"Urban Living" Boom In Downtown Phoenix
This weekend is supposed to be the first to reach 100 degrees in Phoenix this year. So it is apt that we hear of RE fever in downtown. "Downtown living is suddenly very hot, with more than 1,700 residential units just opening, planned or starting construction soon. And the biggest fuel to the fire is the Arizona State University Downtown Phoenix Campus."
But can the ASU freshmen afford this? "Consider that units at 44 Monroe start at about $300,000 for a 780-square-foot space. The new Portland Place Condominiums also start at the low $300s and run up to more than $1 million."
"About 90 people signed conditional sales contracts in the past two weeks for units that range in price from $199,000 to $965,000. Eddie Chang is among them. The 25-year-old apartment broker snapped up a two-bedroom, 2 1/2-bath unit on the eighth floor. 'To me, it was a no-brainer,' said Chang, a self-described Diamondbacks fanatic. 'Phoenix is true urban living.'"
"The city's downtown plan calls for as many as 10,000 units in the next decade."
6 Comments:
("Phoenix is true urban living")
Now there's a funny one. I've always thought that Phoenix was the capital of Hell.
I suppose Phoenix is true urban living to someone who is coming from Kingman or Pahrump.
If Chang asks what those wide stretches of concrete are that don't seem to have any cars driving on them, tell him that here in San Francisco we call them sidewalks.
When Peak Oil hits the SouthWestern Boom towns are Fucked. They use up huge amounts of natural gas to generate electricity for Air Conditioning. We will be facing a Natural Gas shortage in the next couple of years.
Water will be in even shorter supply. Huge amounts of water will be need to produce heavy oil from deep wells
in Wyoming and CA and to produce even small amount of oil from the Oil shales of Wyoming and Colorado. Heavy Oils and Shale Oil will never make up more than 5-10% of current oil demand due to the huge amounts of water required and the enormous polution it will generate. These sources will never scale regardless of the massive amounts of energy they contain.
Gee does anybody build houses in Arizona that do not require AC. Solar energy will help but only at the margins.
see http://www.peakoil.blogspot.com/
12:20 -- there doubtless will be great debate about Peak Oil. In the 1970s I read (and believe I still have, somewhere) an entertaining book titled, "The World After Oil." It contained many, many useful observations. But we didn't run out of oil then and we won't now. The only medium term glitch is caused by the unexpectedly rapid rise of the economies of China and India.
It has never been economical for oil companies to "discover" more than 50 years' worth of proven oil reserves. The present-day cost of such discovery could not produce a reasonable ROI. Now, it is true that China and India will hot things up for further exploration, and that the Middle East is a lot less reliable than before, but neither problem has to do with Peak Oil, at least as I understand the term. Oil will be a lot more expensive for quite a while, but then it will go back down again in real terms.
A final note -- I've lived in desert regions and there we did not use energy-inefficient air conditioners. The simple reason: they take out of the air what little humidity there was. Instead we used "desert coolers" that are essentially straw filters through which water passes. A simple fan blows the air into the house and thermodynamics makes sure you have reasonably humid, cool air for a pretty good price. Southwestern houses may be using these and, if they don't, may begin converting to them.
Chip
Yes, this board is getting hijacked by extremists. Oil is as big a bubble as RE. There are fundamental drivers for all hard assets that paralleled the devaluation of the dollar, which was the result of losoe monetary policies. We are now in a tightening cycle, which will kill RE and oil. It takes up to 12 months before monetary tightening spills over into the economy. That's why the dollar didn't start to tumble until the Spring of 2002 and reached parity to the Euro by the summer. Then the insane monetary inflation of late 2001 kicked in and drove the dollar below $1.10 by the beginning of 2003. I remember being in the Alps that winter thinking, wow things are no longer a bargain.......
Read the Economist's survey from two issues ago for sensible analysis of oil, although they have always been oil bears. In 1998-9 they got a bit giddy on the bear side of the case.
I remember buying 93 octane for less than $1 a gallon in New Hampshire back then.
Frank, there is a big bubble in Oil-related stocks too. Sadly, that buble can be inflated more if the housing bubble pops. We are too addicted to bubbles.
Anyway, back on topic......... the price point for those condos in Phoenix are too high for the area (no one ever mentions the association fees, which are like 250-400 per month). Like in Vegas, these new condos are being bought on speculation. If you buy and sell quick you might make some cash. But they are just not supportable for at those price points. The banks/fed should be requiring more down payments to slow these markets down. It is a disgrace how careless these institions are with money.
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