To Permit, or not to permit; that is the question.

Here in the Valley of the Sun, as in the rest of America, many homeowners decide to remodel rather than move. Often, it is a sound idea. However, many Phoenix residents pose the question "Should I get a permit?"

The simple answer to this conundrum is, of course, yes. If it is required by law for the work you are contemplating, one could argue that you are indeed obligated to obtain a permit. However, this does not make for a very interesting article, so let us dig a little deeper to find out why.

Firstly, is it actually required? Obviously, you do not need to pull a permit for something as simple as changing a washer on a faucet. but in some parts of the country, any alteration to the home that exceeds $500 in cost, may require a permit. Make sure to check with your local authorities before you even start on the project.

Many folks tell me they do not want to obtain a permit because they want to "save" money. The reality, usually, is that such a move would probably prove to be a false economy. Because the permit is only part of the process; the other part being the physical inspection. Many folks regard the inspector as an overbearing busybody, and I suppose one or two are, but the fact is they are extremely knowledgeable professionals who, in essence, act as a buffer between you and your chosen contractor. You could argue all day with your contractor about a detail you think is necessary all to no avail. The inspector says "do it" and it gets done. Therein lies the reason to do the job properly. An inspector checks the plans, and the completed work, to ensure that all areas of work are completed correctly, and most importantly, to the standards required by the building code. (Most municipalities adhere to the International Building Code) It is a health and safety issue, and circumventing the permit process really is, as noted earlier, a false economy.

In a previous life, I was involved in constructing a new garage on my property, which was built on a hillside, which means the code is much more stringent. Special concrete mix is required, extra rebar was necessary as was a substantial retaining wall. The inspector's advice was invaluable as he thwarted the contractor's attempt to save money (cut corners) at every turn. I shudder to think how the project would have evolved without the inspector's participation.

Also, when it comes time to sell an addition to a home constructed without a permit is not just "not a positive". It is not even a wash. It is in fact a negative as any potential buyer will not only ignore the "improvement", they may attach a negative dollar amount to it, as the city, or state, may require its complete removal.

Also, do not fall victim to a contractor telling you, "I will do it all to code, but we will just save the cost of the permit." You will just be wasting your hard earned money if you do.

Finally, if it is not added by permit, and therefore to code, it will not show up on your city/state tax records. That means that any square footage you thought you added will not be recognized by an appraiser, nor the lender who employed him, when valuing your home for a potential buyer. Still glad you "saved" money on a permit?

Phoenix Real Estate Predictions for 2008

Well, here we are again! Another year older and deeper in debt (thank you Roger Miller.) Before I put quill to parchment I went back and read what I had predicted for 2007.
I think I was right to predict a gloomy market and the market has indeed seen a reduction in sales volumes and sales prices. In fact, with only minor editing, I could easily re-print last year’s predictions without worry.

Unfortunately for some, prices still have around 5%-10% more downward potential before the market stabilizes, which I predict may occur by late ‘08, early ‘09. I say “unfortunately for some” because lower prices are good news for first time buyers, and for those folks looking to trade up to a larger home.

It is also the reason I am at a loss to understand why the government, in a bi-partisan effort, is attempting to bail out some of those who took out adjustable loans that they could not afford, and that they now claim not to have “understood”. I fail to see how manipulating the free market, in an attempt to keep prices up, is a good thing. Luckily, our inept government has structured the bail-out so poorly, that I doubt it will reach many of its intended targets. However, it will provide the politicos with “window dressing” in an election year to create the illusion that they cared.

So, back on topic, in 2008, inventory, which remains at a historically high level, will diminish for the following reason. Clearly, about half the current listings are not truly for sale. Many are overpriced and what I call “opportunistic listings”-- I.E. the owner will sell only if someone pays their inflated price. Not gonna happen. As those listings expire, and more experienced agents decline to re-list them, and novice agents go back to their original jobs, we will begin to see a return to some sort of equilibrium.

Another factor in depressing re-sale prices is the relentless onslaught of new construction. Even though housing starts have slowed, there remains an unbelievable amount of new homes being built. That is a builder’s right in a free market, but it will have an effect, All of which is good news for buyers, who remain nervous, but will start to re-emerge in 2008.

Sellers are not in such a happy position but, realistically only those who purchased since 2005 are in any sort of hurt. Even in “normal’ markets, it is very difficult to turn a profit on a house in only 2-3 years, partly because of closing costs. If you are just slightly upside-down in your home, my advice is to hold on and ride it out. Eventually, it will come back. The effect of running away and possible foreclosure or bankruptcy could decimate your credit rating for many years to come, so do not take those steps lightly.

Finally, whilst the housing market can be stressful at times, remember without the health and happiness of you and your loved ones, you really have nothing.

Scottsdale, Arizona, Where The Living Is Easy

Scottsdale Arizona, is internationally renowned as a major resort destination despite barely squeaking into the top 100 of U.S. cities in terms of population. No Virginia, size is not everything.

Although its nickname is "the West's Most Western Town" I have to say that really is a misnomer. In fact, construction of new horse corrals was all but banned back in the 70's. Call me old fashioned but to be "Western" I think horses should factor into the equation somewhere. The only re-shoeing going on in Scottsdale today is a trophy-wife exchanging her Blahnicks for Jimmy Choos!

That being said, Scottsdale truly is a treasure. It has been written that in terms of entertainment and culture, Scottsdale ranks at #3 behind Los Angeles and New York. As someone who has lived, at length, in all three places, I have to say that Scottsdale is most definitely on the ascendancy; indeed it may already have surpassed L.A., in this humble scribe's opinion. Certainly, theatre, dining and entertainment are L.A.'s equal, but housing costs are much lower, and the traffic here in Scottsdale is a breeze compared to the grid-lock that L.A. has become.

It is also the reason that many wealthy people, and in fact several celebrities, have chose Scottsdale for their second home. Spectacular estate homes in Scottsdale are available for a fraction of the cost of comparable homes in LaLa land. Of course, many are of new construction with all the attendant modern conveniences that would be expensive retrofits in Los Angeles. Plus we still have abundant land available here in Scottsdale, a situation not available in L.A. for many years.

Scottsdale is also well served by its own airport as well as Phoenix International Sky Harbor Airport just minutes away. Of course, the northernmost boundary of Scottsdale abuts Carefree,(which also has its own airport) even so it is still a scant 30 minute drive to downtown Phoenix.

Believe it or not, when the town of Scottsdale was incorporated in 1951 it was just one square mile. Today, it covers around 184 square miles.

As testament to its status as one of the premier golf and tourist destinations in the world, Scottsdale is home to the annual FBR Open Golf Tour, the most attended PGA event on the tour.

It is also home to the world famous Barrett-Jackson Collector Car Auction, plus a host of lesser auctions staged at the same time, such as Russo and Steele and Kruse.

While it is true that it can be an expensive place to live, it should be remembered that the older parts are quite affordable and are enjoying something of a renaissance. One of the benefits of the cooling real estate market, is that for some who felt the ship had sailed forever in 2004 and 2005, there is a second chance to grab a piece of the dream.

Whether your interest is cars, horses, museums, art, theatre, entertainment, shopping, nightlife or golf, there is something for everyone in Scottsdale, Arizona.