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Real Estate Remains Fundamental to Local Commerce

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If we have the “outdoorsy” part covered, then the “affordability” factor is what we should focus on.

For most of us, 2022 was a year spent watching the housing market closely. As mortgage rates fluctuated and home prices continued to rise, many began to expect that the real estate industry was in trouble. However, a better word would be “transition.”

Although inflation continues to be a concern, consumer sentiment remains strong. According to the most recent data from the U.S. Bureau of Labor Statistics, employment numbers are holding steady in our region. Stable employment is good for commerce, generally speaking. But, what does this mean for the housing market in the Quad Cities, and, by extension, the business community as a whole?

According to a joint analysis from The Wall Street Journal and Realtor.com published in July, “All of the top 20 markets in [the] index fall into one of two categories: affordable or outdoorsy.” The Quad Cities has an abundance of outdoor attractions; more lakes than any other city in Arizona, which offer fishing, boating and swimming; hiking, biking and exploring along our extensive trail systems; Prescott is home to the World’s Oldest Rodeo and a vibrant horse culture; our culinary scene includes Master Chefs, farm-to-table retreats and dining options with outdoor patios that can stay open for most of the year.

If we have the “outdoorsy” part covered, then the “affordability” factor is what we should focus on. Record low mortgage interest rates and increased time spent at home during the pandemic resulted in a surge of home buying. This caused a drastic reduction in available homes just as we saw an influx of families relocating to our area from around the country. You can look around and see neighborhoods being developed to try and meet demand, but labor and material shortages continue to impact new construction. Inventory is increasing but is still low, far below expectations. Historically, one of the biggest drivers of price is inventory, and a key reason for higher home prices is that the country is millions of homes short of projected demand. A thriving real estate market is an integral part of the local economy; what supports one supports the other.

There are a few things to keep in mind as we look forward to the 2023 business year:

The recent slowdown will take some time to show up in the price index. According to the monthly housing data provided by the Prescott Area Association of Realtors, median sales prices in 2022 are not increasing as rapidly as last year, but are still increasing. Talk to a licensed realtor if you’re considering listing a property so they can prepare a Comparative Market Analysis (CMA) and place you at the best price point for the current market.

Economists expect home price gains for the foreseeable future. Transitions in the housing market are rarely sudden and dependent on a complex host of factors. Residential, commercial and rental properties are likely to continue gaining value. Your realtor can provide up-to-the-minute market trends to keep you informed.

Many cities are concerned about the strain on resources and are trying to curb development. A big part that local realtor associations play is to advocate, educate and serve to protect private property rights in your community. We build relationships with local leaders, track national legislation and act as an arm of the National Association of Realtors in pursuing grants and campaigns in the public’s best interests.

High demand and low inventory are likely to persist. The current transition in the housing market and its associated effects on the business and residential sectors is likely to continue for some time. A realtor is there to represent your best interests and fiduciary responsibilities. They are licensed, bound by a strict code of ethics, and work for you.

 

The Quad Cities is an amazing place to buy a home, raise a family, start a business or retire. Regardless of any changes we see in the coming year, that’s one fact that will never change. QCBN

By George Beitzel

To find a REALTOR, visit www.paar.org/find-a-realtor.

George Beitzel is a local realtor and the 2022 president of the Prescott Area Association of Realtors (PAAR). For additional information or to contact PAAR, go to www.paar.org.

Will the New Year Deliver Another Hot Real Estate Market?

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So, what do prospective buyers need to do to get the home they want at a price they can afford?

For those in the business of real estate, 2021 was among the fastest-moving markets in history throughout the Quad Cities area. Some of the statistics are actually hard to believe. However, the unrivaled Multiple Listing Service provided by the Prescott Area Association of Realtors (PAAR) reveals that, last year, homes in this area spent just 11 days on the market. That is half the time it took homes to sell in 2020.

Not only is home inventory flying off the shelves, the median price buyers paid was $417,615, which is 22.7% higher than in 2020. Most of the area’s sales – about 40% – were homes priced between $400,000 and $700,000, with another 37% of home sales in the $200,000 to $400,000 price range. Home sellers in Dewey-Humboldt and Chino Valley experienced the largest increase, at 7% more sold than 2020.

Across the board, the largest increases occurred in land sales. Chino Valley was at the top of the list with a 24% year-over-year increase, or 118 sales of land. All other areas in the region reported an increase of 20% to 24% except Prescott Valley, which experienced a 4% increase.

What’s Going On?

Although the Quad Cities region has enjoyed a healthy real estate market for some time, what is the impetus for such dramatic numbers? For one thing, new homes are not being built at the same rate, curtailing available housing. Supply chain delays for new home construction, coupled with labor shortages during this time of COVID-19, have driven more  buyers to existing homes. Not only are there limited additions of new homes to the area, but prices are reflecting the higher cost of hard-to-find building materials.

Consequently, buyers have to act fast, and prices are higher than in recent years. So, what do prospective buyers need to do to get the home they want at a price they can afford?

How to Navigate Buying and Selling

Step one is to obtain the professional services of a realtor, because you will need an expert to navigate this unprecedented environment. These days, it is a must to work with a skilled realtor, who, every day, has the most up-to-date information on home inventory and understands the nuances of the local market and individual neighborhoods.

Step two: Because buyers will most likely have to make a purchase decision quickly, be ready! Get pre-qualified, and know your must-haves and what you’re willing to compromise on. Additionally, getting pre-qualified helps you know what you can afford so you can focus and not waste time when house hunting in this swirling market. Take advantage of your realtor’s knowledge to help you bid competitively.

Also, be prepared to tour homes virtually. With as fast as the market is moving, and many homes receiving multiple offers shortly after listing, you may need to take a virtual tour if you can’t see the home right away in person.

And, finally, make sure you understand the contracts and other documents you need to sign when purchasing a home or even just putting in an offer. Having a knowledgeable guide – like your realtor – by your side will give you peace of mind, whether you are a buyer or a seller.

As a seller, there is other important language in the contract to contemplate besides the dollar amount of the offer because the highest bid is not necessarily the best offer. Many factors should be considered such as the closing timeline, type of financing the buyer is using and contingencies, all of which will be stated in the legal documents.

Putting up a home for sale is an emotional experience for many sellers, which can make the entire process feel like being on a rollercoaster. After all, it’s hard not to take things personally when you are selling a piece of property that has meant so much to you and your family.

On the other side of the table, buyers may be on their own rollercoaster. This may be their first home or the place that finally brings them closer to their families. A realtor is objective and can help sellers and buyers keep their focus on the goal of completing a home sale on mutually acceptable terms and making the experience as painless as possible.

To find a realtor, visit paar.org/find-a-realtor. QCBN

By George Beitzel

George Beitzel is a local realtor and the 2022 President of the Prescott Area Association of Realtors (PAAR). For additional information or to contact PAAR, go to paar.org.

Who Pays the Real Estate Agent?

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Buyers should expect to sign an agreement with a savvy buyer’s agent.

This is a frequently asked question in any consultation between client and agent. The seller selects an agent to list their home and is often surprised to hear the estimate of fees for this process, including a commission for both the listing agent and the agent who brings the buyer.

The listing broker is paid commission from the seller proceeds at closing and out of that compensates the agent who brings the buyer, also known as the “cooperating agent.”  This is how it has worked for decades, but changes are coming as a result of a class action suit filed against many major real estate corporations, the multiple listing service providers and the National Association of Realtors. The complaint centered around transparency on who is paying the commission in a real estate transaction. The National Association of Realtors is voluntarily rolling out some changes to increase transparency in commissions paid for real estate services.

What is the Problem?

Buyers do not pay their own agent commission, so buyers often view their agent’s services of showing the property, contract negotiation and transaction consulting services as “free.” Sellers do not want to pay the buyer’s agent for essentially negotiating against them.

Who Really Pays the Commission?

All commissions and fees come out of the funds the buyer pays the seller for the home. Sellers consider this amount in the price they ask for the home so an argument can be made that the buyer pays the commission when they pay at or near the list price of the home.

What if I Skip the Agent?

Consumers have been encouraged to visit various real estate portals and search for homes. The driver for the consumer is to get real estate information without having to speak to an agent until they are ready. What happens behind the scenes is the real estate information portal sells the consumer’s information to a real estate licensee who then follows up and often becomes the agent for the client. The agent then splits up to half of the commission with the real estate portal that provided the consumer info as a sales lead. This is how portals make their income to continue developing their sites and providing information to consumers.

What’s New in 2022?

The trend is moving toward buyers paying their own agent commission at close of escrow. This could be an issue for a cash-strapped first-time homebuyer who is among those who most need the services of a real estate agent. Agents working with buyers will be asking for signed employment and compensation agreements to ensure they are fairly compensated for their time advocating on behalf of the buyer.

Starting in January 2022, commissions are now viewable by buyers and sellers on real estate portals. Buyers can see what their agent will be paid if they purchase a home that they view online. It helps to know in advance if the commission offered the buyer’s agent will cover the entire fee charged or if the buyer will have to kick in at closing to ensure their agent is paid. Sellers will know if the listing agent is offering a fair incentive to the agent who brings the buyer.

Buyers should expect to sign an agreement with a savvy buyer’s agent. A great buyer’s agent is priceless if they lead your search for the right property and advocate on your behalf while keeping you informed throughout the transaction. The first test for a consumer could be to see if the agent is savvy and negotiating on their own behalf to ensure they will be paid and can invest the time into you and your property search. QCBN

By Leslie Guiley

For more information, please visit our office or call 928-443-8800 or bloomtreerealty.com.  Leslie Guiley is chief operating officer at Better Homes and Gardens Real Estate | BloomTree Realty, which includes BHGRE Commercial and she is an area ambassador with Inman News.

Top Ten Trends Impacting Real Estate

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The market is split into the haves and have-nots in terms of where capital is flowing.

Everyone wants to know where the real estate market is headed. There was big news in November when the real estate giant, Zillow, known for its consumer website and property value estimates, announced it would no longer be buying homes.

In the recent real estate runup, Zillow had turned from its core business model of providing real estate listings to gain consumer interest and then selling the consumer’s contact information to real estate agents and brokerages. Zillow had transformed into a real estate brokerage and, with deep-pocketed investors, was buying thousands of homes in 25 major market areas. Then, what seemed to be an abrupt pump of the brakes on new purchases, the company admitted the algorithm made it difficult to determine property values in three to six months during one of the strongest markets in history.

Zillow laid off 25% of its workforce and is arranging bulk sales of property to institutional investors that plan to put the properties on the market as rentals in a buy-and-hold strategy that will not dump much-needed inventory into the market for sale. There is also a shortage of rental property and that has created a spike in rental rates at a time when most renters have had a reduction in income.

The National Association of Realtors remained cautiously optimistic at its recent annual conference in San Diego, California. Buyer demand is expected to continue through 2022, although we have seen a tapering of multiple offers in our local market as sellers realize there is a limit to how high home prices can climb in one or two years.

Here are the top 10 trends impacting commercial and residential real estate as we move into 2022:

  1. Bifurcation of Capital Markets

The market is split into the haves and have-nots in terms of where capital is flowing.

Industrial real estate has been the darling of commercial investment, so much so that cap rates have fallen from 2% to 3%. Phoenix currently has 29 million square feet of new industrial space under construction and there is little supply in the Prescott area.

Multi-family investments are attracting capital but there are just not enough properties to satisfy the decade-high demand for multi-family rentals. The Phoenix metro area is on the list of top areas in rental demand and has the strongest apartment rental growth of 21% according to a NAR analysis of Costar data.

Ecommerce is booming but brick and mortar is gaining market share particularly in open air centers or strip malls anchored by a grocery store.

Restaurants overall are suffering, but we are seeing a demand for quick-service spaces that accommodate drive-thrus, and not just one, but two, three and even four drive-through lanes with small or non-existent dining rooms.

  1. The Need for Adaptive Re-Use

There are many empty big box stores and regional malls that need to be reimagined with the needs of the community in mind. In Prescott, we have seen hotels repurposed into apartments and that is the kind of thing developers and communities need to be working on together.

  1. Economic Structural Change

The U.S. economy is still strong internationally; however, the pandemic continues to cause uncertainty and we are experiencing inflation. Interest rates are so low that many see that as a sign of an economy not as strong as we would like it to be.

  1. Political Polarization

The country has been more focused on what divides us than on what we agree on and that has made it difficult to find solutions as the political aisle widens across the parties in Washington and at home. Real estate needs a strong, stable government to thrive.

  1. Housing Supply and Affordability

Costs of both for-sale and rental housing are rising much faster in secondary and tertiary markets like Prescott as people flee pricier gateway markets and are able to bid up residential prices past the point that local workers can afford.

Housing production overall has fallen short of new household formations as millennials approach their peak buying years and more baby boomers are aging in place. Many first-time homebuyers struggle with putting together their down payment, with only 28% receiving assistance from family or gifts.

About 80% of renters earn $36,000 to $60,000 annually and only 3% of construction of rentals in the past 10 years was for B and C class units, which would be considered affordable. Millions of moderate-to-lower income families are severely housing cost burdened, spending more than half of their income on housing.

  1. Infrastructure  

This is perhaps the biggest issue facing our Prescott area. Commercial agents working with companies looking to bring business and jobs to the area cite the distance from I-17, the lack of a rail line or port to deliver goods and even the cost to bring utilities to an area or upgrade water mains and sewer systems to increase demand on an area. Matt Fish from BHGRE Commercial said, “Modern and reliable infrastructure is an essential building block of commercial development. Without the roads to access it, without the power to run it, without the gas to heat it, and without water and sewer, it’s not profitable to build it. Our economy is changing as fast as our society. In order to continue attracting new jobs, economic opportunities and essential services, we must constantly invest in the infrastructure needed to ensure economic growth.”

There is also a social equity concern with infrastructure such as widely available broadband. As more shopping, work and school moves online, we have a great need for expanded service to rural areas.

  1. Logistics

The economics of the last mile of service are growing ever more important to the field of logistics as companies struggle to predict demand and manage their supply chains with significant challenges not always in their control.

  1. Environmental, Social Governance, or ESG

ESG is at a tipping point, especially in major market areas. A reported 82% of the people making the world’s real estate decisions are considering ESG. Most of our carbon footprint comes from the buildings we live in, work in and construct. Buildings without the proper retrofitting are falling out of favor in large funds as a preference for buildings that are newer and constructed with attention to clean energy are garnering the most attention and, of course, capital. This has not been a big concern for seekers of commercial real estate in our area, but it will be someday.

  1. Tech Acceleration

This year has taught us that adoption of tech is a must. Some technology solutions were adopted easily, especially those that aided us in working from home and doing more business in a contactless environment.

  1. Remote Work and Mobility 

A third of workers were able to work from home specifically because of the pandemic, according to the BLS, but there were sharp differences by educational level. More than half of workers with a college degree worked from home, while only 5% of those with a high school diploma did.

NAR economist Lawrence Yun believes we are only in the first innings of work-from-home options. We now have “WFA,” or Work From Anywhere! The great resignation is in sectors where employees cannot work from home – in retail, hospitality and entertainment/events.

Working from home is trending down as employees go back to work, but it remains elevated above pre-pandemic levels. Office occupancy levels are increasing but the vacancy rate is still high in metro areas. In downtown Prescott, we have had high demand for office space and there are almost zero available listings. QCBN

By Leslie Guiley 

Leslie Guiley is chief operating officer at Better Homes and Gardens Real Estate | BloomTree Realty, which includes BHGRE Commercial and she is an area ambassador with Inman News.

The Last Large Parcel of Private Land in Northern Arizona Goes into Escrow

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500 Acres Just Outside of Flagstaff in Williams To Also Include Approximately 75 Custom Home Lots within Larger Master Planned Community

One of the largest privately owned parcels of land in the cool pines of Northern Arizona is currently in escrow and scheduled to close this year.

Located in Williams, just 30 minutes from Flagstaff in Coconino County, the 500 acres are owned by Valley entrepreneur Max Biegert, who spent 85 million to develop and build the Grand Canyon Railway and Hotel in the late 80’s. He is selling the land to developers to make way for a new mini master planned community that would include custom homes as well as other housing options. Developers are also in negotiations with an undisclosed theme park entertainment design company to develop 85 acres of the land into a possible western themed story park including other hospitality uses. Williams is already a tourism destination as evidenced by BEARIZONA, who saw 500,000 visitors in 2020 alone.

Listed for $20M, the property is currently in escrow after a comprehensive two-year marketing campaign. The property is located at interstate 40 and Grand Canyon Boulevard. The purchase is scheduled to close escrow later this year.

Principals Brent Moser and Mike Sutton of Lee & Associates are representing the transaction. Moser and Sutton specialize in large and complex mixed-use land and development projects throughout Arizona.

Moser said this will be one of decade’s most significant sales for the region.

“There is nothing of this magnitude currently for sale or possible for development on the private land side in Northern Arizona,” said Moser. “We are moving swiftly to get the property closed and entitled so that we can announce more exciting plans for the project in the coming months.”

Moser says once completed the project will have regional and even a global draw as it sits at the gateway to the Grand Canyon National Park. Gail Jackson, President and CEO at ECoNA says, “This new development will bring much needed housing and diversity to our strong tourism offerings in Northern Arizona.”

Offering views of the 35-acre lake, pine trees and Bill Williams mountain, the property is expected to draw a huge interest list. While it’s still early in the process, Moser says 90 of the 500-acres will be used for private custom lots which will be elevated over 100 feet above Gonzales Lake and available for purchase by the general public.

“Housing is really the driving force for this project, as the demand has never been greater in Northern Arizona,” said Moser. “We are in the process of getting all the approvals and entitlements in place with a plan of breaking ground in early 2022.”

More details will be announced in the coming months.

For media inquiries, please email Jparks-Sturgeon@rosemoserallynpr.com or call 480.495.3806.

For real estate inquiries email CanyonGatewayWilliams@gmail.com

About Brent Moser and Mike Sutton

Brent Moser and Mike Sutton are one of the most successful land sales teams in Arizona. Their forty-five years of combined experience in commercial real estate, expansive market knowledge and invested relationships across Arizona provides clients with the holistic approach to land sales and development. They focus on commercial and residential land opportunities in Arizona with a major focus on significant transportation corridors. Some current major projects include master planned communities in the Surprise area of Maricopa County, Marana and Northern Pima County, as well as urban mixed-use projects such as South Pier on Tempe Town Lake and One Scottsdale, in addition to multiple large investment opportunities in the Phoenix Metro Area.

Assessing the Residential Real Estate Market

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  The No. 1 tool on your side is knowledge, and the more prepared you are before placing your home on the market or placing your first offer, the more likely you are to get your desired outcome.

Homes for sale nationally are down 52% over the same time last year and in Arizona, there was a 64% decrease in inventory over last year. Demand is up as potential buyers re-evaluate their priorities in homes and lifestyle during and after the pandemic. There are four offers for every listing and intense competition has led to double-digit price growth according to the National Association of Realtors.   Absorption rate measures how fast we would sell out of the current homes on the market if no new listings were added, and we are under one month in Prescott and the Quad Cities. The list price has become the starting price as buyers bid over market and financed offers struggle to compete with all cash offers. Speculation abounds about another bubble to burst, so let’s look at the fundamentals of this market.

Migration to Arizona has been strong and it lands in the Top Five on UHAUL’s migration growth list.    Buyers in our area have been able to sell homes in more expensive areas and can afford to pay cash about 50% of the time. Baby Boomers are very attracted to the Quad Cities area, while the Millennials are edging them out to be the largest homebuying demographic in our state and nationwide.

Nationally, there have been 13 straight years of below-average building of new homes. We have not made up for or matched the pace of building during the last boom. We do need to build more homes to increase the supply, but it won’t be done fast enough to be the complete solution. Shortages in skilled labor, increases in the costs of building supplies and the length of the entitlement process contribute to how quickly developers can add supply to the market. The National Association of Realtors posits that to get back to a six-month healthy supply of inventory, an additional 2.7 million homes should be on the market for sale.

There is a foreclosure moratorium in place until June 30, and whether that will be extended is a subject of much discussion. There are about four million borrowers behind on their mortgage payments, but banks are working with many to add overdue payments to the end of their loan. Borrowers that can’t qualify for this type of loan restructure likely will be able to sell their homes at a profit, as equity has climbed in the past few years. As more of these homes come on the market and as vaccines ease sellers’ hesitancy to have buyers visit their homes, we do expect a balancing of supply and demand to occur.

How does a buyer succeed in this market? One way is to have a strong local agent on your side as sales do occur prior to hitting the general market. Know what you are looking for and be prepared to look at a home quickly and decide whether to place an offer. Buyers in a competitive market need to go in strong and fast to not miss an opportunity. Get advice on the risks in waiving home inspections and appraisals as ways to sweeten the deal. Too much sweet can promote different aches and pains in the process, and a skilled agent can help you cap your risk.

If you are a seller, the highest offer is not always the best offer. An experienced agent can be your best asset in negotiation during a market that moves fast. This professional can help you weigh which offer is most likely to get to closing date and this can be absolutely critical if your next home purchase relies on the sale of your current home.

The No. 1 tool on your side is knowledge, and the more prepared you are before placing your home on the market or placing your first offer, the more likely you are to get your desired outcome. QCBN

By Leslie Guiley

Leslie Guiley is the co-founder of Better Homes & Garden Bloom Tree Realty.

 

Remodeling Industry Going Strong

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The remodeling market declined significantly at the onset of COVID-19 in March and April of 2020, but has since more than fully recovered.

Welcome to “At Home With Tom & Sandy.” We are here to give you the inside scoop and tips on everything A to Z for your home. Settle in, enjoy, and have fun reading our column. We sure do enjoy sharing our words with you. Thanks for being such loyal and great readers.

Sandy:  Well hello, Tom, and happy April.

Tom:  Back at ya, Sandy. Inasmuch as you are the lady with her ear to the popular winds, what kind of calls are you getting these days? Are they COVID-related?

Sandy:  Oh my, not COVID. However, speaking of COVID, I am thrilled to see the rollout of the vaccines.

Tom:  My wife and I received our vaccinations at the Findlay Center. Very well organized. No waiting. But, I agree, so many are ready to move on and start to enjoy life.

Sandy:  Most of the calls we are getting at YCCA are homeowners asking for information on four basic topics. Bath remodels, kitchen remodels, interior and exterior painting and handicapped accessibility retrofitting.

Tom:  Wow! You really have your finger on the pulse. The remodeling industry is staying quite steady these days.

Sandy:  I would say steady, strong and pretty darn solid. With families staying at home more, their imagination takes over and opens all manner of ways to refresh their homes. Tom, can you give us some of your thoughts on these topics?

Tom:  Sure. The best starting point for any project is PLANNING!

Sandy: That message has been consistent. And good planning goes hand-in-hand with research.

Tom:  With just about everybody here having access to the internet, it has become something folks can do while staying at home. We find that most folks have been to our website long before they make the call.

Sandy:  I agree. At YCCA, we take the time to help folks wade through the tons of information out there. A call to us can save hours or even days of searching.

Tom:  YCCA is a great service to the community, for sure. Getting back to steps to take, I suggest the budget should be next. If you have $5,000 to do a 5’ x 8’ bathroom, then that will direct your focus to certain solutions. You truly need to communicate that up front with a design professional.

Sandy:  That is so true and so many folks are afraid to give out that information. I know the average national cost of replacement in a bath that size is almost twice that amount.

Tom:  Yes, you are right on. So, communicating budget up front saves you and the remodeler quite a bit of time.

Sandy:  The point is to not spend time guessing and working on a plan that does not even match the budget. And a budget can always be matched with a plan. Let’s talk about painting. I feel that planning for painting, while not as potentially complex, is still important.

Tom:  You need to choose colors, of course, and a qualified painter can help you select the type of paint appropriate for your project.

Sandy: A licensed, bonded and insured painter (also a member of the YCCA) can also assist with preparation, fixing all the knicks and cracks before painting. So, yes, planning is needed. When planning on painting, I always suggest obtaining three bids. It is important to call out the paint use. There are three levels of exterior paint and if this is not specified up front, the bids will most certainly be unbalanced. Gosh, I could go on and on about painting. I would hijack our column for sure!

Tom, I would say retrofitting for disabilities certainly needs planning. There are a lot of different ways to make aging in place more accommodating and comfortable.

Tom:  True, the solution to making your home more accommodating and comfortable begins with determining the level of disability one has and what that might lead to in the future. Many disabilities are not wheelchair-bound, as is the common perception.

Sandy:  Are there certifications people should look for? I see an alphabet soup of acronyms following people’s names. I am pretty savvy and I do not know what they all mean.

Tom:  LOL! I don’t either and I have a few after my name as well. Generally, you can Google the acronym and determine its significance. There are quite a few educational organizations out there that support the remodeling industry.

Sandy:  I am aware of some really good ones, like the National Association of the Remodeling Industry, or NARI. They do a great job of supporting designers, contractors and homeowners with all kinds of really super information.

Tom:  Great example. Renovations has been a member for years. It conducts courses, usually online, designed to help educate people in all manners of problem solving.

Sandy:  As an architect, you have had all kinds of training and education. Have you kept up with all the changes over the years?

Tom:  Mostly. The American Institute of Architects, as with many professional support organizations, has a Continuing Educational Unit (CEU). These are designed to keep old guys like me in the know. With many professional organizations, a member needs to have a certain number of CEU credits per year to maintain membership.

Sandy: That is great information for our readers to have. Tom, it is important to let our readers know that spending on residential improvements will continue to grow at a healthy pace over the next several years.

Tom: You are correct, Sandy. Professional remodelers from across the country from a group I belong to agree that this is the case. Consumer spending is at an all-time high.

The remodeling market declined significantly at the onset of COVID-19 in March and April of 2020, but has since more than fully recovered.

Sandy: I can attest to that after that small dip at the beginning of the pandemic, remodeler confidence bounced back and my phone continues to ring and ring.

Tom: It is nice to see that homeowners have a desire to invest in their homes.

Sandy: Tom, at the beginning of our conversation, you asked if the calls coming in were COVID-related. I said not really, but with homeowners using their time at home now to remodel, the demand and backlog for remodeling remains high. So, COVID did cause folks to look at their homes and make them more user-friendly and give certain rooms a facelift for more ease and enjoyment.

Tom: As a warning, projects are taking longer, COVID has created volatile material prices, labor shortages and material delays.

Make it a great month.  Thanks for stopping in “At Home with Tom and Sandy.”

You’re in good company and we love sharing important information with you.

See you next month. QCBN

By Tom Reilly and Sandy Griffis

Tom Reilly, LEED Accredited Professional, Architect, Contractor, Renovations 928-445-8506 www.renovationsaz.com

Sandy Griffis, Executive Director, Yavapai County Contractors Association.  928-778-0040

Remember to tune in to YCCA’s Hammer Time every Saturday and Sunday morning 7 a.m. on KQNA 1130 AM/99.9 FM/95.5FM or the web kqna.com. Listen to Sandy and Mike talk about the construction industry and meet your local community partners. Hammer Time is a great way to start your weekend.

Luxury Homes Attracting Buyers Seeking Open Spaces

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We have a very limited home market, and that is driving values up exceptionally fast.

Real estate agents say two factors are driving up the market for luxury homes in scenic rural settings: low interest rates and thousands of homeowners who want to escape crowded, expensive metropolitan areas to communities with more open space and a better quality of life.

Di Ann Norkus, a realtor affiliated with Better Homes and Gardens Bloomtree Realty in Prescott, is talking specifically about Whispering Canyon, a master-planned community about 15 miles north of Prescott on Williamson Valley Road.

Lots offer spectacular views of rugged, rolling terrain, rock outcroppings and arroyos punctuated with scrub oak, juniper and pinon pine trees. Norkus, a Prescott resident for 21 years, is a certified luxury home marketing specialist ranked among the top 1% of multi-million-dollar producers.

“I sold four homes the second week of February, and my appointment schedule the next two months keeps growing,” she said.

Norkus estimates that 75% of potential buyers are coming from out of state. “We’re showing lots and homes to people from the East and West Coasts – and most states between. Most eastern buyers want out of cold climates, while Pacific Coast buyers want some open space, blue skies and sunshine.”

The other 25% of buyers usually are from Arizona, typically Tucson or Phoenix.

Norkus noted that current phases in the development are nearing closeout. Only about 20 lots remain in non-gated Phase 3 and gated Phase 4. That prompted owner-developer Cole Johnson from Prescott to authorize construction of Phase 5, currently underway.

“People are relocating to Arizona because they appreciate the value, amount of land, and size of home they can get for their dollar here in Prescott,” Johnson said. “It’s ideal for retirees as well as for families looking for a second home or wanting to move into a community where they can enjoy the privacy they desire. It’s a great way to downsize a mortgage and home costs while simultaneously increasing acreage and all the benefits of a new home. Such benefits were recognized by the development team about 20 years ago when we secured the 900 acres and began designing what is now our community here.”

One of Johnson’s commitments is to keep at least 40% of the community dedicated to open space. Developed hiking trails abound and homes are surrounded by green belts.

Water for Whispering Canyons and other nearby developments is provided by ICR Water Users Association, a private company. Before the property was approved for development, water availability had to meet established guidelines. Studies and research through the Arizona Department of Water Resources demonstrated that “an assured water supply will be physically, legally and continuously available for the next 100 years,” Johnson said.

Inventory at a 30-Year Low

Norkus cited a recent study conducted by realtors and construction officials in Yavapai County and surrounding regions. “We were shocked to learn that fewer than 300 homes are available in the greater area. And I’m not talking about stick-built houses. That includes mobile homes and manufactured homes. In short, we have a very limited home market, and that is driving values up exceptionally fast,” she said.

Most Whispering Canyon residents are full-time residents of early retirement age, she said. “Our residents love the tranquil setting and open space.”

Homes available at Whispering Canyon range in size from 2,027 square feet to 2,527. All have a large three-car garage. Most lots are half an acre; however, larger lots also are available.

Four floor plans options for one-story homes include a variety of exterior styles such as Tuscan, Spanish, Ranch, Territorial and Craftsman-Bungalow. Exterior combinations of stucco, architectural stone and timber, combined with tile rooftops, provide distinctive personalities for each home.

Buyers can select from multiple choices for home interiors: cabinet styles and colors, granite or quartz countertops and several flooring options. Kitchens feature stainless steel Bosch appliances. “Flexible floor plans give our buyers many options to personalize their homes. Our homes are definitely a cut above mass production line construction,” Norkus said.

Prices start in the low $600,000s and go up, contingent on the floor plan and type of lot selected. Costs for houses in gated communities are higher, as are those for custom lots available in different phases, she said.

Homeowners Association (HOA) monthly fees are $30 a month in the non-gated area and $50 in the gated community.

For more information, call 928-710-0146 or visit whisperingcanyon.com. Office hours are 11 a.m. to 4 p.m., daily. QCBN

By Ray Newton, QCBN

Real Estate Market Maintaining Momentum in the New Year

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Staying strong since last June, the housing market on the local, state and national level has risen to a 14-year high, despite the pandemic, economic uncertainty and a difficult presidential election. Even during historically slow periods, like the holiday season, homebuyers are quickly purchasing the few homes listed for sale.

The shortage of housing inventory and extremely low interest rates have driven the hyperactive real estate market, says long-time realtor Gary Nelson, who heads the Gary Nelson Group and is the associate broker at Realty Executives of Flagstaff. That trend, he says, is expected to continue through 2021.

“The market in general is extremely hot, almost throughout all price ranges,” said Nelson, who is starting the year as president-elect of the Arizona Association of Realtors (AAR), also known as Arizona REALTORS. “There are some remote rural areas that aren’t seeing the same activity, but in urban and suburban real estate markets, there remains very low inventory. We’re seeing multiple offers on most properties if they are priced to sell and, sometimes, even if they are overpriced.”

Real Estate Challenges

In the current sellers’ market, bidding wars on properties have become commonplace. To be successful, Nelson says buyers need experienced professionals working on their behalf. “The biggest challenge has been keeping up with market activity,” he explained. “Even more important is ensuring client safety and personal safety to make sure we all remain safe and are not spreading the coronavirus.”

To adjust to social distancing and other safety guidelines, realtors have adapted by using more technological support and providing virtual open houses and 3D walk-through tours. Even so, prices continue to rise and double-digit annual growth continues month over month in both list and sale prices. Those who remember the real estate frenzy of 2006 may well be wincing in anticipation of another bursting bubble, which nose-dived Arizona’s and the nation’s housing and construction market in 2008 and brought on The Great Recession.

“The difference is that there are safety measures in place now that weren’t around then regarding lending,” said Nelson. “People are not over-extending themselves. They are not allowed to. In the early 2000s, everybody could get a loan. Things are different now. We will probably see some type of market adjustment in the coming years, such as the slowing down of rising housing costs, but not the extreme drop we experienced a decade ago.”

Meanwhile, all indicators show interest rates will stay low. “In the past year, they have fluctuated around 2.7% and 2.8%, the lowest we’ve seen since 1971,” he said. “We might see a slight increase toward the middle of 2021, but they will probably stay around 3%.”

Arizona Remains a ‘Bargain’

Although real estate prices have risen overall, Nelson says Arizona is still a great place to buy. “We’re seeing huge activity in Prescott, with a lot of Victorians and bungalows. Also in Flagstaff, Sedona and through the Verde Valley into Camp Verde and Cottonwood,” said Nelson. “There is something for everyone – from condos to townhomes to single-family homes – sometimes you have to go outside city limits to find it.”

Emerging markets to watch, he says, are rural towns like Williams and Kingman and the surrounding areas with available private land.

“People complain about the cost of housing in the Prescott and Flagstaff areas and other rural markets, but Arizona across the board is a bargain. When you look around, homes in New Mexico and Utah are higher. Colorado is ridiculously higher and of course, so is California.”

Nelson adds into the equation the quality-of-life benefits that mountain and rural communities offer with open space and nearby forests, which make Arizona attractive. He’s noticed the increase in outdoor recreation on the trails through the pandemic and understands that desire to be close to nature, which has kept him in Northern Arizona.

“Prescott and Flagstaff have a very outdoorsy personality. People here enjoy outdoor activities like hiking, mountain biking, kayaking, stand up paddle and skiing. These are the reasons we felt we could raise a family in this environment after exploring other communities across the West,” said Nelson, who grew up in Flagstaff. He and his wife, Tammy, the principal at Mount Elden Middle School, have raised two daughters there. “We wanted our children to grow up enjoying the outdoors like we did.”

Nelson says a lifetime of outdoor recreation activities has kept him in better shape now than he was 15 years ago. “We do 17-mile day hikes with backpacks,” he said. His hope is to complete the entire 800-mile Arizona Trail in the next two years. His brother, John, was involved in the trail’s development around Flagstaff and Mormon Lake in the 1990s. “We have 365 miles in and have another 450 to go.”

Giving Rural Communities a Voice

In his new role as president-elect of the Arizona Association of Realtors, Nelson believes he can better represent the concerns of rural area realtors. “Typically, Northern Arizona realtors are very well trained, but they might feel like they don’t have a voice at the table in statewide and national discussions. The rules and regulations differ for rural counties and larger cities. Rural realtors have to be good at selling land and dealing with septic systems, private water companies and wells, which is not usually the case in more urban areas.”

Nelson looks forward to being able to travel again, as more people become vaccinated, in order to promote professional real estate standards and ethics. “The biggest part of our code of ethics, which started in 1913, involves fair housing laws and rules. Realtors hold themselves to a higher standard than federal and local fair housing laws. On a state and national level, we’re probably one of the most powerful lobbying entities. We advocate for private property rights and fair housing and also included in that is housing opportunity and lending opportunity.” QCBN

By Bonnie Stevens, QCBN

An Arizona realtor since 1994, Nelson can be reached at gary@garynelsongroup.com.

Arizona Leads Nation In Homeownership Growth

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 Arizona is adding homeowners faster than any state in the nation, a sign of continued growing economic momentum in the state. The state’s quarter-over-quarter homeowner rate change increased by 7.7 percentage points in Q2 2020, according to data from the U.S. Census Bureau, the best in the nation.

“The American dream of owning a home is alive and well in Arizona,” said Governor Ducey. “People continue to flock to Arizona for our growing jobs market, unbeatable quality of living, and affordable housing. While many states pursue an opposite approach—higher taxes, more regulations and more burdens on regular people—we will continue to pursue policies that keep Arizona an affordable and attractive place to live.”

The state’s homeowner rate increased from 64% to 71.7% from Q1 2020 to Q2 2020 — the fastest growth in the nation. Arizona is followed by:

  • Missouri with an increase of 7 percentage points;

  • Kentucky with an increase of 6.6 percentage points;

  • North Carolina with an increase of 5.8 percentage points;

  • And Virginia with an increase of 5.6 percentage points.

The next closest state in the Western Region is New Mexico with an increase of 3.7 percentage points, ranking #13 in the nation. 

Background
Arizona is ranked third best in the nation for economic momentum, based on a new report by State Policy Reports. The report ranks states’ economic momentum based on growth in personal income, employment and population. 

The state’s median household income rose by 15.2%, according to new data from the U.S. Census Bureau that compared income growth averaged between 2017-2019 and 2014-2016. Arizona also experienced the fifth strongest personal income growth in 2019, according to data from the Bureau of Economic Analysis. 

Data shows there are nearly 177,600 manufacturing jobs in Arizona. In Fiscal Year 2018, manufacturing across the state produced a total gross state product of $47.3 billion and total exports reached $24.5 billion.