Tag Archives: W.P. Carey School of Business

Luxury Home - AZ Business Magazine November 2008

Expect a stronger spring in the Phoenix housing market

Expect to see a stronger spring this year in the Phoenix housing market than we saw last year. January was the “lull before the storm,” according to the latest monthly report from the W. P. Carey School of Business at Arizona State University. Here are the highlights of that report on Maricopa and Pinal counties for January:

  • The median single-family-home sales price went up 5.6 percent from January 2014 to January 2015 — $197,000 to $208,000.
  • Condos and townhomes continue to gain a larger share of the market.
  • Preliminary February figures show demand about to boom, with the number of homes under contract dramatically rising.

After the housing crash, Phoenix-area home prices quickly rose from September 2011 to summer 2013. Then, the median single-family home price went up about another 5.6 percent from last January to this January – from $197,000 to $208,000. Realtors will note the average price per square foot gained 5.1 percent.

Condos and townhomes picked up even more momentum, with their median price up 11.6 percent – from $121,000 to $135,000. While single-family home sales activity dropped 7 percent from last January to this January, townhome and condo sales activity rose 6 percent. In fact, the amount of money spent on mid-range townhomes and condos was up an incredible 54 percent. Orr credits interest in easy-to-maintain homes.

Despite the attached-home phenomenon, though, the Phoenix market experienced relatively weak home-sales activity both last year and in January. However, things finally appear ready to change.

“January is always a quiet month, but we believe this was a lull before the storm,” explains the new report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University. “We have already seen early signs of much stronger activity from buyers in February and March. Looking at the number of homes going under contract, there was significantly increased demand in the lower and middle price ranges.”

Orr notes that listings for non-distressed homes under contract in the Phoenix area were up 26 percent from last year on a typical day in February. Listings from $150,000 to $600,000 were up more than 30 percent. He attributes this largely to lenders starting to relax their tight loan-underwriting guidelines and “boomerang buyers” who went through foreclosure or short sale being able to come back into the market.

Rental homes are also doing well.

“With relatively fast turnover and low vacancy rates, rents have been increasing in the most popular locations,” says Orr. “We are currently seeing a 5.8-percent rise over the last 12 months across the Greater Phoenix area.”

However, supply is an issue when it comes to all types of homes, including affordably priced rentals, which Orr says are at the lowest level he has seen in 14 years. Single-family home listings (excluding those under contract) were down 7 percent on Feb. 1 from the already depressed level at the same time last year.

“Supply remains relatively low except at the high end of the market,” Orr says. “At the moment, we are seeing early signs that demand is likely to recover quite a bit faster than supply. It would only take a modest increase in first-time home buyer demand to overwhelm the current weak level of supply, making it tougher to find affordable homes for sale.”

Don’t expect more supply to come from foreclosures. Completed foreclosures were down 43 percent from last January to this January.

One last note: Orr says home builders aren’t enjoying 2015 much yet. In January, newly built single-family homes hit their lowest monthly sales total in three years. However, he expects that trend to reverse, too.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Entrepreneurs

ASU honors top ASU-bred entrepreneurs

Arizona State University has been gaining a nationwide reputation as a breeding ground for entrepreneurs. Accordingly, next week, the W. P. Carey School of Business at ASU is holding its first-ever Sun Devil Select event, to honor some of the country’s top ASU alum-owned and alum-run businesses. Seventeen firms from a variety of industries will be recognized for their achievements.

“We’re honoring organizations that demonstrate innovation, growth and entrepreneurial spirit,” explains Sidnee Peck, director of the Center for Entrepreneurship at the W. P. Carey School of Business, which is hosting the event. “The inaugural Sun Devil Select class includes firms from Chicago, the Los Angeles area, Kansas City, Dallas and the Phoenix area.”

The winning firms and alums are:

  • Betablox – Weston Bergmann is an angel investor and the founder and chief executive officer of this Kansas City-based group that helps select startups navigate through their first stages of business.
  • Dunn Transportation – Margaret Dunn is founder and president of this transportation company, which owns Scottsdale’s popular Ollie the Trolley and an executive coach service.
  • Fan Interactive Marketing – Joel McFadden serves as chief operating officer for this California firm specializing in customer relationship management, interactive marketing, database knowledge and email deployment.
  • FSW Funding – Robyn Barrett is the managing member of Factors Southwest, LLC, an independently owned factoring firm in Phoenix that helps small to mid-size businesses to secure funding.
  • Higher Ed Growth – Frank Healy is president and chief executive officer of this Tempe company that helps schools reach enrollment goals by using proprietary technology.
  • Homeowners Financial Group USA – William Rogers is chief executive officer of this family-oriented, award-winning mortgage company based in Scottsdale.
  • Infusionsoft – Marc Chesley serves as chief technology officer for this Chandler-based sales-and-marketing software firm recognized by Inc. Magazine as one of the fastest-growing private companies in the United States eight years in a row.
  • itSynergy – Michael Cocanower is founder and president of this Phoenix IT consulting firm with more than 200 clients.
  • Off Madison Ave – David Anderson is co-founder and chief executive officer of this Phoenix-based marketing and advertising firm with clients that include Nike and LifeLock. 
  • Print.Save.Repeat. – Errol Berry is co-founder and chief executive officer of this Chandler toner-cartridge manufacturer that focuses on recycling and saving businesses money on printing.
  • RedShelf – Tim Haitaian is co-founder and chief financial officer of this Chicago-based company that partners with publishers and college bookstores to more easily and affordably deliver eTextbooks.
  • Signature Technology Group – Charles Layne serves as president and chief executive officer of Phoenix-based STG, which provides data-center services that support more than 300,000 devices across North America.
  • Skin Script Skin Care – Lisa VanBockern is the owner of this Tempe skin care company that makes natural clinical products designed to address anti-aging, sun damage, acne and other issues.
  • Skyhook – Dallin Harris is founder and chief executive officer of this Mesa-based Internet marketing firm that has worked with clients including AT&T, Subway and the Make-A-Wish Foundation.
  • Tiempo Development – Cliff Schertz is president and chief executive officer of this Tempe company that provides software firms with an integrated platform of services to accelerate how they develop, deploy and support their products.
  • Vetscience/Fruitables Pet Food – David DeLorenzo serves as president of this Dallas company that makes natural dog treats.
  • Western Window Systems – Scott Gates is president and chief operating officer of this Phoenix-based window and door manufacturer that has been making energy-efficient products for more than 50 years.

The Sun Devil Select Class of 2015 will be recognized at a special invitation-only luncheon on ASU’s Tempe campus on March 20. They will reconnect with their alma mater and spend time networking with each other and current ASU students, including some budding entrepreneurs. They will also meet Amy Hillman, dean of the W. P. Carey School of Business; Christine Wilkinson, head of the ASU Alumni Association and ASU senior vice president and secretary; and Mitzi Montoya, vice president and university dean for entrepreneurship and innovation.

Sun Devil Select is just one focus of the Center for Entrepreneurship, which helps hundreds of businesses each year. The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business-creation experience. The center is self-funded and utilizes community sponsorships to sustain its activities. For more information, visit wpcarey.asu.edu/entrepreneurship.

manufacturing sector expanded

W.P. Carey offers supply chain refresher

Companies are always interested in keeping costs down, minimizing risk and streamlining efficiency. That’s why supply chain management is such a popular field, with the Bureau of Labor Statistics estimating a 26-percent increase in logistics jobs by 2020. So, what do you do if you work in supply chains, but get transferred to another function or simply need a refresher on what’s new? The W. P. Carey School of Business at Arizona State University offers a program for that.

“This new online certificate program will help participants think more about the company as a whole – about how to manage complex supply chain problems,” says Professor John Fowler, chair of the Supply Chain Management Department at the W. P. Carey School of Business. “The program takes six months or less and is designed to fit into busy working professionals’ schedules.”

The W. P. Carey School of Business is launching the new online supply chain management certificate – an upgrade of an earlier program – this spring, with an April start. U.S. News & World Report currently ranks the W. P. Carey School Top 3 in the nation for online graduate business programs. The new certificate program is being taught by instructors from the school’s renowned supply chain management department, consistently ranked Top 10 in its field.

“Whether you work in logistics, operations management or supply management, this program can help get you up to speed on the latest developments in your field,” says Dawn Feldman, executive director of executive education at the W. P. Carey School of Business. “You can choose electives in anything from operations planning to supplier management and even reverse logistics and sustainability.”

The new non-credit, professional certificate program is designed to help supply chain workers expand their roles and skills, learning about a variety of industries. It includes case studies and simulations of real-world challenges. Courses can be taken one at a time, and assignments can be turned in at any time throughout the week.

For those exploring the intersection of supply chain management with the emerging field of “big data,” there is another option, too. The W. P. Carey School is also launching a new business-analytics certificate program that includes electives in supply chain management. It covers analytical decision modeling.

For more information on either program, call (480) 965-7579 or visit www.wpcarey.asu.edu/executive-education.

data.center

W. P. Carey helps you become part of ‘big data’ team

As jobs boom in the area of “big data,” there’s a need that hasn’t really been addressed. About 85 percent of Fortune 500 companies are planning for or already executing big-data initiatives. However, while some degree programs already exist to help train the actual data scientists – those who sort through and analyze the mountains of information coming into companies through the Internet and other methods – how do we train the team members who just work with the data analysts?

“We want to help the big-data team members who only need to know the basics to help them participate and make a significant impact,” explains Professor Michael Goul, chair of the Information Systems Department at the W. P. Carey School of Business at Arizona State University. “We are offering a short online certificate program in which they can learn business-analytics foundations and strategy, so they can communicate about big data, better understand what results are coming in, and contribute to making important decisions.”

The W. P. Carey School of Business is launching its new online business-analytics certificate program this spring, with an April start. Participants can complete the program one course at a time, in six months or less. The convenient format allows busy working professionals to do their assignments any time throughout the week.

“Those who take this certificate program will be able to contribute to the new culture of evidence-based decision making, which is becoming increasingly important in the business world,” says Dawn Feldman, executive director of executive education at the W. P. Carey School of Business. “This will really help managers, marketers and others who regularly interact with data scientists and want to help address critical business challenges through the use of data.”

U.S. News & World Report currently ranks the W. P. Carey School Top 3 in the nation for online graduate business programs. This new non-credit, professional certificate program is being taught by instructors from the school’s renowned supply chain management and information systems departments, both consistently ranked Top 15 in their fields.

Participants will take two core courses in analytics, plus two electives. In the elective tracks, they can focus on either data management or supply chain management. It’s all about being a part of the process for the overall company.

To learn more about this flexible online certificate program in business analytics, call (480) 965-7579 or visit www.wpcarey.asu.edu/executive-education. The W. P. Carey School also offers full online master’s degree programs in business analytics and information management.

housing.prices

Phoenix-area housing market sees uptick

The sluggish Phoenix-area housing market just got a pleasant surprise. New figures show a sudden uptick in buyer demand, with a significant boost in homes under contract since late January.

“I do NOT think this has anything to do with the crowds that came in for the recent Super Bowl in Arizona, but that is coincidentally when we started to see this rise in demand,” says Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University.

Orr looked at statistics from the Arizona Regional Multiple Listing Service (ARMLS) for his W. P. Carey School of Business analysis. In 2014, the Phoenix-area housing market had relatively low demand, and sales activity even dropped 14 percent. However, the new ARMLS numbers show this year has already brought in more than the usual seasonal uptrend in almost every price range.

These numbers are for non-distressed homes under contract in Maricopa and Pinal Counties, on a typical day in late February 2015 versus the same day in 2014:

  • Under $150,000 – Up 7 percent
  • $150,000 to $250,000 – Up 35 percent
  • $250,000 to $400,000 – Up 38 percent
  • $400,000 to $600,000 – Up 33 percent
  • $600,000 to $1.5 million – Up 12 percent
  • More than $1.5 million – Down 10 percent

Overall, non-distressed listings under contract are up 26 percent. Orr says luxury homes aren’t seeing as much impact from recent changes in market conditions, but entry-level and mid-range homes are attracting far more buyer interest.

“The reasons for these increases include: 1.) that lenders have started to relax their previously tight loan-underwriting guidelines and 2.) that more people who went through foreclosure or short sale are now able to return to homeownership,” explains Orr. “These changes largely affect the lower and middle ranges of the market.”

Orr calculates that, in 2014, the median single-family-home price in the Phoenix area went up 5.4 percent. He now expects 2015 to be a much better year for home sellers, if the new trend continues. However, he does have one note of caution.

“The Phoenix area was already dealing with a relatively low supply of available homes for sale before this uptick,” says Orr. “If the higher-demand trend continues for several months, then that tight supply could become a bigger issue.”

Orr’s next regularly-scheduled monthly housing report will be out in mid-March. Meantime, those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

T Mobile IPhone

ASU study reveals formula for app success

Americans love our smartphones, and we’re constantly downloading more apps to use on them. So, how do you know which apps are going to be the most worthwhile to get — the ones that will ultimately be the best sellers? A new study from the W. P. Carey School of Business at Arizona State University breaks down the formula for a winning app.

“More than 1,200 apps are released each day, and we found a number of ways to determine which ones would be the most successful,” explains Professor Raghu Santanam, one of the study’s authors, who teaches in the Information Systems Department at the W. P. Carey School of Business. “For example, simply providing updates for an existing app can really add to its popularity.”

Santanam and Ph.D. student Gun Woong Lee conducted the new research, recently published in the Journal of Management Information Systems. Since Apple doesn’t release sales figures to the public, the researchers tracked individual apps and their presence on the “Top 300” charts in Apple’s App Store over 39 weeks. The final dataset covered about 7,600 apps by almost 4,000 sellers, and the researchers found a number of factors that make an app more attractive to buyers.

“Free app offers, high debut ranks, expanding into less popular categories, continuous quality updates and high user-review scores all have positive impacts on an app’s sustainability,” says Lee.

In fact, the study found that each time a seller just expands to a new app category, it bumps up that seller’s presence on the top-grossing charts by about 15 percent. The researchers also discovered that free apps generally stay on the charts up to two times longer than paid apps. In addition, when sellers keep updating and improving the features in an app, it can help the app stay on the charts up to three times longer.

“For app sellers, it is a great idea to implement some type of portfolio-management strategy to app markets that focuses on developing multiple apps with low production costs,” explains Lee. “Then, they can take advantage of a large network of different user groups by selling many apps in multiple categories and offering frequent updates to those apps.”

Santanam adds, “The App Store launched with only 500 apps back in summer 2008, and seven years later, users can now download about 1.2 million different apps from that store. Developers and sellers have the opportunity to change the features and characteristics of the apps based on user feedback, reviews and other factors listed in our research, even after those apps go on the market. We’re hopeful this new study will provide them with useful information about how to make adjustments to benefit both consumers and their own company bottom lines.”

More on the study is available at http://www.jmis-web.org/articles/1202 and http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2560677.

housing.prices

Phoenix home prices rose 5 percent in 2014

The final numbers are out for 2014, and the median single-family-home prices in the Phoenix area officially went up 5.4 percent. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University. Here are the highlights of that report on Maricopa and Pinal counties, as of December:

• The median single-family-home sales price rose 5.4 percent in 2014 – from $204,000 to $215,000.
• Demand for townhomes and condos is strengthening, and the median sales price for those types of homes went up a whopping 15 percent in 2014.
• Demand for rental homes also remains strong.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just another 5.4 percent — $204,000 to $215,000 — from December 2013 to December 2014. Realtors will note the average price per square foot went up about 3 percent. At the same time, townhomes and condos really took off, with their median sales price up about 15 percent – from $123,900 to $142,000.

“The most promising signs in 2014 were for townhomes and condominiums, where both sales volumes and prices were higher than expected,” says the report’s author, Mike Orr, director or the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Demand is shifting away from single-family homes and toward smaller attached homes that are easier to maintain and to ‘lock and leave.’ Growing numbers of baby boomers, whose children have grown up and left, are downsizing. Many millennials also seem to show a preference for smaller, easy-to-maintain homes in central locations.”

Orr adds that mid-range and luxury homes continue to do relatively well in the Phoenix market, while it’s tougher to find homes priced below $150,000. The amount of single-family home sales overall was up 3 percent from December 2013 to December 2014.

Meantime, the supply level remains low. The number of active listings available on Jan. 1, 2015 was down 3 percent from the already low level of Jan. 1, 2014. Fewer “distressed” homes are coming onto the market, with completed foreclosures down 42 percent from December 2013 to December 2014. That lack of cheap inventory is keeping investor interest significantly lower than it was during the initial housing recovery.

Other home buyers weren’t filling the gap, but we may see a positive turn soon.

“We anticipate a modest increase in sales in 2015, as compared with 2014,” says Orr. “The primary increase in demand is likely to come from boomerang buyers who have repaired their credit after foreclosure or short sale several years ago.”

Multifamily units and rental homes continue to command local attention. The multifamily vacancy rate for the end of 2014 was at an all-time low, and multifamily construction permits have been on a strong upward trend. Rental homes are seeing relatively fast turnover and low vacancy rates. As a result, rents are up 6.8 percent in the Phoenix area over the past 12 months.

Lastly, Orr mentions that some Canadians may decide to lock in profits made on Phoenix-area homes bought since the housing crash. In 2014 alone, the prices went up an additional 15 percent when converted to the Canadian dollar.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Warren-Buffett

Warren Buffett headlines new ASU speaker series

Leading business figures, including BerkshireHathaway CEO Warren Buffett, are participating in a new speaker series at Arizona State University.

The “Iconic Voices” lecture series, to be held at the Walter Cronkite School of Journalism and Mass Communication, features candid in-person and video interviews with business notables that include Buffett and Freeport-McMoran CEO Richard Adkerson as well as Andrew Fastow, the former Enron chief financial officer who was at the center a scandal with the energy company.

Jeff Cunningham, professor of practice at ASU’s Cronkite School and the W. P. Carey School of Business, is the creator and host of the series, which is scheduled  for select Thursdays during the spring semester.

Cunningham, who is the former publisher of Forbes Magazine, said, “‘Iconic Voices’ will focus on candid discussions about the everyday lives of extraordinary people.”

“We have chosen to bring these important leaders and disruptors to the Cronkite School to impart the lessons from disruption in non-media industries that could be applied to the digital transformation taking place in the media,” he said. “They have relevance to our student journalists’ understanding of how different leaders approach change, innovation and disruption.”

“Iconic Voices” kicks off on Feb. 26 with an in-person interview with Fastow and concludes March 19 with an interview with Adkerson. The hourlong talks are open to the public and will take place in the Cronkite School’s First Amendment Forum on the ASU Downtown Phoenix campus.

The interviews will be featured on iconicvoices.org, currently under development, with articles written by Cunningham.

Cunningham joined ASU in 2014 as a professor in the areas of disruptive innovation and the business of media. In addition to serving as publisher of Forbes Magazine, he also was publisher of American Heritage magazine, founder and editor-in-chief of Directorship Magazine, the leading publication for corporate board directors, and a senior executive with BusinessWeek.

Cunningham has profiled or interviewed many key business and public policy leaders, including former Supreme Court Justice Sandra Day O’Connor, former Securities and Exchange Commission Chair Mary Schapiro and Goldman Sachs Chairman and CEO  Lloyd C. Blankfein.

“Iconic Voices” Schedule

Thursday, Feb. 26, 2015
7-8 p.m.
Andrew Fastow, former chief financial officer, Enron Corporation; convicted in 2006 of two counts of securities fraud
“Failed, Jailed, and Recovered”
Live interview conducted by Jeff Cunningham, professor of practice, Cronkite School and W. P. Carey School of Business

Thursday, March 5, 2015
7-8 p.m.
Warren Buffett, chairman and chief executive officer, Berkshire Hathaway
“When I Buy a Company, I’m a Journalist”
Video interview conducted by Jeff Cunningham,professor of practice, Cronkite School and W. P. Carey School of Business

Thursday, March 19, 2015
7-8 p.m.
Richard Adkerson, vice chairman, president and chief executive officer, Freeport-McMoRan
“The World of the Global CEO”
Interview conducted by Jeff Cunningham, professor of practice, Cronkite School and W. P. Carey School of Business

housing.prices

Are investors returning to Phoenix housing market?

Investors appear to be returning to the Phoenix-area housing market. The latest monthly report from the W. P. Carey School of Business at Arizona State University examines that new trend, as well as the possibility of a future supply problem. Here are the highlights of the new report on Maricopa and Pinal counties, as of November:

  • The median single-family-home sales price went up 5.5 percent from November 2013 to November 2014 – from $200,000 to $210,990.
  • President Obama announced a housing plan in Phoenix last week that might help create both more demand and a supply problem.
  • Investors are returning to Phoenix, with their percentage of the area’s home purchases up over the past four months.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just another 5.5 percent from November 2013 to November 2014. Realtors will note the average price per square foot went up about 5 percent. The median townhome/condo sales price actually dropped 2 percent.

“Prices in the Phoenix-area housing market remained relatively flat in 2014, when you take into account the general level of inflation,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “When you look at the change in the mix of sales – with more expensive luxury homes being sold – there is not much real upward price momentum.”

Orr adds there also isn’t much downward price momentum because both supply and demand remain relatively low. The number of single-family-home sales dropped 9 percent from November 2013 to November 2014. The low demand has largely been masking the fact that the market also has a low supply of homes – a situation that appears to be getting worse.

“The rate of new listings has dropped significantly since April, and active listings even dropped slightly in November, which is unusual and signals a weakening supply,” explains Orr. “It would not take much of an increase in demand to overwhelm the current level of supply, and if this occurs, we should expect prices to start rising once more. We will have to wait and see how first-time home buyers react to the new lending environment in 2015.”

Orr’s concern about the potential supply problem stems from a number of things meant to stimulate housing demand:

  • Down payments being reduced to 3 percent on certain Fannie Mae and Freddie Mac conventional loans
  • Continued drops in mortgage interest rates for all types of loans
  • Reduced mortgage insurance premiums announced by President Obama in Phoenix last week

Orr weighed in on the president’s new housing initiative by saying it may help middle-income renters buy their first homes. However, he also doesn’t think the overall impact will be that great.

“By the government’s own numbers, it will only add 250,000 sales nationally over the next three years – increasing sales only about 1.6 percent,” Orr says. “It’s a step in the right direction, but only a small step. A resurgence in home buying will probably occur anyway.”

Meantime, foreclosures remain well below long-term averages for the Valley. Completed foreclosures were down 39 percent from November 2013 to November 2014. Earlier, the loss of these bargain properties prompted a trend of investors leaving the Phoenix area for cheaper areas of the country, but now, that’s changing. The percentage of residential properties bought by investors was up to about 16 percent in November, the highest level since May. All-cash purchases are also back on the upswing.

“While investor purchases are still below the peak levels we saw in the Phoenix area after the housing crash, the levels have started to recover over the last four months,” says Orr. “However, we may see fewer international buyers in the market now because of the recent dramatic rise in the value of the dollar against most foreign currencies.”

Rental-housing demand in the Valley remains strong, partly because many people had their credit damaged during the housing crash and because millennials are waiting until later in life to enter the home market. Rents rose 4.8 percent in the Phoenix area from November 2013 to November 2014.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. They also hear directly from Mike Orr about his latest housing report at an event co-hosted by The Arizona Republic and the W. P. Carey School of Business tomorrow morning at Arizona State University. More information and tickets are available attickets.azcentral.com.

Phoenix-Area Housing Market

How to survive the Phoenix-area housing market

The new year brings new challenges for those who want to buy or sell homes in the Phoenix area. Do you know what to expect? The Arizona Republic and the ASU Real Estate Council at the W. P. Carey School of Business will host an event Saturday, Jan. 17 to help you find out the current trends and prices in the market.

“Phoenix Housing Market Explained III,” a third annual event, will feature an overview of the local housing market, including trends like employment and population growth. The experts will also answer submitted questions from the audience.

The speakers – all experts frequently quoted in the media — will be:

Catherine Reagor, senior real estate reporter for The Arizona Republic
Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business
Mark Stapp, director of the Master of Real Estate Development (MRED) program at the W. P. Carey School of Business

Reagor says, “We hope to provide helpful information to both those in the real estate industry and those who are thinking about buying or selling their own homes in the Phoenix area.”

The event will be held in the Business Administration C-Wing Building, or BAC, at 400 E. Lemon St. on Arizona State University’s campus in Tempe. Registration starts at 9 a.m., followed by the presentations and discussion from 9:30 to 11 a.m. The cost is $30 per person, with a 30-percent discount available for subscribers to The Arizona Republic and ASU students, employees and alums.

Parking is available just across the street at the intersection of Apache Boulevard and Normal Avenue. Signage will direct participants from the garage to room BAC 116 on the first floor of the BAC building.

Space is limited, and you can register at tickets.azcentral.com. More information about the event can be found at www.money.azcentral.com, www.wpcarey.asu.edu, or by calling (480) 965-8517.

More information on the Valley housing market can also be found at the W. P. Carey School of Business website, including monthly housing reports available via subscription at www.wpcarey.asu.edu/realtyreports.

housing.prices

Phoenix housing market ending relatively flat year

After several years of wild roller-coaster activity, the Phoenix-area housing market is ready to end a relatively flat year. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University. Here are the highlights of the new report on Maricopa and Pinal counties, as of October:

• The median single-family-home sales price went up just 4 percent from last October to this October – from $200,000 to $208,000.
• Demand remains lower than last year, with sales of single-family homes down 5 percent from last October.
• The Valley is experiencing a very small bump up in two areas – investor interest and new-home sales.

After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just 4 percent more – from $200,000 to $208,000 – from last October to this October. Realtors will note the average price per square foot also went up 4 percent. The median townhome/condo sales price rose only 2 percent.

“We’ve seen very little change in the Greater Phoenix housing market for the last year, and stability is the order of the day,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Price increases look tame over the last 12 months and even tamer if you examine just the last six months. There is no longer any real upward price momentum greater than the general level of inflation.”

Orr’s report notes that demand in the market remains lower than last year. In fact, the amount of single-family-home sales dropped 5 percent from last October to this October. Activity from first-time home buyers has been unusually low, in part because some people had their credit badly damaged during the housing crash and also because millennials are waiting to enter the home market until later in life than previous generations. These are also reasons the rental market is strong. Rents have increased 3.7 percent over the last 12 months in the Phoenix area.

Meantime, Valley foreclosures have dropped way down over the past year. Completed foreclosures of single-family and condo homes were down 19 percent from last October to this October. The lack of cheap foreclosures here has been largely driving investors to other areas of the country, where bargains are more plentiful. However, there was a little bump back up between this September and October. The percentage of residential properties bought by investors hit 15.5 percent, the highest level since May, but still well below last year’s levels.

“Investors and out-of-state buyers are showing a small recovery in buying interest, but to get our market back to what we would consider normal will still require a major increase in demand from local first-time home buyers,” explains Orr.

Some expect the coming introduction of conventional home loans with a lower, 3-percent down payments next year to stimulate more interest, but Orr isn’t sure this will make a major dent. He anticipates small, incremental improvements.

“The big economic gains of the last few years have helped companies, but not necessarily the average person who might consider taking out a home loan,” says Orr.

One other note from Orr: The market share for new-home sales is doing better and has recovered to 14 percent – the same level as October 2013. Taylor Morrison, Pulte Homes and Meritage Homes are leading the way in the Phoenix area.

Those wanting more Valley housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Deloitte Report Reveals Mid-Market Companies Expect U.S. Economic Growth

Experts: 2 more years until full economic recovery in Arizona

We can expect our economic recovery to take about another two years in Arizona. That’s what experts said today at the 51st annual Economic Forecast Luncheon co-sponsored by Arizona State University’s W. P. Carey School of Business and JPMorgan Chase.

About 750 people attended the event at the Phoenix Convention Center. Key experts delivered a comprehensive overview of what’s happening in the state and national economies, as well as the stock market and housing market. One main message was that Arizona is now growing at a faster rate than the nation, but we still have some distance to go.

“As of May, the United States finished gaining back 100 percent of its jobs lost in the recession, but in Arizona alone, we’re only 69 percent of the way there,” explained Research Professor Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “We expect to regain that last 96,400 jobs in the next year and a half.”

So far this year, Arizona has experienced 2-percent job growth, while our state’s 30-year average is a much higher 4.2 percent. Still, this rate was good enough to rank Arizona as the No. 12 state for job growth as of October. Arizona ranked No. 13 in personal-income growth by midyear. McPheters believes the state will speed up from here.

Among his Arizona predictions for 2015:
• Employment growth could rise from an expected 2.2 percent this year to 2.5 percent next year.
• Personal-income growth could jump from 4 percent this year to 4.5 percent in 2015.
• Population growth could go up from 1.4 percent in 2014 to 1.5 percent next year.

McPheters added Arizona is doing particularly well in creating jobs in finance/insurance and health care. The state is lagging in manufacturing and construction. Arizona unemployment has dropped from 7.8 percent last year to 6.8 percent this year. However, we continue to recover much more slowly than from past economic downturns, and we continue to face risks from ineffective growth policies at the national level.

John Lonski, chief capital markets economist of Moody’s Analytics, addressed the national economy by saying that we can expect more subpar growth in 2015.

“We expect U.S. real GDP (gross domestic product) growth to rise from an expected 2.2 percent this year to about 2.8 percent next year,” said Lonski. “We also anticipate the national unemployment rate may drop from 5.8 percent this October to 5.4 percent by the end of 2015.”

In addition, Lonski predicts U.S. wage and salary income should grow by about 4.5 percent next year. He believes industrial capacity will be more fully utilized. He said the housing collapse, tightening of fiscal policy, and insufficient new product development have been contributing to America’s economic struggle. However, he expects the next major wave of technological innovation to supply stronger-than-expected growth, whether it’s self-driving autos or robotics.

“We’re also experiencing some big changes because of a population shift,” Lonski added. “Only about 1.5 percent of the jobs added post-recession have gone to those ages 16 to 54, while those ages 55 and older gained 20.9 percent. This shift has prompted less spending and more saving, especially by those closer to retirement.”

Lonski also expects the budget deficit to go up, after bottoming out at 2.6 percent of GDP in 2015. That’s because of increased spending on retiring baby boomers, as well as the still-unknown costs of the Affordable Care Act. Decreased defense spending should moderate some of the increases.

James Glassman, managing director and senior economist for JPMorgan Chase & Co., covered the financial markets. He said that, despite the recent rise in stock prices, they are still fairly valued. He added household net worth is back in record territory.

“Credit conditions are improving, and rising vehicle sales prove it,” said Glassman. “Also, we’re seeing some improvements in the housing industry, since builders addressed their previous speculative overbuilding by underbuilding in recent years. Rising home prices are helping to drain the number of ‘underwater’ mortgages.”

Glassman notes the energy sector is also humming along. He expects interest rates to go up next year as the economy continues to improve.

Elliott D. Pollack, chief executive officer of Scottsdale-based economic consulting firm Elliott D. Pollack and Company, covered the Arizona housing market. He repeated that the state has recently experienced a significant slowdown in population flows and only a modest recovery from the sharp downturn in our housing market.

Pollack said there are a few positives, such as slow acceleration of the local economy, decent home affordability, low mortgage rates, a slight loosening of lending standards, and the movement of many all-cash investors to other bargain areas of the country. These factors create more opportunity for local buyers who need financing.

“However, we still see several negatives that outweigh those positives, including relatively sluggish employment growth, fewer people moving, millennials delaying home purchases, many people still waiting out their required seven years in the credit ‘penalty box’ after foreclosures, and overall difficulty in getting home loans,” explained Pollack. “Full recovery is still years away.”

Pollack said more people who have been renting may jump back into the housing market over the next several years as conditions improve. Meantime, apartment construction is up. Pollack believes the Valley won’t see any significant office construction – except in select submarkets like Tempe – until at least 2017.

More details and analysis from the event, including the presentation slides, are available from the business school’s “Research and Ideas” website at research.wpcarey.asu.edu.

tax

Will campaign contributions lower your tax rates?

Many politicians will tell you that donating to their campaigns does not affect the way they vote or design laws. However, a new study from the W. P. Carey School of Business at Arizona State University suggests regular ongoing contributions do help provide access to influential lawmakers and that companies making campaign contributions specifically to tax-writing members of Congress wind up paying lower tax rates over time.

“We found that firms investing in relationships with tax policymakers through campaign contributions do gain greater future tax benefits,” says Assistant Professor Jennifer Brown of the W. P. Carey School of Business, one of the study authors. “We specifically looked at members of the Senate Finance Committee and the House Ways and Means Committee in the research. Overall, we saw that donating companies experienced lower and more consistent effective tax rates in the long run.”

The new research was recently published online by the Journal of the American Taxation Association. The authors are Brown and two recent Ph.D. graduates from the W. P. Carey School at Arizona State University: Assistant Professor Laura Wellman, now of the University of Illinois at Chicago, and Assistant Professor Katharine Drake, now of the University of Arizona. In the study, they remark that political action committee (PAC) contributions to members of Congress, in general, rose 60 percent from the years 2000 to 2008, but PAC contributions specifically to tax-writing members of Congress went up even more — 80 percent.

“Proactive firms build relationships with policymakers through continued campaign support, with the expectation of gaining some economic benefit,” says Wellman. “There is an advantage to getting in the game early and maintaining your seat at the table. Our research provides evidence that increasing the number of political ties to tax policymakers produces a stronger effect on future tax rates.”

The paper points out that one member of the Senate Finance Committee raised more than $11 million in his 2008 campaign, even though he was running essentially unopposed. The research isn’t aimed at showing that anything inappropriate is happening, but rather, that contributions to tax policymakers may help supply more access, such as a receptive ear.

The study utilizes PAC data from the Federal Election Commission and lobbying data from the Center for Responsive Politics. The researchers found that when a firm moved from the 25th percentile to the 75th percentile of “relational” activity – equal to supporting at least five more candidates — then that firm experienced a lower future cash effective tax rate, which added up to an average of about $33 million in annual savings. The frequency of the donations and the power level of the candidates also play a role in the equation.

The article adds that lobbying and contributions work together in achieving firms’ tax-policy outcomes. The full study is available at http://aaajournals.org/doi/pdf/10.2308/atax-50908.

Arizona Economic Forecast 2011

Boyes named founding director of ASU research center

ASU has announced the appointment of Professor William Boyes as the founding director of the Center for the Study of Economic Liberty at the university’s business school. Through the research center, Boyes will be able to build on his scholarly investigation of how economics, policy and general well-being are influenced by individuals’ ability to make choices.

“This new center will bring together scholars and public intellectuals to examine the broad societal effects of free markets, private property rights and entrepreneurship,” said ASU President Michael Crow. “The issues that it will convene researchers to consider are directly linked to ASU’s commitment to engage on questions of critical importance to our region, to the nation and to the wider world.”

The center is made possible by $5 million in gifts. Part of the money comes through a grant from the philanthropic W. P. Carey Foundation, which supports schools and universities in the areas of business and economics. The organization’s founder, the late investor Wm. Polk Carey and founder of W. P. Carey & Co., also provided a $50 million gift to ASU in 2003 that resulted in the renaming of the business school as the W. P. Carey School of Business.

The W. P. Carey Foundation helped to secure up to $3.5 million for the center from the Charles Koch Foundation, which also focuses its philanthropy on university research and education.

ASU is frequently recognized for innovation in research and education, and the university was recently ranked the nation’s No. 2 up-and-coming school, according to U.S. News & World Report. The new Center for the Study of Economic Liberty will build on the university’s legacy of innovation. It will be involved in research, publishing, conferences, and engaging students and scholars from around the world.

Boyes is excited to take his current research further. His research has helped to inform policymakers at the U.S. Department of Commerce, the Federal Trade Commission and various companies that all play a significant role in America’s economy. His new research will explore the economic implications of government regulation, small business and public education.

“We will study the intersection of individuals, the private sector and government,” explained Boyes. “We want to help educate students and inform the general public. We hope to use our research as a catalyst for broader conversations that can lead to societal solutions.”

The center’s executive director will be Scott Beaulier, an economist who has held previous appointments in the area of economics at three universities. He has done extensive research on the implications that economic policy has at a state, federal and international level, affecting the ability of people to live satisfied, fulfilling lives.

W. P. Carey Foundation Chairman Francis J. Carey, III noted, “We appreciate the opportunity to partner with the W. P. Carey School of Business, Dean Amy Hillman and Professor Boyes in supporting the Center for the Study of Economic Liberty.”

Charles Koch Foundation President Brian Hooks said, “We’re excited to support ASU and the important work its faculty members are doing.”

Staying Innovative as a One Man Operation

Arizona businesses win Spirit of Enterprise Awards

We all win when local companies grow, create jobs and help boost our still-recovering economy. Today, several of the state’s best businesses were honored for their positive role in our communities. They’re the winners of the 18th annual Spirit of Enterprise Awards from the W. P. Carey School of Business at Arizona State University.

“We enjoy recognizing locally owned companies that introduce innovation, empower employees, impress customers, and make a real difference in Arizona,” says Sidnee Peck, director of the Center for Entrepreneurship at the W. P. Carey School of Business. “This year’s Spirit of Enterprise Award winners are in a variety of industries, and they all meet a market need and have a great impact on the Valley.”

Hundreds of business and community leaders attended today’s awards luncheon at the JW Marriott Desert Ridge Resort & Spa in Phoenix, where the winners were announced. The finalists’ impressive stories were shown on video, as the firms were lauded for ethics, energy and excellence in entrepreneurship.

The 2014 Spirit of Enterprise Award winners are:

• Ersland Touch Landscape – Overcoming Adversity Award. This state-of-the-art landscape maintenance company started as a one-man, one-mower operation run out of a garage. After 30 years in business, it now has a complete customer “feedback log,” an Adopt a Highway commitment, work with nonprofits, and more than 400 residences and 20 homeowner associations as clients.

• IO – Emerging Enterprise Award. This growing firm is focused on rethinking data-center technology, using software solutions, instead of just physical locations. It has more than 650 global clients, including Goldman Sachs and LexisNexis, as well as two patents and an emphasis on energy efficiency.

• I-ology – Gary L. Trujillo Minority Enterprise Award sponsored by Blue Cross Blue Shield of Arizona. This woman-owned technology company offers Web design and related services. It features close client relationships, heavy community involvement, and no management hierarchy, offering all employees a chance to participate in revenue sharing, stock options, flexible schedules and industry events.

• Kitchell – The Hahnco Companies Special Achievement in Entrepreneurship Award. This 100-percent employee-owned commercial builder, developer and program manager launched 65 years ago. It now has more than 850 employees, international operations, an internal leadership program, significant charitable contributions, and a focus on enabling employee-driven innovation.

• Melrose Pharmacy – Innovation in Entrepreneurship Award. This independent pharmacy offers fast, highly personalized service; utilizes cutting-edge equipment; and supports charities like the March of Dimes and local community issues. It has also achieved a 119-percent increase in net income already for this year.

The other Spirit of Enterprise finalists this year were Clean Air Cab, Endless Entertainment, India Plaza/The Dhaba, The James Agency and Potter’s House Apothecary.

Also this year, the Spirit of Enterprise Student Entrepreneur Award went to Anthony Gonzales, a recent W. P. Carey School of Business MBA graduate. Gonzales is a finalist in Entrepreneur magazine’s College Entrepreneur of the Year competition with his grant-winning, ongoing development of FITGuard, a mouthguard designed to indicate levels of head impact for athletes, as well as a smartphone application that can provide data to a diagnosing physician.

The event also included its first-ever National Founder of the Year award. The honoree is Sam Calagione, founder and president of Delaware-based Dogfish Head Brewery. Calagione’s family-owned business started small and grew about 400 percent in just four years. He still experiments with new products, works creatively with other breweries and food companies, and has written books about his experiences as an entrepreneur.

The Spirit of Enterprise Awards are just one focus of the Center for Entrepreneurship, which helps hundreds of businesses each year. The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business-creation experience. The center recently introduced the Sun Devil Select competition to honor ASU alum-owned or alum-led businesses. The center is also self-funded and utilizes community sponsorships to sustain its activities. For more information, visit wpcarey.asu.edu/entrepreneurship.

housing

Phoenix Housing Market in Low Gear Until Next Year

The Phoenix-area housing market is unlikely to see a significant boost until next year. That’s according to the latest monthly report from the W. P. Carey School of Business at Arizona State University.

Here are the highlights of the new report on Maricopa and Pinal counties, as of September:

• The median single-family-home sales price was up 5 percent from last September, but that’s largely just because fewer sales are clustered at the bottom end of the market, not because individual home prices are rising much.
• The area has been experiencing sluggish demand and low sales activity for more than 14 months.
• Because there are fewer people buying, the rental market is hot, with both rents and construction permits for new multi-family housing rising.

After the housing crash, Phoenix-area home prices shot up from September 2011 to last summer. This year, prices leveled off and then rose somewhat. The median single-family-home price went up 5 percent from last September to this September – from $198,997 to $209,900. Realtors will note the average price per square foot rose 7 percent. The median townhome/condo price went up 15 percent.

However, the report’s author says the median increases happened primarily just because fewer sales are now clustered at the lower end of the market, with fewer foreclosures and short sales available. Only luxury homes above $2 million are seeing stronger-than-normal demand. Overall, the number of single-family-home sales is down 7 percent from last September to this September.

“Demand has been much weaker since July 2013 and still shows little sign of recovery,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Supply is also fairly limited. We anticipate pricing will continue to move sideways over the next few months, and a significant increase in demand will be required to change things.”

Investors are unlikely to bring that increase in demand. They’ve largely lost interest in the Phoenix area, now that better bargains can be found in other parts of the country with more foreclosures. Investors accounted for only 14.4 percent of residential-property purchases in September — way down from the peak of 39.7 percent in July 2012.

“To get the market back to what we would consider normal will require a major recovery in demand from local first-time home buyers,” explains Orr. “The last quarter of the year is rarely one in which first-time home buyer demand takes off without some unusual stimulus, so it looks as though our hopes for a livelier market will have to rest on a stronger start to 2015.”

Orr says if lenders decide to lower their standards for home loans, then that might create some additional demand next year. Many people who went through foreclosure in 2008 will be allowed to enter the market again, after spending the required seven years in the credit “penalty box.”

Until then, the rental-home market is red hot, with fast turnover and a constrained supply of rental homes available. The Phoenix area has already seen a 5.7 percent boost in rents over the past 12 months. Construction permits to build new multi-family housing to meet the demand are also on a strong upward trend.

Those wanting more Phoenix-area housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

Land Advisors, WEB

Metro Phoenix Land and Housing Forecast examines ‘refined opportunity’

While the industry has experienced sub-par housing activity over the past 11 months, the anticipated pace of growth going forward depends on a few factors, not the least of which is credit and qualification conditions, household formation, employment growth, the cost of new construction and outsiders’ perceptions of the local market. What are the expectations for growth in the nation’s economy, real estate capital markets, and residential real estate? Will these perceptions of a “refined opportunity” in real estate change how you operate your business now and in the future?

On Wednesday, December 10, 2014 the Land Advisors Organization will bring together a distinguished group of industry experts including Tim Sullivan (Meyers LLC), Nick Taratsas (DMB), Joel Shine (Woodside Homes), Mike Orr (Arizona State University, W. P. Carey School of Business), Don Garner (Alliance Bank of Arizona) and Matt Cody (Cachet Homes), to provide their considerable insight. Greg Vogel, CEO of Land Advisors Organization will moderate the panel.

Event Information:
DATE:        Wednesday, December 10, 2014
TIME:        2:30 Registration, 3:00 Program, 5:00 Networking Reception
LOCATION:    Sheraton Downtown Phoenix
COST:        $100 per person; $75 for public agencies and officials ($25 increase after Dec. 3)
REGISTER:    www.landadvisorsevents.com

All net proceeds benefit New Pathways for Youth and Arizona State University Real Estate Programs.

Since 1989, New Pathways for Youth has transformed the lives of more than 2,600 at-risk youth through mentoring. Their programs are designed to build self-esteem and leadership skills, increase school attendance and performance, end gang activity and violence and decrease substance abuse.

The Division of Real Estate at the W. P. Carey School of Business at Arizona State University provides the research and experience-based expertise necessary to address challenges in the contemporary real estate industry. Real estate faculty members bring real-world expertise into the classroom. Their collaboration and vision have contributed to an international real estate projects emphasizing ethical and responsible development that enhances community value and vibrancy and is sustainable and financially successful.

For companies interested in supporting this event and its chosen charity, they can review the sponsorship opportunities.

phoenix

Arizona drops from Top 10 for job growth

We’re still slowly recovering from the staggering loss of jobs during the Great Recession, but some cities and states are rebounding faster than others. The job-growth numbers for the first three quarters of 2014 are now out. Research Professor Lee McPheters of the W. P. Carey School of Business at Arizona State University provides rankings and analysis of the winners and losers, based on the latest figures from the U.S. Bureau of Labor Statistics.

Top 10 cities and surrounding metro areas (1 million or more workers), for non-agricultural job growth — comparing January through September of this year to the same nine months last year:

Orlando, Fla. – up 3.7 percent
Houston – up 3.5 percent
Dallas – up 3.4 percent
Miami – up 3 percent
Portland, Ore. – up 2.9 percent
Riverside, Calif. – up 2.8 percent (tie)
Denver – up 2.8 percent
San Francisco – up 2.6 percent (tie)
Seattle – up 2.6 percent
10.  San Diego – up 2.4 percent

Top 10 states for non-agricultural job growth – comparing January through September of this year to the same nine months last year:

North Dakota – up 4.6 percent
Nevada – up 3.6 percent
Texas  – up 3.3 percent
Utah – up 3.1 percent
Florida – up 2.9 percent
Oregon – up 2.8 percent
Colorado – up 2.7 percent
Delaware – up 2.5 percent
California – up 2.2 percent (tie)
Washington – up 2.2 percent

Analysis:

The United States has added about 2.4 million jobs so far this year. The monthly average from January through September was 1.8-percent job growth nationwide. That pace is only slightly better than last year’s, when we saw an overall annual increase of 1.7 percent, so the recovery remains relatively slow.

On the state list, North Dakota has held the No. 1 spot every year since 2009, largely thanks to its oil and gas production. Nevada, Texas and Utah also topped 3-percent job growth this time, with Nevada’s economy receiving a big boost from building activity and impressive construction gains of more than 10 percent.

“Seven of the top 10 job-growth states so far this year are in the West,” says McPheters, director of the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business. “Oregon and Delaware are new on the list this time, replacing Idaho and Arizona.”

Arizona actually fell out of the top 10 for the first time in two years. Even though it ranked No. 3 in health-care job growth and No. 5 in financial-activities job growth, the state has now dropped to No. 14 overall. Manufacturing, government and construction contributed to the decline.
The bottom 10 states so far this year are Michigan, Pennsylvania, Connecticut, Maryland, Illinois, Vermont, Virginia, New Jersey, New Mexico and last-place Alaska.  Five of these states were also on the bottom in 2013: Pennsylvania, Vermont, Virginia, New Mexico and Alaska.

McPheters notes very high interest in state economic performance right now because 30 governors are up for reelection, including those in top-10 states Nevada, Florida, Oregon, Colorado and California, as well as bottom-10 states Michigan, Pennsylvania, Connecticut, Illinois, Vermont, New Mexico and Alaska.

On the top 10 cities list, Orlando holds the No. 1 position with 3.7-percent job growth, double the national pace.

“Eight of the top large cities for job creation are in the West,” explains McPheters, “However, Florida also did well, with two cities on the list.”

Seven of the top 10 cities are clustered in Florida, Texas and California. They include Orlando, Miami, Houston, Dallas, San Francisco, San Diego and Riverside, Calif.

The greater Phoenix labor market dropped out of the top 10, as its rate of job growth slipped from 2.7 percent in 2013 to a more modest 2.2 percent during the first three quarters of this year. Phoenix is currently No. 12 among labor markets with 1 million or more workers.

Still, seven large labor markets have job creation below 1 percent: Chicago, Cleveland, Philadelphia, Kansas City, Pittsburgh, northern Virginia and lastly, Detroit.

The full rankings and other job-growth data from McPheters can be found at the W. P. Carey School of Business “Job Growth USA” website: www.wpcarey.asu.edu/jobgrowth. Use the “year to date” function for the current 2014 numbers.

housing.prices

Could Looser Lending Standards Boost Phoenix Market?

Will banks start to drop their standards and let people with slightly lower credit scores and much lower down payments buy homes? That’s the big question, after the Federal Deposit Insurance Corporation (FDIC) and other agencies voted to approve new, looser lending rules this week. A well-known expert from the W. P. Carey School of Business at Arizona State University says if the change happens, and the adjustments are reasonable, then it could be good for the Phoenix-area housing market, stimulating growth.

Here are the highlights of the school’s monthly housing-market report on Maricopa and Pinal counties, as of August:

• The median single-family-home sales price went up 11 percent from last August, but that’s largely just due to having fewer sales clustered at the bottom end of the market.
• Both supply and demand in the market remain relatively low.
• Lenders have been reluctant to expand the number of people eligible for home loans, which is helping to stunt market growth.

After the housing crash, the Phoenix area had a fast boost in home prices from September 2011 to last summer. This year, prices leveled off and then rose somewhat. The median single-family-home price went up 11 percent – from $192,000 to $213,500 — from last August to this August. The average price per square foot jumped 7 percent. The median townhouse/condominium price went up 10 percent. However, the report’s author explains the median gains are not reflective of higher home values across the board.

“The median went up largely just because we saw a big drop in sales clustered at the low end of the market,” explains Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “The average price per square foot actually dropped last month. I expect prices to move sideways to slightly down over the next few months until supply and demand get back into balance.”

Both supply and demand are relatively low in the Phoenix-area housing market right now. Single-family-home sales activity dropped 15 percent from last August to this August. Investor interest, in particular, has dramatically fallen over the last year. The percentage of homes bought by investors in August was 14.4 percent, way down from the peak of 39.7 percent in July 2012. There aren’t a lot of cheap “distressed” homes to buy, with completed Phoenix-area foreclosures down 43 percent from last August to this August.

“Better bargains for investors can be found in other parts of the country,” says Orr. “Over the last three months, the percentages of homes bought by investors have been lower than we have seen for many years, confirming investors are no longer driving the market the way they did between early 2009 and mid-2013.”

Rental homes remain popular for those who don’t want to buy a house or who can’t qualify for a home loan. Fast turnover and low vacancy rates have already pushed rents up 5.8 percent over the last year in the Phoenix area.

Meantime, we’re seeing a lot of speculation about whether banks will lower their standards and start letting people with good – but not great – credit scores qualify for home loans. Also, conventional loan down payments could be dropped from 10 percent to as little as 3 percent. The chairman of the Federal Housing Finance Agency spoke in Las Vegas this week and indicated that Fannie Mae and Freddie Mac would likely still purchase and retain those loans, if the banks make them.

“Right now, funds are flowing only to a small proportion of potential buyers, who have excellent credit, which is contributing to weaker-than-normal demand for homes to purchase,” explains Orr. “Lenders are reluctant to take any unusual risks in an environment when Fannie Mae and Freddie Mac might take negative, profit-damaging action against the banks on loans sold to them. It appears it will take a major move by Fannie and Freddie to limit those risks before mortgage availability can get back to a normal level and support the next stage in the housing recovery.”

Orr adds, “Banks have to walk the line on their lending standards. They went from the porridge being too hot (standards too lax) to the porridge being too cold (standards too tight). It’s still a while until we get to ‘just right,’ but striking the right balance could move the Phoenix-area housing market toward more sales and more demand.”

Those wanting more Phoenix-area housing data can subscribe to Orr’s monthly reports at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on specific aspects of the market. More analysis is also available at the W. P. Carey School of Business “Research and Ideas” website at http://research.wpcarey.asu.edu.

W. P. Carey School Announces Hall of Fame Members

Two technology mavens and a prominent professor focused on improving our health care will be honored for their accomplishments this month. The three alums will be inducted into the W. P. Carey School of Business Homecoming Hall of Fame at Arizona State University on Oct. 30. Previous inductees come from such diverse organizations as the American Red Cross, the Arizona Diamondbacks, Motorola, Wells Fargo Bank and XM Satellite Radio.

“The new honorees have all blazed a trail in their respective fields, making a difference in their professions, their community and society as a whole,” says Amy Hillman, dean of the W. P. Carey School of Business. “They also set a great example for our current students that there are no limits on how far they can go in their own career paths.”

The 37th annual W. P. Carey School inductees are:

• Leonard Berry – Dr. Berry, a distinguished professor and well-known author, has devoted his career to studying the marketing and quality of services, with a recent focus on how to improve health care service. He has written 10 books and done extensive work with the Mayo Clinic. He is currently examining how to improve the service experience of cancer patients and their families. Berry has received countless major academic awards and is both a fellow of the Academy of Marketing Science and a past national president of the American Marketing Association. He is a member of several boards of directors, including for Lowe’s, Genesco and Nemours Children’s Health System. He is a Regents Professor, teaching at Texas A&M University, and he received his Ph.D. from ASU’s business school in 1968.

• Brian Gentile – Gentile’s impressive tech career spans almost 30 years and major global companies, including Apple, Sun Microsystems (now part of Oracle), and NCR Corporation. He is a leader in “big data” and cloud computing, who recently built and served as CEO of Jaspersoft Corporation. After TIBCO Software recently acquired the company, Gentile became senior vice president and general manager of its TIBCO Analytics products business unit. He has also been a public governor on the board of the Pacific Stock Exchange, a public member of a New York Stock Exchange committee on ethics and business conduct, and a founding board member for several Silicon Valley startups. He earned his MBA from ASU in 1992.

• Chuck Robel – Tech legend Robel served as chairman of the board of McAfee, one of the world’s best-known computer-security software companies, prior to its multibillion-dollar sale to Intel. He now serves on the boards of directors of GoDaddy, Jive Software, and several other public and private companies. He previously helped to manage about $1 billion in portfolio investments as chief operating officer at venture capital fund Hummer Winblad Venture Partners. He has been involved in more than 80 initial public offerings (IPOs) as an adviser, investor and board member. He received his bachelor’s in accounting from ASU’s business school in 1971.

Alumni, business leaders and students will attend the Homecoming Hall of Fame event Thursday, Oct. 30 at McCord Hall Plaza on ASU’s Tempe campus. The reception starts at 5:30 p.m. Advance registration is requested at www.wpcarey.asu.edu/events/2965 or by calling (480) 965-3978.

Deloitte Report Reveals Mid-Market Companies Expect U.S. Economic Growth

ASU helps honor ‘Most Accurate Economist’

While many Americans were still pinching every penny and praying for a faster recovery from the Great Recession, John Lonski, chief capital markets economist of Moody’s Analytics, understood what our country really faced in its uphill battle toward an economic comeback. He had the most accurate U.S. forecast among the nation’s top economists for the years 2010 to 2013. Accordingly, he will be honored Oct. 16 with the prestigious Lawrence R. Klein Award for his achievements.

“I am honored to receive this award on behalf of Moody’s Analytics’ Capital Markets Research team,” Lonski says. “Given the economic uncertainty, accurate economic analysis is more important than ever to help financial institutions quantify risk and opportunities and simulate the impact of policy adjustments.”

The W. P. Carey School of Business at Arizona State University sponsors and judges the Lawrence R. Klein Award, one of the best-known and longest-standing awards in the economics profession. The annual award is named for the late Nobel Prize winner Dr. Lawrence Klein, and it goes to the individual or team with the most accurate economic forecast among the Blue Chip Economic Indicators survey participants for a four-year period. The Blue Chip newsletter has been published for almost 40 years and is regarded as the “gold standard” of business forecasts. Lonski beat out about 50 competitors for this year’s award.

“The biggest challenge of the 2010-to-2013 forecast period was to anticipate how the recovery would unfold,” explains Economics Professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business. “John Lonski’s projections were particularly accurate for the last two years, when he called for a slow decline in the unemployment rate and nailed gross domestic product (GDP) growth at just over 2 percent.”

Lonski is an acclaimed forecaster, who contributes regularly to forecasting surveys from The Wall Street Journal, Bloomberg News, Reuters and the Philadelphia Federal Reserve Bank. He was named the top economic forecaster in The Wall Street Journal’s June 2004 survey, and he has done countless interviews for CNBC, The New York Times, Fox Business, Dow Jones, Bloomberg TV, National Public Radio and many other major media outlets. He contributes a quarterly editorial piece for Japan’s Nikkei Veritas newspaper and comments regularly in Moody’s “CreditTrends” and weekly “Market Outlook.” Prior to joining Moody’s Analytics, he worked for National Economic Research Associates.

At the Klein Award event, Lonski will deliver his 2015 forecast, “Goldilocks Redux: 2015’s Outlook for Business Activity, Inflation, and Interest Rates,” including these predictions:

• Another year of modest improvement for the U.S. economy is likely.
• The continued release of pent-up demand for autos and housing should underpin consumer spending.
• However, the subpar growth of employment income, the household-sector’s debt overhang, and the conflict between still-tighter mortgage loan standards and the diminished savings of middle-income households limit the upside for household expenditures.
• The unprecedented aging of both the population and the work force will weigh on income growth and spending.
• Ample global slack implies that a disruptive swelling of inflation risks is unlikely.
Year-end 2015’s expected ranges are .75 to 1 percent for federal funds and 3 to 3.25 percent for the 10-year Treasury yield.
• By mid-2015, the Fed should begin a measured tightening of policy.
• The heightened scrutiny of regulators may ward off the excesses of previous credit-cycle peaks.

Top industry professionals and others will attend the invitation-only award ceremony Oct. 16 at the University Club in New York, starting at 6 p.m.

VIPs expected to be in attendance include Randell E. Moore, executive editor of the Blue Chip Economic Indicators; Amy Hillman, dean of the W. P. Carey School of Business; Hannah Klein, daughter of the award namesake; and Trevor Bond, president and chief executive officer of W. P. Carey Inc. (NYSE: WPC).

Staying Innovative as a One Man Operation

Spirit of Enterprise Award Finalists named

Arizona is still recovering from the Great Recession, and many local businesses are playing a key role in the comeback. Today, some of the state’s best companies are being recognized as finalists for the 18th annual Spirit of Enterprise Awards from the W. P. Carey School of Business at Arizona State University.

The prestigious awards recognize firms for creating jobs, boosting our economy and delivering great customer service. Past winners include well-known names like Cold Stone Creamery, Ollie the Trolley and Total Transit (Discount Cab), as well as fast-growing businesses, such as Infusionsoft.

“We look for Arizona businesses that demonstrate ethics, energy and excellence in entrepreneurship,” explains Sidnee Peck, director of the Center for Entrepreneurship at the W. P. Carey School of Business. “We also want to see innovation, a positive internal culture, and an impact on both our economy and our local community.”

The 18th annual Spirit of Enterprise Award finalists are:

• Clean Air Cab (Mesa) – a family-owned, eco-friendly cab fleet with consistent 100-percent annual growth and a Happy Ride consumer guarantee, sourcing more than 83 percent of its business needs from local providers and donating to local charities, including the ONE Community Foundation for advancing the rights of the LGBT community.
• Endless Entertainment (Tempe) – an events production and consulting company started by a college entrepreneur at ASU that has been lauded by Inc. magazine, has a strong customer-service focus, and has worked with a range of clients from San Diego Comic-Con and the X Games to the American Cancer Society, Autism Speaks, Target and Zappos.
• Ersland Touch Landscape (Phoenix) – a state-of-the-art landscape maintenance company with more than 30 years of experience, a complete customer “feedback log,” an Adopt a Highway commitment, work with nonprofits, and more than 400 residences and 20 homeowner associations as clients.
• India Plaza/The Dhaba (Tempe) – a small, minority-owned one-stop shop for all things Indian, including an award-winning restaurant, a marketplace and an education center, with a low staff turnover rate, a no-questions-asked return policy, and vegetarian, gluten-free and environmental initiatives.
• IO (Phoenix) – a firm focused on data-center technology, services and solutions that are defined by software, instead of physical locations, with more than 650 global clients, including Goldman Sachs and LexisNexis, as well as two patents and a focus on energy efficiency.
• I-ology (Scottsdale) – a woman-owned technology company offering Web design and related services that features close client relationships, heavy community involvement, and no management hierarchy, where all employees have the chance to participate in revenue sharing, stock options, flexible schedules and industry events.
• The James Agency (Scottsdale) – a boutique, full-service advertising and public relations agency specializing in high-end brands, which was started by a 25 year old and now boasts flexible work schedules, no outsourcing, annual pro bono clients and last year’s revenue of more than $2 million.
• Kitchell (Phoenix) – a 100-percent employee-owned commercial builder, developer and program manager launched 65 years ago, which now has more than 850 employees, international operations, innovations like virtual construction, an internal leadership program, significant charitable contributions, and a focus on safety, work quality and customer satisfaction.
• Melrose Pharmacy (Phoenix) – an independent pharmacy that offers fast, personalized service, contributions to the March of Dimes and other charities, and involvement in community issues, as well as achieving business goals of $2.7 million in sales by its third year in business and a 119-percent increase in net income so far this year.
• Potter’s House Apothecary (Peoria) – a pharmacy specializing in compounding, with its own continuous-quality-improvement program and patient seminars, which reached its three-year business plan projections in just 18 months and became one of fewer than 15 Arizona pharmacies with accreditation from the Pharmacy Compounding Accreditation Board.

The finalists from the W. P. Carey School for the Student Entrepreneurship Award are:

• Anthony Gonzales/Force Impact Technologies – Gonzales, who just graduated with his MBA, has made headlines as a finalist in Entrepreneur magazine’s College Entrepreneur of the Year competition with his grant-winning, ongoing development of FITGuard, a mouthguard designed to indicate when an athlete should be removed from a game for possible head injuries/concussions, as well as a matching smartphone application that can provide results to a diagnosing physician.
• Paige Corbett/PetSitnStay – Corbett was working as a kennel assistant and attending business school, when she came up with the idea to start an online service to connect pet owners with pet sitters and in-home care options as an alternative to less personal commercial boarding facilities.

Winners will be announced at a luncheon Friday, Nov. 21 at the JW Marriott Desert Ridge Resort & Spa in Phoenix. Hundreds of business and community leaders attend the annual event. Also, new this year, an entrepreneurship workshop will be held right before the awards luncheon. There, top W. P. Carey School faculty members will talk about what tools and techniques you can use to advance your business.

For more information on sponsorship opportunities or to attend, call (480) 965-0474, e-mail wpcentrepreneurship@asu.edu, or visit www.wpcarey.asu.edu/spirit.

The Spirit of Enterprise Awards are just one focus of the Center for Entrepreneurship, which helps hundreds of businesses each year. The center recently introduced the Sun Devil Select competition to honor ASU alum-owned or alum-led businesses, as well as the Sun Devil Igniter Challenge to help fund student businesses. The center also offers companies a chance to recruit and meet with top student talent, while allowing students to get hands-on business experience. It is a gateway to access other ASU business resources. The center is self-funded and utilizes community sponsorships and volunteers to sustain its activities.

WPCarey-School-Sign

W. P. Carey School Ranks Top 30 Again

U.S. News & World Report announced its highly anticipated annual rankings for undergraduate business schools. Once again, the W. P. Carey School of Business at Arizona State University is honored among the nation’s Top 30. This is the ninth time in 10 years the school has made the prestigious Top 30.

“We’re proud to strive for and achieve excellence year after year, thanks to our dedicated faculty, staff, students and alumni,” says Amy Hillman, dean of the W. P. Carey School of Business. “This ranking is determined by deans and senior faculty members at peer schools, who understand what it takes to create and maintain a fantastic business program.”

In addition to the No. 29 ranking overall, the undergraduate business program is also among the top 10 in the West. The school’s acclaimed supply chain management program ranks No. 3 nationwide in the specialty category for its field. In addition, the school has several other programs in the Top 30 in their specialties – accounting at No. 30, entrepreneurship at No. 19, management at No. 20, management information systems at No. 15 and marketing at No. 23.

The W. P. Carey School and its programs have achieved many other recent Top 30 rankings, as well, including:

• U.S. News & World Report ranks the school’s full-time MBA program No. 27 in the nation.
• U.S. News ranks the school’s online MBA No. 2 nationwide and the school’s evening MBA No. 18 among part-time MBA programs.
• Britain’s Financial Times ranks the school’s online MBA program Top 10 worldwide.
• The Financial Times ranks the school’s China-based executive MBA program No. 28 worldwide.
• The University of Texas at Dallas ranks the W. P. Carey School Top 30 worldwide for business-school research productivity.
• The Center for World-Class Universities at Shanghai Jiao Tong University ranks the W. P. Carey School No. 22 in the world for economics/business.

For more information about the W. P. Carey School of Business, visit www.wpcarey.asu.edu.

housing

No Housing Bubble Right Now in Phoenix

The Phoenix-area housing market is NOT creating another housing bubble to pop anytime soon. The latest monthly report from the W. P. Carey School of Business at Arizona State University shows a lack of enthusiasm from both buyers and sellers. Here are the latest details on Maricopa and Pinal counties, as of July:

• The median single-family-home sales price went up 8 percent from last July, but forward price movement is greatly slowing down.
• Activity in the market was also much slower this July than last July, with the number of single-family-home sales down 19 percent.
• The W. P. Carey School is launching an enhanced-content website where those interested in more in-depth housing-market statistics can get customized views of what’s happening.

Phoenix-area home prices dramatically recovered from the housing crash, quickly rising from September 2011 to last summer. This year, prices dropped a little, leveled off, and then finally, the median single-family-home price rose this summer. The median jumped 8 percent — from $194,000 last July to $210,000 this July. Realtors will note the average price per square foot also went up about 8 percent. The median townhouse/condo price went up about 6 percent to $130,000. However, don’t expect much more upward momentum.

“Most of the median-price increase over the last 12 months is because a greater percentage of the homes being sold are in the luxury market, not because home values overall are increasing,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “We anticipate pricing will move sideways or slightly down over the next few months until supply and demand get back into balance.”

At the moment, both demand and supply are low in the Phoenix area. The amount of single-family-home sales dropped 19 percent from last July to this July. (The only bright spot is new-home sales, which increased their market share from 9 to 12 percent.) Investors have focused on other areas of the country with better bargains, so the percentage of residential properties they bought in July was just 13.6 percent, down from the peak of 39.7 percent in July 2012. Orr says other home buyers aren’t stepping in, and supply isn’t rebounding.

“Usually, when demand is weak for an extended period, supply starts to grow, as it did in the second half of 2005 and throughout 2006 and 2007, heralding the collapse of the housing bubble,” Orr explains. “However, this summer, supply is slowly weakening. It appears that the lack of enthusiasm among buyers has spread to sellers, instead of causing them to panic. Many sellers clearly have the patience to wait for better times and are unwilling to drop prices to dispose of their homes.”

Orr adds the choices for anyone who wants to buy a Phoenix-area house for less than $175,000 are pretty slim. For example, bargain foreclosures are few and far between. Completed foreclosures on single-family homes and condos are down 45 percent this July from last July.

The limited options at the low end of the market are also contributing to the booming demand for single-family rental homes. Orr says fast turnover and low vacancy rates have already pushed the rent on single-family homes in the most popular areas up 7.5 percent over the last 12 months. Affordable apartment and condo rentals have also become hard to find.

In order to better serve the public with more insight on the Phoenix-area housing market, Orr and the Center for Real Estate Theory and Practice at the W. P. Carey School of Business are launching a new enhanced-content website today. In addition to the free news releases distributed by the school, those wanting more housing data can subscribe at www.wpcarey.asu.edu/realtyreports. The premium site includes statistics, charts, graphs and the ability to focus in on whatever interests you most about the market.

“Though we’ve already had a great response to our housing reports, we wanted to make our real estate information even more useful to people,” says Orr. “With the enhanced site, you’re able to customize your view to more closely examine data in particular price ranges, specific parts of the Valley, and even certain transaction categories. We think the real estate community will be really pleased with the new tools.”