Phoenix is seeing a boom in housing construction, but this is taking the form of condos, lofts, and townhomes. In fact, the ratio of shared housing developments to single family homes is stunning, with the shared dwellings surpassing SFHs (single family homes) easily.
The Phoenix metropolitan area is growing at a staggering rate; while the city used to be known for having the highest amount of vacant space back in 1997, it’s now seeing that land filled with more and more complexes, sparking bidding wars and fast speculation. Even older buildings that are somewhat decrepit are being bought out and either remodelled or replaced.
All of the cities in the Valley are seeing this phenomenon, from Glendale and Gilbert to Chandler and points east and south. However, Phoenix’s downtown area is, like downtowns in other major cities, seeing a huge renaissance that’s showing no sign of stopping. It’s these developments that are considered the hottest (no pun intended).
Prices are up substantially; downtown condos, in general, have seen a spike of about 15 percent, going from nearly $123 per square foot to $150 per square foot. Like many condo developments, residents pay a fee to fund community amenities like gardens and landscaping, maintenance, swimming pools, and more. Curb appeal is still necessary, but it’s been taking a backseat to the amenities for buyers.
According to Scott Jarson, of real estate firm Jarson and Jarson, the boom in smaller housing units may be related to the Recession. He notes that residents may have rethought how they live their lives and decided that they wanted to spend less while still getting good value for the money. Combined with downtown Phoenix’s revamped inner core, and these residents now want to make the area a real community.
This is something that may be unique to Phoenix. “In other cities, like Las Vegas, it’s the business people and companies who decide what housing will be built and where it will go.” says Catherine Castaneda, a realtor who markets the top Las Vegas condos available in Nevada.
Instead, Phoenicians themselves are showing developers that they want certain types of housing in certain areas, and the developers are listening and producing. It may also have to do with the population in Phoenix, a highly creative and involved community that wants to be nearer the action.
Jarson also notes that the complexes may become even more diverse as time goes on. Right now, many are being developed into typical condo communities. Soon, though, Phoenix may see a trend toward more live/work spaces that provide various services.
High-efficiency housing is also becoming more common, something necessary given the need for comforts like air conditioning in Phoenix. Combined with built-in garages that reduce the need for extra horizontal space for parking, these newer units help make the city more eco-friendly. Jarson is enthusiastic about Phoenix’s future and sees the city becoming more well-defined, both regarding physical place and identity. The building boom may seem like it could lead to issues down the road, but fears of a real estate bubble should be tempered. Jason Hartman, a real estate investment advisor, told Forbes last year that Miami, for example, which has a similar situation happening with condos there, was not that safe an idea. However, Miami’s condos are mainly paid for with cash. Condos in cities like Phoenix and Scottsdale don’t follow that route, making the market a little more stable.”