Housing Doom

Last February an Arizona Republic article stated:

Your rent is rising faster than your paycheck. A new report this morning shows Valley renters will pay 5.4 percent more this year, to $785 a month.

That monthly rent is just about equal to the average weekly paycheck of $794 in Maricopa County. But wages are rising just 4 percent a year, and on top of that, consumers are already dealing with rising energy prices and soaring health care bills.

With vacancy rates projected to fall below 5 percent for the first time in years, renters won’t see many give-backs from their landlords this year, according to real estate brokerage Marcus & Millichap.

L checked ARMLS for us then and reported:

Don’t drink the tap water. Something is causing these people to hallucinate. There are so many rentals its a price war.
 
Total number of properties found: 7275 ACTIVE RENTALS

L checked again for us again yesterday- you know, to see how many of those rentals disappeared.  The current number:

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Hat tip to AZKevan for this Arizona Republic article:

An Arizona regulatory board has ordered Zillow.com to stop offering its online estimates of home values.

The Arizona Board of Appraisal has issued two cease-and-desist letters to the popular real estate Web site, claiming Zillow needs an appraiser license to offer its "zestimates" in Arizona.

"It is the board’s feeling that (Zillow) is providing an appraisal," said Deborah Pearson, Board of Appraisal executive director.

I love the Zillow website.  I use it a lot.  [No they don't pay me to say that.]  I do not use their "Zestimate number," which is Zillow’s estimate of a property’s value.  I do like their information on square feet, price history and recent sales in the area.  Zillow is the best tool I know for individuals to determine a GENERAL idea of what a property is worth, without consulting a professional.

The "Zestimate" is not an appraisal- their website clearly states:

The Zestimate™ (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value.

I suppose there might be people who believe the "Zestimate" to be the final authority on a property’s value, and  make either a purchase offer or list a home according to that value.  Then again, buyers and sellers might use "How much Joe next door got last summer" as a guide, or consult a Ouija board.  That’s one of the reasons Arizona law requires a REAL appraiser to get involved before closing–to hopefully protect the clueless.  [OK, given some of the inflated appraisals that have been given in the last few years, a lot of people probably would have been better off with a Ouija board, but that's a post for another day.]
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Remember when housing was the new paradigm with the limitless upside?  Now commercial office space is the new "new paradigm" for Phoenix.

Last September, the Real Estate Journal reported that the Cooling Housing Market in Phoenix Doesn’t Dampen the Commercial Sector:

Phoenix’s rapidly cooling housing market hasn’t damped the region’s commercial real-estate market. From a new football stadium for the Arizona Cardinals with a design inspired by a desert cactus to more than 16 million square feet of offices, warehouses and retail stores slated to be built in the region this year, the area’s commercial sectors are expanding at a brisk pace amid rising rents and falling vacancy rates.

Some 5.3 million square feet of office buildings are scheduled to be built in the region this year, about double the amount delivered in 2005, according to Property & Portfolio Research Inc., a Boston-based research firm. Meanwhile, some 7.4 million square feet of new retail space is to be delivered this year, up 26% from last year.

The commercial growth has been fueled by a continuing surge in population and employment, says Marshall J. Vest, an economist at the Eller College of Management at the University of Arizona. New arrivals first purchase homes, and now are helping to drive demand for places to shop and work, sending rents higher and triggering more commercial projects that previously didn’t make sense economically, Mr. Vest says. Over the next five years, office, retail, warehouse and apartment rents are all expected to grow at above-average rates, PPR says.

Apparently, unlike the residential side of the industry, commercial was to remain "bullet-proof."

Fast forward to April 2007.  In Wednesday’s Arizona Republic:

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