Phoenix-area housing market in low gear until next year


November 12, 2014

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. portrait of ASU director Mike Orr Download Full Image

• 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. “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.

ASU engineers join US effort to protect water quality


November 12, 2014

Arizona State University engineers will work as part of a new national center for research and innovation in small- and medium-sized drinking water systems.

The Design of Risk Reducing, Innovative Implementable Small System Knowledge (DeRISK) Center will develop and test advanced, low-cost methods of reducing, controlling and eliminating water contaminants that present challenges to communities worldwide. Kiril Hristovsky water research Download Full Image

The U.S. Environmental Protection Agency (EPA) recently awarded more than $4 million to the University of Colorado-Boulder to establish and lead the center together with Arizona State University, University of Alaska Anchorage, University of New Hampshire and the Rural Community Assistance Partnership as partners.

The center’s focus will be on the kinds of smaller drinking water systems that make up most of the public water systems in the United States. Many of the systems face obstacles, such as limited resources, aging infrastructure and a lack of capability to comply with Safe Drinking Water Act regulations.

The center is envisioned to serve as a hub for collaboration between the universities and various state and local government agencies, private-sector organizations and the Canadian small water systems network.

“By its selection to be part of this EPA-funded multi-university center, ASU is again being recognized as one of the leading research institutions in developing solutions for safeguarding the environment and public health,” said Kiril Hristovski, who will lead the ASU team. Hristovski is an assistant professor in The Polytechnic School, one of ASU’s Ira A. Fulton Schools of Engineering.

His research partner on the project will be Paul Westerhoff, a professor in the School of Sustainable Engineering and the Built Environment and ASU’s vice provost of academic research programming.

The ASU researchers will focus on developing novel photochemical-based applications, including both sunlight and engineered light sources, to improve water quality and provide effective photon-based water treatment for small systems.

“The ultimate goal is to develop novel and sustainable technologies for photocatalytic water treatment that can move us closer toward using sunlight to convert nitrate and other contaminants to innocuous end-products without addition of any chemicals. Nanomaterials will play a central role in this research endeavor,” Hristovski said.

As part of the center’s activities at ASU, the researchers plan to develop and prototype novel nanomaterial-based treatment technologies, which can remove nitrate and other contaminants, such as hexavalent chromium, from water by photocatalytic reduction.

Nitrate was selected as a model contaminant because it represents a key component of the nitrogen cycle. The sustainable management of the nitrogen cycle on a global scale is designated by the National Academy of Engineering as one of the Grand Challenges for engineers in the 21st century.

Estimates suggest that more than 24 million people in the United States alone are affected by nitrate contamination, making it the most ubiquitous contaminant in drinking water sources that poses high risk to human health and the environment.

“Nitrate is high on the International Agency for Research on Cancer priority list for upcoming review of possible carcinogenicity,” Hristovski said.

“Hexavalent chromium is already a confirmed carcinogen, and many may remember it as the focus of the Erin Brockovich story. Development of novel technologies that could eliminate these contaminants from water is of critical importance in the national and global effort to protect public health and the environment,” he said.

Joe Kullman

Science writer, Ira A. Fulton Schools of Engineering

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