The key components in green design include location as it is significant in green construction-ideally, a house will be close to schools, offices, mass transit, and recreation. Also, green homes are just big enough, as opposed to the "bigger is better" mentality that dominated home construction in the 1980s and 1990s. In addition, ventilation and limiting use of materials that could adversely affect air quality is important.

The Energy Star Qualified Home certification is awarded to any home that meets strict guidelines for energy efficiency set by the U.S. EPA; Energy Star houses are typically 20 percent to 30 percent more energy-efficient than standard homes. The National Green Building Certification, which is operated by the National Association of Home Builders, covers environmentally friendly building products and practices for residential design, development, and construction. The Environments for Living Certified Green program relates to the level of energy used to heat and cool homes as well as efficiency in such categories as indoor water use and lighting and appliances.

Seattle's first-place ranking for greenest city is attributed to factors such as it gets 90 percent of its power from hydroelectric plants, its incentives for reduced use of automobiles, and the amount of existing and under-construction LEED-certified public buildings in the city. The other large green cities rounding out the top 5: San Francisco; Portland, Ore.; Oakland, Calif.; and San Jose, Calif.

New homes are more likely to have building wrap and well-insulated attics and basements than old ones. They are also more likely to have efficient double-paned windows and heating and air conditioning systems than those that are more than 40 years old. However, both old and new homes typically have unsealed holes where pipes and wires come into them, which can cause energy loss.

Energy improvements must be installed in a residence between Jan. 1, 2009, and Dec. 31, 2010, to be eligible for tax credits. When filing for these credits, be sure to use IRS Tax Form 5695.

Any green-building program should be followed, documented, measured, and verified. It should also include a resource center for the builder and the consumer.

Let's be green!

AVID Ratings Co., a firm that provides surveys and employee training to home builders across the United States and Canada, conducts an annual survey of home buyer preferences.

The company found the following hot home features reign supreme in today�s market:

1. Large kitchens with an island - No question about it.

2. Energy-efficient appliances and high-efficiency insulation and windows - The most popular green feature.

3. Home office or den - Right by foyer or an extra bed room.

4. Main-floor master suite - IT's getting popular these days.

5. Outdoor living room - For Arizona, it is deep and wide patios or Arizona rooms.

6. Ceiling fans - This is almost the standard for Arizona homes.

7. Master suite soaker tubs and oversize showers with seating areas - Of course.

8. Stone and brick exteriors - Normally the elevation C of new builds.

9. Community landscaping with walking paths and playgrounds - Green belt it is.

10. Two-car garages - Or maybe 3-car garages here in Arizona.

Today's top 10 features will be tomorrow's top sellers. So keep them in mind when you are planning for remodeling or buying a home.

After APL, a shipping container company, moved its regional headquarters from Oakland, CA to the Kierland mixed-use development in Scottsdale. Another San Francisco based company Yelp, an internet review company, announced opening an office in Scottsdale.

While APL brings 300 and 400 new jobs to the Valley, Yelp will employ some 200 sales agents and account managers to market its web sites that offer consumers the chance to review restaurants, bars and other businesses in various cities.

Intel, the major Valley employer is also hiring. Intel has opennings for college graduates as well as positions for 5-10 years experienced professionals.

Apollo Group, the holding company of University of Phoenix, continues hiring since 2009 to keep up with its growth of distance learning programs.

The Institute for Supply Management reported that the monthly index of manufacturing activity rose 58.4 in January after reaching 54.9 in December. It was the sixth straight month of expansion and the fastest pace of growth since August 2004. A reading above 50 signals expansion.

The Commerce Department reported that total construction spending fell 1.2% in December after a downwardly revised 1.2% decline in November. Economists had expected a decrease of 0.5%.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 1% in December. Compared to a year ago, pending home sales are up 11%.

The U.S. non-manufacturing sector rose to 50.5 in January from a downwardly revised 49.8 in December. A reading above 50 signals expansion. Economists had anticipated a reading of 51.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending January 29 rose 21% to 620.7. Purchase volume increased 10.3% to 237.8. Refinancing applications jumped 26.3% to 2,854.8.

The Commerce Department reported that factory orders rose 1% in December. That was double the 0.5% increase economists had anticipated. It was the fourth straight gain and follows a revised 1% increase in November.

The Labor Department reported that productivity rose at an annual rate of 6.2% in the fourth quarter, following a revised third-quarter gain of 7.2%. Labor costs fell at an annual rate of 4.4%.

The unemployment rate fell to 9.7% in January from 10% in December. Employers cut 20,000 jobs in January, far fewer than the 150,000 jobs lost in December. The four-week average for continuing jobless claims fell 51,250 to 4.618 million.

January 2010 was a relatively slow month for sales with a total of 5,788 reported through ARMLS for all areas and types. This is fairly normal as January is a slow month of the year. This compares with 7,611 for December and 4,704 for January 2009. Nevertheless this is the second highest sales count ever for a January with only January 2005 coming in higher at 6,589. The annual sales rate has now risen to 93,420, a level we last saw in May 2006.

Within Greater Phoenix, 46% of sales were REOs with 23.6% short sales and 30.4% normal transactions. So REOs took the same percentage as in December but short sales grew at the expense of normal transactions.

There was a distinct lull in the foreclosure storm in January with "only" 6,762 new notices being filed in Maricopa County. This is the lowest monthly total since November 2008. However the last week of January was busy and I expect February's total will exceed this, so let's not get too excited. Maricopa trustee deeds numbered 4,452 which was 15% lower than December but at a similar level to much of last year.

Looking ahead we see fairly stable $/SF pricing for sales in February with a slight dip noticeable by the third week, driven by lower pricing in the REO market which is less active now than for most of 2009. However we should be able to celebrate our first positive annual appreciation number sometime during the last week of February. With today's overall $/SF at $91.51 and that on February 28, 2009 being $89.77, this is not a difficult target. The typical home owner will probably respond "positive appreciation, are you kidding me?", but I am not kidding. The typical home owner probably does not realize quite how low average $/SF prices were last March.

Above is quoted from Cromford Report dated Feb 3, 2010.

As of 2/2/2010...

Active Short Sale Listings: 15,442
Pending Short Sale Sales: 3,781
Short Sale Sales for the last 30 days: 1,373
$/SqFt for all sales for the last 30 days: $90.72
$/SqFt for Short Sales for the last 30 days: $84.81
$/SqFt for REOs for the last 30 days: $68.97
Short Sales currently represent 23% of the sales for the last 30 days

While I was preparing the Phoenix Housing Market Snapshot for local Chinese newspapers, I came across a few important market drivers I'd like to share with you. These drivers illustrate both sides of the equation of supply and demand.

Supply Side

Active Listings - A balanced market is generally considered to be when four to six months worth of inventory is available for sale. Currently, according to the Arizona Regional Multiple Listing Service (ARMLS), there is 4.8 months of supply as of Nov 29, 2009. When the months of supply is above 6 months, it means houses tend to sit on the market for too long and don't get sold.

Pent-up Supply - According to Zillow's Chief Economist Stan Humphries, 8% of homeowners nationwide said they would put their homes up for sale if the market showed signs of a recovery. These homeowners are a source of pent-up supply that would flood the market as it begins its recovery. As the bucket drains water, they're the ones who will pour water back on top of it. According to Mike Orr, author of the Cromford Report which details specific statistics in the Arizona housing market, there is total of 1,152,408 single family homes (982,397) and condominium (170,011). So 8% pent-up supply is another 92,193 properties or equivlent of 13.88 month of resale volume.

Foreclosures - Foreclosure rates are increasing in many parts of the country just as sales become seasonally slow for the fall and winter. Foreclosures should stay prevalent for the next two years since 2010 will be a major year for resets on option ARMS. According to a statistic from Fitch ratings, 94 percent of option ARM holders aren't paying any principal now but they'll have to when those loans recast in 2010. Similarly, 2011 will be a peak year for resets of Alt-A loans (also known as "no-doc" or "low-doc" loans). If interest rates stay low, then those resets won't be disruptive but chances are that rates will rise.

Demand Side

Homebuyers Tax Credit - The $8,000 credit is extended to April 30, 2010. Adding the newly expanded $6,500 tax credit for the repeat buyers, the tax credit is estimated to increase demand in 2010 by 334,000 incremental sales nationwide. For metro Phoenix, That's about 6 percent up next year, in terms of the volume of home sales or approximately 6,000 properties including both new builds and resale homes.

Interest rates - Rates are at their lowest in 60 years. However, rates will rise as the Fed tapers off buying mortgage-backed securities by the end of the first quarter of 2010. Word on the street is a possible rise of fifty to one hundred basis points in rates even if the Fed Funds rate stays the same. That's a full half a percent to one percent, raising the spectre that today's five-ish percent interest rates turn into tomorrow's six-percent-ish ones. If interest rates rise any higher, no buyers will be able to help unload the pent-up supply brought upon by increasing foreclosures.

Asking Prices vs. Sale Prices Ratio - Home prices around the Valley have rolled back to levels before 2004-2005, if not 2003. Many buyers, owner occupied as well as investors, have seized the opportunity to jump in. This has helped push up sale prices in some markets such as Laveen and Maricopa. As for areas where the ratio of asking prices vs. sale prices is more than 100%, that's where the buyers flocking to.

Pending Listings - A valuable forward-looking indicator revealing the sale volume 30-60 days in advance. It shows the trend and momentum of the demand side. Up until 11/29/2009, number of Pending listings is 11,428, 50% increase comparing to 12 months ago, and this does not include those AWC (Active With Contingent - Seller's Instruction) listings pending lenders' approval of short sale.

At the end of 2009, as you are reviewing what happened in the metro Phoenix housing market, I hope the above indicators help provide some insights.

See you 2010!

After Senate passed last night (11/5/2009) the provisions of the extended and expanded tax credit by the vote of 98-0. The President has signed it into law today.

What does this mean for you?

- More buyers are now qualified and they will soon jump in the pool to grab a piece of government handouts.
- No longer exclusive to first time home buyers, many move-up homeowners are also eligible.
- The income ceiling is pushed up to $225,000 for married couple.
- Time is limited, less people will jump on short sales, many will target lender owned properties only.

The result?

- Housing market will get more momentum through April 2010.
- Bidding war will continue for bank owned properties.
- Listing prices will go up as well as the sales price.

Don't wait! This is the last extension of Tax Credit Bill, ACT NOW!

The Senate is currently working on a bill to extend the deadline from November 30th to April 30th 2010. Congress has also said that this is the last extension. Senate Banking Committee Chairman Chris Dodd (D-Connecticut) has said he expects the chamber to vote on it next week. Obama has already given his support and the general consensus is that he will sign as soon as the bill reaches his desk. Once the bill gets out of the Senate, it will go through the House and then onto the President.

Most sources are reporting that...

- the extension will continue the $8,000 tax credit for first time home buyers but they only have to be in contract by 4/30/2010 and are then allowed another 60 days to close.

- it will expand the bill to allow repeat home buyers who have lived in the home they are vacating for at least 5 consecutive years of the last 8 years. They have a $6,500 limit.

- the bill will increase the income ceiling from $75,000 to $125,000 an individual and from $150,000 to $225,000 for couples.

- the proposed bill will limit properties eligible for said tax credit to be below $800,000.