Every now and then M sends me a listing to show me just how far the Phoenix market is fallen. Check this out-
How about a 2006 lender owned property, 3,884 square feet, 5 bedroom, 2.5 bath, 2 car garage for $124,900, or $32/s.f.
It’s true it’s out in the town of Maricopa (which is a bit of a drive) but from the pictures in the listing, it looks like the property is in nice shape with cabinets, fixtures and everything. (And the listing does state that "Broken windows will be repaired prior to close of escrow")
The property is in the subdivision of Maricopa Meadows. I did a post on another property located in Maricopa Meadows back in October 2006. The property for sale then was a 2005 home, purchased originally for $296,437. It was 3,212 square feet and was listed for $330,000. [I doubt they got it, you could buy the same model from the builder at the time for $246K, or about $77/sq. ft.] Stil, that’s a heck of a haircut in just over two years.
It’s true that it’s not conveniently located, but with lower gas prices, people are more likely to be tempted to make the drive than they were last year. That’s going to put more pressure on prices closer in.
With prices so low in the outskirts, that leaves us with the question, "Just how low will Phoenix prices still go?"
So far all we know for sure is "lower".
they’ll keep heading down for a while. about 2 years ago someone explained it to me like this…..take a target and lay it over a map of phoenix with the bullseye over central phoenix (or any major city). you’ll find the begining of the bubble on the bullseye……then over time it spreads to the next ring, and the next ring and so on…..until it pops. the declines begin with the outer ring and continue over time all the way back until it gets to the bullseye. but it will always get back to the bullseye. some zip codes have hung in there and there are ALWAYS exceptions to the rules…..but for the most part, if your neighborhood hasn’t been hit, it will be.
Yossarian,
I would be interested in your comments.
As a matter of fact, there are 20 properties in the city of Maricopa listed in the MLS that are built in 2005 and later ranging from 85k to 150k and at least 3000 square feet.
I am sure other outer areas are cheap too like Casa Grande, Buckeye, Surprise, etc, etc.
the bullseye analogy above is accurate only to a point:
check out maryvale terrace! ok, its a shithole, but the area is quite close to downtown, and you can buy homes there for literally next to nothing. Heading towards detroit level pricing, where they just give you the home for the back taxes… (ok, high velocity lead poisining might be a risk if you went there to collect your rent!)
other similar zipcodes are seeing the same implostion: condos that sold for 140k are now 20k… Though once again, after repairs,taxes,the very low rent they command (550 a month which might easily drop in this recession) and HOA’s that could suddenly climb due to not receiving dues from most of the neighbors, well make your own decision. I’m a realtor, but I’m not really interested in driving anybody around there to sell any! and I certainly don’t want to manage them!!!!
I’d post some specific examples, but the crappy flexmls is not working tonight!
AZRob-
If you want to post listings, may I suggest using ZipRealty’s site? Whenever M or L sends me a listing, rather than post the listing from the MLS, I use Zip’s search, find the listing, and post that. Less info, but more reliable than what you get from ARMLS, but ARMLS puts the agent’s name on the listing and using Zip lets me keep their names private.
Hi, Surak…. I tried emailing you directly, but apparently something is wrong with the email address you sent Twist. Anyway..
… Azsaluki has the pattern right on, in a broad sense .. remember, two years ago, almost every SMSA had people home shopping using the ‘drive until you qualify’ rule of thumb.
This breaks down however, when you consider work commute patterns. There are more people in the US commuting from suburb to suburb than there are people commuting from suburb to downtown. This has been true in almost every metro, for at least 25 to 30 years.
What this really means is, cities don’t have real centers anymore. But you knew that.
Take Phoenix. The geographic center of Phoenix is now somewhere north of Northern Avenue (now probably up by Cactus). But 35 years ago, it was not much higher up than say Indian School or Camelback. That’s when Phoenix ‘planners’ decided to try the multiple urban cores, and ring-freeway approach to growth. Multiple centers. Easier to constrain growth in theory, because now every home can be close to a downtown… or ‘center’.
But look what’s happening now. The center of growth for the foreseeable future is likely to be government (federal – Arizona is already #1 in state budget deficits), which isn’t spread out much. Old downtown is infrastructure. Old downtown is courthouses, government, light rail, warehouses, and someday… that old Amtrak rail station will be back up and running. That’s stuff that can’t be duplicated easily.
So… yeah, so long Queen Creek, Maricopa, and god knows what else … in five years, the landscape will start to return to the desert. Watch for the headlines in Ahwatukee … they’ve always prided themselves as being a separate enclave, and are somewhat resistant to housing declines, in a broad sense. But wait until Motorola goes into receivership, and defense spending drops. That combined with the Alt-a resets just starting, will gut big sections of the ‘town’.
Merry Xmas, and keep a happy thought. Wise men (and women) have plenty of time to consider the future.