The Phoenix, Arizona, real estate market is, in my opinion, much worse shape than Tucson’s. Phoenix experienced more speculation for a longer period of time than Tucson. During the boom, I remember speaking with agents in Phoenix who talked about the wave of speculators arriving and buying Phoenix up for a full two years before the same type of speculators came to Tucson in droves. When they came to town, the buying frenzy only lasted roughly 8 months, whereas Phoenix experienced well over two years of blatant overbuilding and speculation. However, just because the Phoenix AZ real estate market is in worse shape than Tucson’s, it doesn’t mean the market is dead.

The Phoenix real estate market and especially the new home marketplace (the largest in America) have had a rough time the past two years, but the numbers are still staggering. The Phoenix market is just a juggernaut and is many times larger than Tucson’s. 2008 will be a slower than normal year for the Phoenix new home builders. Only 22,000-24,000 home building permits are expected to be issued. That’s about a 20% drop from 2007, which was even much slower than 2006. By comparison, I believe the Tucson home building numbers come in around the 6,500 mark for 2007, down from 7,831 in 2006 and 11,270 in 2005 when the housing boom reached its peak. The leading homebuilder by number of sales in Phoenix for 2007 was D.R. Horton. They logged over 5850 sales last year alone! Coming in second was Pulte Homes, and they had sales figures in excess of 4250 sales! Those numbers are still huge. In Tucson, the leading homebuilders top out around only 600-800 total sales. It’s easy to see the Phoenix market is still churning out a large number of sales.

I recently just took a new listing located at 6688 S. Hidden Flower Way, Tucson AZ 85706. The home is a single story, located in the very popular community of Rancho Valencia (also known as Valstate) just west of I-10 and south of Valencia. The actual crossroads would be Swan/Valencia. This home is 1634 square feet with extra high ceilings, a large spacious kitchen, extra high vaulted ceilings, and an oversized lot with enough space for even adding a POOL down the road.

Purchasing a new construction home is often the best way to buy. Currently, great incentives and bottom dollar prices are being offered by builders to move their inventory, but how do you know which builder to select? Ultimately it all comes down to price. If your resources are unlimited, then naturally you can hire a full custom homebuilder to build the home of your dreams. But, if you’re like most, you will need to buy and build from either a local tract homebuilder or a national one that builds in Tucson. Here are some tips to help you select the best fit for your family’s needs.

Moving to Tucson AZ could be a shock if you’re from the East Coast or northern parts of the country. The culture, climate, and way of life are quite different here from many other parts of America. For those who would like some insight about what to expect when relocating to Tucson, here are some tips.

Culture: Since Tucson is located in the southwest and was for many years part of Mexico, it has retained many of the traditions that the natives of Mexico brought here hundreds of years ago. The Hispanic influence is strong in many parts of the city. Festivals, religious events, and Hispanic foods are all very common in Tucson. Many areas of town, streets, and buildings have Spanish names. Many residents embrace the culture that Tucson offers once it becomes more familiar.

Building a sizable real estate portfolio takes time, patience, and the ability to manage your holdings in a competent manner. If you can do this, the money is there to be made in large quantities. By holding for long periods of time, you allow others to pay off your mortgages and eventually this will equate to your outright ownership of the property once the mortgage has been paid in full. This does not even account for all the appreciation, tax benefits, and stability that real estate typically offers its owners. Investors who are interested in making profits must understand one thing: you need to purchase in areas of the country that are experiencing growth. Growth puts upward pressure on prices.

Target has now started construction on a massive distribution center, which is located north of Interstate 10 on Rita Road. The distribution center will ship online orders for Target.com, the store’s online presence. The distribution center is larger than 16 football fields, or roughly 1 million square feet. When completed (approximately two years from now), it is expected to employ hundreds of people. This is just one of many new developments validating Tucson as a destination for corporations to locate large plants and assets to the region. Target stated that Tucson’s strategic location, with access to interstate highways, railroad, and airport facilities, was a major factor in selecting Tucson AZ as the location for this huge distribution center. Hopefully, other businesses will take notice that Target (the second largest retailer in America) has selected Tucson, Arizona, as the spot for their distribution center, and will give Tucson an opportunity to provide them with as perfect a location also. This, in turn, could make Tucson, Arizona, one of the nation’s leading logistics centers.

Since Bank of America purchased Countrywide last week, it has now become the major player in mortgage loans for America. This graph (from The Wall Street Journal online) shows that the Bank of America and Countrywide now represent one quarter of all loans originated in the country! What this means is twofold. First, the good news. By saving Countrywide from bankruptcy, it solidifies the real estate market and keeps things from getting much worse. Some think that if Countrywide had gone bankrupt, it would have severely halted the entire mortgage business from Wall Street to Main Street. The bad news for consumers is that because Bank of America now essentially owns a quarter of the mortgage business in America, I believe the result will be higher costs and interest rates for borrowers since there naturally will be less competition — at least for the next year. Once the market shakes out, there will once again be new mortgage companies and programs that will compete with the large players. This has always been the case.

Last week was a very unstable one for Countrywide Home Loans. The largest mortgage originator in America saw its stock drop off a cliff, had its stock halted amid bankruptcy concerns, and had to hold a press conference to deny that they were going to file for bankruptcy. Then, at the 11th hour, Bank of America came to their rescue and stepped up to purchase Countrywide Home Loans for $4B. In my opinion, B of A did this for multiple reasons. The simplest is that they understand the mortgage business and can pick up Countrywide for a cheap price. They understand all the facets of the business, and will be able to assist Countrywide out of their troubles. In the end, Bank of America will become the largest mortgage originator in America by a long shot. Secondly, back in August, Bank of America injected two billion dollars into Countrywide to help keep the company solvent. They purchased the 2 billion dollars worth of stock at around $18/share. When Countrywide’s stock dipped to the low $5/share mark, it only made sense for Bank of America to spend another $4 billion to buy the entire company and ensure their initial 2 billion dollar investment did not get lost if Countrywide did proceed to file bankruptcy. Finally, the real estate market and the mortgage market are in shambles. Bank of America realizes this and has the cash to buy when everyone is selling. In the long term, buying Countrywide may prove to have been an amazing business deal once the real estate and mortgage markets have stabilized and pulled out of their downturn.

Today it was reported that the State Land Department is planning for a 15,900 home development that will more than quadruple the area of northern Pima County’s population when completed. The Department released a draft of the development plans, called the Arroyo Grande plan. The new area will be large enough to house about 38,000 people, roughly the current size of Oro Valley (estimated at 44,000). This super development will span across 14 square miles bordered by Oro Valley on the south, Pinal County on the north, Oracle Road on the east, and the Tortolita Mountains on the west. That’s a HUGE AREA!

Yesterday KB Home reported their 4th quarter results and they were dismal, to be optimistic about it. For the quarter ended Nov. 30, the company posted a loss of $772.7 million. That’s a $ 772.7 MILLION LOSS in 3 months! This just goes to show how bad things really are for all builders. KB Home, in my opinion, runs a pretty good operation building homes for primarily first time homebuyers. Other homebuilders have faired just as badly. Pulte, DR Horton, Richmond American, and Standard Pacific (who just sold their Tucson operations earlier this month) have all been beaten down pretty hard.