THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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New Home Communities FEATURE STORY STORY FEATURE
Jim Belfiore
Inside
PHOENIX.ORG NEW HOME COMMUNITIES
BY CHRISTINA FUOCO-KARASINSKI
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eal estate consultant Jim Belfiore has seen the ups and downs of his industry. Since founding Belfiore Real Estate Consulting in Ahwatukee in 2006, he and his staff have become the foremost authority on Arizona housing. “We’re lucky and fortunate that everyone puts the trust in our information and forecasts,” he said. “It’s a team effort. We’re not using hammers and nails to build houses. We’re on the forefront of advising builders what they should do in terms of communities and homes that best fit the public.” Belfiore will give an overview on housing during his ninth annual AZ Dealmakers event, Housing and Hyper-Growth, on Thursday, January 25, at the Westin Kierland Resort and Spa. Visit belfioreconsulting.com for more information. The keynote speakers are Elliott Pollack and Joe Blackburn, president and founder of Everest Holdings. Jordan Rose, president and founder
INTRODUCING
Features
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Latest Tech
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New Communities
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Community Map
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(Photo by Kimberly Carrillo)
Jim Belfiore of Belfiore Real Estate Consulting in Ahwatukee has seen market growth for four to five years.
of Rose Law Group, will lead a discussion with panelists: Andy Warren, president of Maracay Homes; Sheryl Palmer, president and CEO of Taylor Morrison Home Corp.; John Bradley, president, Arizona division, Brookfield Residential; Roger Gannon, division
president, Woodside Homes; David Everson, owner and CEO of Mandalay Homes; and Sean Walters, COO of Sunbelt Holdings. Registration is $109 in advance, See
On Phoenix.org/NewHome
Belfiore on page 6
Blog – What will 2018 bring The Vista at Granite Crossing
Cadence at Gateway
PHOENIX.ORG STAFF
C
adence at Gateway is a new 464acre master-planned community in Mesa’s Gateway corridor at the southeast corner of Ray and Ellsworth roads, on the former GM Proving Grounds. Phase one will open late 2018/early 2019 featuring five builders—Lennar and its NextGen homes with built-in casitas, Pulte, CalAtlantic Homes, David Weekley Homes and Gehan Homes. These builders will be in nine neighborhoods, offering more than 47 different floor plans for approximately 600 homes. Each home will be less than 300 feet from a park, trail or The Square, a resident-only country-club
style community center. The Square and its offerings will be available to community members from the day they move in and include resort-style swimming pools, café great room, meeting rooms for entrepreneurs, fitness center and virtual fitness classrooms, sports fields, tennis, bocce and pickleball courts, a garden and dog park. All amenities at Cadence
will be included with the $125 HOA fee. Phase two will include additional homes, a main street parkway with shopping and office space as well as a charter school and additional parks and trails. At build out, Cadence will include more than 12 miles of hiking and biking trails that connect to the Mesa Regional Trail System.
“We have one of the best amenities packages of any current master plan that’s launching,” said Tim Brislin, vice president of Harvard Investments. “We expect to have the improvements complete and the grand opening in late fall. Home sales should start before that with the individual builders. Stay tuned for that.”
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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TAX REFORM BY JORDAN ROSE AND DAN GAUTHIER, ROSE LAW GROUP PC
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n December 22, 2017, the president signed into law the Tax Cuts and Jobs Act (“the Act”). The Act brings about the most sweeping tax reform in more than 30 years. It will affect every U.S. taxpayer, especially with regard to residential and commercial real estate markets. This article highlights some of the Act’s provisions that will significantly affect the real estate industry.
Tax rate reduction
The Act lowers tax rates for all individual taxpayers. The Act retains seven tax brackets but slightly lowers the rates to 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent. While this does not necessarily mean everyone will pay less taxes, many will.
Jordan Rose and Dan Gauthier filing jointly can exclude up to $500,000 ($250,000 for single taxpayers) in capital gains on the sale of a home, provided they have used it as a primary residence for at least two of the last five years.
doubling the standard deduction and limiting or repealing other deductions, Congress has greatly reduced the tax incentives for homeownership.
Mortgage interest deduction
The Act preserves like-kind exchanges, which allow taxpayers to defer gain recognition on the sale of real property. However, the Act no longer allows likekind exchanges for personal property.
The Act reduces the limit on deductible mortgage interest payments to loans up to $750,000. Current loans of up to $1 million are grandfathered and not subject to the lowered limit. The limit is not indexed for inflation. Homeowners can still deduct interest on second homes, subject to the same cap.
State and local taxes deduction
The Act limits the deduction for state and local property, income and sales taxes to $10,000. It is important to note that this limit applies equally to single and married filers and is not indexed for inflation.
Capital gains on sale of primary Standard deduction residence This provision stays the same. With certain exceptions, married couples
The Act nearly doubles standard deductions: $12,000 for single filers and $24,000 for joint filers. By nearly
One of the most exciting occasions in your life is the purchase of your first home. There is nothing more satisfying than planning, saving and watching all that hard work turn into the reality of a new home. The National Association of Realtors reported that 34 percent of all home buyers in 2016 were first-time home buyers. How exciting is that? As a Realtor, there is nothing I enjoy
Pass-through business deduction
Under the Act, a taxpayer may deduct 20 percent of his/her share of qualified business income from a qualified business, with certain exceptions. This deduction effectively lowers the taxpayer’s maximum taxable rate to 29.6 percent.
Carried interest
Managers or partners of real estate businesses organized as partnerships or LLCs are subject to a new limit on receiving business profits. Typically, such a manager or partner receives an interest in profits, called a carried interest.
Business interest deduction
Under the Act, business interest deduction is limited to 30 percent of the adjusted gross income of the business. Starting in 2022, this limit is further reduced by including depreciation, amortization, and depletion in adjusted gross income. Real estate businesses can opt out of this limitation, but must then use an alternative depreciation system.
Jordan Rose is the founder and president of Rose Law Group pc, a full-service business and real estate law firm. Dan Gauthier is a Rose Law Group law clerk.
Could this be the year you buy your first home?
HOME BUYERS BY CARI GILILLAND
Like-kind exchanges
Previously, this carried interest could retain the tax classification it had when it was earned by the business. For capital gains recognized as carried interest to be taxed as long-term capital gains (a lower rate), businesses must hold those gains for at least three years before distributing them. If the three-year holding period is not satisfied, then those capital gains will be taxed at ordinary income rates.
more than handing over a shiny set of keys to a first-time home buyer. I for one will never forget how fun, stressful and rewarding our experience was when my husband and I purchased our first home. While every home buyer’s situation and expectations are different there are some basic steps that every buyer should pay attention to. First you must put together your team! Having a team of professionals to help you through the process is crucial. You will need a Realtor, lender, home
inspector, insurance agent and several other professionals along the way. A great Realtor will be able to help you connect with most of these professionals. Second, get your financing in order. Your lender will be able to help you understand your options for obtaining a home mortgage, the cost associated and down payment requirements. It’s always best to have your prequalification letter in hand before you start your search. Finally, determine what your ideal
home looks like and the best location for you and your life. The internet will come in very handy in this step. Now that you have some of the basics covered, start your search. Work closely with your team you have carefully aligned on your behalf. For real estate questions, contact her at cari@ carisellshomes.com or 480-390-9247. As a fulltime, full-service Realtor since 2002, it is her mission to offer top-notch service with the utmost integrity to my clients, friends and family.
Experience you can count on. Belfiore Real Estate Consulting is Arizona’s leading, independent real estate research firm. The company provides data products and advisory services to those tracking current market trends- whether at a macro Metro Phoenix, Metro Tucson, or Northern Arizona level or within a particular community or specific competitive market area. Leading homebuilders, developers, appraisers, brokers, lenders, title companies, landscape management companies, retailers, and investors rely on Belfiore’s stats and projections.
As a full-service firm, Belfiore’s Team of analysts produces off-the-shelf advisory and data-tracking products, as well as Custom Market Feasibility Studies and Asset Management Reports. Clients have access to award-winning, comprehensive, webbased software that contains five distinct pricing metrics for actively-marketed Arizona communities, incentive levels, inventory levels, lot information for inactive, planned pipeline communities, land and lot sales comparables, and much more.
Analysts visit and update data within every new home community in the Phoenix-area, Tucson-area, and Northern Arizona a minimum of six times annually, updating information with the company’s proprietary software. 3930 E. Ray Road, Phoenix, AZ 85044 480.706.1002 belfioreconsulting.com
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
NEW HOME TECH BY CHRISTINA FUOCO-KARASINSKI
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very day in the news, there are reports of smart devices being hacked. The real danger lies in products that are used to keep homes safe and comfortable, such as smart locks, cameras and thermostats. Eric Marcus of Marcus Networking in Tempe described products that are ideal for any home. “There’s always a risk to any technology,” he said. “The thing to consider to have strong passwords to your devices. Don’t use 1234. I think, then, your risk is extremely low.”
Alexa
Alexa is Amazon’s cloud-based voice service available on tens of millions of devices from Amazon and third-party device manufacturers. It’s dubbed an “intelligent personal assistant.” “They have different versions,” Marcus said. “That’s a great product. I use it. My clients use it in their businesses and homes. The reason I start with that one is it can control everything else I’m going to talk about.” amazon.com, $129.99
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Safe Smart Devices
Bluetooth door locks
Schlage makes the product; that is one that Marcus has used. “They work with Alexa,” he said. “They have their own apps as well. It will tell you if someone is opening the door or closing the door. You can lock the door remotely. You can also set up a keypad code that only works a couple times, if someone is watching your home.” schlage.com, prices vary
Next Thermostat E
“Those are all affordable products,” Marcus said. “If you’re looking for ancillary ones, Philips makes light bulbs that tie into Alexa. They will turn on through Alexa, change colors and dim.”
Nest Indoor Camera
Nest Thermostat E
Ring Video Doorbell
The Nest Thermostat E turns itself down when the occupants are away. Homeowners can also control it from anywhere. “It’s great,” Marcus said. “You can use that remotely to control your air or heating. Alexa can control it.” nest.com, $179
Nest Cam Indoor
There is no feeling that’s worse than being burglarized. To ease fears, an indoor camera will help. They also allow parents to check up on kids and pets, Marcus said. nest.com, $199-$994, depending on number purchased.
Schlage Bluetooth Door Lock
Ring video doorbell
When TV news shows packages being stolen, those clips are from video doorbells that pick up motion. “It can send you an alert on your phone that the doorbell has been run or motion has been detected,” Marcus said. “That’s a phenomenal product.” shop.ring.com, starts at $149.99
Alexa Enabled Echo Spot
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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NEW COMMUNITIES
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t started in the mid-1960s when two brothers, Bob and Bruce Toll, found the right piece of land in rural Pennsylvania and opened their first new home community in 1967. They had a vision for building more than just houses. Together, they recognized a growing demand for luxury homes within communities where amenities and neighbors created a highly desirable lifestyle. The Fortune 500 company is celebrating its 51st year, building luxury home communities in 20 states. Five communities, all featuring homes with hundreds of personalizing options, are offered in the East Valley.
Toll Brothers at Avian Meadows
Located in the city limits of Chandler, Toll Brothers at Avian Meadows is a family-friendly community with tree-lined streets, community parks, fitness stations, trails and vast open spaces. Schools are “A” rated, and this neighborhood offers the largest home sites in the master plan. Designed to meet the needs of growing families, three one-and-two-story flexible floor plans, with four to six bedrooms, range from approximately 2,800 to 4,500 square feet. Two model homes are open. Prices start from the upper $400,000s.
Dorada Estates
On the border of Queen Creek and Gilbert, Dorada Estates has a new gated entry making for a grand sense of arrival. Set upon a backdrop of mountains it has a modern ranch architectural style flanked by exposed brick towers and waterfalls. The entry is just a prelude. Approximately one-half-acre home sites are offered with one- and two-story homes ranging from
Toll Brothers
3,461 to 6,668 square feet, with up to six bedrooms. A selection of seven home designs are available. Two model homes are open. Prices start from the upper$500,000s.
Toll Brothers at Avian Meadows
Calliandra Estates
In a picturesque Gilbert setting, Calliandra Estates is a gated neighborhood with open space and a large community park, including a new clubhouse and pavilion. It is near the 202 San Tan Freeway in close proximity to SanTan Village and Crossroads Towne Center. A selection of five single-story floor plans range from approximately 2,800 to 5,000 square feet, with three to five bedrooms, on estate-sized home sites. Two model homes are open. Prices start from the low $500,000s.
Toll Brothers at Whitewing
According to Belfiore Real Estate Consulting, Toll Brothers at Whitewing is one of the Southeast Valley’s best sellers, recognized as the No. 1 top selling new home community priced over $550,000 in Gilbert as of July 11, 2017. That was before the model home opened last fall. Whitewing is a private, tranquil staffgated community, featuring single-story homes on nearly half-acre home sites. Homes range from 3,556 to 6,909 square feet, with three to seven bedrooms. Five home designs are offered. Prices start from the upper $700,000s.
Calliandra Estate
Toll Brothers at Whitewing
Legacy at Seville
Toll Brothers recently began home sales at Legacy at Seville within the Seville Golf & Country Club in Gilbert. Private and gated, it is the final new home neighborhood within this renowned golf and country club community. Home sites here, close to the clubhouse, overlook the Gary Panks golf course with views of the San Tan Mountains. Four home designs are offered, ranging from 2,698 to 3,310 square feet, with three to seven bedrooms. Prices start from the $500,000s. Dorada Estates
Toll Brothers sales offices are open from noon to 5:30 p.m. Mondays, and 10 a.m. to 5:30 p.m. Tuesday through Sunday.
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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East Valley Communities 87 202
McKellips Rd. Pima Rd.
MESA
Brown Rd.
TEMPE 60
Ellsworth Rd.
Power Rd.
Recker Rd.
Higley Rd.
Greenfield Rd.
Val Vista Dr.
Lindsay Rd.
Gilbert Rd.
Stapley Rd.
Southern Ave.
Mesa Dr.
Dobson Rd.
Broadway Rd.
Main St. Country Club Dr.
University Dr.
Alma School Rd.
44th St.
Scottsdale Rd.
101
40th St.
Thomas Rd.
GILBERT
McClintock Dr.
Rural Rd.
Kyrene Rd.
Priest Dr.
Guadalupe Rd.
Warner Rd. Ray Rd.
Chandler Blvd.
Williams Field Rd.
CHANDLER
Pecos Rd.
10
Queen Creek Rd.
Cooper Rd.
McQueen Rd.
Arizona Ave.
Ocotillo Rd.
SUN LAKES
eR d.
QUEEN CREEK Chandler Heights Rd.
Riggs Rd.
MARICOPA
ous
Germann Rd.
Power Rd.
202
Ritt enh
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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NEW TO THE MARKET
Mill’s Run
Blandford Homes
Fulton Homes Easy living in Gilbert
Re-Grand Opening February 2018!
Mulberry
Cooley Station
The Mill’s Run Re-Grand Opening is happening in February 2018 with four new home designs ranging from 1,621 to 2,243 square feet. Floor plans and more updates coming soon! 41581 N. Calle del Sol San Tan Valley, AZ 85140 602-497-3570 www.avhomesinc.com
Belfiore from page 1 $125 onsite. “This is our ninth annual one,” he said. “It was born out of necessity when the market was devastated. Our company, to survive, I took my last $30,000 out of my personal savings account and put it into events, and put it into creating a database product.” Belfiore Consulting sells its products to businesses or individuals who have a vested interest in new home communities and development. He and his staff of six track the market proactively. “We visit all the new home communities in Arizona every other month and we collect standardized data,” he said. “We put it into products that are accessible to subscribers. We also put it into custom products that essentially compare new home communities with existing communities and the performance of that community.”
Four collections of homes from 1,700 square feet to just over 4,000 square feet. Starting from the mid $200,000s to the mid $300,000s. Located on Guadalupe Road between Crismon & Signal Butte in Mesa — in the Gilbert School District. Take the 202 to Guadalupe Road, Exit 32. Just 1.8 miles east. www.mulberryneighborhood.com
Belfiore advises builders, for example, what types of homes a future community should have, ranging from square footage to amenities to potential housing prices. “The basis of our research here is really on-the-ground research,” he added. “The people in this office spend 50 percent of their time in the field, talking with salespeople, brokers, appraisers, builders and developers. “We’re out there gathering information from them, bringing it back here and churning out advisory products to help them succeed in their business.”
Forecast
For 2018, Belfiore sees a continuance of what’s occurred over the past two years. “The market didn’t start growing healthily until 2015, when we grew at a rate of 44 percent, in terms of new home sales year over year. “The last two years, we’ve grown at 10 to 11 percent – 10 percent in 2016 and
Choose from 30 different floorplans in five neighborhood series! • Union Pacific - from the $280s • Central Vermont - from the $290s • Boston & Maine - from the $360s • Seaboard - from the $400s • Santa Fe - from the $450s Williams Field and Recker two to seven bedrooms 1,677 - 4,764 square feet 480-895-6300 www.fultonhomes.com
11 percent last year. We expect growth ranging between 9 and 12 percent, in terms of new home demand. I’d say that demand is pretty healthy.” From 2011 to 2013, coming out of the Great Recession, following the bursting of the housing bubble, demand was low, he added. “That was speculative growth,” Belfiore said. “Investors were purchasing houses expecting a rebound in home prices. They were converting for-sale homes into rentals. “Today, this is primary demand, buyers who need a place to live. They may have been renting for a considerable amount of time. A lot of them are millennials who are now in the market purchasing homes. They’re coming out of households that are doubled up, or living with their parents. They’re actually making home purchases. “I think we’re going to continue to see a pendulum swing from a really strong healthy rental market, to a stronger
for-sale housing market.” To put things in perspective, this trend is great, relative to the last 12 years. Belfiore has seen year-over-year growth for four or five years. “We’re now hitting decade highs, in terms of sales office traffic,” he said. “People are coming into offices, looking at homes, which shows higher interest. “I would expect that growth to continue. Over the last 30 years, we averaged about 29,450 for-sale housing permits that includes the boom time and the Great Recession period. In 2017, the final number isn’t out yet, but only about 20,500 were issued. In 2018, we’re expecting 23,500. In a historical perspective, that’s not gangbusters, but it feels a lot better than when we were at the bottom.” Belfiore is pleased to have become the go-to analyst. “I am blessed and fortunate to have come across the allies that we have over the years,” he said. “They put their trust in me.”
THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
HOME MARKET
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New-home buyers likely to see rising prices, low stock
BY PAUL MARYNIAK Executive Editor
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ew-home buyers could experience déjà vu this year as the 2017 pattern of low inventory and upwardly bound prices continue unabated, according to a variety of real estate analysts. Builders are expected to put up more new construction in the year ahead – but the rate of building is likely to slow, according to several housing economists and the National Association of Home Builders in Orlando, Florida. About 653,000 newly built homes will be sold in 2018, up 5.4 percent from 2017, predicted NAHB’s Chief Economist Robert Dietz. While that may sound impressive, the growth rate is down from 10.5 percent in 2017. And those additional homes aren’t nearly enough to meet demand, said Realtor.com “There will be modest growth,” Dietz said at the show. “We’re going to see some changes in the types of homes that are being sold by builders, with more lower-priced offerings.” But “lower-priced” still means cashstrapped, first-time, and millennial buyers won’t be able to get in on the action. Dietz defines this category as costing less than $350,000. The national median home price was $269,900 as of December 1, according to the most recent Realtor.com. New construction is expensive because the labor and land shortage has put a crimp in building, materials costs are rising, and it’s become harder for builders to obtain financing for their projects. Local regulations in certain parts of the country may also make it more time-consuming – and, therefore, costly – to put
up new homes. A recent tariff on Canadian lumber imported into the United States could raise the cost of building a home by about $1,300, Dietz said. The big wild card, however, is the recent tax reform, Dietz said. If more folks have more money in their pockets as a result of the tax changes, it could make it easier for them to save up for a down payment. But the recent changes to the tax code, particularly capping the mortgage interest deduction and limiting local and property tax deductions, may also make well-off potential buyers more likely to shy away from buying pricier new construction. If that happens, builders will put up fewer homes. In addition, mortgage interest rates are expected to rise by a quarter percent several times next year. This makes home buying more expensive. “Mortgage rates are going to go up
a bit more this year,” David Berson, chief economist of Nationwide Mutual Insurance Company, said at the show. “Inflation is going to be just a tad hotter than it’s been.” Corelogic chief economist Frank Nothaft expressed alarm, noting, “Rising home prices are good for home sellers but add to the challenges that home buyers face. Growing numbers of first-time home buyers find limited for-sale inventory, leading to both higher rates of price growth for starter homes and further erosion of affordability.” Nor are millennials the only would-be buyers who will be affected, warned Corelogic President/CEO Frank Martel. He said: “Without a significant surge in new building and affordable housing stock, the relatively high level of growth in home prices is likely to continue.” Urban villages are expected to take hold, predicted Dietz. These are
larger-scale, walkable developments that often include a mix of townhouses, condos, and apartments along with shopping, grocery stores, and entertainment. He expects to see more townhouses go up, as they require less land and are less expensive to construct, and more teardowns – razing one building to put up another – to address the lack of land. The Phoenix market is no exception to the trend, the experts added, adding that a third of all homes sold went for at or above their listing price. The housing market scene also has impacted rents. Yardi Matrix reported that the average rent in the United States was $1,359 per month at the end of 2017 – about 24 percent higher than 10 years prior, when the national average rent was $1,093 per month. Phoenix Metro is in line with the national trend – the smaller rental markets saw the most spectacular changes, whereas the more expensive markets saw fairly modest increases: Queen Creek stands out with a 7.9 increase in the average rent. Despite seeing the lowest rent increase (3.7%), Scottsdale remains the most expensive city for renters, with an average monthly rent of $1,320, followed by Tempe ($1,240) and Queen Creek ($1,172). At the other end of the spectrum, the most affordable cities are Glendale, where renters pay an average rent of $862, Mesa ($892) and Phoenix ($934). The website rentcafe.com said, however, that while rents rose in 2017 by 4.5 percent, “they are still considered to be affordable compared to the rest of the country. Moreover, the increase was significantly lower than in 2016, when it got to 7.1 percent.”
Hard work. Speed. Unmatched dedication. Rose Law Group pc is a full-service real estate and business law firm practicing in and use, zoning, renewable energy, government relations and lobbying, administrative law, family law, transactional real estate, employment law, water law, Native American relations, ADA compliance, infrastructure finance, special districts taxation, business formation/corporation transactions, business litigation, cannabis law, school law, cyber-defamation, cyber-privacy, drone law, intellectual property, estate planning, asset protection, private
litigation, class actions and DUI’s. Rose Law Group pc values “outrageous client service.” We pride ourselves on hyper-responsiveness to our clients’ needs and an extraordinary record of success in achieving our clients’ goals. We know we get results and our list of outstanding clients speaks to the quality of our work. We are honored to represent the top homebuilders, developers, solar companies, schools, businesses and cannabis companies in the country. We are attracted to successful
companies, and they to us because we know our role – to use the law and our creativity to help them achieve even greater success. We are a team motivated to make our clients team even better. We are a team energized by quick and positive resolution to complicated problems. 7144 E. Stetson Drive, Suite 300, Scottsdale, AZ 85251 480.505.3936 roselawgroup.com
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THE SUNDAY EAST VALLEY TRIBUNE | JANUARY 21, 2018
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