The Dealmaker: 9/29/2017

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The Dealmaker is a daily note of the day’s top real estate stories served just in time for lunch. Bon Appetit! Subscribe here to receive the Dealmaker to your inbox





Forward-looking homeowners want rooms that do double duty. With “a resurgence in demand for bonus spaces that serve multiple purposes — “from man cave to master bedroom to music room” — builders are responding, including Scottsdale-based Cullum Homes, which is “incorporating flex spaces in homes throughout [its] luxury development” at Mountain Shadows. (NOTE: The story is Wall Street Journal subscriber content. Grrr!).

Real estate pros say prices to continue to escalate. <— That, according to the August 2017 REALTORS® Confidence Index. REALTORMag has an index overview and a link to the full report, where you can see how Arizona stacks up for buyer & seller traffic, days on market, and expected price increases.

Most expensive home sales in Phoenix. Arizona Foothills Magazine is out with an ALL NEW scroll-show of “the Valley’s top home sales from the past week (9.18.17 – 9.24.17). The combined sales for the top 10 of the past week was over $22 million,” up from the previous week’s $13 million.

New versus resale home prices: Risk and opportunity. “Using… broad-stroke rough estimates, people who buy new homes pay almost $20,000 more for homeownership than people who buy resales for reasons strictly to do with land use fees, taxes, etc… Still, setting aside that $20,000, there’s another $47,000 dividing new home median prices from existing homes.” But Builder’s John McManus maintains that a “disruptor will likely find a way to cut the current 27% new-home price premium by almost half.”

Home equity lines of credit. “The decline in home prices after 2007 and the potential for rising interest rates resulted in a fear that a substantial number of HELOC borrowers would default on the loans upon reaching the end of their draw period.” However, this report from CoreLogic shows that “robust home price appreciation in recent years and continued low interest rates have mitigated default risks for recent cohorts reaching the end of draw.”

’It just has to go’: Plans for crumbling Phoenix housing projects threatened by new HUD cuts. “Phoenix planned to rebuild Edison-Eastlake the new way. It wanted a community where people could thrive, and to pay for [rebuilding of the ’75-year-old project near downtown’] the city eyed a $30 million grant from HUD’s popular Choice Neighborhoods grant program. Then the federal government outlined next year’s budget.” Read the story at AZCentral.

Deep Well debate: P&Z commissioners want fewer houses, developers more. “Several commissioners continued their objections on Thursday… to the Deep Well Ranch’s plans to build 10,500 homes on 1,800 acres of ranch land in northeast Prescott.” It’s an issue that’s probably summed up best with a paraphrase of a question that Bob Dylan raises in his song “Blowin’ In The Wind”: “How many homes must one development have, before you call it too dense?” And the answer, my friend, might be found in The Daily Courier’s coverage of the density debate:

Judge sides with Phoenix Chinese Cultural Center preservationists.“Superior Court judge [Randall H. Warner] has ruled in favor of a restaurant owner whose business [Szechwan Palace Restaurant] is still open at the center. The business owner [CJ Design & Construction Corporation] hopes that legal action can stop planned renovations at the site.” But, as Phoenix New Times reports, “Wednesday’s ruling is just one piece of a complicated legal battle between Chinese Cultural Center supporters and the site’s new owner.”

Hopi Elementary community gathers one last time before rebuild commences. “[Plans call for] an 18-month project that would… include a one-story school building, separate administration building, four playgrounds and three basketball courts… Several members of the Hopi Elementary community gathered at a Sept. 27 meeting… to see one last presentation and ask questions on the rebuild.” Scottsdale Independent reports that the rebuild is set to start “in just a couple of days, although to the dismay of some parents and community members.”

New downtown Flagstaff hotel brings more than just views. (One would certainly hope so! Kinda weird if all you had were views and not things like icemachine, beds, towels, doorknobs, maid service, vending machines, walls, “Do Not Disturb” signs, etc. That would be called a “field,” wouldn’t it? Moving on…) “[T]he Marriott Residence Inn on Humphreys Street… is one of the first private developments in the downtown area in the last 75 years… Rooms on the north side of the building boast views of the mountains as well as the historic district.” For info on some of the hotel’s other features, head to Arizona Daily Sun.

Regents approve UA’s $137M Honors College complex. “The Arizona Board of Regents on Thursday unanimously approved for the University of Arizona to begin constructing a $137 million Honors College complex, described by the school as a “campus within a campus…. The idea for the project is to have one defined area for honors students to sleep, attend classes, eat and recreate.” Arizona Daily Star.

Water wars: Are hundreds of residents going to go thirsty north of Phoenix? The Republic looks into a story that we brought to you yesterday, and which first caught our attention in NoPhoNews: “Hundreds of residents are slated to lose affordable access to privately hauled drinking water at the end of the year because of a city of Phoenix crackdown on water haulers refilling from city fire hydrants. Meanwhile, families who own wells are anxiously watching groundwater levels drop as population growth sucks the already shallow aquifer dry.” KEY QUOTE: ‘Frustration is an understatement. Anger is a better word.”

[COLUMN] Díaz: How Kyrsten Sinema’s Senate bid unravels Phoenix City Hall. AZCentral editorial board member Elvia Díaz writes that “Sinema not only sent Republicans into a frenzy, but she also opened the gates to a Phoenix Hunger Games for the mayoral and city council seats.” Check out the five impacts — the “domino effect” — that Díaz says Sinema will have on the Phoenix races.

Mesa City Council appoints Francisco Heredia to replace Ryan Winkle.“Heredia is a former field director for Latino civic-engagement organization Mi Familia Vota and director for One Arizona. More recently, he was in community relations at the Maricopa County Recorder’s Office…” Learn more about now-Councilman Heredia at AZCentral.

The most livable mid-sized cities in the U.S. Check out the SmartAssetrankings of “some fantastic places in the United States that boast more affordable homes, low unemployment rates and come without the hustle and bustle of big cities.” (And see what Valley suburb cracks SmartAsset’s top 25!)

GDP growth in Q2 ticks up with third estimate. “The nation’s economy, measured by real gross domestic product (GDP), rose by 3.1 percent over the April to June period. This rate of growth exceeds the 1.2 percent pace recorded in the first quarter of 2017 and is the highest of the three second quarter growth estimates.” It’s a chart-’n-graphs-fest in Eye On Housing, which examines this latest GDP data from the U.S. Bureau of Economic Analysis. –> 

Cameron’s $5M + deals of the day –

As a supplement to the Dealmaker, we thought you might enjoy these articles!

Sinema challenges Flake in showdown for U.S. Senate seat. As mentioned previously: “Democratic U.S. Rep. Kyrsten Sinema announced [yesterday] that she is running for the U.S. Senate, setting up a showdown with U.S. Sen. Jeff Flake in what is likely to be Arizona’s biggest political race in 2018.” Arizona Capitol Times has the story along with a link to the (dare we say, a “Sinematic”) YouTube video “announcing her run.”

ASU coach comments on the scandal that puts cloud over college basketball as season starts. “A federal probe has led to the arrests of four assistant coaches, including Arizona’s Emanuel ‘Book’ Richardson [for allegedly accepting bribes]… In Tempe, Arizona State coach Bobby Hurley on Thursday declared it a ‘tough’ time for a sport that shaped him into who he is today.” AZCentral has Hurley’s remarks, but the question still hanging out there is: “What does it all mean for UA coach Sean Miller?” 

Budget process brings more discord among utility regulators.“[The Arizona Corporation Commission] is now giving extra money to some commissioners to lead workshops on special issues. And the idea of budgeting additional money for newly created committees… led Commissioner Bob Burns to dissent from the commission’s budget request…” Snarky Quote of the Day comes courtesy of commission chairman Tom Forese: “If I signed a birthday card, Bob Burns would dissent.” (Also from Arizona Capitol Times: “Agencies make case for new spending, but most requests likely doomed.”)

Elon Musk: SpaceX can colonize Mars and build moon base. “Musk has unveiled plans for a new spacecraft [codenamed ‘BFR’] that he says would allow his company SpaceX to colonize Mars, build a base on the moon, and allow commercial travel to anywhere on Earth in under an hour.” (To which HHS Secretary Tom Price reportedly said, “No, thanks. I’d rather take my sweet time by chartering a plane on the taxpayer dime.”) Further details, including what the $%#! the acronym BFR stands for, in The Guardian

Arizona on the verge of a nursing shortage. “Arizona State University reports there will be 28,100 nurse openings in the state by 2025… In as many as 30 states, health care organizations are finding it difficult to fill nursing positions.” And in keeping with this “shortage” theme, you can read a very brief summary of the original PBJ report on the scarcity of nurses, in Rose Law Group Reporter.

[OPINION] The cat’s out of the bag . . . and onto the ballot. In this piece for Rose Law Group Reporter “Growlery,” Senior Reporter/Writer Phil Riske roars out his approval for a proposed ballot initiative from the Humane Society that would “outlaw the practice of ‘trophy hunting’ of mountain lions” in Arizona.

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September 2017