-          Housing starts were down 4.5% and building permits were down 12%

-          CPI (measure of inflation) posted the largest decline in the 51 year history of the BLS

-          Average weekly earnings rose 1.4%

I am going to take a glass is half full stance on these numbers.  Obviously the lower inflation number is a big plus (we must see what the Fed does with rates to see where this will go), and the hike in earnings is positive.  The negative housing stats while “negative”, are helping to ease inventory or what inventory would be which is one of our core issues right now.  Low mortgage rates and a decreasing inventory will certainly not hurt our cause.

Mortgage rates are doing their best to break away from the 200-day moving average.  The problem is, they haven’t made up their mind what direction to go.  Mortgage Bonds (mortgage rates) have traded sideways and remained relatively unchanged for 11 straight days now.  That is something we haven’t seen in 2 years.  So, I am not complaining about this nice break from the volatility we have become accustomed to, but I am eagerly awaiting a break for the better.

We will be sure to keep you posted!  Please let me know if you have any questions!

Jay Otlewski, RE/MAX Integrity, 623.362.3060, Jay@valleyREadvisor.com

Ask me about how you can stay at the villas for FREE!

Q: How many Inventory homes do they have?

A: Approximatley 93 finished homes.

Q: What are the average prices of these inventory homes now, with the reductions?

• 1372 sq ft - 1494 sq ft ….. $160’s to the $190’s
• 1610 sq ft - 1816 sq ft ….. $200’s to the $220’s
• 1960 sq ft - 2323 sq ft ….. $230’s to the $250’s
• 2528 sq ft - 2849 sq ft ….. $350’s to the $450’s

Q: What is included in youe inventory homes?

• All appliances including stainless refigerator
• GE washer and dryer
• 2″ wood window blinds
• Extended tile floors
• Surround sound pre-wire
• Maple or Cherry cabinets
• Granite Countertops

Q: How much will I pay to stay in a vaction villa to experience the lifestyle?

A: $69 per nigh through Jan 15th and $79 per night from Jan 16th till April 30th

Q: What do I get with my villa stay?

• 2 bedroom home plus den
• Fully furnished w/ big screen TV
• $25 gift certificate to Indigo grill (1st time guests)
• Drink tickets to happy hour
• Golf cart in garage to use while here
• Access to recreation center and pools, golf and indigo Grill and Restaurant

Q: What are the fees at Copper Canyon Course?

• $45 residents fee (all golf includes cart and range balls)
• $2,000 flex pass (50 rounds @$40 per round)
• Unlimited golf ($3,000 one person) and ($5,000 for two)

Q: Why Sun City Fesitval over all other active adult communities?

• Voted best active adult recreation center nationwide by teh National Builders Association
• Only $95/mo HOA dues which includes Cox basic cable
• All homes include granite, SS appliances, 18 by 18 tile, pull-out shelves, energy efficient low-E windows, post-tension foundations and newer homes therefore newer technology.

Q: How many homes will there be in Sun City Festival at build-out?

A: 7,200 homes with 3 recreation centers and 2 golf courses when complete.

Q: What’s new in ‘09 at Sun City Festival?

A: 5 new model homes currently under construction

Q: Can the residents at the neighborhood across the street (Foothills) use the facilities on teh active adult side?
A: NO_ The recreation centers and pools are exclusive to the active adult side and connot be shared, although the golf course and restaurant are open to the public.

- Check your credit report. Find out if there have been changes to your account limits, and make sure there aren’t any errors. Look for any negatives on your report-many negative items should be removed after seven or 10 years.
- Don’t get close to card limits. About 30% of your FICO is based on the ratio of the amount that is owed on active cards to your available credit. But utilization on individual cards is important too; getting close to the limit on one card will also reflect negatively on your score. Pay down balances as much as possible.
- Keep accounts active. Accounts get closed when there hasn’t been activity on them for a while. Make small purchases on cards a couple of times a year-then pay them off right away-to keep accounts active and your available credit up.
- Pay bills on time. This should an easy one, but could prove challenging for people who could lose their jobs in the months ahead. Be proactive, and contact the credit card company as soon as possible if you’re having problems paying your bill. Payment history counts for about 35% of your credit score.
- Don’t apply for new cards. Store cards are tempting when they offer discounts at the register, but don’t bite. Applying for that card will have a negative effect on your score in the short term.

A guarantee* that I will save you at least $5,000 off the list price of your home purchase or I will contribute $1,000 towards your closing costs!

I feel so confident that I can save you money off the purchase of your next home that I will now put my own money on the table to guarantee it. Being a “Certified Negotiation Expert” I have the skills to negotiate your offer and successfully complete the transaction.

To find out more about this exciting offer visit http://valleyreadvisor.com/platinum-buyer.asp

Finally a way to buy a home and know you’re getting the best price.

*Some restrictions apply.

Two things I’d like to comment on-

1- I want to thank Arizona for passing proposal 100, the amendment that permanently stops the state and local government from ever adding a transfer (sales) tax on real estate. I think the best part of this is the state now has to be “Honest” when it goes after more money from us and do it the old fashioned way. Like taxing payroll taxes so I clearly know how much I’m paying instead of hiding it in a transfer tax on real estate, etc.

2- As most people that know me understand I do not believe in the Democratic Parties idea of how to run the government. Larger government, more spending and “taxing wealth” instead of “creating wealth” never seems to work. With that being said, I am hopeful that President Obama will bring everyone together and get the country’s economy going again. Now will he?

Once he’s Washington and is surrounded by Democratic Lifers that have been waiting for this for years, will they be inclusive? Will they tolerate other opinions? Will will they do what the Republicans did back when they have this kind of power and thumb their noses at the other side of the isle?

Bottom line is this country has a new president and I hope everyone (like him or not) will get behind him and pray that he makes the right decisions. One thing McCain said last night that stuck with me is “I’m ready to serve my commander and chief”. If he can live his life this way shouldn’t we all?

I would invite you to also listen to my recent audio podcast about the market conditions in the Phoenix, Arizona area. It also digs into the northwest valley market conditions.

Click here to listen to the podcast!

As we have talked about in the past, often times money will flow into stocks and out of bonds and vice versa.  The price and demand of mortgage backed bonds on Wall Street is the ONLY thing that moves long term mortgage rates.  So right now, mortgage rates are being pounded a bit.  However, if we see a dramatic cut in the Fed Funds Rate tomorrow you can bet  at some point we will see investors begin to move back into mortgage back securities (MBS’s).  The result for MBS’s could very well be a nice rally, higher yields and most importantly lower 30 year fixed mortgage rates.   Stay tuned!

Take a peek at the chart below showing daily activity over a the past 3 months for Mortgage Backed Securities.  Up equals lower mortgage rates and down means….well we don’t like down J  As you can see there has been a TON of volatility as this market starts to heal.

Example of tax-

If a home sold for $275,000, Arizona residents would pay an additional $5,418 and it could be worse. A YES vote on proposal 100 will protect you from:

• Double Taxation
• Loss of Equity
• Damage to the Real Estate market
• Punishment of homeowners
• An unfair impact on lower-income Arizonans

To learn more and to calculate what you might have to pay go to:

www.YES-ON-100.com

Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate of 5.18 million units in September from a level of 4.91 million in August. Home sales are 1.4 percent higher than the 5.11 million-unit pace in September 2007.

Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.

“The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri, and Rhode Island,” he says. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”

NAR President Richard F. Gaylord says low home prices and low interest rates have helped attract buyers.

“This is the first time since November 2005 that home sales have been above year-ago levels,” Gaylord says. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.

Yun says there may still be market disruptions.

“The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac,” Yun says. “Inventory remains high, and price declines are pressuring owners.”

Yun says that an additional housing stimulus would stabilize prices more quickly and help bring faster stability to Wall Street.

“Removing the repayment feature on the [$7,500] first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory,” Yun says.

A Closer Look at the Numbers

• Total housing inventory: at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.

• National median existing-home price: $191,600 in September, for all housing types. That’s down 9 percent from a year ago when the median was $210,500.

“Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions,” Yun says. “These are pulling the median price down because many are being sold at discounted prices. The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”

• Single-family home sales: increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.

• Existing condominium and co-op sales: were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price was $199,400 in September, down 10.2 percent from a year ago.

By Region

Here’s a breakdown across the country of existing-home in September:

• West: sting-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. Median price: $253,600, down 18.5 percent from a year ago.

• Midwest: sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. Median price: $152,500, which is 7.9 percent lower than September 2007.

• South: sales rose 2.2 percent in September to a pace of 1.9 million but remain 7.8 percent below September 2007. Median price:$167,200, down 4.1 percent from a year ago.

• Northeast: sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. Median price: $246,800, down 5.4 percent from September 2007.

Source: NAR

West Fork is probably one of the most beautiful hikes we have taken yet, except maybe the Devils Bridge trail.  The entire trip you are deep in the red rock canyon that was carved by this little creek and wind over the millinium.

You will see early into the slide show some ruins.  These ruins were once home to Bear Howard, one of Sedona’s early and legendary settlers.  Years later they were improved to form the Mayhew Lodge which was a getaway for many celebrities and diplomats.

You will also see a rock formation that is light colored and seems very much out of place.  Look at the full series of this formation, as you may see:  a fish, a mummy, or a Native American warrior.  I see all three, depending on which I am looking for.

We travel deep into ponderosa pine forests, some of which feels like it gets very little sun.  The temperature variance was probably about 10 degrees in some areas.  The end of this trail is at an area of the canyon that narrows significanly, to become just about unpassable.

The deeper we went into this canyon, the more fall color we saw.  Keep in mind as you look at the slide show that I did not enhance any of the colors.  There are differences in the vibrance of some of the rock only because much of this was in shadow.  We also crossed over the creek 15 times on rocks and logs that are percariously placed for passing.  We got pretty good at it about half way through as we found our center of gravity to balance!

As you look at these cliffs, keep in mind that most of them soar about 500 to 700 feet.  Some of the formations further out in the pictures are probably 1000 feet at least.  We are right at the cliffs edge, and can reach out and touch them in most spots.  This is incredible.  I can only imagine what the early explorers thought when they first found this place…