Arizona Homebuilder

OCTOBER | NOVEMBER 2013

ArizonaHomebuilder Eliant Ranks Homeowners Financial Group #1 Why do so many builders name HFG their preferred lender?

SUPPLY OR DEMAND

“Our buyers are always impressed and satisfied with the professionalism and overall service received by Homeowners Financial Group.”

Metro Phoenix New Home Sales

Mark & Julie Hancock, Founders – Camelot Homes

SERVICE LEVEL COMMITMENTS · All Builder Files Receive Initial 30-Day Underwriting · Extended Locks up to 12-Months · Customized Marketing Support PORTFOLIO SELECT PRODUCTS · Expanded FHA and Conventional · Clean Slate Program · Construction Financing

WWW.HOMEOWNERSFG.COM • 480.305.8550

Old Town Scottsdale

16427 N. Scottsdale Rd. Suite #145 Scottsdale, AZ 85254

Arrowhead

16165 N. 83rd Ave. Suite #120 Peoria, AZ 85382

HOMEBUILDER SPOTLIGHT

Chandler

CORPORATE OFFICE

55 N. Arizona Place Suite #204 Chandler, AZ 85225

16427 N. Scottsdale Rd. Suite #145 Scottsdale, AZ 85254

Prescott

140 N. Montezuma Street Suite #100 Prescott, AZ 86301

Brentwood

11777 San Vicente Blvd. Suite #601 Los Angeles, CA 90049

Westlake

VALLEY BUILDER STATS

340 N. Westlake Blvd. Suite #155 Westlake Village, CA 91361

FINANCE CORNER

Homeowners Financial Group USA, LLC lends in the following states, AZ BK #0906222; CA Finance Lenders Law License # 603 F033; ID # MBL-5879; NM # 03068; ND #MB102538; OR # ML-5229 WA: #CL-93718 and is registered in CO. 866-305-8059.

Featured Development Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net

Eastmark Hits the Mark with Eye on Innovation

GARILYN BOURGEOIS Director of Marketing at Eastmark

Eastmark’s emphasis on innovation and the human connection adds a whole new dimension to the traditional formula for building a master planned community. But while the groundwork is done and the master plan paints the vision of what is to come, the final picture of the Eastmark of the future is not set in stone.

“Eastmark truly reflects a new way of development,” said Garilyn Bourgeois, Director of Marketing at Eastmark. “We are taking a much more flexible approach. This will allow us to blend all aspects of a vibrant community as Eastmark evolves with the needs of the marketplace to create a truly integrated place to live, work, play, and learn.”

The 3,200 acre community – already welcoming its first residents and planning for the 2015 arrival of Grand Canyon University - is mapped to grow with multiple residential builders, plenty of recreational space and commercial areas to attract businesses and the knowledge workers they will seek to employ. In fact, when planning Eastmark, DMB placed a heavy emphasis on economic development and jobs creation.

“This 5 square-mile parcel is a very special piece of land,” said Bourgeois. Located right in the center of a transportation corridor, near the Phoenix-Mesa Gateway Airport, and the ASU Polytechnic campus– it bodes well for continued growth as an employment center for healthcare, education, aerospace, and technology.

The Eastmark master plan has the flexibility to accommodate growth to support commercial, residential and active adult lifestyles – all while keeping an eye on the community connectivity that people crave and adhering to the DMB legacy of responsibly integrating the built environment into the natural environment.

“Eastmark places a great importance on our lifestyle component,” said Suzanne Walden-Wells, Director of Community Life at Eastmark. “We want our residents to experience connected living where everything that makes life work is right at their fingertips.”

“The homebuilding industry is entering a new era – one where we are seeing people return to the convenience and connectivity of communities that offer high quality of life, “ Bourgeois said. “We think our new approach will ensure the Eastmark community will meet their needs now and into the future.”

The Phoenix housing market Is it all about Supply or Demand?

The new home market continues to show strength inspite of metered sales due to strong demand in many communities. Many have a limited supply of lots available for new construction while other are smartly managing construction time frames and price increases.

In July we counted 888 new home closings, up 17.93% from the previous year. New home permits totaled 1,190 units…down 8.6% from the previous year.

So, is a Phoenix housing market all about supply or is it all about demand? It looks from our vantage point that the market today is largely about supply, or rather the shortage of supply!...and that the demand for both new and resale homes is being artificially slowed or distorted because of a lack of available inventory of either existing homes or new homes.

The resale market in the Metropolitan area continues to be generally flat, with 8,623 resale transactions (we count both broker assisted and for sale by owner transactions) vs. a total of 8,432 from June of this year. [Maricopa and Pinal Counties combined] Resale insiders continue to tell us that the resale market is being dramatically hampered by a shortage of homes for sale and are becoming more and more focused on the opportunities offered by the new home market place for their clients. However, the market continues to be tilted dramatically in favor of preowned homes versus new homes. In July, of the 9,511 total homes sold in the Metropolitan Phoenix area, 9.3% of those homes were new homes.

While demand is up, prices are increasing, and so are mortgage interest rates which impact those “normal” owner occupant buyers of both existing and new homes.

Another factor we feel is worth considering is that while traditionally in this overall Metropolitan Phoenix housing market existing homes have captured 60 to 65% of the housing market activity. That equation has been dramatically changed during the recession and the recovery to date of the marketplace, with the market share capture of new homes falling below 10% currently. A significant portion of that decline in capture by new homes can be attributed both to the extreme price differential between existing homes and new homes and the failure of builders to produce spec inventory in the face of the uncertainty of the recovery.

Judging by the current level of permit activity for new homes in the region, it does not appear that the new home producers are currently able to fill the new home supply need, keeping inventory pressures on the local existing home market including continuing upward price pressures.

For additional insight and market data call Greg Burger at 480-614-0211 or visit our website at www.RLBrownreports.com.

VALLEY BUILDER STATS MIKE ORR

The Cromford Report

The Maricopa County single family housing market has been in recovery mode for two years now, since hitting bottom in September 2011. We can see an encouraging trend in new home revenues recorded at the county, illustrated by the chart below: However the local single family market is hitting a soft patch as we enter the fall of 2013. Buyers’ enthusiasm has been hit by several factors.

They now find significantly higher prices for new homes, up 22% in average closed price per square foot over the last two years. For existing homes, the glut of bargain properties has disappeared, leaving the average closed price per square foot up a staggering 52% over the same period. Since May, buyers have also faced a sudden steep rise in mortgage interest rates.

Although still very low by historic standard, the fact they jumped by nearly one third from around 3.5% to around 4.5% for a thirty year fixed loan, makes some buyers feel like they missed the boat.

In normal circumstances, these factors would not be enough to deter any but the most timid buyers, but we have just been through the biggest housing bubble bursting in most buyers’ memory. Those harmed by the housing collapse are anxious not to get caught out again. With the media full of articles that suggest a new bubble may be forming, or claiming that the market has been artificially inflated by hedge fund investors, it is easy for buyers to decide to stay on the sidelines for a while, even though these stories have little basis in fact. A surfeit of skepticism is characteristic of a market in the early stages of recovery.

The lack of buyer enthusiasm is evident from the 27% fall in Maricopa County listings under contract on the MLS from 10,754 on June 20 to 7,850 on September 20. In turn this has caused the number of active single family MLS listings to grow from a very tight 9,341 to more reasonable 12,726 (excluding those under contract accepting backup offers). This still represents only 2.5 months of supply, but it feels a lot more plentiful than the 1.4 months of supply we had in June because the sales rate has also fallen by 26% since then. Nevertheless, if buyers on the sidelines are hoping for a reprieve from price rises, it appears they are likely to be disappointed unless supply grows much higher and reaches well above a normal level of 4 to 6 months.

Meanwhile new home construction has only added modestly to total home inventory. We have seen an increase of 19% in closed single family new home sales across Maricopa County, from 4,904 in 2012 to 5,861 in 2013 for the first eight months of each year. Total revenue is up a healthy 40% year to date, but the unit count remains extremely low by historic standards. We saw more new single family homes closed in the first 3 months of 1999 than in the first 8 months of 2013.

According to Maricopa County recorded deeds, the top twenty developers for year to date as of August 2013 for single family homes are shown in the chart to the left:

FINANCE CORNER We all know that interest rates soared in May and June of this year. With most “build time” taking 6-9 months, have you contacted your preferred lender to see how this may have affected your buyer’s ability to qualify? Or said another way, has your lender contacted you? A 1.25% increase in BILL ROGERS an interest rate, results in a $217 increase to the buyer’s mortgage payment on a Chief Executive Officer Homeowners Financial Group $300k loan. For buyers on a fixed income with high debt ratios, this can turn an approval into a denial. Many builders and their buyers are now realizing that this swift increase in rates has created some problems for buyers that are now getting ready to close.

Here are a few tips to consider: If you haven’t reviewed your current pipeline with your lender, now is a good time. Specifically ask the lender to provide an updated pre-approval based on today’s rates.

In volatile markets (like we currently are experiencing today), encourage your buyer’s to lock in their interest rate early in the process-especially if an adverse move in rates will prevent them from qualifying.

Make sure that your lender offers an extended long term lock option for your clients. All builder mortgage partners should be able to offer 6-12 month lock options for builder accounts.

How are your clients utilizing any builder incentives? With the increase in rates, redirecting these incentive dollars to help “buy down” the rate might be something to consider.

Bill Rogers is CEO & Founder of Homeowners Financial Group and is a Columnist for MP Media Publications and Desert Lifestyle Publishing.

Bill can be reached at 480-305-8500.

Are you feeling lucky?

Join us for a night of music, drinks, poker and casino gaming!

CALAIS CAMPBELL #93

Celebrity Poker Invitational

Proceeds benefitting the Care Fund and the CRC Foundation

Saturday, October 19, 2013 5pm – Poker Tournament Starts 7pm – General Admission Held at a Paradise Valley mansion. Get your tickets at www.thecarefund.org/events/

Eastmark Hits the Mark with Eye on Innovation

GARILYN BOURGEOIS Director of Marketing at Eastmark

Eastmark’s emphasis on innovation and the human connection adds a whole new dimension to the traditional formula for building a master planned community. But while the groundwork is done and the master plan paints the vision of what is to come, the final picture of the Eastmark of the future is not set in stone.

“Eastmark truly reflects a new way of development,” said Garilyn Bourgeois, Director of Marketing at Eastmark. “We are taking a much more flexible approach. This will allow us to blend all aspects of a vibrant community as Eastmark evolves with the needs of the marketplace to create a truly integrated place to live, work, play, and learn.”

The 3,200 acre community – already welcoming its first residents and planning for the 2015 arrival of Grand Canyon University - is mapped to grow with multiple residential builders, plenty of recreational space and commercial areas to attract businesses and the knowledge workers they will seek to employ. In fact, when planning Eastmark, DMB placed a heavy emphasis on economic development and jobs creation.

“This 5 square-mile parcel is a very special piece of land,” said Bourgeois. Located right in the center of a transportation corridor, near the Phoenix-Mesa Gateway Airport, and the ASU Polytechnic campus– it bodes well for continued growth as an employment center for healthcare, education, aerospace, and technology.

The Eastmark master plan has the flexibility to accommodate growth to support commercial, residential and active adult lifestyles – all while keeping an eye on the community connectivity that people crave and adhering to the DMB legacy of responsibly integrating the built environment into the natural environment.

“Eastmark places a great importance on our lifestyle component,” said Suzanne Walden-Wells, Director of Community Life at Eastmark. “We want our residents to experience connected living where everything that makes life work is right at their fingertips.”

“The homebuilding industry is entering a new era – one where we are seeing people return to the convenience and connectivity of communities that offer high quality of life, “ Bourgeois said. “We think our new approach will ensure the Eastmark community will meet their needs now and into the future.”

The Phoenix housing market Is it all about Supply or Demand?

The new home market continues to show strength inspite of metered sales due to strong demand in many communities. Many have a limited supply of lots available for new construction while other are smartly managing construction time frames and price increases.

In July we counted 888 new home closings, up 17.93% from the previous year. New home permits totaled 1,190 units…down 8.6% from the previous year.

So, is a Phoenix housing market all about supply or is it all about demand? It looks from our vantage point that the market today is largely about supply, or rather the shortage of supply!...and that the demand for both new and resale homes is being artificially slowed or distorted because of a lack of available inventory of either existing homes or new homes.

The resale market in the Metropolitan area continues to be generally flat, with 8,623 resale transactions (we count both broker assisted and for sale by owner transactions) vs. a total of 8,432 from June of this year. [Maricopa and Pinal Counties combined] Resale insiders continue to tell us that the resale market is being dramatically hampered by a shortage of homes for sale and are becoming more and more focused on the opportunities offered by the new home market place for their clients. However, the market continues to be tilted dramatically in favor of preowned homes versus new homes. In July, of the 9,511 total homes sold in the Metropolitan Phoenix area, 9.3% of those homes were new homes.

While demand is up, prices are increasing, and so are mortgage interest rates which impact those “normal” owner occupant buyers of both existing and new homes.

Another factor we feel is worth considering is that while traditionally in this overall Metropolitan Phoenix housing market existing homes have captured 60 to 65% of the housing market activity. That equation has been dramatically changed during the recession and the recovery to date of the marketplace, with the market share capture of new homes falling below 10% currently. A significant portion of that decline in capture by new homes can be attributed both to the extreme price differential between existing homes and new homes and the failure of builders to produce spec inventory in the face of the uncertainty of the recovery.

Judging by the current level of permit activity for new homes in the region, it does not appear that the new home producers are currently able to fill the new home supply need, keeping inventory pressures on the local existing home market including continuing upward price pressures.

For additional insight and market data call Greg Burger at 480-614-0211 or visit our website at www.RLBrownreports.com.

VALLEY BUILDER STATS MIKE ORR

The Cromford Report

The Maricopa County single family housing market has been in recovery mode for two years now, since hitting bottom in September 2011. We can see an encouraging trend in new home revenues recorded at the county, illustrated by the chart below: However the local single family market is hitting a soft patch as we enter the fall of 2013. Buyers’ enthusiasm has been hit by several factors.

They now find significantly higher prices for new homes, up 22% in average closed price per square foot over the last two years. For existing homes, the glut of bargain properties has disappeared, leaving the average closed price per square foot up a staggering 52% over the same period. Since May, buyers have also faced a sudden steep rise in mortgage interest rates.

Although still very low by historic standard, the fact they jumped by nearly one third from around 3.5% to around 4.5% for a thirty year fixed loan, makes some buyers feel like they missed the boat.

In normal circumstances, these factors would not be enough to deter any but the most timid buyers, but we have just been through the biggest housing bubble bursting in most buyers’ memory. Those harmed by the housing collapse are anxious not to get caught out again. With the media full of articles that suggest a new bubble may be forming, or claiming that the market has been artificially inflated by hedge fund investors, it is easy for buyers to decide to stay on the sidelines for a while, even though these stories have little basis in fact. A surfeit of skepticism is characteristic of a market in the early stages of recovery.

The lack of buyer enthusiasm is evident from the 27% fall in Maricopa County listings under contract on the MLS from 10,754 on June 20 to 7,850 on September 20. In turn this has caused the number of active single family MLS listings to grow from a very tight 9,341 to more reasonable 12,726 (excluding those under contract accepting backup offers). This still represents only 2.5 months of supply, but it feels a lot more plentiful than the 1.4 months of supply we had in June because the sales rate has also fallen by 26% since then. Nevertheless, if buyers on the sidelines are hoping for a reprieve from price rises, it appears they are likely to be disappointed unless supply grows much higher and reaches well above a normal level of 4 to 6 months.

Meanwhile new home construction has only added modestly to total home inventory. We have seen an increase of 19% in closed single family new home sales across Maricopa County, from 4,904 in 2012 to 5,861 in 2013 for the first eight months of each year. Total revenue is up a healthy 40% year to date, but the unit count remains extremely low by historic standards. We saw more new single family homes closed in the first 3 months of 1999 than in the first 8 months of 2013.

According to Maricopa County recorded deeds, the top twenty developers for year to date as of August 2013 for single family homes are shown in the chart to the left:

FINANCE CORNER We all know that interest rates soared in May and June of this year. With most “build time” taking 6-9 months, have you contacted your preferred lender to see how this may have affected your buyer’s ability to qualify? Or said another way, has your lender contacted you? A 1.25% increase in BILL ROGERS an interest rate, results in a $217 increase to the buyer’s mortgage payment on a Chief Executive Officer Homeowners Financial Group $300k loan. For buyers on a fixed income with high debt ratios, this can turn an approval into a denial. Many builders and their buyers are now realizing that this swift increase in rates has created some problems for buyers that are now getting ready to close.

Here are a few tips to consider: If you haven’t reviewed your current pipeline with your lender, now is a good time. Specifically ask the lender to provide an updated pre-approval based on today’s rates.

In volatile markets (like we currently are experiencing today), encourage your buyer’s to lock in their interest rate early in the process-especially if an adverse move in rates will prevent them from qualifying.

Make sure that your lender offers an extended long term lock option for your clients. All builder mortgage partners should be able to offer 6-12 month lock options for builder accounts.

How are your clients utilizing any builder incentives? With the increase in rates, redirecting these incentive dollars to help “buy down” the rate might be something to consider.

Bill Rogers is CEO & Founder of Homeowners Financial Group and is a Columnist for MP Media Publications and Desert Lifestyle Publishing.

Bill can be reached at 480-305-8500.

Are you feeling lucky?

Join us for a night of music, drinks, poker and casino gaming!

CALAIS CAMPBELL #93

Celebrity Poker Invitational

Proceeds benefitting the Care Fund and the CRC Foundation

Saturday, October 19, 2013 5pm – Poker Tournament Starts 7pm – General Admission Held at a Paradise Valley mansion. Get your tickets at www.thecarefund.org/events/