Tucson Real Estate News

Driving home the other day, I heard an ad on the radio that caught my attention.  A teenager and her father were discussing her high school education, and she was touting the benefits of Arizona Virtual Academy...a fully accredited online school.  Some of her reasoning seemed solid:  personalized instruction, regular phone and IM contact with instructors, daily homework, etc.  "It isn't an old correspondence school," was one of her lines.

Intrigued, I looked up the website at home to see more about it...lo and behold:  this is a full-on school for ages K-12!  The only requirement for enrollment is that the student must live in Arizona to qualify for free tuition. 

My first thoughts were, "How Cool!"  and "Education is catching up to the technology," even "how convenient for working students."  As I put more thought into it, the less I liked it.

I embrace technology and see the benefits that can come from enhancing one's education by utilizing the convenience of online classes, but I can't endorse it as a replacement for the classroom.  In my own experience of the past couple of years, online education is decent, but I learn better in a classroom setting.  The lessons stick in my mind stronger and I learn more by interacting with not only the instructor, but the other students.

For a child, cutting off a major avenue of social interaction and group dynamics can only be to their detriment.  Call me old fashioned, but I hate to think that this kind of school is the wave of the future, except when used to enhance the physical classroom or in special circumstances.  School is not just a book and a plan, it is a place and its own community.

The Virtual Academy is interesting and I wish the students success...but I will be sending my children (if I ever have any) to a bricks & mortar school.

         Kent Simpson

It has been interesting the past 2 days, reading what is going on with the drop in stock prices of both Fannie Mae & Freddie Mac.  I've had the luxury of a little time today to read several different articles about the whole shebang.

The most interesting thing is the disparity between the headlines and the quotes from analysts & investors within the same article!  While a banners consistently scream of impending doom, the body of the articles consistently quote financial industry insiders who say the same thing:  "Don't panic, cooler heads will prevail," and talk about the fact that "these companies are too important to the overall U.S. economy to be allowed to fail."

The point I'm trying to make is that disaster sells soap, and the media counts on the general public reading only the headlines, not the story underneath.  We have to educate our clients, colleagues and anyone we can that there is more than panic underneath the clouds.  It may be raining, but the sky is not going to fall.

There are some difficulties, and interest rates may well go up, but to buy into the doom of the headlines without knowing the story underneath will only make people miss the opportunity that is right in front of them.  Isn't it smarter to buy an umbrella today, when they are plentiful and affordable than wonder why you can't get one later?

        Kent Simpson

In a June 5 Senate hearing about "The State of The Banking Industry," John Dugan, Comptroller of the Currency, announced that bank examiners will require management to obtain new appraisals due to market or project changes when needed, and take action when appraisals show that current value no longer supports a loan.  

In the hearing before the Senate  Banking, Housing and Urban Affairs Committee, Dugan allowed that in many cases an adjustment to reflect current market conditions, rather than a full appraisal could be sufficient, and that examiners should allow banks ample time to have appraisals completed and corrections made.

Reflecting upon the 1980s, Dugan reminded the committee that  "In too many instances, because bankers were reluctant to adjust appraisals to reflect current market conditions, examiners were forced to unilaterally make such adjustments." 

Other speakers at the hearing were: Sheila Bair, chair, Federal Deposit Insurance Corporation; John Reich, director, Office of Thrift Supervision; JoAnn Johnson, chair, National Credit Union Administration; and Donald Kohn, vice chair, Board of Governors, Federal Reserve System.

It will be interesting to see how this is implemented and whether it goes smoothly or becomes a battle of "tug & shove" between the banking industry and regulators.  The reaction, not the rule itself, will be an indicator of how this will affect the general public.  Will the industry take the medicine and move along to do business, or will it resist...to the detriment of us all?

          Kent Simpson

How much is your money going to cost you next year? 

Whether the price of the home you are looking to buy goes up or down a little bit, the biggest uncertain factor in today's economy is whether interest rates will continue to hold steady.  Interest rates are climbing up, but are still very good!

For example:  Lets say you are buying a home that costs $250,000.  You are going to pay for it with an FHA loan, with a 3% down payment--keeping your out-of-pocket expenses low.  Look at the difference between today's common 6.5% interest rate vs. an increase of 1 percent:  (insurance & taxes not included)

                                VS.       

Big difference, huh?  Just one simple percentage point might not look so different at first glace, but to think of it another way:  you are paying the equivalent of buying a $275,000 home at the same interest rate. 

Now does it get a little bit clearer? 

With all of the doubts and uncertainty floating around, there are sure to be changes coming in mortgage rates.  Why not lock in an interest rate that is good in an historical sense.  Since home prices are lower than in the past few years AND interest rates are still good...the time to buy is now!

          Kent Simpson