July 07, 2006

Saw this one coming a mile away - stupid condo project in Chandler Arizona becomes an urban skeleton


You're going to see condo construction in bubble towns come to a screeching halt, as "buyers" cancel, and builders can't pay their subs.

This project, "Elevation Chandler" was the stupidest one I ever saw in Arizona, with an equally stupid name, $1 million-plus prices, and a stupid slick website full of stock-art yuppies.

A 15 story condo building in Chandler? Ah, the smell of cow manure, with no culture, nothing to do, nowhere to walk and absolutely zero reason to have a high rise urban condo. How it ever got off the ground in the first place I'll never understand. I'd like to see the Republic do an update on every condo project in Phoenix. It's gotta be ugly.

I wonder what they'll do with buildings like these? Knock 'em down? Leave them as eye-sores and open wounds for years until someone buys it out of bankruptcy? Make them office towers?

Liens worth $3 million filed over high-rise project

Five subcontractors that have worked on the high-rise hotel south of Chandler Fashion Center have filed mechanic's liens worth more than $3 million against the property.

Liens, documents filed with the Maricopa County Recorder's Office, pave the way for subcontractors to file a lawsuit to force payment of money they say is owed them. The liens also can halt the transfer of a property until the debt is paid, but subcontractors aren't first in line.

In a guest opinion published June 17 on the editorial pages of The Chandler Republic, developer Jeff Cline defended his project:"Neither Elevation Chandler nor the developer is bankrupt or is filing for bankruptcy. Full and complete financing is in place to complete this project."

On Friday, Cline declined to speak directly to The Chandler Republic but sent an e-mail response through his spokeswoman, Lindsay Hicks. Friday's e-mail said, in part: "The financing is just in the process of being completed for the project. Upon funding, any amounts due shall be paid current, and the project shall commence site construction with the original contractor."

35 comments:

Anonymous said...

well, what do you want for a mil $ condo?? We have the mall on the front and the 202/101 interchange on the back..

Looks like a money maker to me!!

Anonymous said...

is that a picture of what i think it is?

Python said...

Yup, it's a view of the U.S. economy as seen from space.

Anonymous said...

if any fool paid $1 million for a condo in chandler, they deserve to be separated from their money

Laura said...

The website did a good job of projecting fantasy living - no wonder it won a prize.

Unfortunately, the only thing the new homeowner will get will be a booby price.

bspays said...

Is this project designed for all the rich twenty-something yuppies in Chandler, AZ? Where are they getting financing? If I had any money in the bank that financed this turd I would move it ASAP.

Anonymous said...

the phoenix / scottsdale 944 crowd (the locals know what i mean) is all about this pimp my car living - but on credit of course, since they work in call centers in real life

so yes, a $500,000 condo, but no-down, no-doc, interest only, and now their first bankruptcy filing at age 25

but that won't stop them from going to axis/radius and buying $10 cosmos all night long

Anonymous said...

I love the unfinished hi rise in Bullhead City, Az. that has been there for decades.

waiting for godot said...

I have to hand it to the housing bulls as being eternal optomists. They probably look at the picture and see pudding. Dig in and get ready for another shock.

Anonymous said...

maybe the mall can annex the property and put a starbucks on every floor. these developer idiots can't even sell buildings in downtown phoenix where there are actually some higher paying jobs. i have driven by this mess, and i don't know how it ever got approved.

the buyers might get their deposits back once all the liens are paid, but i doubt it.

kaboom.

brokersleaveyoubroke said...

EWWWWWW, I was just sitting down to a morning bowl of oatmeal and up pops that picture........... Meanwhile, back at the story.

"It's just a matter of funding; it's not anything more than that," Barnier said.

Well, good to hear it's just something trivial like you don't have the money to finish the project.

autofx in Phx said...

Still waiting for the big home price crash that's supposed to come.

The way Keith paints it, we should have had our huge price crash by now.

Any theories as to why the prices are barely budging yet? Yeah, sure, we see anecdotes of people lowering prices tens of thousands and still no bites, but the asking prices are still generally very high.

And Phoenix housing inventory actually went DOWN over this last week.

foobeca said...

Why aren't prices budging much? Because sellers won't accept lower prices than their neighbor got last summer. Eventually some sellers must sell and will capitulate in order to make the sale. Sellers are asking for the moon and nothing is getting sold. It doesn't matter if your house is worth a billion dollars if you can't sell it.

Another thing that happens at the beginning of a downturn is that the price/sqft goes down, but the median price doesn't. That is because people are buying bigger houses.

Anonymous said...

yo autofx - do some research. the inventory went down ever so slightly. prices are down far more. you will start seeing dramatic year-over-year reductions in the 3rd and 4th quarters for phoenix.

http://www.benengebreth.org/housingtracker/location/Arizona/Phoenix/

Anonymous said...

The crash hasn't happened because big money is still flowing into the hands of builders and buyers. Builders have no choice - it's either finish their projects and spend the money they got 12 months ago, or go bust.

Most buyers don't care about HP and the doom/gloom crowd. The RE agents and mortgage brokers fill their heads with happy talk as they sign those papers.

Until the money spigot is turned off for at least six months, things will continue on the current crazy, unsustainable trajectory.

keith said...

no, the way keith paints it is this is following predictions perfectly

first comes the euphoria, and drying up of listings.

then comes awareness, cashing in, investors getting out, new supply hitting without buyers, causing building inventory

then comes builders cutting their prices on new homes and offering big incentives

then comes greedy dumb bagholders finally realizing (and not denying) that they can't get last year's price, and cutting their prices to get out

that happens right now, but you won't see the sales data until the house does this one crucial thing:

it finally sells.

borkafatty said...

Who on earth unless you have the 20% to 25% downpayment would get a mortgage now?...they are not even offering the mom & pop 30 year fixed rates...its all these fancy type mortgages...it's almost like they want to see your home foreclosed on in 3 or 4 years.

And also prices have not come down because people have HELOC their houses to the max and if they cut the price that is more out of pocket money from the seller, who is already stretched to thin in the wallet.

Anonymous said...

the phoenix / scottsdale 944 crowd (the locals know what i mean) is all about this pimp my car living - but on credit of course, since they work in call centers in real life

so yes, a $500,000 condo, but no-down, no-doc, interest only, and now their first bankruptcy filing at age 25

but that won't stop them from going to axis/radius and buying $10 cosmos all night long
---------------------------------------
GO TO 944.BIZ TO SEE THE PICS OF THIS HOT SLUT CROWD

Anonymous said...

http://www.944.com/phoenix/

but now the hoes that run it want you to login so they can stalk you via email spam

Osman said...

Keith's right about the data.

You won't see a median price drop until those that have overpriced lower their asking and sell. Many of the local markets I follow are showing the same pattern; higher median price, lower DOM, higher inventory, higher foreclosures (Boulder is the healthiest of these markets)

Real estate is far more inefficient than the stock market. There are no market makers, day traders, etc. The transaction costs and time lag is substantial. Information also lags massively.

Can you imagine if we had to wait unti AUGUST to get stock market data from June and the 2nd quarter? That's how long we have to wait for real estate data to be published.

Foobecca is right about $/SQFT. It's a better indicator of a price increase/drop than median sale price.

I wrote a piece on real estate versus the stock market on my blog today, if you're curious.

foxwoodlief said...

Yes, when I lived in Phoenix I thought that project was insane. Still, that area was one of the fastest growing in the country and with Intel and all out there some of the highest paying jobs in Maricopa County so I guess someone thought someone would want the urban feel (how can you really duplicate that in a cottonfield?) and buy so they wouldn't have to commute from downtown.

I lived downtown and thought the prices for lofts and condos insane. I want a thriving urban experience like anyone else but not going to pay more for less and the risks of owning a condo. We lived at Third Ave Palms while our home in Austin was being built (previously Andover when apartments) and laughed when the California investor came and bought and put them on the market back in Oct 2005. They were arrogant and thought they were going to sell out in a week (as some other projects by the Biltmore had two months earlier) and asked us renters to leave so they could renovate the property. Most did, we weren't going to move until our home was finished, well they still haven't sold out and have lowered the prices and I still think them over priced and they are right off Central and the Future light rail.

So what were those folk thinking in Chandler? In Comparison condo's in Downtown Phoenix and the Biltmore area look like steals....which they are not! Here in Austin those similar condos/lofts sell for 1/2 of what they are asking in Phoenix.

foxwoodlief said...

Yes, when I lived in Phoenix I thought that project was insane. Still, that area was one of the fastest growing in the country and with Intel and all out there some of the highest paying jobs in Maricopa County so I guess someone thought someone would want the urban feel (how can you really duplicate that in a cottonfield?) and buy so they wouldn't have to commute from downtown.

I lived downtown and thought the prices for lofts and condos insane. I want a thriving urban experience like anyone else but not going to pay more for less and the risks of owning a condo. We lived at Third Ave Palms while our home in Austin was being built (previously Andover when apartments) and laughed when the California investor came and bought and put them on the market back in Oct 2005. They were arrogant and thought they were going to sell out in a week (as some other projects by the Biltmore had two months earlier) and asked us renters to leave so they could renovate the property. Most did, we weren't going to move until our home was finished, well they still haven't sold out and have lowered the prices and I still think them over priced and they are right off Central and the Future light rail.

So what were those folk thinking in Chandler? In Comparison condo's in Downtown Phoenix and the Biltmore area look like steals....which they are not! Here in Austin those similar condos/lofts sell for 1/2 of what they are asking in Phoenix.

Bubble Bling said...

I don't understand why Kieth posted a photo of shinola.

AnonyRuss said...

>>>Still waiting for the big home price crash that's supposed to come.

National homebuilder KB Homes made heavy reductions on spec homes in subdivisions throughout the Phoenix area. Here is one in Surprise:

Price Increased: 01/27/06 -- $348,500 to $349,000
Price Reduced: 02/02/06 -- $349,000 to $326,000
Price Reduced: 02/19/06 -- $326,000 to $299,900
Price Reduced: 03/16/06 -- $299,900 to $275,000
Price Reduced: 03/30/06 -- $275,000 to $262,900
Price Reduced: 07/02/06 --
$262,900 to $224,900

Bedrooms: 4
Baths: 2
Square Feet: 1,981
Lot Size: 7,501 TO 10,000 SQ FT
Year Built: 2005

Anonymous said...

I LOVE the homebuilders! They KNOW how to sell houses in a crashing market!

More price reductions to come.

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