Scottsdale was recently presented the 2007 America's Crown Community award for the Chaparral Water Treatment Plant by American City & County magazine. The award recognizes the extra steps local governments take that have lasting effects on residents, businesses and the environment. Projects are judged based on their uniqueness, short- and long-term value to the community and effective/innovative financing. Scottsdale is one of only six cities to receive the award this year.
The Chaparral Water Treatment Plant won as a result of its innovation and its benefit to the community. The plant, which produces 30-million-gallons-a-day, sits on a nine-acre site and is a technical marvel. A conventional plant of this production capacity would have required a footprint two to three times larger. Instead, the city used state-of-the-art membrane technology to compress the footprint of the plant leaving room to extend nearby Chaparral Park with additional amenities, such as an off-leash area.
The design of the plant also allows it to connect the adjacent neighborhood to the park, rather than separate the two spaces. In addition, the plant also serves an educational purpose because it offers a Xeriscape demonstration garden where residents and park visitors can learn about low-water use landscape.
The award was presented to the city on Nov. 15 as part of a special awards ceremony at the annual National League of Cities convention held in New Orleans, Louisiana.
For more information on American City & County magazine visit http://americancityandcounty.com For more information on Scottsdale water quality and conservation, visit: http://www.scottsdaleaz.gov/water.asp
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Monday, November 26, 2007
Scottsdale - 85262
This upscale north Scottsdale ZIP code posted the third-biggest increase in the Valley.
This area is second only to Paradise Valley for metropolitan Phoenix's priciest homes.
The increase: The ZIP posted a 13 percent increase in median home prices this year. Most of the price increase came from existing home sales in golf communities such as DC Ranch. And while prices climbed here, Paradise Valley experienced a 5.6 percent drop.
Median price: The jump pushed the median home price above $1 million for the first time.
The ZIP code, north of Bell Road next to the McDowell Mountains, had fewer than 50 new homes go up. The Loop 101 has helped this neighborhood as well as the rest of north Scottsdale grow.
Communities in this ZIP code draw second-home buyers as well as Valley executives. Several big firms have moved their corporate headquarters to the Scottsdale Airpark during the past few years.
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
This area is second only to Paradise Valley for metropolitan Phoenix's priciest homes.
The increase: The ZIP posted a 13 percent increase in median home prices this year. Most of the price increase came from existing home sales in golf communities such as DC Ranch. And while prices climbed here, Paradise Valley experienced a 5.6 percent drop.
Median price: The jump pushed the median home price above $1 million for the first time.
The ZIP code, north of Bell Road next to the McDowell Mountains, had fewer than 50 new homes go up. The Loop 101 has helped this neighborhood as well as the rest of north Scottsdale grow.
Communities in this ZIP code draw second-home buyers as well as Valley executives. Several big firms have moved their corporate headquarters to the Scottsdale Airpark during the past few years.
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Tuesday, November 20, 2007
COZY TOWNHOUSE @ PEPPER RIDGE
On-going OPEN HOUSES. Please check schedule at calendar.e-Scottsdale.com
Great location, Ideal First Home or Investment. $182,477.00
Great first home or rental property. Features include 2 bedrooms, 1 bath, family room with separate eating area, laundry room, large inside storage closet w/shelving and full size 2-car garage.
Master bedroom also includes patio doors as a separate backyard exit to the covered patio. New dishwasher, home warranty included. Two community pools, large green belt for children/pets and close to all major shopping, SR51 and Loop-101 freeways.
For further details and pictures, visit the property's web site at http://www.house8622.com/
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Great location, Ideal First Home or Investment. $182,477.00Great first home or rental property. Features include 2 bedrooms, 1 bath, family room with separate eating area, laundry room, large inside storage closet w/shelving and full size 2-car garage.
Master bedroom also includes patio doors as a separate backyard exit to the covered patio. New dishwasher, home warranty included. Two community pools, large green belt for children/pets and close to all major shopping, SR51 and Loop-101 freeways.
For further details and pictures, visit the property's web site at http://www.house8622.com/
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
CITY OF SCOTTSDALE-UNPAVED ROADS AND DUST CONTROL TOPIC OF NOV. 28 MEETING.
Scottsdale's Environmental Quality Advisory Board hosts a meeting to discuss unpaved roads and dust control at 7 p.m. Nov. 28 at Sonoran Trails Middle School, 5555 E. Pinnacle Vista Drive, Phoenix. The meeting is being held at a Phoenix location because it's the closest facility for residents living in the affected area. Advisory board members will moderate the meeting, solicit citizen input and make recommendations to the Mayor and City Council.
Representatives from the Arizona Department of Environmental Quality, Maricopa County and the city will discuss new federal, state and county regulations and how they affect Scottsdale.
To learn more about this issue, visit http://www.ScottsdaleAZ.gov/airquality/dustcontrol.asp
Those who cannot attend the meeting can still comment. Here's how: E-mail comments to lperson@ScottsdaleAZ.gov Mail comments to Larry Person, Senior Environmental Coordinator, City of Scottsdale, 7506 E. Indian School Road, Scottsdale, Ariz. 85251
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Representatives from the Arizona Department of Environmental Quality, Maricopa County and the city will discuss new federal, state and county regulations and how they affect Scottsdale.
To learn more about this issue, visit http://www.ScottsdaleAZ.gov/airquality/dustcontrol.asp
Those who cannot attend the meeting can still comment. Here's how: E-mail comments to lperson@ScottsdaleAZ.gov Mail comments to Larry Person, Senior Environmental Coordinator, City of Scottsdale, 7506 E. Indian School Road, Scottsdale, Ariz. 85251
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Thursday, November 15, 2007
Mortgage rates hold below year-ago levels
Mortgage rates were mostly flat in the week ending Thursday, as mixed economic news kept rate movements in check, Freddie Mac said.
The national average interest rate on the benchmark 30-year fixed mortgage was 6.24%, unchanged from last week. The mortgage carried that same interest rate a year ago and is at its lowest point since May 17. One-year Treasury-indexed adjustable-rate loans were also unchanged at 5.50%.
The 15-year fixed-rate mortgage averaged 5.88%, down from 5.90% a week ago. Last year at this time the loan averaged 5.94%. The five-year, Treasury-indexed hybrid mortgage rose to 5.96% from 5.89%. A year ago that loan averaged 6.04%.
The two fixed-rate loans and the hybrid mortgage required the payment of an average 0.4 point to achieve the rate; the ARM needed 0.5 point. A point is 1% of the loan amount, charged as prepaid interest.
"Higher productivity growth in the third quarter coupled with a larger-than-expected decline in consumer confidence in November sent mixed signals to the current state of the economy," said Frank Nothaft, Freddie Mac chief economist. "As a result, there were no definite upward or downward pressures on mortgage rates this week."
"On a positive note, the National Association of Realtors reported this week an unexpected 0.2 percent gain in September's pending home sales index, which suggests less of a decline in existing home sales for October and November. That said, however, it should be noted the index is still 24% below that in December 2006."
Source: Steve Kerch, MarketWatch
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
The national average interest rate on the benchmark 30-year fixed mortgage was 6.24%, unchanged from last week. The mortgage carried that same interest rate a year ago and is at its lowest point since May 17. One-year Treasury-indexed adjustable-rate loans were also unchanged at 5.50%.
The 15-year fixed-rate mortgage averaged 5.88%, down from 5.90% a week ago. Last year at this time the loan averaged 5.94%. The five-year, Treasury-indexed hybrid mortgage rose to 5.96% from 5.89%. A year ago that loan averaged 6.04%.
The two fixed-rate loans and the hybrid mortgage required the payment of an average 0.4 point to achieve the rate; the ARM needed 0.5 point. A point is 1% of the loan amount, charged as prepaid interest.
"Higher productivity growth in the third quarter coupled with a larger-than-expected decline in consumer confidence in November sent mixed signals to the current state of the economy," said Frank Nothaft, Freddie Mac chief economist. "As a result, there were no definite upward or downward pressures on mortgage rates this week."
"On a positive note, the National Association of Realtors reported this week an unexpected 0.2 percent gain in September's pending home sales index, which suggests less of a decline in existing home sales for October and November. That said, however, it should be noted the index is still 24% below that in December 2006."
Source: Steve Kerch, MarketWatch
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Monday, November 12, 2007
FARMER'S MARKET RETURNS TO DOWNTOWN SCOTTSDALE STARTING NOV. 17.
The Downtown Historic Fifth Avenue Merchants will be hosting a Saturday Farmer's Market from 10 a.m. to 2 p.m. through May, 2008.
The market will feature fresh and seasonal produce, herbs, plans, specialty foods, wines, fine crafts and music. The Fifth Avenue Farmer's Market will also be available Thursday evenings from 3 to 7 p.m. from November 29, 2007 through April 2008.
For more information visit: http://arizonafarmersmarkets.com
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
The market will feature fresh and seasonal produce, herbs, plans, specialty foods, wines, fine crafts and music. The Fifth Avenue Farmer's Market will also be available Thursday evenings from 3 to 7 p.m. from November 29, 2007 through April 2008.
For more information visit: http://arizonafarmersmarkets.com
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
City of Scottsdale Community Design Studio Lecture Series
Fall/Winter Lecture Series Underway.
Scottsdale's Community Design Studio, in collaboration with the ASU School of Design and Phoenix Urban Research Laboratory, is hosting a series of free community lectures to explore issues related to design, architecture, economics and sustainability. Attendees are encouraged to RSVP by calling (480) 312-2647.
Thursday, December 6 - Ann Markusen, Artist Centers - the evolution and impact on careers, neighborhoods and economies, from 6 to 7:30 p.m. in Room 2 of the Granite Reef Senior Center, 1700 N. Granite Reef Rd.For more information on Scottsdale's Community Design Studio go to:
http://www.scottsdaleaz.gov/bldgresources/planning/lectures.asp
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Scottsdale's Community Design Studio, in collaboration with the ASU School of Design and Phoenix Urban Research Laboratory, is hosting a series of free community lectures to explore issues related to design, architecture, economics and sustainability. Attendees are encouraged to RSVP by calling (480) 312-2647.
Thursday, December 6 - Ann Markusen, Artist Centers - the evolution and impact on careers, neighborhoods and economies, from 6 to 7:30 p.m. in Room 2 of the Granite Reef Senior Center, 1700 N. Granite Reef Rd.For more information on Scottsdale's Community Design Studio go to:
http://www.scottsdaleaz.gov/bldgresources/planning/lectures.asp
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
18043 N 24th Pl Phoenix AZ 85032
Spacious Townhouse @ Pepper Ridge Subdivision. This lovely townhouse is located near all major shopping, SR51 and Loop-101 freeways.
Click here to view property's web site www.house8622.com
Click here to view property's VideoWalk(c) @ 777 Real Estate TV
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Click here to view property's web site www.house8622.com
Click here to view property's VideoWalk(c) @ 777 Real Estate TV
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
Friday, November 02, 2007
A New Measure of the Housing Market
It could be the perfect investment instrument, at least for these times.
With housing markets roiling and tumbling across the country, debt markets in a tense and fragile holding pattern, and nervous but plentiful global capital waiting on the sidelines, a former investment banker, in partnership with some powerful investment banks and a rocket scientist, is preparing to launch the latest in real estate indexes in an attempt to break open the derivative market for residential property. It might actually work.
The Residential Property Index, or RPX, a creation of Radar Logic, will track owner-occupied housing in 25 metropolitan statistical areas (MSAs) nationwide. That's nothing new. What is new is that RPX will update its numbers daily, and, unlike other indexes, it will reflect about as simple a metric as real estate has to offer: price per square foot.
The data used by RPX will be drawn from public sources and will be provided in one-, seven- and 28-day snapshots for each MSA, along with a composite of all 25 cities. Although a beta version of the 28-day cycle can already be viewed at www.radarlogic.com, trading isn't expected to begin until September. That's when broker/dealers that have already licensed the index, including Morgan Stanley (nyse: MS - news - people ), Merrill Lynch (nyse: MER - news - people ) and Lehman Brothers (nyse: LEH - news - people ), will begin offering it to their institutional clients.
Radar Logic was founded more than three years ago by Michael Feder, a former Credit Suisse managing director. Feder says he initially "set out to solve the problem of enabling capital markets participants to trade values in markets that were large but not commodity-like"--in short, to create "a steady stream of spot price data." He also calls it a "surrogate" spot market for housing.
A reliable price benchmark has been a holy grail for real estate buyers and sellers, especially since transparency in real estate transactions began to creep into the marketplace in the early 1990s, with REITs and securitized mortgages requiring more accurate reporting. (In commercial real estate, the growth of the REIT market was just one embodiment of this trend over the past 15 years, and the return of REIT-owned properties to the private markets has caused some concern over the loss of transparency.)
In order to set the stage for what he calls "participation in value away from asset ownership," Feder and his partners have built a model that he says is "proprietary but not secret." Broker/dealers will not be allowed exclusive use of the information, he says. Thus, any partner that creates a new index based on RPX data--for example, one based on high-flying markets like New York, Los Angeles and San Francisco--will have to make that index available to other investment managers.
In light of the current housing market malaise, Feder is at pains to point out that RPX is not a market forecasting tool but instead offers a "following perspective." It is posted nine weeks, or 63 days, after closings have been recorded. The index will reflect "actual closing values from transactions involving homes, not securities."
Just how big is the market? Big, Feder believes. The Federal Reserve estimates the value of owner-occupied real estate in the entire U.S. at just over $22 trillion. In the 25 cities from which the Fed gets data, there is $13 trillion in value, with just under $2 trillion in annual turnover.
"Our expectation," says Feder, "is that if the capital markets want to trade equity value, this is likely to be a very large market."
He may not be far off. Robert F. Dall, a Wall Street veteran involved in the inception of the commercial mortgage-backed securities market, thinks the new vehicle will catch on. "There should be a lot of trading in that index," he says.
That's certainly what Feder & Co. hope for as they bring their creation up against existing vehicles like the Standard & Poor Case-Schiller home price index, the current industry standard for residential real estate pricing. Case-Schiller is thinly traded, primarily on the Chicago Mercantile Exchange (nyse: CME - news - people ). Feder says that his index will reflect more information, including sales of new single-family homes and condominiums, and the sales of homes out of foreclosure.
"Case-Schiller is an econometric Index," he says. "Ours is a spot price index reflecting every arm's-length transaction" in the markets it covers.
The mathematical wizardry behind the RPX formula comes from Ventana Systems, a Massachusetts-based designer of dynamic systems whose clients include NASA.
To select the MSAs for RPX, Radar Logic considered the top 50 U.S. cities with estimated residential values (according to U.S. Census data) of $1 trillion or more.
"The top 35 capture a huge majority of the value," says Feder, noting that some states employ nondisclosure laws that prevent the collection of accurate data. One of those state is Texas, where, he says, all property sales are recorded with a residential value of one dollar
Another partner in Radar Logic's growth is Jonathan Miller, the CEO of Miller Samuel, a leading New York residential appraisal firm. Miller will provide research related to the RPX data.
Along with predicting that more MSAs will be added to RPX in the future, Feder also hopes to develop an index for the commercial property industry. It may not have the total volume that the residential market offers, but numerous derivative products have already been launched or are in development. And that price per square foot metric is, if anything, even closer to the valuation question of commercial property.
That suits Feder fine. "A trade is a trade," he says, "and a market is a market."
Source: Peter Slatin, Forbes/Slatin Real Estate Report
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
With housing markets roiling and tumbling across the country, debt markets in a tense and fragile holding pattern, and nervous but plentiful global capital waiting on the sidelines, a former investment banker, in partnership with some powerful investment banks and a rocket scientist, is preparing to launch the latest in real estate indexes in an attempt to break open the derivative market for residential property. It might actually work.
The Residential Property Index, or RPX, a creation of Radar Logic, will track owner-occupied housing in 25 metropolitan statistical areas (MSAs) nationwide. That's nothing new. What is new is that RPX will update its numbers daily, and, unlike other indexes, it will reflect about as simple a metric as real estate has to offer: price per square foot.
The data used by RPX will be drawn from public sources and will be provided in one-, seven- and 28-day snapshots for each MSA, along with a composite of all 25 cities. Although a beta version of the 28-day cycle can already be viewed at www.radarlogic.com, trading isn't expected to begin until September. That's when broker/dealers that have already licensed the index, including Morgan Stanley (nyse: MS - news - people ), Merrill Lynch (nyse: MER - news - people ) and Lehman Brothers (nyse: LEH - news - people ), will begin offering it to their institutional clients.
Radar Logic was founded more than three years ago by Michael Feder, a former Credit Suisse managing director. Feder says he initially "set out to solve the problem of enabling capital markets participants to trade values in markets that were large but not commodity-like"--in short, to create "a steady stream of spot price data." He also calls it a "surrogate" spot market for housing.
A reliable price benchmark has been a holy grail for real estate buyers and sellers, especially since transparency in real estate transactions began to creep into the marketplace in the early 1990s, with REITs and securitized mortgages requiring more accurate reporting. (In commercial real estate, the growth of the REIT market was just one embodiment of this trend over the past 15 years, and the return of REIT-owned properties to the private markets has caused some concern over the loss of transparency.)
In order to set the stage for what he calls "participation in value away from asset ownership," Feder and his partners have built a model that he says is "proprietary but not secret." Broker/dealers will not be allowed exclusive use of the information, he says. Thus, any partner that creates a new index based on RPX data--for example, one based on high-flying markets like New York, Los Angeles and San Francisco--will have to make that index available to other investment managers.
In light of the current housing market malaise, Feder is at pains to point out that RPX is not a market forecasting tool but instead offers a "following perspective." It is posted nine weeks, or 63 days, after closings have been recorded. The index will reflect "actual closing values from transactions involving homes, not securities."
Just how big is the market? Big, Feder believes. The Federal Reserve estimates the value of owner-occupied real estate in the entire U.S. at just over $22 trillion. In the 25 cities from which the Fed gets data, there is $13 trillion in value, with just under $2 trillion in annual turnover.
"Our expectation," says Feder, "is that if the capital markets want to trade equity value, this is likely to be a very large market."
He may not be far off. Robert F. Dall, a Wall Street veteran involved in the inception of the commercial mortgage-backed securities market, thinks the new vehicle will catch on. "There should be a lot of trading in that index," he says.
That's certainly what Feder & Co. hope for as they bring their creation up against existing vehicles like the Standard & Poor Case-Schiller home price index, the current industry standard for residential real estate pricing. Case-Schiller is thinly traded, primarily on the Chicago Mercantile Exchange (nyse: CME - news - people ). Feder says that his index will reflect more information, including sales of new single-family homes and condominiums, and the sales of homes out of foreclosure.
"Case-Schiller is an econometric Index," he says. "Ours is a spot price index reflecting every arm's-length transaction" in the markets it covers.
The mathematical wizardry behind the RPX formula comes from Ventana Systems, a Massachusetts-based designer of dynamic systems whose clients include NASA.
To select the MSAs for RPX, Radar Logic considered the top 50 U.S. cities with estimated residential values (according to U.S. Census data) of $1 trillion or more.
"The top 35 capture a huge majority of the value," says Feder, noting that some states employ nondisclosure laws that prevent the collection of accurate data. One of those state is Texas, where, he says, all property sales are recorded with a residential value of one dollar
Another partner in Radar Logic's growth is Jonathan Miller, the CEO of Miller Samuel, a leading New York residential appraisal firm. Miller will provide research related to the RPX data.
Along with predicting that more MSAs will be added to RPX in the future, Feder also hopes to develop an index for the commercial property industry. It may not have the total volume that the residential market offers, but numerous derivative products have already been launched or are in development. And that price per square foot metric is, if anything, even closer to the valuation question of commercial property.
That suits Feder fine. "A trade is a trade," he says, "and a market is a market."
Source: Peter Slatin, Forbes/Slatin Real Estate Report
This Blog is brought to you by the 777Team. The 777Team specializes in Scottsdale Luxury homes, investment properties, Scottsdale real estate, Phoenix real estate, or real estate in any of the surrounding Valley Cities, such as Paradise Valley, Pinnacle Peak, Tempe, Chandler, Mesa, Cave Creek, Carefree, Glendale, Peoria and others. Buyers, Sellers or Investors are encouraged to visit the 777Team's website at www.e-Scottsdale.com as it is designed to be a one-stop source for all real estate information and consumer research for properties throughout our Valley Cities and community information.
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