When
It was the
Two years later,
While sales boomed at Verrado when it opened, Spectrum sputtered out of the gate, a result of bad timing more than anything else. And today, like nearly every other master-planned community in metro
To compound matters, each community is a long way from downtown
The Phoenix Business Journal took an in-depth look at these publicized developments on opposite sides of town, from the real estate boom in the middle of this decade to the crash that continues to plague the Valley.
Last week, the
Forty-eight homes are in the short-sale process and 27 are foreclosures.
RL Brown, publisher of the Phoenix Housing Market Letter, said Verrado was on the cutting edge of the marketplace, but “clearly they have seen a change in their fortune.” He said a slowdown in custom housing sales hurt the project, which may have suffered further strain because of its location on the far west side.
To date, about 1,450 production homes and 20 custom properties have been built, according to developer
Verrado is 30 percent developed, and its estimated 25-year build-out likely will be extended. The community’s master plan called for 14,000 homes by 2030.
Buckeye Associate Planner Brian Rose said home builders have stopped construction. Forty to 50 final plats, or subdivisions, were presented to the city for approval in 2006. The city has held off on those approvals at the request of developers because there is no demand.
About 1,600 to 2,000 homes were scheduled to be built on those plats by now, but the land sits barren as builders wait for the ailing economy and real estate market to turn around.
Verrado Vice President and General Manager George Casey said the business plan and development will span multiple decades and market cycles.
According to ARMLS, 170 homes were sold in Verrado from March 17, 2008, to March 17, 2009, a 91 percent increase from the same period the year before. Of those 170 homes, 75 were foreclosures, an 80 percent increase from the prior year.
About 3,000 people now live in Verrado and about 165 homes there are leased, according to Casey. That is a departure from the community’s marketed concept of a family utopia devoid of renters.
DMB gradually has changed its marketing strategy to attract seniors as well, a shift from its intended demographic of families and commuters.
“The active-adult market has always been a part of the Verrado residential mix,” Casey said.
At the other end of the Valley, ARMLS listed 20 active home sales at Spectrum at Val Vista as of March 24, and nearly as many in pre-foreclosure (10) and foreclosure (7). In the past year, the Gilbert community, originally developed by Woodbine Southwest Group, recorded 56 home sales, eight short sales and 26 foreclosures.
Unlike Verrado, Spectrum is near build-out: Some 3,500 homes have been planned and approved, with about 200 yet to be built.
Gilbert spokesman Garin Groff said the economy has slowed the development rate.
Len Meyer, an associate broker who markets the area, said Spectrum has gone through its woes, including developer changes and home builder and land banker bankruptcies. Despite that, the market has picked up, thanks to foreclosures.
“That’s what’s selling,” said Meyer, co-owner of Tempe-based
Market analyst and consultant John Fioramonti said Spectrum has laid off most of its sales force.
Get Connected
Verrado: www.verrado.comSpectrum at Val Vista: www.spectrumatvalvista.com
East vs. West
Figures are for the 12-month periods starting March 17:
Spectrum at Val Vista
’07-’08 ’08-’09 % change
Homes sold 52 98 88%
Real estate owned 8 40 400%
Average sale $304,700 241,600 -21%
Median sale $297,900 222,500 -25%
Verrado
’07-’08 ’08-’09 % change
Homes sold 93 178 91%
Real estate owned 9 75 800%
Average sale $416,700 $301,100 -28%
Median sale $338,000 $273,500 -19%
Source: Arizona Regional Multiple Listing Service Inc.
Troubled Builders
Home builders and other stakeholders going through Chapter 11 bankruptcy or facing other financial troubles:
VERRADO
SPECTRUM AT VAL VISTA
Fulton Homes: The Tempe-based builder filed for Chapter 11 bankruptcy in late January.