News Article From: 04-13-2006
The first article, Economists: 2005 a record year for jobs growth in state, from the Phoenix Business Journal, reports that employment growth in Arizona set a record in absolute numbers and, in percentage terms, was the strongest in a decade for the state and for greater Phoenix, according to economist Elliott Pollack in the Arizona Blue Chip Economic Forecast report. State employment growth was revised upward to 5.3 percent from a preliminary estimate of 4.1 percent, as Arizona added more than 125,000 new jobs. "This is a remarkable performance and far exceeds, in absolute terms, any year in history," said Pollack. "The employment boom seems to be broad based and sustainable." And despite a slowdown in the housing market, the economic outlook looks good for this year, according to the report.
The second article, Condo conversions coming, from the Arizona Republic Mesa, reports that a Chicago real estate investment group says Mesa is in the early stages of a trend toward condo conversions, with a handful of top apartment properties going condo. Renters likely would have to settle for the city's large number of lesser complexes if they can't afford to buy, according to investors Natalia Picoulas and Jacob Bletnitsky of Russland Capital Group. "It's going to happen in the next six months; you'll see the difference", said Bletnitsky. The group has converted more than 600 apartments into condos in Scottsdale and Phoenix. The high cost of single-family homes is pushing first-time buyers toward cheaper condos. Brad Johnson with C.B. Richard Ellis said at least six Mesa apartment complexes with 917 units are in the process of being converted into condos. Ellis estimated that 10,000 to 15,000 such conversions are under way Valley-wide.
The article, Housing Bubble: Top 30 cities to watch, from MSN.com, reports on what Bankrate.com sees as the 30 U.S. cities to watch for housing market changes. It lists the top ten cities where prices and values should rise, the top 10 cities where prices and values should hold steady, and the top ten cities where prices are likely to decline. Unfortunately, the cite Phoenix as one of the top ten cities where prices are likely to decline. About Phoenix, they state:
Phoenix: The bigger they are, the harder they fall, and Phoenix is the largest housing market in the country in terms of new construction. It's been running at 65,000 new units per year, with housing appreciation increasing at rates of nearly 30% per year.
"You can't sustain 30% increases a year for very long," Winzer says. "Of all the 100 markets we review, we think if you're an investor in Phoenix, you should sell, because vacancy rates are already pretty high." Gollis says his firm has been studying the market carefully and doesn't like what it sees. "It's had an incredibly unusual amount of growth," he says. "The land market has accelerated dramatically and the lot price as percentage of the home price has gone up significantly. We have some concerns about going long in Phoenix."
What they dont say is that we led the nation in job growth, we are adding 100,000+ people a year in population, we still have affordable land, and that we have a low cost of living. Very biased statement in this article without showing both sides of the coin!