The Carefree Times blog      

Today's Forecast Sunny. Hi 75 Never Windy

Volume 1, June 2008 Edition






Commentary and Perspective from one of America's most unique small town areas, edited by Preston Westmoreland of Russ Lyon Sotheby's International Realty.

Fed's interest rate cut could help ARM holders

By Stephanie Armour and Sandra Block, USA TODAY

May 1 2008

The Federal Reserve's action on Wednesday was the latest in an interest-rate-cutting drive over eight months that's helped lower the yields that many adjustable-rate mortgages are tied to.

Thanks to the Fed's cuts, the rates to which those ARMs have been resetting have sometimes saved homeowners hundreds of dollars a month. For some struggling mortgage holders, the lower rates have helped stave off delinquencies or foreclosures.

"This could be the difference between a person being current (on a mortgage) or delinquent," says Orawin Velz, senior research director at the Mortgage Bankers Association. "The risk of foreclosures due to resets has declined."

But Wednesday's cut might not bring any further relief for ARM holders, says Greg McBride, a senior analyst at The benchmark indexes for ARMs had already factored in Wednesday's Fed rate cut, he says. ARM holders, McBride says, "got the benefit back in March."

Still, the Fed's action, its seventh cut since September, could bring other benefits. The average rate on a home-equity line of credit fell to 5.7% last week from 7.3% in January, says; the average on a home-equity loan was 7.73%. Those rates move in direct response to Fed cuts, so they could fall further this week, McBride says.

Other effects on consumers:

•Possible relief ahead for savers. As is usually true when the Fed cuts, savers with certificates of deposit will see lower rates, though their discomfort could end soon if the Fed halts its rate cutting. "We are at or near the bottom on CD yields," McBride says. "If the Fed moves to the sidelines, that will be the first good news savers have had in a long time."

Last week, the average one-year CD rate was 1.93%, says. But to try to draw more deposits, some financial institutions are dangling much higher rates, McBride says, so savers should shop around.

•Some credit card holders win. Consumers with variable-rate credit cards could benefit, because those rates also tend to move in lockstep with the Fed, McBride says. But the lower rates will be restricted to those with top-notch credit. Saddled with losses from other consumer loans, banks have sharply raised rates for customers considered risky, even if they've paid their bills on time and have decent credit.

•Easing payments for some subprime borrowers. Many subprime loans are ARMs that impose much higher payments once they reset. Nearly 90% of subprime mortgages issued from 2004 to 2006 charge low rates that rise rapidly after a year or two, the Center for Responsible Lending says. To read more:


The Last Flower. .

Phoenix temperatures have already hit 110 degrees and locals know when the mammoth saguaro cactus blossoms, that's the end of the wildflower season.  How amazing it is to see a plant that can grow  as slow as one inch a year, evolve into a giant that weighs several tons!  A plant that ages up to 70 years before a flower ever comes out, and eighty years before an arm emerges. The pleated body of the saguaro expands like an accordion when rain falls on it's shallow roots, and and shrinks down skinny in extended drought  periods.  These protected cactus can have as many as 20 arms emerging, yet the tallest documented saguaro in the world had no arms, and used the energy to shoot skyward for record-breaking height.  Be watching this site for rare photographs of the tallest saguaro in the world, located in Cave Creek, BEFORE it fell over in a storm. How much do you know about the southwest deserts?  Be sure to take  one of the desert survival quizzes at:

Today's Quiz?????

What star was in Cave Creek in 2007 and rented out this popular eatery for a movie? (scroll down for answer)

















































Economists see credit crisis nearing end

Forecasters expect credit conditions to improve in the second half of the year; outlook for economic growth scaled back.

Last Updated: May 19, 2008: 9:07 AM EDT

WASHINGTON (AP) -- First the good news: The worst of the painful housing slump and the credit crunch might come to an end this year. Now the bad: The economy will weaken further and unemployment will rise.

That's the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym NABE. It will take time for any rays of light to poke through the economic clouds, though.

A growing number of economists believe the country is on the brink of a recession or in one already, dragged down by all the problems in housing, credit and financial markets. Now 56% of the economists think the economy has started or will enter a recession this year. That's up from 45% in a survey in February. If there is a recession, it probably will be short and shallow, economists said.

Forecasters downgraded their projections for economic growth. They now predict the economy, which grew by 2.2% last year, will slow to 1.4% this year. That's lower than the 1.8% growth projected in February. If the new figure proves correct, it would mark the weakest growth since the last recession in 2001.  Next year, the economy should grow by 2.3%, less than previously forecast and a pace that is still considered subpar.

"Although housing and credit markets will gradually loosen their grip, U.S. economic growth is expected to only slowly return to health," said Ellen Hughes-Cromwick, president of NABE and chief economist at Ford Motor Co.

Given the outlook for sluggish overall economic activity, companies are likely to remain cautious in their spending and hiring.

The unemployment rate, which averaged 4.6% last year, will move higher. Forecasters predict the jobless rate will hit 5.3% this year and 5.6% next year.

Forecasters are hopeful that the housing slump - in terms of home sales - will hit bottom this year. However, economists were divided over whether the low point would be reached in the second, third or fourth quarters of this year. House prices, though, are still expected to drop this year and next.

On the credit front, economists predict conditions will improve in the second half of this year.

"The economy is still going to be weak in the very near term, but the worst is likely to end this year with respect to the housing decline and the credit crunch," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group, who was involved in the NABE survey. The survey of 52 forecasters was conducted April 17 through May 1. Find out more:



Give us your comment: Email us your thoughts on the area and real estate trends to:

Fannie Mae payment rules eased

Alan Zibel
Associated Press
May. 17, 2008 12:00 AM

The Arizona Republic

WASHINGTON - Lending giant Fannie Mae is doing away with higher minimum down-payment requirements for borrowers in parts of the U.S. where home prices are dropping.
The government-sponsored mortgage-finance company said Friday it will require minimum down payments of between 3 percent and 5 percent for all loans it guarantees. That replaces a December rule requiring a higher minimum if the loan was for a home in a ZIP code with declining real-estate prices.

When Fannie Mae tagged metro Phoenix a declining housing market in January, the residential market suffered. Dozens of home sales fell through because borrowers couldn't come up with the extra cash required for a down payment, and the status of buying in a declining market spooked some potential buyers.




















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Take a Hike! Now that access issues have been resolved, enjoy the Black Mountain Trail 




Cave Creek, AZ-After being shut down for several years while a better access route was being found, the summit of Black Mountain is once again open on the Black Mountain Trail in Cave Creek.  Homeowners had complained of constant hikers skirting their property from the older trailhead, and now, access is off of School House Road and requires hikers to park a quarter-mile down the hill.  Black Mountain Conservancy has done much work to keep the mountain open and publishes an excellent hiker's guide available at the Cave Creek and Carefree Town halls.  Recommended parking is behind Frontier Town, in a lot along Mark Way. On a clear day, enjoy views all the way to Kitt Peak and Mexico! Bring plenty of water during the hot summer months and hike in the cooler parts of the day.

Trail Information: Summit-3,398 ft 2.2 miles long Gains 1,000 ft.


Quiz Answer: What star rented out Big Earl's Greasy Eat's to use in a movie?Answer:  Donald Sutherland and the cast of "Jolene" used the converted 1950's gas station as a car hop restaurant. Big Earl's Greasy Eats is open at 6135 E. Cave Creek Road. The movie is out on DVD August, 2008.
Real Estate Stat Box
Maricopa County Active Listings:  53,611
Maricopa County Actives Last wk  54,470
Carefree Active Homes (last wk 150)  135
Carefree Homes Under Contract         11  
Cave Creek Active Homes                 579
Cave Creek Homes Under Contract      52
Scottsdale Zip Code 85262 Actives      979
Scottsdale Zip 85262 Under Contract    36
Paradise Valley Active Listings          457
Paradise Valley  Under Contract          31
Paradise Valley Homes over $ 10 mil    16
Most Expensive P.V. Home listed  $20 mil
Homes sold in the last 30 days/1 year ago: Carefree-4/5, Cave Creek 25/35, Scottsdale zip 85262- 30/71
Current Carefree foreclosure/short sales 1

Cave Creek foreclosures/short sales     15  




Real Estate Hot Tips

A Little Bit of Europe Comes to Carefree

Carefee/Cave Creek                        by Preston Westmoreland with dispatches from "The Chronicle"

Yes, this column may be a little self-serving today, as I work for Russ Lyon Realty, but there's been an interesting development this week.  Before I explain, let me go back years ago, when I was advertising on the radio for new developments in North Scottsdale like Troon.  I remember a rental agent told me that Prince Rainier of Monaco had  reserved a house in the Troon area to vacation in seclusion, something he would do from time to time.  I thought, "wow, here's a man who could vacation anywhere in the world, and he chose here." On occasion, you would hear about Celine Dion golfing on a nearby course at Desert Mountain or John Denver laying by the Boulders Resort pool after a busy concert tour.  When Dick Van Dyke, Paul Harvey and Hugh Downs settled out here, people knew this was the place you went, if you wanted beauty. .and privacy.  Now. . . .here's what has happened. . .one of the most famous companies in the world,  is involved in selling area real estate.  The long anticipated merger of Russ Lyon Realty, a company with deep roots in the luxury home market for 60 years here, and Equitable Sotheby's, was announced May 19th,  to form Sotheby's largest franchisee in the world. Russ Lyon Sotheby's International Realty has close to 1,000 of Arizona's top agents in the Greater Phoenix area, Flagstaff, Prescott and Sedona. 

"Luxury real estate in Arizona is a very attractive market for Sotheby's International Realty's clients globally," explained Michael R. Good, President and CEO of Sotheby's International Realty Affiliates, LLC. Roots of the company, which serves affluent clients around the world,  go back to 1744, to the venerable Sotheby's auction house. We're still located in that striking southwest building just south of the Boulders Resort.   Moving to the area?  Check out our website for more information at:

Click on the "Moving Here" button

















Who to Believe?Valley home-sales reports are at odds

Trustee-sales figures skew real-estate picture

J. Craig Anderson
The Arizona Republic
May. 20, 2008 12:00 AM

One sign of the Valley's troubled housing market is the growing incidence of lenders assuming ownership of homes.
Ironically, the increasing number of those transactions has led to a false perception that the real-estate market may be showing signs of recovery.
The confusion stems from a report on April home sales by Jay Butler, director of real-estate studies at Arizona State University's Morrison School of Management and Agribusiness. Butler compiles a report each month on home-resale transactions in Maricopa County.
The report said home resales were up 15 percent compared with the same month in 2007, the first year-over-year increase since July 2005.
That conflicts with a report released Monday by the Arizona Regional Multiple Listing Service indicating a 12 percent decrease in home sales in the same period.
The reason is Butler's report does not differentiate between "trustee sales," in which banks take over properties from borrowers in default, and routine home resales.

More than one-third of the sales reported by Butler for April, or 2,025 of the 5,585 total, were trustee sales. To read more: