Michigan's decline began at the turn of the century, not in 2005 as in Arizona. Michigan has not fared well for the past decade. But the last three years have shown a turn around in Michigan:

Employment is the key to recovery everywhere. Expenditures on home-building and home-remodeling can be part of a recovery boost.

Image one of four from NAR's Economists' Blog

Arizona experienced a 25% drop in homeowners behind on mortgage payments from December 2010 to December 2011. In other parts of the country, it’s not so good and Arizona is certainly not in great shape yet. Overall, we have a long-way to go before we’re rid of the shadow inventory that hangs over the housing market.

The National Association of Realtors® Economists’ Outlook blog provided a state-by-state update on shadow inventory today. “Shadow inventory” means homes that aren’t listed for sale yet, but soon will be. As discussed in the NAR blog piece, shadow inventory includes homes in the foreclosure process and homes with mortgages that are delinquent but on which legal foreclosure proceedings (or in Arizona, trustee sale processes) have not started.

I think it’s important to also think of the “looming shadow” as including those homes which have been foreclosed, are now owned by banks, and are sitting on the banks’ books without being put on the market. In Flagstaff, as elsewhere, there are also a lot of homeowners who would like to sell and will sell at the first uptick in prices. When that “shadow inventory” comes on the market, the new supply will put downward pressure on prices, so the home price recovery is likely to be bumpy or at least slow.

Nationwide, only about a quarter of new delinquencies are first-time delinquencies. That means that 75% of the reported delinquent homeowners are folks who were in trouble before and had some short-term resolution that didn’t work. The good news is there is not a flood of newly in-trouble people. Arizona is one of the states that saw a significant drop in new delinquencies during 2011.

In summary, as I’ve said before, things are getting better but the housing recovery is going to be slow.

When you are ready to sell, give me a call: 928-714-0001 and consider my Flagstaff real estate website.

I hear this is a great show: The Theatrikos Theatre Company continues its presentation of Cabaret, on Friday and Saturday, 8 p.m., and Sunday at 2 p.m.  The play brings to life the dark, sexually-charged decadence of 1930s Berlin. It sizzles and provokes with classics such as Wilkommen, Money, and of course, Cabaret.  Continues on weekends through February 18^th.  Doris Harper White Playhouse in downtown Flagstaff.  Tickets.

The NAU School of Music continues its High Country Concert Series on Friday afternoon.  The series presents musical performances by students accompanied by light refreshments and snacks.  High Country Conference Center, 2:30 p.m.

Bundle up and head downtown on Friday evening for Flagstaff First Friday Art Walk.  It’s the monthly celebration of the Flagstaff art community where downtown galleries, businesses and studios open their doors for special shows, performances and refreshments. 6 p.m.

On Saturday, the National Park Service offers an extraordinary treat with a Discovery Hike (guided) into Wupatki National Monument areas rarely seen by the public.  See spectacular ruins and rock art that has been preserved for hundreds of years.  Hikes begin at 12:00 p.m. every Saturday through March 31^st.  Reservations are required.  Hikes are moderately difficult.  Park entrance fee is required.  For more information, call (928) 679-2365.

NAU Men’s Basketball vs. Portland State, Saturday, 6:35 a.m., NAU’s Rolle Activity Center.

To kick off Flagstaff’s celebration of the Arizona Centennial, make plans to be at the Northern Arizona Centennial Fandango on Saturday evening at the Radisson Woodlands Hotel.  Music by the Burnett Family Bluegrass Band with brief remarks by Jim Babbitt and Schnebly Heidinger.  Ongoing show of historic photos, hors d'oeuvres and cash bar.  Period costumes encouraged.  7:30 p.m., $20/person.

Flagstaff Shelter Services is having a Homeless Shelter Benefit Dinner on Saturday evening to raise money and increase awareness of hunger and homelessness in Flagstaff.  A four course meal will be created by seven local chefs from Cottage Place, Karma Sushi, 1899 Bar & Grill, Red Raven, Josephine's, High Country Conference Center and Abineau Lodge.  Cocktails at Coconino Center for the Arts, 5 – 7 p.m., with dinner seating at 7 p.m.  $75 plus 4 non-perishable food items.

Other entertainment picks:  See Flagstaff blues guitarist Ray Rossi at Altitudes Bar & Grill on Friday and Saturday, 7 p.m.  Also on Saturday it’s the Flagslam Poetry Showcase, 7 p.m.  Sundara Fine Art Café and Boutique. $3.  Poetry featuring Christopher Fox Graham, You Phonik, and Evan Dissinger and music by Lilah Rose.

When you’re ready to give Flagstaff living a try, start with my Flagstaff real estate website.

Here's the Inman News report on the new proposal to allow underwater homeowners to refinance at today's lower interest rates. Parts of the plan need Congressional action, so don't hold your breath.

Most blind calls I get these days are from would-be buyers who start by telling me they are looking for a "deal."

Here's a primer on the "deal" mentality, from Inman News columnist Tara-Nicholle Nelson.

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For expert help in cutting down the stress when buying a Flagstaff home, start here: Flagstaff real estate website.

Warren Buffet

In an article in the Omaha World Herald, Debbie Bosanek, Warren Buffet's recently-renowed secretary, discussed her reasons for purchasing a second home and the personal advice she received from Mr. Buffet:

"I just thought it was time to buy a home," she said. "Warren tells me that it will be the best opportunity in my lifetime. Mortgage rates are low and prices have dropped dramatically. Getting a nice home in a great climate for only a $30,000 down payment and a mortgage that has a low interest rate — I've been working 37 years and saving for an opportunity like this.

"I share Warren's view about the future of America, and we believe that our country will do just fine. I'm happy to make this investment."

Perhaps Surprise, AZ is too warm for you. But the rest of the advice is good. Give us a call to buy Flagstaff real estate.

This report from Case/Schiller confirms data reported earlier about November home sales on the national level -- prices down and volume up. December was a somewhat different story and presumably we'll hear that from Case/Schiller in another month.

Meanwhile, remember that all real estate is local. For the latest Flagstaff real estate news, follow this blog and for my latest reports and analysis, see the links below:

December Flagstaff home prices and sales volume down from one year ago.

Experts Target Flagstaff for Early Housing Recovery

When you're ready to buy or sell a Flagstaff home, start here: Flagstaff real estate.

To search the Flagstaff MLS, click here!

Everything, from 1-year adjustable rates to 30-year fixed rates, is lower now than it ever has been in most peoples' lifetimes. Which mortgage program is right for you?

The 15-year mortgage was recently at 3.2% while the 30-year could be obtained at 3.9%, a difference of 70 basis points. The 5-year hybrid ARM is 2.8%. The 1-year ARM is of no value since it is also being quoted at 2.8%. These rates are based on a Freddie Mac survey of lenders.

The 5-year hybrid option is best for those who are fairly sure they will be moving within the next 5 years. On a $200,000 mortgage, the 5-year hybrid monthly payment will be $822 with the remaining loan balance at $177,200 in 5 years. By contrast, the 30-year mortgage will require a $943 monthly payment with the principal balance at $180,600 in 5 years. Both of these monthly payments are lower than rent in Flagstaff.

Have a conversation with a local Flagstaff lender to find out which loan program is best for you -- whether you are buying or refinancing.

Things have been bad with Flagstaff homes sales, but not as bad as elsewhere. And things are likely to get better here in Flagstaff more quickly than in some places (though not as quickly as, say, San Francisco and New York). None of that will be of great comfort to those who have to sell and are underwater on their mortgages. For the rest of us, let's not mire ourselves in doom and gloom -- or be overly optimistic. I'm in favor of realism when it comes to the Flagstaff housing market.

To get started, let's look at where we have been since the housing crisis started. It hit Flagstaff a bit later than the downturn in Phoenix and elsewhere. And, as you'll see from the chart, the impact on Flagstaff's median home price has varied month-to-month.

Let's watch the Flagstaff housing market with realism over the next few months. There are likely to be opportunities for both buyers and sellers. Check out some recent reports in the links below. And when you need to buy or sell, contact me: Ann Heitland at RE/MAX Peak Properties.

I've already got two galleries picked out for this coming Friday's stroll through downtown Flagstaff:

Pieter Schaafsma's "One Man Show" opens this week at Gallery 113 (113 East Birch Avenue).

I also want to stop in at Arizona Handmade/Fire on the Mountain to check out the selection of Debbie Leavitt's Rock & Roll Album.

Of course, there will be much more, as there always is at Flagstaff's First Friday Artwalk.

On Friday evening, the Flagstaff Symphony presents Showcasing the FSO.  Soloists: bad-to-the-bone trombonist David Vining, and Louise Scott, violin; Mary Beadell DiBartolo, cello; Rebecca Kemper Scarnati, oboe; and Kent Moore, bassoon.  Selections include Beethoven’s Overture to Egmont in F Minor, Op. 84; Haydn’s Sinfonia concertante for Violin, Cello, Oboe, and Bassoon in B-flat Major, Hob. 1:105; Tomasi’s Concerto for Trombone; and Beethoven’s Symphony No. 8 in F Major, Op. 93.  NAU’s Ardrey Auditorium, 7:30 p.m.  Tickets.

See JesterComedy standup comedian Bob Kubota on Friday evening at The Orpheum, in downtown Flagstaff at 9 p.m.  Performing since 1987, Kubota’s penchant for dry wit, lighthearted sarcasm and deciphering life’s ironies has led him to shows across the U.S.

Theatrikos Theatre Company presents Cabaret, beginning Friday and Saturday, 8 p.m., and Sunday at 2 p.m.  The play brings to life the dark, sexually charged decadence of 1930s Berlin. It sizzles and provokes with classics such as Wilkommen, Money, and of course, Cabaret.  Fridays and Saturdays through February 18^th.  Doris Harper White Playhouse.  Tickets.

Start Your Own Business with the help of Coconino County Community Services with classes starting on Saturday.  Classes are classroom-based, online or as independent study.  (Classroom training runs 8 weeks in Flagstaff.)  Coconino County Building, 2625 N. King St.

NAU Women’s Basketball vs. Sacramento State, Saturday, 6:35 p.m., NAU’s Rolle Activity Center.

On Saturday, join the excitement at the Northern Arizona Wedding Expo, 10 a.m. – 3 p.m. at the Radisson Woodlands Hotel.  Caterers, photographers, reception venues, DJs and more.  Make all your wedding plans in one place.

Other entertainment picks:  See local singer-songwriter Matt Bingham on Friday evening at Charly’s Pub & Grill at the Hotel Weatherford, 9 p.m.  See up-and-coming, Abilene-based country star Aaron Watson on Saturday evening at the iconic Route 66 Museum Club. 9:30 p.m.

Come live in Flagstaff! It's so much fun!