Golf real estate: It’s time once again to take a look at the Phoenix market

Updated: February 2, 2011

We’ve all watched the news and seen the incredible drop in home values throughout the country and the Southwest. Arizona is always near the top of the drop list! If not for the devastation in Nevada and Florida, we would outpace all others in the free-fall. Remember when we watched in amazement as values appreciated 30-40% annually from 2002-2005? At that time we were saying, “This can’t go on forever” or “How are our kids going to buy homes?” Well, now we know; we’re experiencing a correction to a very out-of-balance marketplace.

The Valley of the Sun was the site of a building frenzy in a “gold rush” mentality. Lenders were providing loans based on virtually no criteria and short sighted, inexperienced home buyers thought they could ride the appreciation wave to quick riches until the proverbial “bubble” burst.

Enough history, fear and panic. Now is the time to seize the opportunities that are here today. There are homes in the Valley in the $65,000 range that once peaked at $200,000. Homes on the golf course in beautiful, gated communities that commanded prices in the $400s are priced in the mid $200s. And if you are in the luxury market, those homes are experiencing downward pressure and price reductions that are open to negotiation. There are homes currently listed just above $1 million that, at the peak, were in the $3-4 million dollar range. Opportunities abound!

Investors are back in the Phoenix marketplace! They know opportunity when they see it. Historic low interest rates, coupled with prices rolled back Walmart style, have them partying like it’s 1999 because the prices are at 1999 levels! Positive cash flow is very possible for the modest investor and rent demands remain strong.

There are more positive signs of recovery. A recent report in the Phoenix Business Journal states, “Arizona’s economy is expected to do better, though barely, in 2011 than just about every other state in the west, according to forecasts from the Western Blue Chip Economic Forecast and Arizona State University’s W.P. Carey School of Business.”

This is not going to be a quick turnaround by any means. “The growth will be about ‘half speed’ of what Arizona normally experiences in a strong economy,” says ASU economist Lee McPheters, editor of the Arizona Blue Chip Economic Forecast and the Western Blue Chip Economic Forecast newsletters. Some of the experts do not expect a marked recovery and a balanced, healthy housing market until 2014.

The Phoenix Business Journal goes on to say, “Every state in the west is expected to get more single-family housing permits next year, with the largest increase in California, followed by Arizona. Arizona, Texas and California are expected to have the fastest population growth.”

Then there’s migration and boomers! Approximately 7,000 baby boomers will turn 65 each day this year. Many of them do not wish to spend the next 20 plus years (avg. 87-year life span) shoveling snow or dodging rain drops. There’s an active adult community that thrives here in the desert on hiking and biking trails, golf courses and in social clubs of every kind. There’s a steady migration from the northern cities to the Southwest.

With all the uncertain and contradicting economic forecasts, here’s what we know for sure! Arizona offers
• 340 days of sunshine
• More than 250 golf courses and some of the finest golfing in the country
• Average winter temperature (October-April) of 75 degrees
• National events including NCAA bowl games, Phoenix Open, Barrett-Jackson Auto Auction, Scottsdale Arabian horse show, Scottsdale Art shows, Major League Baseball spring training exhibition games and much more.

If you’ve been thinking about purchasing your dream Arizona property, now is the time to contact a Realtor, plan your portfolio and secure your place in the sun!

Bill Cole is a Certified Investor Agent Specialist, Certified Distressed Property Expert and Associate Broker with RE/MAX Excalibur Realty in Scottsdale, AZ and RE/MAX Metro in Seattle WA. He has been an agent for over 25 years.