Phoenix Development News - Page 5

Krasna Sreča · July 13th, 2006, 10:57 AM

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ragerunner1 · July 25th, 2006, 08:51 PM

With the crashing housing market just starting its down turn in the Phoenix area, I would not look for any new residential towers, (that are not currently underconstruction) to be built in the next 3-5 years. The residential market in Phoenix along with Florida is probably ground zero for this crash. Also, I am not sure the Phoenix metro area is growing as fast as the estimated numbers show. I just saw an article the other day that talked about how estimates were not in line with reality once they started to take data samples of some of the neighorhoods in the Phoenix area. What they are finding is so many of residential units that have been built actually have no one in them. Thus making construction of residential units (building permits) not a good source to determine population growth. Florida is also finding this out. The number of students for this coming school year is significantly less than what was projected. Supply and Demand in the Phoenix area is why out of hand, along with all of the Interest only loans, and ARMs (adjustable rate mortgages). Add in income to housing cost being way out of balance, and you have highrise residential projects that are, at best, on life support.
With this said, I am not anti-Phoenix, I think it would be great to see the city continue to become more urban in design. I just believe that the market forces are in for a major adjustment.

Don B. · July 25th, 2006, 10:22 PM

^ Why would you post the same content in two different threads?

See my response below, which is incorporated herein fully by reference:

http://www.skyscrapercity.com/showth...=375461&page=3

ragerunner1 · July 26th, 2006, 05:03 PM

Don B.
I hope you are right. But, all the data that I have been looking for says that the US is in for a major downturn. With the previous hot markets like Phoenix leading the way.
Example:
Phoenix area:
Average Household income: around $50,000
Average home price: $250,000 (5 times the average income, ouch!)
Residential units for sale around: 50,000
Interest only Loans and ARMs, estimated around 40% or more of all home sales over the last couple of years.
Economy $1 out of every $3 generated from housing

Doesn't look good for future projects.

ragerunner1 · July 30th, 2006, 06:15 PM

Arizona Republic,
"Demand from buyers continued to wane and builders pulled fewer housing permits again last month. There were 4,842 home-building permits issued Valley-wide in June, down 26 percent from last year's record pace, according to RL Brown's Phoenix Housing Market Letter.

For the first half of 2006, home building is down 19 percent from the same period last year. Resales are down more than 25 percent, Brown reported, and there are a record number of homes for sale in the Valley."

Don B.
These numbers don't look so good for future highrise or residential demand. And, this is only the being of the downturn. With all the ARMs and I/O adjusting this year and over the next few years along with all the investors (flippers) get burned at the same time. The market will have to fall to a level that local income can afford a average home price. That is a long ways down.

ragerunner1 · July 30th, 2006, 07:04 PM

"In the Phoenix metro area, inventory spiked from 10,748 on 7/20/05 to 51,557 on 7/5/06 according ZipRealty and Bubble Markets Tracking Inventory. This represents an incredible increase of 379% year over year."

bubblemeter.blogspot.com

AzChristopher · July 30th, 2006, 07:11 PM

Quote:

Originally Posted by ragerunner1

Arizona Republic,
"Demand from buyers continued to wane and builders pulled fewer housing permits again last month. There were 4,842 home-building permits issued Valley-wide in June, down 26 percent from last year's record pace, according to RL Brown's Phoenix Housing Market Letter.

For the first half of 2006, home building is down 19 percent from the same period last year. Resales are down more than 25 percent, Brown reported, and there are a record number of homes for sale in the Valley."

Don B.
These numbers don't look so good for future highrise or residential demand. And, this is only the being of the downturn. With all the ARMs and I/O adjusting this year and over the next few years along with all the investors (flippers) get burned at the same time. The market will have to fall to a level that local income can afford a average home price. That is a long ways down.

You are over exagerating. The truth of the matter is people are still buying. Houses are still on the market for only a couple of months before they sale.

If you go out home buying you will notice a couple of things. First is that the sellers, both home owners and developers, do not understand that its a buyers market. I went to a developer in Suprise that was advertising homes in the 200s. That was of course if you used them to finance the house. Otherwise it was another 80,000 dollars. Likewise with home owners they are still trying to sell on their terms.

One of the huge reasons for so many houses on the market right now is the number of sellers who have put their houses on the market while still living in them. They are not in a hurry to sale. They just want someone to walk in and give them the money they are looking for.

Still there our thousands of people moving into the valley and new jobs across the spectrum from poor to upper class as well. The market is slowing down. Its not going to crash. Even people with ARMs are finding ways to survive.

As for the average household income try not to forget we have a huge population of imigrants and a lot of people that live in apartments. They are not the ones who move into these houses. Those are the ones with the higher amount of income coming in.

AzChristopher · July 30th, 2006, 07:12 PM

Quote:

Originally Posted by ragerunner1

"In the Phoenix metro area, inventory spiked from 10,748 on 7/20/05 to 51,557 on 7/5/06 according ZipRealty and Bubble Markets Tracking Inventory. This represents an incredible increase of 379% year over year."

bubblemeter.blogspot.com

But they are still selling. And they are selling for much higher prices than they were 2 years ago.

ragerunner1 · July 31st, 2006, 03:25 AM

If they are still selling like last year why is their 40,000 more for sales in one year? Something in the market has changed dramatically.

AzChristopher · July 31st, 2006, 03:51 AM

Quote:

Originally Posted by ragerunner1

If they are still selling like last year why is their 40,000 more for sales in one year? Something in the market has changed dramatically.

I didn't say like last year. I said they were still selling. Yeah the market has changed. I outlined that. However, its not the end of the world. And the back end isn't going to fall off.

ragerunner1 · July 31st, 2006, 07:45 PM

AzChristopher,
What data can you point to that supports your opinion that "the back end isn't going to fall off"? The numbers and data I have put forth shows a MAJOR market correction on the way. I am not trying to be combative, I just want to know what historic housing data supports you opinion of no major market adjustment.

Don B. · July 31st, 2006, 08:56 PM

^ You can dispense with the Chicken Little "The Sky is Falling" rhetoric. You are paying too much attention to our "dramatis personae" media, who have a need to sell newspapers. Dumb investors might get burned some in the short term but homeowners like myself who aren't going anywhere are just fine.

In some areas of the city, such as Scottsdale where we live, property values are still increasing. Even if we had a dramatic 20 percent drop in one year (which no one is predicting), you'd still be ahead of 2004's numbers by 20 to 30 percent, given most of the city increased by 40 to 50 percent in 2005. Remember, you still have 150,000 people per year moving here, and they all need places to live.

I'll sum it up this way: If you don't live here, you don't know what you are talking about. My partner is a realtor with Re/Max and we just sold a 1,300-square-foot investment home for $326,000 after paying $247,000 for it in March of 2006 and putting $40,000 into it. That's a profit of almost $40,000 in four months.

There's still money to be made in this market if 1) You know what you are doing and 2) you are not impatient.

--don

ragerunner1 · July 31st, 2006, 09:06 PM

Quote:

Originally Posted by Don B.

^ You can dispense with the Chicken Little "The Sky is Falling" rhetoric. You are paying too much attention to our "dramatis personae" media, who have a need to sell newspapers. Dumb investors might get burned some in the short term but homeowners like myself who aren't going anywhere are just fine.

In some areas of the city, such as Scottsdale where we live, property values are still increasing. Even if we had a dramatic 20 percent drop in one year (which no one is predicting), you'd still be ahead of 2004's numbers by 20 to 30 percent, given most of the city increased by 40 to 50 percent in 2005. Remember, you still have 150,000 people per year moving here, and they all need places to live.

I'll sum it up this way: If you don't live here, you don't know what you are talking about. My partner is a realtor with Re/Max and we just sold a 1,300-square-foot investment home for $326,000 after paying $247,000 for it in March of 2006 and putting $40,000 into it. That's a profit of almost $40,000 in four months.

There's still money to be made in this market if 1) You know what you are doing and 2) you are not impatient.

--don

Don,
We shall see. You may be right. I guess in about a year or so we shall know.

Krasna Sreča · August 7th, 2006, 02:43 PM

Houses aren't being built because there are so many old one for sale that are so expensive people wont buy them.

An example is in Scottsdale, there are such a large number of older houses for sale but none are below 450k. Thats one reason why no one builds new houses, there is no point since so many are empty. This downturn can only lead to lowered prices on houses and then a building boom again.

blueb73 · August 16th, 2006, 05:41 PM

Correct me if Im wrong, but is it a bright idea to build alot of towers in a small area if people are still using there cars for everything?

wouldnt that just make traffic a nightmare?

AzChristopher · August 17th, 2006, 10:38 PM

Not if those towers include shopping, living, work space, and tourism. Especially not when you are also building light rail through downtown.

blueb73 · August 18th, 2006, 12:19 AM

but, is one rail line enough?

ive never lived anywhere where i didnt need a car, so im not really sure what its like....

AzChristopher · August 18th, 2006, 03:28 PM

Quote:

Originally Posted by blueb73

but, is one rail line enough?

ive never lived anywhere where i didnt need a car, so im not really sure what its like....

Depends on how far you are from the line. Obviously the more lines the more people that can ride on them... depends on where they are. Tempe up to Chris Town is pretty good.

AzChristopher · August 18th, 2006, 03:44 PM

Also any city with half way decent density doesn't require the people living downtown to drive. Seattle, San Diego, San Francisco... all cities on the west coast with higher density than Phoenix and no need to have a car if you live downtown.

Paddington · September 4th, 2006, 12:46 AM

I'd love to see housing prices come down a little in Phoenix. It's a city that I'm considering moving to once I get done with my studies in medical school.

Maricopa Medical Center, FTW!

August 17th, 2006, 10:38 PM	#96
AzChristopher Registered User Join Date: Mar 2006 Posts: 246 Likes (Received): 3	Not if those towers include shopping, living, work space, and tourism. Especially not when you are also building light rail through downtown. __________________ www.azchristopher.com

August 18th, 2006, 03:44 PM	#99
AzChristopher Registered User Join Date: Mar 2006 Posts: 246 Likes (Received): 3	Also any city with half way decent density doesn't require the people living downtown to drive. Seattle, San Diego, San Francisco... all cities on the west coast with higher density than Phoenix and no need to have a car if you live downtown. __________________ www.azchristopher.com

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July 25th, 2006, 08:51 PM	#82
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	With the crashing housing market just starting its down turn in the Phoenix area, I would not look for any new residential towers, (that are not currently underconstruction) to be built in the next 3-5 years. The residential market in Phoenix along with Florida is probably ground zero for this crash. Also, I am not sure the Phoenix metro area is growing as fast as the estimated numbers show. I just saw an article the other day that talked about how estimates were not in line with reality once they started to take data samples of some of the neighorhoods in the Phoenix area. What they are finding is so many of residential units that have been built actually have no one in them. Thus making construction of residential units (building permits) not a good source to determine population growth. Florida is also finding this out. The number of students for this coming school year is significantly less than what was projected. Supply and Demand in the Phoenix area is why out of hand, along with all of the Interest only loans, and ARMs (adjustable rate mortgages). Add in income to housing cost being way out of balance, and you have highrise residential projects that are, at best, on life support. With this said, I am not anti-Phoenix, I think it would be great to see the city continue to become more urban in design. I just believe that the market forces are in for a major adjustment.

July 25th, 2006, 10:22 PM	#83
Don B. Phoenician Join Date: Nov 2005 Location: Phoenix Posts: 114 Likes (Received): 0	^ Why would you post the same content in two different threads? See my response below, which is incorporated herein fully by reference: http://www.skyscrapercity.com/showth...=375461&page=3

July 26th, 2006, 05:03 PM	#84
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	Don B. I hope you are right. But, all the data that I have been looking for says that the US is in for a major downturn. With the previous hot markets like Phoenix leading the way. Example: Phoenix area: Average Household income: around $50,000 Average home price: $250,000 (5 times the average income, ouch!) Residential units for sale around: 50,000 Interest only Loans and ARMs, estimated around 40% or more of all home sales over the last couple of years. Economy $1 out of every $3 generated from housing Doesn't look good for future projects.

July 30th, 2006, 06:15 PM	#85
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	Arizona Republic, "Demand from buyers continued to wane and builders pulled fewer housing permits again last month. There were 4,842 home-building permits issued Valley-wide in June, down 26 percent from last year's record pace, according to RL Brown's Phoenix Housing Market Letter. For the first half of 2006, home building is down 19 percent from the same period last year. Resales are down more than 25 percent, Brown reported, and there are a record number of homes for sale in the Valley." Don B. These numbers don't look so good for future highrise or residential demand. And, this is only the being of the downturn. With all the ARMs and I/O adjusting this year and over the next few years along with all the investors (flippers) get burned at the same time. The market will have to fall to a level that local income can afford a average home price. That is a long ways down.

July 30th, 2006, 07:04 PM	#86
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	"In the Phoenix metro area, inventory spiked from 10,748 on 7/20/05 to 51,557 on 7/5/06 according ZipRealty and Bubble Markets Tracking Inventory. This represents an incredible increase of 379% year over year." bubblemeter.blogspot.com

July 31st, 2006, 03:25 AM	#89
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	If they are still selling like last year why is their 40,000 more for sales in one year? Something in the market has changed dramatically.

July 31st, 2006, 07:45 PM	#91
ragerunner1 Registered User Join Date: Dec 2005 Posts: 404 Likes (Received): 0	AzChristopher, What data can you point to that supports your opinion that "the back end isn't going to fall off"? The numbers and data I have put forth shows a MAJOR market correction on the way. I am not trying to be combative, I just want to know what historic housing data supports you opinion of no major market adjustment.

July 31st, 2006, 08:56 PM	#92
Don B. Phoenician Join Date: Nov 2005 Location: Phoenix Posts: 114 Likes (Received): 0	^ You can dispense with the Chicken Little "The Sky is Falling" rhetoric. You are paying too much attention to our "dramatis personae" media, who have a need to sell newspapers. Dumb investors might get burned some in the short term but homeowners like myself who aren't going anywhere are just fine. In some areas of the city, such as Scottsdale where we live, property values are still increasing. Even if we had a dramatic 20 percent drop in one year (which no one is predicting), you'd still be ahead of 2004's numbers by 20 to 30 percent, given most of the city increased by 40 to 50 percent in 2005. Remember, you still have 150,000 people per year moving here, and they all need places to live. I'll sum it up this way: If you don't live here, you don't know what you are talking about. My partner is a realtor with Re/Max and we just sold a 1,300-square-foot investment home for $326,000 after paying $247,000 for it in March of 2006 and putting $40,000 into it. That's a profit of almost $40,000 in four months. There's still money to be made in this market if 1) You know what you are doing and 2) you are not impatient. --don

August 16th, 2006, 05:41 PM	#95
blueb73 Registered User Join Date: Aug 2006 Posts: 116 Likes (Received): 0	Correct me if Im wrong, but is it a bright idea to build alot of towers in a small area if people are still using there cars for everything? wouldnt that just make traffic a nightmare?

August 18th, 2006, 12:19 AM	#97
blueb73 Registered User Join Date: Aug 2006 Posts: 116 Likes (Received): 0	but, is one rail line enough? ive never lived anywhere where i didnt need a car, so im not really sure what its like....

September 4th, 2006, 12:46 AM	#100
Paddington Registered User Join Date: Mar 2006 Posts: 4,509 Likes (Received): 176	I'd love to see housing prices come down a little in Phoenix. It's a city that I'm considering moving to once I get done with my studies in medical school. Maricopa Medical Center, FTW!