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  #41  
Old Posted Jun 3, 2017, 6:59 AM
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Can't resist giving biggus diggus some support.

My understanding is that vacancy rate takers don't survey new projects; I think they wait until projects are at least a year old. New projects typically use a 12-18 month lease-up projection and usually pencil in lease-up incentives. That's more of a conservative proforma for finance purposes and ofc they hope to do better and in a good market much better.

Given the downtown area's relatively modest if growing size, it can easily be impacted by 2 or 3 new projects. Rentals can sit for a couple of months w/o much activity and suddenly get a surge of rentng. It's the whims of the market.

My best guess is that it will take 9-12 months before you can state a trend or concerning vacancy problems. Absorption is often somewhat seasonable so that can be misleading also but should even out over a year. In other words a vacancy "problem" that doesn't last long is not a big deal. biggus diggus could have a good sense of right now... but let's wait a few months to see how absorption goes.

The other thing to consider is that any new larger project that would break ground has about an 18 month construction period before it adds any new inventory to the market; a high rise more like 24 months.
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  #42  
Old Posted Oct 19, 2017, 12:42 AM
RonnieFoos RonnieFoos is offline
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A little tidbit of news to add to our exciting last couple of days. Paint is marked on the lawn and sidewalk and a sample drilling rig is onsite where the tower is supposed to go. Definitely a pre-cursor to work. Hopefully, will get some more news out of the pipeline soon.

Also, the renovation is coming along great!
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  #43  
Old Posted Oct 19, 2017, 3:44 PM
Obadno Obadno is offline
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A little tidbit of news to add to our exciting last couple of days. Paint is marked on the lawn and sidewalk and a sample drilling rig is onsite where the tower is supposed to go. Definitely a pre-cursor to work. Hopefully, will get some more news out of the pipeline soon.

Also, the renovation is coming along great!
I think a lot of these proposals have hit a point where they see competitors going up and are worried about being last to the party.

Do give biggus some credit the prices downtown are for sure going to crash after all this inventory comes online.
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  #44  
Old Posted Oct 19, 2017, 3:59 PM
ASUSunDevil ASUSunDevil is offline
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I think a lot of these proposals have hit a point where they see competitors going up and are worried about being last to the party.

Do give biggus some credit the prices downtown are for sure going to crash after all this inventory comes online.
Credit for endlessly predicting a crash that hasn't happened?

Even a broken clock is right twice a day.
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  #45  
Old Posted Oct 19, 2017, 4:01 PM
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Credit for endlessly predicting a crash that hasn't happened?

Even a broken clock is right twice a day.
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  #46  
Old Posted Oct 19, 2017, 4:51 PM
biggus diggus biggus diggus is offline
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You guys can cut the snark any time. Also, don't mince my words. It's one thing to be ignorant but it's a whole 'nother thing to be stubborn and refuse to do any research into the past or listen to someone who has seen this rodeo. Ignorance can be cured if you listen.

I told you about a year after these apartments were all leased is when things would get rough, are we there yet? I don't think in short term, I wouldn't tell you "next week all the apartments are going to stop leasing."

They will all lease initially but apartments have high turnover rates at his price point, you're going to see a LOT of incentivized leases being offered. You're going to see an implosion in pricing due to competition and saturation followed by increased vacancy, this cycle has repeated itself multiple times in my lifetime, this round isn't magically going to be different than the last. The question is will it be as extreme as the 80's when you could get a free trip to Hawaii for signing a 12 month lease.

The developers don't care, once they've leased the units and have sold the building it's not their problem so they'll keep building until someone can't sell one. After apartments become difficult, attention will turn to condominium buildings. Right now renting is hot but there is only so much market and younger adults are beginning to purchase homes at a quicker rate since they are realizing renting is not a good idea.
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  #47  
Old Posted Oct 19, 2017, 5:21 PM
dtnphx dtnphx is offline
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Dude, please give it a f'ing brake for once...please.
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  #48  
Old Posted Oct 19, 2017, 5:21 PM
ASUSunDevil ASUSunDevil is offline
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Originally Posted by biggus diggus View Post
You guys can cut the snark any time. Also, don't mince my words. It's one thing to be ignorant but it's a whole 'nother thing to be stubborn and refuse to do any research into the past or listen to someone who has seen this rodeo. Ignorance can be cured if you listen.

I told you about a year after these apartments were all leased is when things would get rough, are we there yet? I don't think in short term, I wouldn't tell you "next week all the apartments are going to stop leasing."

They will all lease initially but apartments have high turnover rates at his price point, you're going to see a LOT of incentivized leases being offered. You're going to see an implosion in pricing due to competition and saturation followed by increased vacancy, this cycle has repeated itself multiple times in my lifetime, this round isn't magically going to be different than the last. The question is will it be as extreme as the 80's when you could get a free trip to Hawaii for signing a 12 month lease.

The developers don't care, once they've leased the units and have sold the building it's not their problem so they'll keep building until someone can't sell one. After apartments become difficult, attention will turn to condominium buildings. Right now renting is hot but there is only so much market and younger adults are beginning to purchase homes at a quicker rate since they are realizing renting is not a good idea.
Renting is not a good idea? People are now more informed (thanks internet) and owning a home can be expensive as hell with all costs considered. Don't forget that the younger generation doesn't want to be as tied down (marriage, location, mortgage etc.) as generations past.

Also, when have businesses not offered incentives? With competition comes finding creative ways to sell your product. See: "first month free"
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  #49  
Old Posted Oct 19, 2017, 5:22 PM
biggus diggus biggus diggus is offline
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Dude, please give it a f'ing brake for once...please.
I'm responding to people, I dropped it months ago at you guys' request. If other people hadn't brought it back up I wouldn't have said anything.

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  #50  
Old Posted Oct 19, 2017, 5:26 PM
biggus diggus biggus diggus is offline
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Originally Posted by ASUSunDevil View Post
Renting is not a good idea? People are now more informed (thanks internet) and owning a home can be expensive as hell with all costs considered. Don't forget that the younger generation doesn't want to be as tied down (marriage, location, mortgage etc.) as generations past.

Also, when have businesses not offered incentives? With competition comes finding creative ways to sell your product. See: "first month free"
dtnphx is going to have a problem with me responding to your post but look...

renting is basically throwing your money away every month. You build no equity, you buy no tax shelter, and you have no net worth. Millennials are beginning to realize that and are making up some of the largest percentage of home buyers in a lot of markets around the country.

As for incentives, I'm not talking the usual "we'll discount your security deposit" or "free $350 TV". I literally saw a giant burst of apartments built in the mid 80's and about a year later some complexes were giving multiple months of free rent and one of them, yes, I remember the signs "lease today - Hawaii vacation included".

Just curious how young is the average person on this forum? You all seem pretty hard to convince of anything and a lot of the optimism and excitement makes me think you've never seen the bad side of business.
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  #51  
Old Posted Oct 19, 2017, 5:42 PM
Obadno Obadno is offline
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Originally Posted by biggus diggus View Post
dtnphx is going to have a problem with me responding to your post but look...

renting is basically throwing your money away every month. You build no equity, you buy no tax shelter, and you have no net worth. Millennials are beginning to realize that and are making up some of the largest percentage of home buyers in a lot of markets around the country.
Im in the process of buying right now because renting in the areas I like vs buying in the areas I like are practically the same.

Age wise im guessing most people on this forum are probably under 40 so mostly "Millennials" And I would like to point out that most of the lack of home buying from the young is that housing prices vs average incomes aren't as favorable as they were from 1950-2000.

There is an element of people wanting to live in the city but I would bet the majority of it is economic.

ALSO and I point this out a lot to "kids these days!" complaints. the entire concept of a young person or couple being able to go out and buy a house in their 20's is an aberration to the norm.

My grandparents lived with their parents until they were in their mid 30's, this was incredibly common among middle class people except for a few decades under a special set of financial and cultural circumstances that made home buying the norm and fell apart 10 years ago.

Millenniasl living at home longer and waiting to buy a house isn't an exception its a return to the norm.
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  #52  
Old Posted Oct 19, 2017, 5:53 PM
PHXFlyer11 PHXFlyer11 is offline
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Originally Posted by biggus diggus View Post
dtnphx is going to have a problem with me responding to your post but look...

renting is basically throwing your money away every month. You build no equity, you buy no tax shelter, and you have no net worth. Millennials are beginning to realize that and are making up some of the largest percentage of home buyers in a lot of markets around the country.
Generally, I agree. I bought, BUT one caveat that comes with buying a high-rise condo specifically vs. renting is the HOA costs are SIGNIFICANT. This creates a scenario where the monthly outlay can be almost as much as the mortgage, so really only a small percentage of your dollars are going to principal and the rest to HOA and interest.

Houses of course are different. I'm talking specifically high-rises.
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  #53  
Old Posted Oct 19, 2017, 5:53 PM
exit2lef exit2lef is online now
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Originally Posted by Obadno View Post
Im in the process of buying right now because renting in the areas I like vs buying in the areas I like are practically the same.

Age wise im guessing most people on this forum are probably under 40 so mostly "Millennials" And I would like to point out that most of the lack of home buying from the young is that housing prices vs average incomes aren't as favorable as they were from 1950-2000.

There is an element of people wanting to live in the city but I would bet the majority of it is economic.

ALSO and I point this out a lot to "kids these days!" complaints. the entire concept of a young person or couple being able to go out and buy a house in their 20's is an aberration to the norm.

My grandparents lived with their parents until they were in their mid 30's, this was incredibly common among middle class people except for a few decades under a special set of financial and cultural circumstances that made home buying the norm and fell apart 10 years ago.

Millenniasl living at home longer and waiting to buy a house isn't an exception its a return to the norm.
I didn't buy until I was 32, and two decades later (I guess I'm older than most in this forum), I still think that was the right decision for me. I think that at some point in the late 20th Century a culture of premature home ownership took hold and people became convinced they were losers if they rented for more than a few years after college. That led to a lot of drive-til-you-qualify behavior, contributing to sprawl and the housing bubble that burst a decade ago. Equity and a tax deduction are good, but housing should be shelter first and an investment second.
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  #54  
Old Posted Oct 19, 2017, 6:08 PM
RonnieFoos RonnieFoos is offline
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Originally Posted by biggus diggus View Post
dtnphx is going to have a problem with me responding to your post but look...

renting is basically throwing your money away every month. You build no equity, you buy no tax shelter, and you have no net worth. Millennials are beginning to realize that and are making up some of the largest percentage of home buyers in a lot of markets around the country.

As for incentives, I'm not talking the usual "we'll discount your security deposit" or "free $350 TV". I literally saw a giant burst of apartments built in the mid 80's and about a year later some complexes were giving multiple months of free rent and one of them, yes, I remember the signs "lease today - Hawaii vacation included".

Just curious how young is the average person on this forum? You all seem pretty hard to convince of anything and a lot of the optimism and excitement makes me think you've never seen the bad side of business.
Biggus. We all know that renting throws money away. That says nothing. People will still rent because:

A. They don't want to be tied down to living in one area the rest of their life.
B. They are single and the cost of home ownership is greater.
C. Home prices in Phoenix are expensive. Maybe not compared to Cali, but I consider $250,000 for a small 1 story 3 bedroom in an average neighborhood to be 'effing ridiculous. I could get the same home in Ohio for $90,000. That is no joke.
D. Home buying requires property taxes. Yes, rentals include this in the cost of taxes in rent, but it is easier to pay a few extra per month than one lump some per year.
E. Maintenance costs: Mowing your own lawn, landscaping, replacing your own appliances, etc. My AC broke down this summer. It would have cost me $1400 to fix it. Free with my rent.
F. More utilities: Water, trash, sewer which are normally included with most rentals.
G: HOA costs. I hate HOA's.

This all adds up in home ownership costs which a lot of people simply do not want to deal with which is why there will ALWAYS be rentals. Also, Millennials are primarily renters, not homeowners. I have no idea where that statistic come from.

Also, I am 47. So, I am not some young yuppie that has no idea between rentals and ownership. I choose to rent because it suits my lifestyle.

Also, again this is not the 80's man. You're basing everything on 30 years ago. A lot has changed since then and if it's one thing the last bubble bust taught Phoenix and surrounding cities is that Phoenix CANNOT afford another housing bust! This is why the emphasis is urban development and sustainability which is why the market favors multi-family over single-family right now.

No one is trying to bust your chops, but quit living 30 years ago and enjoy the ride Phoenix has going right now. If it bust, you can say "I told you so". But at least wait till it happens.
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  #55  
Old Posted Oct 19, 2017, 6:11 PM
biggus diggus biggus diggus is offline
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I dabbled in sales back in the early 2000's and people were wanting to go to Maricopa because you could buy a 3,000 sq ft house for $150K. I never sold anything to people who would actually live in their house so we never went out there but I think those people prioritized shelter/comfort over investment and look what that got them.

I buy places when I see an opportunity to make some money, it's worked well for me. I bought my first place at 19 and still own it and have been through a dozen since that all turn to rentals when I move on to the next one. I've never had a house that I "love" because to me the idea of making money accumulating more wealth is more important than shelter/comfort.

I can live anywhere, but not everywhere makes money.
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  #56  
Old Posted Oct 19, 2017, 6:12 PM
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Originally Posted by biggus diggus View Post
dtnphx is going to have a problem with me responding to your post but look...

renting is basically throwing your money away every month. You build no equity, you buy no tax shelter, and you have no net worth. Millennials are beginning to realize that and are making up some of the largest percentage of home buyers in a lot of markets around the country.

As for incentives, I'm not talking the usual "we'll discount your security deposit" or "free $350 TV". I literally saw a giant burst of apartments built in the mid 80's and about a year later some complexes were giving multiple months of free rent and one of them, yes, I remember the signs "lease today - Hawaii vacation included".

Just curious how young is the average person on this forum? You all seem pretty hard to convince of anything and a lot of the optimism and excitement makes me think you've never seen the bad side of business.



Dude, why are you (and everyone) trying to convince anyone anything? I thought the purpose of this forum was to share information regarding future, on-going, and past skyrise developments. That's literally it.


And for the record... we all know not every proposed development will get built. But when we go through a period with a TON of news... this forum is going to get excited. Kinda the whole point, is it not?
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  #57  
Old Posted Oct 19, 2017, 6:15 PM
RonnieFoos RonnieFoos is offline
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Dude, why are you (and everyone) trying to convince anyone anything? I thought the purpose of this forum was to share information regarding future, on-going, and past skyrise developments. That's literally it.


And for the record... we all know not every proposed development will get built. But when we go through a period with a TON of news... this forum is going to get excited. Kinda the whole point, is it not?
I get excited when a deli opens up, so
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  #58  
Old Posted Oct 19, 2017, 6:16 PM
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I get excited when a deli opens up, so
Everyone loves a good sammich!
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  #59  
Old Posted Oct 19, 2017, 6:18 PM
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D. Home buying requires property taxes. Yes, rentals include this in the cost of taxes in rent, but it is easier to pay a few extra per month than one lump some per year.
Actually the most common method of paying property taxes is contributing to an escrow account as part of your house payment, which is exactly what you describe. If you do pay by lump sum, by the way, it's twice a year, at least it is in Maricopa County.
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  #60  
Old Posted Oct 19, 2017, 6:21 PM
biggus diggus biggus diggus is offline
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Biggus. We all know that renting throws money away. That says nothing. People will still rent because:

A. They don't want to be tied down to living in one area the rest of their life.
This is a fallacy. Own a home and want to move to another city? do it. You can sell your current house or if you're smart use it as a rental. Most lenders will allow you to use 80% of the gross monthly rent as income to qualify for another house. You now have that tax shelter and continue building equity. You're not tied down, you have an opportunity.
B. They are single and the cost of home ownership is greater.
Not really. My total monthly nut for a three bedroom house in North Central Phoenix is only a couple hundred dollars more than my 2 bedroom condo downtown after I factor in utilities on each and HOA on the condo. The house is substantially nicer and I only put 5% down on the purchase.
C. Home prices in Phoenix are expensive. Maybe not compared to Cali, but I consider $250,000 for a small 1 story 3 bedroom in an average neighborhood to be 'effing ridiculous. I could get the same home in Ohio for $90,000. That is no joke. Phoenix prices are below or just at the national average, I don't consider that "expensive".
D. Home buying requires property taxes. Yes, rentals include this in the cost of taxes in rent, but it is easier to pay a few extra per month than one lump some per year. Taxes are taken out of the mortgage impound and included in your monthly payment. See my response to item B.
E. Maintenance costs: Mowing your own lawn, landscaping, replacing your own appliances, etc. My AC broke down this summer. It would have cost me $1400 to fix it. Free with my rent. This is a fair point, but I enjoy maintaining the yard and having a space to be proud of. Home warranty costs about $500/yr and so far I've had two AC compressors and a water heater repaired in the past year between three homes, this substantially reduces the cost of maintenance to nearly nothing.
F. More utilities: Water, trash, sewer which are normally included with most rentals.
G: HOA costs. I hate HOA's. me too. There are more rules in apartment buildings than there are in HOAs usually, but you can buy a house with no HOA.
I'm not trying to argue with you, all of your points are reasonable but I think you are not looking at the big picture.
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