Real Estate Information

DO'S
Turf: Water lawns once per week to a depth of 1/2 inch. For a complete lawn-watering guide, go to cals.arizona.edu /azmet. Overwatered winter lawns may turn yellow.

Landscape plants: Water deeply at least once a month. Prune frost-sensitive plants, such as bougainvillea and lantana, after they begin to leaf out with new spring growth. Spread mulch around the base of plants to conserve moisture and prevent weeds. Remove weeds while they are young and tender and their roots are manageable. If grubs have killed agaves in your yard in the past, apply at the base of the plants a pesticide labeled for use to kill agave weevil grubs. Follow directions on the package. Repeat application in June. As the weather warms, expect leaf drop on carob, African sumac, pine and other evergreen trees.

Fruits and vegetables: Prepare garden soil for spring planting. Eleven types of seeds to plant this month: beans, beets, carrots, corn, cucumbers, green onions, melons, okra, pumpkins, radishes and summer squash. Plant transplants of artichokes, eggplant, peppers and tomatoes. Place 50 percent shade cloth over tomatoes to keep leafhopper insects away and to prevent curly-top virus. The virus affects more than 150 plants in the Southwest, severely stunting and killing vegetable plants.

Herbs: Prepare garden soil for spring planting by adding 2 to 4 inches of compost or mulch as well as gypsum and soil sulfur. Follow directions on the package. Incorporate materials into soil well and water deeply. Nine types of seeds to plant this month: amaranth, basil, bee ball, Roman chamomile, garlic chives, rue, sage, sesame and yarrow. Eight transplants to plant this month: bay tree, German chamomile, chives, garlic chives, lavender, lemon verbena, oregano and thyme. Water every five to seven days. Water deeply to encourage good root development.

Roses: Plant container-grown or "potted" roses. Roses need well-drained, well-amended soil. Dig a hole 18 inches deep and 18-30 inches wide. In the hole add 1 cup rock phosphate, soil sulfur, gypsum and 1/2 cup blood or bone meal. Mix with 2 shovelfuls of soil and shape into a cone. Remove the container and carefully plant the rose. Do not disturb the roots. The bud union should face east and be about 2 inches above the soil level. Backfill with a 50/50 mix of soil and compost. Water slowly and thoroughly to allow the soil to settle. Water every five to seven days. Spread mulch around the base of plants to conserve moisture and prevent weeds. Continue fertilizing established roses with granular fertilizers once every six weeks. Follow directions on the package. Remember to water the day before application and the day after. Scratch 1/4 to 1/2 cup of Epsom salts around the base of rosebushes and water deeply.

Annuals, wildflowers and bulbs: Water once or twice per week. Twelve types of seeds to plant this month: bee balm, black-eyed Susan, blackfoot daisy, butterfly weed, cosmos, dahlias, four-o'clock, hollyhock, lantana, marigold, Mexican sunflower and zinnia. Wildflower seeds to plant this month: Arizona poppy, desert marigold, desert milkweed, desert senna, firewheel, penstemon, sacred datura and salvia. Plant amaryllis, caladium, calla, crape flower, crinum, gladiola, manfreda, spider lily and tiger flower. Clean out canna beds. Cut back canna. Fertilize and water regularly. Fertilize growing and blooming container plants with a soluble fertilizer every other week.

Fruit and nut trees: Peel color is not an indicator of maturity or taste in citrus. Give citrus the taste test. If fruit is not sweet enough for your liking, leave on the tree for a while longer. Plant citrus trees. Young trees, 2 to 5 years old, transplant more successfully than older trees. Dig a hole three to four times wider than the container and just as deep. The shed of newly set citrus fruit is a natural thinning worsened by hot weather and dry winds. There is no cause for concern. Prune non-native deciduous shade trees and grapevines. Fertilize deciduous fruit trees with nitrogen when they leaf out with new spring growth. When deciduous fruit is about the size of a walnut, thin the fruit to 6 inches apart on the limb so remaining fruit can grow to full size. Water deeply at least once a month.

DON'TS

• Avoid planting the same vegetables and annuals in the same place year after year. Doing so allows disease and pest populations to increase.

• Do not prune citrus except to remove dead or damaged wood or branches obstructing pathways, views or structures.

• Do not increase opportunities for fungal disease on turf by overwatering, watering at night, overfertilizing or mowing wet grass.

• Do not overwater, which can cause root rot. Allow soil to dry out between waterings.

• Do not use pre-emergent herbicides in areas you intend to plant seeds.

Sources: University of Arizona's Maricopa County Extension; The Low Desert Herb Gardening Handbook, by the Arizona Herb Association; Month-by-Month Gardening in the Desert Southwest, by Mary Irish; and Extreme Gardening, by Dave Owens.

by Kenneth R. Harney

Within days, the federal department of Housing and Urban Development plans to unveil sweeping proposed changes to the American mortgage application process and real estate settlement system.

The rule changes are the end-product of HUD's five-year effort to streamline mortgage disclosures, promote comparison shopping by loan applicants, and to stamp out eleventh-hour surprises at closings -- where fees come in hundreds or thousands of dollars higher than initial estimates.

Realty Times obtained a point by point summary of the proposals in advance of their official release by HUD. The changes are designed to radically overhaul the current, much-criticized "Good Faith Estimates" (or GFE) disclosures and the "HUD-1" closing procedures.

Among the key changes in the 250-page HUD proposal:

1. Transformation of the GFE into a consumer education and shopping tool. The GFE will now explain in detail to an applicant how a particular loan works, how high monthly payments could rise, disclose any potential fees such as prepayment penalties, and provide information about escrow items.

2. New, strict limits on how much settlement charges can depart from the Good Faith Estimate stage -- within three days of the loan application -- to the HUD-1 closing stage. Total settlement charges could not be more than 10 percent above the initial estimates, absent tightly-defined "unforeseen circumstances" limited to acts of God, war and disasters, among others.

3. The Good Faith Estimate and the HUD-1 forms are aligned with each for easy comparison, with similar categories and graphic displays of loan origination charges and settlement cost items on both.

4. All fees paid to mortgage brokers by a lender in connection with the interest rate charged to the consumer must now be disclosed and listed on the Good Faith Estimate as a "credit to the borrower." Brokers are likely to oppose this strenuously, arguing that competing loan originators -- such as retail bank personnel -- are not required to disclose fees they receive in connection with higher note rates.

5. All settlement agents will now be required to "read aloud" a new "closing script" to mortgage borrowers. The script walks consumers through the various charges on the revised HUD-1, and whether and why they differ from earlier estimates. Finally, the script requires the settlement agent to explain the loan terms and mechanics as stated in the mortgage note itself.

The proposals will have a 60 day period for industry and consumer comment, after which HUD is expected to issue them in final form with a period of months set aside to allow lenders, title companies and attorneys to gear up for the new forms and procedures.

Published: March 3, 2008

"The importance of immediately implementing the new limits cannot be overstated," said NAR President Richard Gaylord last week in a public statement. (Listen and watch Gaylord's video podcast on the topic at REALTOR.org). "Mortgage markets throughout the country need liquidity. Our research indicates that the increased FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their homes.”

The FHA limit will increase to as much as $729,750 in high cost areas (to 125 percent of local median home prices). The GSE limit will jump to $729,750 for loans; currently Fannie Mae and Freddie Mac loans are capped at $417,000.

Eligible loans from FHA include mortgages that were issued for credit approval on or before Dec. 31, 2008. GSE loans that are eligible include loans that originated after July 1, 2007 to Dec. 31, 2008.

The U.S. Department of Housing and Urban Development is required to publish the new mortgage limits by March 14; the limits will be effective for FHA immediately upon publication.

— REALTOR® Magazine Online

Original article can be found here: http://www.realtor.org/RMODaily.nsf/pages/News2008022001

The short week turned out to be one of the most volatile in recent years. Early in the week, mortgage rates surged to the highest levels of the year, before they turned around and recovered nearly to their starting level, leaving only a small rise for the week. With the Fed cutting rates and pumping liquidity into the economy, and the government implementing fiscal stimulus programs, mortgage investors became increasingly worried that the stimulus would lead to higher inflation, which is negative for mortgage markets. The major inflation data released during the week amplified those concerns, as the January Core Consumer Price Index rose at a 2.5% annual rate, which was higher than the consensus estimate.

Perhaps contrary to what one would expect, the recent Fed rate cuts have led to higher mortgage rates as opposed to lower mortgage rates. To understand why, it's important to understand that the Fed only controls short term interest rates. When they cut rates, it generally has the effect of increasing bank lending and consumer spending, which leads to more economic activity. Long term rates, such as 30-year mortgage rates, are determined by trading in financial markets and are highly impacted by expectations for future inflation. To a mortgage investor, a Fed rate cut increases the risk of higher future inflation, and that has been the dominant sentiment in recent weeks. This explains why 30-year mortgage rates have jumped 0.75% since the Fed's aggressive January 22 rate cut.

In the housing sector, the news was mixed. January Housing Starts rose slightly from December, while Building Permits, a leading indicator of future activity, fell to the lowest level since November 1991. The National Association of Home Builders (NAHB) Housing Market Index showed a small increase. According to the NAHB, builders have been attempting to reduce the inventory of homes on the market, and there has been an increase in the flow of prospective buyers.

Source: Wendy Devereaux

In just a few weeks, Casa Grande teens will have a place to call their own thanks to the kind spirit of community volunteers and donors who have worked closely with City staff to build the new municipal facility.

The Casa Grande Teen Center, located in the Palm Center at Florence Blvd. and I-10, will celebrate its grand opening on Thursday, March 27 from 5 to 7 p.m. with a ribbon cutting ceremony and open house for all residents to tour the new facility. Other grand opening festivities will include a middle school dance on Friday, March 28 and a high school dance on Saturday, March 29.

These events will truly be a celebration of the culmination of the vision of the City’s Youth Commission, who dreamed up concepts for the facility two years ago and shared their ideas with the Mayor and Council. However, a lack of funding put the project on hold until Central Arizona College partnered with the City to provide the shell for the facility through a generous lease program in the fall of 2007. Soon after, sponsorships from local businesses and residents started rolling in and, coupled with a generous grant from the Gila River Indian Community, the City was able to complete the facility. Major partners in the project include local businesses such as Quest Electric, Shearer Enterprises, Golden Touch Realty and Developers, REA Construction, Achen Gardner Construction and Al and Riley’s Air Conditioning and Sheet Metal.

“Without the bighearted support of many in our community this project would not have been possible. We invite all of our residents young and old to come out and see this beautiful new facility during the grand opening celebration,” said Betsy Rice, the City’s public information officer. “The Casa Grande Youth Commission has worked hard with City staff, as well as their advisors – Donna McBride, Jim Rhodes and Mayor Pro Tem Karl Peterson, to see this dream through. The Teen Center is truly a reflection of their vision for a place that area teens can call their own.” 

The 4,000-square foot facility includes a computer lab, television and game lounge, pool table and snack bar. The Teen Center is not only a place for students to relax and socialize with friends, but also provides areas for studying and homework. The City is also working on providing special programs for teens as well as dances at the facility for middle and high school students. The Teen Center will be monitored by staff during all hours of operation.

The Center will be open to Casa Grande students in grades 6-12 with different hours of operation for middle and high school students. Those hours will be announced as the schedule of operation is finalized in early March. Teens wishing to utilize the center can do so by applying for a free photo ID card at the Casa Grande Community Services Department, 404 E. Florence Blvd., or at the Center’s front counter. Applicants must show proof of residency.

For more information about the Teen Center, contact Caryl Chase at (520)421-8677.

The IRS just released a ruling setting forth the guidelines for doing a 1031 exchange on a vacation home. The ruling is a Revenue Procedure (2008-16), which is what I call a ‘cookbook ruling,’ which essentially means that if you do certain things, you get a guaranteed result. In this case they will NOT challenge the investment nature or exchangeability of your property.

To avoid any possibility of a challenge to your vacation home exchange, you have to meet certain requirements for your vacation property. During the 24 month period preceding the sale of your vacation home, or the 24 months after the purchase of your vacation home, or both if they both are vacation home properties:

1. You must have rented the property, at a fair rental price, for at least 14 days during each 12-month block of the 24-month period, and
2. You did not use the property personally for more than the greater of 14 days, or 10 percent of the days rented, during each 12-month block of the 24-month period.

Since this ruling is a Revenue Procedure, failure to meet the exact requirements of the ruling are not fatal, but could subject you to closer scrutiny of your exchange. In other words, using the property for 15 days does not mean that your exchange is ‘toast’–it merely means that they could audit you if they wish.

The purpose of the ruling is to provide a ‘bright line’ test that gives you concrete assurance that your exchange will not be challenged. This goes into effect for the sale of any vacation homes starting March 10, 2008.

See the original article here: http://www.expert1031.com/1031education/teeshots.archive/97022008.html

Actions by Congress and the Federal Reserve in the last few weeks were designed to have a positive impact on the current housing market.   Listed below is a brief update of each item and the potential impact:

Federal Reserve: The Fed has reduced short term interest rates twice in recent months in an effort to gradually stimulate the housing market without increasing inflation. The Fed changed tactics in mid January by announcing an agreement with four foreign central banks to inject billions of dollars into the world’s financial system to make more money available for big banks to lend to smaller ones. The Fed said it would lend at least $40 billion to cash-strapped U.S. banks and make $24 billion available to the European Central Bank and the Swiss National Bank, as well as the Canadian and British central banks to alleviate the demand for dollars in Europe. “This Fed has surprised people with its ability to think outside the box,” says Jay H. Bryson, global economist for Wachovia Corp. “It’s trying to take a more targeted approach to financial problems, instead of the sledgehammer of cutting the benchmark federal funds rate.” 

Congress takes action. The Senate passed legislation to improve the capacity and flexibility of the FHA to serve the credit needs of borrowers. Specifically, FHA regulations have been changed to:

1.    Increase the current FHA loan limits to enable deserving potential buyers to purchase homes in more markets across the country.

2.    Allow the FHA to establish greater flexibility in setting down payment requirements for its single family loan programs.

3.    Simplify requirements for FHA condo loans, which historically have been difficult to finance through FHA.

Senate approves bill to eliminate taxes on debt relief. On Dec 14^th the Senate approved legislation that would eliminate taxes homeowners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage debt, such as in a short sale. The bill would cap untaxable forgiven mortgage debt at $2 million and apply only to principal residences. Existing IRS tax rules forced many struggling homeowners to seek foreclosure over restructuring their loan with lenders because forgiven mortgage debt is taxed as ordinary income. “This legislation will play a central role in helping American families avoid foreclosure and stay in their homes,” said Brian Catalde, president of the National Association of Home Builders. The Mortgage Cancellation Relief Act of 2007 will provide a temporary, three year change to the tax code to eliminate taxes on forgiven mortgage debt.

Freddie Mac produces internet video on foreclosure fraud. A new survey found one-in-four delinquent borrowers go to the Internet before their bank or lender for information about avoiding foreclosure. Freddie Mac’s two minute anti-fraud video can be found at www.youtube.com/AvoidFraud. The video uses professional actors to demonstrate how con artists can get copies of foreclosure notices at City Hall or a county courthouse; persuade distressed borrowers to give up their deeds in exchange for suspicious promises to solve their financial problems; use the deeds to secure new loans for themselves; and let the new loans go into foreclosure, which means the homeowner looking for help can still end up losing their home.

Construction spending unexpectedly rose 0.1 percent in November despite private homebuilding construction dropping 2.5 percent.   Private non-residential construction rose 1.7% to a record annual rate of $375.8 billion. That trend is certainly visible in the Casa Grande Valley, as non residential construction seems to be everywhere!

Special Financing Available for Homebuyers in Pinal County: Contrary to recent news reports there are several programs available for homebuyers with limited cash resources that may allow them to purchase a home with assistance now and take advantage of lower housing prices and interest rates than have been available in the past few years. Carl Kinney, Programs Administrator for the Arizona Housing Finance Authority spoke to Casa Grande area Realtors in January about the Assistance for First Time Homebuyers, Mortgage Revenue Bond, and Mortgage Credit Certificate programs. These are programs for First Time Homebuyers or home buyers who have not owned a home in the past three years. They may be used to buy a larger home or in the case of homebuyers with good credit scores, possibly receive a better interest rate.   Contact a local Realtor or lender for more information on these programs.

Real estate recovery expected in the second half of 2008. My crystal ball has been a bit cloudy lately when I inquire as to “when will the housing market recover?” While it has almost become a national past time to predict when the market will “hit bottom” we all know that housing markets are local and that by the time the experts announce “the bottom” a rebound will have already occurred and prices will have already begun to increase. Nonetheless, the National Association of Home Builders (NAHB) predicts the housing industry will begin its recovery in the second half of 2008. NAHB Chief Economist David Seiders said this forecast is based on several assumptions – the economy avoids recession, Congress passes key reforms to address the subprime lending crisis and the central bank remains ready to step in if needed to keep the economy moving forward. It seems to me that these “requirements” necessary for recovery are well underway.

Jan. 31 (Bloomberg) -- Federal Reserve officials, focused on heading off a recession, once again did what financial markets demanded by cutting their target for the overnight
lending rate by a half percentage point.

The action yesterday came on top of a 75 basis-pointreduction only eight days ago and left the target at 3 percent, down from 5.25 percent last September, when the series of cuts
began.

``Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity,'' the statement issued by the Federal Open Market Committee. ``However, downside risks to growth remain.''

Investors in fed funds futures contracts immediately assumed that was an indication the target would be cut again by another 25 basis points at the next FOMC meeting on March 18, or by 50 or maybe even 75.

Actually, by mid-March, it might be clear that the U.S. economy isn't in as much trouble as a lot of investors think it is because they're shocked by the plunge in housing construction and sales and by the subprime-related losses at several major
banks and brokages.

Rather than more rate cuts, 2008 may see a replay of 1988, when the Fed quickly raised rates to control inflation after the growth scare caused by the October 1987 stock market crash dissipated. The sheer size of the Fed's easing may ensure that.

``The Fed's aggressive easing -- with today's move, the Federal funds rate has been lowered a dramatic 225 basis points in five months -- will accelerate the healing process in the badly battered financial markets, and with a lag, will stimulate economic activity -- in late 2008,'' economic Mickey Levy of Banc America Securities said.

The Federal Reserve decided to cut the federal funds rate by a half-point today and signaled that they door may be open for additional rate cuts. This was the fifth cut since September 2007 and now totals a 2.25% reduction to the Federal Funds Rate. Following the move, they issued the following statement:

"The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 3 percent.

Financial markets remain under considerable stress, and credit has tightened further for some businesses and households.  Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets.

The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.

Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity.  However, downside risks to growth remain.  The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks."