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Post Recession Housing Rebound Has Winners And Losers
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Carrie Jung/KJZZ
As the valley recovers from the recession, neighborhood change is becoming the new normal.
The New Neighbors project is a collaboration between KJZZ and the Arizona Center for Investigative Reporting that looks at how the Valley of the Sun has changed since the economic downturn a decade ago. Today, we’re in the middle of a real estate and rental market boom, our cities are centralizing - it’s all changing the face of our communities Valley-wide. This is Part I of the "New Neighbors" series.
If you drive around the Arcadia neighborhood in east Phoenix, you’ll be hard pressed to find a house that hasn’t been renovated recently.
"So we did this white one on the right," said Austin King as he drove through the area. "Here’s a house fenced off. That recently sold in the MLS."
King is a local developer and runs a company known as Rafterhouse. He lives in this neighborhood, and until about a year ago this area was also the main stomping ground for Rafterhouse’s renovation projects.
"The amount of construction, the fences around houses, I mean just, it’s everywhere," King said.
Today the housing market in Arizona is humming along.
According to data from the residential real estate website Trulia, home prices in Maricopa County have increased by 83 percent, on average, since 2011. A stark difference from the way things were nearly 10 years ago, just after the so called housing bubble burst sending housing markets across the country into a downward spiral.
The Recession
For perspective, King hits the rewind button.
"It was shooting fish in a barrel. Literally, if you tried you could buy two or three homes in one day," he said, adding the fallout made for some crazy times in home buying if you had the money to invest.
Those conditions were created, in part, because there was a giant glut of homes here in the valley.
"By some estimates we overbuilt by 100,000 housing units," said Mark Stapp, the director of the Center for Real Estate Theory at Arizona State University.
Carrie Jung/KJZZ
The housing market recovery is reshaping many Valley neighborhoods, especially in downtown Phoenix.
While things here stabilized, Stapp added a few new forces hit the scene like the light rail.
Officials at ASU were also beginning the school’s expansion into downtown Phoenix. And Millennials played a role too because, just as the recession hit, that generation began to move into the economic segment of their lives.
But Millennials have some notable differences from Generation Xers and Baby Boomers when it comes to their consumer habits.
"They’re dealing with the recession, the impact the recession had on their lives. The two longest wars in our history," Stapp said. "And that impacts their psyche, that affects their decision making and their biases."
"The iPhone and all other smart phones we have changed social capital," Stapp said. "So the ability to take a picture of where you are and share it. Food became social capital. The places we visited."
Meaning there was a growing focus on factors like design and authenticity. And those priority changes had a drastic impact on how the housing markets in the Phoenix metro area recovered and rebuilt from the recession.
The Recovery
To get a better idea of just how much things have changed across the valley KJZZ and our partners at the Arizona Center for Investigative Reporting ran the numbers.
"We saw a couple of census tracts where the price per square foot increased sometimes two or three times," said Evan Wyloge, a reporter with AZCIR.
Hover over the map to see household income, rental prices, home values and more.
He said trends like this popped up all over the valley. Some were expected, like in central Phoenix and along Central Avenue in downtown and midtown. But others were surprising, like emerging growth clusters in the downtown districts of valley suburbs.
Take Mesa for example. Home values there are up more than 160 percent since 2011. And the West Valley sticks out too.
"There was a huge portion out there that saw home sales increase more than the rest of the valley," Wyloge said.
But while all of these numbers tell one story, there are countless personal stories to be told behind the statistics.
Over the next week, we'll take you around the valley to see how these market changes have impacted local residents and their communities for better and, sometimes, for worse.
