People Will Buy Homes in Cities With Jobs


At the sales office for a new development southeast of Phoenix called Waters at Ocotillo, the PulteGroup (PHM) representative says she’s too busy to talk. It’s a Monday afternoon. One customer is signing a contract in her office, she explains, and another is due soon. The model for Pulte’s Yucca home is open, though. The price starts at $392,990. It’s two stories and 2,688 square feet, designed for four bedrooms and three cars. It’s stucco—as is nearly every home in every subdivision in Phoenix—high-ceilinged, and energy-efficient. The model is completely furnished, with fake iPods, iPads, and family photos. There’s a real foosball table and Whitney Houston’s Greatest Love of All streams through built-in speakers. The Yucca is part of what homebuilder Pulte calls the Cactus line; there’s also the Majesty line, which is bigger and has courtyards.

This week’s issue of Bloomberg Businessweek looks at the housing recovery in metropolitan areas like Phoenix, where housing prices climbed by 22 percent last year. Arizona was number six in the country last year for job growth, and since housing inventory is low in Phoenix, prices of homes have risen and homebuilders are scrambling to buy land to build new subdivisions. It also helps to play Whitney Houston in model homes too, apparently.

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2 Comments / Post A Comment

probs (#296)

But then you have to live in Phoenix.

synchronia (#185)

I guess you can call this a recovery, but it’s not really a recovery for prospective first-time home-buyers. They’re are getting priced out by the “private equity firms [that] have raised as much as $8 billion to buy as many as 80,000 homes” and will basically be left renting the same houses back from these firms.

Right now, in Phoenix 45 PERCENT of houses are being purchased with cash (no mortgage), vs. 10% in 2007.

Apparently this is happening mostly due to banks holding on to foreclosures (because to actually foreclose would mess up their balance sheets, so available inventory is limited and rents stay high) and the Fed keeping interest rates low (meaning there aren’t too many better places for those firms to invest). Capitalism marches on!

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