From the Communications Chair
Some Real Estate Facts
In full disclosure, I have an active Real Estate license in Arizona. I am a real estate owner, investor, flipper, sales agent, buyers agent, and landlord in Arizona, formerly in Illinois, and member of multiple HOA boards. That said, I proclaim myself qualified to write this piece.
Recently, a neighbor approached me. He said while cleaning his garage two gentlemen drove up in a Mercedes, identified themselves as Realtors and according to my neighbor, said that the building of the Sky Crossing Community developement is going to drive down prices of homes in Aviano, and that he should put his house on the market soon. He then asked me what I thought. My answer was three parts. First of all, it is at the very least an unethical statement by a licensed professional. Second, was this their opinion or are they trying to pass this along as factual? If so, where are their facts? Third, it’s basically illegal to incite fear selling.
Truth is, no one can accurately predict future prices especially with unknowns. At the time of this piece, prices in Sky Crossing have not been published . . . neither were their upgrades scheduled, exact delivery dates, or d
etails about amenities. We know the developers paid $100,000,000 and plan to build 1,621 homes. They will also build an elementary school, community center, and neighborhood parks.
We know the community is boarded by Black Mountain Blvd., the soon-to-be Deer Valley Rd. improvements, a treatment plant, and a National Cemetery. This is not a malicious statement in any way or one that would question the value of the homes. The homebuilders, Pulte and Taylor Morrison are highly regarded with great reputations. But when talking about the effect a new community has on resale prices of homes in a neighboring community, more comes into play than just construction costs or sales prices. Relative value comes into consideration. In our case here, I call it the Desert Ridge effect.
About Desert Ridge
Desert Ridge is a master-planned community carved out of land owned by the State Land Trust and incorporated in 1992. When fully built, Desert Ridge will be home to over 20,000 households and a community of over 55,000 residents. Although Desert Ridge is part of Phoenix, this will make the population of Desert Ridge the seventh largest city in Arizona. The available land is still subject to the original population density plan with amenities to be added when population numbers are reached. The master developer, the community management team at FirstService Residential, and the engaged Desert Ridge Community Association board all actively review the plan. Combined, their functions are to monitor growth, maintain standards, ensure strong fiscal management, and attract residential and commercial investment that will maintain Desert Ridge home values. Yes, there is a master association assessment of roughly $1 a day that has not increased in 15 years, which is a testament to the Desert Ridge value received and is well in excess of the costs.
Value of a master developer
One sales feature of communities adjacent to Desert Ridge is that they will not have to pay a master association assessment in addition to their subassociation. This appeals to many. But who will speak up for the community to the city and state government? Who will actively lobby and represent the broader, more global interests and needs of the neighboring residents that are not within the master-planned community of Desert Ridge? Invariably they should benefit, as well as Desert Ridge, from the surrounding future developments. So let’s get back to price
and relative value.
Here is the basic premise:
Price is what you pay, value is what you receive.
Which is where the Desert Ridge effect comes in:
In my experience in real estate, I cannot recall a community experiencing widespread home price reductions in growing and well managed communities outside of either macro economic conditions or environmentally impacting events. I have, however, seen prices decrease in communities that experience stagnation, improper management, or a lack of leadership.
If you have attended a DRCA meeting, read the blast emails, or logged onto the DesertRidgelifestyles website, you’ll see how the Desert Ridge board and management team are working diligently to grow and improve our community. In great part to their efforts, we have Banner Healthcare building a new facility on Irma Ln., with ongoing discussions with other enterprises interested in coming to Desert Ridge.
We are home to the Mayo Hospital, American Express campus, the MIM, the new research facility planned for ASU, and the projected buildout of pharmaceutical facilities along Mayo now named the Mayo Research corridor. The established enterprises as well as the new enterprises are located in Desert Ridge and will further enhance the brand, and the community.
An important element of price and value
The other communities can only market as “close to Desert Ridge”. A definite differentiator in marketing. And by identifying its location to Desert Ridge acts to further reinforce our brand.
There is no wrong answer as to what a person values in a home. I’m confident that the homes in Sky Crossing will be magnificent. Many Desert Ridge residents and buyers new to the area may decide to relocate there. As many as 1,621 in total. We stand to benefit from the interest as well.
Sky Crossing will spend a significant amount of money marketing the community. This brings additional interest and buyers to the area. Those buyers that are in a position to wait until a new home is built could very well choose to buy in Sky Crossing. Those that can not wait and desire a home in this area, may well turn to homes in Aviano, Fireside, etc. with the economic law of supply and demand coming into play. Which is why no one can uniformly say prices will plummet here strictly because a new development is being built close. It’s just wrong. And, it is selling Desert Ridge short.