Cities Poised for a Surge in Sales

DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 11, 2014

More baby boomers are planning a move, and they're targeting cities with a lower cost of living, greater job potential, and warmer weather, according to new research by the National Association of REALTORS®.

"A broadly improving economy and rebounding home prices are giving baby boomers the opportunity to sell and move to support their retirement lifestyle," says Lawrence Yun, NAR's chief economist. "Furthermore, our research identified cities movers are gravitating to while still remaining in the workforce as a business owner."

According to an NAR generational study earlier this year, baby boomers represent 30 percent of all buyers. They have a median income of $92,400, and their home purchases average about $210,000.

For its most recent research, NAR analyzed population trends, housing affordability, and local economic conditions, among other trends, in 100 metro areas to determine the housing markets baby boomers are most likely to gravitate toward.

NAR singled out Boise, Idaho, and Raleigh, N.C., as top standouts for baby boomers, mostly because of their solid job growth, share of self-employed workers, and affordable home prices. Yun also notes that Florida and Arizona cities are attracting many baby boomers.

NAR identified the following markets as the most likely to see an influx of baby boomers moving there in the coming years (listed alphabetically):

• Albuquerque, N.M.
• Boise, Idaho
• Denver
• Fort Myers, Fla.
• Greenville, S.C.
• Orlando, Fla.
• Phoenix
• Raleigh, N.C.
• Sarasota, Fla.
• Tucson, Ariz.

Additional markets NAR identified as having "strong potential for attracting" baby boomers include:

• Chattanooga, Tenn.
• Dallas
• McAllen, Texas
• Riverside, Calif.
• Tampa, Fla.

"These metro areas are attractive to baby boomers because of their housing affordability, lower tax rates, and welcoming business environment," Yun says. "With baby boomers working later in life, these factors will likely play as much of a deciding role of where boomers eventually retire as will areas with a warm climate or variety of outdoor activities."

Source: National Association of REALTORS®

Phoenix-area home prices headed upward

Phoenix-area home prices headed upward
With fewer houses for sale, buyer competition mounts

by Catherine Reagor - Mar. 31, 2012 11:32 PM
The Republic | azcentral.com

Home prices are climbing in metro Phoenix faster than they have since the housing boom.

Some parts of the region experienced home-value increases of 5 to 10 percent a month this year because of a shortage of homes for sale that is sparking bidding wars between investors and regular buyers armed with pre-approvals for mortgages.

This emerging recovery of home prices in the Phoenix area started late last year and has been building each month.

Home values still have a long way to go to recover to pre-boom levels. MetroPhoenix's median existing-home price is currently $124,500, about $20,000 below the area's median in 2002 and well below the $267,000 from the height of the boom in summer 2006.

But many housing-market analysts see this as the beginning of a long-awaited recovery for the area's battered housing market. The uptick in prices is enticing more buyers who have been waiting for the market's bottom to purchase a home and now have likely missed it.

"Phoenix-area home prices are climbing so quickly in some areas now, due to such low inventory, it's hard to keep up," said Tom Ruff, real-estate analyst with online foreclosure service AZ Bidder and a founder of the Information Market, which supplies data for The Republic's Valley Home Values report.

He said the prices on sales closing now, which were started 90 days ago, are outdated. So to find comparable sales, buyers and real-estate agents need to look at sales negotiated last week.

Investors have driven the market, usually paying cash for low-priced homes and beating out other bidders. About 60 percent of homes sold in metro Phoenix this year have gone to cash buyers.

Now, both investors and regular buyers trying to purchase before prices climb higher are giving Phoenix's housing recovery momentum.

However, not all parts of the region are showing the same positive signs. Areas with lower-priced homes are drawing the most buyers, while the Valley's high-end housing market is still in a slump.

Communities in metro Phoenix with better schools, shopping and freeway access are also beating out other neighborhoods -- not far away -- for home-price increases.

"Metro Phoenix has always been a pocket market for home sales," said Jim Sexton of Realty One Group. "Chandler home prices may be steadily rising now, while a neighborhood in Mesa right next to its border are seeing declines."

Micro-markets
Many of the metro Phoenix neighborhoods and communities seeing the most rapid increases in prices now experienced the biggest drop in values.

Some communities on the edge of the region, including Goodyear in the west and Queen Creek in the southeast, drew more speculators and homebuilding during the boom. Many of the buyers had subprime loans that resulted in the Valley's first wave of foreclosures.

Home prices in these new communities plummeted much lower than the region's median but are now rising the fastest.

For example, in Goodyear, the median home price has climbed 14 percent in the past year.

But while the increases are large, the prices are low: The growth translates to a median home price of $92,000 in the area, compared with $81,000 in 2010.

Some neighborhoods with bigger homes in the southeast Valley cities of Chandler and Gilbert are posting significant price increases, even though the areas didn't see huge previous declines. Chandler's median home price has climbed to $186,000 from $170,000 last year.

Bidding wars
Martin Dace has been shopping for a house in the southeast Valley for nine months. He has been outbid by both investors and regular buyers on foreclosures and short sales.

Now he's considering buying a new home in Gilbert, near his job. Though the new home will cost $25,000 more than a short-sale house of the same size, he won't have to worry about being outbid.

"I am ready to buy and move in," he said. "I am tired of losing out on bidding wars. And new homes' prices are bound to go up, too, at some point."

Housing analysts say higher-paying jobs and better schools in the East Valley draw buyers willing to pay more to live there.

Homes priced below $400,000 in established neighborhoods are selling the fastest, real-estate agents say. A home listed for $165,000 in the upscale Encanto neighborhood in central Phoenix drew 26 offers and sold for almost $225,000.

There are similar bidding-war stories across the Valley in neighborhoods where homes are priced below $400,000, even in high-end communities.

A Carefree home priced at $300,000 through a short sale received three offers on the first day.
"The lender actually accepted the offer right away, but I had agents calling me for weeks with clients who wanted to put in backup offers," she said. "So many buyers are losing out on bidding wars, they are getting desperate."

Struggles remain
The high-end housing market was the last to crash and is now the slowest to recover. Homes priced above $1 million in Paradise Valley and parts of northScottsdale are generally slow to sell.

Mike Orr, a real-estate analyst with Arizona State University's W.P. Carey School of Business, said supply is a problem for the million-dollar-plus market.

He said so many homes are for sale with price tags and mortgages above $1 million, that this portion of the market could take a few years to post increases.

The median price of a home in exclusive Paradise Valley has fallen to $870,000 from $1 million a year ago.
Though, last week, a Paradise Valley home did sell for $10.5 million in cash, the highest price paid for a metro Phoenix home since the boom.

Joan Levinson of Realty One Group said that there are buyers looking for great deals in the Valley's high-end housing market but that some sellers are still reluctant to accept offers in the hope prices will climb.

Looking ahead
If the current trends continue, with fewer foreclosure homes for sale, home prices will also continue to rise, real-estate analysts say.

Foreclosures did climb slightly in February, but not enough to alarm housing-market watchers.

The number of metro Phoenix homes taken back by lenders during February is still less than half the number of foreclosures recorded during almost every month in 2009.

Also, the number of homeowners behind on their mortgages in Arizona continues to fall. So, many market watchers don't expect another big jump in foreclosures.

Post-foreclosure sales are another matter; banks decide when to put those homes back on the market. If they were to flood the market with a large supply of vacant homes, they could drive prices down again, as a similar move did in 2008-09.

Longer term, experts are gauging a housing recovery not by bank-owned homes but by homes for sale by owner-occupants.

Orr said the recovery will feel much more real when homeowners who bought before the boom feel optimistic enough to put their homes on the market.

"Many homeowners and buyers are still several months behind the reality of what's going on in metro Phoenix's housing market," said Orr, who also publishes the Cromford Report, an online daily real-estate analysis. "The housing market started recovering last year and hasn't stopped."

Willo Historic District in Phoenix, Arizona

Willo Historical District History Plus Light Rail Access

Nestled in the very heart of urban Phoenix, Willo was once the epitome of suburbia - a collection of subdivisions on the outskirts of the small, but thriving metropolis of Phoenix. The Willo neighborhood between 7th and Central Avenues can be divided into two sections. J. P. Holcomb used a Homestead Patent in 1878 to acquire and settle the southern portion of Willo between Encanto Blvd. and McDowell. Mr. Holcomb acquired the northern portion, between Thomas Rd. and Encanto Blvd. in 1886 through a Timber Culture Land Patent.

For the next 20 years or so, the land was primarily for agricultural purposes and lay on the outskirts of town. In the early 1900's, four subdivisions were platted, containing home sites with long narrow lots. In the early 1920's, Home Builders, a residential construction firm, built 41 homes in the Bungalow style. During the mid to late 1920's Phoenix, like the rest of the West, experienced tremendous growth and a building boom.


Standards were set for residential construction, and "exhibition houses" (now called model homes) were developed to market the new construction. Most of the building activity in Willo during this period occurred in the N. Kenilworth and Broadmoor subdivisions, and included a "Spanish Rancho Home" exhibition house.


During the 1930's the Period Revival movement brought tremendous variety in architectural styles, including Tudor Revival, Greek Revival, American Colonial Revival, Spanish Colonial Revival and Pueblo Revival. However, the Depression brought construction to a near standstill. The mid to late 1930s and the development of the Federal Housing Administration (FHA) brought construction back to Willo. Construction from this period and later years often featured French Provincial and Monterey styles, with an architectural design that would eventually become what we know today as the Ranch Style house. Construction was also more standardized due to the influence of the FHA and other government-imposed standards. Most of these newer homes are found in the northern section of Willo.


In all, 22 separate subdivisions were platted and developed in Willo by various entrepreneurs from the turn of the century up to the beginning of WWII. Eventually, with the growth of Phoenix over the last century, the individual subdivisions platted by early developers were forgotten and the area blended into one cohesive whole. Unfortunately, the amazing growth of the city resulted in the encroachment of commercial development on what were once quiet suburbs. In the 1980's, residents of Willo successfully lobbied for status as a special conservation district, achieving historic status and assuring that this beautiful part of Phoenix history will be preserved for the enjoyment of future generations.

Development Influences

The historic development of Willo was the result of deliberate actions that shaped and controlled the neighborhood's visual and social characteristics. Many parties, including the local and national real estate trade, prominent civic leaders and the federal government, were responsible for these actions.

Over 700 homes were constructed in Willo, making it one of Phoenix largest historic neighborhoods. Seventeen subdivisions were platted in Willo, each indicative of the land development and architectural trends of their time. This brochure describes how the resources of public agencies, private firms and organizations were used to create the Willo community. 

Home Builders

In the early 1920’s, most of the Willo area was undeveloped agricultural land on the outskirts of the city. It was difficult to attract families to build their homes in Willo because of its somewhat isolated nature. Home Builders, a speculative residential construction firm, saw great opportunity in this new area.

Through the large-scale construction of homes, the company had the opportunity to create a new community, an atmosphere that encouraged people to purchase a house. Home Builders constructed 41 residences in Willo between 1920 and 1925, each in the same architectural style. The company was also responsible for the marketing of these residences, offering an affordable time payment plan, which appealed to middle class homebuyers. Home Builders thus set the standard for the appearance of the neighborhood, the quality of buildings to be located there and the economic and social characteristics of the area's residents.

Home Builders, like other builders of that time, constructed homes in the Bungalow style. Bungalows have large porches and broad roof overhangs and are usually one story. Wood clapboard, wood shingles, and stucco or brick masonry form exterior walls. The Bungalow style easily accepts simple plan variations and emphasizes the use of common building materials such as brick and wood, making the Bungalow simple and inexpensive to construct.

The Roaring 1920's

During the mid to late 1920’s, Phoenix witnessed phenomenal growth in its population and a great expansion of its city limits. Consequently, there was a growing concern over how the City should accommodate this growth without losing its unique qualities. Civic leaders and members of the local real estate trade agreed that haphazard development would be detrimental both to the current residential population and to property values. The residential building developers of Willo used four strategies to accomplish their goal of forging an economically and socially viable community: deed restrictions and protective covenants; platting large-scale subdivisions; constructing model homes and supporting the local zoning movement. Unlike Home Builders, these early developers only sold residential lots; they did not build speculative homes.

Subdividers controlled land values by placing building restriction clauses on the lots sold. For example, a building cost restriction of $2,500 would prevent those of modest means from building there and would dictate the quality of materials chosen for the structure. Other restrictions regulated specific building materials and types of building use, such as excluding an apartment house from a subdivision. As in many parts of the nation, racial restrictions were imposed as well. These restrictions gave Willo an upper middle class identity. Many store owners; professionals and upper echelon public service employees were the initial homebuyers in Willo.

Developers also set the tone of development in Willo subdivisions with the use of "model homes." The National Association of Real Estate Boards, local real estate firms and the American Construction Council sponsored a national program of model home construction during this period. This program emphasized the American Dream of home ownership as a marketing tool. New building technology was promoted in the model home campaign as well, offering added convenience and low building costs for homebuyers.

The "Spanish Rancho Home," the first building constructed in the Broadmoor Subdivision, was an "exhibition house." The house received wide publicity during its construction and opening. The interior was decorated, and the latest electrical, plumbing and heating systems installed and brought to the attention of the visiting public. After the house had successfully attracted prospective lot buyers to the subdivision and had set the architectural standard for the area, the building was sold to a private buyer.

Most of the building activity in the late 1920's occurred in the large North Kenilworth and Broadmoor subdivisions. Both were platted in 1928. By purchasing lots in large subdivisions, prospective homeowners were assured of neighbors who would meet the same deed requirements as they did, thereby guaranteeing social homogeneity in the area. The large size of the subdivisions offered the opportunity for a creative layout of lots and streets. The curvilinear street pattern of Broadmoor was touted for its design along 11 artistic lines" in keeping with the city beautification and planning movement of the period.

While deed restrictions assured Willo residents that nearby buildings would be of a character similar to their own, there was no means by which residents could control development immediately beyond the boundaries of their subdivision. However, by the 1910’s, large cities adopted zoning ordinances which granted municipalities the authority to regulate development within their city limits. Following suit, Phoenix civic leaders recognized that a zoning ordinance was an essential feature of a modern city.

Therefore, the city hired a prominent San Francisco consultant to draft a zoning code for Phoenix. The first zoning ordinance was passed in 1930. Zoning was supported by the local realtors for its ability to stabilize property values. William Hartranft, the first chairman of the Phoenix Planning Commission and a longtime resident of Willo galvanized their support. With the exception of a few lots zoned 11 neighborhood commercial" at major street intersections, all the Willo area was designated for single- family residential use. An exception was the provision for modest apartment buildings (such as the El Encanto Apartments) along Central Avenue, which was the historic edge of the Willo neighborhood.

Period Revival Architecture

The "Spanish Rancho Home's" design reflects the influence and popularity of the Spanish Colonial style through the mid and late 1920’s. By the early 1930’s, the Period Revival movement introduced a range of historical styles reflecting picturesque images of early American or European domestic architecture. Period Revival was the dominant style in California at the time, a factor that influenced design trends in Phoenix. The Spanish Colonial Revival style was first exhibited before the American public at the 1915 Pan-American Exposition in San Diego. Characteristics of these low, horizontal one or two story buildings include simple stucco or plaster walls and chimneys, low-pitched red tile gable roofs, arched window and door openings and modest detailing from several earlier eras of Spanish and Mexican architecture.

Tudor/Elizabethan Revival buildings have their origins in medieval England. The style, which was often described as picturesque and romantic, is characterized by its irregular shape; steep roof with sharp gables accented with half-timbering details; large chimney; cast concrete or stone-framed doors and various combinations of sheathing materials such as rough stone, stucco and brick. An interesting variation of the Tudor / Elizabethan Revival found in Willo is the Cotswold Cottage. The style's most distinguishing feature is its curved wood shingle roof, which suggests the appearance of a historic English thatched roof.

Also found in Willo are examples of the American Colonial Revival style. Although American Colonial is the nation's most popular revival style, it is not extensively represented in Phoenix. Characteristics of the style include Greek Revival door and window surrounds; shuttered, multi-paned windows; low-to-medium pitched gabled roofs, usually with the broadside facing the street and wood clapboard or brick outer walls.

The Impact of the FHA

The worst years of the local economic depression, 1931 through 1935, are illustrated by the virtual standstill of real estate development and construction activity in the Willo neighborhood. The National Housing Act of 1934 rejuvenated residential growth in Willo. The purpose of the Act was to "improve nationwide housing standards, provide employment and stimulate industry, improve conditions with respect to home mortgage financing, and to realize a greater degree of stability in residential construction." The Act created the Federal Housing Administration (FHA) that stimulated new construction by insuring residential mortgages, thus making them easier to obtain. In return, the FHA required that housing built with insured loans meet certain design and construction standards.

The development of Willo during this period was a direct consequence of Phoenix' zoning regulations converging with the policies of the FHA. The City's zoning regulations established types of land uses in Phoenix. The FHA policies mandated a specific palette of building materials and designs, which could be used to qualify for financing programs. The program also encouraged speculative development in large subdivisions by limiting the risk of mortgage foreclosure and by increasing demand for houses based on the FHA's low interest rates. As a result of these influences, like no other time in Phoenix history, there was a uniform, coordinated and controlled vision for developing new residential areas of the city. 

The FHA's directives gave developers a blueprint for the most cost efficient and marketable designs. The FHA sought uniformity in their subdivisions in hopes of creating stable, secure and attractive communities. Building components and styles were mass-produced, thereby cutting costs. Developers were able to plat and subdivide property confidently, for they were assured of financial backing from the banks.

In an effort to boost the public's awareness of their mortgage financing and to show future homeowners the advantages of the program, the FHA, with local lending institutions and building contractors, sponsored the construction of two "demonstration houses" in the Willo neighborhood. The houses, built in the summer and fall of 1936, were constructed for private owners but were opened for public inspection to demonstrate the ultra modern dwellings achieved through FHA financing." The prominent and prolific Phoenix architectural firm of Lescher and Mahoney designed both of these homes. The P.W. Westerlund House, designated the "House of Romance," was the first of three houses to be built Economy of construction and convenience were billed as the main features of the house. The "Home of Happiness" was the second FHA sponsored demonstration home in Willo. The Arizona State Fireman's Association sponsored the "Miracle" demonstration home in Willo. This home, which was endorsed by the FHA, promoted the use of fireproof construction materials such as adobe, cement, steel and asbestos.

Unlike the architecturally diverse subdivisions developed during the 1920’s, the subdivisions developed in Willo during the New Deal years are more uniform in appearance. This uniformity was a response of local developers to federal housing initiatives.

FHA era houses were constructed in two basic styles: French Provincial and Monterey. The FHA borrowed the general shape of their homes from the Period Revival styles but stripped the houses of elaborate exterior details, ornamentation and finishes. Built when the private automobile had become the dominant mode of transportation, these buildings incorporate garages or carports into their design.

The most distinctive feature of the Phoenix-FHA interpretation of the French Provincial style is its steeply pitched, hipped roof. These one-story buildings are asymmetrical in plan and have interlocking wings, giving the appearance of a rambling farmhouse. The Phoenix version of the FHA Monterey style is a forerunner of the modern Ranch style house. These are one-story structures with a low, horizontal orientation and an asymmetrical front facade. Exterior walls are covered by stucco or plaster. They have low-pitched gabled roofs usually sheathed in Spanish tile, and have adjoining garages.

Preserving Neighborhood Character

The effort to maintain the Willo neighborhood's character still continues. In 1986, Willo residents and city officials prepared the Willo Neighborhood Conservation plan, addressing such quality-of life issues as the development of high-rise office buildings in the area. In 1990, a neighborhood coalition successfully promoted designation of Willo as a local historic district. With the continuing commitment of its residents, the Willo neighborhood will remain proud of its past and preserving the neighborhood's unique qualities for the future.

Call Laura B. with DPR Realty, LLC at 602.400.0008 to buy or sell a Historic Home in the Willo Historic District in Downtown Central Phoenix