Arizona Tops Nevada as Fastest Growing State
By STEPHEN OHLEMACHER, AP
WASHINGTON -- Arizona: It's not just for retired Midwesterners. Arizona is attracting people from across the U.S. and across the border at such a pace that it is now the fastest-growing state in the country, replacing Nevada, which had held
the crown for 19 straight years. The new population figures were released Friday by the Census Bureau.
"It used to be merely a retirement magnet for Midwest seniors," said William Frey, a demographer at the Brookings Institution, a Washington think tank. "Now it's also a front door for immigrants from Mexico and an escape hatch for Californians seeking affordable housing."
At the other end of the scale, Louisiana lost nearly 220,000 people -- more than any other state -- in the year following Hurricane Katrina.
Arizona led the nation with a population growth rate of 3.6 percent in the past year, followed by Nevada, Idaho, Georgia and Texas.
Arizona added about 32,000 immigrants in the past year. It added four times that many people who were relocating from other states. The biggest donor state: California.
"Every area where there's private land there's some form of development going on or being considered," said Merrill Wuerch, who owns Century 21 real estate offices in Phoenix and Sierra Vista. "I've been in the business 24 years and I have never seen anything like this, what we went through."
Wuerch said Arizona's real estate market has cooled after sizzling for several years. Still, he said, the market remains stronger than in other parts of the country, with growing medical and high-tech industries providing the jobs, and the sunshine providing the allure.
The pace of development has strained Arizona's resources and preoccupied local officials, said Tom Rex, associate director of the Center for Competitiveness and Prosperity Research at Arizona State University.
"All they can think about is getting the sewer lines out to the new housing and getting the roads in," he said.
The growth pattern means Arizona and Florida will probably add two House seats when congressional districts are redrawn following the 2010 Census, said Clark Bensen of Polidata, a Virginia firm that consults on political redistricting. Texas could add four seats and several other states could add one, he said.
Bensen projects New York and Ohio to lose two seats apiece, and several other states, including Louisiana, to lose one.
The Census Bureau estimates annual state population totals using local records of births and deaths, IRS records of people moving within the United States and census statistics on immigrants. The bureau does not distinguish between legal and illegal immigrants, and most experts believe that the number of illegal immigrants is underestimated.
Among the findings for 2006:
-- Texas gained the most people, about 580,000, followed by Florida, California, Georgia and Arizona.
-- North Carolina broke into the top 10 in total population, nudging New Jersey to 11th.
-- Four states and the District of Columbia lost population: Louisiana, New York, Rhode Island and Michigan.
-- Many other states lost people who relocated elsewhere in the country, increasing their populations only through births and immigration.
-- The South had a net gain of a half million people relocating there from other parts of the U.S., while the Northeast had a net loss of 375,000 people and the Midwest lost 184,000, according to the census estimates.
-- The West had a net gain of 53,000 people from other parts of the U.S., even though California lost nearly 300,000 people to other states.
-- Texas passed Florida as the top destination for people moving within the U.S., in part from people fleeing the aftermath of Hurricane Katrina.
-- Other relatively affordable southern states such as Georgia, North Carolina, South Carolina and Tennessee also had significant increases in people moving there from other states.
-- "Good climate and affordability seem to be the draws for Americans this decade," said Frey, the demographer.
-- In the Northeast, New York, New Jersey and Massachusetts continued to lose large numbers of people to other states. In the Midwest, the big losers were Illinois, Michigan and Ohio.
-- Louisiana had been losing people to other states for years before Hurricane Katrina hit, though the storm exacerbated the problem, said Elliott Stonecipher, a veteran Louisiana demographer and pollster. Last year's loss amounted to nearly 5 percent of the state's people.
-- "The numbers make it clear that Katrina has had an incredibly negative effect," Stonecipher said. "But pre-Katrina, Louisiana was already in trouble."
September slow for home resales
Median price lower than last year's for 1st time in decade
Glen Creno
The Arizona Republic
Oct. 11, 2006 12:00 AM
The Valley's resale housing market continued to slow in September as the market struggled to find a bottom.
The number of houses sold fell and, for the first time in a decade, the median price was down from the same time last year, according to the latest resale report by the Arizona Real Estate Center at Arizona State University Polytechnic.
Prices have bounced around from month to month as the market recovers from the buying frenzy fueled by investors and speculators. But it's the first time in 10 years that the price dropped when compared with the previous year.
The latest median resale home price in the Valley is $256,900. That's down from $263,000 in September of last year, according to the monthly report. The record of $267,000 was set in June.
While the overall median is down, there were enough neighborhoods with rising prices to let some cities post overall gains.
The price drop rattles one of the fundamental assumptions of Phoenix housing: Buy a home and it will probably be worth more next year. It's another reason for skittish buyers to stay on the sidelines.
"The problem gets to be what is the incentive to move into the market?" said Jay Butler, head of the real estate center.
It's also bad news for people who bought at the peak of the market who are finding their houses no longer are worth what they paid. People who need to sell now because of a relocation or other non-negotiable reasons could lose thousands of dollars on their housing investments.
"If you bought last year and you don't need to sell, bite the bullet and wait for the appreciation," said Diane Watson of Realty Executives in the northeast Valley. "But if you need to sell, buyers don't care. You have to be competitive."
Scottsdale residents Kyle and Jaci Olsen are seeing that phenomenon firsthand. They bought two investment homes in Scottsdale last year, and one has been on the market for 10 months. They paid $415,000 for it and dropped in $40,000 to $50,000 in renovations. Now, it's now listed for $435,000 after coming to market at $499,000.
"It's a nightmare," Kyle Olsen said. "It's priced really well. We've had a lot of lookers but no one is coming to the plate."
The couple will list the other house this weekend. Kyle Olson expects it to fare better because they spent $45,000 to completely remodel it, something they hope sets it apart from other resales that have had only the requisite touching up. They bought the house for $430,000 and will try to sell it for $529,000. They originally hoped to get $599,000. "That's how much the market has come down," Kyle Olsen said.
There were 4,875 existing homes sold in September, the lowest monthly total since February 2003 and down significantly from the 9,815 sales of September of last year.
But last year's price and sales numbers can be misleading since they represent the peak of a historic buying frenzy in the Phoenix housing market. Month-to-month comparisons might be a better measurement though September's total sales still are below the 5,685 recorded in August. The August median price was $262,500, also higher than September's figure.
It all adds up to a soft resale market where inventories are high and buyers are delaying decisions because they think prices will fall further. It's also difficult for them to sort through the houses for sale.
"There are way too many listings, way too many homes for buyers to see," said Bridgette Gavagan of West USA's Arrowhead office in Peoria. "It makes it hard for buyers to make a decision."
Analysts say one of Phoenix's chief housing problems, other than affordability, is the glut of new and resale homes on the market. Jim Sexton, the broker and owner of John Hall & Associates, expects the first quarter of next year to be strong as inventory falls and home-hunting winter visitors see that prices are down from last year's sticker-shock levels. He said there are plenty of condos for sale and sellers are offering incentives.
Sexton said it's pointless for sellers to obsess over last year's prices. They're not going to get them.
"Comparing to last year, you're setting yourself up to find a six-story building to jump from," he said. "You can't be too greedy."
With 25,000 spec homes, now may be the time to buy
Catherine Reagor
On real estate
New numbers are in on the fallout from the investor home-buying spree in
metropolitan Phoenix.
As many as 40 percent of the contracts on all the new homes in the Valley
during 2005 and early this year have fallen through. That translates to 25,000
spec homes, according to a new survey from housing analyst RL Brown.
Many new-home deals fell apart because buyers couldn't sell existing homes.
But there also were many investors who pulled out of new-home deals after
seeing they couldn't flip the homes for hefty profits.
Speculators had a big hand in hurting the resale market, too. Many snatched
up existing homes last year and are now trying to sell them for a profit.
Those extra homes for sale, by many people who never lived in them, have created a glut in some areas of the Valley.
Housing analysts say supply and demand in the resale market has to get back in sync before the home building market will rebound.
There were only 2,341 new-home permits issued in October; that's half the wild pace of 2005.
The drop in building is a good sign the market is working to absorb all the spec homes.
When the incentives on new homes start to drop and new-home prices stop their drop, then it's a good sign the home-building market is rebound- ing.
So if you are looking for the best deal on a new home, it might be now.
Fresh calculations
Realty Executives President John Foltz said many of his agents ask where all the home buyers are in this "buyers market."
His answer: "They're living in overpriced listings."
At the Realty Executives quarterly meeting last week, the veteran real estate executive gave 1,000 agents a formula to show people why it's better to buy and sell in the Valley now.
Based on home prices or what buyers are willing to pay dropping 10 percent in the past year, buyers who could have sold their home for $400,000 last fall would have paid $600,000 to move up.
Now, the same buyers should look at selling their house for $360,000.
But they can move up to the same bigger home they looked at last year for $540,000.
Those buyers actually would spend less money now.
Reach the reporter at catherine.reagor@arizonarepublic.com or read her blog at reagorblog.azcentral.com.
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Experts say housing slump headed for turnaround
The Business Journal of Phoenix -
by Christia Gibbons
The Business Journal
Single-family housing sales slowed in 2006, but construction of new homes continued as the inventory-heavy market started to stabilize by the end of the year.
It slowed, sputtered and came to a crawl this year, but the housing market next year and beyond will be golden, some real estate experts say.
"If you're in real estate and not optimistic, you're a bonehead," said Nate Nathan of Nathan & Associates, a 25-year-plus land brokerage company in Scottsdale. The firm is associated with such high-profile developments as DC Ranch, Johnson Ranch, Grayhawk, Power Ranch, Las Sendas and Vistancia.
"California is in the tank and we don't compete with Nevada anymore for job growth," Nathan said. "This place is going to be on fire."
He joins Ken Losch, a principal with Avenue Communities LLC, which is behind Tempe's Centerpoint Condominiums and has developed Trillium Residential projects throughout the Valley, in saying the facts can't be denied: Population growth, employment growth, economic growth.
"People don't realize that we've become a primary market," Losch says. "We're also the only one in the top five markets with a strong second-home market."
Neither Nathan nor Losch discounted the downturn in the housing market this year, after a boom in 2005. This year's slowdown was a market correction, they say.
"Right now, where we are in the market is where we need to be," Losch said. "Right now, we're in a breather and it's probably shaken some people out who shouldn't be here."
As it always has, good weather will continue to attract people, Losch said.
Citing research by the U.S. Bureau of Economic Analysis, Nathan said in July, Arizona became the fastest-growing state, passing Nevada in economy, population and job growth.
In-place entitlements (zoning and plat designations), affordability (land and housing), enough water, infrastructure, new transportation corridors, and having the second-fastest growing airport in the country will continue to boost the residential real estate economy for years to come, he said.
Developers will continue to offer single-family homes in the state and a desire for that continues. However, urban living will continue growing. People from out of state -- used to living in high-rises and living, working and playing close by -- will expect the same here, the experts say.
Keith Mishkin, Cambridge Properties founder, said earlier attempts at Valley high-rise living were unsuccessful because retail, grocery stores and coffee shops didn't follow the first attempts at vertical living.
"It was urban development in a suburban area," said Mishkin, who is the broker for such projects as Esplanade Place, Orpheum Lofts and The Residences at 2211 Camelback.
Now, he explains, the trend of mixed-use housing, including residential on top of retail, is taking off.
And, from aging baby boomers to young professionals, people crave a lock-and-leave housing situation with fewer homeowner worries.
"They are willing to trade the single-family home dollars and willing to buy smaller, maintenance-free urban product," Mishkin said.
Losch said homes will appreciate between 5 percent and 8 percent a year, as they have for decades, rather than the 45 percent price hikes experienced during the boom.
"People will come from all over and want all types of living opportunities," he said.
The experts caution, however, that limited availability of subcontractors and increasing materials costs could mean some projects don't come on line, or on line as quickly.
"When you announce 50 projects in a market and there's not enough concrete and subcontractors to get it built, it matters -- you are limited by what you can build," Losch said.
