Bubble trouble? Not this time, experts say. ASU economist: trends show Valley avoiding real-estate repeat - Ahwatukee Foothills News: Real Estate

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Bubble trouble? Not this time, experts say. ASU economist: trends show Valley avoiding real-estate repeat

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Posted: Monday, June 17, 2013 6:41 am

A report issued by the W.P. Carey School of Business at Arizona State University indicates the recent upswing in home prices has come at a steady, sustainable pace, meaning homeowners should not expect another bubble to burst.

In a housing report released Monday, Mike Orr, director of the Center for Real Estate Theory and Practice at the Carey School, wrote the median prices of homes in the Greater Phoenix Metro Area — encompassing the East Valley, West Valley and Pinal County — made a year-to-year jump from $140,000 to more than $180,000 in April. That 29.6 percent was accompanied by a 23.5 percent increase in the average price per square foot, which he said is a less volatile and more reliable indicator.

But the bump in home prices that have come since the market bottomed out in September 2011 were made in a fashion that doesn’t portend a potential real estate bubble like those that hurt the Phoenix market in the 2000s.

“What we have is a recovery,” Orr said. “I think what will happen is prices will go up, but more slowly.”

The reasons Orr cites for the price increase in the report vary, but are highlighted by the lack of houses available on the market. One reason for that trend is the relative dearth of homes that have been built over the last few years, which has limited buyers’ options. 

Orr said the building snarl is rooted in three factors that have stopped builders from adding new homes to the market: the demise in the number of construction positions in Arizona; difficulty finding attractive land to build upon; and a general satisfaction from builders with the state of the market.

“The builders like it where it is,” he said. 

Another contributor to Orr’s projections is the type of sales being made at the moment, as the number of new home sales went up during the April year-to-year stretch as the percentage of investor flips and short sales both decreased during the same time period. Orr expects the short sales and investor flips to continue to decrease in the coming months as well. 

The decrease in the number of investor flips, or properties that are bought and then sold in short order, is one of the reasons Orr predicts the current real estate environment will not develop into a bubble. Orr said one of the causes of the bubble back in the mid-2000s was consumers’ ability to purchase multiple homes at a time in order to sell them quickly, which essentially turned houses into a completely different type of commodity. But the increase in home prices have made flipping a less attractive option, and Orr said regulations have helped curb some of the problems — including fraud within the mortgage system — that occurred during the last decade.

• Contact writer: (480) 898-5647 or emungenast@evtrib.com

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Keystone Montessori

[David Jolkovski/AFN]
Teacher Pily Pantoja helps Sarah Wang, 4, with the addition snake game at Keystone Montessori on Thursday, Sept. 4, 2014.

Keystone Montessori has come a long way since its founding in 1995. Back then it was operated out of the founder’s home before eventually moving on to rent rooms from Horizon Presbyterian Church. It was only in 2000 that they had gained a strong enough enrollment to move into the facility where they currently reside on Liberty Lane, just off Desert Foothills Parkway and across from the Ahwatukee Foothills Family YMCA.

The school services students as young as 18 years old, as part of their toddler program, and as old as ninth-graders. The current enrollment is around 320 students, who all have access to Spanish, music and arts programs in addition to the full Montessori curriculum.

“We provide an authentic Montessori education which focuses on the independence and whole development of the child, including academic as well as social and emotional growth,” said head of school Cindy Maschoff. “We want our students to become independent citizens of the world.”

The school will be taking the time to present the concept of Montessori education to the public Jan. 29 and 30. At the presentations the school will provide a clear understanding of what Montessori education looks like at each level of education. Those wanting to attend should plan on going to both meetings, with the Jan. 29 meeting going from 6-7 p.m. and the Jan. 30 meeting from 9 a.m. to 1 p.m. The meetings require attendees to RSVP, which can be done by emailing laura@keystonemontessori.com.

For more information, visit keystonemontessori.com.

• Compiled by James Gingerich.

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