Phoenix AZ | Scottsdale AZ Real Estate

Leverage is the ability to borrow money with little down payment to buy something. It is what the majority of Home Buyers and real estate investors enjoy to buy real estate.

In this case, we will use Real Estate as our example of why you must be careful. Leverage can be your best friend or can be your worst enemy.

The law of compound interest shows you the wonderful nature of money increasing rapidly by adding interest to principal so interest is earned on interest, thus compounding rapidly.

However, there is a reverse implication and is arguably more important to be aware when investing.

This example should be the best and maybe the mot simple way to explain.

If you have $1.00 and it drops 50%. How much do you have??? 50 cents , right?

Well, in order to get back to $1, just to get back to break even, what percentage return do you need??

50 cents is what you know have, you need 50 cents more to get back to 1 dollar. So you need to double your money or 100% return. Just to break even

When money drops by a certain percentage, you need a bigger percentage return just to get your money back; before you start making money.

Leverage can be great. But be prudent. Evaluate risk, Before you evaluate profit potential. As we have unfortunately seen here in Scottsdale, Fountain Hills and the area towns of Metro Phoenix , Real Estate losses can take time to recover.

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Copyright © 2008 By James Wexler, All Rights Reserved. *What Goes Up , can Come Down Much Faster!!*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

For those of you who know me, and know how I like to hear myself talk , especially about Real Estate, you will understand that this quick blog is the is the biggest challenge I have faced in awhile in that I am going to let the headlines speak for themselves ,

you know, the picture is worth a 1,000 words, thing...

the articles are a little dated, however, I think the message is still current...

Take a look at some of these multi-family housing, residential construction and Commercial Real Estate developement that is going on in Phoenix, Scottsdale, Desert Ridge, Glendale and many area towns.

 ... az-republic-headlines.pdf

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Copyright © 2008 By James Wexler, All Rights Reserved. *Newsflash!!   Phoenix paper actually has good news about AZ Real Estate*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

According to the US News and World Reports annual report and rankings of the best college graduate schools in the country Best Graduate Schools the town of Tempe - Arizona State University WP Carey School of Business was ranked # 22 in the US, 8^th in the US amongst public schools and only 1 of 5 in the West that made the list.

Why is this important, ... better schools attract better students, better professors, better business research, more money, better companies have a selection of a better pool of candidates, better companies will remain in ,and some will relocate offices and headquarters to Arizona, offering better jobs, employees making more money, to spend in the economy and in real estate.

Boston, Chicago, New York and all of California enjoy real estate prosperity for a variety of reasons, however, these strong markets all have great job opportunity and corporate prosperity and achieves this through quality education.

Baseball fans can think of it as a good farm system (minor leagues). Gardeners can think of it has planting seeds to harvest later.

Education is the foundation of our country and trickles (defying the laws of physics) up to the economy and real estate prosperity.

We Congratulate Tempe and the ASU School of Business for its accomplishment and its contribution to Maricopa County and Arizona.

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Copyright © 2008 By James Wexler, All Rights Reserved. *Tempe's Arizona St. University Business School ranked # 22*

Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.

According to the census bureau. , “The spending rate for residential (new homes ) construction projects dropped for the 25th consecutive month at the end of the first quarter and has fallen 34.4 percent from its peak in February 2006.

Now, those of you who know me and have read my posts in the past, know that I am eternally, (but not blindly) optimistic , not in a Wayne Dyer sort of way. However, there is a silver lining in most clouds and prefer to look for that …

ok, You read the headlines, sounds bad, right? but is it really ??

let’s look at this in 2 parts.

1) the economy - ok, construction spending is down, sharply, year over year, and construction spending is significant part of our economy ; in this sense todays numbers (above) are not great news for an already struggling (notice, I dont use that evil word ‘recession’) economy ,

2) Real Estate - the market we (or maybe its just me) all really care about. - In my humble opinion, and the opinion of most experts is that the #1 factor plaguing our ailing real estate market is excessive surplus in product or Inventory.

The news , shows at least that builders are putting out less product.

In Maricopa County, which includes Phoenix, Scottsdale, Fountain Hills, Glendale, Mesa, Chandler, Peoria, Tempe and Paradise Valley, ...

less product is significant in that it does not add to the problem. Less product , less supply , the more demand. Now, housing now has a strong fighting chance to resuscitate much sooner.

I dont know when, however, I do know we do'nt need more homes on the market. I think everyone who sees all those for sales signs in their neighborhood can attest to that!

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 Copyright © 2008 By James Wexler, All Rights Reserved. *New Home Construction Spending Down - Good for Phoenix Real Estate*

Contact James Wexler (480) 221-8080 for Internet Marketing Coaching and Consulting.

A real estate agent, friend of mine, yes, Realtors are people too, and I have been known to socialize with their kind from time to time told me he received an office wide email stating,

"Please stop by the front desk to sign up for floor time in April. With floor calls picking up in the last couple months, the schedule has been filling up very fast, so if you won't be in the office in the next couple days, I would suggest that you email or call me with the days that you would like to ensure that you don't miss out."

Floor time, is something that allows agents the opportunity to take calls for that day that come into the office, or walk-ins, (buyers or sellers who come into the office for information and/or a realtor).

Until 2006, where here in Phoenix, Scottsdale, Tempe, Fountain Hills, Peoria, Glendale, Paradise Valley, Desert Ridge, DC Ranch, Troon and Grayhawk,

the phones rang off the hook from buyers seeing for sale signs and wanting information, and sellers asking for help to sell their home and find another. However, that activity died rather abruptly, and Floor Duty was what most realtors would say is a ‘waste of time' (although, I am not sure what else they had to do?) as no one walked-in to the office and the phone didn't ring.

My friend, the Realtor, has been taking a day a week and a day on the weekend Floor Duty. His fellow agents, said, in not so many words , that he was a "fool" for wasting his time waiting for a phone that would never ring and a buyer who would never walk-in the door.

He shared with me yesterday over coffee that an out of state Seller, who had inherited a property recently, walked into the office on a Sunday, when (my friend the realtor was wondering if he himself was a fool to be working that day) This out of state seller need an agent and asked him to list her $1.2 million house.

He was even more excited that he received a call from a buyer who wanted to see a house they had driven by. He showed the buyer the house. Buyer did not like that house. However, they found another house that same day and had an offer accepted for his ‘New' client.

I assure you, he is humble, and was this way before the real estate market decline forced all of us to be, and is not one at all to gloat. However, understandably, was proud of his commitment, encouraged about the real estate market, and had to ask to those naysayers ," Who's the Fool now???

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Copyright © 2008 By James Wexler, All Rights Reserved. *Who's the Fool*

Contact James Wexler (480) 221-8080 for Internet Marketing Coaching and Consulting.

Yesterday, the prognosticators over at Money magazine offered up their Real Estate survival guide that I thought you may be interested in the predictions of its crystal ball.

The articles included

Where Home Prices are Headed

10 Fastest Growing Real Estate Markets

Homes for Sale In Hot Markets

and unfortunataly,

Cities Set for Steep Losses  (which includes Phoenix , sadly enough)

you can also take a look at Tips of Home Buyers and Home Sellers

5 New Rules for Home Sellers

and

5 New Rules for Home Buyers

enjoy!!

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Copyright © 2008 By James Wexler, All Rights Reserved. *Where Home Prices are Headed and Other Real Estate Predictions for the Country and Phoenix*

Contact James Wexler (480) 221-8080 for Internet Marketing Coaching and Consulting.

in my post from earlier today, I mentioned a friend, who has made his fortune in real estate here in Maricopa County which includes Phoenix, Scottsdale, Tempe, Fountain Hills, Peoria, Glendale, Paradise Valley, and the communities of Desert Ridge, DC Ranch, Troon, Grayhawk, Estancia and Silverleaf

and teaches others his secrets to success.

Here are 3 of his rules to live by explained.

1) Make sure that your primary residence is not an investment; it is primarily a place for your family to live. A home offers tax benefits. If financed correctly, it is a hedge against inflation (more on this another day soon) and can provide some long term capital appreciation; but an investment last. Thus you are less affected to short term fluctuations in the market.

2) A rental property must be rented or it can be a very expensive, thus not very profitable investment. He teaches people to own rental properties in places=where there are young professionals, a college town, or in an apartment community where there is an on-site leasing and management office with a excellent "low vacancy" record. Some communities are even offering some form of rent guarantee. Don't buy a large home, with a big mortgage, to rent to families. These can be difficult to rent, and costly if vacant.

3) Speculative Investing has to be done prudently, with a different type of real estate than completed single family homes in your "backyard". Commercial real estate (you don't have to be rich) with tenants in a great place to start that will keep you diversified and offers income to pay for your monthly mortgage.

Real Estate can be enriching in more ways than one; but it must be done in a diversified manner and must be financed correctly or what goes up can come down much faster.

I encourage all the faithful members to add any pearls of wisdom and experience that they have learned in what I hope has been and will continue to be a personally professionally rewarding career.

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Copyright © 2008 By James Wexler, All Rights Reserved. *3 Real Estate Investing Rules to live by (continued)*

Contact James Wexler (480) 221-8080 for Internet Marketing Coaching and Consulting.

Don't put all your eggs in one basket!

We have all heard this sasying from our parents since we were young.

However, when it comes to investing, especially in real estate, especially in today's real estate market here in metro Phoenix, Scottsdale, Fountain Hills and the East Valley this could be one of the most important things we were taught.

Many real estate investors will buy their primary residence, a rental property or more, and even a "fix n flip" speculative home investment all within a small geographic radius. Investing 101 will tell you this can be a risky strategy. Of course, as the market rises, all things real estate prices rise with the tide.

However, as we have seen lately, the opposite holds equally true.

A close friend of mine, who has made a fortune in real estate, in high-flying markets and has protected himself against losses in housing declines, reminds me every Easter (his favorite holiday , I might add) , "Don't put all your eggs in one basket! " , especially, when it comes to real estate.

He offered these 3 tips and when I am done finding Easter eggs with my nephew Sam (once in a awhile, I will even let him find it before I grab it)

1) Make sure that your primary residence is not an investment

2) A rental property must be rented or it can be a very expensive

3) Speculative Investing has to be done prudently and not in your "backyard".

stay tuned, I will explain these 3 points in greater detail later tonight....

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Copyright ©  James Wexler, *Don't put all your (real estate) Eggs in one Basket*

RL Brown , the premier source for Phoenix area housing data, incuding the cities of

Phoenix, Scottsdale, Tempe, Fountain Hills, Peoria, Glendale, Paradise Valley, and communities of Desert Ridge, DC Ranch, Troon, Grayhawk

and its most recent report on the the Phoenix housing market showed signs that we may be approaching a bottom.

Although inventory levels have remained high and stayed at the same level,

Sales have picked up for several reasons.

1) Lower home prices - yes, prices are going down, especially here in Arizona and metro Phoenix Scottsdale, where we saw on of the biggest national drops. Inventories remain high. However, lower prices are creating buying opportunities which we haven't seen in several years

2) Easing of interest rates - although, rates have trended up in the last few weeks, they still remain low and lower interest rates allow one to buy the same home with a more affordable monthly payment. Although, credit is a little more difficult to come by. Stricter lending terms, larger down payment requirements make the likelihood of future foreclosures less and a prolonged housing recession less likely.

3) Buyer confidence seens to be returning - Buyers dictate pricing. Period! Lower home prices make buyers more eager to dip a toe in what has been a scary real estate pool. Buying can have a positive effect on consumer and home buyer sentiment pushing this housing negativity further back in our rear view mirror.

Does that mean we have hit a bottom?

Is the end in sight?

Is it time to buy??

Inventory levels would indicate that we have some time to go.

However, The Federal Reserve Chariman Ben Bernanke appears set to address inflation and will likely leave rates alone or lower interest rates further to stimulate the economy.

Federal lawmakers are committed to work with Government backed lending institutions (Fannie Mae , Freddie Mac ) to stimulate the Real Estate Market and banks are working with consumers to help keep them in their homes.

Don't let the naysayers fool you. If it's not the time, to buy, there is plenty to indicate and to suggest we are getting close.

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Copyright © James Wexler, "Report offers some Good News for Phoenix Real Estate Market *

For those who read yesterday's Blog, when I took a leap of faith of faith (or as some have suggested, contributed to the problem) when I was either bold or crazy enough to suggest that the overall drop in home prices in Phoenix and the surrounding communities of Scottsale, Tempe, Fountain Hills and the other areas of metro Phoenix  announced is"Good News"!!

I must have miscommunicated. I Intended to attack the problem. Not Contribute.

I was simply attempting to address the pervasive negative headlines and show how they can be misleading and in fact not necesarily as negative news as the media would have us believe.

I am not retracting my belief just qualifying it as an assessment that the news was a case of the Glass Half-Full v. Half Empty. Here's why .... 

1) It's a Buyer's market - for the Half of every real estate transaction, the Buyer, opportunities are created for those who have the conviction to step in when value in home prices is in their sights and the patience for long-term growth which historically real estate has given

2) Lenders easing credit - the lower prices, offer less risk for lenders. Let's face it, values are not going to $zero. Lower purchase prices, lower loan amounts, lower payments for borrowers, more upside in appreciation, than downside, eventually lenders will ease credit

3) Lower interest rates - how you finance a home, is often times more significant than what price you pay, 30-year fixed rates are hovering near all-time lows. You can lock in a fixed payment with a reduced price and reduced rates than seen in many many years, thus lower monthly payments for the same house 3-4 years ago.

(for the rest of the reasons and story)

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Copyright © James Wexler, *5 Reasons why bad news in Phoenix can be Good News !*