“The Last Man Standing On The Road To Nowhere”
A housing report from the Arizona Republic. “In another sign that the condo conversion market is declining, a company that was converting a large Tempe apartment complex to condos announced Friday that it is going to lease the units as apartments instead.”
“The CG Development Group, of Chicago, decided there was a greater need for apartments because the market is flooded with condos, according to company staff. About 60 of the 660 units had been pre-sold, and those owners will get their deposits back, said Chris Day, a publicist for the company.”
“Several real estate experts say they are seeing more of these ‘reversions’ and that they are proof the condo conversion craze that began several years ago has peaked.”
“‘There are still people looking around for property with the intent to convert to condos,’ said Ron Brock Jr., vice president and director of sales for a Scottsdale multifamily housing research firm. ‘The last man standing is not smart enough to realize it’s already over.’”
“He and Terry Feinberg, president of the Arizona Multihousing Association, said they have heard of other complexes intended for condo conversions in Tempe and elsewhere that have reverted to apartments.”
“Jay Butler, director of the Arizona Real Estate Center, said he wasn’t surprised. Butler said he was around to see the apartment-to-condo conversion market in the 1980s wither away.”
“‘In a sense, the concept (converting apartments to condos) is a reasonably good idea, but there was just too much. You just can’t handle the mass in a reasonable period of time. You can only absorb so much into the market,’ he said.”
“The latest condo conversion market was driven by a shortage of houses for sale. But that situation eased a year ago, and last month there were about 15,800 homes for sale in the Southeast Valley, according to the Arizona Regional MLS.”
“All the units in the Haven, formerly known as the Meridian Corners Apartments, are being stripped out and getting makeovers, complete with granite countertops. They will be available for lease in February at prices ranging from $850 for a studio to $1,400 for a two-bedroom, two-bath.”
“A remote parkway in the far West Valley nicknamed the ‘Road to Nowhere’ is poised to become Main Street for nearly 1 million people. More than a dozen huge developments are sprouting up on both sides of the 30-mile-long Sun Valley Parkway, west of the White Tank Mountains.”
“Buckeye, with just 30,000 residents, has been annexing so much land it’s about to rival Phoenix in sheer size. Deep-pocketed developers bought huge swaths of land west of the mountains and already have started building the first of more than 300,000 homes.”
“‘This is Buckeye’s shot at growth,’ said Kevin Johnson, a real estate agent. ‘If it’s done right and bosses and their employees want to live in the new developments, then companies will move to them and bring jobs.’”
“Buckeye needs jobs because new homes already are going up. And without jobs there, people have to commute on the already clogged I-10.”
“In 2000, fewer than 50 new homes were built in the town. Last year, 5,000 went up. The town stretches across 230 square miles but is planning for 600 square miles.”
“Sun Valley’s developers are thinking big, too. Douglas Ranch, still in the planning stages, will span almost 34,000 acres and have as many as 83,240 homes.”
“People already have moved into new homes in the 12,812-acre Tartesso at the southern gateway of Sun Valley Parkway. Nearly 49,000 homes are planned for the project. Many fringe areas draw buyers with low prices, but homes in Tartesso are now selling in the high $200,000s, close to the Valley’s median new-home price.”
“Farther north along the parkway is Trillium, a 3,000-acre project that could sprout 7,200 homes. Pulte Homes is building Sun City Festival with 7,200 homes in north Sun Valley.”
“Transportation already is an issue. I-10 is jammed with commuters as well as big-rig trucks making the drive between Phoenix and Los Angeles. Every day, more than 100,000 vehicles travel the portion of I-10 that bisects Goodyear.”
“Drew Brown, president of DMB, which is developing Verrado, has joked that with all the projects planned for Buckeye, I-10 would need more than 20 lanes.”
“One plan is to build a road west of Sun Valley that would connect to the East Valley. But there is no money to build it.”
“‘We want to show the nice lines on the map for new roads and work out a plan to pay for them,’ said Bob Hazelett, senior engineer with the Maricopa Association of Governments.”
Want a Phoenix condo?
‘Students attending Arizona State University’s newest campus love their academic environment but say their college experience isn’t quite what they hoped because downtown Phoenix does not yet have all the amenities they want and need. There is no grocery store within walking distance, and dining options are limited. Downtown is a maze of construction, with no grassy areas or parks. ‘Everything closes so early down here,’ said Kaylin Hasselquist, an 18-year-old freshman nursing major. ‘I mean nothing is open.’
‘So, how do ASU administrators rate their own performance so far? Reasonably well, as it turns out. ‘Overall, I’d give us a B-minus,’ Cook said. Students, however, have a slightly different take. ‘I think I’d have to give them two grades,’ Carfagno said. ‘I’d give them a B-minus too, as far as the classes and the buildings and all that stuff goes. But if we’re including the campus, I’d say maybe a C-minus. Actually, probably a D, now that I think about it.’
‘Several cases in the Queen Creek area may launch the next chapter in the fight against fissures that are pulling homes and yards apart. One homeowner is suing her property’s previous owners and real estate agents involved in the deal while several others are considering similar lawsuits. Another has filed a complaint with the Arizona Department of Real Estate, which could issue fines. It may be a sign of things to come.’
‘I’m sure there are a lot of other attorneys that, once they hear about this case, will watch it,’ said David Sandoval, an attorney who filed the lawsuit on behalf of resident Joan Etzenhouser. It is the latest round in an ongoing battle between home buyers and developers, which over the past decade in Arizona has included scores of lawsuits over new-home issues such as shoddy construction, inadequate drainage, HOA rules and unreported nearby nuisances.’
no money for roads? make the developers build em.
municipalities will miss developers real soon- low and no growth dufusses are crowing now- wait till 07-
When the words “no money” start to appear watch out.
Believe it or not builders do pay for their infrastructure. At least they are charged and then pass on the costs. The problem is usually that the municipality mishandles their end.
Really? How? Are you saying they are being charged for the infrastructure that they build in the development (streets) or the additional infrastructure that becomes necessary in other locations (highways leading to the developments in the middle of nowhere).
Around here, the party line is usually that all the infrastructure will be paid for using the property tax revenue…
In most, if not all of CA, developers put in the infrastructure. Of course, this cost does get passed through to the eventual buyers. Where are you at geographically, annata?
Oregon.
I’m wondering what you mean by “infrastructure” that the developer is paying for. Do you just mean the streets and utility hookups inside the development, or also the ones outside the development that become necessary because of it? Does it also include law enforcement and emergency response coverage in the development?
I’m not too keen on subsidizing ex-urban sprawl with my tax dollars, although I’m pretty sure that this is happening.
I’m not too keen on subsidizing ex-urban sprawl with my tax dollars, although I’m pretty sure that this is happening.
Nope, exurban sprawl is the only development model that makes municipalities money.
The “make money” calculation includes the cost of all the infrastructure required to get services out to the ex-urbs? (highways, water, sewer, emergency response coverage, etc)
Makes money in the short term, maybe? Over the long term keeping up all that extended infrastructure becomes fantastically expensive, especially if there are a lot of extra facilities like schools and commercial areas that come along for the ride.
Annata,
What will be fun to watch is when cities start figuring out it doesn’t make sense to have an off ramp, police/fire service and street lights to a sub-division w/three families living there! I mean, at what point does serving a “community” largely populated by empty specuvestor homes cease to make economic sense? Just think of the waste, no matter who got stuck w/the original bill.
In Oregon, generally, builders pay System Development Fees, which generally only cover street improvements. Schools are paid for by the entire district.
Portland closed the schools early last year to in part pay for their light rail expansion.
That’s one way to look at it. Another way to look at it is to say that they closed early to give several hundred million dollars of tax breaks to companies like Intel. Or to give tax breaks to luxury condo developers who get double mileage out of the break by charging their customers a premium equal to the value of the tax break itself. There were lots of priorities other than the lightrail that were deemed higher than the length of time that Portland schools stayed open …
yes, but developers aren’t going to put in an expansion of I-10 to 20 lanes to support the enormous expansion outside of PHX. none of these insta-towns have any kind of job base much above minimum-wage misery at the Home Depot; FBs will have to commute to the city and close surrounds.
True, I agree it will be a mess when all these folks hit the main highway.
My guess is the developers are counting on retirees. That’s who’s been populating AZ recently, and they do keep coming … probably not in large enough numbers to fill the McMansion tracts. But, even if they do come, think how many of the retirees are themselves funded by pension agreements written in disappearing ink !
Everyone is hitting on the edge issue of one of my areas of interest.
Builders routinely buy raw land and turn over streets with sidewalks and underground utilities and roight-of-way and sewers all to city specs over to the municipality as a condition of development. In CA these are CUPS. Often they also satisfy “will-serve” conditions with further dedications to schools, fire, police and parks. Then to compound the issue Mello-Roos and Special Assesment Districts are formed with no resident participation in the process.
Yes, abuses in both directions exist and more often than not the next developer is only paying for the deficiencies of the last but who wants a perfect government?
In Texas, the developers do that by creating special taxing (water I think) districts whose boundaries are only the developer owned land. Then they move in a couple employees (onto mobile homes parked on the development) and hold bond elections, with all 3 or 4 employee-residents voting. Presto, the money to pay for everything will be paid back by the suckers who buy the homes they build, who find they get an extra (undisclosed) debt.
“‘This is Buckeye’s shot at growth,’ said Kevin Johnson, a real estate agent. ‘If it’s done right and bosses and their employees want to live in the new developments, then companies will move to them and bring jobs.’”
That one’s so breathtakingly assinine that I don’t know where to start.
Yeah, I didn’t see any mention of all the office buildings, R&D parks, manufacturing plants, distribution centers being built and what plan they had for luring jobs. Any room for anything but malls & fast food joints after all the houses are built or is that the real economy ?
Sorry to say, Ed, but Kevin’s Buckeye reasoning is in line with what we hear in Tucson.
I agree that it sounds assinine. However, this is what happened to some degree in Cincinnati. As home building expanded along I-71 north of the city and outside the outerbelt, companies followed in building research centers, IT centers, etc out that way. Soon those 50 minute commutes to downtown became 10 minute commutes. It didn’t take as long as you would expect for employers to follow workers into the outer suburbs. I don’t know if it will happen in Az, but it happens here in Cincinnati, Dayton, and Columbus. New commercial employment centers follow the people out of downtown.
How about bring the industry first ,than build the houses . Don’t know what kind of industry would fit out there .
Anyway ,I’m glad to see that they refunded the money/deposits back to those people that did buy into that condo conversion turn back to apartments project . At another project they converted it back to apartments without any regard to the people who had already move in and bought them as condos .
That’s why I decided to buy into a already established used tract of SFR’S. The tract has been around for 12 to 13 years and has mature landscaping etc.
After taking care of a big yard for years I was looking for a smaller yard also with community green belts and park-like settings .I got what I wanted for retirement .
I don’t know if a bunch of baby boomers are going to want to move to Arizona ,but it use to be a major retirement destination.
I just think Arizona over-built lately and had to much speculator demand .
Wizard: if you build it (houses), they will come (industry). At least that is the mantra. Just outside the bay area in San Joaquin County, there is a development named Mountain House. They must have at least a couple thousand homes out there by now, with approval for many more thousands. The closest real employment is at least 30 minutes away without traffic (never). The project was sold on the idea that businesses would relocate there and the residents could live next door. I’d say the chances of that are slim to none. It’s a real crap hole location with lots of wind and few trees. It used to be all dairies. Of course, the reason we wind up with this stuff is because nobody wants new development in their neighborhood (NIMBY). Typical CA attitude, I got mine, eff you! Very short sighted, and IMO we will look back on this with regret.
Oh, industry is moving out that way.. It doesn’t stop to settle down at the new deelopments…. it just keeps on going until it crosses the state line.
WHen new home tracts use to expand they use to expand a 10 minute drive at a time ,industry would move in ,and than another 10 minute expansion . Being 2 hours away from jobs is just a little out of it . I think speculators bought rather than end-users so much .Now jobs are needed for end-users .
“‘This is Buckeye’s shot at growth,’ said Kevin Johnson, a real estate agent. ‘If it’s done right and bosses and their employees want to live in the new developments, then companies will move to them and bring jobs.’”
so the developers’ theory is “build and they’ll come”, i don’t see how this would work, ppl. like to stay close to work, and the current work centers are pretty far from here. the saving grace may be a lower mortagage bill, but i don’t see a price difference between living here and phoenix (or the other established job hubs.)
zee, couldn’t agree with you more. This agent is high. Why would the owners of companies want to move there? I’m pretty sure they already have a nice home in an area that has a bit more to offer. The cost savings to the company would have to be pretty significant to justify that kind of move. I would think they’d be just as likely to leave the state.
Some much to muse over, so little time.
a) The student who duplicates herself ” ‘Everything closes so early down here,’ said Kaylin Hasselquist, an 18-year-old freshman nursing major. ‘I mean nothing is open.’” Duh: If Everthing is closed there is not need to futther clarify with ‘I mean nothing is open’. We understood first time !
Other thing is the idjiot now suing for fissures after she waived an inspection. Let’s see her prove who everyone else knew about it at the time of sale. Buy in haste, repent at leisure.
If Everthing is closed there is not need to futther clarify
We understood first time !
Yeah, nobody duplicates themselves
Slightly off topic but remember Gary Watts from Orange County. Well guess who just visited my blog after doing a google search for his name…
I can’t imaging the government going after anyone unless they are mega mortgage fraud brokers… hey isn’t Gary a large broker…?
Maybe some employee at the FTC is a bubble head??
Gary Watts should be tarred and feathered then dropped off at the state line with instructions to never return to CA.
Damn. I hate not being able to edit a post after I press the button.
hmmm…people who live in glass houses…..
Should get dressed in the darK ?
Can’t walk around in their underwear.
…never take a dump
“Buckeye, with just 30,000 residents, has been annexing so much land it’s about to rival Phoenix in sheer size. Deep-pocketed developers bought huge swaths of land west of the mountains and already have started building the first of more than 300,000 homes.”
ATTN: All Baby Boomers planning to retire to Florida - You’re now desperately needed in Arizona.
All of you.
Sorry, Florida.
LOL!
300K homes? Surely they jest.
What? Don’t they understand the next Lethal Weapon is to be filmed in Lancaster? Not Buckeye. Hmph! Pretentious little town…
Will this be an economic development battle? Cities begging Hollywood to use their burbs as movie sets for mass destruction scenes? I can see it now.
Dude,
Can you just imagine how awesome of a Godzilla movie they could pull off? Imagine the police/army chace. Tanks ramming half way through a completed McMansion to fire their guns…
For some reason, this always keeps coming back to popcorn…
Neil
It would make a good western movies, with saguaros, snakes, and all kinds of brown things.
CA Guy– NOPE, they’re not (pls pass the crack pipe). Out in the middle of the god forsaken desert. 35 or so miles west of downtown phx. Have stopped in a couple of times in my back and forth between OC & Phx. At least as of early October, they were going great guns on building…..
Saw what had to be a couple hundred homes done, and maybe a dozen that looked occupied. Kinda eerie–late in the afternoon, wind blowing, and yes, a couple of tumbleweeds rolling by. Great set for a spaghetti western.
Absolutely NO services there– gas, groceries, ANYTHING. 8-10 miles for that.
Google view of the area. It’s that lite colored area in the middle (3 miles off I-10).
http://tinyurl.com/ykufzg
“Buckeye, with just 30,000 residents, has been annexing so much land it’s about to rival Phoenix in sheer size. Deep-pocketed developers bought huge swaths of land west of the mountains and already have started building the first of more than 300,000 homes.”
Where is all of the water coming from? Surely there must be some massive water importation plan that I haven’t heard about, because that desert is dry. I even heard that the ski area up in Flagstaff was only open 15 days last year. Yikes.
The article says they have plenty of water as long as they can find a source to replace all the water they use. Of course, the same thing is true on the moon.
Fast forward and this place sounds like it could resemble the housing version of that dead-airplane storage place somewhere out there in the desert.
‘The government on Monday filed civil charges against former Fannie Mae chief Franklin Raines and the mortgage giant’s former finance chief and controller, seeking fines and the return of millions in bonus money said to be tied to an improper accounting scheme.’
‘The Office of Federal Housing Enterprise Oversight announced that it filed 101 charges against Raines, former chief financial officer Timothy Howard and former controller Leanne Spencer.’
Ben: I read the whole announcement from OFHEO and I hope this case goes somewhere. Raines took almost $92 million during his six years. With the CFO and Controller we’re looking at close to $130M. This at an entity with an $11 billion accouting problem. I don’t know if the Senate and House have any say in this, but I’m thinking I might write my reps asking them to pound these crooks deep and hard. And why is Fannie not de-listed?????????!!!!!!!!
Finally.
Channel surfing last night and came across a public access station for Thousand Oaks, ca. I didn’t realize it at first because some guy was blathering on about how great the real estate is in Thousand Oaks and how wonderful it is to see all these new developments along the 101 from Thousand Oaks to Oxnard and Ventura. Couldn’t see where he was going with all of his cheery prognosis about how it gave him a great feeling to see all the new people enjoying their new houses and what a wonderful place Thousand Oaks is for families, etc, etc. By now my nostrils were twitching as the stink of b.s. got stronger and the familiar sound bites were injected into his talk. As the camera moved onto a new face, leaving the grinning face of the speaker, I realized it was some kind of local Thousand Oaks council gathering……….and then the odor became recognizable. A REALTOR!! The council members nodded and smiled. 99% seemed to be in their 60’s. They probably all bought their houses in the 70’s for $100,000. Then the camera panned back to the realtor and the crap continued to pile up. What annoyed me more than the crap he was spouting, was the fact that NOBODY questioned him. Not one person said, for instance, “Will there be a problem with traffic considering all these new drivers from these developments will be using the 101 which is already grid locked.” Nada. Nothing. Just acceptance that this promoting dickhead’s yada-yada was straight from the bible and shouldn’t be questioned. Finally, I couldn’t stand the smarmy a**hole anymore and switched to another channel but, obviously, the realtors are still out there spinning their webs and inviting the GF’s in with (and he ACTUALLY SAID THIS!) “There has never been a better time to buy.”
We have become a nation of sound bite followers. “Stay the course.” “Now is the best time to buy.” “Values can only go up.” “A new direction.” I’m seriously thinking of cutting the power wire on my tv.
Any Realtor who tells a client, “There’s never been a better time to buy” should be sued for breaching a fiduciary duty. Realtors have an obligation to make full disclosure to their clients. Now is not the best time to buy; that was several years ago.
Can anyone tell me where the water for Buckeye’s million people will come from?
From the Colorado River. Which is already oversubscribed.
Sweet Fancy Moses. Buckeye. If y’all could see this land, you’d laugh. It makes Bakersfield look like Honolulu.
You mean like:
Arizona: 50%
Nevada: 50%
California: 50%
(and the remaining 50% going to Mexico)
?
There was an article today in AZ Republican on the water issue in Buckeye. Go to: http://www.azcentral.com, it’s on front page. All developers in AZ are suppose to be able to show a 100 yr water supply (I bet there are shenanigans going on with that). Also, related to earlier article regarding fissures in Queen Creek area…these are mainly caused by pumping out groundwater, over time.
Forgot to add that there is suppose to be a large aquafier in the Buckeye annexed area that all these developers are looking to get water from.
“But builders can’t just start drilling wells. They must secure other water sources to replace what they pump out, a requirement that could raise the cost of living in the new subdivisions.”
What other water sources are there to secure?
They (developers and City Gov) plan on using “recharged” water to replace some (ie, irrigation, runoff, treated sewage) water. Cities also look to CAP (Central Az Project - water via the canals, which is mostly water from AZ’s portion of Colorado river) - however most of thats already claimed. Once thats gone, Cities look to Indian Reservations, to see if they have “extra water” they want to sell. After that, who knows. My guess in the coming decades, is the whole West (which is, and has been, in severe drought for many years) will start looking at desalinization (sp?) plants in CA and a public works project to get that water to the entire western area of the US, lol.
They’ve got it all figured out. Seriously:
“Part of the town sits on the Hassayampa River aquifer. The aquifer holds enough for Buckeye’s new developments to have water for the state-mandated 100 years as long as builders recharge as much water as they pull from the ground, according to the two-year survey by environmental engineering firm Brown and Caldwell.”
So the Hassayampa Acquifer will become a giant urine filter, and they’ll cover the whole town with a plastic tarp to prevent any evaporation.
albrt,
None of us really want to think about how many times our water has been “recycled” over the years. Some things are better off left unthought.
Anyway, when they build the houses and no one buys, Hollywood will have an opportunity to destroy a few hundred houses for cheap, sorry Lancaster.
Also, who would want to like right next to the Palo Verde Nuclear power plant? One mistake and the plume is right over all of this new develpment.
For those that aren’t familiar w/the area, the Hassayampa is a long trench in the sand for virtually the entire year.
It appears that the engineering firm had a sip off the riverwater already–I remember hearing this growing up in Phx:
There is a legend centuries old,
by the early Spaniards told
of a sparkling stream that “Lies”
under Arizona skies.
Hassayampa is its name
and the title to its fame
is a wondrous quality
known today from sea to sea.
Those who drink its waters bright
red man, white man, boor or knight,
girls or women, boys or men,
never tell the truth again!
Maybe a Realtor or two as well.
and so it begins………….
http://news.yahoo.com/s/afp/20061218/bs_afp/iranforexbank_061218114915
putin tried too
man he’s turned out to be a bummer- when china gets ired of us= whammo
We’ve been hearing about this for a while now. I’m honestly confused as to what the effect will be for the dollar. OT, I know, but the value of the dollar at least ties to the blog.
Personally, I think it will have no noticeable effect. They’re doing this to avoid our scrutiny of, and interference with, their transactions and holdings. It’s just politics, IMO.
Ben,
Since we are on the subject of failing AZ condo conversions what is happening with those butt ugly floresent colored conversions behind the movie theater? I’m assuming they’re conversions, I was there in August and the place was desereted except for contractor vehicals. I rented there for a short while I was going to NAU and can’t imagine anyone wanting to actually buy there. Why anyone would want to paint anything the color those things are in such a beautiful area as Flagstaff is beyond me.
No surprise with Buckeye going large. I’ve said for the last 10 years that developers want to make the I-10 a complete strip mall from Phoenix to LA.
OT, but does anyone else here get annoyed with the names given to these bubble communities? In the AZ article we have “Tartesso” and “Trillium.” WTF does that have to do with anything?? The worshipping of labels in the US is getting out of hand. Are those names supposed to make the FBs feel prestigious? Honestly, if you have to put a label on your community then at least have it reference something, anything relative to the immediate area/region. Or is this area so barren that “Dirt” was the only alternative?
CA Guy - your post made me laugh, even though you’re right. Awhile back, my wife refused to look at a listing on Hog Liver Road, simply because of the address. In the Deep South, we often have the opposite problem from what you described — overly literal descriptions of the area or what it’s noticed for.
Yeah, this “Tuscan” phase will get worn out just like the “Gardens” did when every apartment complex began using it as a suffix.
Today’s Trillium = Tomorrow’s Knickerson Gardens
My grand parents used to own a good deal of land out by Buckeye. I remember as a kid in the early 80s what a berg Buckeye was and remained well into 2000. My grandparents used to let us drive a VW Thing all over out there, we explored mines, went hunting for birds around the White Tanks and along the Hassempa River, collected bottles and old junk at all the abandon sites.
it strange they don’t mention the US’s largest nuke plant Palo Verde just a few miles away.
That’s interesting. They don’t build nuke plants unless they have an abundant source of water nearby. Too bad your family doesn’t have that land today.
As I recall, PV nuke was supposed to use city of Phx greywater for cooling. Kinda funny how “Sun Valley Parkway” is actually named Palo Verde road on the other side of I-10!
Sorry if some of this info. was posted already…
Lansner blog: Housing’s ill hits Black & Decker
http://tinyurl.com/lzgbg
wow, they’re REALLY running out of land in the Phoenix metroplex!
The next boom might be for senior housing. Probably in condos bought out of forclosure. Of course as they move more houses drop in to the market.
I too have spent a lot of time around Buckeye. These subdivisions are really on a road to nowhere, just north of dairies, and the Palo Verde nuclear power plant, 45 minutes on I-10 from downtown in good traffic. 1 1/2 hours in bad traffic. But don’t worry it’s just desert for another 125 miles west to Quartsite- home of the biggest RV squater spot in the world. - There is no more land-
Downtown Phoenix - lived there- great for Diamondback games. Five bars, three of them gay, one topless bar, and no grocery stores- Oh I forgot Hooters, so that’s 6 bars. Also a couple of eating places and movie theater by Hooters, close at 10 pm. Walk around at 12 pm, noone around but you and the homeless. Oh forgot the transvestite hookers up by the freeway!
Even Glendale is far out. Went to first Cardinal game…and won’t again. An hour from Tempe!!!