The Wall Street Journal recently reported that some well-known home builders and lenders have offered home buyers incentives that make it difficult for consumers, Realtors, appraisers and lenders to know how much some home buyers actually paid for their houses.
If home builders are selling houses for less than they used to, it's not in their best interests to make this public knowledge. Public disclosure of reduced sale prices could anger buyers who recently paid higher prices, and it could also make it more difficult for the builder to unload his housing inventory. So while the recorded sale price may be the same as it would have been six months earlier, some builders may have offered incentives like cars, free upgrades and cash back to the buyer. These incentives conceal the fact that the cost to the buyer and the net to the seller were actually less than the sale price.
The article said giving cash back to buyers isn't illegal as long as it's disclosed to the lenders and any investors who may buy the mortgage. This was news to me, as I had always thought that cash rebates were just not allowed by lenders. It's obvious why the lender wouldn't approve a cash rebate or other kick backs to the buyer. If the lender loans $200,000 for a house, but the buyer wouldn't have bought the house without the free Mustang convertible or $30,000 cash rebate from the builder, the house is worth less than $200,000, and the lender is going to have trouble selling it if the buyer defaults.
This article also described a ruse that wasn't on my radar screen. A home builder may hire a company to find a buyer for its house. In the example given, KB Homes in Parker, Colorado sold a house for $196,000. That was the sale price recorded with the county clerk. However, KB paid a third party $27,600 for locating the buyer. Some of that payment to the third party may have been passed on the buyer. At any rate, the net to KB was $168,400. This is the actual value of the house, without the rebates. The buyer obtained two loans totaling $176,400, which is 5% more than the net to KB. So the buyer was already "upside down", owing more than the house was worth.
I don't know whether this sort of hocus pocus occurred in Tucson, and I don't know whether it's still going on anywhere. The sales described in the article occurred before the mortgage industry melt down in August 2007. Many of the lenders who made these Wild West maneuvers have gone out of business. But the damage is done. Buyers need to look very carefully at comparable sales when deciding how much to offer for a house, because the recorded sale price may not show all the terms of the sale. If there were hidden rebates and incentives, the actual value of the comparable sales is lower.
Occasionally, appraisers will call me to ask about the terms and conditions on a house I sold. Perhaps they are trying to find out whether there were any hidden rebates or incentives that aren't recorded in the public record. This Journal article stated that Realtors and builders are not required to disclose the terms of past sales to appraisers, so appraisers may not be able to determine the actual value of the houses they use as comparable sales.
Sunday, December 30, 2007
Loan Fraud
I have seen some strange property listings in the past year. They follow the pattern of a Central Tucson house that is currently in escrow. Here's the home's sale history:
March 2006, sold for $201,000.
May 2006, sold for $350,000.
August 2006, sold for $375,000.
In November 2007, the lender from the May 2006 sale purchased the house for $319,000. All these transaction occurred outside the Multiple Listing Service. Now it's listed for sale at $230,000.
What's going on? I went to see this house, expecting that it had been over-improved by some ill-advised investor, but that wasn't the case. Original kitchen, windowless dining room in the center of the house, mish mash of floor coverings, no landscaping. The carport was hastily enclosed with small windows and wall AC, and it still has the unfinished, sloping, concrete floor, but the carport enclosure is brazenly called a bedroom. Your typical Central Tucson do-it-to-yourself project.
I asked the listing agent why it was listed at $145,000 below last year's sale price, and she said she thought $230,000 was about what it was worth. She didn't know why someone paid $375,000 for a house that has such a bad floor plan and no upgrades. Her client (the current owner) is the lender who acquired it from the $375,000 purchaser. She thought loan fraud may have something to do with it.
That seems like a good guess to me, too. Before the lender bought it, the buyer who paid $375,000 received 100% financing, in the form of two loans, one for $300,000 and one for $75,000. There's no way a legitimate appraiser could say this house was ever worth $375,000.
The problem with these high jinks is they distort the comparable sale data that we Realtors use to evaluate property values. Any real estate agent familiar with Central Tucson would look at the $375,000 sale price and know something is fishy. Unfortunately, agents who are new to this business might not hear alarms, because they may not realize they should look at the sale history of any house they are selling.
Inflated sale prices may also skew the automated programs like Zillow.com, as well as the program that calculates our property taxes. Bogus sales give sellers unrealistic expectations of their home equity, and may cause unwary buyers to over pay for comparable houses.
March 2006, sold for $201,000.
May 2006, sold for $350,000.
August 2006, sold for $375,000.
In November 2007, the lender from the May 2006 sale purchased the house for $319,000. All these transaction occurred outside the Multiple Listing Service. Now it's listed for sale at $230,000.
What's going on? I went to see this house, expecting that it had been over-improved by some ill-advised investor, but that wasn't the case. Original kitchen, windowless dining room in the center of the house, mish mash of floor coverings, no landscaping. The carport was hastily enclosed with small windows and wall AC, and it still has the unfinished, sloping, concrete floor, but the carport enclosure is brazenly called a bedroom. Your typical Central Tucson do-it-to-yourself project.
I asked the listing agent why it was listed at $145,000 below last year's sale price, and she said she thought $230,000 was about what it was worth. She didn't know why someone paid $375,000 for a house that has such a bad floor plan and no upgrades. Her client (the current owner) is the lender who acquired it from the $375,000 purchaser. She thought loan fraud may have something to do with it.
That seems like a good guess to me, too. Before the lender bought it, the buyer who paid $375,000 received 100% financing, in the form of two loans, one for $300,000 and one for $75,000. There's no way a legitimate appraiser could say this house was ever worth $375,000.
The problem with these high jinks is they distort the comparable sale data that we Realtors use to evaluate property values. Any real estate agent familiar with Central Tucson would look at the $375,000 sale price and know something is fishy. Unfortunately, agents who are new to this business might not hear alarms, because they may not realize they should look at the sale history of any house they are selling.
Inflated sale prices may also skew the automated programs like Zillow.com, as well as the program that calculates our property taxes. Bogus sales give sellers unrealistic expectations of their home equity, and may cause unwary buyers to over pay for comparable houses.
Escrow Account Review
Those of us who have mortgages will receive an extra page with this month's statement. When you make your monthly mortgage payment, you're paying principal and interest, plus one-twelfth of your annual property tax and homeowner's insurance (PITI). The tax and insurance payments go into an escrow account and the mortgage lender pays your taxes and insurance when they are due.
Each year, your mortgage lender reviews the escrow account to determine whether your payments into the escrow account will be sufficient to pay the bills. This escrow account review is the extra page in your December statement.
The mortgage lender provides a list showing how much they expect to receive from you each month next year for your escrow account. They will also list anticipated payments they will make for tax and insurance. Half of your annual property tax will be paid in April, and half will be paid in October. One whole year's insurance premium will be paid on the anniversary of the month you received your home loan.
Most months, there will be money left in your escrow account. During the months when the property tax is paid, the escrow account balance may drop into the red. The lender, of course, doesn't like this, because they will have to pay part of your property tax with their own funds. They'd rather keep the balance comfortably above zero.
If the escrow account analysis shows the balance will fall below zero, the mortgage lender will divide the lowest projected negative balance by 12 and add that amount to your mortgage payment. Fair enough.
What I don't like is the reserve requirement, which, you will find, is not a requirement at all. My statement from my lender says "Federal law allows for the collection of a reserve amount to maintain a cushion for unexpected tax and/or insurance increases and other costs". To calculate the reserve amount, the lender first adds up the total payments they expect to receive from you next year for tax and insurance. These total payments are called the base amount.
The maximum amount of reserve amount the lender can collect is one-sixth or 16.6% of the base amount, equivalent to two months' of taxes and insurance.
Back when my mortgage lender was collecting the reserve amount on my loans, my escrow account always had at least a few hundred dollars in it. This is my money, and I decided I'd rather have it in my bank account than my lender's. A few years ago, I called my lender and told them my taxes and insurance have never increased 16% in one year, and I didn't want to pay this reserve amount.
I thought they would agree to make the reserve amount a smaller percentage of my base amount. To my great surprise, they agreed to reduce my reserve amount to zero. Even more surprising, they have permanently changed my reserve amount to zero. I don't have to call them every year to ask them to make this change.
So give it a try. Call your lender and tell them you don't want them charging you 16% of your base amount for the reserve amount. Let me know what they tell you. Good luck.
Each year, your mortgage lender reviews the escrow account to determine whether your payments into the escrow account will be sufficient to pay the bills. This escrow account review is the extra page in your December statement.
The mortgage lender provides a list showing how much they expect to receive from you each month next year for your escrow account. They will also list anticipated payments they will make for tax and insurance. Half of your annual property tax will be paid in April, and half will be paid in October. One whole year's insurance premium will be paid on the anniversary of the month you received your home loan.
Most months, there will be money left in your escrow account. During the months when the property tax is paid, the escrow account balance may drop into the red. The lender, of course, doesn't like this, because they will have to pay part of your property tax with their own funds. They'd rather keep the balance comfortably above zero.
If the escrow account analysis shows the balance will fall below zero, the mortgage lender will divide the lowest projected negative balance by 12 and add that amount to your mortgage payment. Fair enough.
What I don't like is the reserve requirement, which, you will find, is not a requirement at all. My statement from my lender says "Federal law allows for the collection of a reserve amount to maintain a cushion for unexpected tax and/or insurance increases and other costs". To calculate the reserve amount, the lender first adds up the total payments they expect to receive from you next year for tax and insurance. These total payments are called the base amount.
The maximum amount of reserve amount the lender can collect is one-sixth or 16.6% of the base amount, equivalent to two months' of taxes and insurance.
Back when my mortgage lender was collecting the reserve amount on my loans, my escrow account always had at least a few hundred dollars in it. This is my money, and I decided I'd rather have it in my bank account than my lender's. A few years ago, I called my lender and told them my taxes and insurance have never increased 16% in one year, and I didn't want to pay this reserve amount.
I thought they would agree to make the reserve amount a smaller percentage of my base amount. To my great surprise, they agreed to reduce my reserve amount to zero. Even more surprising, they have permanently changed my reserve amount to zero. I don't have to call them every year to ask them to make this change.
So give it a try. Call your lender and tell them you don't want them charging you 16% of your base amount for the reserve amount. Let me know what they tell you. Good luck.
Wednesday, December 19, 2007
Benjamin Plumbing
I am finally getting started again on renovating my Tucson Mountain house, after giving up in dismay for 18 months. The granite counters are being cut this week, the tile is going in Thursday, and I've bought my new kitchen sink and faucet.
I bought the last two items at Benjamin Plumbing Supply. This place is way more fun than Home Depot! A locally-owned business since 1950, it's located between Fourth Avenue and downtown.
The stuff they carry is absolutely delightful.
How about a purple glass vessel sink? Agate faucet handles?
A shocking orange and black sink and countertop combination?
My favorite is the bronze sink that looks like fabric draped over a bowl and spilling off the counter. Check it out.
November Residential Sale Statistics
The Tucson Association of Realtors has finally released the residential sales statistics for November.
759 properties sold last month. This is better than the low for the year, 683 in September, but it's 23% below November 2006.
The average sale price in November 2007 was $269,968, which is 2.9% higher than October 2007 and 0.9% higher that November 2006 (not 1.72% higher as stated in the Sales Snapshot on page 2).
The median sale price also remains stable.
November 2006: $218,000.
October 2007: $210,000.
November 2007: $213,000.
The problem of excessive listings continues.
November 2006: 9,238.
October 2007: 9,313.
November 2007: 9,234.
At least this is lower than 10,387, the all-time high number of listings reached in April 2007, so we're going in the right direction.
Like weather, the real estate market is local. Houses are selling if they are in good locations and have the features buyers want (garage, AC, open floor plan, big updated kitchen, closet space and landscaping). Of course, the seller has to be sure the house is priced right, easy to show and in excellent condition. It's a good time to buy a house.
759 properties sold last month. This is better than the low for the year, 683 in September, but it's 23% below November 2006.
The average sale price in November 2007 was $269,968, which is 2.9% higher than October 2007 and 0.9% higher that November 2006 (not 1.72% higher as stated in the Sales Snapshot on page 2).
The median sale price also remains stable.
November 2006: $218,000.
October 2007: $210,000.
November 2007: $213,000.
The problem of excessive listings continues.
November 2006: 9,238.
October 2007: 9,313.
November 2007: 9,234.
At least this is lower than 10,387, the all-time high number of listings reached in April 2007, so we're going in the right direction.
Like weather, the real estate market is local. Houses are selling if they are in good locations and have the features buyers want (garage, AC, open floor plan, big updated kitchen, closet space and landscaping). Of course, the seller has to be sure the house is priced right, easy to show and in excellent condition. It's a good time to buy a house.
Sunday, December 16, 2007
My Supervisor When I Was a Hydrologist
September 1, 2005
To Whom It May Concern:
I am writing to express my complete satisfaction with the services provided by Donna Moulton for representing me in the sale of my former residence in Tucson, Arizona. Donna first provided me with a fair and reasonable estimate of the market price for my residence. Because I had not personally occupied the residence for some time, she also took responsibility for coordinating and supervising minor repairs and improvements that substantially increased the selling price of the residence, at no additional commission. After the improvements, the house was listed for one week and I received two offers, both for more than the asking price. Without her honest recommendations and support, I am sure I would have received a reduced price for the residence.
I strongly recommend Donna as a real estate agent because she will provide an honest assessment of the market value of the property and has the marketing resources and know-how to promote the sale.
Sincerely,
Gary R. Walter, Ph.D.
San Antonio, Texas
To Whom It May Concern:
I am writing to express my complete satisfaction with the services provided by Donna Moulton for representing me in the sale of my former residence in Tucson, Arizona. Donna first provided me with a fair and reasonable estimate of the market price for my residence. Because I had not personally occupied the residence for some time, she also took responsibility for coordinating and supervising minor repairs and improvements that substantially increased the selling price of the residence, at no additional commission. After the improvements, the house was listed for one week and I received two offers, both for more than the asking price. Without her honest recommendations and support, I am sure I would have received a reduced price for the residence.
I strongly recommend Donna as a real estate agent because she will provide an honest assessment of the market value of the property and has the marketing resources and know-how to promote the sale.
Sincerely,
Gary R. Walter, Ph.D.
San Antonio, Texas
Friday, December 14, 2007
The Plan to Freeze ARM Rates
The Bush administration recently announced a plan that would allow the interest rate on some sub-prime adjustable rate mortgages (ARMs) to be refinanced or frozen for five years. Like so many things this administration does, the plan is based on unfounded hopes, and the consequences have not been thoroughly evaluated.
In the next two and a half years, the interest rate on as many as 1.8 million sub-prime owner-occupied ARMs will increase. The Bush administration estimates that nearly two-thirds of those borrowers were able make their payments with the low introductory interest rate, but will be unable to afford the increased rate.
Under the administration’s proposal, only borrowers with FICO scores under 660 who face an increase in monthly payments of greater than 10% will be eligible for the program. Borrowers who are behind on their payments, who have other mortgages that prevent renegotiation of the ARM, and borrowers with ARMs that have already increased from the initial “teaser” interest rate will not benefit.
The plan is supported by the American Securitization Forum, the companies that issue mortgage backed securities, as well as investors and loan servicers.
Consumer advocates and Standard and Poor’s rating agency are skeptical.
The administration estimates the program will provide debt relief for up to 1.2 million borrowers. The Center for Responsible Lending (CRL) states that perhaps only 145,000 borrowers will qualify. CRL notes that the plan is only a set of voluntary guidelines for mortgage servicers. If lenders decide that will be more advantageous to them to foreclose, they are under no obligation to renegotiate home loans.
In this market, I don’t think lenders will be eager to foreclose and take possession of houses with negative equity. However, lenders will be concerned about lawsuits from the investors who bought these mortgages with the expectation that the interest rate will increase to a profitable level within the next two years.
Standard and Poor’s stated that freezing interest rates on ARMs could discourage investment in mortgage backed securities, which will make the home loan credit crunch worse.
I think this idea is short-sighted grandstanding. It just delays the inevitable. Wage increases have not kept up with inflation, and it’s unlikely that trend will reverse within the next five years. If borrowers are unable to absorb a few hundred dollars increase in their mortgage payment now, it is unlikely they will be able to afford the increase five years from now.
The other big problem with this plan is that it is so unfair to the millions of people who don’t meet its very narrow guidelines.
In the next two and a half years, the interest rate on as many as 1.8 million sub-prime owner-occupied ARMs will increase. The Bush administration estimates that nearly two-thirds of those borrowers were able make their payments with the low introductory interest rate, but will be unable to afford the increased rate.
Under the administration’s proposal, only borrowers with FICO scores under 660 who face an increase in monthly payments of greater than 10% will be eligible for the program. Borrowers who are behind on their payments, who have other mortgages that prevent renegotiation of the ARM, and borrowers with ARMs that have already increased from the initial “teaser” interest rate will not benefit.
The plan is supported by the American Securitization Forum, the companies that issue mortgage backed securities, as well as investors and loan servicers.
Consumer advocates and Standard and Poor’s rating agency are skeptical.
The administration estimates the program will provide debt relief for up to 1.2 million borrowers. The Center for Responsible Lending (CRL) states that perhaps only 145,000 borrowers will qualify. CRL notes that the plan is only a set of voluntary guidelines for mortgage servicers. If lenders decide that will be more advantageous to them to foreclose, they are under no obligation to renegotiate home loans.
In this market, I don’t think lenders will be eager to foreclose and take possession of houses with negative equity. However, lenders will be concerned about lawsuits from the investors who bought these mortgages with the expectation that the interest rate will increase to a profitable level within the next two years.
Standard and Poor’s stated that freezing interest rates on ARMs could discourage investment in mortgage backed securities, which will make the home loan credit crunch worse.
I think this idea is short-sighted grandstanding. It just delays the inevitable. Wage increases have not kept up with inflation, and it’s unlikely that trend will reverse within the next five years. If borrowers are unable to absorb a few hundred dollars increase in their mortgage payment now, it is unlikely they will be able to afford the increase five years from now.
The other big problem with this plan is that it is so unfair to the millions of people who don’t meet its very narrow guidelines.
Wednesday, December 12, 2007
Tucson Green News Magazine
Tucson Green News Magazine is a free, two month old newspaper intended to bring together Tucsonans who want to live in greater harmony with the planet. The November issue contains articles about a group of bicycle recyclers, the energy-efficient features of Amory Park del Sol, bamboo farming, biodiesel, organic cotton, book reviews, a calendar of events and lots more.
My friend and house buying and selling client, Mary Sisson Eibs, writes the Desert Gardening column. In the current issue, she discusses composting. Mary also writes beautifully illustrated articles for Tucson Lifestyle.
You can pick up Tucson Green News Magazine at health food stores, coffee shops and most of the commercial establishments where tree huggers congregate. Distribution of the new issue starts on the 15th of the month and takes three days.
My friend and house buying and selling client, Mary Sisson Eibs, writes the Desert Gardening column. In the current issue, she discusses composting. Mary also writes beautifully illustrated articles for Tucson Lifestyle.
You can pick up Tucson Green News Magazine at health food stores, coffee shops and most of the commercial establishments where tree huggers congregate. Distribution of the new issue starts on the 15th of the month and takes three days.
Thursday, December 6, 2007
Fourth Avenue Street Fair
The Fourth Avenue Winter Street Fair is this Friday, Saturday and Sunday, and takes place between East Ninth Street and University Blvd. along North Fourth Avenue. Free to the public, the Fourth Avenue Street Fair brings together 400 arts and crafts booths, 35 food vendors, 3 stages, street musicians, food, jugglers, street performers, kids entertainment, face painting, balloons and tons of other fun activities, and then packs them into three days of celebration.Among the fine art available are the fascinating photographs of my good bud and home buying and selling client, John Villinski. John specializes in close ups of mysterious objects like the car shown here. He also has images of landscapes, desert plants, minerals and much more. His works are still affordable, even to novice art collectors. You can buy one now and be able to say you knew him before he became famous, as I have no doubt he will be before long. You could also pick up some of his original greeting cards. Check out the amazing things on his web site, and then go meet him and buy his wares at booth 660 on the east side of North Fourth Avenue between East Fourth and Fifth Streets.
Home Value and Schools
In the December issue of DesertLeaf, the free magazine about Catalina Foothills living, is an article about how proximity to a school affects property values in Tucson. Chad A. Hartley, AICP, looked at average dollar per square foot sale price of single family houses sold in 2006 in eleven submarket areas in the greater Tucson area, and compared that to the $/sf sale price of houses within one quarter mile of a school.
The average sale price in the entire metro Tucson area was on average $10/sf less for houses located within a quarter mile of any type of school. The largest impact was in Northeast/Tanque Verde, where houses near schools sold for $20/sf less. The lowest impact was seen in Central/West Tucson, where houses near schools sold for only $1/sf less than the average house in that area.
Hartley suggested that one possible explanation could be that schools tend to be located on busy streets. Prospective buyers may also be concerned about kids hanging around and causing mischief before or after school. The study did not evaluate whether the price effect was greater near high schools.
The average sale price in the entire metro Tucson area was on average $10/sf less for houses located within a quarter mile of any type of school. The largest impact was in Northeast/Tanque Verde, where houses near schools sold for $20/sf less. The lowest impact was seen in Central/West Tucson, where houses near schools sold for only $1/sf less than the average house in that area.
Hartley suggested that one possible explanation could be that schools tend to be located on busy streets. Prospective buyers may also be concerned about kids hanging around and causing mischief before or after school. The study did not evaluate whether the price effect was greater near high schools.
Friday, November 30, 2007
Rainfall Data
Lovely weather we're having, isn't it? We got 0.21 inch of rain at our house yesterday. How much did you get? You don't have a rain gauge? Maybe you'll consider getting one now. It's fun to be involved with our fabulous climate, and you can even be a citizen scientist.
SAHRA (Sustainability of semi-Arid Hydrology) collects and reports rainfall data at 1,300 sites in Arizona, with 373 in Tucson alone. You can be a passive or active participant. You can sign up to receive a map by e-mail showing the amount of precipitation that fell the previous day at various places around the city, with your home location highlighted. You can also report your rainfall data.
It's fascinating to see how widely the rainfall varies from one neighborhood to another. Of course, you already know about that if you've ever had the experience of talking on the phone to a fellow Tucsonan, and marveling at the intensity of the rain, only to have your skeptical friend tell you it's not raining at all at his house.
SAHRA (Sustainability of semi-Arid Hydrology) collects and reports rainfall data at 1,300 sites in Arizona, with 373 in Tucson alone. You can be a passive or active participant. You can sign up to receive a map by e-mail showing the amount of precipitation that fell the previous day at various places around the city, with your home location highlighted. You can also report your rainfall data.
It's fascinating to see how widely the rainfall varies from one neighborhood to another. Of course, you already know about that if you've ever had the experience of talking on the phone to a fellow Tucsonan, and marveling at the intensity of the rain, only to have your skeptical friend tell you it's not raining at all at his house.
Thursday, November 29, 2007
Grant Road Widening
Tonight I went to a meeting at Councilwoman Nina Trasoff's office in order to learn more about the proposed widening of Grant Road. The future of Grant Road is of great concern to me because my rentals are nearby and I frequently sell houses near Grant Road.
Only three things are known at this point -- Grant Road will be six lanes from Oracle to Swan; the budget is $166 million; and construction is scheduled to begin in 2013.
I was hoping to learn which properties will be demolished, but I found that the purpose of the meeting was to get public input on priorities. The city says they will consider public opinion when determining which houses and businesses will be saved.
I have frequently heard people say that the houses on the north side of Grant will be demolished. According to Trasoff, this has not been decided. In fact, the road may curve several times in the interests of preserving the most important buildings and making the road more aesthetically pleasing. The final alignment will be selected by fall 2008.
People who own homes or businesses on or near Grant will be in limbo until the alignment is announced. Who wants to buy a house or start a business if it will be condemned in a few years? If Grant ends up in your back yard, will your property value decrease?
Participants in the meeting were very concerned about preserving the unique character of Grant Road. Support for small, locally-owned businesses was as strong as dislike of chains. Somebody must be supporting all those McDonald's and Walgreen's, but no one at the meeting would owe up to it.
Some people thought the houses along Grant should be saved. Having been inside many of those houses, I can say that because of the intense traffic fewer than 30 feet away, they are not relaxing places to be. Few people would buy a house on Grant with the intention of living in it. An investor may buy it to rent out, but rentals, especially those that can't command high rent because of an undesirable location, are notorious for lack of maintenance. A drive down Grant will confirm this. I don't think those houses are going to look any better when Grant Road is six lanes.
I have talked with a few clients about converting a cute old Grant Road house to commercial use. It seems like a good idea, but because the lots are so small, most houses can not meet city requirements for business ingress, egress and parking.
Grant Road is not pedestrian friendly. It is already too wide to walk across easily, and the noisy, speeding cars are tranquility killers. The city planners told us that walls are not the answer. They may block some of the noise on one side of the street, but it just bounces over to the other side. With walls on both sides, we have the echo corridors that make Furnix, that inferno two hours to the north, so oppressive.
Rubberized asphalt is proposed for the sections of Grant where the houses will remain. This doesn't mitigate the noise and pollution of trucks, busses and motorcycles, but it will cut down on the tire noise of most cars.
Other concerns were the need for better drainage, shorter waits at the lights, making it easier to turn left, buried utiliies, landscaping, and enhancement and creation of parks.
The city planners say preservation of Bobo's Restaurant at Country Club and Grant always shows up on citizens' lists of concerns. I've never been to Bobo's, so I can't vouch for the food, but its fans do seem to be legion, given the traffic jams of cars trying to turn into their parking lot.
To learn more about the planning process for the Grant Road widening, go to www.grantroad.info. If you want to offer your two cents, attend one of the planning meetings to be held at the Tucson Association of Realtors, 2445 N Tucson Boulevard, from 6:00 to 8:30 PM on January 14, 16 and 17.
Only three things are known at this point -- Grant Road will be six lanes from Oracle to Swan; the budget is $166 million; and construction is scheduled to begin in 2013.
I was hoping to learn which properties will be demolished, but I found that the purpose of the meeting was to get public input on priorities. The city says they will consider public opinion when determining which houses and businesses will be saved.
I have frequently heard people say that the houses on the north side of Grant will be demolished. According to Trasoff, this has not been decided. In fact, the road may curve several times in the interests of preserving the most important buildings and making the road more aesthetically pleasing. The final alignment will be selected by fall 2008.
People who own homes or businesses on or near Grant will be in limbo until the alignment is announced. Who wants to buy a house or start a business if it will be condemned in a few years? If Grant ends up in your back yard, will your property value decrease?
Participants in the meeting were very concerned about preserving the unique character of Grant Road. Support for small, locally-owned businesses was as strong as dislike of chains. Somebody must be supporting all those McDonald's and Walgreen's, but no one at the meeting would owe up to it.
Some people thought the houses along Grant should be saved. Having been inside many of those houses, I can say that because of the intense traffic fewer than 30 feet away, they are not relaxing places to be. Few people would buy a house on Grant with the intention of living in it. An investor may buy it to rent out, but rentals, especially those that can't command high rent because of an undesirable location, are notorious for lack of maintenance. A drive down Grant will confirm this. I don't think those houses are going to look any better when Grant Road is six lanes.
I have talked with a few clients about converting a cute old Grant Road house to commercial use. It seems like a good idea, but because the lots are so small, most houses can not meet city requirements for business ingress, egress and parking.
Grant Road is not pedestrian friendly. It is already too wide to walk across easily, and the noisy, speeding cars are tranquility killers. The city planners told us that walls are not the answer. They may block some of the noise on one side of the street, but it just bounces over to the other side. With walls on both sides, we have the echo corridors that make Furnix, that inferno two hours to the north, so oppressive.
Rubberized asphalt is proposed for the sections of Grant where the houses will remain. This doesn't mitigate the noise and pollution of trucks, busses and motorcycles, but it will cut down on the tire noise of most cars.
Other concerns were the need for better drainage, shorter waits at the lights, making it easier to turn left, buried utiliies, landscaping, and enhancement and creation of parks.
The city planners say preservation of Bobo's Restaurant at Country Club and Grant always shows up on citizens' lists of concerns. I've never been to Bobo's, so I can't vouch for the food, but its fans do seem to be legion, given the traffic jams of cars trying to turn into their parking lot.
To learn more about the planning process for the Grant Road widening, go to www.grantroad.info. If you want to offer your two cents, attend one of the planning meetings to be held at the Tucson Association of Realtors, 2445 N Tucson Boulevard, from 6:00 to 8:30 PM on January 14, 16 and 17.
Friday, November 16, 2007
Credit Repair and Credit Rescore
You've probably seen the signs posted illegally on city sidewalks promising "Credit Repair." These scam artists promise desperate consumers that bankruptcies and chronic late payments can be magically removed from their credit reports for a fee. The only truthful part of this claim is the fee. Only time (seven to ten years) will remove bankruptcies and improper use of credit from a credit report.
Rapid Credit Rescoring is something entirely different. If you've ever applied for a mortgage, you know the importance of your credit score, which reflects your history of debt repayment and supposedly predicts the likelihood that you will repay your mortgage on time. A minimum credit score of 650 is required for most mortgages today. Loan qualifying is automated now, and there is little to no flexibility in the requirements.
Suppose you have a credit score of 642. If your lender doesn't know about Rapid Credit Rescoring, you are out of luck. If your lender is on the ball, she will look for minor issues that may be easy to remove from your credit report. Suppose you have always paid your bills on time, but one payment was 30 days late because you moved and the bill was lost in the shuffle. Or maybe you had a parking ticket, and you didn't know until your credit report was pulled that the city had turned your ticket over to a collection agency. Or maybe you cancelled your membership in a book club, but the book club continued to bill you for books, and when you didn't pay, the book club charged off your small debt and reported it to the credit bureau.
Believe it or not, just one of these issues will actually prevent you from buying a house. However, if you are smart enough to choose a lender who knows about Rapid Credit Rescoring, the lender can run your credit report through a "what if" program and determine how much your credit score might be increased if you could remove these small blemishes. You need to provide proof that you paid the parking ticket, or you need to call your credit card company, explain why you were late that one time, promise never to do it again, and beg them to remove the late pay from your credit report. Usually they will do this, especially if you call on Friday and act really polite and contrite.
Once you have proof that you have rectified your little credit crime, your mortgage lender can submit the proof to a company for Rapid Credit Rescoring. This will cost you about $140. What? Just to get a new credit score? Yes, that's right. But remember, you must either 1) get your credit score in line with the automated lending standards, or 2) pay a higher interest rate, or 3) forget about buying the house you want. $140 is a bargain if it enables you to buy the house at the best possible interest rate.
If you are preparing to buy a house, get your free credit report several months in advance. There are three credit reporting bureaus, and you need to get a report from each one, because they don't all have the same information, and you don't know which bureau's report your lender will use. It can take several months to remove errors and surprises from your credit report, but if you do all the legwork yourself and allow plenty of time, the corrections will be reflected in a new credit score in about 30 days. Then you can avoid last minute trauma during the home buying process, and save the $140 charge for Rapid Credit Rescoring.
Rapid Credit Rescoring is something entirely different. If you've ever applied for a mortgage, you know the importance of your credit score, which reflects your history of debt repayment and supposedly predicts the likelihood that you will repay your mortgage on time. A minimum credit score of 650 is required for most mortgages today. Loan qualifying is automated now, and there is little to no flexibility in the requirements.
Suppose you have a credit score of 642. If your lender doesn't know about Rapid Credit Rescoring, you are out of luck. If your lender is on the ball, she will look for minor issues that may be easy to remove from your credit report. Suppose you have always paid your bills on time, but one payment was 30 days late because you moved and the bill was lost in the shuffle. Or maybe you had a parking ticket, and you didn't know until your credit report was pulled that the city had turned your ticket over to a collection agency. Or maybe you cancelled your membership in a book club, but the book club continued to bill you for books, and when you didn't pay, the book club charged off your small debt and reported it to the credit bureau.
Believe it or not, just one of these issues will actually prevent you from buying a house. However, if you are smart enough to choose a lender who knows about Rapid Credit Rescoring, the lender can run your credit report through a "what if" program and determine how much your credit score might be increased if you could remove these small blemishes. You need to provide proof that you paid the parking ticket, or you need to call your credit card company, explain why you were late that one time, promise never to do it again, and beg them to remove the late pay from your credit report. Usually they will do this, especially if you call on Friday and act really polite and contrite.
Once you have proof that you have rectified your little credit crime, your mortgage lender can submit the proof to a company for Rapid Credit Rescoring. This will cost you about $140. What? Just to get a new credit score? Yes, that's right. But remember, you must either 1) get your credit score in line with the automated lending standards, or 2) pay a higher interest rate, or 3) forget about buying the house you want. $140 is a bargain if it enables you to buy the house at the best possible interest rate.
If you are preparing to buy a house, get your free credit report several months in advance. There are three credit reporting bureaus, and you need to get a report from each one, because they don't all have the same information, and you don't know which bureau's report your lender will use. It can take several months to remove errors and surprises from your credit report, but if you do all the legwork yourself and allow plenty of time, the corrections will be reflected in a new credit score in about 30 days. Then you can avoid last minute trauma during the home buying process, and save the $140 charge for Rapid Credit Rescoring.
Thursday, November 15, 2007
Tucson Museum of Art Craft Fair
The 26th Annual Tucson Museum of Art Holiday Craft Fair is this Friday through Sunday from 10 AM to 5 PM. On Saturday and Sunday, there will also be an Art Book Sale.
The fair will be on the lovely shaded patios and in the lobby of the new part of the museum at 140 North Main Street in the historic El Presidio barrio north of Presidio Park.
The fair will be on the lovely shaded patios and in the lobby of the new part of the museum at 140 North Main Street in the historic El Presidio barrio north of Presidio Park.
Some of the museum galleries are in fabulous old territorial homes. The Cordova House is believed to predate the 1854 Gadsden Purchase, which would mean it was built when Tucson was part of Mexico. You can peek inside the Cordova house while enjoying live music in the Cordova Courtyard beer garden.
120 artists will offer jewelry, ceramics, water colors, metal work and more. Fancy eats and gorgeous desserts will be for sale.
120 artists will offer jewelry, ceramics, water colors, metal work and more. Fancy eats and gorgeous desserts will be for sale.
Get a start on your holiday shopping, or just enjoy the beautiful weather and music for free in a lovely downtown environment.
Tuesday, November 13, 2007
October Residential Sales Statistics
Tucson Association of Realtors has released the Residential Sales Statistics for October. The average sale price was $262,251, which is 12% less than the record high achieved in June of this year, but only 1.7% lower than the October 2006 average.
The median sale price is also less than June's all time high, but only $1,150 lower than it was twelve months ago.
Number of active listings has been increasing since July this year. In October, 9,313 properties were for sale through the MLS.
Number of sold properties increased from 683 in September to 790 in October, but sold units are still 28% below a year ago.
The median sale price is also less than June's all time high, but only $1,150 lower than it was twelve months ago.
Number of active listings has been increasing since July this year. In October, 9,313 properties were for sale through the MLS.
Number of sold properties increased from 683 in September to 790 in October, but sold units are still 28% below a year ago.
Monday, November 12, 2007
Tohono Chul Park
Tohono Chul (Desert Corner) Park will be open to the public free of charge from 8 AM to 5 PM on Thanksgiving Day, November 22. This lovely bit of desert northwest of Oracle and Ina Roads is the perfect place to take the relatives and walk off your feast.
Join the mailing list so you'll know about upcoming events like the December 2nd performance of U of A's Harp Fusion, the largest touring ensemble of concert harps in the world. http://www.tohonochulpark.org/
Join the mailing list so you'll know about upcoming events like the December 2nd performance of U of A's Harp Fusion, the largest touring ensemble of concert harps in the world. http://www.tohonochulpark.org/
Saturday, November 10, 2007
Bicycle Recycling and Art
Bicycle Inter-Community Action and Salvage (BICAS) will have its 12th Annual Art Auction, Fundraiser and Celebration on Sunday, November 18 from 6 to 9 PM at Artfare, 55 N 6th Ave., across from the Ronstadt Transit Center, just north of Congress St.. Music, food and entertainment will be offered, and winner of the silent auction will be announced at 9 PM. The art will be sculpture, jewelry, paintings and more, all made from bicycle parts or having bicycle themes.
BICAS believes that if you give people fish, you have fed them for a day. Teach people to fish; they can feed themselves for a lifetime. Therefore, the good people of BICAS will not repair your bike for you, but they would be delighted to teach you how to repair it, and you can use their tools.
They will also help people of any age who live in the barrios near BICAS to built their own bikes free of cost. Children from any part of Tucson can apply for scholarships to build their own bikes, too.
The crew reconditions and recycles bikes, so if you're like me, and you just want a nice used bike, you can go to their underground bike purgatory at 44 W 6th St. and pick one out. When I bought my bike there years ago, the entrance to the bike shop was through a hole in a wall next to a loading dock. You'd drop down into the shop, and it was sort of like entering Wonderland with Alice.
The web site photo seems to indicate that they are still underground, but now they have a ramp. Not quite as much quirky fun, but no doubt a lot more convenient.
The crew reconditions and recycles bikes, so if you're like me, and you just want a nice used bike, you can go to their underground bike purgatory at 44 W 6th St. and pick one out. When I bought my bike there years ago, the entrance to the bike shop was through a hole in a wall next to a loading dock. You'd drop down into the shop, and it was sort of like entering Wonderland with Alice.
The web site photo seems to indicate that they are still underground, but now they have a ramp. Not quite as much quirky fun, but no doubt a lot more convenient.
Friday, November 9, 2007
Prop 200 Defeated
Prop 200 went down in flames. 58,966 people voted. 28% yea, 72% nay.
Opponents of Prop 200 spent over $725,000 on their campaign, which included door hangers and lots of mailings. The victors paid over $17 per vote.
John Kromko's pro-Prop 200 campaign was more cost effective, costing him and his supporters $13,000, or 79 cents per vote.
I hope some serious work on the important problem of limiting growth can now begin.
Opponents of Prop 200 spent over $725,000 on their campaign, which included door hangers and lots of mailings. The victors paid over $17 per vote.
John Kromko's pro-Prop 200 campaign was more cost effective, costing him and his supporters $13,000, or 79 cents per vote.
I hope some serious work on the important problem of limiting growth can now begin.
Monday, November 5, 2007
Prop 200
If the people lead, the leaders will follow. All too often in Tucson, our elected officials fail to address issues that concern voters. Various special interest groups respond by putting propositions on our ballots. Lots of money is spent on advertising, and the side with the most money usually wins.
No one is more opposed to the endless, reckless growth of Tucson than I am. While I do sell houses for a living, I draw the line at selling land and new construction. I am a house recycler. I think there are already more than enough houses in Tucson. If a buyer wants to build a new house, destroying wildlife habitat, wasting energy and building materials while contributing to urban sprawl, I tell him he will have to get some one else to help him with that.
Proposition 200 is on the November 6 ballot. It was written with the intention of stopping new home construction by prohibiting additional connections to Tucson Water's supply once "Tucson Water reaches an annual rate of water delivery to customers that exceeds . . .140,000 acre-feet per year," which is 4,000 acre-feet less than Tucson's allocation of Colorado River water. Except for the part about rejecting some of our allocation, limiting water service to available supply seems to make sense.
Unfortunately, the consequences of this statement were not thoroughly considered. Prop 200 does not define water delivery. Presumably, when he wrote the proposition, former state legislator John Kromko was talking about drinking water, but if we include use of reclaimed water (water that is treated and used for irrigation) the 140,000 acre-feet limit is reached a lot sooner, perhaps as early as 2009. There is no room for presumption when writing public policy.
Additionally, Prop 200 eliminates the $14 per month fee on our water bills that was initially called the refuse fee because it was associated with a new charge for garbage collection that was formerly funded by other revenue sources. Realizing a public relations snafu, Tucson Water changed the refuse fee to the environmental services fee, and revenue from the fee now supports $23 million worth of services that need to be funded somehow. Kromko doesn't state which city programs he wants to have eliminated so we can continue to have brush and bulky, garbage and recycling collection, landfills and groundwater remediation. He simply says the City will have to tighten its belt. Our overworked and underpaid police and fire departments are concerned that their already inadequate staffing will be reduced even more, and they oppose Prop 200.
For emotional impact, Kromko also threw in something to prevent treated sewer water (effluent) from being mixed with drinking water, even though Tucson Water has no intention of delivering water "toilet to tap" as Prop 200 so graphically describes it. The Arizona Department of Environmental Quality does not allow direct delivery of treated effluent to homes. Recharge or infiltration of highly treated effluent into groundwater is permitted, but Tucson Water gave up that idea when the public howled. They may revisit this idea in the future, especially if we don't stop building more houses, the drought continues and global warming worsens. In other words, sooner or later effluent will become drinking water in Tucson, just as it is in many other western cities.
Prop 200 requires "the purest possible water". The word pure contains no measurable standards. Who will define purity? Lawyers. Who will pay for the highest level of water treatment? Tucson Water customers. Do we need and will we be able to afford water quality that exceeds EPA drinking water standards? No.
Prop 200 prohibits the use of effluent for some legitimate purposes, such as dust control, fire suppression, and wildlife habitat restoration. Prop 200 says effluent can be used for irrigation, but only enough to "sustain the vegetation". What does that mean? The lawyers will tell us.
Except for 10 days of assistance in an emergency, Prop 200 would prevent Tucson Water from delivering water to a "water distributor," a term that has no definition in water law. Does this means Tucson Water can't provide water to the University of Arizona, Davis Monthan Air Force Base or the VA Hospital? These are water service providers. Is a provider the same as a distributor? The courts will decide.
Kromko probably intended to prevent more than 10 days of assistance to utility companies like Metro Water. Do we really want to cut off the water supply on day 11 to our neighbors in need? Vague intentions have no place in public policy. The lawyers would have to sort that one out, too.
To get the City of Tucson's analysis of all this, click here. Of course, the City of Tucson has an ax to grind. Tucson Water is a City department, so naturally the City of Tucson doesn't support criticism of Tucson Water.
The Arizona Daily Star asked some independent water law experts to evaluate Prop 200. The experts concluded that Prop 200 is poorly written, uses terms that have no legal definition, and if passed, will not accomplish its objective of limiting growth. If developers aren't allowed to connect to Tucson Water's system, they will either drill wells, which could lower the water table, or they will build outside the Tucson Water service area, contributing to sprawl.
Molly McCasson, a former member of the Tucson city council, supports Prop 200. But her argument boils down to this: if Prop 200 passes, the City will be forced to deal with the legal quagmire that will be created by this confusing measure. I think this is the best argument in favor of Prop 200, because it is clear that Tucson Water and the current city council have no intention of dealing with the growth issue unless they are forced to.
Various environmental groups were asked for their views on Prop 200. Only the Sierra Club endorses it.
When evaluating a voter initiative, I think it's smart to follow the money. Usually, if home builders, car dealers and the Tucson Association of Realtors are in favor of something, it means more houses and more people, and I'm automatically against it. The growth industry opposes Prop 200, and they have spent over $700,000 to defeat it. So it's strange to find myself in agreement with these groups, but I have to say that Prop 200 is not the right way to limit growth.
No one is more opposed to the endless, reckless growth of Tucson than I am. While I do sell houses for a living, I draw the line at selling land and new construction. I am a house recycler. I think there are already more than enough houses in Tucson. If a buyer wants to build a new house, destroying wildlife habitat, wasting energy and building materials while contributing to urban sprawl, I tell him he will have to get some one else to help him with that.
Proposition 200 is on the November 6 ballot. It was written with the intention of stopping new home construction by prohibiting additional connections to Tucson Water's supply once "Tucson Water reaches an annual rate of water delivery to customers that exceeds . . .140,000 acre-feet per year," which is 4,000 acre-feet less than Tucson's allocation of Colorado River water. Except for the part about rejecting some of our allocation, limiting water service to available supply seems to make sense.
Unfortunately, the consequences of this statement were not thoroughly considered. Prop 200 does not define water delivery. Presumably, when he wrote the proposition, former state legislator John Kromko was talking about drinking water, but if we include use of reclaimed water (water that is treated and used for irrigation) the 140,000 acre-feet limit is reached a lot sooner, perhaps as early as 2009. There is no room for presumption when writing public policy.
Additionally, Prop 200 eliminates the $14 per month fee on our water bills that was initially called the refuse fee because it was associated with a new charge for garbage collection that was formerly funded by other revenue sources. Realizing a public relations snafu, Tucson Water changed the refuse fee to the environmental services fee, and revenue from the fee now supports $23 million worth of services that need to be funded somehow. Kromko doesn't state which city programs he wants to have eliminated so we can continue to have brush and bulky, garbage and recycling collection, landfills and groundwater remediation. He simply says the City will have to tighten its belt. Our overworked and underpaid police and fire departments are concerned that their already inadequate staffing will be reduced even more, and they oppose Prop 200.
For emotional impact, Kromko also threw in something to prevent treated sewer water (effluent) from being mixed with drinking water, even though Tucson Water has no intention of delivering water "toilet to tap" as Prop 200 so graphically describes it. The Arizona Department of Environmental Quality does not allow direct delivery of treated effluent to homes. Recharge or infiltration of highly treated effluent into groundwater is permitted, but Tucson Water gave up that idea when the public howled. They may revisit this idea in the future, especially if we don't stop building more houses, the drought continues and global warming worsens. In other words, sooner or later effluent will become drinking water in Tucson, just as it is in many other western cities.
Prop 200 requires "the purest possible water". The word pure contains no measurable standards. Who will define purity? Lawyers. Who will pay for the highest level of water treatment? Tucson Water customers. Do we need and will we be able to afford water quality that exceeds EPA drinking water standards? No.
Prop 200 prohibits the use of effluent for some legitimate purposes, such as dust control, fire suppression, and wildlife habitat restoration. Prop 200 says effluent can be used for irrigation, but only enough to "sustain the vegetation". What does that mean? The lawyers will tell us.
Except for 10 days of assistance in an emergency, Prop 200 would prevent Tucson Water from delivering water to a "water distributor," a term that has no definition in water law. Does this means Tucson Water can't provide water to the University of Arizona, Davis Monthan Air Force Base or the VA Hospital? These are water service providers. Is a provider the same as a distributor? The courts will decide.
Kromko probably intended to prevent more than 10 days of assistance to utility companies like Metro Water. Do we really want to cut off the water supply on day 11 to our neighbors in need? Vague intentions have no place in public policy. The lawyers would have to sort that one out, too.
To get the City of Tucson's analysis of all this, click here. Of course, the City of Tucson has an ax to grind. Tucson Water is a City department, so naturally the City of Tucson doesn't support criticism of Tucson Water.
The Arizona Daily Star asked some independent water law experts to evaluate Prop 200. The experts concluded that Prop 200 is poorly written, uses terms that have no legal definition, and if passed, will not accomplish its objective of limiting growth. If developers aren't allowed to connect to Tucson Water's system, they will either drill wells, which could lower the water table, or they will build outside the Tucson Water service area, contributing to sprawl.
Molly McCasson, a former member of the Tucson city council, supports Prop 200. But her argument boils down to this: if Prop 200 passes, the City will be forced to deal with the legal quagmire that will be created by this confusing measure. I think this is the best argument in favor of Prop 200, because it is clear that Tucson Water and the current city council have no intention of dealing with the growth issue unless they are forced to.
Various environmental groups were asked for their views on Prop 200. Only the Sierra Club endorses it.
When evaluating a voter initiative, I think it's smart to follow the money. Usually, if home builders, car dealers and the Tucson Association of Realtors are in favor of something, it means more houses and more people, and I'm automatically against it. The growth industry opposes Prop 200, and they have spent over $700,000 to defeat it. So it's strange to find myself in agreement with these groups, but I have to say that Prop 200 is not the right way to limit growth.
Thursday, November 1, 2007
All Souls Procession
If you haven't been part of Tucson's most original event, make this the year that you march in the All Souls Procession.
November 2 is the Mexican holiday Dia de los Muertos (Day of the Dead). Bearing no resemblance to Halloween, this is a day when Mexicans clean and decorate the graves of their beloved departed, and take picnic lunches and maybe some alcohol to share with the deceased in the graveyard. It's a time to keep the deceased close to us and remind them and ourselves of what they mean to us.
This Sunday, November 4, in keeping with the spirit of Dia de los Muertos, thousands of Tucsonans will dress up as skeletons or other dead beings, carry giant puppets or ride on fabulous human-powered floats, and parade down Fourth Avenue to the railroad docks on Toole. Many people carry percussion instruments, and there will be at least a few bands. It is a stunning spectacle, and the best part is this: anyone can and should participate.
All Souls Procession is a creative way to celebrate the lives of dear ones who have passed over to the other side. While the event is a celebration, it is respectful, touching and family-friendly. Participants and spectators are not rowdy. Well, they will hoot and howl as they go through the underpass on 6th Avenue, but who can resist that? But this is not a lewd or drunken Mardi Gras. It's a time to honor and remember friends, family, pets, even border crossers and war victims who have left this world. You absolutely can not miss it.
Find a place on the sidewalk along Fourth Avenue between University Boulevard and 7th Street before 6 PM, watch the procession, and then follow the last marcher. Wear a costume, take pictures, play a percussion instrument, carry a photo of a loved one. The procession will wind through downtown and end at the railroad docks southwest of Toole and Stone. Then you must stay for a performance by Flan Chen. This dance troupe will have giant creatures on stilts wearing big papier mache heads. A percussion band keeps the beat as the dancers sling fire torches and buckets. One of them will do scary flips and spins while suspended from enormous helium ballons.
After Flan Chen, a crane will hoist a huge cloth and metal urn high above the crowd. The urn will contain handwritten messages and prayers from the audience and will be ceremonially burned. You can contribute a message of remembrance or grief, or state what you wish to embrace or release, then watch the sparks of your prayer ascend into the night sky.
Wednesday, October 31, 2007
17th Street Market
Most people have heard of it, but many still haven't ventured into the industrial area east of downtown to search for 17th Street Market. Once you find it, you will become another convert spreading the exciting news about this amazing place.
Are you looking for fresh fish, organic coffee and produce, or exotic ingredients for your Asian, Mexican, Indian, Jamaican or MIddle Eastern recipe? How about that bizarre Mexican blue parrot fish in the photo? Food is not supposed to be blue! More appealing is the beautiful yellow tail snapper from Brazil, with its pink body and longitudial yellow stripe making it look more like candy than a fish. Imported toys, dishes, tea sets, clothing and cooking supplies make this market a miniature of the famous Uwajimaya of the Pacific Northwest.
Who knew there were so many weird kinds of canned mushrooms? This place is a sensory delight.
But I don't think Uwayimaya has a complete music store. At 17th Street Market, you can buy a guitar, mandolin, ukelele, percussion instrument or thumb piano. Check out the extensive collection of world music CDs and books.
The market jumps every Saturday with a World Music concert from 11:30 to 3:30. This Saturday would be a great time to check out 17th Street Market because my pal and house-buying client Gary Mackender will be there with his fabulous band The Carnivaleros. Gary's the ring leader, abusing the squeeze box and playing original compositions in the Tex/Mex, Cajun, and folk genres. Actually, Carnivaleros defies description, but you can be assured that it is a lot of fun. Gary's band is an ever changing crew of some of Tucson's best musicians. You never know which of his saxophone, fiddle, guitar, bass or drum playing cohorts he'll have with him, but it's always a treat to see The Carnivaleros.
Who knew there were so many weird kinds of canned mushrooms? This place is a sensory delight.
But I don't think Uwayimaya has a complete music store. At 17th Street Market, you can buy a guitar, mandolin, ukelele, percussion instrument or thumb piano. Check out the extensive collection of world music CDs and books.
The market jumps every Saturday with a World Music concert from 11:30 to 3:30. This Saturday would be a great time to check out 17th Street Market because my pal and house-buying client Gary Mackender will be there with his fabulous band The Carnivaleros. Gary's the ring leader, abusing the squeeze box and playing original compositions in the Tex/Mex, Cajun, and folk genres. Actually, Carnivaleros defies description, but you can be assured that it is a lot of fun. Gary's band is an ever changing crew of some of Tucson's best musicians. You never know which of his saxophone, fiddle, guitar, bass or drum playing cohorts he'll have with him, but it's always a treat to see The Carnivaleros.
September Sales Stats Update
In my October 18 post, I provided a link to the September Residential Sales Statistics. Multiple Listing Service (MLS) President Judy Lowe summarizes the stats on the first page of the link. Recently, Judy has started commenting on the number of pending sales, instead of the number of sold housing units. A pending sale is one where the inspection, financing and appraisal contingencies have been completed, and the buyer and seller are just waiting for closing. It's almost a done deal, but it's not the same thing as a sale, where everything is signed, sealed and delivered, and the deed has recorded in the buyer's name. The number of pending sales are quite a bit higher than the closed sales. Check this out:
...........................June.....July.......August...Sept.
Pending Sales....2,053....1,777....1,024.....989
Pending Sales....2,053....1,777....1,024.....989
Closed Sales......1,226....1,098....1,019.....683
It usually takes about 30 days to get from contract acceptance to close of escrow, so most of the June pending sales should be closed sales by July. I thought the big discrepancy between pending sales and sold units indicated that over a third of the pending sales were canceled and didn't get to closing for some reason.
Judy is Executive Vice President of my company, Realty Executives, and she is a very smart and approachable manager. I asked her why she is focusing on pending sales instead of solds. She said she thought pending sales were more indicative of buyer activity. She explained that when the market was hot and the sales were easy, home builders did not list their inventory in the MLS. Realtors had to go to the builders' websites to see what they had for sale. When the market went soft, builders started putting their inventory in the MLS. This explains, in part, why there are so many more listings in the MLS than there were a few years ago. New construction wasn't in the MLS a few years ago, but now it is.
Judy further explained that with new construction, the time from contract acceptance to closing can be months, because house construction usually begins only after the purchase contract is signed. It's not surprising that June's pending sales didn't become solds in July, because many of those pending sales were new construction contracts. She noted that the apartment-to-condo conversions are also causing long escrow periods while the buyers wait for their new condos to be completed.
Judy says that she hopes the MLS will be able to separate resale houses from new construction in their stats by next year, but this is a huge undertaking, and we shouldn't count on it.
So things look rosier than I thought when I reported 683 sales in September. However, this brings up another trend that sellers need to keep in mind. Builders are offering aggressive incentives to reduce their housing inventory. Free upgrades and price reductions are common. This provides tough competition for sellers of existing homes, especially older ones with small rooms, small closets, low ceilings, outdated floorplans, no garage, no air conditioning plus elderly plumbing, electrical and mechanical systems. Buyers can get a brand new house, and pick out their finishes, for less than the cost of a 20 to 50 year old house. While I myself prefer the older houses, many buyers choose what they perceive to be maintenance-free, semi-custom new construction.
It usually takes about 30 days to get from contract acceptance to close of escrow, so most of the June pending sales should be closed sales by July. I thought the big discrepancy between pending sales and sold units indicated that over a third of the pending sales were canceled and didn't get to closing for some reason.
Judy is Executive Vice President of my company, Realty Executives, and she is a very smart and approachable manager. I asked her why she is focusing on pending sales instead of solds. She said she thought pending sales were more indicative of buyer activity. She explained that when the market was hot and the sales were easy, home builders did not list their inventory in the MLS. Realtors had to go to the builders' websites to see what they had for sale. When the market went soft, builders started putting their inventory in the MLS. This explains, in part, why there are so many more listings in the MLS than there were a few years ago. New construction wasn't in the MLS a few years ago, but now it is.
Judy further explained that with new construction, the time from contract acceptance to closing can be months, because house construction usually begins only after the purchase contract is signed. It's not surprising that June's pending sales didn't become solds in July, because many of those pending sales were new construction contracts. She noted that the apartment-to-condo conversions are also causing long escrow periods while the buyers wait for their new condos to be completed.
Judy says that she hopes the MLS will be able to separate resale houses from new construction in their stats by next year, but this is a huge undertaking, and we shouldn't count on it.
So things look rosier than I thought when I reported 683 sales in September. However, this brings up another trend that sellers need to keep in mind. Builders are offering aggressive incentives to reduce their housing inventory. Free upgrades and price reductions are common. This provides tough competition for sellers of existing homes, especially older ones with small rooms, small closets, low ceilings, outdated floorplans, no garage, no air conditioning plus elderly plumbing, electrical and mechanical systems. Buyers can get a brand new house, and pick out their finishes, for less than the cost of a 20 to 50 year old house. While I myself prefer the older houses, many buyers choose what they perceive to be maintenance-free, semi-custom new construction.
Sellers beware! Your competition in the new construction industry has accepted the changing market conditions, and they are adjusting very smoothly.
Webcam on the Catalina Mountains
Do you think the sky can't really look this spectacular over the Catalina Mountains? Do you think filters and Photoshop were used to produce this purple mountain majesty? Then you haven't been in Tucson very long. Skies like this are not typical, but when I see one, I'm reminded again of how incredibly lucky I am to live here.
Do you think it never rains in Tucson? Then you're really in for a surprise. I moved to Tucson in June 1990, and the all-time record high temperature of 117 degrees was reached within a few weeks of my arrival. Someone told me, "Wait until the monsoons start! It rains so hard, it's like a miracle!" I thought this was a pretty strange outlook on rain, having come from the east coast where rain is a nuisance that frequently ruins plans.
Then, one night in early July, right on schedule, the monsoons started. The skies opened like a pouring bucket, and the streets were instantly flooded. The temperature dropped 20 degrees in minutes, and the spicy fragrance of creosote bushes filled the washed air. Everyone ran outside, raised their faces to the sky, danced around and got soaked while the lightning crashed and flashed. I think that was the moment I realized I was home. I thought, "Wow, they worship the rain here. That's pretty cool." The next day, the ocotillo branches leafed out and the mountains turned from brown to green. Everyone and everything rejoices when the monsoons arrive.
Do you think it never snows in Tucson? Surprise, surprise, surprise! Don't leave your woolies behind if you are moving here from some frozen netherworld. While it could be 75 degrees in the city when the snow is on the mountains, you'll want to be able to go up Mt Lemmon and make some snow angels.
Notice the temperature stamp in the upper right corner of the photo. 31 degrees at 10:31 AM. BRRRR! Also, the snow still hasn't melted from the tile roofs. Many people would have been taking a snow day, which is a lot more fun here than snow days are back east.
Do you think it never rains in Tucson? Then you're really in for a surprise. I moved to Tucson in June 1990, and the all-time record high temperature of 117 degrees was reached within a few weeks of my arrival. Someone told me, "Wait until the monsoons start! It rains so hard, it's like a miracle!" I thought this was a pretty strange outlook on rain, having come from the east coast where rain is a nuisance that frequently ruins plans.
Then, one night in early July, right on schedule, the monsoons started. The skies opened like a pouring bucket, and the streets were instantly flooded. The temperature dropped 20 degrees in minutes, and the spicy fragrance of creosote bushes filled the washed air. Everyone ran outside, raised their faces to the sky, danced around and got soaked while the lightning crashed and flashed. I think that was the moment I realized I was home. I thought, "Wow, they worship the rain here. That's pretty cool." The next day, the ocotillo branches leafed out and the mountains turned from brown to green. Everyone and everything rejoices when the monsoons arrive.
Do you think it never snows in Tucson? Surprise, surprise, surprise! Don't leave your woolies behind if you are moving here from some frozen netherworld. While it could be 75 degrees in the city when the snow is on the mountains, you'll want to be able to go up Mt Lemmon and make some snow angels.
Notice the temperature stamp in the upper right corner of the photo. 31 degrees at 10:31 AM. BRRRR! Also, the snow still hasn't melted from the tile roofs. Many people would have been taking a snow day, which is a lot more fun here than snow days are back east.
These photos were taken by the webcam on top of the Gould Simpson geology building on the campus of the University of Arizona. You can check out the webcam here.
I know a sad ex-Tucsonan who keeps the webcam site on his computer screen all day so he can torture himself with views of what he's missing in Tucson.
Check out the webcam site, and you'll find an archive of some of the coolest photos, as well as all-day videos, which are absolutely fascinating.
Sunday, October 28, 2007
Big Art, Chapter One
Tucson is blessed with astounding works of folk art sculpture. In this first installment you'll see some of the best known works.Papa Moai is the omniscient oracle of the nationally-syndicated comic strip Red Meat, which is drawn from the secret files of Tucson's own Max Cannon. You can consult Papa Moai at Magic Carpet Golf, 6125 East Speedway.
Update: Magic Carpet Golf has been bought by a car dealership and will be turned into a parking lot. All the sculptures have to find new homes. Papa Moai is supposed to go to The Hut, a bar and music venue on 4th Avenue.
Volunteers painted the sculptures and cleaned up the miniature golf course just before the closing so nostalgic Tucsonans could enjoy one last day of golf. The plan is that the proceeds from the last round of golf will be used to move some of the sculptures to Valley of the Moon.
A rock dove chills out on the wine bottle in front of Boondocks Lounge on North First Avenue. Many great local bands can be heard at Boondocks, including Carnivaleros, Wayback Machine, and in a new St Patrick's Day tradition, a reunion of the world famous Mollys.
Paul Bunyan or some other gigantic lumberjack threatens motorists at the corner of Stone and Glenn. I used to think that Dennis Hopper and Peter Fonda rode their motorcycles past this guy in the beginning of Easy Rider, but on closer examination of the opening scenes, I see they are not cruising this particular intersection, although they do pass this guy's identical twin. I am told that similar behemoths menace other Arizona towns, and he may actually be the Northern Arizona University Lumberjack. If that is the case, it's a mystery why he would risk a venture into U of A Wildcat territory. Sometimes at Christmas, the ax is replaced by a huge red and white stripped candy cane. I like that gesture toward peace on earth.
Thursday, October 18, 2007
September Sales Stats
The September Residential Sales Statistics from the Tucson Association of Realtors are finally available. The good news is that the median sale price is $220,000. As many properties sold for more than $220,000 as sold for less than $220,000 in September. The median sale price has been dancing around that number since the sales volume peaked in June 2005.
Other encouraging news is the average sale price is $279,025, which is down from the all-time high of $298,477 in June 2007, but still above the average price of $253,781 posted in September 2006.
So the oft-discussed housing bubble still hasn't burst.
The number of listings on the market was 9,190, which is up from this year's low of 8,665 in June. Listing volume reached a record high in April 2007 at 10,387. So it is good to see that there are fewer sellers in the market now than there were in the spring.
The most stunning news is that only 683 properties sold in September 2007. This is way down from the craziness of June 2005, when 1,858 properties sold.
I think the dramatic decrease in buyers is due in part to the changes that occured in the mortgage industry in August. Borrowers with marginal credit or no savings can no longer buy houses. Buyers who are financially qualified to buy feel no rush to make a commitment, and are a little overwhelmed by the number of properties from which to choose.
My experience is that attractive, well priced houses in good locations are still selling quickly, and sometimes with multiple offers. Sellers who still insist on overpricing their houses or who will not make repairs, improvements and concessions are experiencing few to no showings, and no offers.
Other encouraging news is the average sale price is $279,025, which is down from the all-time high of $298,477 in June 2007, but still above the average price of $253,781 posted in September 2006.
So the oft-discussed housing bubble still hasn't burst.
The number of listings on the market was 9,190, which is up from this year's low of 8,665 in June. Listing volume reached a record high in April 2007 at 10,387. So it is good to see that there are fewer sellers in the market now than there were in the spring.
The most stunning news is that only 683 properties sold in September 2007. This is way down from the craziness of June 2005, when 1,858 properties sold.
I think the dramatic decrease in buyers is due in part to the changes that occured in the mortgage industry in August. Borrowers with marginal credit or no savings can no longer buy houses. Buyers who are financially qualified to buy feel no rush to make a commitment, and are a little overwhelmed by the number of properties from which to choose.
My experience is that attractive, well priced houses in good locations are still selling quickly, and sometimes with multiple offers. Sellers who still insist on overpricing their houses or who will not make repairs, improvements and concessions are experiencing few to no showings, and no offers.
Tuesday, October 9, 2007
Building Permits
Sometimes I'm my own worst enemy. I just talked myself out of a sale by providing service that exceeds my clients' expectations. My clients were very interested in a wonderful old Central Tucson house. They even flew in from out of state to see it. They loved almost everything about it, and decided they could probably deal with the things they didn't love. Like many Tucson houses, this one has a guesthouse.
Tucsonans have a Wild West state of mind, so the chances that the guesthouse was built without a building permit were pretty high. I asked the listing agent whether the guesthouse was permitted. She didn't know, even though she represented the seller in their purchase of the property.
The guesthouse was about 25% of the total floor area of the house, and the additional area did not appear in the assessor's records. That is usually a pretty strong clue that the guesthouse was built without a permit.
It's possible to look for building permits online, but the records have been digital for only a few years, so to find anything older requires a trip down to the Maps and Records Department of the City of Tucson Development Services Office, followed by a battle with their microfiche machine. I found permits for all kinds of things pertaining to this house, but I did not find the thing I needed most, a permit for the guesthouse.
I told my buyer that the guesthouse wasn't permitted, and he asked what were the consequences. Unpermitted structures are common in Tucson, and usually there are no consequences to purchasing a property with unpermitted additions, but I can't say that there will never be problems.
One of my neighbors was always worried that I was going to turn the big shed behind one of my rentals into an illegal guesthouse. I kept telling him I had no interest in doing that, but he decided just to be sure, he'd better call the City building code compliance office and have them check it out. They determined the shed was built without a permit, and they made me bring it up to current code. I had to add more studs, and attach the roof to the walls and the walls to the floor with some sort of fasteners. I made three trips to City offices over the course of a month and spent $1,000 on a shed that doesn't even have water or electricity.
I ran into a problem a few years ago selling a listing with an unpermitted carport-to-family-room conversion. The first buyer to make an offer on my listing demanded that my seller get a building permit for the addition. I learned that getting a building permit after a a structure is built is no easy matter. For starts, the permit cost is doubled. Then the owner has to draw the building as if he were applying for a permit to build it, and he has to show all the plumbing, electrical, framing, roofing and mechanical systems. Of course, he doesn't know what they look like, so the walls have to be opened to show the inspector. The foundation and all other systems must meet current building code (not the code when the addition was built), and the structure must meet property line set-back requirements. If it's not possible to do this, in theory, the City could require the structure be removed.
I have never heard of that happening, but because it's possible in theory, I always tell my buyers to consider this potential risk. Most of them don't worry about it, especially if they already live in Tucson and they know how prevalent unpermitted additions are.
Sometimes I will see a house with an obvious illegal addition (ceilings too low, windows too small, furnace closet or garage window in a bedroom, etc.) and the assessor has included the addition in their records. Although some people accept this as proof that the addition is legal, I recommend digging deeper. The assessor may have just added the square feet of the addition because the additional area showed on the Multiple Listing Service (MLS) listing. The assessor is only concerned with collecting enough property tax on the house. The larger the house, the higher the tax bill. The assessor is not interested in whether the building meets code.
I am told the City building inspectors do not have time to sneak around alleys looking for illegal additions. They only respond to complaints. But you might have a neighbor like I had, who called the City to try to prevent me from building an illegal guesthouse. Or if you or your tenants annoy the neighbors, they may decide to take revenge with a visit from a building inspector. Not likely scenarios, but it could happen, and I think it's my job to help you with your due diligence.
So, my buyer decided to wait for a less complicated house to come along. We're both disappointed, but at least he won't be asking me a few years from now what do I know about unpermitted guesthouses, and when did I know it.
Tucsonans have a Wild West state of mind, so the chances that the guesthouse was built without a building permit were pretty high. I asked the listing agent whether the guesthouse was permitted. She didn't know, even though she represented the seller in their purchase of the property.
The guesthouse was about 25% of the total floor area of the house, and the additional area did not appear in the assessor's records. That is usually a pretty strong clue that the guesthouse was built without a permit.
It's possible to look for building permits online, but the records have been digital for only a few years, so to find anything older requires a trip down to the Maps and Records Department of the City of Tucson Development Services Office, followed by a battle with their microfiche machine. I found permits for all kinds of things pertaining to this house, but I did not find the thing I needed most, a permit for the guesthouse.
I told my buyer that the guesthouse wasn't permitted, and he asked what were the consequences. Unpermitted structures are common in Tucson, and usually there are no consequences to purchasing a property with unpermitted additions, but I can't say that there will never be problems.
One of my neighbors was always worried that I was going to turn the big shed behind one of my rentals into an illegal guesthouse. I kept telling him I had no interest in doing that, but he decided just to be sure, he'd better call the City building code compliance office and have them check it out. They determined the shed was built without a permit, and they made me bring it up to current code. I had to add more studs, and attach the roof to the walls and the walls to the floor with some sort of fasteners. I made three trips to City offices over the course of a month and spent $1,000 on a shed that doesn't even have water or electricity.
I ran into a problem a few years ago selling a listing with an unpermitted carport-to-family-room conversion. The first buyer to make an offer on my listing demanded that my seller get a building permit for the addition. I learned that getting a building permit after a a structure is built is no easy matter. For starts, the permit cost is doubled. Then the owner has to draw the building as if he were applying for a permit to build it, and he has to show all the plumbing, electrical, framing, roofing and mechanical systems. Of course, he doesn't know what they look like, so the walls have to be opened to show the inspector. The foundation and all other systems must meet current building code (not the code when the addition was built), and the structure must meet property line set-back requirements. If it's not possible to do this, in theory, the City could require the structure be removed.
I have never heard of that happening, but because it's possible in theory, I always tell my buyers to consider this potential risk. Most of them don't worry about it, especially if they already live in Tucson and they know how prevalent unpermitted additions are.
Sometimes I will see a house with an obvious illegal addition (ceilings too low, windows too small, furnace closet or garage window in a bedroom, etc.) and the assessor has included the addition in their records. Although some people accept this as proof that the addition is legal, I recommend digging deeper. The assessor may have just added the square feet of the addition because the additional area showed on the Multiple Listing Service (MLS) listing. The assessor is only concerned with collecting enough property tax on the house. The larger the house, the higher the tax bill. The assessor is not interested in whether the building meets code.
I am told the City building inspectors do not have time to sneak around alleys looking for illegal additions. They only respond to complaints. But you might have a neighbor like I had, who called the City to try to prevent me from building an illegal guesthouse. Or if you or your tenants annoy the neighbors, they may decide to take revenge with a visit from a building inspector. Not likely scenarios, but it could happen, and I think it's my job to help you with your due diligence.
So, my buyer decided to wait for a less complicated house to come along. We're both disappointed, but at least he won't be asking me a few years from now what do I know about unpermitted guesthouses, and when did I know it.
Arizona Opera
Saturday night we went to our first opera at the Tucson Convention Center Music Hall. Arizona Opera presented "Lucia di Lammermoor", an opera based on a story by Sir Walter Scott. It is basically the Romeo and Juliet story with an extra death, set among the nobility of seventeenth century Scotland. The stage set was stunning, the costumes were gorgeous, and the soprano, Tracy Dahl, was beyond beautiful. Her voice was like water music, and very touching. Although the melodrama was a bit overwrought at times, the famous scene in which Lucia went mad was riveting. The opera was in Italian, with English surtitles above the stage. I expected the surtitles to be distracting, but it only takes a second to read them, and then you return your eyes to stage.
This being Tucson, we saw many people dressed in "Tucson Casual", which means jeans and tee shirts. My pal Alona and I got dolled up, and while we weren't out of place, we were certainly in the minority.
We're looking forward to "The Magic Flute" in the spring. The music is by Mozart and the singing is in English. It's said to be one of the most accessible operas. If you've ever wondered whether you have an opera fan hidden deep within you, this might be the performance for you to see first.
This being Tucson, we saw many people dressed in "Tucson Casual", which means jeans and tee shirts. My pal Alona and I got dolled up, and while we weren't out of place, we were certainly in the minority.
We're looking forward to "The Magic Flute" in the spring. The music is by Mozart and the singing is in English. It's said to be one of the most accessible operas. If you've ever wondered whether you have an opera fan hidden deep within you, this might be the performance for you to see first.
Monday, October 8, 2007
New Improved FHA
Although I bought my first two houses with Federal Housing Administration (FHA) mortgages, as a real estate broker, I have never enjoyed working with government-insured loans. FHA insures mortgages so that people with little-or-no down payment, high debt-to-income ratios or marginal credit can buy houses. FHA used to be the only mortgage option for people in those circumstances.
FHA sounded good to the first-time buyer, because the seller was required to pay some of the buyer's closing costs. Of course, for this very reason, it sounded very bad to the seller. Then the seller learned that he would be required to provide a two-year roof warranty, which often resulted in providing a new roof. A "clear termite report" was required, which usually meant the seller paid for termite treatment and often repairs due to damage by termites, water or mold. Sometimes the appraiser appraised the house below the sale price. Result: no sale. The appraiser would always present the seller with a list of arbitrary and unpredictable repair requirements. Closing the sale would take at least six weeks instead of the usual four weeks needed for a conventional mortgage.
During the seller's market of 2003 to 2006, sellers would laugh if a buyer made an offer with FHA financing. There were plenty of investors with deep pockets, conventional financing or cash, and the FHA buyers were out of luck.
FHA was not such a great deal for the buyer, either. When a buyer puts less than 20% down on a house, the lender considers the loan risky. The lender wants to be compensated for the risk, and charges a mortgage insurance premium (MIP) that in effect adds about 0.5% to the interest rate. With a conventional mortgage, the buyer can stop paying the MIP once he has 20% equity in the house, either through appreciation or paying down the mortgage. With FHA, the MIP is for the life of the loan. I wasted $34 per month on MIP on a house I bought with FHA financing, even ten years after I bought the house and I had 70% equity. The risk of default was non-existent, but I had to pay this useless MIP until I refinanced.
All the wild and crazy lending practices of the last several years created new and better loan programs in the conventional, or non-government-insured, mortgage market. No savings, no credit, lots of debt? No problem! Buyers were no longer interested in FHA and its byzantine complexities.
FHA's share of the market dwindled to almost nothing.
Then, as we all know, all those wild and crazy mortgages came home to roost. The sub-prime conventional mortgage industry is history. Fortunately, the mortgage melt down occurred just as FHA decided that maybe they should stop making it so difficult to use FHA loans.
Last week, Jane Penttinen with Sunstreet Mortgage sent me these glad tidings regarding FHA.
The new and improved FHA guidelines may be the answer for buyers with limited cash to close, a less than stellar credit history, or both.
Maximum loan amount for Pima County is $239,850. Congress is considering raising this to $417,000.
Minimum down payment is 2.85%
Seller contributions up to 6% allowed. Buyer must have 3% of purchase price invested in the transaction
Debt ratios of 31/43 allowed (possible to go higher with strong compensating factors).
Non-occupant co-borrowers allowed (family members).
No cash reserves required.
Lenient credit standards.
No minimum credit score required.
Two-year minimum wait after discharge of a bankruptcy (three years if foreclosure involved).
Gift funds (from family) allowed for entire down payment and closing costs.
No clear termite report required unless appraiser calls for it.
No two-year roof certification unless appraiser calls for it.
No mandatory seller-paid closing costs.
Cash-out refinance allowed up to 95% of value provided borrower has occupied the property as a primary residence for at least the last 12 months (less than 12 months limited to 85%).
Condos must be on the FHA-approved list and must have 51% owner occupancy.
Nehemiah and Ameridream no longer allowed!
MIP can be dropped after five years if the buyer has 22% equity in the property, based on the original purchase price.
FHA: no longer a bureaucratic nightmare!
For more information, contact loan wizard Jane Penttinen at Sunstreet Mortgage. 520-237-8430 or 888-634-6399 or jpenttinen@sunstreetmortgage.com
FHA sounded good to the first-time buyer, because the seller was required to pay some of the buyer's closing costs. Of course, for this very reason, it sounded very bad to the seller. Then the seller learned that he would be required to provide a two-year roof warranty, which often resulted in providing a new roof. A "clear termite report" was required, which usually meant the seller paid for termite treatment and often repairs due to damage by termites, water or mold. Sometimes the appraiser appraised the house below the sale price. Result: no sale. The appraiser would always present the seller with a list of arbitrary and unpredictable repair requirements. Closing the sale would take at least six weeks instead of the usual four weeks needed for a conventional mortgage.
During the seller's market of 2003 to 2006, sellers would laugh if a buyer made an offer with FHA financing. There were plenty of investors with deep pockets, conventional financing or cash, and the FHA buyers were out of luck.
FHA was not such a great deal for the buyer, either. When a buyer puts less than 20% down on a house, the lender considers the loan risky. The lender wants to be compensated for the risk, and charges a mortgage insurance premium (MIP) that in effect adds about 0.5% to the interest rate. With a conventional mortgage, the buyer can stop paying the MIP once he has 20% equity in the house, either through appreciation or paying down the mortgage. With FHA, the MIP is for the life of the loan. I wasted $34 per month on MIP on a house I bought with FHA financing, even ten years after I bought the house and I had 70% equity. The risk of default was non-existent, but I had to pay this useless MIP until I refinanced.
All the wild and crazy lending practices of the last several years created new and better loan programs in the conventional, or non-government-insured, mortgage market. No savings, no credit, lots of debt? No problem! Buyers were no longer interested in FHA and its byzantine complexities.
FHA's share of the market dwindled to almost nothing.
Then, as we all know, all those wild and crazy mortgages came home to roost. The sub-prime conventional mortgage industry is history. Fortunately, the mortgage melt down occurred just as FHA decided that maybe they should stop making it so difficult to use FHA loans.
Last week, Jane Penttinen with Sunstreet Mortgage sent me these glad tidings regarding FHA.
The new and improved FHA guidelines may be the answer for buyers with limited cash to close, a less than stellar credit history, or both.
Maximum loan amount for Pima County is $239,850. Congress is considering raising this to $417,000.
Minimum down payment is 2.85%
Seller contributions up to 6% allowed. Buyer must have 3% of purchase price invested in the transaction
Debt ratios of 31/43 allowed (possible to go higher with strong compensating factors).
Non-occupant co-borrowers allowed (family members).
No cash reserves required.
Lenient credit standards.
No minimum credit score required.
Two-year minimum wait after discharge of a bankruptcy (three years if foreclosure involved).
Gift funds (from family) allowed for entire down payment and closing costs.
No clear termite report required unless appraiser calls for it.
No two-year roof certification unless appraiser calls for it.
No mandatory seller-paid closing costs.
Cash-out refinance allowed up to 95% of value provided borrower has occupied the property as a primary residence for at least the last 12 months (less than 12 months limited to 85%).
Condos must be on the FHA-approved list and must have 51% owner occupancy.
Nehemiah and Ameridream no longer allowed!
MIP can be dropped after five years if the buyer has 22% equity in the property, based on the original purchase price.
FHA: no longer a bureaucratic nightmare!
For more information, contact loan wizard Jane Penttinen at Sunstreet Mortgage. 520-237-8430 or 888-634-6399 or jpenttinen@sunstreetmortgage.com
Wednesday, October 3, 2007
Rose Canyon
We finally made our first trip in the 1995 VW Eurovan camper we bought in July 2006. What took us
so long? We wanted to take our first trip
in August 2006 to the Chiricahuas, but the morning we were supposed to leave, excruciating back pain put me in the hospital for three days. Now, 42 pounds lighter and a lot healthier, I am finally ready for a one night shake-down trip to the Catalinas.
Sunday afternoon we headed up the Catalina Highway. Molino campground was closed. General Hitchcock only has a few sites, and they were filled. Past Windy Point, we turned down the road to Rose Canyon. Ever since I read Cadillac Desert, I have been opposed to dams, particularly dams on the rare and precious rivers of the Southwest. I was not interested in seeing the abomination that plugged up Rose Canyon to make a crowded fishing hole. But the next and last campground was Spencer Canyon, five miles further and 1,000 feet higher, and it would be dark soon. We thought it would be cold enough at 7,000 feet, so Rose Canyon it was.
Most of the camp sites at Rose Canyon are for tents, and we were a little sheepish about now requiring a site for an RV. After a lot of driving around looking for the perfect combination of level site, privacy and view, we chose site 46. We popped the camper top, got the stove fired up, and Steve made some fried eggs to go with the spinach and lentils, Spanish rice and fresh veggies we’d packed. We ate at the picnic table and rejoiced that we and the camper finally made a trip to somewhere that isn’t a repair shop.
Something strange is going on in Rose Canyon, and maybe all over Mount Lemmon. A lot of pines have been chopped down, cut into five foot logs, and stacked into teepee-shaped piles. On top of each pile is a square yard of clear plastic, with a few more logs on top. The plastic is not enough to keep the logs dry; it’s only enough to make the piles ugly and non-biodegradable. We suppose this has something to do with thinning the forest in the aftermath of the horrible Aspen Fire, which burned for almost a month in summer 2003 and covered 85,000 acres before the monsoon put it out. If the forest had to be thinned, why were the logs left here to rot? We remembered a few years ago after some thinning, the Forest Service offered firewood-sized logs to anyone who wanted to haul them away. The waste and the ugliness were sad.
Our first wildlife sighting was of some big, beautiful squirrels. With tufted ears, bright white bibs and paws, and gorgeous fluffy tails with white undersides, these were clearly not the Arizona gray squirrels that run across our patio. These were Abert’s squirrels, or tassel-eared squirrels. They entertained us with turf wars that sent them spiraling around the pine trees. Those log teepees seem to be favored dining spots and lookouts.
We walked down the road in search of the "lake", but it was too dark to see much. We could see plenty of bear-proof garbage cans and signs warning us of bear country. We don’t think there are really any bears left up here after the unfortunate bear/human conflicts a few years ago resulted in several bears being killed or moved off the mountain, which is the same thing. Still, I was a little unnerved by every movement in the dark woods. Steve turned on his flashlight and we saw a juvenile deer about 20 feet from us. True to form, it froze and stared at us until Steve turned off the light. We walked up the road to Catalina Highway and back, a round trip of about two miles. We knew we were walking in thin air.
We got back to the camper and delighted in its Swiss-Army-knife qualities. Besides the gas cooktop, we have a water pump and sink, a propane/AC/DC refrigerator (which still doesn’t work all that great after the hundreds of dollars I have spent on it), jalousie windows with screens, exhaust fan, solar panels, tables, front seats that swivel to face the tables, lots of storage nooks, and two beds. The beds are small, and the attic bed under the pop-up roof induces claustrophobia and bruised knees, but it was a lot better than sleeping on the ground, especially when the rain started.
The rain continued all night and most of the day, but it was a warm, light rain, and most welcome to desert rats like us. We ate our breakfast at the table inside the camper with the sliding side door open to the fresh and pine-scented air. Deliciously decadent after years dealing with the weather while backpacking or car camping in tents.
We walked down to the end of the road to look for the lake again. This time we found it. I immediately saw why this place is so dear to the hearts of so many Tucsonans. Water in the desert is always fascinating, even when it’s an artificial lake. Fog flowed down through the trees and slid across the lake. Trout jumped into the air as the rain gently dappled the water.
And the birds! Gray jays, robins, mountain chickadees, acorn woodpeckers, white-breasted and pygmy nuthatches, all strangers to Tucson, only a hour away and 4,600 feet lower. The most amazing creature was an osprey. Yes, I know he lives near the ocean, but Peterson says he also lives by California lakes. This one was just a little extra adventurous. He caught a fish with the characteristic osprey feet-first plunge into the lake, not the glide and grab of an eagle. And he flew with a bend in his wings at his black wrists. An osprey, for sure. What a sight!
As the sun went down, the air turned golden. The pines looked like autumn aspens reflected in the lake. I guess this dam idea isn’t so bad after all.
We got back to the camper after dark and ate dinner before packing to leave. Steve had the prize wildlife sighting of the trip. While I was up in the attic doing battle with the sleeping bag, Steve was standing inside the camper as a striped skunk walked up to the door. Steve said it was a beautiful beast, with thick shiny fur, not like the scrawny beggar skunks we have seen sneaking around Provincetown on Cape Cod (or in our furnace closet at home, for that matter). By the time I was able to get out of the attic, the skunk had ambled away with his dignity and wildness intact.
Back down the winding mountain road to millions of lights filling the valley to the horizon. It was a lovely get away. Why did it take so long? When are we going to do it again?
so long? We wanted to take our first tripin August 2006 to the Chiricahuas, but the morning we were supposed to leave, excruciating back pain put me in the hospital for three days. Now, 42 pounds lighter and a lot healthier, I am finally ready for a one night shake-down trip to the Catalinas.
Sunday afternoon we headed up the Catalina Highway. Molino campground was closed. General Hitchcock only has a few sites, and they were filled. Past Windy Point, we turned down the road to Rose Canyon. Ever since I read Cadillac Desert, I have been opposed to dams, particularly dams on the rare and precious rivers of the Southwest. I was not interested in seeing the abomination that plugged up Rose Canyon to make a crowded fishing hole. But the next and last campground was Spencer Canyon, five miles further and 1,000 feet higher, and it would be dark soon. We thought it would be cold enough at 7,000 feet, so Rose Canyon it was.
Most of the camp sites at Rose Canyon are for tents, and we were a little sheepish about now requiring a site for an RV. After a lot of driving around looking for the perfect combination of level site, privacy and view, we chose site 46. We popped the camper top, got the stove fired up, and Steve made some fried eggs to go with the spinach and lentils, Spanish rice and fresh veggies we’d packed. We ate at the picnic table and rejoiced that we and the camper finally made a trip to somewhere that isn’t a repair shop.
Something strange is going on in Rose Canyon, and maybe all over Mount Lemmon. A lot of pines have been chopped down, cut into five foot logs, and stacked into teepee-shaped piles. On top of each pile is a square yard of clear plastic, with a few more logs on top. The plastic is not enough to keep the logs dry; it’s only enough to make the piles ugly and non-biodegradable. We suppose this has something to do with thinning the forest in the aftermath of the horrible Aspen Fire, which burned for almost a month in summer 2003 and covered 85,000 acres before the monsoon put it out. If the forest had to be thinned, why were the logs left here to rot? We remembered a few years ago after some thinning, the Forest Service offered firewood-sized logs to anyone who wanted to haul them away. The waste and the ugliness were sad.
Our first wildlife sighting was of some big, beautiful squirrels. With tufted ears, bright white bibs and paws, and gorgeous fluffy tails with white undersides, these were clearly not the Arizona gray squirrels that run across our patio. These were Abert’s squirrels, or tassel-eared squirrels. They entertained us with turf wars that sent them spiraling around the pine trees. Those log teepees seem to be favored dining spots and lookouts.
We walked down the road in search of the "lake", but it was too dark to see much. We could see plenty of bear-proof garbage cans and signs warning us of bear country. We don’t think there are really any bears left up here after the unfortunate bear/human conflicts a few years ago resulted in several bears being killed or moved off the mountain, which is the same thing. Still, I was a little unnerved by every movement in the dark woods. Steve turned on his flashlight and we saw a juvenile deer about 20 feet from us. True to form, it froze and stared at us until Steve turned off the light. We walked up the road to Catalina Highway and back, a round trip of about two miles. We knew we were walking in thin air.
We got back to the camper and delighted in its Swiss-Army-knife qualities. Besides the gas cooktop, we have a water pump and sink, a propane/AC/DC refrigerator (which still doesn’t work all that great after the hundreds of dollars I have spent on it), jalousie windows with screens, exhaust fan, solar panels, tables, front seats that swivel to face the tables, lots of storage nooks, and two beds. The beds are small, and the attic bed under the pop-up roof induces claustrophobia and bruised knees, but it was a lot better than sleeping on the ground, especially when the rain started.
The rain continued all night and most of the day, but it was a warm, light rain, and most welcome to desert rats like us. We ate our breakfast at the table inside the camper with the sliding side door open to the fresh and pine-scented air. Deliciously decadent after years dealing with the weather while backpacking or car camping in tents.
We walked down to the end of the road to look for the lake again. This time we found it. I immediately saw why this place is so dear to the hearts of so many Tucsonans. Water in the desert is always fascinating, even when it’s an artificial lake. Fog flowed down through the trees and slid across the lake. Trout jumped into the air as the rain gently dappled the water.
And the birds! Gray jays, robins, mountain chickadees, acorn woodpeckers, white-breasted and pygmy nuthatches, all strangers to Tucson, only a hour away and 4,600 feet lower. The most amazing creature was an osprey. Yes, I know he lives near the ocean, but Peterson says he also lives by California lakes. This one was just a little extra adventurous. He caught a fish with the characteristic osprey feet-first plunge into the lake, not the glide and grab of an eagle. And he flew with a bend in his wings at his black wrists. An osprey, for sure. What a sight!
As the sun went down, the air turned golden. The pines looked like autumn aspens reflected in the lake. I guess this dam idea isn’t so bad after all.
We got back to the camper after dark and ate dinner before packing to leave. Steve had the prize wildlife sighting of the trip. While I was up in the attic doing battle with the sleeping bag, Steve was standing inside the camper as a striped skunk walked up to the door. Steve said it was a beautiful beast, with thick shiny fur, not like the scrawny beggar skunks we have seen sneaking around Provincetown on Cape Cod (or in our furnace closet at home, for that matter). By the time I was able to get out of the attic, the skunk had ambled away with his dignity and wildness intact.
Back down the winding mountain road to millions of lights filling the valley to the horizon. It was a lovely get away. Why did it take so long? When are we going to do it again?
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