Whispering Ranch Diary


2009 Newsletters


This is a summary of the notes and information that I have been including for the past five years or so 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 are 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 is more space available here on this site than on the maps, I may go into more detail or more fully explain events. If you have any questions or comments, please feel free to send me e-mail to me by clicking here.



If you are looking for the newsletter information from earlier years, please check at the bottom of this page for the links to the earlier Diaries starting in 2005.
To review the headway we are making in our efforts to bring electrical service into Whispering Ranch Electrification Efforts click here. And - we ARE making headway.





Newsletters - 2009


November 14, 2009

Business News . . . My first month in business as a new entity involved a considerable amount of tying up loose ends from a regulatory standpoint, but I did assemble ten property listings in Whispering Ranch. It's a little scary stepping out into this crazy market on my own, but it is invigorating in another way as well. I have had people stop me and congratulate me on the move, and others have stopped and told me I was crazy. In this goofy market, who knows. I look around and say "There's nowhere to go but up." Current market indicators are all over the map, depending on who you are listening to. There are those predictors and economists who don't see any improvement in the economy for another year or two, and then there are those who feel we are at the bottom and that the first quarter of 2010 will represent the start of an upward move out of this depressed market. I am the perennial optimist, and I think we have seen the worst of the economic distress, but I also acknowledge that it is going to be a slow recovery. The recent steady rise stock market (Wall Street) normally precedes business activity which again precedes what we see happening as consumers (Main Street). I hate to use a well worn phrase, but "Trickle Down" sums it up pretty well. The indicators are there that things are getting better in some areas of the economy, but they just haven't worked their way through the whole system yet. I will again stress that we probably won't see much of an upturn or recovery until the common man on the street is a little more secure about his job and starts investing for the long term future as opposed to saving for the short term tomorrow.

Sales Activity . . . October was a time for me to take a long hard look at what was happening in the marketplace. Pricing appears to have stabilized for now in the $4,000 per acre range ($20K for a five acre parcel) for your average properties (reasonable access, no power on the property, no floodplain or floodway impact) but there are a few properties priced lower. Most of the lower priced parcels are in areas where the access is more difficult, or they are impacted by floodway and/or floodplain to varying degrees. The two parcels I sold in July were at that price point, and the latest negotiations I am involved in are in the same price range. I am currently in touch with the Lenders on foreclosed properties I had listed last year to see if they are interested in putting these properties back on the market, and if so at what price point. My suggestions are to have a minor price reduction on the property, but to offer Seller Carryback financing with a 20% down payment. Since there is essentially no financing available for raw land (there is only one Institutional Lender in the market right now and they are asking for 50% down) having the Seller act as the lender, it should create more interest on the part of Buyers. So look for properties coming on line in the $5K to $6K/Acre price range, but you can finance these - they're not all cash deals. My belief in the potential of this area is still the same . . I feel now is the time to buy into this area. If you try to "time the market" you will probably miss the bottom.

Bureaucracy on the Move . . . The Maricopa County Assessor's Office did start its sweep through the area in late October, looking for any violations, unpermitted structures or other issues. I haven't had input back from any of the properties involved, and there is the chance that the County officials have decided to see what can be done to work with the area residents before they take any drastic action. In a down economy, the residents don't have the funds to fight the County, and the County doesn't have the staff or money to mount an offensive against non-conforming properties, so I guess we'll just watch and wait until someone blinks. This probably will start to become an issue about the same time they balance the County budget and the local economy heads back upward. This will make for some interesting events.

What's Next . . . I don't expect we are going to see any significant cooperation from Maricopa County until the economy recovers, so rather than waste energy arguing with them, I plan to just move forward without them. I am renewing my efforts toward putting together a "think tank" on how to design, develop and construct a modern off the grid house in this area. Whether it involves individual power, smaller shared generating facilities or finding joint venture partners willing to put money or technology in to mix if a parcel of land is available, the talent and ability is out there, I just need to tap into it. I have been contacted by builders, architects, solar and alternative energy entrepreneurs and development companies and I'm trying to get them all talking with each other, developing ideas and innovative concepts. Once this movement starts, a lot of the other area problems (Emergency Services, Roadways, Police and Fire Protection) will solve themselves. These deficiencies are all a function of the number of permitted buildings, and as soon as word gets out that we can provide a modern "stand alone" living environment, there will be significant interest. Building will follow. I anticipate this might be the catalyst to pull this area out of the economic and development slump we are currently facing. For far too long, this area has been neglected. Maybe it is time to just start demonstrating the independent thought this area has been known for. We don't need the County for this effort. Let's just start it ourselves.

October 10, 2009

Business News . . . I didn't print up and deliver a Newsletter for our September 12th "Open Lot" outing, as I was in the process of leaving Coldwell Banker and setting up my own Real Estate office. I wanted to make sure that Steve Moore would take over the representation of all the remaining listings. Without appropriate time, these issues could have resulted in a mess and a disservice to the Owners of these properties. Steve has been involved in almost all of the area activities and is the most competent agent I know of to take over the responsibility for marketing these properties. We have hammered out an agreement to cooperate on the marketing of these properties and will be working together on handling these properties in the future. I am pleased that after a little work and considerable expense, I will now be operating as Liberty Southwest Realty, LLC. Watch for the new signs and new listings as time progresses. Everything else you are accustomed to should be pretty much the way it was before this change. I wanted to make this change as transparent and effortless as possible.

Sales Activity . . . It is discouraging to have another month of dismal activity. The one of the latest property sales was a five-acre parcel on the north side of Dixileta Drive, just west of 307th Avenue. The property is about 60% floodway and 25% floodplain which doesn't leave a lot of room to build. I had originally listed the property at $29,900, and as time went on, the Owner wanted to drop the price so we lowered it to $23,500. When my agreement expired, another agent picked it up and had it on the market at $16,000. It finally sold for $8,500. For the first time in more than two years, the number of properties on the market has dipped below 100. Effectively, Sellers are realizing that parcels are not selling at the target price levels, so they are taking the properties off the market until prices start to rise sometime in the future. This is evident since there are five-acre properties coming on the market in the $20,000 range. These are mostly foreclosed properties, parcels impacted by floodplain and floodway or short sales. And these properties will probably sell at bargain prices. Owners are now going through the process of getting a grazing lease and tax reduction with the Agricultural Exemption, keeping the annual holding expenses to a minimum. When the market turns and heads back up, they can then sell the property and get a higher price in line with their investment strategy. I have properties that can be bought at $2K per acre for an 80 acre parcel. And there are properties that will cost you more per acre, but you're probably getting more access, power, etc. The smart money seems to be betting on the premise that if we're not at the bottom of the market, we're pretty close - so now is a good time to buy. We'll see.

Bureaucracy on the move . . . Owners are now getting their tax bills, and are shocked to find that even though the value of the parcel went down, the taxes went up ! ! Maricopa County is in a budget deficit situation. They have made cuts in services and they are still coming up short, so the answer is to raise the tax rate. I asked in the past if any of the elected officials were taking a pay cut, but no one would answer me. They are laying off staff to save a little money, but I think that all of the elected officials (and their staff) should take a 25% pay cut until they balance the budget. And the lawsuits between the County Board of Supervisors and Sheriff Joe Arpaio should be paid by the litigants, not the taxpayers. This would save about $2 million. If they had to pay for these lawsuits themselves, I think we would see fewer of these. The County will continue to raise taxes until the budget is balanced. When times get better, the economy will improve, increased sales activity and rising property prices will solve this problem. This is another of the bureaucratic "Heads, they win, Tails, you lose" situations.

I also heard a rumor that Maricopa County has been going over maps and aerial photos and may be planning a sweep through Whispering Ranch to inspect all parcels identified as having "improvements" on them. There is the possibility at that point of 'notices of non-compliance' being issued, citations and fines assessed against properties. I sure hope this isn't true. I think that if they are stupid enough to pull this stunt, they might be surprised at the reception they get. After the hearing that the Hudson's had it is obvious that the County is not interested in working with any property owners. They just want the money.

And then there is the "Disappearing Plat". One of the first areas of Whispering Ranch to be subdivided and sold off was the northeast area of 20-acre parcels. There was a plat recorded with the County (100-24), but sometime in the past few months, the Plat disappeared as part of the Whispering Ranch subdivision. I am trying to find out how you can "undo" a platted subdivision, but nobody can give me any answers on where it went or why it went away. But it's gone. Who knows where . . . . . . . . . . . . . . .

August 8, 2009

Sales Activity . . . Things are still very slow. The only transaction in July was two side-by-side parcels just north of the power lines that were on the market at $55K. I brought a buyer into the picture who made and offer of $40K for both - and even though I didn't think it would be accepted, it was. Than transaction closed in early July. I know there were properties going back to Lenders in foreclosure actions, but either the Lenders didn't know they were getting them back or decided to wait until there is more activity before they put the properties on the market. When we were holding out monthly "Open Lot" on July 11th, there were two or three property owners who stopped by and told me that they wanted to sell some parcels, but with the number of properties on the market and bargain-basement prices already out there, there's not much hope until we start seeing more interest in the area. We are witnessing a number of properties that are going through price reductions at the moment, and the number of properties priced below $30K has doubled in the past 60 days. Hopefully, the lower prices will generate interest. That means we have more buyers looking and that will lead to more activity.

I have parcels from five acres up to 80 acres, and pricing as low as $2,000 per acre (a cash deal for the 80 acres). Prices are all over the map as some Sellers are just going to wait out the market. I'm doing all I can to hang in there until the market improves. I just wish I knew what more could be done to get things moving again. I am still getting calls about properties, and folks are looking at the lower priced parcels. With more interest in the area, you would expect more sales activity, buy there is still no financing available for raw land. Those few interested buyers currently don't have the cash to buy, so I have been checking to see if any of the Sellers are willing to do Seller Carry back Financing for buyers. Until there are more lenders willing to lend on land parcels or until the consumer has more credit available, these transactions where the Seller becomes the lender will be prevalent. How this works is the Buyers puts down 20% to 25%, and the Seller agrees to monthly payments over a 15-year period at 7.5% interest. Unless you need the cash now, this has the advantage of stretching the tax liability for the Seller over a longer period of time. And it works for the Buyer since they don't have to come up with all the cash at once. And, should the Buyer fail to make the payments, you can foreclose, get the property back and do it all over again - hopefully in a stronger market. I have updated the information on the back of the monthly maps to indicate which Sellers are interested in doing Carry back financing. I hope this will create a little more demand in this otherwise stagnant market.

Bureaucracy on the move . . . In late June, the Maricopa County Planning and Development Department sent out a salvo of letters to property owners in Whispering Ranch, notifying them that they had a certain time period to bring their property into conformance with the local building codes. Some properties had a small structure (shed) built on it, others have a house or barn or other structure, some were just a lot of junk, but a lot of folks got hit with these letters. Others didn't, but they know they are on the radar for a letter in the future. I don't think the County is stupid enough to send compliance officials out to go after these folks, but let's just wait and see. What action is taken against the non-conforming properties will tell a lot about how aggressive the County is planning to be. I think they might just lay low for a while and let the dust settle, but you never know - they could just decide to exercise their might and drive a lot of people from Whispering Ranch as a warning not to cross them in the future.

Progress with Power issues . . . Having not heard anything back from either of the power companies (SRP or APS) or the Arizona Corporation Commission on any ideas for power, I decided to take a different approach. What if I could find some Whispering Ranch owners who have land that would be difficult to sell (let's say under or near the power lines along Dove Valley Road) and see if they would be willing to "Joint Venture" with a solar based power generating company to set up some smaller scale power grid areas in two or three sections of the Ranch. These owners would be part owners of the utility company joint venture, as would the company that made the technology investment. I did find a couple of owners who were interested. Add into this equation the influence that the Arizona Corporation Commission could provide to see if any of the Federal Stimulus Funds could be brought to this "Green" project. This seems like a project that makes sense, but can it be done in today's market?? The answer is "Probably Not". When the solar company started looking at the area, there were way too many loose ends. The development lacks roadway improvements, there is no cohesive structure for planning or managing area projects (the Whispering Ranch Residents Association is effectively disbanded and there is no other group to take its place), the County has a very negative view of anything to do with this area, so there's not much chance for this idea or anything like it to move forward. And in this tough economic climate there is no way that the area power companies are financially willing or able to rise to the challenge. It's not their fault, it's just an economic reality. What hope remains for the future of area development is in the hands of a few far-sighted individuals who are working to get all the pieces in place to build a state of the art, modern, energy independent home in Whispering Ranch. And without a large-scale plan for utility infrastructure this will probably happen on a home by home basis. These architects and energy entrepreneurs are working to enhance the different types of solar based electric generating systems and combine various technologies and building and design concepts. I just hope these creative, forward-thinking individuals are not beaten down by the bureaucrats and others who say it can't be done. It will take some time to see these homes designed, permitted and built, but I hope to see houses of this type being built in the future.

And the latest on "Grazing Leases" and the Agricultural Exemption . . . I am still getting e-mails from folks who are interested in getting the Agricultural Exemption for their property and I'm still in favor of this program. I have had a number of e-mails from folks who have just finished the process and they are surprised at the amount that their taxes dropped and even though it was a pain in the butt to go through the process, they are going to see significant tax savings every year into the future. If you haven't done so, call and talk to Mark Lee at B&J Cattle Company. Office number (928) 715-0362, Mobile Phone (602) 882-6413, E-Mail markwlee89360@yahoo.com . I also got an e-mail back from one of my past contacts who had called L&L Palm Farms about selling a couple of cacti on her parcel and she was very impressed by the courteous and professional service she experienced. So this tells me that if you are considering selling a cactus or two from your property, these are a good contact to have. Contact Robert Levings or Darryl Levings at (602) 738-8080 or (602) 739)-8181.

July 11, 2009
I just finished up compiling the numbers for the second Quarter of 2009. Sales activity is still very slow, but there are more folks looking and there are offers on property, but the offers are not even at the lower listing prices, so we still have a little way to go before Sellers and Buyers have a meeting of the minds on the values of property in this area. There are some buyers out there, but I have an 80-acre property that can be bought of $2,000 an acre, and no one is willing to part with that much money in this shaky economy. When we were out this past weekend holding out monthly "Open Lot" I had two owners stop by an tell me they wanted me to sell their property, but with all the parcels on the market trying to sell theirs would be difficult. Just last week, I completed a cash deal for two five-acre parcels at $40,000. That's $20,000 for each parcel. And I felt lucky to have found this buyer. It seems like everyone is just holding tight to whatever money they have until things either get better . . . or not.

The lowest priced five-acre property in Whispering Ranch is at $9,700 (mostly flood impacted) and the highest priced five-acre parcel is at $260,000. And there are a lot of properties (129 on the market at present) priced anywhere in between.
Unemployment is still on the rise, there is a new wave of residential foreclosures on the books and heading to the Trustee's Sales on the Courthouse steps, the Federal Government is continuing to borrow money for us and pour the money into programs to stimulate the economy, but nothing has taken hold yet. Are we near the bottom ? ? I sure hope so, but I don't know any more than any of you. What is unnerving is that even when the economy does turn and start back upward, it is going to take a long time to start to pay back all of the money we have allowed the Government to borrow. And the Government won't pay it back, we will. After all, it is money being borrowed "on our behalf", and we will be the ones to repay it. And since the numbers are getting larger and larger every day, it will create more difficulty to "grow" our economy in the future. So it may be a long time before we work our way out of this crisis.

With the continuing depressing economic and market conditions, it is difficult to keep a positive outlook. And after attending the County Board of Supervisors hearing for Ed and Susie Hudson, it is even more difficult. As I expected, the decision to "make an example" out of them was predetermined and the hearing was just a formality. There were four or five other Whispering Ranch Residents who spoke at the hearing and related the same information - they were told by the County officials not to worry about permits - and now they are among about a dozen or so people who have received their notices of violation from the County. Supervisor Andy Kunasek said that the County wouldn't do that . . but he was not a party to any of these conversations or meetings so how can he tell the Residents who had these conversations with the County officials that they were wrong. But he did. Essentially he called us all liars, so after the meeting, I sent him and e-mail and told him I thought he was an idiot. All of these residents are about to go through the same nightmare as Ed and Susie Hudson. And there is not a thing they can do about it. They don't have the resources to fight the County, and it's a sure bet the County won't work with them. The bureaucracy is now in control of the future of these residents, and those elected and appointed public servants have stated, "Our job is not to work with people. Our job is to enforce the codes." It is sad that those who claim to be public servants are just the opposite. And it's even more embarrassing that we allowed it to happen. Last week, I was told by one of my business associates that the largest special interest group in our society is the politicians. And their agenda is to get elected, at any cost, so they can continue to extract money from us for programs they convince us we need, whether we do or not. I have not yet found a politician I can trust. There are a few that seem to be genuinely concerned, but most of the time, they admit things are way out of anyone's control.

After about six months with a vacant seat at the Commissioner's Office at the Arizona Department of Real Estate, Jan Brewer (our new Governor) appointed Judith Lowe as our new Commissioner. But the Department has been working for the past year or so on investigating issues. The move is on by the Arizona Department of Real Estate (ADRE) to make sure that property owners are aware of the Statute regarding Subdivision Public Reports. This is happening in Whispering Ranch as well as quite a few other areas throughout the State. There were a lot of transactions in the past few years when the market was hot that were in violation of this Statute and ADRE is notifying all owners who "own or have owned more than five parcels in the subdivision" that they are considered "subdividers" as soon as the own the sixth parcel. Most folks don't have to worry about this, but I know plenty who are now caught in this trap. The State requires a Subdivision Public Report to sell any of the parcels if you own more than five. These reports are comprehensive, expensive to produce (about $100K), and take anywhere from six months to a year to complete. There are owners who were unaware of this Statute who are in financial difficulty or who have foreclosed on properties and now they are unable to sell parcels until they prepare, submit and get approval of their Public Report. This Statute was created to prevent people from buying parcels, splitting them up and re-selling them to folks who wanted to build a home, thereby creating an illegal subdivision. But the way the Statute was written, it also caught up a lot of innocent investors and owners. Once you buy the sixth parcel, you are considered a "subdivider" by the ADRE, no matter if you are only a passive investor buying land on the hopes you can sell it for a profit in the future. I have an associate in my office who bought parcels and wasn't aware of this situation until he came to work in our office and I brought him up to speed on it. ADRE is researching ownership and is currently sending out letters to all property owners who "own or have owned" six parcel or more so they will have all the ammunition in the future to go after any violators. In the past, ignorance was sometimes allowed if the offender followed the straight and narrow, but if the State now decides to play hard ball, they can fine you $10,000 per violation and put a hold on any permits for offending properties (no well drilling permits, no building permits) until the owner of the property comes into compliance with the Statute. And, any Real Estate agents involved in these transactions are subject to disciplinary action including license revocation. So everyone loses in this deal. I am working with some lobbyists and legislators to see what can be done to define who is a "subdivider" and who is an "investor". But I don't realistically see any change in the short term until enough people are motivated to challenge this issue. My voice alone will not be enough.

I have been in touch with my contacts at the Arizona Corporation Commission for probably two or three months, and I haven't heard anything on Commissioner Mayes letter to the two main power companies on their ideas for Whispering Ranch. I guess since the Whispering Ranch area has no political influence or financial leverage within the bureaucratic arena, we can expect to be put at the lowest level of importance. I have sent a couple of e-mails containing possibilities for "green" power - on or off grid, but there has been no response. I guess they have bigger issues to address that will have a greater impact on their political longevity. So much for the little guy.

Despite all of the negative news, I am still optimistic about the long-term future of the Whispering Ranch area. There are a number of positive factors at play in Whispering Ranch - ample water availability, reasonable cost for property, plenty of land available for different uses - that will be an asset in the future. I still believe that this area has a bright future, but it will take time and plenty of hard work.

June 13, 2009

The Whispering Ranch Real Estate market has not shown any significant change over the past month. I have had the chance to work with a couple of Buyers who made offers on parcels in the area, some were rejected and some were accepted. Since these offers were well below the asking prices, I didn't see much hope for them, but surprisingly, some are working out. It seems that some of the Sellers are willing to settle for these lower prices (in the $4K to $5K per acre price range) for an "average" parcel just to assemble some quick cash. There was one other sale of interest . . . a parcel that was previously listed at $125K and that sat on the market for nearly two years was reduced to $25K and guess what - it sold right away. So there is a little activity at the bottom end of the price scale. The lowest priced parcel currently on the market has recently been reduced to $9,700, and about 25% of the currently active listings are priced at or below $40K for a five acre parcel which translates to $8,000 per acre or less. (On a side note, I do have an Owner who is interested in selling his 80 Acre parcel at a rock bottom price of $2K/Acre. That's right - only $160K for 80 acres. There is currently one buyer looking at the property, but if you know of any Buyers interested at this price, contact me and I can get the information on this one out to them.) On the higer priced parcels, it seems that there are a few Sellers who will negotiate on price. Aside from price, the other major hurdle is financing. Unless you find a Seller who will carry the financing, there really is no other financing available. And those buyers who have cash seem to be heading into the residential housing market. We are seeing record numbers of sales in the residential housing market, the majority are foreclosed properties being snapped up by investors - because financing is available, but more importantly because they can quickly rent out the property and see immediate return on investment - something vacant land does not offer. With all these rental properties coming on the market, however, there is a strong possibility that it may glut the rental market making it tough to rent the houses after you buy them and fix them up. This recent increase in sales activity is encouraging, and may be signaling a turn of the market. The big fear now is that there is a large number of properties heading into foreclosure and if they are not absorbed into the market we may in the near future, have a glut of properties for sale - further depressing prices. We will need to watch to see how the residential Real Estate and financial markets behave in the upcoming weeks to get a better feel for which way we are heading.

The County Board of Supervisor's hearing on the permit issue for the Hudson property was postponed at the last minute and has been re-scheduled for June 17, 2009. In another move to expedite this hearing, the hearing will be silent - that is the County Board of Supervisors has elected to hold the hearing without any input from the public. Most meetings I have been to in the Supervisor's auditorium have been open to input from any interested party - you do have to fill out a request card and indicate that you want to speak, but you usually have the opportunity to express your view. Not the case at this hearing. I guess the County has either already made a decision or they are just not interested in the input from their constituents. Either way, it is a poor example of "public service" on the part of the elected officials. But after looking into the various action items that were approved or the text amendments incorporated into the County Codes at the last few meetings, I don't think this would come as much of a surprise to anyone. I guess that's how politics is supposed to work. It's sad to see how far we have wandered from the original concept for how government should work outlined by our founding fathers.

In the past month or so I was contacted by Darryl Levings. His family company will buy and remove cactus from your parcel if you choose to do so. I know of a number of owners they have worked with, and they have a good reputation. They are selective about what they harvest and they won't strip the area clean so you will still have some cactus on the property to keep that pristine raw desert feeling. When I asked Darryl to put something together for my newsletter and web site, he sent me the following . . "L&L Palm Farms will buy or salvage your saguaro cactus. We are a family owned and operated business serving the Valley for 26 years. We can help you keep the value of your property by selecting a limited number of saguaro and providing you with a cash sale. References can be provided at your request. Contact Robert Levings or Darryl Levings at (602) 738-8080 or (602) 739)-8181. We look forward to working with you."

I haven't had any input back from the Arizona Corporation Commission on their request letter that was sent out to Arizona Public Service President and CEO Don Robinson and Salt River Project General Manager Richard Silverman on the issue of providing electrical service to the Whispering Ranch area. I have been watching and listening to the hearings that are in process involving utility rate increases. With all the current hoopla about "Going Green", the various solar energy alternatives and working to reduce our addiction to fossil fuels, some intelligent planning for solar power in this area could be a "no-brainer", but I guess they are having difficulty in figuring out how everyone can make money off the idea. Sadly, it's not about the money. It's about providing a basic necessity. I just hope there are some public servants out there who will step and do the right thing for the residents of this area.

May 9, 2009

There was no significant activity in the past month. There was a large group of non-contiguous parcels (295 acres) that was foreclosed, and I am working with the group that took the properties back to see what opportunities might be out there instead of just putting another 59 five acre parcels on the market. To put that many parcels on the market right now would pretty well collapse the market, so we're going to look at some other alternatives. (See the Power Issues section below.) I have been continuing to see more interest in the area, but with almost nothing available for financing through normal lending channels, the only transactions have been cash sales. The financial markets seem to be showing some strength, unemployment seems to have peaked and dropped off, but these could just be minor blips on the radar. Or they could signal we are at the bottom of the market. I don't know yet. I am still concerned by the number of single family homes foreclosures in the wings that have not yet hit the market - Banks were holding off on these during the first quarter to make their numbers look good - and we will probably see these "held off" foreclosures hitting the market in the next 60 to 90 days. If I don't see these causing an upward swing in inventory overall in the market, we may be seeing the market bottom. If these properties are not absorbed into the market relatively quickly, it will indicate we have another two quarters of absorption before we have bottomed out.

I have spent some of my time working with a couple of owners in getting their lenders to reduce interest rates on current notes, or to allow a payment moratorium, either tacking interest onto the end of the note, forgiving payments for a short term, or reducing the principal balance on some of the notes to put the note balance more in line with current values. There are also a couple of owners who stopped making payments, but the lenders are not taking any action to take the properties back. And I don't know what's going to happen on these properties. I haven't seen this type of confusion since the late 70's crazy market.

Sales Activity . . .

Sales Activity has not changed much from last month - I sold one parcel. It was the "Give-Away" parcel that was on the market at $14,900 and I sold it to one of my clients for $14,000. This one is completely "high 'n dry" and was a great deal. There are two other parcels priced low - one is at $16K and the other is at $20K - but both of these are almost entirely covered by floodway issues. And what buyers are looking for is the best buy - not just the lowest price. I have had a number of inquiries from various Sellers, and in most cases, I convinced them to wait a few more months to see what the market does. Other have indicated that they want their property on the market and are willing to wait for the market to come up to their price point.

Some of the Sellers I am working with have agreed to be the Lender if someone wants to buy their property, (this was the Seller Carryback Financing I describes last month) and I am getting that information out to the Buyers who had contacted me in the past to hopefully get them to make a move. We'll see. If you need more information on what the advantages are with this type of financing, shoot me an e-mail and I'll get information out to you.

Bureaucratic Bungles Department . .

We are having a follow up meeting on May 9th at the corner of 299th Avenue and Patton Road at 10:30 AM to go over the latest happenings in the Ed Hudson case. If you have questions about what's happening, you should be at this meeting to ask questions and listen to those who are on the front lines in this case. When the architects plans were submitted to the County, they were rejected - even though the Hudson's advocate (S. A. Everly) was there to answer questions and clarify any issues. The plans were finally stamped and logged in, but from what I was told it was a pretty nasty meeting. So it looks like Ed and Susie Hudson are going to be the County's example of what will happen to you if you try to work with the County to correct items. That's all they have done. When this all started they went to the County and said "We will do what we need to do to be in compliance". And the County has been running them in circles ever since. I have no idea of how many thousands this has cost Ed, but I knew the outcome would not be pretty when the Deputy Director of Planning and Development stated in a meeting - "We are not here to work with people, we are here to enforce the codes." That's a direct quote, and I couldn't believe it when I heard it. So anyway, Ed's case is going to be heard downtown at the County Board of Supervisors auditorium on May 20, 2009. From what I have seen at the last few Board of Supervisor Meetings, the decision is already made, and Ed is dead meat. I'll know it for a fact if I see a firing squad lined up out front when I arrive.

The County has again sneaked another change into the rules and regulations to give them more authority and a stronger grip. Now, if the County decides you have violated ANY codes - even something as simple as not getting a permit for a fence, they can issue a citation, assess fines against you, have daily ongoing non-compliance fees accruing, and you will have NO recourse until all fines, fees and penalties are paid. At that time you can ask for a hearing. And if it is discovered that the County is wrong, you don't get your monies back - you have to sue the County for that!! What a mess. These guys have gone from autocratic to draconian in a period of a few months. So watch out.

Power Issues . . .

I am still waiting to see what response the letter from Commissioner Kristin Mayes of the Arizona Corporation Commission has elicited from the principals of Arizona Public Service and Salt River Project, the two large electrical utility companies in this area. Their response will have an effect on the direction I take in the talks currently underway. I have been communicating with an architect who is working to design and construct a state of the art off the grid house, and who plans to build it in Whispering Ranch. I am also in touch with a couple of Solar Energy companies who might be interested in a joint venture to supply equipment for a project like this - but on the other hand, they might want to propose a larger project. This might be the opportunity for the Lender that foreclosed on a bunch of properties - a lot of these parcels are limited in their use and value since they are already under the Transmission lines that run through Whispering Ranch on Dove Valley Road - so why not also put these into a joint venture to put the solar equipment in these locations? Where will we get the capital to pay for this stuff? The Corporation Commission has already mandated that the local power companies set aside a small percentage of their income to fund "green projects". And there are some funds available under the Federal Stimulus plan that could go toward creating the jobs and meet the requirements for a "green" development, community or subdivision. This just might be the "trigger event" that is needed to generate interest in the area and start the momentum toward growth. We'll see.

Grazing Leases . . .

The deadline to get your paperwork in to the County offices for the Agricultural Exemption was on April 11, 2009, so if you didn't get it done, you will now have to wait until the 2011 tax year to take advantage of this reduction in your property taxes. But, don't wait or put this off. Do it now. It just might be 2011 before we can sell you parcel at a reasonable price. Nobody knows.

April 10, 2009

There's Good News and Bad News . . . the Bad News is that things aren't getting any better. The Good News is that things aren't getting any worse.

Activity in Whispering Ranch is still slow . . . there was only one sale in the first Quarter of 2009 and that was one of my listings that I sold at $25,000. It was a five acre parcel with minor floodplain impact (maybe 10 to 15%) in the south east area of Whispering Ranch. I also put another property under contract that will close in April, so that will show up in next months activity. I have recapped the 1st Quarter 2009 activity and have put the new graphs and numbers on the web site in the "Activity" area. With 132 parcels currently on the market it is unlikely we will see a dramatic change in the near future, but there seems to be more interest recently. I had 14 properties that came up to renew the agreements to sell them, but only 7 of these parcels renewed the agreements. Some of the Sellers who didn't renew are just going to wait on the sidelines until the market changes. I was out in Whispering Ranch showing property last Wednesday and on the drive out, I was listening to an economist that was predicting recovery - making the statement that we are at the bottom of the market now. There is a lot of federal stimulus money that is starting to weave its way into this stagnant economy which will hopefully restore consumer confidence in the economy. Until there is consumer confidence and available credit we will continue to skim along the bottom.

I am getting more calls about properties, and folks are looking at the lower priced parcels. With more interest in the area, you would expect more sales activity, buy there is no financing available for raw land. The buyers currently don't have the cash to buy, so I have been checking to see if any of the Sellers are willing to do Seller Carryback Financing for buyers. Until there are more lenders willing to lend on land parcels or until the consumer has more credit available, these transactions where the Seller becomes the lender will be prevalent. How this works is the Buyers puts down 20% to 25%, and the Seller agrees to monthly payments over a 15 year period at 7.5% interest. Unless you need the cash now, this has the advantage of stretching the tax liability for the Seller over a longer period of time. And it works for the Buyer since they don't have to come up with all the cash at once.

The previous month brought a number of interesting developments. We had a meeting outlining the problems we are facing in light of the attitude that Maricopa County Planning and Development Department has demonstrated toward the residents of Whispering Ranch. For years, folks had been told to just go ahead and build what you wanted, the County would probably "grandfather" your property in the future. Now the County is facing a budget shortfall and seems to be viewing the area as a way to help balance the budget by issuing citations and fining property owners who are not in compliance with current County building rules and regulations. There has not been a wave of complaints or inspections yet, but I see it coming on the horizon. Even things as minor as having put a fence on your property without a building permit could leave you liable for a citation, fines, collection action, liens and eventually, property seizure and sale for delinquent fines. I went to a County Board of Supervisors meeting on April 1st where they were allowing the Planning and Development Department the additional powers for collections and property liens. I went on record and told them I was against this action as they were "giving the Fox the keys to the hen house". But they passed the proposal anyway.

Earlier this week, I received a copy of a letter that Commissioner Kristin Mayes sent to the top executives at Arizona Public Service and Salt River Project. Her office is requesting that they investigate the possibility of utilizing American Recovery and Reinvestment Act (ARRA) funds for energy infrastructure projects in Whispering Ranch and get back to her on what they can do. I am going to wait to see how they respond to this inquiry. Since she is the Chairman of the Corporation Commission - the regulatory agency that oversees power companies, water companies, pipelines and the like, it will be interesting to see how they respond to her request. I would think they want to approach this situation in a cooperative manner. But we'll see.

March 14, 2009

February of 2009 brings us the latest wave of discouraging news - in our Economy in general, in the Real Estate market locally, and in Whispering Ranch as well. I hope to briefly cover these items in the following paragraphs.

On the national level, despite the infusion of just over a trillion of borrowed dollars (which we or our grandkids will eventually have to pay back with interest), our economy has not yet shown signs of reversing the previous downward trend. The major banks and financial institutions that received funds earlier are in no better shape now, contributing to a continued slide on Wall Street. For the common person, it is causing more 'belt tightening' in our personal budgets and a continuing spiral of business cutbacks, job losses, and reduced spending. We are witnessing what happens when the consumer has no confidence in the economy. And until the consumer has confidence there will be no improvement.

On the local level, the record number of foreclosures in this market represents 70% of the Single Family home sales for the past two months. We are experiencing more sales activity in the housing market than we have seen in about three years. It appears that the activity in the local housing market is on an upward move recently, but there is still a record amount of inventory to sell before prices start to head back up. We are looking at an investor driven market as prices are still low. There are record numbers of houses being foreclosed but with sales activity on the increase we may be heading back into a balanced market. For the past three years we have been in a Buyers market, but this may be changing in the not too distant future. But remember that people take care of their housing needs first and investment needs second. And in most cases, the vacant land and parcels in Whispering Ranch are an investment. In a time of no consumer confidence, making a speculative investment in land is put on hold. If you look at the business cycle for Arizona since World War II, you will see that our economy tends to recover from down cycles sooner than the national economy. We have the advantage of a broad based economy, lower cost of living, a large inexpensive labor market, better climate (except 3 months in the Summer) and a water conservation and management policy that is a model for the future. So we do have a bright future. When this market does turn back upward, it will happen quickly, so you will want to keep on top of issues in this area.

So far this year, there has only been one sale through the local MLS, one of the parcels I had listed went under contract. I have 50 or so parcels for sale in Whispering Ranch of the 150 currently on the market. The pricing of the parcels range anywhere from $21K to $90K for a five-acre parcel. Lower priced parcels are generally impacted by floodplain or floodway, and higher priced parcels that are 'high n dry' and have nicer views are priced higher. In the past few days a couple of Give-Away parcels where Sellers are desperate for cash came on the market. How quickly these parcels sell should indicate the market direction, and if other similar parcels start to sell at slightly higher prices we might be witnessing the start of market recovery. Or at least we could see that we are at the bottom of the market. I sure hope things don't get even worse than they are now, but a lot depends on the economy in general, consumer confidence and the local housing market as well.

Efforts continue to get some planning done for a future power grid for the area. Newly elected Commissioner Newman of the Arizona Corporation Commission (regulatory agency for the local power companies, gas companies and water companies) is checking his schedule for an acceptable date in the near future to meet me in Whispering Ranch for an informational tour of the area. This is just another fresh set of eyes to take a look at our issues with power in the area and help us to initiate a plan to solve this 40-year-old problem. I look forward to this tour and upcoming meetings with the Corporation Commission. In working with local residents to see what can be done to improve County Services (Road maintenance, police and fire protection, emergency services), I fear we may have poked a sleeping tiger. The County bureaucracy is not being at all cooperative or understanding, and we may be about to witness a rash of building code violations, citations and fines since they now view this area as a way to balance the current budget deficit. So if you live in Whispering Ranch or have a house or any buildings out there, you better make sure that all of your buildings are permitted, plans are approved and everything is up to snuff. There are folks who are working to come into compliance with County regulations and they report that the County offices are taking an adversarial position instead of a cooperative position. They are, after all, civil servants. Their job is to assure that every building meets building code and that every process has an appropriate permit. It's a shame they are acting the way it has been reported, not very civil and not servile.

It may be necessary in the near future to re-invigorate the Whispering Ranch Residents Association (WRRA). This was a loose knit group that fought to get some justice when Salt River Project (SRP) steamrolled through the Ranch with the transmission lines in the past. They were effective, but have lost members and influence over the years. If it looks like we need to assemble an organized group to address issues or make our voice heard, this is an option. We could get a group together and retain an attorney or lobbyist to make our point in the right venue to the right officials. Or, if you have an area of expertise that could help us in these efforts, let me know. Just a thought for the future.

In future communications, I may request that you make your voice heard as we try to solve some of the past problems that have hindered the growth of Whispering Ranch. I might ask you to send an e-mail, make a phone call or write a letter. We may bring political pressure to bear on the members of the Arizona Corporation Commission (issues related to power and water services), the Maricopa County Board of Supervisors (Police and Fire protection and/or Emergency Services), Maricopa County Department of Transportation (Roadway maintenance and/or improvements), Maricopa County Planning and Zoning (helping current residents come into compliance with existing structures), Maricopa County Development Services (plans for new homes/buildings and/or building inspections on existing structures).

Please understand that these efforts will benefit every owner of property in Whispering Ranch in the future to varying degrees. Parcels with access to power sell at higher prices. Parcels on roadways with reasonable access also bring a higher price. Having a plan for how the area grows will also enhance values. I will benefit as a Real Estate Agent as the market activity comes back. There will also be plenty of opportunistic agents running back to Whispering Ranch when the market comes back. I hope you will remember who stayed on the side of the residents and owners and fought to get these issues resolved.

February 14, 2009

Happy Valentine's Day and Happy 97th Birthday to the State of Arizona. Congratulations to the Pittsburgh Steelers on their victory in Super Bowl XLIII. Our Arizona Cardinals played their hearts out, but came up short against a strong team in one of the finest games I have seen in a few years.

In January, I had a number of Sellers agree to renew their agreements to sell their parcels at varying prices, and an additional 15 new properties come on line for sale. These new properties are the lowest prices I have had since late 2004/early 2005 - ranging anywhere from $21,900 for properties that are impacted by floodplain and/or floodway to $33,000 for High 'n Dry parcels in various areas of "The Ranch". I hope that these prices will represent the price point that will interest Buyers, but I am still not sure if we are at the bottom of the market. In the hopes that the new administration will have a positive effect on consumer confidence and thus the rest of the economy, I anticipate activity will increase in Real Estate in general and in this area in particular. I don't know if this is a sign of future activity, but there have been more calls for information on what is available in Whispering Ranch, and I am spending more time touring Buyers through the area. When you check the web site you will notice that I have properties listed in a wide range of price points - some that want to sell more quickly, and others that are willing to wait for a market rise.

Part of the recent efforts to bring some improvements to Whispering Ranch since the taxes have gone way up is starting to get some attention. But, as with all good things, there will probably be some unpleasant or unanticipated things that we will have to put up with as time moves forward. The County is now aware that there is the need for roadway maintenance and/or improvements in the area, and that the response for emergency services (Police, Medical and Fire Department) is deficient, to say the least. And despite the lack of funds to make any improvements, there may well be some action in the foreseeable future to address some of these problems. I was in a meeting with Maricopa County Planning and Zoning to get some feedback information on the impact these deficiencies have on the g rowth of the area and start a process for answers to some of these issues. Without some sort of plan for the area, things won't change. And without change there won't be any progress. There are a number of various agencies who will be involved in how and when services in the area unfold, and it is important to make sure we have representation to move in a direction which is both beneficial and manageable. I don't realistically expect to see much happening in the short term in light of the current budget shortfalls, but we need to start raising awareness for future improvement efforts.

I recently sent e-mail of congratulations to the three newly elected members of the Arizona Corporation Commission and copies to the two continuing members to get some action from them on their position of a power grid (?) or green energy policy that can be implemented in Whispering Ranch. It appears there may be a re-instatement of the "1000 Foot Free Zone" which was taken away in July of 2007, as some of the newly elected members of the Commission realize that this is another stumbling block in the path toward "re-energizing" our economy (no pun intended). It also appears that there may soon be additional tax credits - not rebates after the fact - for those who are planning energy independent homes in this area. There is the possibility that we could be considered a 'green' area where off the grid construction would be encouraged, eliminating the need for an expensive power grid to be brought in. This is an area for further investigation, as it is one of the most logical directions in view of the costs and related problems of bringing in a full power grid for this area. I hope to get a progress report soon from one of my previous clients who purchased a parcel with the goal of designing and building a fully modern, turnkey, "off the grid" home. He's an architect who has been doing serious work on alternative energy advances, and knows how to get it done from a design and approval standpoint, so this could be a major breakthrough for the area.

January 10, 2009

There are plenty of folks, myself included, who are happy to see 2008 in our rear view mirror. I don't know of anyone who was not impacted by the wild ride that we witnessed last year. We were in the midst of a downward adjustment in Real Estate prices and upward adjustment of the price of gasoline when we were blindsided by a collapse of one financial institution after another, then by financial service companies followed by the big three car companies in Detroit. All we could do was tighten our belts, trim our budgets and hope that we could weather the storm.

What we witnessed in Whispering Ranch - and the other local area land markets - was a market system that effectively ground to a halt. Most folks who were thinking about buying seemed to back away with the intention to see what happens as we work our way through the rest of the cycle. Is there more downward movement? Are we at the bottom . . . just skimming along for a while until things start back up? These buyers are positioning themselves to jump into the market just a moment before it starts upward. But trying to "Time the Market" is impossible. There are too many factors and more things in motion that will affect a market than anyone can keep track of or predict. And there is always the unexpected event that might just come out of left field and catch everyone off guard. You never know when the market has bottomed out until you look back on it. So when I am asked if we have bottomed out yet, I admit that I don't have that answer yet, but if you ask me in a couple of months, I might see the signs we did hit bottom.

The last month of 2008 was as discouraging as the previous months. There were no MLS sales during this period, though there were some rumored principal to principal sales at rock bottom prices. Some Sellers just got what they could and got out. I did have one Seller drop the price on this parcel down to $23,500 but even that did not bring any responses. I have had calls from folks who are interested in the area, but none were ready to buy - they are just assembling information or "just looking" - and will hopefully jump in when the market turns. I'm not saying there are no buyers - I'm just saying they are not contacting me about the properties I have on the market. And, if you look at the opposite page, I have a pretty wide selection in all price ranges ! !

I have been continually optimistic about the future of this area, though I haven't seen any specific or significant progress in the areas where we are trying to move forward. I hope that the installation of three new members of the Arizona Corporation Commission will allow us to raise the awareness of these power brokers to consider what planning deficiencies we are facing in relation to getting some form of a power grid into the Whispering Ranch future. I have made some inroads toward getting Supervisor Max Wilson's office more involved in determining why Whispering Ranch has such a minimal level of access to public services (police, fire protection, ambulance service). I don't know if any of the previous efforts have been met with anything other than bureaucratic lip service, but I hope we are making progress. During the time leading up to the elections, nothing was happening, and now that folks are in office, I hope we can start working again, renew our efforts, and see some forward motion.

I see an area that has the potential to become an example of what progress and the future should be. We have the open space, the water, the plans for highway transportation, light rail and commuter rail, the combined intelligence of a number of private and public planning resources. If we add a little foresight to keep open space available, plan a few more regional preserves, consider a regional airport in the area between Whispering Ranch and Aguila, everything would be available. Douglas Ranch would be a self contained "city" and the other area developments would be the bedroom communities.

I would hope that in 2009 we could get the following issues in view of the bureaucrats, power companies, and regulatory agencies . . .

a. What can be done to get electrical service to the 100 or so families who live in Whispering Ranch? Or are there any programs that would assist local residents in getting solar, wind or other alternate energy systems in place?

b. Since we are paying higher taxes, is there anything that can be done to fix some of the roads? We don't need paving yet, but some grading and drainage work would sure be nice.

c. Is there any chance to improve the availability of law enforcement, fire protection or ambulance service? These are public safety issues that should have been addressed long ago. I look forward to this New Year. I have a renewed sense of hope that if we continue with our efforts we will see some results.
Or my name isn't Don Quixote.




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Joseph D. (Joe) Liberty, Designated Broker

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


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