February 20, 2014
Host: Richard Ruelas
2014 Housing Market
- The 2014 housing market is expected to slow, with big price increases in the Phoenix-area declining, or even reversing. Demand has already fallen sharply, and investors are showing less interest in the market. Mike Orr, director of the Center for Real Estate Theory and Practice at ASU’s W. P. Carey School of Business, will talk about his latest report.
- Mike Orr - Director, Center for Real Estate Theory and Practice at ASU’s W. P. Carey School of Business
| Keywords: business
Richard Ruelas: The 2014 housing market is expected to slow with big price increases declining or even reversing. Demand has fallen sharply and investors are showing less interest in the market. Mike Orr, director of the Center For Real Estate Theory and Practice at ASU's W.P. Carey School of Business, is here to talk about his latest report. Thanks for joining us this evening.
Mike Orr: My pleasure.
Richard Ruelas: Should we be worried about what seems to be a slowdown this year?
Mike Orr: I think we should expect it anyway. Prices going up as much as they have last year, eventually demand starts to get depressed. You can't have prices going up , 20-25% each year without demand dwindling. Prices are pretty much back to where they would have been if we just applied inflation to where we were in 2001.
Richard Ruelas:: If we hadn't had the bubble --
Mike Orr: And the burst
Richard Ruelas: which was so much fun.
Mike Orr: It wasn't all that much fun for most people.
Mike Orr: Now back to a normal, balanced price, and demand is relatively weak in that situation. We've really driven away the investors because we don't have many bargains anymore. That was really driving all of their interest. They have taken their money and they are buying elsewhere. The market is relying on ordinary buyers and a number of areas that the demand is weak still partly from the boom and bust.
Richard Ruelas: Are people suffering from not being able to get financing still?
Mike Orr: Well, that's part of the problem. A whole group, the Milliennials, age 20 to 35 who have only seen a real estate market that got really scary --
Richard Ruelas: It's a market they don't trust yet?
Mike Orr: some are a little scaredAnd some are participating in buying homes to a much lesser extent than previous generations, they are tending to rent. They need somewhere to live. The rental market is doing well but homes to purchase are not doing as well as the baby boomers did at the same age.
Richard Ruelas: What would it take, besides time, to get their faith back in the market?
Mike Orr: That's a really good question. They don't have a lot of examples of people who have bought homes and done well out of it. They are not going to take the example of their parents. Many of those actually got foreclosed, a counter-example. If you sit them down and say here's what you're spending on rent and here is what it would save you money to buy a home, plus over the long term, 40 years, generally owning a home has been a very good thing to do for your long term wealth, that's not a message many of them have internalized yet.
Richard Ruelas: With the investors being out what does that signal?
Mike Orr: That means we don't have a lot of distressed properties at bargain prices. That's really a good thing for the market. But investors thrive on being able to buy homes at 25% below the normal value. They are still doing fix and flips, but not many are doing the fix and then renting out. Very few new rental homes being created. It could become an issue if we get a population expansion where people want to rent. There's no more supply coming along.
Richard Ruelas: Investors pulling out doesn't indicate --
Mike Orr: They are not selling what they have got, they are just not acquiring any more. They have got as much as they need. In fact, their financial strategy is looking pretty good. Having bought over the last four years they are in at low prices, they are getting good rents. The rents might go up. They will probably hold on to those and keep them for a number of years.
Richard Ruelas: If stability is the goal rather than a price run-up, it seems like you want to see the owner occupied level where we have it?
Mike Orr: I would like to see a little more demand. We've got demand dropping to a level which is causing concerns for sellers. At this time last year buyers had the problems, there were too many of them and not enough homes for sale. Now there are so few buyers that some of the sellers are starting to get a little nervous and are competing with each other. It's a good time to be a buyer. You can pick and choose. You can ask your seller for concessions like help with closing costs or even with a down payment. There are a lot of things to make it much more pleasant to be a buyer now. You're in the sort of best seat for negotiating. It won't last forever. So if you're in the market now is really good timing for buying. All of these things are very cyclical and Arizona and Phoenix in particular changes very quickly. That's what makes my job fun.
Richard Ruelas: Are values down across the board in all regions?
Mike Orr: I think what's happened is prices have gotten to a point where they are fairly stable, they haven't changed a lot in the last four or five months. There's no upward pressure anymore. They may settle back a little bit with the current situation. We're not looking at a crash or another bust. No real further movement upwards and maybe a little bit settling back over the next months.
Richard Ruelas: But are there areas of the county that you're seeing fewer -- more or less price increases? Or decreases?
Mike Orr: It does vary a lot. It's not so much the area, it's the price range. And the luxury end of the market has taken longer to feel this lack of demand. It's actually feeling it now, but for the last half of last year it was doing very well. That's partly because the stock market is doing very well in the past year and that tends to provide impetus for the housing market in the luxury area. Plus, a lot of the lenders are very anxious to write jumbo loans right now. They are competing to write large loans to people who are already wealthy.
Richard Ruelas: That's where they can play.
Mike Orr: Always fascinating, hopefully you come back with good or at least stable news next time we talk, thank you very much.
Mike Orr: Thank you very much.
Arizona’s National Monuments
- The book “Arizona’s National Parks and Monuments” gives details about Arizona’s 20 federally-recognized parks and monuments. Donna and George Hartz will talk about their book.
- Donna Hartz - Author, Arizona’s National Parks and Monuments
- George Hartz - Author, Arizona’s National Parks and Monuments
| Keywords: education
Richard Ruelas: A new book titled "Arizona's National Parks and Monuments" gives details about Arizona's 20 federally recognized parks and monuments. Here to talk about their book are coauthors George Hartz and Donna Hartz, Donna Hartz actually is mentioned first on the cover.
Richard Ruelas: You'd think if we were going to talk about Arizona's parks and monuments we'd begin at the Grand Canyon. But actually it begins with Casa Grande. Tell us about the fight was over realizing we need to save those ruins.
Donna Hartz: At the time the westward movement happens after the Civil War, people began to see these monuments and see these ruins out there and people started -- Casa Grande was just deteriorating from weather. But a lot of other ones were in danger because of people going out and digging up pots. At that point with Casa Grande it was an effort by people both here in Arizona and some also in other places in the country to get it preserved and try and stabilize it so it wouldn't continue to fall apart.
Richard Ruelas: Were the people taking things, doing so -- was there a big market for relics? Or were they doing it not really realizing they would damage the archeology?
Donna Hartz: A lot of them were being pulled out for relics. It was a real big problem. People were -- they became very popular and valuable and people would just go in and willy nilly dig them up. The sort of damage done was often indescribable.
Richard Ruelas: What was said at the time that made Casa Grande the first one to get things going in Arizona? What was it that made people think, we need to save this?
George Hartz: One of the things was it was very visible. It was along a road that prospectors or soldiers were traveling. There was a visible documentation of the deterioration. It excited the interest of some archeologists in the northeast who worked with friends on -- in Washington, and got $2,000 raised. Not a lot but enough to at least begin the process of stabilizing it. And it was the first ever national archeological reserve in the United States in 1892. It started with Casa Grande.
Richard Ruelas: It started with the idea that this is still a relatively new country at the time, there is stuff here that needs saving. Next, Montezuma Castle. The Grand Canyon comes deep into the story. I don't know if that surprised you when you started researching your book but the Grand Canyon was not the first. Tell us about the efforts to save Montezuma Castle.
George Hartz: It was one that suffered significantly from the pot hunters and vandals. This is a picture from the late 1890s, we do not know if these are good guys or bad guys. But they are digging up pots and they are probably going to take them and sell them to a collector. They certainly aren't taking the sort of records you wish were taken as you're digging these up.
Richard Ruelas: Is part of this simply the fascination from back east of what this western life was like and the frontier?
Donna Hartz: Absolutely. There was a tremendous amount of publicity. One of the big things that occurred up at Mesa Verde was we had a man from Sweden who came in and dug up, took things back to Sweden and did this really fabulous picture book that got wide distribution in the United States. That really sparked it. But it was an impetus to really start saving these. The damage was done and things are gone and most of them are still not back in the United States.
Richard Ruelas: So far we look at these first two, they are big things. The Casa Grande, the castle sort of dug in, the well sort of off to the side. Then we get to the Petrified Forest, which again, you just -- it's amazing when you flip through the book to think, this was just out there. This was not protected. We were not told to be in reference of this, and please don't take this home and make it a coffee table. This was just out there.
Donna Hartz: Yeah, just sitting there.
Richard Ruelas: What was the thought, what got to us sort of say that is good thing to say?
George Hartz: The scientists and geologists were fascinated by it. It was a huge collection of petrified wood and it drew a lot of interest scientifically. The publicity that surrounded Petrified Forest caused a lot of people to come in and big up chunks of petrified wood and cart them away. That was, again, part of the impetus to get this antiquities act signed in 1906 that gave the President the authority to unilaterally proclaim national monuments and protect these properties. John Muir came down to Arizona in 1905 to publicize how important it was to protect the Petrified Forest. It all led to the Antiquities Act.
Richard Ruelas: I guess as we hit the Grand Canyon, it sort of shows before it was protected what free range kind of commerce was going on. The Bright Angel Trail was not free, right?
Donna Hartz: It started as a mining trail. And there were quite a few mines in the Grand Canyon at that point in time. There were also other entrepreneurs who were mining the tourists.
Richard Ruelas: The mining didn't seem to be going really well.
Donna Hartz: There wasn't a lot coming out.
Richard Ruelas: But people came with money so let's mine the tourists, as you say.
George Hartz: As the picture shows, Bright Angel Toll Road. So we had entrepreneurs charging the public for crossing public lands. They just set up a toll road. They had no authority or right. But because business interests were so strong, even a President like Teddy Roosevelt was hesitate to move real quickly on the Grand Canyon. He proclaimed 10 national monuments before the Grand Canyon. It was the fifth one done in Arizona amazingly.
Richard Ruelas: Why? Because there was so much revenue being made?
Donna Hartz: There were a lot of political issues because there was a lot of pressure to not protect it, not to pull it away from the ability to go in and mine or go in and set up your businesses.
Richard Ruelas: The state was already running it in a way, it already allowed businesses to set up, why are the Feds coming in.
George Hartz: Yeah, I think it's a matter of rights. You know, does the federal government have the right to do this, versus the state. And it didn't become a national park until 1919 , it was just amazing.
Richard Ruelas: And soon after, even though I was born and raised right next to it, I had no idea that Papago Park was one of eight national monuments, hole in the rock, right there.
Donna Hartz: The folks in the Phoenix area really wanted that preserved because it was ready to be put out for use.
Richard Ruelas: Like, use meaning it could have been anything.
Donna Hartz: It could have been a ranch or anything.
Richard Ruelas: Of course.
Donna Hartz: Once it got to that point the people in the area recognized they needed to preserve it. It was a recreational place even at that point in time at the turn of the century. They wanted to keep it protected. They didn't have the money to buy the land. There was a lot of pressure in Washington to get it named as a national monument. Once that was done they started pressuring Washington to make it recreational, put in a pool and a fish hatchery. It didn't take very long. By 1930 the government had enough and gave it back to the state of Arizona so we got it for free, which was really good. but it was indeed first a national monument.
George Hartz: For 16 years.
Richard Ruelas: Then Arizona gets a bunch, it's been used in Arizona more than any other state.
George Hartz: More than any other state. The Antiquities Act has been used 23 times in Arizona. All of our national parks and monuments except one were originally preserved under the Antiquities Act. They couldn't do it under the act here because it was part of an Indian reservation. They need to do work with the Indian tribe and Congress, and site got made a national monument by congressional action.
Richard Ruelas: Yeah, the book is available and I'm assuming on Amazon and in bookstores? From Arcadia Publishing. Seems like you had a lot of fun researching this, and the government helped you out by preserving a lot of these stories.
George Hartz: The government has terrific photographs and we had a great time putting it together.
Richard Ruelas: Sure, and thank you for joining us. It's a wonderful read with a lot of great photos. I appreciate your both being here tonight.
- The Greater Phoenix area has been named one of the best intergenerational regions in the country. MetLife Foundation and Generations United have announced the Maricopa region will receive one of four Best Intergenerational Communities Awards on March 25 in Washington, D.C. Maricopa Association of Governments Human Services Director Amy St. Peter and Jacky Alling, Senior Program Officer at the Arizona Community Foundation, will discuss the award and why the Phoenix area is receiving it.
- Amy St. Peter - Director, D.C. Maricopa Association of Governments Human Services
- Jacky Alling - Senior Program Officer, Arizona Community Foundation
| Keywords: culture
Richard Ruelas: The Greater Phoenix area has been named one of the best intergenerational regions in the country. MetLife Foundation and Generations United announced the Maricopa region will receive one of four best intergenerational communities awards on March 25th in Washington, D.C. Here to talk about that is Maricopa Association of Governments is human services director Amy St. Peter, and Jacky Alling, senior program officer at the Arizona Community Foundation. Let's first define what an intergenerational community is and what a best one is.
Amy St. Peter: We're very excited about that. Simply put, it's all people all together. It's accomplished by looking strategically at the infrastructure and the programming and really allowing opportunities for older adults and youth to be able to come together in really meaningful ways and impact both of them positively.
Richard Ruelas: What's a building where this goes on?
Jacky Alling: I'd be happy to talk about that. At the Arizona Community Foundation we have an affordable housing program which jump-starts and provides predevelopment zero interest loans to non-profit developers to do affordable and supportive housing. A recent project we were able to give one of these loans to was to the foundation for senior living. It's called Twenty-nine Palms and it integrates services and housing for seniors and young adults with autism. So there will be opportunities for them to be resources and assets to one another, and have special services that will help both populations, as well.
Richard Ruelas: And I guess flip it, has there been a model -- did areas just try to put seniors in this one apartment building?
Jacky Alling: Well, we're the original home of the first segregated retirement community. I won't name any names, but it's pretty notorious as being the first one in the country. There are benefits to that and also social disadvantages.
Richard Ruelas: Right, because those seniors in -- let's say Sun City Leisure World, are there by choice. But some would rather live among everybody. What are the benefits for seniors living among a younger population?
Amy St. Peter: People feel as though they have value and add value. When people have opportunities to volunteer to assist others, they feel much better about themselves. Sometimes if someone is always just receiving services, they don't necessarily have a good self-esteem because they aren't imparting value to others, they aren't able to share their skills and benefits. While allowing for that reciprocity it's really important because it builds on both sides of that equation.
Richard Ruelas: Is it a situation where if we don't try to engage this and let it happen naturally in the market, those who want to be integrated do end up segregated anyway?
Jacky Alling: Well, I'll speak from the funding side because the Arizona Community Foundation is a philanthropy and we give grants to nonprofits and agencies. Funding often tends to be very age siloed. It's the natural course of things.
Richard Ruelas: Like building a subsidized housing unit, it's going to end up being --
Jacky Alling: Exactly, even in terms of federal funding there have been challenges with siloing populations. So we do think that if you think about community development and programs being good to grow up with and good to grow old with, it's pretty simple.
Richard Ruelas: So what did we say in the application? What did we point to? You mentioned the one development. What did we point to as far as what we do well?
Amy St. Peter: Exactly. First the leadership of the mayor who helped us submit the application. We're very thankful to him for his leadership on that. The application was fairly long and expensive but the outpouring of support from the community was just absolutely wonderful. We received letters of support from older adult volunteers, teens in high schools who have been able to work with them. Nonprofit agencies doing really cutting edge work. In that sense it's very easy to submit the application, because we had so much support on it. We were able to point to the number of intergenerational centers, volunteer opportunities and decades of history in this, with doing excellent programming in intergenerational work. And some really cutting edge programs such as through the age friendly network where we're working with communities in Phoenix, Tempe, Scottsdale and the northwest valley. They are bringing in models that have never existed before in this part of country.
Richard Ruelas: What was it that made us recognize this being of value years and years ago, to get us to the stage where we can apply for this?
Jacky Alling: For us, we got into this work because we looked at the demographics. The largest population in Arizona is youth under 18 and the second largest growing population in Arizona is 55-plus. If you think in terms of our future, it's sort of a no-brainer, the more we can integrate resources and not compete it just makes great community development sense.
Richard Ruelas: Integrated resources meaning a center not just for youth or elderly but a center where everyone can get together.
Playgrounds. Grandparents raising grandkids, are they accessible, public spaces, when you are offering program offer them for seniors of youth. At Golden Gate Community Center they have integrated those because the youth want to learn about traditional recipes. They want to have those interactions with older adults.
Richard Ruelas: What do we get? There's a ceremony in D.C.?
Amy St. Peter: There is.
Richard Ruelas: T-shirts? Medals?
Amy St. Peter: We will be getting a flag and we will fly it high as soon as we return. More importantly, we are being held up as a national model. It's wonderful to get that national recognition and press, and for people to be able to look to us for examples of what can work really well in this setting.
Richard Ruelas: Something we have been doing and haven't really doing it much.
Richard Ruelas: I said Maricopa County, I meant Maricopa Association of Governments. People probably make that mistake all the time.