Whispering Ranch Diary

2006 Newsletters

This is a summary of the notes and information that I included for 2006 on the maps that I prepared and made available "for Public Use" in the information boxes at the two signs I have in Whispering Ranch. One is located by the mailboxes at 299th Avenue and Patton Road, and the other is at 347th Avenue and Carefree Highway, so depending on which way you come in, there were maps and current information near each entrance. Originally, I was just putting out maps with the listings of properties for sale, but I broadened the scope to give more people an idea of what was happening in the market, and how market changes were affecting Buyers and Sellers in the area.

Since there was more space available here on this site than on the maps, I may have gone into more detail or more fully explained events. If you have any questions or comments, please feel free to send me e-mail to me by clicking here.

Newsletters - 2006

December 9, 2006 - when I referred to current sales slowing to a trickle in last month's narrative, I now realize I should have used the term "drip". In 1st Quarter '06 there were 39 reported sales. In 2nd Quarter '06 there were 41 reported sales. In 3rd Quarter '06 there were 14 reported sales. So it did slow to a trickle. But so far, in the 4th Quarter of '06 there are only 4 reported sales so far. Thus, a more appropriate reporting could describe this activity as a "drip". With almost 170 properties on the market, using this number as a basis, it translates to an 11 year supply of inventory. Of course, this is not realistic. As the market changes, activity will increase (but probably not to the level of the "frenzy" of 2005) and we will see parcels selling again. Until that time, we will witness price reductions for those who have to sell, and Buyers offering low prices on parcels, hoping to "steal" a parcel at a low price. And there may be some of those out there.

I attended the "Arizona 2007 - Real Estate and Business Forecast" on November 17th. The general consensus was that there is an oversupply of houses which has led to the current "adjustment". Builders were building at the rate of 60,000 new homes per year, and didn't take note that demand was only for 45,000 new homes per year. And by the time they realized it and hit the brakes we were sitting on an oversupply of about 20,000 homes. And then the laws of "Supply and Demand" kicked in, and prices dropped. The same thing happened in Whispering Ranch. We now have an oversupply of parcels for sale which means prices have dropped. The unnerving item is that we are now seeing a decrease in demand as well as an increase in supply, which is a recipe for disaster.

And that might be the case, except the local economy is strong, job growth is strong, there are about 300 people a day moving into the Phoenix area, and the Developers and Home Builders are moving forward with their plans to grow into the future. So despite all of the gloom and doom you hear from others, I see a bright future. With all of the happenings in the northwest Valley (and you san see the earth moving and development happening in the corridor from Sun City Grand to Circle City, or along Patton Road with new houses springing up almost on a daily basis as you head west to "the Ranch") this current slump has to end. It's just a matter of when it will start to go back up and return to a normal market.

In the meantime, my advice is to just hold on to your parcels in Whispering Ranch - it might not be a bad time to buy more property to add to your current holdings. This market may not have bottomed out yet, so there could be more bargains out there. You never know when the market bottomed out until you look back.

November 11, 2006 - All the current indicators lead me to believe that we are now in a "stagnant" market in Whispering Ranch for the foreseeable future. Sales have slowed to a trickle of what they were, inventory for sale has increased above the 160 mark, and the average sales prices have dropped. What we are witnessing is a direct effect of the softening of the Real Estate market in general. Sellers are having a rough time turning their properties (since there are so many parcels on the market), and Buyers have so many choices it's tough to make a decision. So it is definitely a Buyers market. In working with Buyers, I stress that we are at a temporary lull in the market, and that I am sure that values will increase in time, it's just that nobody knows exactly when this stagnant market will come back to life. . but it will. So now is a great time to invest in land in Whispering Ranch. There is no doubt about all the construction and development activity in the area, and the changes that this will bring. We are seeing new homes pop up on Patton Road on the way out here, and there is a new large home going up in Whispering Ranch, a predictor of the future in "The Ranch". There are more home like this in the planning stages as well. In addition, there is continued activity in most of the larger planned developments in the area. The Douglas Ranch development has submitted plans for bridges across the Hassayampa River, Trillium has started the "De-Veg" process of moving protected plants prior to getting the groundwork underway, Sun City Festival has started moving dirt to the west of the previously opened area, and Tartesso is continuing to build houses toward the river. I'm not sure of the specific purpose, but recently there were surveyors marking the Jomax Road alignment from 307th Avenue heading west - the boundary between the Douglas Ranch property and the Toyota Technical Testing facility - could this mean that someone is planning to extend Jomax Road to Vulture Mine Road?? Gosh, I wonder why someone would have this amount of foresight. Or maybe they are thinking that the Jomax alignment is the likely choice for the planned Tillman Parkway? I am reminded of the Summer of 2004. I had about 35 properties listed and nothing was selling. Then in November and December of 2004 everything started to sell, prices were rising like crazy, and the market was "Red Hot" until September 2005. I don't think we will see the same activity, but I sense the market will improve. My crystal ball isn't telling me exactly when things will get better, but I have faith it will. In the meantime, my advice is to just hold on to your parcels in Whispering Ranch - it might not be a bad time to buy more property to add to your current holdings. This market may not have bottomed out yet, so there could be more bargains out there. You never know when the market bottomed out until you look back.

October 13, 2006 - The numbers are in for the 3rd Quarter of 2006 and they indicate that Whispering Ranch parcels are following the trend of the rest of the Real Estate market in the area. That trend is downward. Inventory (the number of properties for sale on the market) has reached 140 properties on the market. The number of reported sales for the 3rd Quarter was only 14 parcels. This equates to a ten month supply if we only look at the current inventory and recent activity. In the previous two Quarters, there were about 40 sales per Quarter, so this is a significant slowdown in activity. In addition, the average sales price for the parcels sold dropped down to $79,392. This $4,400 drop in average sales price from the previous Quarter indicates that the range where properties are selling is in the $75K to $85K price range. There was only one sale above $100K and that was in an area where there is availability to power. So unless the market changes, don't look for higher sale prices in the short term. The larger parcels - more than 10 acres - are not selling, primarily due to the fact that the "Investor Money" has moved to different areas. The majority of Buyers are simply an average couple who have some money saved, looking to make an investment that they can hold on to for five to seven years, in an area that shows signs of future growth. And they are discovering that there are plenty of parcels available in their budget range. They will take their time, look at what is within their budget, and find the best parcels to suit their investment needs, then make an offer below asking price. Sellers who have had their parcel on the market for a while are becoming more realistic, and, if they want to sell, are looking closely at offers that come in. Now that the weather has moderated, I am seeing more activity in the market, my phone is ringing more for Whispering Ranch information, which should translate to stronger sales in the next few Quarters. With all of the inventory currently on the market, it will be a while before prices start to rise. This market, like all markets, responds to the Laws of Supply and Demand. - when there is a lot of supply (140 parcels on the market) combined with not much demand (only 14 transactions in the last three months) prices will tend to drop. - which is exactly what has happened. For Buyers, now is the opportune time to buy when there is plenty to choose from and prices are down. Will the market fall lower? ? No one can be sure it won't. Will the market rise ? ? You bet it will - it's not a matter of if it will rise, the question at the moment is when it will rise. There is plenty of planned growth, major developments are moving forward, roadway planning and improvements are on the horizon, and annexation of these rural areas is already becoming a hot issue politically.

September 9, 2006 - In looking at the activity reported by the local Multiple Listing Service, sales are still relatively slow, and the current number of sales is about one third of the previous Quarter. This is probably partly due to the "Summer Doldrums" - when it's HOT and folks are not spending a lot of their time wandering around in the desert looking at parcels. Average sales prices have dropped a little this quarter to $80,807 for five acres or $16,160 per acre. Since July 1st there have been 13 sales recorded through the local MLS ranging from $67K to $115K for five acre parcels. The average time on the market for the properties sold was 93 days. There are now 142 properties for sale in "The Ranch" ranging from a low of $35,000 for five acres up to $2,000,000 for 95 acres. What has changed is that properties are now taking longer to sell. Demand appears to be on the decrease. The average number of days on the market for the properties currently for sale is 133 days. This is up from 95 days on the market as reported for the 2nd Quarter of 2006. These market numbers validate my earlier statement "Properly priced properties will sell in a reasonable period of time". We have plenty of properties priced to high for this market, and most people who call me are looking for the best parcel they can get in the $75K to $85K price range. That is what is selling. There are very few Buyers who are willing to spend more than that in the current market for an average parcel. We have plenty of Sellers looking to put their parcels on the market at last year's prices or next year's prices and they won't sell anytime soon. So plan to see a lot of parcels on the market unless we see some radical changes in the local market in the near future. I predict a bright future for Whispering Ranch parcels. The only question that nobody can answer is "when" the market will change.

August 22, 2006 - Accipiter Communications went before the Corporation Commission this morning, accompanied by some of the property owners in Whispering Ranch, and was granted approval to act as the communications company / phone company for the Whispering Ranch subdivision. As a part of the efforts underway, they have also been put in touch with the representatives from Arizona Public Service who are currently working on the study of how and when to bring electrical service to "The Ranch". They may, as a part of the construction to provide these infrastructure services in the area, join forces so trenching and cabling will only have to be done ones, saving each of these companies some of the costs to provide these services. Progress is on its way! Now we need to focus our efforts on determining a time frame for the completion of these studies and start of construction. You can read the details of who they are, and what their plans are for the area by going to the "Meetings" section of this web site as the original communication is presented in that area.

August 12, 2006 - We have now reached a record number of parcels on the market, 133 at last count. The prices, for the most part, are within the range of reason, and Sellers understand that it is going to take longer to sell a parcel with all the properties currently on the market. Buyer's are taking their time and seeking out the best property for dollars spent. I guess the folks are starting to realize what I have been saying for the past three years, Whispering Ranch is the best dollar value for land in the County. And there are signs that we may be seeing more activity in the near future. Land activity generally runs a little behind what happens in the New and Resale housing market, and the housing market activity is increasing. We still have some rough water ahead of us - there are plenty of Adjustable Rate and Interest-Only Mortgages that will be adjusting in the near future, so the supply of houses on the market will remain high. Prices won't rise significantly with this increase in inventory, but there will be an increase in activity as Buyers see the market prices stabilizing instead of dropping. Add to this the inventory of housing that was started last year, being completed this year and going on the market. And also be aware that the builders have lowered their prices and are offering more incentives to Buyers. Plenty of Buyers have been waiting for the market to bottom out. In just one year, it has changed from a Seller's market to a Buyer's market. The biggest difference is that they are building more houses all the time - but they're not making any more land ! ! El Dorado Holdings/Douglas Ranch and Lyle Anderson Company are moving forward with their development plans, so civilization is continuing this direction.

July 8, 2006- The numbers are in for the 2nd Quarter of the year and are available for your review on my web site. The condensed version is that it's pretty much the same as the previous quarter. The biggest surprise recently was that a five-acre parcel was listed for $300,000 . . . not any great chance this one will sell any time soon . . . unless they find gold on it. There are more properties coming on line all the time, some priced in the range of recent sales, and others priced at the higher end. There are properties priced as high as $220K and a few coming in at $150K range. Rumors running rampant at the moment are that since the housing market has softened, the Douglas Ranch group that was buying the Toyota Proving Grounds backed out . . . and that the property was being sold to Hyundai for their proving grounds facility. This makes no sense since Hyundai could go anywhere and buy land far cheaper than this parcel. And you can bet your boots that Toyota will hold out for the big $$$. Maricopa County Planning & Zoning has indicated that there is nothing to stand in the way of splitting five-acre parcels into smaller parcels in the area where the County has R-43 zoning, (north of Cloud Road, east of 307th Avenue) so there may be some of these parcels developed into homes on 1 acre parcels in the future. I guess that if there are any documents restricting these parcels to a five-acre minimum the County either can't find them or doesn't care about them.

The Federal Reserve Board raised interest rates another percent, which will be reflected in interest rates on financing and mortgagerates soon, banks are getting more restrictive on their land loans, but there is still private money available to purchase lots if you want it. I have a lender who is interested in lending on the parcels I have for Sale in Whispering Ranch. He is lending at 8.5% for 15 years with 30% Down. Call me if you have an interest in this financing.

June 10, 2006 - There are lots of agents getting nervous because the market is not as active as it was last year. I am finding that there is just as much business, it just takes longer to hone in on the "right" parcel, and there is more work involved. This is a function of the large number of properties for sale and understanding that Buyers want the best parcels they can get for the money they spend (within reason). There are plenty of Buyers looking for bargains, and I tell them they are about a year too late. An informed Buyer will pay a fair market price, knowing that land prices traditionally rise - sometimes quickly (like in 2005) and sometimes slowly (like in today's market) - but the long term trend is always upward. The market has flattened out since the last quarter of 2005, but there is still activity. I have had more transactions this year to date than last year, and at higher prices. So the business is there, it just involves more work, more research, more time and effort with Buyers (and Sellers) and getting both to be more realistic in light of the current market conditions. It's going to be a long hot summer, but if there are no "economic crisis issues" I expect that parcels will continue to sell and that prices will continue to creep upward into the fall months.

May 12, 2006 - This past Wednesday, the Federal Reserve Board raised the prime interest rate by another percent. Gas prices are at an all time high. And since the stock market is pretty hot, money is moving there. The Real Estate market overall has cooled down significantly. So what does all of this mean to you?? Only that if you are buying, you will have more choices due to the amount of inventory on the market, and if you are selling, it will take more time to sell your parcel because of all the choices the competing parcels offer. If you go to www.JoeLiberty.com and go to the "Whispering Ranch" link you can see the graphs of listing vs. sales prices, time on the market and number of transactions. The Arizona State Land Department has verified that they are in discussions with the town of Wickenburg about annexation of State land. The information on the Tillman Parkway (a four to six lane parkway using either Patton Road or Jomax Road from Grand Avenue to 307th Avenue) is under study. And the surveyor's stakes and signs are up for the development (Resort, golf clubhouse, three golf courses) that the Lyle Anderson Company is doing on the east bank of the Hassayampa River south of Patton Road. I think there is a very bright future for property in Whispering Ranch. Right now it's just slower that it was this time last year. If you go back to last year's newsletters you'll see I anticipated the market changes. Prices are up, inventory is up, time to sell a parcel is up - and - interest is up as well!!

April 8, 2006 - As of this writing, there are about 120 parcels for sale here in Whispering Ranch. Prices are all over the map, but the recent analysis of the previous three months of sales activity does not reflect any major changes in what Buyers are willing to pay for a property. Parcel pricing is hovering in the $15K to $18K per acre range, depending on location, access, flood impact, etc. Buyers are taking their time, looking at all the inventory in their price range, and then offering less than asking price in most instances. There is one pending sale where the property was on the market at $24K per acre, but we don't have any actual sale price information yet. Once this deal closes we may well have a new benchmark for property pricing. This may allow the sale of the parcels listed at the higher prices, and drive up the pricing on properties listed in the lower price range. As they say "A rising tide lifts all boats". So, as I predicted late last year, prices will rise, although more slowly that what we witnessed in the first three quarters of 2005.

There are now radio commercials about Pulte's Festival Ranch properties about to open for sale. This area is south east of Whispering Ranch and will have a ripple effect on properties in this area. So we should see the impact of this development in the near future.

March 10, 2006 - Since my last report, events in Whispering Ranch have been pretty much as we all expected. The proposed study to bring in a power grid is just that - a study, and we probably won't see anything start to happen before 2009. The meeting to plan roadway improvements on either Patton Road or Jomax Road is just that as well - a study. But in the instance of the roads you won't see anything happening for about 12 to 15 years, unless there are dramatic events. No word back on the study that would construct a six lane parkway from the center of Douglas Ranch to the Grand Avenue/Highway 74 interchange. That would cut diagonally through "The Ranch". Wickenburg has not said anything since January about the proposed annexation of the Whispering Ranch area and this would be about seven years in the future, if they did follow their original timeframes. So . . . all that being said, we are seeing properties sell, mostly at less than asking prices with the majority of sales in the $80K price range. Properties at the top of the market (over $120K) are selling very slowly, and those priced below average due to floodway, overhead transmission lines, poor access, etc., are selling slowly since there about 120 parcels to choose from at the moment. Buyers are being very selective about finding just the "right" property and they have a lot of choices. Whether you are buying or selling, be realistic in your expectations, and watch what the market is doing. If you try to buy too low - offering less than a "fair" price your odds are slim. Same with trying to sell too high - with all the inventory on the market, if your property is not priced right other may sell all around you at "fair" prices, but not yours.

February 3, 2006 - As many of you have probably heard by now, representatives of APS met with a group of about 40 people (Property owners, developers, realtors) to determine what we could do to get power brought to more areas of "The Ranch". There is a lot of work ahead - planning a three phase service "backbone" and looking into the various possibilities of a substation to serve the area. There are cost issues and problems with roadways and access. And the power company wants to know that there would be enough usage to repay the cost of their investment in all of these expenses. So a study will begin and as time moves forward, I have agreed to post any updates on future meetings or recap what transpired at the past meetings on my website. You can watch for that information in the near future.
Rumors abound that the Douglas Ranch consortium has purchased the Toyota Proving Ground, but until I get third party information, I don't feel it is proper to comment either way. I treat rumors the same way Ronald Reagan treated the Russians - "Trust, but Verify". There's no word back on the proposed study that would run a highway from Douglas Ranch up through "The Ranch" either. More on these items as word surfaces.

The Real Estate Market has showed some signs of strength since the first of the year, with properties selling at or near the asking prices, but only in the mid-price range. Very few of the high priced parcels are selling, and if they do sell they are at discounted prices. There are still a lot of properties on he market (over 100 at this writing) and the range for a five acre parcel runs from $50K up to $180K. And there are a number of larger parcels 10, 20, up to 100 acres at varying prices, but the sales appear to be in the $15K per acre to $18K per acre range - further supporting the pricing observations on the smaller five acre parcels.

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Liberty Southwest Realty, LLC

Joseph D. (Joe) Liberty, Designated Broker
26742 West Ross Avenue
Buckeye, Arizona 85396
Phone: (602) 505-7675

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