[combusean]

Scottsdale condos opening as fever dips
Scottsdale wave starts strong, may ebb later

Peter Corbett
The Arizona Republic
Aug. 2, 2006 12:00 AM

Scottsdale's condominium market is showing signs of slowing just as some of downtown's projects are close to moving in their first residents.

The Hotel Valley Ho is to complete its first condos early this month, and the residential tower should be completed by November, said Alyssa Wick Thomas, a sales agent for Russ Lyon Realty.

With the market cooling, Thomas said it is fortunate the Valley Ho is on the leading edge of downtown's condo development wave.

"It's certainly not as strong as it was two years ago when people were signing up without even looking at anything," she said. "Now they're analyzing everything and crunching the numbers."

About half of the Valley Ho's 37 condos have been sold. Among the remaining condos are 1,800-square-foot penthouses, priced at $1.5 million.

Some other projects in the first wave of what is expected to be 2,000 new downtown condos will welcome their first tenants during the next few months.

Optima Camelview's first residents will move in by September. Spokeswoman Jennifer Ziegler said about 535 of 700 condos have been sold. Steel framing was to start last month on the second phase.

The first occupants of the 13-story Scottsdale Waterfront Residences will move in by January. Meanwhile, the steel framing of the second residential tower on this project is nearly complete, with move-ins scheduled for the second quarter of 2007.

Developer Alan Farris said Main Street Plaza will turn on the lights and air-conditioning for its first residents in August. Construction of a second phase will start later this year, he said.

Soft buyers flee

Scottsdale's market started picking up steam when the condo cranes went up, and it appeared buyers were feverish about the new urban lifestyle that builders were touting downtown.

It's clear now that some of those folks were testing the waters. Once developers had their real estate reports in hand and wanted signed contracts, some of the so-called buyers took their refundable deposits and pulled out.

"We had buyers who went to all of the different developments and put their money down," said Thomas, the Russ Lyon Realty agent.

Now, as the doors open on a new style of luxury living in Scottsdale, it will be interesting to see how many condo deals close and whether prices slip or developers offer incentives to fill up their lofty and costly perches.

Resale market cools

While builders add finishing touches to new condos, Scottsdale's resale condo market has seen sales dip 18 percent from May to June. The median sales price last month was $264,750, up 1.2 percent from May but down 7 percent from February, according to the Arizona Real Estate Center at Arizona State University.

Valley-wide sales of existing condos were off 30 percent from May to June, and the price dipped 0.2 percent.

Local buyers, squeezed out of the single-family home market, had shifted to condos and condo conversions. But many of those doors closed to them when prices shot past $200,000 for dolled-up apartments, some of them older than the 20-something buyers.