Cash for Clunkers

I was at a dinner party last night and the subject of the popular Cash for Clunkers" came up. A sure fire subsidy for the car manufacturers, the program has instantly boosted sales for the moribund auto industry and has allowed people to trade in their less energy efficient car for a brand new one while enjoying up to $4500 from the government for a down payment.

One of the guests at the party was a technician who works in a local auto shop. He was quite animated in his opposition to the program, primarily because of the waste. You see, when a new car buyer brings in his clunker for trade, the dealership is instructed to drain the oil out of the car, then pour a silica (sand) product into the engine and run it until it quits, effectively "euthanizing" the car. The car is then crushed and sold for scrap.

Not only does this program, in many cases, eliminate a perfectly good car from the marketplace, it also eliminates the opportunity to recycle parts from the car, which of course includes a motor (which might run cleaner than one that it could replace) doors, side panels, alternators, bumpers, radiators, mirrors, wheels, gas tanks, trunk lids, chassis, etc. The waste, he said, is appalling and to label this project as "green" is simply a lie.

Many industries are being given subsidies these days: banks, investment houses, the auto industry and yes, even the real estate industry, with the current $8000 tax credit. If the real estate tax credit program was run in the same manner as "Cash for Clunkers", they would be bulldozing a "clunker" (old?) house with no salvage allowed for every subsidized home sold. That wouldn't be right, and "Cash for Clunkers" isn't right either, especially from a "green" perspective.

What do you think?

Ham Radio Antennas

Todays Az Daily Star had an editorial regarding a recent bill being produced in the AZ State legislature that would allow "reasonable accomodation" for ham radio antennas in neighborhoods governed by HOAs. They came out against the bill.

As you know, I am a real estate broker. I am also a ham radio operator.

A few years ago, I represented a ham operator in the purchase of a town house that was regulated by an HOA. We negotiated with the HOA board to allow a small VHF antenna on the home. We provided a reasonable explanation of the hobby, the public safety aspects and included a picture of the antenna and its dimensions.

The board granted, in writing, permission for my client to erect the antenna, so he bought the place.

It is unfortunate that these days, if someone wants to buy a newer home, it is almost inevitable that it will be governed by a HOA. The power that these associations have over people should be regulated.

Rather than some blanket prohibition, which I believe that many HOA boards insist on, there should be "reasonable accommodation" for certain things. Solar power, clothes lines and yes, ham radio antennas. I believe that this bill is a step in the right direction.

Sewer Fee Update!

This just in from the Tucson Association of Realtors:

Waste Water Fees

At the last Public Affairs Committee meeting the members voted to support Option C of Pima County Wastewater's proposal to raise wastewater fees. On Tuesday the Board of Supervisors voted to adopt Option C as well but are still interested in raising the connection fee which was part of Option D. The four options are laid out below.

• Option A - Increase the volume rate assessed to all customers by 16.75% ($2.81) as early as possible in 2009, by 16.75% ($3.28) in July of 2009 and by 16.75% ($3.83) in January of 2010.

• Option B - Increase the volume rate assessed to all customers by 25.25% ($4.24) as early as possible in 2009, by 9.25% ($1.95) in July of 2009 and by 9.25% ($2.13) in January of 2010.


• Option C- Increase the fixed monthly service fee assessed to all customers by $1.50 and increase the volume rate by 12.75% ($2.14) as early as possible in 2009. Increase the volume rate by 12.75% ($2.41) in July of 2009 and increase the fixed monthly service fee by $1.50 and increase the volume rate by 12.75% ($2.72) in January of 2010.


• Option D - Increase the fixed monthly service fee assessed to all customers by $1.50 and increase the volume rate by 12.75% ($2.14) and increase connection fees by 4% as early as possible in 2009. Increase the volume rate by 12.75% ($2.41) in July of 2009 and increase the fixed monthly service fee by $1.50 and increase the volume rate by 12.75% ($2.72) in January of 2010.

Why Own a Home?

To me, the big motivator for home ownership is lifestyle: privacy, personal enjoyment, and self expression, with a bonus of shelter. With a rental, you get shelter. When you own a home you get more.

My home is worth less than it was two years ago but I still enjoy living here, I am happy that I don't have to ask anyone's permission to hang my photo gallery, paint the interior green, tear up the carpet and replace with tile, or radically change the landscaping. I can stay here for as long as I can make the payments. Someday I will own it outright.

If everything was only about the bottom line, no one would ever buy that fancy red sports car in the showroom, a student's artwork at a school gallery, or that little red brick 1950's charmer on the corner.

The real bottom line is: If you found the place you want, can afford it and you plan on sticking around for a while, go ahead and buy it. Life is too short to live in someone else's house if you don't have to.

Time to Buy?

I have noticed some discussions lately about market timing and our housing market. Some have said that it would be smart to wait for the "bottom" before committing to a purchase. Even if you could predict when the bottom will occur (you can't) there is more to that equation.

For anyone contemplating a home purchase, it is also important for them to factor in the cost of financing in that decision and their ability to pay at that rate.

If I can afford the home I want and have a time horizon longer than a year or two, what difference does it make if I buy at the bottom or a year (or two) early?

Just as home prices can go down, mortgage rates can go up. Today's rates are at historic lows. Buying a home now at a fixed rate that is affordable sounds smart to me.

I bought my first home in 1974, in the midst of a recession during the oil embargo. I was too dumb to know that it was a bad time to buy a house (I was only 21) I was not a speculator, just a kid who wanted a place of his own to live. My time horizon was very long. Never heard of the concept of "flipping". I just liked the idea of no landlord. Although sometimes it was a struggle, I was able to make the payments. Needless to say, I did OK with that house.

I am glad that there was no 24/7 media to talk me out of that purchase in 1974. Although the bottom may not be here yet. there are some good deals out there right now. If you are planning on hanging around the Old Pueblo for a while, buying that home you want and can afford might be a smart thing to do.

Shipping Container Homes!

This is a very interesting concept from a recycling as well as an archetectural standpoint...

Save Rillito Race Track

On Saturday I detoured to the track during a relaxed stroll with a friend down the Rillito River Walk. When we arrived the official at the ticket gate told me that over 10,000 people were there (she had a counter-clicker) and there were still more streaming in. The parking lot was full of cars.

We sat in the grandstand which appeared to be solid (it's steel) and in no danger of collapsing. The overall cosmetic condition was poor, the windows had cobwebs, the bench seats (with backs!) needed painting, as did the rest of the place, but despite the County's neglect, everyone was having a great time, whether in the grandstand or close up, on the rail watching the beautiful horses run by at top speed.

The Catalina mountains are perfectly framed in the big glass window array of the grandstand. The large grassy infield sports 4 soccer areas with goals, so the site serves more than one purpose.

I signed a petition to save this historic landmark. The public should get on board too to preserve this 1940's era part of our heritage before it is leveled and sold to the highest bidder. As one petition signer said to me, "This place belongs to the people, not the Board of Supervisors". I agree.

The Phone is Ringing

Recently I wrote about "The January Effect" where I described the historic trend in our Real Estate market place where sales activity increased after the new year started. This has been vividly demonstrated to me this week with a ringing phone from buyers calling on our listings and happily, an offer that was negotiated to a contract on one of them.

It is good to set aside all of the doom and gloom for a while and just do our work. In my business, there are people out there who recognise the opportunities in our market place (lowered prices and historic low interest rates) and are acting on it. Things will be better in the months to come.

Tucson is a great place to live. Lots of people know this. I received an e-mail from a friend in Indiana this morning and he said that it was minus 35F there today! I am taking our sunshine dividend to the bank, knowing that Tucson will continue to grow, probably at a faster pace than some other parts of the country, and our real estate market will recover. And the weather is better here. That's one of the blessings that should be on our counting list.