Sapsucker or flicker ... it's a bird. Probably will not do permanent damage unless that is the trunk. of a tiny tree.

More worrying is how close it appears to be to your house ...

Looks like you might have a bird issue - a sapsucker which is a kind of woodpecker.

Yes, the tree is close to the house and highly visible from a second floor bedroom window. Is that bad?

If you have trees as foundation planting (2'-3') you get a lot of wind-rubbing damage to the tree and to your house. As the trees get older you risk limb damage to your roof and windows.

My preference is to keep trees 15'-20' from houses and leave shrubs as foundation plants.

not to mention that improper historical prune near the top of the pic ..

the tree above that prune.. will fail ... when the wood inside rots .. and the tree above grows to extreme weight ...

it will happen.. in a wind storm.. or an ice storm in winter ... when??? .. who knows.. anytime in the next few decades.. or next winter ... lol.. no clue ....

we would need a pic of the whole tree... to give you any concrete advise as to its placement ...

ken

Can I see that the tree has been wired together at the top of the picture there? That won't be good for it either.

Very observant floral_uk! That wire looks as if it was just recently installed to keep the branch from leaning out too much. It's going to girdle the branch and kill from that point on.
The 'tree' appears to be a branch of a birch tree planted way too close to the house. I'd just leave it be until it falls away from the house when it gets larger. It will begin to lean more and more until it's removed.
Ice won't do it in ken, the OP is in Phoenix.
Around here aphids chew on the leaves causing a sticky soot mold on everything under it, cars, windows, and other plants.
I had no idea a birch could survive in Phoenix. I've never seen one there.
Mike...Birchless in Seattle

Mike, the OP is in z4B.

Whoops!
I was looking at Lazygardens page.
Mike