One community continues to see an increase in single-family home construction while the other is seeing a proliferation of multifamily housing from border to border.
Town and city officials say the economic activity is welcome and over the last few years home construction has been relatively steady.
Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, has declared the Phoenix housing market officially mired in a sales slump. Phoenix-area home prices shot up from September 2011 to last summer, before slowing down and then even dropping earlier this year.
Then, this June — after three months of almost stagnant prices — the median single-family-home price finally rose to $211,000, which is up from $190,000 last June, the latest real estate report shows.
The change in home valuation hasn’t pushed sales, which some say in Scottsdale is being realized in the creation of an abundance of multifamily housing product throughout the community.
Scottsdale saw 36 single-family-home permits sought in August while year to date the municipality has seen 359 permits issued, according to numbers provided to Independent Newsmedia.
In August 2013, the city saw 17 single-family-home permits sought while 25 permits were issued the same time period the previous year, the report shows.
Multifamily home permits sought during the same period paint a different numerical picture.
Year to date Scottsdale has seen 147 permits issued for 995 new apartment units to be built over the next calendar year, according to Michael Clack, Scottsdale Development Services director.
In August, 584 apartments were permitted to be built. In August 2013 the city approved 12 units while that same time period the previous year the city approved 613 apartments to be built.
Scottsdale has a population of 217,385, according to the 2010 Census.
“The only thing I can tell you is apparently there must be a demand for housing,” Mr. Clack said in a Sept. 23 phone interview. “That is the only conclusion unless people wouldn’t be building houses and apartments.”
Mr. Clack says building permits are issued once the proposed housing projected completes the municipal process.
“I just issue the permits,” he said. “If they have the proper zoning and they have gone through the design development review process we will issue the permit. It is not so much what we desire to see, but what people want to build.”
Todd Bowden, JPI/TDI Companies senior vice president, says Scottsdale continues to see a need for multifamily housing.
“Our research continues to show strong demand for new multifamily projects especially in this area,” he said of Jefferson at One Scottsdale, 7355 E. Thompson Peak. “The simplest way to put is job growth continues to be strong in the Phoenix metropolitan area.”
JPI/TDI Companies owns Jefferson at One Scottsdale where construction is ongoing on the second phase of the 710-unit multifamily housing project in north Scottsdale.
“North Scottsdale has always been a desirable place to live,” Mr. Bowden said of why his company chose to build a luxury apartment project adjacent to the Grayhawk master-planned community.
“We are quite happy being a part of that neighborhood with this project.”
Mr. Bowden says 64 percent of the 388 units already built at One Scottsdale are leased.
“There has been very little new multifamily housing built over the last decade,” he explained. “In a sense the market is finally just catching up.”
Scottsdale Vice Mayor Guy Phillips has been a critic of the amount of apartment projects pursued by local builders.
“When the downturn in the economy hit everyone lost their homes. People needed a place to live,” he said of the recent popularity of apartments and the perceived need for more of them in Scottsdale. “Those same people want to get back into a home. What happens when they leave? They become empty shells. We are bringing in workforce housing.”
New apartments are expected to become within the city, especially in the Scottsdale McDowell Corridor.
There was a time when portions of McDowell Road served as a major commercial artery pumping a constant flow of revenue into the coffers of local proprietors and the municipality of Scottsdale.
Once referred to as the Scottsdale “Motor Mile,” the area saw an exodus of business over the past decade as low- and high-end car dealerships sought greener pastures in different parts of the Valley of Sun.
City leaders now identify the McDowell Corridor as an eight-square mile area spanning McDowell Road from Pima Road west to Phoenix and including surrounding neighborhoods north to Osborn Road and south to the city limits.
Some say new apartments planned along McDowell Road will jumpstart the revitalization effort along the thoroughfare.
“I do not agree,” Councilman Phillips said. “Most people do not want to live where they work. What we need is a lot of new businesses, little businesses — not a lot of apartments.”
Councilman Phillips says he worries too many apartments in Scottsdale could over-saturate the market, eventually driving real estate values down.
“I think we are saturating the market,” he said of previous council approvals. “They (council) weren’t thinking about that when they were approving. They were thinking about putting money into city coffers because that is what we do.”
North Valley News Editor Terrance Thornton can be contacted at 623-445-2774 or you can follow him at www.twitter.com/nvnewsman
Terrance Thornton can be contacted at 623-445-2774 or at email@example.com