TRENDING REAL ESTATE NEWS_______________________
Construction Begins on 1.2 Million SF Mack Innovation Park Scottsdale
Mack Real Estate Group (MREG) announced that the initial phase of Mack Innovation Park Scottsdale is fully financed and breaking ground imminently. Affiliates of MREG have secured approximately $63 million of debt financing for construction of the two-building, 305,400 first phase of development. The first phase will be on a well-located 124-acre infill site in North Scottsdale with capacity for 1.2 million square feet across 11 buildings. The location offers excellent access to Pima and Bell roads and the Loop 101 freeway. Bank OZK provided $43.0 million of first mortgage construction debt. Additionally, PGIM Real Estate provided $19.78 million of construction mezzanine financing. JLL Capital Markets arranged the financing.
“The Scottsdale industrial market continues to see limited new supply and ongoing rent growth. Given these positive dynamics, we believe Mack Innovation Park Scottsdale will be well received,” said Richard Mack, CEO of MREG. “We’re excited to break ground on our first phase with the support of construction debt from Bank OZK and PGIM Real Estate. As a firm we remain bullish on Phoenix, with a large footprint of active projects across the Phoenix MSA.”
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Metro Phoenix’s West Valley Building Boom Spurred by TSMC, Amkor Mean Thousands More Houses
The West Valley is the hottest spot for homebuilding in metro Phoenix. The huge expansions of the Taiwan Semiconductor Manufacturing Co. and Amkor Technology will spur thousands more new homes in the already growing area.
The two big firms are expected to add at least 8,000 jobs in the northwest Valley. Notably, that doesn’t include new jobs created by their many suppliers. Many people are moving to the Phoenix area for well-paid positions, and they need homes.
Smaller new communities are selling out quickly. Builders are seeking new sites on state-owned land and in big master-planned communities just opening or expanding.
“The West Valley is definitely dominating housing,” said Jim Daniel, president of the veteran new home research firm RL Brown Reports.
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MARKET UPDATE_______________________
3 More Cities in a Buyer’s Market – Incentives Continue to Rise
Rate Drops Equal Major Savings for Buyers
For Buyers:
The second half of 2024 is expected to be better than the first half for buyers in terms of mortgage rates. Last year from July to October rates rose from 7% to 8%, increasing payments by hundred of dollars and knocking many buyers out of the market. This time around, housing analysts are not expecting more dramatic rate increases. Instead, multiple factors are pointing towards improvement.
All eyes are on the Federal Reserve Board to determine when they may drop the Federal Funds Rate this year, but the Fed’s eyes are on annual inflation rates and the labor market. June’s inflation report came down more than expected to 3.0% and the response from mortgage rates was immediate, dropping sharply to 6.82%. That’s a major improvement from the 7.51% recorded on April 30th, and a savings of $187 per month on a $400,000 loan. If rates continue to decline over the summer, then prices may not need to decline to make homes more affordable to buyers.
Market Improving for Buyers
The market continues to get better for buyers. Half of the homes that went under contract in June were on the market for over a month prior to an accepted contract compared to 21 days last year. Price reductions are up 88% over last year, and 51% of sales involved seller-paid incentives to the buyer, the highest percentage this year so far. In June, the median concession paid to the buyer was $9,900, up $500 from May.
As the market has shifted out of a seller’s market and into balance, it has become a friendlier space for not-so-perfect buyers, especially first-time home-buyers. Buyers looking to assume FHA or VA loans with rates under 5%, or purchase with a low down payment, or down payment assistance, will find more opportunities with sellers today. Those same sellers would have scoffed at them 2-3 years ago in preference for cash buyers boasting guaranteed 2-week closing dates and prices that defy appraisals. As with many opportunities in real estate, these conditions will not last forever if mortgage rates continue to decline.
For Sellers:
The Greater Phoenix market has been in a balanced state for two months and the buyers are getting their groove back at the negotiating table. Over the last 30 days, there were two cities that shifted from a seller’s market into balance: Peoria and Paradise Valley. There were 3 cities that shifted from a balanced market into a buyer’s market: Surprise, Goodyear, and Cave Creek. In the meantime, 14 out of the largest 17 cities in the Valley showed a weakening in their market measures in favor of buyers.
There are 9 cities in buyer’s markets in Greater Phoenix as of July, located primarily in the West Valley and Pinal County. These areas have significant levels of new construction. These growing communities increase competing supply as builders create shiny new inventory for buyers to consider. Single family permits are up 56% to-date compared to last year, reflecting a strong optimism here that isn’t reflected in other parts of the country. As the second lowest count of new resale listings hit the market, new construction has little competition and comprises 27% of all single family home sales in the first half of 2024. New builds are formidable competitors for resale sellers.
Need for Professional Representation
Meanwhile, sales prices are still holding steady. The median sales price has only increased 1.9% from last year and the average sales price per square foot is up 2.6% annually for the month of June. It’s expected that annual price appreciation in a balanced market will stabilize around the rate of inflation. This is a market Greater Phoenix hasn’t seen since 2014-2015. Sellers need to prepare their home for sale, adjust their expectations, market and price their listing, and negotiate buyer concessions. It’s markets like this that demonstrate the need for representation and guidance from a professional real estate agent.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC
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FOR THE HOME_______________________
Does Arizona Have Enough Water? Here’s How Cities Make Sure It Does
Brett Fleck does not have an easy job. He manages water for a city in the desert. He has to keep taps flowing while facing a complicated equation: Peoria is growing – attracting big business and thousands of new residents each year – but its main source of water is shrinking. Does Arizona have enough water? Does Fleck have an answer?
Standing on the edge of a sun-baked canal with palm trees lining its banks, Fleck watched water flow into the pipes that supply the Phoenix suburb.
“We’re really having a complete changeover in how people view the Colorado River from a reliability standpoint,” he said.
The river, which accounts for about 60% of the city’s supply, is stretched thin. Its water is used by 40 million people from Wyoming to Mexico. Climate change is shrinking its supply. As a result, the federal government is scrambling to boost depleted reservoirs. The Biden administration has poured money into the problem. The federal government allocated $4 billion from the Inflation Reduction Act for Colorado River projects.
Across the seven U.S. states that use the river’s water, that money has been used to save water in a number of ways – from patching up leaky canals to paying farmers to pause crop planting. A relatively small chunk of the money has gone to cities. However, it is still being welcomed with open arms in the Phoenix metro area.
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How Arizona’s Monsoon is Changing
Each summer, thunderstorms tower in our otherwise sunny Arizona sky. Winds shift out of the south and southeast, bringing moisture in all the way from the Gulf of Mexico. That moisture rises and forms thunderstorms in the heat of the day. This is our monsoon.
Much of Arizona typically receives 30 to 50 percent of its annual rainfall during the monsoon months of June, July, August, and September, which helps replenish our dry land and diminish wildfire threats.
But, the monsoon as we know it is changing. As our atmosphere gets hotter with climate change, it’s able to essentially hold more water vapor and that’s altering how our monsoon behaves.
“We don’t get as many storms, but when they do come, they’re tending to produce higher rainfall amounts, more intense rainfall, and more intense winds,” says Dr. Christopher Castro with the Hydrology and Atmospheric Sciences Department at the University of Arizona.
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LOCAL ADVENTURE_______________________
Candytopia
THE OUTRAGEOUSLY INTERACTIVE CANDY WONDERLAND
A whimsical realm of sugary wonders. Lose yourself in a sprawling sanctuary of confectionery bliss, where every corner unveils delights straight out of a dream!
PRACTICAL INFORMATION:
- Date: from July 2024
- Time: Wednesdays–Sundays, various sessions throughout the day
- Duration: 1 hour
- Location: Scottsdale Fashion Square
- Age requirement: all ages are welcome!
- Accessibility: Venue is ADA compliant
- Price: ticket prices will start at $17.90
CANDYTOPIA LOCATION IN SCOTTSDALE
Scottsdale Fashion Square
7014 E Camelback Rd, Scottsdale, AZ 85251, USA
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The Best Pool Parties in Scottsdale
Summer 2024 is here, and while some activities are put on pause for the triple-digit temperatures, Scottsdale’s renowned pool parties are in full swing! From bass-bumping music and lively crowds to chilled-out loungers, here’s the scoop on Scottsdale’s best poolside celebrations.
HIGH OCTANE FESTIVITIES
Scottchella at Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch
Liquid Sunshine at Hotel Adeline
LAID BACK BASHES
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See something that interests you in this July 2024 Newsletter? Contact me and we can check it out together! Feel free to call me directly at 480-788-5446.
