Fed Chairman: "We'll Take A Look At That"

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Millionaire Now! by Larry Nusbaum

This blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth".

Fed Chairman: "We'll Take A Look At That"

Posted on 03/28/2007 10:24 AM | Link | Post Comment

Housing permits up 26% in February from the Arizona Republic, reports that permits for new-homes in Maricopa and Pinal counties jumped 26% in February compared with the previous month, the third monthly increase. Builders pulled 3,630 permits in February, according to the latest report from RL Brown's Phoenix Housing Market Letter . Brown stated that 18 percent of the February permit total was for condos. The increase in permits indicates that builders are starting to make a dent in their excess inventory and are looking to start new construction. Brown said that clearing out the excess inventory in both the new-home and resale market is key to any correction. Brown said that the spec inventory is falling as more builders buckle down. Brown's report also noted that the number of closed sales was the lowest since May 2003.

. Arizona's pay growth lags U.S. rate from the Arizona Republic, reports that new income figures released by the U.S. Bureau of Economic Analysis shows that Arizona's per capita income rose 4.8 percent last year to $31,458, ranking it 39th in the country. The typical American earned $36,276 last year, an increase of 5.2 percent over the prior year. Arizona's income figures are kept in check in part because of the state's rapid growth. "It's kind of a double-edged sword," said Tracy Clark, an economist with ASU. "Rapid population growth tends to hold wages down because there is always somebody moving in to take a job. What typically drives wages up is some shortage in labor."

. Peoria upscale homes fill niche from the Arizona Republic, reports that a new, upscale gated community is opening in Vistancia which will give buyers looking for luxury homes in the Northwest Valley more options. Blackstone will be a gated country-club style development with homes in the $600,000 to almost $1 million. Cachet Homes and TW Lewis just opened their models last weekend. Blackstone will have 350 builder homes and 150 custom homes to go along with the Blackstone golf course and a 30,000 square foot clubhouse. Curt Smith, chief operating officer for Sunbelt Holdings, which is co-developing Vistancia with Shea Homes, said "we felt a country club lifestyle was something that was missing in the market here."

Apartment Market Sizzles in the Valley of the Sun:

Apartment brokers Marcus & Millichap, in ranking Phoenix the nation's No. 10 market for apartment investors (down from No. 12 in '06), says of the local rental climate ...

"Asking rents are expected to gain 5.4 percent, to $1,543 per month, while effective rents are forecast to increase 5.9 percent, to $785 per month, this year. Asking and effective rents each climbed5.7 percent in 2006. Vacancy is expected to remain steady at 4.6 percent in 2007 as new units are quickly absorbed."

• Declining housing affordability will continue to support the Phoenix apartment market in 2007. While the local housing market has cooled, the median price for a single-family home in Phoenix is approaching $255,000, making it tougher for current renters to become first-time buyers, but still more affordable than both coats.

• While condos will tempt some renters, the gap between mortgage payments for the median-priced condo and the average Class A asking rent has increased significantly in the past year.

• Strong fundamentals will continue to attract institutional buyers to Phoenix. Investors may target more affordable properties to the west and in Pinal, while strong revenue growth should continue to drive prices higher for downtown properties.

To read more, CLICK HERE.

I first noted this trend in September HERE & October, HERE, with an update in February HERE when Apartment Owners Remained Bullish.

Housing Bubble and Real Estate Market Tracker from SA for 3/27

The S&P composite index of 10 major U.S. cities fell at a 0.7 percent annual rate, the first drop since 1996. This index tracks "repeat sales" rather than a median price for single-family residences in the region. That means it tracks the typical gain or loss a local seller experienced, then combined all those results into a two-month moving average of the math. Read more HERE and read Eddy's take HERE.

Jim Hamilton looks at the housing market in "Bubble, bubble, toil, and trouble."

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