminating them. This will have the effect of requiring some owners to purchase flood insurance for the first time and others to be able to eliminate it.

If you know a subject property is currently in or near a flood prone or riparian area I would recommend contacting your local jurisdiction for more details. These include:

• the City of Tucson 791-5609
• Marana 382-2600
• Oro Valley 229-4818
• Pima County 243-1800
• Sahuarita 344-7100
• South Tucson 917-1563

If you’re not sure, I would begin a search on the website that covers all floodplain jurisdictions in Pima County, www.rfcd.pima.gov/dfirm. You will find a simplified search procedure by address or parcel number and a dual screen comparison showing old and revised maps.

Living in the desert, it’s hard for us to imagine that flooding is a problem. We hear about the “100 year flood” and think it won’t happen in our lifetime. Here’s an interesting fact: the statistical probability of a 100 year storm occurring during the life of a 30 year mortgage is 26%. Don’t be caught unprepared.

Most Realtors I know are optimists by nature, including myself. We’re “cup half full” sort of folks usually focusing on the bright side of the world. I’m reminded how challenging this notion can be when I see headlines like today’s Business section in the Arizona Daily Star declaring that the equity in our homes is “melting away”. This was the fate of the wicked witch of the west! Melting away isn’t an optimistic image. Especially when we read that the average home’s equity, nationwide, is at 38% compared to 61% only 10 tears (I think I’ll let this Freudian typo stand) ago. This report by the Federal Reserve outlines a bleak picture for the Real Estate Sector that could, according to the author, take years to correct in some parts of the country. But despite dire predictions such as these, it’s a different picture for those of us who continue to love what we do.

The real kicks in this business come from the relationships we establish with our customers and clients and the solutions we come up with together to solve the challenges of “the deal”. Service is an end in itself and always satisfies. But how special it is when the relationships occasionally deepen and enrich our lives. The camaraderie we feel with the agents, builders, mortgage lenders, bankers, title staff and other professionals we talk to and interact with on a daily basis. The enjoyment and personal satisfaction of the professional committees we serve on to help solve our industry’s problems and move it forward. The classes we continually take to better ourselves professionally. The social events and happy hour time we spend with colleagues to celebrate successes and commiserate defeats.

These are the things that endure whether times are good or bad. These are some of the blessings we receive daily. These are the things that keep a smile on our faces.

The Arizona State Legislature adjourned sine die on Apri1 20,2011. The following bills were passed and signed into law by the Governor and affect the Department of Real Estate and related industries. Please be advised of all of the following. The general effective date of the bills is July 20, 2011, unless otherwise stated. Please be advised that this list is not comprehensive and therefore may not include all bills that directly or indirectly affect ADRE licensees. Please visit the state legislature’s website at www.azleg.gov for more information.

Gretchen Conger is the ADRE Legislative Liaison and her email is gconger@azre.gov.

General:
SB1292 real estate; education; broker requirements (General effective date, however please note that the provision that requires instructors to attend a three hour workshop is applicable beginning Jan. 7, 20121 – requires that the real estate exam demonstrate that the applicant has an appropriate knowledge of other real estate practices and principles as determined by the Commissioner; allows the Commissioner to withdraw or deny instructor certification for instructors teaching course content that is not current or that has been substantially changed from the course as approved; starting January L, 20L2, requires that instructors take a three hour department-approved seminar or workshop emphasizing instruction methods, techniques and skills in the 24 months prior to application or renewal; allows for the instructor seminar provision to be waived based on individual request review; finally the bill changes the number of days that brokers have to review listing agreements, purchase or nonresidential lease agreements or similar instruments from five to ten business days and defines business day as “a day that is not a Saturday, a Sunday or any other legal holiday in this state.”
*Please note that the continuing education provisions originally included in 587292 relating to post-licensing education for salespersons and broker supervision are not included in the final version of the bill that was passed and signed by the Governor.
HB2102 license eligibility; authorized presence – makes changes to the lawful presence requirements that licensees have to abide by; exempts an applicant if all of the following apply: (a) they are a resident of another state, (b) they hold the equivalent license in that state that they are seeking in this state, and (c) they seek the Arizona license to comply with this state’s licensing laws and not to establish residence in this state; clarifies that if the document the applicant uses to prove lawful presence does not have a photograph, they must also present a government issued document that contains a photograph.
SB1105 real estate transfer affidavit; transmission – requires the county recorder, rather than the Department of Revenue, to scan and transmit an electronic copy of affidavits that are received in regard to real estate transfer to the Department of Revenue and the Arizona State Library, Archives and Public Records.
HB2153 municipalities; counties; fire sprinklers; code – prohibits a city, town or county from adopting an ordinance that mandates the installation of fire sprinklers in single family homes.
SB1458 professional licensure; out-of-state applicants – requires a license be issued without an exam to a person who is married to an active duty member of the Armed Forces and who is accompanying the member to an official permanent change of station to a military installation located in Arizona if certain provisions are met (currently holds equivalent license in good standing in another state, previously passed an exam required for the license, has not had their license revoked or voluntarily surrendered for unprofessional conduct, etc.)
SB1609 retirement systems; plans; plan design (Certain sections become effective June 30, 2011) – makes changes to the existing contribution and benefit structures for the Arizona State Retirement System (ASRS), the Public Safety Personnel Retirement System (PSPRS), the Elected Officials Retirement Plan (EORP) and the Corrections Officers Retirement Plan (CORP); for ASRS, removes the 85 points system for all members, retains the 80 points system for members hired before July 1, 2011; changes age plus service requirements for members hired after the effective date of the bill to: age 55 and 30 years of service, age 60 and 25 years of service, age 62 and 10 years of service, age 65; makes numerous changes to the Alternate Contribution Rate.

Developers:

HB2005 subdivisions; acting in concert – states that either the county where a division occurred, or ADRE, but not both may enforce “acting in concert” statutes; asserts that a familial relationship alone is not sufficient to
constitute unlawful acting in concert; permits the county to waive the requirement to prepare, submit and receive approval of a preliminary plat as a condition precedent to submitting a final plate, as well as waive or reduce infrastructure standards or requirements; states that a creation of six or more lots, parcels or fractional interest is not subject to public report requirements when the sale or lease of a lot, parcel or fractional interest occurs ten or more years after the sale or lease of another lot, parcel or fractional interest and the other lot, parcel or fractional interest is not subject to public report requirements and is treated as an independent parcel, unless upon investigation by the Commissioner, it is found that there was evidence of intent to circumvent the subdivision laws; removes the provision that states that the commissioner may “take whatever other action he deems necessary to ensure compliance with the subdivision laws of this state”; states that the Commissioner has no longer than five years after an initial complaint is received or the commissioner initiates an investigation to determine if there was a violation of the subdivision statutes; finally, the bill limits the liability for developers when an untrue statement of material fact or omission of material fact on a public report is made by limiting the amount in damages that have to be paid.
SB1525 city; town; development fees (Section 9-463.05 becomes effective Dec. 37, 2011) – makes numerous changes to the statutes governing municipal development fees and infrastructure improvement plans.

Homeowner’s Association

HB2245 homeowners associations; open meetings; recordings – allows persons attending HOA meetings to tape record or videotape portions of the meeting. The Board of Directors of an HOA is allowed to adopt reasonable rules governing the taping of open meetings, but may not preclude the tape recording or videotaping.
HB2609 homeowners associations; signs; political; leasing – makes various changes to laws governing HOAs; prohibits HOAs from charging fees for the use or placement of an indoor or outdoor display of for rent or lease signs by a property owner on their own property; allows HOAs to prohibit signs that are not commercially produced; permits the HOA to prohibit the number of political signs earlier than 71 days, rather than 45 days before an election through 3 days after, rather than 7 days after an election and states that an HOA cannot prohibit the number of political signs that are displayed, except that maximum aggregate total dimensions of all political signs may not exceed nine square feet.
HB2717 homeowners’ associations; penalties; attorney fees – prevents an HOA from charging a fee for the use or placement of indoor or outdoor display of a for sale or lease sign by a unit owner on their property; clarifies that an HOA shall not prohibit in any other way than as specifically authorized in statute the use of temporary open house signs, a unit owner’s or their agent’s for sale sign and open house hours for property that is available for sale or lease; states that an HOA or managing agent that violates certain statutes governing the use of indoor, outdoor or political signs by a property owner on their property forfeits and extinguishes the lien rights authorized by statute against that unit or property for a period of six consecutive months from the date of the violation.
SB1148 homeowners associations; disputes; administrative hearings – asserts that the Department of Fire, Building and Life Safety applies and enforces the statutes regulating HOAs through its hearing officer function, as
well as the interpretation and enforcement of the otherwise private contracts and rules that govern those communities.
SB1149 planned communities; condominiums; document fees (Effective Dec. 31, 2011) – limits the fee that a planned community and condominium association can charge a unit owner for the preparation of required documents associated with the resale of a unit to an aggregate of 5400.
SB1326 flag display; homeowners associations – prevents an HOA from prohibiting the display of the Gadsden Flag; prevents an HOA from prohibiting the front or backyard display of flags allowed by statute; allowed HOAs to
limit the quantity of flags displayed at one time to no more than two; allowed HOAs to limit the height of the flagpole to no more than the member’s rooftop.
SB1540 political flyers; petitions; homeowners associations – allows HOAs to restrict door to door political activity regarding a candidate or ballot issue from sunset to sunrise; prohibits HOAs from regulating the number
of candidates, public officers or propositions supported or opposed on a political sign; states that HOAs may not
prohibit door to door political activity or the circulation of political petitions on property normally open to visitors
with an HOA.

Property Managers

HB2193 municipal water charges; responsibility – prohibits municipalities from requiring payment for unpaid water and wastewater rates from anyone other than the person who made the contract, resided at the property and received the service; prohibits municipalities from refusing service on the basis of unpaid water and wastewater rates to anyone but the person who resided at the property, and received the service; allows property owners and immediate family members to voluntarily contract with a city for water and wastewater services and provide payment for these services
SB1474 landlord; tenant fit and habitable – requires a tenant to promptly notify the landlord in writing when there is any situation that requires the landlord to take action and provide maintenance or repair; under the “self-help for minor defects” provisions of current law, prohibits the tenant from repairing the premises at the landlord’s expense if the repair does not constitute a breach of the fit and habitable condition of the premises.
S81160 city sales tax; residential rental (retroactive effective date of Dec. 31, 2010) – prevents a city or town from imposing or increasing sales tax on residential renters unless approved by municipal voters.
SB1306 landlords; tenants; bedbug control - stipulates that the landlord cannot knowingly lease a bedbug infested dwelling unit and is obligated to provide existing and new tenants with educational materials on bedbugs; stipulates that in regard to bedbug infestation control, a tenant is obligated to do all of the following: refrain from knowingly moving bedbug infested materials into a dwelling unit, and notify the landlord by written or electronic document; specifically excludes the landlord and tenants of a single family home from provisions of the bill; also prohibits a city, town or county board of supervisors from establishing ordinances or any other landlord or tenant requirements relating to bedbug control.
SB1155 municipal tax exemption; commercial lease - prevents cities or towns from levying transaction privilege tax, sales tax, use tax, or any similar tax on the gross proceeds of sales or gross income derived from commercial
lease between affiliated corporations, if at least 80% of the voting shares of each corporation are owned by the same shareholders.

Mortgage/Escrow/Appraisal-Related

HB2004 commercial mortgage brokers; license conversion (Effective retroactive to September 30, 2009) – allows a licensed mortgage broker to convert their license to a commercial mortgage broker and allows the Superintendent of the Department of Financial lnstitutions to write rules outlining the process for conversion.
HB2296 national banks; mortgage loan originators – allows federally chartered savings and loans to apply with the Department of Financial lnstitutions for certificates of exemption in order to supervise contracted agents as loan originators.
HB2297 escrow agents; recovery fund; repeal - repeals the Escrow Recovery Fund administered by the Department of Financial lnstitutions and reverts all remaining monies to the General Fund.
SB1180 board of appraisal; disciplinary proceedings – allows the Board of Appraisal to continue a disciplinary investigation even if the person under investigation surrenders their license or lets it lapse or expire; permits
investigations to continue up to 24 months after the license or certificate.

I received a call last week from a banker with JPMorgan Chase Bank in the Private Wealth Mgmt. Division announcing that they have begun offering lot loans and acquisition loans for small subdivision development projects. The target market for these loans are high net worth individuals with assets from $1Million and up. Loan rates, terms and prices are designed to meet individual needs on a case by case basis and are quite flexible. Although it is not required that you have an established relationship with JPMorgan Chase to apply and receive this type of loan, it is clearly their intent for this to be an entry into their network of financial services. These loans, thus, are viewed as “relationship loans”.

Although this product isn’t suited for much of the buying market, it is a niche product that certainly could be helpful to the small Builder/ Developer who wants to take advantage of land opportunities and re-enter the market. It also is a very good sign that lenders are starting to see renewed strength in the land market and want to be in a position to invest more funds in this market segment.

I would be happy to make a referral to anyone who contacts me.

Most people knowledgeable of the Tucson Land and Home Market would agree that we haven’t found a bottom quite yet evidenced by a continuation of lower sale prices. Despite this trend, I have noticed that the most recent foreclosed land and lot listings from certain lenders have come to market priced noticeably higher than in the past. Sometimes even higher than recent sales comparables of privately owned parcels. For example, I recently listed a lot in Catalina Foothills Estates in the low $300’s with no activity and literally no chance of selling in this market. Eventually we lowered the price to $249,000, a much more realistic price for an offer. Nothing came and the lot was taken back by National Bank of Arizona. That lot was just listed as a bank owned “great opportunity” at $288,150. Hardly a competitive price. In another case a couple of M&I owned, northwest, 4.13 acre parcels were brought to market at $200,000 each. They are a stone’s throw from 2 gorgeous and much more valuable, gated 4+ acre parcels in Serenita at Saguaro Ranch that recently closed at $175,000 each. Also close by is a similar 3.5 acre parcel that I just closed at $145,000.

I don’t know if banks are simply not doing their homework, not taking their Realtor’s advice or are less motivated to liquidate assets due to changing federal requirements and regulations. REO Land used to represent the best deals in the marketplace. That isn’t the case anymore and buyer should beware.

We always think of the term, “ready, willing and able” as a description of a qualified buyer in a real estate transaction. As we enter spring’s last big push of land sales to our winter visitors, it occurs to me that many sellers need to prepare their land and make it ready, willing and able to be sold. The shiniest toy catches most kid’s attention. The best display in a retail store increases sales. The cleanest and sharpest car on the lot is most likely to sell. Land is no different. The appearance of the property, particularly as a buyer enters , is extremely important and can make the difference between a buyer wanting your parcel or moving on to others. If the parcel is on a dirt road, filling in the ruts, low spots and grading can make a huge difference. If fencing, gates or walls are in disrepair, have them fixed before putting the property on the market. Some spring flowers or plants strategically located can be extremely inviting. Once on the property, buyers don’t want to see, and Realtors don’t want to explain, any junk, refuse, broken glass, construction equipment, vehicles, old sheds and other “stuff” laying around. This gives the buyer the impression that a seller doesn’t care about his property and leads to the thought that there may be other things the seller is “sloppy” about ; ie- regulations, title, surveys, encroachments, etc. If your land has special features such as rock outcroppings, picturesque mesquite trees or beautiful riparian areas, make sure that they are accessible and look their best. That may mean creating an easy walking path, trimming mistletoe and dead growth or clearing underbrush in particular areas. Look at your property through a buyer’s eyes. Anything that detracts from your property looking its best should be fixed.

Every year at about this time when I get the Assessor’s Notice of Value form for the upcoming year announcing that something has changed with my property, I start thinking about this amorphous term; value. On this form alone there is a reference to value, limited value, total full cash value, assessed value, improperly valued and valuation. Six variations of value in one letter! What do these all mean? Are there differences between these? Do they really matter? Additionally, we Realtors (I’m certainly guilty) are always making statements using words like, market value, appraised value, short sale value, foreclosure value, distressed value, full value, true value, partial value, under-valued and over-valued. Unfortunately, I’m sure we confuse, rather than clarify, by incorrectly using them interchangeably on a regular basis. And how about the non-real estate related meanings for value? They run the gamut from ethics, personal and cultural values, to economics, value theory or investing, to mathematic values or the value of lightness in different colors to name a few. In the Dictionary app on my iPhone there are no less than 18 definitions for this nebulous word.

I think I’ve just discovered my New Year’s resolution. I will attempt to enlighten rather than confuse by my written and verbal communications.

The majority of landowners that I talk to still feel that the land valuation used by the Assessor to compute annual property taxes is unrealistically high based on the most recent comparable sales throughout the Tucson area. Land, more so than single family homes, has taken a dramatic fall in value since the highs of 2005/2006 and continues to decline in price today. When this trend will stop nobody knows for sure. This week the Assessor is sending out notices of 2012 values which CAN and SHOULD be protested until April 5, 2011. Although most landowners should see a decline in the Full Cash Value (FCV) from 2011 to 2012, I expect that it will still be significantly higher than a real market value as reflected by actual sales. This is the benchmark that is supposed to be used; the sales price of comparable parcels.

To protest your valuation visit the Pima County Assessor’s website, www.asr.pima.gov, and download the necessary forms. The basis for protest will be that your parcel is valued higher than comparable parcels in your area. Evidence supporting this claim will be recent sales in your area which can be researched on the Tucson Association of Realtors website, www.tarmls.com, under Property Search, or that comparable parcels have a lower FCV than yours, which can be determined from the assessor’s site. It will take a little time but should be well worth your effort. If you’re having a difficult time doing this research on your own, feel free to contact me and I can refer you to companies that you can hire to represent you in this protest.

Remember, the window to file a protest is only open until April 5th. After that time, it will become significantly more difficult and costly to protest your 2012 valuation. The time to act is now.

Read the article from the Arizona Daily Stay on January 30, 2011. Click here.

In walking vacant land or lots in the Tucson area the most frequently encountered natural feature is probably the wash.Thus the most regularly asked question is, ” where do I build in relationship to the wash?”. Also referred to as flood plain, arroyos, water courses, natural drainage areas, or runoff areas, these clearly visible paths carry water produced by our infrequent rains or melting snows in the wintertime from the higher elevations of our surrounding mountain ranges. They come in all sizes and shapes; from narrow paths barely wide enough for one person to walk to deep, wide river beds the width of a football field. Some are deep with 50 foot steep walls and others shallow, flat, wide open areas. They seem to be everywhere and they have a major impact on how and where you build on your land.

Generally, there are two categories of washes according to Pima County; regulated and unregulated washes.The County has done extensive studies to determine the amount of water that each wash carries. If a wash carries 100 CFS (cubic feet per second) or more, it is regulated. If it carries less, it is not. The County has established setback requirements on regulated washes which set the minimum distance away from the wash that you may build. These vary from 50 feet on small washes to 250 feet or more on the large ones like the Agua Caliente or the Tanque Verde. Even on unregulated washes it is prudent to build a distance away from the water course. Consult Pima County Flood Plain Dept. and your builder for help. You can find out the setback in a variety of ways; from the recorded plat if the land is in a subdivision, Pima County Flood Plain website or a visit to their offices. Once you know the setback requirement, the question becomes where is the setback measured from. Many people think that it is measured from the center of the wash but this is wrong. It is actually measured from the ” toe of the wash” which is the point where the flat bottom of the wash meets the side bank that begins to elevate onto the property.