Many thanks to J for the following contribution:
I remember you had a story about how there were several years worth of $1M+ properties in the East Valley awhile back. I couldn’t find the story today so I don’t have the exact numbers [You can see it here.- T.] but it made me think of what things must be like here in north Scottsdale. Even in a melting real estate market, people here are snapping up high end real estate just to have new appliances and granite counter tops, right? Actually, the numbers are quite shocking. In north Scottsdale, which consists of the 85255, 85262 and 85259 zip codes, there are 235 (!) homes on the market listed for $3,000,000+. Only 45 of these $3M+ homes sold in a rolling year- meaning there is NEARLY A 6 YEAR SUPPLY OF THESE HOMES! On it’s own, 85259 has a 10 YEAR SUPPLY OF $3M+ HOMES!
Here’s the breakdown:
85255 – Silverleaf, DC Ranch, Troon, Estancia, Desert Highlands
14 sold in a rolling year, 83 for sale85262 – Desert Mountain, Mirabel, Legend Trail
28 sold in a rolling year, 152 for sale85259 – Ancala
3 sold in a rolling year, 30 for sale[Listing numbers were pulled from the public MLS, and the sales numbers were pulled from the Arizona Republic's homes sold site.]
The sheer greed and the "I’m better than everyone" attitude caused by housing ATM wealth that I have witnessed in Scottsdale over the past few years is certainly disappointing. But seeing someone trying to sell a gussied up, southwest style home for 3M takes the cake. If you look at the actual listings quite a few of them have to utilize the "night shot" sales approach or an "interior picture". This usually means the house is a dog from the front in broad daylight and doesn’t look like it’s worth anywhere near what they are asking.
In your article, I remember you saying: "C’mon this isn’t Beverly Hills". Well, that is certainly appropriate here. After all, $3M+ will get you an ocean view in California’s melting real estate market.
In Scottsdale, as in other areas of the Valley, the ratio of sellers to buyers is greater at the upper end of the market than it is at the lower end. That is going to put more pressure on prices as well. There are those who claim that wealthy buyers are less impacted by market forces, and as a result, the luxury end of the market will be affected. I disagree. If anything, the downward pressure will be grater on what is obviously a more saturated market.
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GREAT ARTICLE!! Maybe just MAYBE, these homeowners and real-estate agents will FINALLY learn one thing: The real estate market has run out of suckers who will pay some ungodly expensive price for a house. No, I take that back; they will never learn….. and history keeps on repeating itself. Greed surely has no bounds in real estate- until a crash happens, and one has already started.
I can’t believe anyone would pay 3 million to live in Phoenix. No offense but if you can afford 3 million for a so so house live where its pretty at least. My god buy your own island.
Sequoia-
No offense taken. Phoenix is my home town- and I wouldn’t pay $3M to live here either. : )
These are what I call styrofoam sh**boxes. These houses do not have a very long shelflife. They start to fall apart as soon as they are built. Let’s see, start off with the assumption that these houses are built with the shoddiest materials, cutting corners, with unskilled workers as a given. Now watch what happens when you put styrofoam on the outside of the house with 1/32nd of an inch of stucco on it!
I have seen what happens to these houses when they take too long to build, they have to sandblast the styrofoam off, and put new on. The stucco just hides what’s going on underneath. And imagine what you can’t see.
These places are literally and figuratively houses of cards!
[Slight edit- I'm a bit of a prude. T.]
An interesting trend in real estate that we will be hearing about in the comming weeks. The number of REALTORS renewing their membership is expected to be off by about 20% this year. Even more are dropping out of the industry while keeping their membership active. What this means besides fewer REALTORS: Those that are left in the business are far less likely to take overpriced listings. This seems to be already happening in a few overpriced markets as listing are not free to a broker and maintaining a large inventory of overpriced homes is costing them dearly. The greybeards I know will not take an overpriced house and will demand that the owner get his own appraisal if they are insistent. The few REALTORS that do take any listing are going out of business as none of their many listings are selling. Also, the “list only” real estate companies (ex: list your house for $295) are taking away much of the lower priced listing. Should be an interesting new year.
There are homes in the Phoenix area, in the Paradise Valley area, which are worth $3M. Nonetheless, I believe a majority of the home in Phoenix are over-priced, including those in North Scottsdale.
Sorry T!
Three million dollar homes in Scottsdale. I’ve always found Scotts and PV overpriced, period. There are homes actually worth three million in Scottsdale? I wouldn’t pay that for Taliesen West! For god’s sakes, the place is running out of water, and has no native industry but agriculture!
Read Jim Kunstler’s site (http://jameshowardkunstler.typepad.com/ … he talks about Phoenix and Scottsdale quite a bit. Not in a positive vein.
I agree with most of what he says about Phoenix, and I confess to be a Phoenix native (AHS).. heckfire, my father was born in the ‘water users village’ back in the Depression!
Three million dollar houses?
Pull the other one!
Yossarian,I have just checked out Jim Kunstler’s site, and did not find a reference to Phx. Can you pls point me to the right post? Many thx.
That is SOOOOOO TRUE!! Even still, the sheeple keep marching up to buy these houses. Doesn’t it make you want to laugh (or cry) when you hear some of these real-estate agents and builders advertising “Award-Winning” homes? What kind of “Award” would that be? I would say that the “Sh**-Box of the Year Award” would describe these glorified cardboard boxes. And, the sheeple continue marching up to buy……..
[Slight edit- I'm a bit of a prude.- T]
Sorry about my last post. I forgot to list the post that I was quoting: Here’s the quote
“These are what I call styrofoam sh**boxes. These houses do not have a very long shelflife. They start to fall apart as soon as they are built. Lets see, start off with the assumption that these houses are built with the shoddiest materials, cutting corners, with unskilled workers as a given. ”
That is SOOOOOO TRUE!! Even still, the sheeple keep marching up to buy these houses. Doesn’t it make you want to laugh (or cry) when you hear some of these real-estate agents and builders advertising “Award-Winning” homes? What kind of “Award” would that be? I would say that the “Shit-Box of the Year Award” would describe these glorified cardboard boxes. And, the sheeple continue marching up to buy……..
“These are what I call styrofoam sh**boxes. These houses do not have a very long shelflife. They start to fall apart as soon as they are built. Let�s see, start off with the assumption that these houses are built with the shoddiest materials, cutting corners, with unskilled workers as a given. ”
My neighbor used to work for a large home builder in town and made an 80-proof confession one night. The shortage of qualified workers to build quality homes was in such shortage during the peak, that home builders would hire almost anyone who could swing a hammer. The obvious result is new home construction standards are not quite up to snuff. Keep that in mind if you are looking to buy a ‘newer’ home.
Not quite a sh** box, per se, but I would be very careful where and what I would buy.