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  #1  
Old Posted Feb 10, 2013, 8:12 AM
HX_Guy HX_Guy is offline
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Metro Phoenix Housing Development Thread

A lot of talk about future housing development in the Transit thread, and then an article today on AZCentral, I figured maybe we should have a thread to discuss this subject (and the Transit thread could get back to focusing on transit).

The article on AZCentral shows that developers (and in turn people) are still going to the fringes because of cost, that's where land is available and where it's the cheapest.

http://www.azcentral.com/business/re...nd-growth.html


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  #2  
Old Posted Feb 10, 2013, 9:30 AM
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phxSUNSfan phxSUNSfan is offline
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The AZ Republic is known for overly optimistic outlooks and complete avoidance of climate issues. For a view of why Phoenix could be headed for negative growth if sprawl continues, I will start with why economic activity could stall in Phoenix which would mean little population growth:

"Fishman sees a more realistic scenario in which 'places like Chicago start using their water supplies to woo companies.' Companies like Intel, whose water-guzzling microchip plants sit near bone-dry Phoenix. This could could have all sorts of implications for where economic growth occurs in the future — shifting, for instance, the balance of prosperity from the Sun Belt back to the Rust Belt. And it might not be too far off. Because while the average person may not think much about the future of water, says Fishman, 'these huge corporations have water security on their top-five lists of critical issues.'"

http://www.salon.com/2012/03/31/the_..._water_crisis/

The AZ Republic article always avoids the issue of water scarcity which gives people the false impression that a problem doesn't exist and growth can continue unmitigated.

But the AZ Republic article does indicate some things to keep an eye on:
1) The land purchases are mostly in communities started before the crash and in some ways echo growth in the boom years, except the developments farthest from Phoenix’s core aren’t yet attracting builder or buyer attention. Most of the land purchases are inside the outermost freeways.
2) Growth is projected to continue at a steady pace for the next few years, with the number of houses built to stay below 50 percent of the number that went up in the peak boom year of 2006.
3) Whether new-home buyers flock to the West Valley like they have to the southeast isn’t a sure thing. And so far, neither builders nor home shoppers are doing any serious buying in most parts of Pinal County or west of the White Tank Mountains. New-housing developments in Pinal and the far southwest Valley were hurt the most by the crash.
4) “The ‘drive until you qualify’ homebuilding trend worked before because the mortgage market didn’t really require borrowers to qualify for the loans they were taking out,” Brown said. “Lending guidelines are much tougher, and borrowers will really have to be able to afford the payments on a new house.”

That could mean that population growth will remain at today's averages of below 2% over the long-run. We also run the danger of another housing crash or devaluation of the market, negating any increase in home values we've recently seen if too much is developed and supply outpaces demand.

This also ignores the fact that the desert Southwest will continue to get hotter: "It's been a record hot summer in many cities across the nation. Phoenix is no exception. This Sonoran Desert metropolis already records more days over 100 degrees than any other major U.S. city. Now, climate models predict Phoenix will soon get even hotter." Sparwling urban heat islands won't make it an attractive place people will want to continue moving to.
http://www.npr.org/2012/08/14/158776...-hotter-future

Last edited by phxSUNSfan; Feb 11, 2013 at 3:27 AM.
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  #3  
Old Posted Feb 10, 2013, 5:39 PM
Leo the Dog Leo the Dog is offline
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I don't think the climate change debate is gonna discourage anyone from buying a brand new home in the desert. It will ultimately come down to personal finance and economics. Price of transportation, utilities etc.

People are still investing and building massive high rise condo buildings 10 feet above sea level in South Florida.

I expect a short term boom along the fringe but it will ultimately become unsustainable in the long term.
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Old Posted Feb 10, 2013, 8:28 PM
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phxSUNSfan phxSUNSfan is offline
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Quote:
Originally Posted by Leo the Dog View Post
I don't think the climate change debate is gonna discourage anyone from buying a brand new home in the desert. It will ultimately come down to personal finance and economics. Price of transportation, utilities etc.

People are still investing and building massive high rise condo buildings 10 feet above sea level in South Florida.

I expect a short term boom along the fringe but it will ultimately become unsustainable in the long term.
One reason why climate change will inevitably lead to fewer houses and less people moving to AZ in the long run is because resources will cost more over time. The price of water will increase, the price of electricity (necessary to air conditioning of course), and ultimately the cost of doing business here will skyrocket. This means we will see less employment in Arizona and little to no growth. Why would people move here with no employment opportunities?

The climate issue is longer term; currently Phoenix is "growing" due to a better housing market but the jobs created are one dimensional yet again. They are tied to unsustainable growth and mostly from retail. No one can afford a house and qualify for a mortgage working at Walmart.
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Old Posted Apr 18, 2013, 7:09 PM
HX_Guy HX_Guy is offline
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Good video on the current Phoenix housing market and future forecasts. Seems the prediction is continued outward growth at about 80% of new builds with 20% being along transit corridors.

http://www.arizonarealestatenotebook...ket-explained/
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  #6  
Old Posted Apr 18, 2013, 7:33 PM
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Arquitect Arquitect is offline
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Many times, people go to the fringes not only because of price, but also because it is the only option available. The reason prices close to the core are more expensive is because there is more demand and a lot less vacancies. People are forced to look at the fringes. If there was more housing in the core, we would see prices drop, and without a doubt we would see the trend of people moving to urban areas continue.
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