Associated Press
May. 15, 2007 07:42 AM

WASHINGTON - Existing home sales rose at an annual rate of 6.4 million units last quarter, down 6.6 percent from a year ago, the National Association of Realtors said Tuesday.

In the trade group’s quarterly survey of housing market conditions, the national median existing single-family home price was $212,300, down 1.8 percent from a year ago when the median price was $216,100.

"It appears the worst of the price correction is behind us," said Pat V. Combs, NAR’s president and vice president of Coldwell Banker-AJS-Schmidt in Grand Rapids, Mich.

Existing home sales were 2.4 percent higher at an annual rate than they were in the last quarter of 2006.

Fourteen states and the District of Columbia showed an increase in the rate of home sales last quarter compared to only six states showing gains a quarter earlier.

The median is a typical market price where half the homes sold for more and half the homes sold for less.

At least part of the decline in the median prices of homes in the United States is because sales have shifted away from more expensive homes, the NAR said.

Regionally, existing home sales took the biggest hit in the West, where the sales pace fell 11.9 percent to an annual rate of 1.3 million units and the median home price was 1.8 percent below a year ago at $336,200.

Existing home sales in the South fell 7.3 percent to an annual rate of 2.5 million units and the median home price was $177,800, just 0.6 percent below a year ago.

In the Midwest, existing home sales fell 6.1 percent to a pace of 1.5 million units. The median single-family home price was $154,600, down 2.8 percent from a year earlier.

The Northeast fared the best with sales rising at a 1.2 percent annual rate to 1.1 million units last quarter with a median price of $268,900, down 2.5 percent from a year ago.

"HEY KIDS, SHAKE IT LOOSE TOGETHER - THE SPOTLIGHT’S HITTING SOMETHING THAT’S BEEN KNOWN TO CHANGE THE WEATHER…" Elton John, "Benny and the Jets" And sure enough, B-B-B-Benny and the Fed held the spotlight last week, as Chairman Bernanke and his team of inflation fighters at the Fed released their latest Interest Rate Decision and Policy Statement. And the tone of the Statement did indeed change the weather for Bonds and home loan rates.

As expected, the Fed voted to leave the Fed Funds Rate holding steady at 5.25%. However, it was the tone of the Policy Statement that was not so nice for Bonds or home loan rates, which worsened a bit following the release. Why? Because the market was looking for some loving lyrics from the Fed, particularly in regards to inflation. Recent inflation and wage data has all been friendly, and the economy is slowing a bit as well. So the markets were expecting a nice ballad from the Fed about inflation being under control…but instead, the Fed said their predominant concern is that inflation will "fail to moderate as expected". While the Fed’s primary mission is to be on guard against inflation, the market was hoping for a little more love on this front, and was a bit displeased with the tone of the Statement.

Retail Sales slipped lower in April, bringing the worst reading in seven months. The declines were seen in clothing, restaurants, sporting goods, cars and home products. Possible reasons? The price of gasoline is back up, and this means consumers may be forced to cut back on their buying of other retail products. Additionally, food costs are significantly higher in recent months, due to a variety of factors including crop freezes early in the year, and many corn products being diverted for use as fuel. Because they are so volatile, neither food nor energy costs show up in the important Core inflation numbers - but when it comes to a consumers actual day-to-day spending habits which will always include gas and groceries, these factors will absolutely have an impact on spending. The weak Retail Sales report was good news for Bonds, but not good enough, and home loan rates still ended slightly higher on the week overall.

BUT IF YOU’RE THINKING ABOUT SAVING A FEW BUCKS BY WASHING YOUR CAR AT HOME RATHER THAN THE LOCAL CAR WASH…THINK AGAIN, AS IT COULD COST YOU BIG IN THE LONG RUN. READ THIS WEEK’S MORTGAGE MARKET VIEW FOR THE WHOLE SCOOP.

The Business Journal of Phoenix - 11:11 AM MST Thursday, April 5, 2007

by Adam Kress

The Business Journal

As per the usual, the Phoenix area is No.1 for new jobs.

Arizona State University’s Blue Chip Job Growth Update ranks the area first among the nation’s largest metro markets for employment growth between February 2007 over February 2006.

The area’s 4.8 percent increase in total nonagricultural employment represents 89,200 new jobs. In metropolitan markets with less than 1 million workers, the Gulfport-Biloxi, Miss., area ranked No. 1, posting a 14.5 percent gain equating to 13,500 jobs.

Among states, Utah holds the top position in nonagricultural job growth for February, with a 4.4 percent increase, representing 52,000 jobs. Michigan remains in last place, with a 1 percent decrease, losing nearly 45,000 jobs.

Overall, the U.S. economy grew by close to 2 million jobs in February 2007 over February 2006, an increase of 1.5 percent.

The Valley grew by 787,306 people from April 2000 to July 2006, the fourth-largest gain for a metropolitan area in the U.S. during that time, according to new census data.

Estimates released Wednesday

indicate that the Valley’s population grew by 24 percent. The Valley is the 13th-largest metropolitan area in the nation, with more than 4 million residents, up from 14th in 2005.

The Atlanta area led the U.S. in population growth from 2000 to 2006, followed by Dallas and Houston.

The 50 metro areas with the largest percentage increases were all located in the West and South.

The most populous areas remain New York (18.8 million), Los Angeles (13 million) and Chicago (9.5 million).

NEW YORK - Home Depot Inc., Alcoa Inc. and DuPont Co. helped the Dow Jones Industrial Average recover almost all of its losses from the Feb. 27 global rout, and led the Standard & Poor’s 500 Index to its second straight/-gain. Google Inc.’s biggest jump since March 6 gave the Nasdaq Composite Index its fourth/-consecutive advance.

The National Association of Realtors’ index of signed purchase agreements climbed 0.7 percent last month, allaying concern falling real estate prices will curb spending. A separate report showed retail sales last week rose the most in two months, while the biggest drop in oil since March 9 bolstered expectations the economy will grow without fueling inflation.

The Dow industrials added 128, or 1 percent, to 12,510.30. The gauge is now 1 percent shy of recouping all of its decline from the global equity sell-off that began Feb. 27.

The S&P 500 rose 13.22, or 0.9 percent, to 1437.77. The Nasdaq increased 28.07, or 1.2 percent, to 2450.33.

More Americans signed contracts to buy previously owned homes in February, easing concern the housing market will worsen. Economists surveyed by Bloomberg expected a 0.5 percent drop in signed purchase agreements.

Warmer weather spurred a 4.9 percent increase in U.S. retail sales last week as consumers bought clothing and foods for Easter and Passover, according to the International Council of Shopping Centers and UBS AG.

Retailers gained the most among two dozen industries in the S&P 500, climbing 1.5 percent. Household spending accounts for about two-thirds of the U.S. economy. Home Depot, the world’s biggest home-improvement retailer, added 84 cents to $37.63.

"Oops, wrong kidney."
In recent years, errors in treatment have become a serious problem for hospitals, ranging from operations on wrong body parts to medication mix-ups.  At least 1.5 million patients are harmed every year from being given the wrong drugs, according to the Institute of Medicine of the National Academy of Sciences.  That’s an average of one person per U.S. hospital per day.

One reason these mistakes persist: Only 10% of hospitals are fully computerized and have a central database to track allergies and diagnoses, says Robert Wachter, the chief of medical service at UC San Francisco Medical Center.  But signs of change are emerging.  More than 3,000 U.S. hospitals, or 75% of the country’s beds, have signed on for a campaign by the not-for-profit Institute for Healthcare Improvement to implement prevention measures such as multiple checks on drugs.

Though the system is improving, it still has a long way to go.  Patients should always have a friend, relative or patient advocate from the hospital staff at their side to take notes and make sure the right medications are being dispensed.

"You may leave sicker than when you came in."
A week after Leandra Wiese had surgery to remove a benign tumor, the high school senior felt well enough to host a sleepover.  But later that weekend she was vomiting and running a fever.  Thinking it was the flu, her parents took her back to the hospital.  Wiese never came home.  It wasn’t the flu but a deadly surgical infection.

About 2 million people a year contract hospital-related infections, and about 90,000 die, according to the national Centers for Disease Control and Prevention.  The recent increase in antibiotic-resistant bugs and the mounting cost of health care — to which infections add about $4.5 billion annually — have mobilized the medical community to implement processes designed to decrease infections.  These include using clippers rather than a razor to shave surgical sites and administering antibiotics before surgery but stopping them soon after to prevent drug resistance.

For all of modern medicine’s advances, the best way to minimize infection risk is low-tech: Make sure any hospital staffers who touch you have washed their hands.  Tubes and catheters are also a source of bugs, and patients should ask daily if they are necessary.

"Good luck finding the person in charge."
Helen Haskell repeatedly told nurses something didn’t seem right with her son Lewis, who was recovering from surgery to repair a defect in his chest wall.  For nearly two days she kept asking for a veteran, or "attending," doctor when the first-year resident’s assessment seemed off.  But Haskell couldn’t convince the right people that her son was deteriorating.  "It was like an alternate reality," she says.  "I had no idea where to go."  Thirty hours after her son first complained of intense pain, the South Carolina teen died of a perforated ulcer.

In a sea of blue scrubs, getting the attention of the right person can be difficult.  Who’s in charge?  Nurses don’t report to doctors but rather to a nurse supervisor.  And your personal doctor has little say over radiology or the labs running your tests, which are managed by the hospital.

Some facilities employ "hospitalists" — doctors who act as point people to conduct flows of information.  Haskell urges patients to know the hospital hierarchy, read name tags, get the attending physician’s phone number and, if all else fails, demand a nurse supervisor, likely the highest-ranking person who is accessible quickly.

Chad Graham
The Arizona Republic

The national chatter over the flailing home lending industry and its effect on the U.S. economy became more heated this week than an Anna Nicole Smith memorial service.

With the jump in foreclosures, predictions quickly gravitated to a "mortgage apocalypse" scenario where more than a million Americans fall behind on payments and lose their homes. Whispers of an ensuing recession in the United States rattled world equity markets.

Still, it’s not time to call the Four Horsemen to Arizona.

"Is recession a possibility? Sure. Is recession a certainty? No," said Dennis Hoffman, an economics professor at Arizona State University.

"It is simply fair to say that the risks of recession are higher today than they were six to 12 months ago, probably somewhere between 1-in-3 or 1-in-4."

Those are still low odds. So far, housing market shakiness is only cooling Arizona’s economy a bit in 2007.

For example:

• We’re spending less money. Sales-tax collections in January rose a disappointing 1 percent due to a lackluster holiday season. Revenue for the month was $7 million below the June 2006 forecast, according to the Joint Legislative Budget Committee.

The uncertain real estate market should continue to curtail consumer spending, particularly on home improvement items.

• Retail jobs are slowing. Arizona lost nearly 40,000 retail jobs in January. While that was blamed on post-holiday layoffs, employment growth in that category has been anemic for months, mirroring a national trend, according to Austin Litvak, associate economist at Moody’s Economy.com.

In metropolitan Phoenix, the sector "has fallen from about 9 percent during the later half of 2005 to about 5.5 percent currently," he said.

• Residential construction jobs are stalling. During the past year, construction accounted for 21 percent of all new jobs created in Arizona. Yet a drop in new housing permits is drying up some work.

Last year, the industry created more than 22,000 jobs. Between December 2006 and January 2007, it lost 4,400, according to Arizona Department of Economic Security data.

• Income growth could taper slightly. "We expect that as commission incomes fall in real estate-related jobs and as jobs are cut in construction and real estate-related sectors, personal income will slow significantly," wrote University of Arizona economist Marshall Vest in a December report. He also predicted that wage growth would drop to about 3.5 percent from 6.1 percent.

Compared with what’s happening in other areas of the U.S., those are not dire developments.

Auto-industry ills and an anemic housing market led Comerica Bank to recently proclaim that Michigan was stuck "in a one-state recession."

That state recently joined Mississippi and Louisiana as places that led the nation in late mortgage payments. Arizona ranked 40th in that measure, and there is no proof yet foreclosures will rise anywhere near the late 1980s, when the bottom fell out of the real estate market.

Economists argue that Arizona’s economy, while still heavily dependent on construction, has diversified recently.

Business services, finance and insurance sectors have grown quickly, said Hoffman, adding that a continuing population boom should grow health care and other related services.

Litvak said, "I would still expect Arizona to remain one of the fastest-growing economies in the nation despite the housing slowdown."

Custom-motorcycle builder Roger Bourget says he isn’t having any second thoughts about paying $3 million for his condominium overlooking the hottest corner at Kierland Commons.

The recent sale of the 2-year-old condo is believed to be the highest price paid per square foot for a Valley condo.

The 2,800-square-foot corner loft sits atop the Bebe clothing shop and looks out toward the sidewalk cafe of Zinc Bistro, where wine flows and patrons watch fashionable passers-by.

"It’s a little spendy," said Bourget, 49, owner of Bourget’s Bike Works, "but I believe that in the long run this stuff is going to go up in price."

Some buyers are downsizing from those big homes on estate lots. Some like the energy and entertainment options at Kierland, downtown Scottsdale and at the Biltmore.

Peter Corbett
The Arizona Republic
Mar. 12, 2007 12:00 AM

by James Kindle

The Business Journal

Bulldozers ramble, excavators till up earth, construction crews traipse across newly placed rooftops.

The scene in Maricopa these days is nothing out of the ordinary in Arizona, where even amid a housing slump, new residential building soldiers on.

What is out of the ordinary in Maricopa, which rose out of the northern Pinal County desert in October 2005 — when it officially incorporated as a city — is the pace of this growth.

Since the city’s first census just less than three years ago, it has grown from 4,523 residents to an estimated 31,490 — a staggering increase of about 596 percent.

Though housing permit rates in the city have cooled significantly from the mid-2005 boom where some months saw more than 700 new-home permits issued, Maricopa still issues a healthy 200 permits or so a month.

As residents continue to pour into the fledgling city, officials are facing the new job of ensuring that Maricopa is more than simply a sleepy bedroom community.

Nearly 50 percent of Maricopa residents commute 21 to 30 miles into the Valley each day for work, according to an October survey of 1,041 residents, many to jobs at south Scottsdale employers such as Motorola Inc. Now, Maricopa is trying to bring employers to these workers, said Maricopa Mayor Kelly Anderson.

"We are working with land owners and property owners and keeping the residential-employment balance, so we’re not just a bedroom community," he said.

The town aggressively is pursuing high-end manufacturing and office jobs while maintaining a high residential building rate, thereby turning the "rooftops to retail to industrial" city model on its ear.

More diverse community

Since its recent incorporation, Maricopa has faced the challenge of building a city in only a matter of years.

"There’s unique challenges in Maricopa because it just incorporated a couple of years ago, and everything’s new," said Jordan Rose, a land-use attorney with Scottsdale-based Rose Law Group, which handles 90 percent of its cases in Pinal County. "You’re there before they’ve actually ever implemented anything."

Rose said the city requires developers to design creative, yet affordable housing options to avoid "the same old red-tile roofs."

She cites developments with amenities such as a telescope area, a duck pond, fishing pond and even a community farm as examples.

Anderson said the town is pushing developers to incorporate churches and nonprofits into communities and ensure affordable housing.

The median new home price in Maricopa in third-quarter 2006 was $251,010, according to the city census; the median price for a new home in Phoenix in 2006 was $303,665, according to figures from the Arizona State University Real Estate Center.

Ben Redman, president of WestPac Developers, said the market also is dictating more unique developments. WestPac has two projects in Maricopa: Sorrento, a 1,900-home master-planned community currently in its first stage of development, and Cortona, a 1,600-home community in the early planning stages.

"Everybody tries to come to the table with their own specific, creative elements to make their community a little different from their competitors," he said. "Collectively, when you look at that, that makes for a more dynamic, more diverse community."

Redman said that, like in other new communities in which he’s worked, the home builder is responsible for infrastructure.

Maricopa is working with a private company to develop its sewer and water infrastructure, which is being oversized in preparation for growth, Anderson said.

Though the city’s focus has been on single-family homes, Anderson said Maricopa has apartment and condominiums in the works, too.

"We do have a lot of condos and multifamily residential in the planning stages right now," he said. "In the next year and half, I would imagine you would see a lot of that product coming on the market."

Why not Maricopa?

To accompany this burgeoning citizen base, the city is pursuing high-end jobs that many other cities would wait a decade or more to attract, said Ioanna Morfessis, the city’s senior economic development consultant.

Many Arizona communities focus more on residential than retail, with high-end employment years down the road, Morfessis said.

"We’re getting things put into place for now, so we don’t have to wait 15 or 20 years for significant employment," she said.

The city is focusing on agri-biotech, manufacturing and regional aviation as several key employment opportunities.

"The citizens want and deserve a good employment base," Morfessis said. "As young as (this) city is, we’re looking to get behind the right kind of companies (and) the right kind of business parks in place. … We need to paint the picture for them what the city is going to be."

Anderson said his theory is, "Why not Maricopa?"

He often stresses the importance of the city’s interstate and rail connectivity — the Union Pacific railroad runs through Maricopa — in meetings with business leaders. He said he hopes to get derivatives of companies such as Intel Corp. and Motorola to open offices in the city.

Barry Broome, president and chief executive of the Greater Phoenix Economic Council, said Maricopa needs to focus on both residential and industrial needs for success.

"Retailers will follow employment centers more than they’ll follow housing," he said. "Rooftops to retail works, but what about the sustainability of that? … (With) employment to residential to retail, you’re going to be more sustainable and economically viable.

"All these communities are growing like crazy. I think it’s too easy to see that as an outcome," Broome added.

Morfessis said the community will use this growth to bring more businesses and people into the city.

"Our goal is to get behind companies that are growing or are continuing to grow because of their market and letting them know about the opportunities within Maricopa," she said.