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.
rate cut could help ARM holders
Stephanie Armour and Sandra Block, USA TODAY
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
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
"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 Bankrate.com. 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, Bankrate.com 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
•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%, Bankrate.com 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.
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
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:
What star was in Cave Creek in 2007 and
rented out this popular eatery for a movie? (scroll down for
credit crisis nearing end
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
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.
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:
Fannie Mae payment rules eased
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
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
Take a Hike!
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.
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.
|Maricopa County Active Listings: 53,611
|Maricopa County Actives Last wk 54,470
|Carefree Active Homes (last wk
|Carefree Homes Under Contract
|Cave Creek Active Homes
|Cave Creek Homes Under Contract
|Scottsdale Zip Code 85262 Actives
|Scottsdale Zip 85262 Under Contract
|Paradise Valley Active Listings
|Paradise Valley Under Contract
|Paradise Valley Homes over $ 10 mil
|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
Carefree foreclosure/short sales 1
Cave Creek foreclosures/short sales 15
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
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: