Periodically, Maps & Facts focuses
on office vacancy. Our last map was a 2Q 2016 Map of the
Month. As shown on this
month’s map and as compared with our 2Q 2016 map, the office market has
improved dramatically. (Though effective rents haven’t increased significantly:
yet.)
Forty-one (41) new buildings have
been added and about 1,000,000 ft.² net have been absorbed. The Valley-wide vacancy rate declined from
16.2% to 13.6%
Central Scottsdale added 7
buildings. Chandler added 6. Tempe’s vacancy improved from 6.57% in 2Q 2016 to
4.3% in 4Q 2018 with 4 additions to inventory. Deer Valley/Airport declined
from 7.8% to 3.4% with 3 buildings added to inventory.
Gateway/Airport/ Loop 202 showed
the biggest percentage increase going from one (1) Class A building in 2Q 2016
to three (3) in 4Q 2018 with only a 5.1% vacancy rate!
Median
Single-family Sales Prices Finally Back to 2006 High!
2018’s median sale price was
$304,000;
a 6.7% increase over 2017, and at
par with 2006’s $302,000!
Maps and Facts has calculated the annual median sales
price for all houses built between 1990 and 1999 that sold between $100,000 and
$1,000,000.
This month’s Map of the Month below shows where all 2018
sales are located.
The bar graph below shows the total number of sales and median sales prices since 2001.
Our study compares the same criteria year over year.
Most other studies include sales of all prices; all ages; and of necessity,
each year’s mix is different.
Click here if you would like a copy of the sales
statistics chart.
In case you missed it, there’s a hot new rental product popping up all over the country. It goes by various names but basically, it’s a gated community of single-family homes that are rented like an apartment project.
This month’s map shows where many of these communities are located here. Christopher Todd Communities and NEXMetro Communities are the largest in Metro Phoenix. There are others we could not readily identify, and, there are more in the pipeline.
Each community has its own pool, fitness center, and parking. Houses have private yards, private entrances, smart-home technology, and even doggy doors! Leased like apartments, a professional property manager is responsible for all maintenance and repairs and rents include real estate taxes, insurance, common area maintenance, etc.
The Phoenix Business Journal regularly publishes real estate news. The March 29 issue highlighted the Top 10 office, retail, industrial, medical office, and multifamily sales for 2018 by sales price according to Real Capital Analytics as published by the Phoenix Business Journal.
This month’s map shows where the Top 10 are located. On a price per square foot basis, Sale #1 @ 2375 E. Camelback Road sold for $330.90 per square foot. Sale #10, The Scottsdale Forum, at 6263 N. Scottsdale Road, on a ground lease, sold for $90.87 per square foot.
The prices and volume of 2018 office sales indicates renewed strong office demand; driven primarily by institutional investors.
Do you have data you would like to map? Just call us.
For 50+ years Phoenix, now the 5th largest city in the US, has (almost) always been one of the top 3 growth cities in the US. On May 23, the US Census Bureau released the latest statistics for July 1, 2007 through July 1, 2018 and, for the third year in a row, Phoenix had the highest numeric population growth in the US adding 25,288 residents (including births over deaths).
Below is this month’s map comparing Phoenix’s numeric growth with our 14 nearest competitors.
Another metric also released was percentage growth; also, for cities over 50,000. Buckeye was # 1 with a growth rate of 8.5%; as compared with Phoenix at 1.5%.
Maricopa City (Pinal County) was one of 10 Census Bureau “places” that first exceeded 50,000 in population as of July 1, 2018
Take your pick. Either way, Phoenix and its Metropolitan Statistical Area (MSA) which includes Pinal County, are still setting records!
Once again, Phoenix has become the #1 Metropolitan growth area attracting people and jobs. Each cycle seems to add density, height, and “world-class” aspirations mimicking cities such as New York and San Francisco.
We like to remind our followers that Phoenix is not New York City or San Francisco. This month’s updated map layers New York City (Manhattan) and San Francisco over Phoenix. As shown, New York City (population 1,665,934) “fits” between I - 17 and SR 51. San Francisco (population 884,363) “fits” between SR 101 and I- I7!
Many analysts
still use one (1) to five (5) mile “rings” to identify a trade area.
Unfortunately, “True Trade Areas” do not radiate from a specific point. True Trade
Areas are always a polygon, or a series of polygons, based on criteria other
than simple geographic distances. Other criteria may include major roads,
traffic sheds, similar uses, neighborhood age, incomes, and more.
The better
approach to a True Trade Area is to “lay out” the most important trade area
criteria on a GIS map to focus on data either similar to your target location,
or, to help select your target location. This can be repeated by layering
multiple criteria. I.e. Where are the youngest households with the
highest incomes?
For this month’s
map we selected the intersection of Scottsdale and Lincoln Roads. While this
submarket is in transition thanks to the Ritz Carlton and other recent resort
projects, it is an excellent example of the difficulty in identifying a trade
area.
As the following “ring”
map shows, a 3-mile ring includes Paradise Valley residential, the Salt River
Pima-Maricopa Indian Community and combined census tract median incomes from
$64 million to $236 million.
If you’re thinking
retail, where will your customers come from? Where is your competition? If
you’re thinking office, how will your employees and clients get to you?
Circular trade areas will not help and may mislead.
Below is a more
realistic, “True”, trade area North/South along Scottsdale Rd. excluding
Paradise Valley and the Salt River Pima-Maricopa Indian Community.
The Tax Cuts and Jobs Act of 2017 established “Opportunity Zones” selected by each state based on “low income and under-capitalized” census tracts intended to attract capital investments to those tracts.
This month’s map shows the 81 Opportunity Zones in Metro Phoenix. As easily seen, many Zones include airports, freeway frontage, reservations, and other “hot spots” such as downtown Scottsdale, downtown Phoenix, and vic. ASU.
The rules are complicated and vague. To learn more, search the internet including the Arizona Commerce Authority site at their website.
With all
the talk of millennials driving infill, apartment construction, and job growth,
this month we looked at the 20 to 34-year-old census bureau cohort growth by
census tract. As seen below on the top map, from 2010 to 2017 the largest
percentage of millennials growth has been at the fringe vs “infill”. I.e. Loops
303 and 202. However, percent change could be misleading based on the size of
the base and small numbers.
To dig
deeper, we plotted the 10 census tracks with the highest number of millennials
– regardless of percentage change. (Based on 2017 American Community Survey)
However, because census tracts are not all the same size, this could be
misleading.
Together,
these maps help decipher what’s trending locally with the largest US population
cohort in history.
While standardized school performance tests, attendance
boundaries, and education concepts have changed over the years, since 1991 Maps
& Facts has ranked all schools in Metro Phoenix using an average of
reading, writing, math, (and sometimes science test scores). This month’s map
plots the top 20 elementary schools, including charters and in-district
charters, based on the Spring 2019 5th grade AzMerit scores.
While student performance on standardized tests is not
the sole measure of a school’s performance, it is the most objective. As this
month’s map shows, there are top elementary schools Valley wide!
This year, the youngest Baby Boomer turned 55. Numerous articles have been published, locally and nationally, implying that Baby Boomer owned houses may “flood” the market due to the smaller sizes of Gen X and Gen Y cohorts; and, implicitly threaten prices.
While this may be true in some parts of the country, primarily due to population shifts, we were curious to see how the existing Metro Phoenix Baby Boomer markets might transition to Gen X and Gen Y cohorts.
For this month’s map we compiled the median sales prices for the original Sun City, Sun City West, and Sun City Grand over the past 3 decades as depicted on the following map.
Our results are charted below:
Sun City Is the largest of the 3 communities with 27,731 housing units (Including apartments and condos). In the 2010 decade to date, 30% of the Inventory, or about 3.5% per year, sold about 8% higher than in the previous 2000’ s decade.
The numbers for Sun City West are similar with about 50% of the inventory turning over (5% annually) and 8% appreciation.
Sun City Grand had 65% turnover (6.5% annually) and 15% appreciation.
These turnover and appreciation rates mimic the long-term Metro Phoenix market i.e. 5% annual turnover and 5% annual appreciation. Even the original Sun City shows positive absorption and appreciation.
These data suggest that Metro Phoenix’s Baby Boomer housing market has performed as well as the larger market. In the years ahead, the Sun City’s should continue to draw from the US’s Gen X and Gen Y population cohorts.
In our opinion, the primary challenge facing Baby Boomer retirement communities Is obsolescence due to housing age and the quality of common area amenities including golf courses and recreation centers.
Metro Phoenix is leading the country in many metrics including Residential
re-sales. This month we tracked
Valley-wide re-sales between $100,000 and $5 million from January 1, 2019 to date. The 25 “hottest” MLS grids are mapped below.
There were almost 45,000 single family re-sales since January 1, 2019
in 258 MLS grids (3 x 3 miles each) with a median selling price of
$291,000. There were almost 12,000
re-sales in the 25 grids with a mean of the median sale price of $317,800.
As shown, Metro Phoenix is enjoying strong house sales across the
board.
