| | MONTHLY NEWSLETTER from Bill Duffey February 2008 Newsletter  
RE/MAX Excalibur 480- 585- 2904 Happy 96th Birthday, Arizona! We have come a long way! | Arizona | Feb. 14, 1912
48th State | This region was sometimes called Arizona before 1863, although it was still in the Territory of New Mexico. |
The Buyer’s Market Continues… You know the national economy is in trouble when the Federal government starts giving tax money back to taxpayers! Are we in a Recession? One thing is for sure, they are sure not going to tell us until we are well into it! I hope for a soft landing in Scottsdale, this year, and an upturn in 2009. Continued interest rate reductions should help. In Arizona, our employment numbers are still very good, compared to the national average and although there are signs of economic slowing, we are in relatively good shape. Don’t confuse the national outlook with our Scottsdale area market. Yes, our real estate inventory is not moving very fast, but we will fare better than most areas of the country! As the value of the dollar continues to slide, foreign investors will continue to pump money into the U. S. to capture the “deals”. We are seeing a lot of foreign investment, here. A good sign! The second half of 2008 should be better, than the first half of the year. By 2009, we should be back to a normalized market. If you are considering listing your home, you need to be in the market – NOW! Call me to list your home - there is no time to spare. This will be a very short selling season! Remember, last year, over 13,000 homes listed and sold in Scottsdale (see chart, below). You cannot sell your home, unless it is listed – obviously. It may take awhile, but homes are in fact - selling! Be patient. Statewide, sales are down and listings are about the same, as last year. We are, however, slowly chipping away at that huge inventory and builders have all but stopped building, on spec. If you are a Buyer – NOW, is the time to buy! If you are trying to find the absolute low in the market – you will most likely miss it, anyway. Look for the bargains, right now. Besides the huge inventory, I have a number of properties (homes and land) that are not yet listed. All are a great values. Just give me a call. Regards, Bill  Bloomingdale's coming to CityNorth developmentCathryn Creno
The Arizona Republic
Feb. 15, 2008 11:57 AM The announcement Thursday that Bloomingdale's would open its first department store in Arizona is not just about having another place to buy Burberry, Fendi or Michael Kors. The deal speaks volumes about the faith that developers and retailers have placed in the future of Arizona's luxury-goods market — even as the current downturn has cut consumer spending dramatically. The store is set to open in fall 2009. It will be an anchor at the CityNorth project, which will feature department stores, luxury condos and offices. By then, officials are banking on an economic recovery being under way along with a continuation of the population boom and the insatiable shopping appetite of well-heeled consumers. That appears to be a relatively safe bet. Local and national experts say the Desert Ridge section of northeast Phoenix surrounding CityNorth and nearby north Scottsdale are among the most desirable places in the nation for retail. ****************************************** Arizona's economic challenge for 2008Betty Beard
The Arizona Republic
Dec. 31, 2007 05:19 PM The slumping housing industry isn't expected to rebound for almost a full year. Commercial real-estate growth may be slowing. Tax collections, another sign of economic health, are slumping. What lies ahead for Arizona's economy in 2008?
Six experts were asked to present their views, and what indicators they will be watching to signal a turnaround.
Some good news: Each of them cited some inherent strengths in the state. "The increasingly entrepreneurial climate in Arizona should also help in 2008," said Barbara Walchli, Phoenix portfolio manager for the Aquila Rocky Mountain Equity Fund "You can see it at the university level, the number of venture capitalists in the state, the business incubators, the amount of medical research now being done in the state. The Internet is making it possible for entrepreneurs to live and work in Arizona." Jay Butler, Director, Arizona State University Realty Studies Expectations: Much slower growth due to slowdown in housing market, as well as slower commercial real estate. "Since real estate and related industries are in a depression, it might not fit the definition of a recession, but it will feel like one. A key concern in early 2008 will be the impact of the employer-sanctions law on the overall economy and employment."
Indicators: Employment, especially potential growth sectors of health care and mining. Also how slow or how far down construction, retail and education will go.
Strengths: Diversity of the economy and continued growth. Dennis Hoffman, Director and associate dean for research and doctoral programs, Arizona State University's Center for Competitiveness and Prosperity Research. Exceptions: Most likely scenario is slow growth in first half of 2008 with some improvement in second half, assuming no more shocks in addition to housing, credit and oil problems. Risks include possibility that housing problems will spread to commercial real estate. "The U.S. economy will avoid recession but only by a whisker."
Indicators: Retail sales, especially auto sales; new claims for unemployment and AHCCCS assistance; estimated and withholding tax payments, and the business conditions index maintained by the Economic Outlook Center at the ASU W.P. School of Business.
Strengths: Diverse economy that includes export-oriented industries such as aerospace, defense and electronics; continued influx of residents and visitors, and growing number of science-related endeavors. Georganna Meyer, Chief economist, Arizona Department of Revenue. Expectations: "I expect the real estate market and contracting to continue to have reduced activity in 2008, but recovery should begin in 2009. As a result, I expect state tax revenues will grow only slightly in 2008, if at all. Whether we're in a recession or not, the results will be the same."
Indicators: Retail and contracting transaction privilege tax revenues and housing resale prices and building permits.
Strengths: "Arizona's job growth, while slower than what we've seen in recent years, outpaces many other states and continues to chug along. A strong stock market can help offset the negatives from the stagnant real estate market. Corporate profits continue to show strength." J. Scott Sperling, Economist, Moody's Economy.com, West Chester, Pa. Expectations: "I estimate that Arizona may already be in a recession, but if not, it is quite likely that Arizona will slip into recession in early 2008. We expect the housing situation will continue to deteriorate through the first half of the year, optimistically, and will be deeper than the national correction. The recession could extend longer if the current credit liquidity crisis persists through the second half of the year."
Indicators: Home sales, construction permits, payroll job growth and unemployment rate.
Strengths: Aerospace & defense-related employment; solid business investment spending and global demand for technology products. "Non-cyclical services such as health and education will provide some sort of floor over the short term as population growth continues." Marshall Vest, Economic and Business Research director, University of Arizona. Expectations: "It will be a number of months before economists can say for sure that Arizona's economy is contracting, but recent trends in the data that we do have are ominous. The homebuilding industry is in a freefall, mortgage-lending operations are closing, and other sectors that are part of the state's 'growth industry' are experiencing declining activity." Employment is declining in manufacturing, financial services, employment services, and information.
Indicators: Employment growth, unemployment rates, initial claims for unemployment insurance, and retail sales and other taxes. Also inventories of unsold housing or the housing months supply measure.
Strengths: Population growth, though it will slow because people can't sell their houses. Also exports of computers, electronics, transportation equipment, electrical equipment, machinery, minerals and ores and agricultural products. Mining has added nearly 2,000 jobs during the past year, an increase of almost 20 percent. ********************* Legal Changes Forgiven mortgage debt tax relief. Addressing the subprime lending crisis, a late 2007 law changes provides tax relief for homeowners whose mortgage debt is forgiven. Prior to the enactment of this law, a homeowner could be taxed on the amount of forgiven mortgage debt. For example, before this law, an individual with a $200,000 mortgage whose lender foreclosed on the home and sold it for $180,000 would have had to report $20,000 of income from the forgiven debt. The result would have been the same if the lender restructured the loan and reduced the principal amount to $180,000. Under the new law, a taxpayer does not have to pay federal income tax on up to $2 million of debt forgiven for a qualifying loan secured by a qualified principal residence (e.g., one to buy or renovate a residence). (Code Sec. 108(a)(1)(E), Code Sec. 108(h)(2)) The change applies to debts discharged from Jan. 1, 2007 to Dec. 31, 2009. Mortgage insurance deduction extended. Mortgage insurance premiums will continue to be deductible after 2007, thanks to another relief provision for homeowners. Originally, this deduction was available only for 2007. It now applies through 2010. (Code Sec. 163(h)(3)(E)(iv)) Basically, it allows taxpayers to treat amounts paid during the year for qualified mortgage insurance as home mortgage interest-and thus deductible in most instances. The special rule for home mortgage interest is phased out at higher levels of adjusted gross income (AGI). The insurance must be in connection with home acquisition debt, the insurance contract must have been issued after 2006, and the taxpayer must pay the premiums for coverage in effect during the year. [See Federal Taxes Weekly Alert 12/20/2007 for further discussion of this provision.] ************************************ Charts *************** 
Coming up, later this month! Two Custom Estate Homes $1.85M and $1.4M - both with views to die for!   Some of my LAND LISTINGS 
********************************************** If you get into a job that's over your head, call a professional. GO TO MY CONCIERGE PAGE FOR A LIST OF VENDORS. <click here Hope you enjoyed this newsletter...let me know if you have suggestions or if you would like me to write an article on any real estate subject.
Please remember that selling or buying your home is not a "do-it-yourself" project. Call me, and I'll handle all the details. I also have a "Moving Coach"! The service is Free for my clients. *Please consult your tax adviser. Please note: This email and any attachments contain confidential and/or privileged information for the sole use of the intended recipient. If you are not the intended recipient you may not read, disseminate, distribute or copy this email message or any attachments. Please notify the sender immediately (by reply email or phone) if you have received this email message by mistake and delete this email message, along with any attachments from your system. Email transmission cannot be guaranteed to be secure or error-free, as information could be intercepted, corrupted, lost, destroyed, delayed or may be incomplete. The Sender does not accept any liability for any errors, omissions or viruses in the contents of this email message or any attachment. This email also conforms with the Arizona Commercial Electronic Mailing Act of 2003. Your Privacy is important to me. I do not share your email information with any other party. If you do not wish to network in this way and desire to be removed from my newsletter email list, simply send me an email with "remove" in the subject line (click on the "email Bill" link. You will be excluded from the list, in a few days. Copyright 2008 Bill Duffey. All Rights Reserved.  To remove yourself from my mailing list, you can opt-out by just sending me an email.
Please put "remove" in the subject line. NOTE: If your home or property is currently listed for sale with a licensed Real Estate Broker, this is not intended to be a solicitation of that listing. It is not our intention to solicit the listing of another real estate Company. GO TO MY CONCIERGE PAGE FOR A LIST OF VENDORS. PS: I never receive any compensation from any vendor, ever!  
LEGAL STATEMENT <please click here to read Regards, Bill Duffey |
