What is it about Phoenix, Arizona that made it the epicenter of the housing ponzi scheme?
Why does Phoenix seem to be the home of rampant mortgage fraud, corrupt and shady realtors, poorly-built stucco homes, unending suburban sprawl, 20-year-old-condo day-traders, clueless masses, REIC blowhards & spinmeisters (i.e. Greg Swann), ethicless appraisers, scummy mortgage brokers, greedy homebuilders and a lazy, complacent mainstream media?
Was it the ready-made sea of life's losers who couldn't or wouldn't get a real job, and seized upon the get-rich-quick allure of the housing ponzi scheme and REIC jobs?
Was it the widespread lack of character, morals and ethics predominant in Phoenix, compared to other more deeply-rooted and family-oriented towns?
Or perhaps it was simply the army of illegal Mexican workers who made it so easy to build fast, build far and wide, and build cheaply?
What is it about Phoenix? A town others have labeled "there is no there, there"
January 22, 2007
Why did Phoenix of all places see the biggest, fastest housing bubble, and now the biggest, fastest housing crash?
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Why? Because bar bouncers and strippers could get $500,000 mortgages for the first time ever!
Get rich quick artists are attracted to cities with limited social structure, education level and family values: Las Vegas, Southern California and Phoenix stand out in those respects
I'd say that in addition to the increase in liquidity that created the national bubble (loose lending standards, low rates, etc.) what made Phoenix the epicenter was the fact that is was/is a growth city. Hence it attracted housing equity from california, retireee's that did not want to go to Florida, large pools of cheap illegal labor to feed the homebuilder industry and lots of land. The mix just took the mania to a higher level relative to other areas due to a lack of this combination of all the noted variables to the same degree.
WHY PHOENIX OF ALL PLACES?
This is the WHY:
Phoenix and it surrounding metro area is finding its
own level. Basically, a repository of mediocre poorly
educated bottom-feeders seeking cheap banal living and easy money.This souless mix of carpet-bagging transients, budget seniors,tatooed
misfits, real estate grifters, toothless white trash
tweakers, minimum wage job seekers and pseudo Scottsdale millionaires has created a major population
center that masquarades as a major metropolis but is really one big cow town.
A bleak barren landscape with terrible weather,traffic
congestion, bad air, stuffed with ugly stucco houses
and big box retailers peddling Chinese crap, corporate
food, and a dumbed down semi-literate citizenry,
Phoenix metro epitomizes the lowest commom denominator
of American cities.
If somehow, by either plan or accident, you're living
in metro Phoenix, you rank on the bottom rungs of the
intelligence charts. The only reason to be here
(temporarily), is if you're making a decent income
(absolute min. 250k per yr). Anything less is not
worth it, as your health, mental well being and
personal esteem will deeply suffer by living in this
genetic cesspool of half-breeds.
As someone posted here before,
Metro Phoenix, AZ:
"There is no there, There".
Because people can't find real honest work in Phoenix, they have to whore themselves out as hookers, strippers, bartenders, drug dealers, mortgage brokers and realtwhores, that's why
if a ditch digger can make $89,000 why can't he have a McMansion????
The area north of Phoenix is nice, but I have no idea why Phoenix exists. The weather is aweful and there is no agriculture. Whoever decided to start a settlement in the middle of the desert?
Proximity to nutty California. I attribute it to the California Equity Giant Halo Effect (CEGHE)™. Phoenix is the next closest metro area to Southern California. Folks bought investment property and second homes in droves. Compared to California, Phoenix was a bargain a few years ago. Currently we are in a national housing bubble that will shave the GDP to the core by the end of the year.
Phoenix is already approaching 52,000 in inventory and we’re only in the third week of the month.
Dr. Housing Bubble
Don't know what it is about Phoenix but it was the city Robert Kiyosaki chose to build his empire in years ago. It will be interesting to see where he ends up now.
Read the Sunday edition (January 21, 2007) of AZ Republican. An article next to the housing story states that a poll/study found that new hires rate PHX lowest in pay and overall quality of living among national metro areas. It all had the highest housing costs!
Corporate headhunters are having a tough time. I wonder why?!
Holy crap! This blog hasn't sucked lately and has been informative. Thanks for sticking to housing Keith! I still hate you but your blog is better.
It's just like the climate: hot, dry heat during the day = rapid price appreciation. At night, cold as heat (equity) evaporates.
Here's the article...word is spreading that Phoenix is not worth it and is really nothing but a shithole.
Home prices making Valley harder sell for exec recruiters
Low salaries, higher housing prices make Phoenix less of a lure for some key job prospects
Chad Graham
The Arizona Republic
Jan. 21, 2007 12:00 AM
DeeAnn Palin experienced sticker shock two years ago when she was recruited from Houston for an executive position at SCF Arizona, the state's largest carrier of workers' compensation insurance.
The Valley's housing market was heating up, and her family paid 40 percent more for a house in Cave Creek similar in size to their Texas residence.
Palin, vice president for human resources and organizational effectiveness, now is helping recruit candidates from other states, and the price jump can make it difficult to find mid- and top-level executives, even with the housing slowdown.
"It's not that it's horrible, it's not an attraction anymore, and it's becoming a point of concern," she said, adding that Phoenix has a lot of other pluses.
It's certainly a main reason Valley corporate recruiters and companies are having more and more difficulty finding executives, according to a new survey releasedby national search firm TowerHunter and WageWatch Inc.
Its findings include:
• During the past 12 months, 74 percent of respondents had "some difficulty" recruiting middle-management candidates, and 60 percent had "some difficulty" in recruiting upper-management candidates.
• Nearly 75 percent of participants said they experienced situations where candidates withdrew from the interviewing process before a formal offer.
• About 70 percent of respondents said middle managers declined to continue with the hiring process because salaries were too low. That increased to 75 percent for upper management.
• About 60 percent of respondents said the average increase in salary for middle managers and upper managers is more than what was needed two years ago.
Other recruitment hurdles included counteroffers, personal/family reasons and, of course, housing.
"Almost one-fourth of respondents stated that middle-management candidates thought housing costs were not only higher than expected but were a deterrent to relocation," the survey indicated. About "52 percent thought middle-management candidates viewed housing costs as higher than expected but not unreasonable."
Upper management appears to be taking higher housing costs in stride.
About 70 percent of respondents said those candidates thought housing was higher than expected but not unreasonable.
"Five or six years ago, we were screening out the people who just wanted to come to Arizona and retire," said Terry Hindmarch, managing partner at TowerHunter, which is based in Phoenix. "Now, the challenge is different in trying to get top talent."
The study, based on responses from 42 organizations of various sizes across industries, is not the final word on the Valley's executive workforce.
Still, it does reinforce the hurdles Phoenix faces in recruiting the best and brightest.
"Compared with eight other regions with which Greater Phoenix generally competes for highly skilled and educated individuals, the Phoenix area is rated the lowest," determined a November report by the Maricopa Partnership for Arts and Culture.
"Of concern is the comparatively low ranking given to the region by young professionals working here in sought-after fields."
Pressures on salary
Salary was less of a problem when corporate recruiters could woo those young workers and executives, especially those from the Midwest, with less expensive housing.
Maricopa County's wages did increase between the second quarters of 2005 and 2006, but they still lag behind counties of similar size.
"Data for 2005 show Phoenix wages are actually above the national average for professions, sales, and office/administrative jobs," said Lee McPheters, senior associate dean at ASU's W.P. Carey School of Business.
"They may be already able to afford higher prices without heavy negotiation, but due to their unique skills, they will probably be able to get what they ask for in higher salary.
"However, Phoenix pay for production, services and management/business/finance is below the national average," he said.
"These workers have less negotiating leverage."
Pay is closer to some areas of the United States where housing costs remains low.
During the second quarter of 2006, for example, workers made an average of $794 per week in Phoenix; $802 in Kansas City, Mo.; $959 in Houston; and $853 in St. Louis, according to the Bureau of Labor Statistics.
Yet, consider those cities' average median housing price during that same quarter: $272,200 in metropolitan Phoenix; $158,800 in Kansas City; $152,700 in Houston; and $153,000 in St. Louis.
"Phoenix is one of those areas where the cost of high-end housing has skyrocketed in the past few years, and executive salaries have simply not kept pace," said H.S. "Sam" Hamadeh, co-president of Vault.com Inc., a New York-based career Web site.
Risking equity problems
"Companies can scarce afford to increase six-figure executive salaries 50 or 60 percent over a two-year period to keep up with the cost of rising high-end housing," he added. "It's a real bind for Phoenix- area corporations who need to attract the best and brightest executive talent to the area."
It may not be in the best interest of a company to increase wages for incoming executives.
"An overwhelming 86 percent of respondents say that new-hire compensation offers have caused internal equity issues related to current middle management," the report said.
Instead, some companies are increasing the size of signing bonuses, paying a greater share of temporary housing expenses and giving executives more time to find a place to live.
"We try to structure the sign-on bonus to best meet their current needs," said Brad Holliday, vice president for employee relations and performance management at Schaller Anderson Inc.
Sign-on bonuses
The health care benefits manager in Phoenix is offering larger sign-on bonuses than in the past, and some candidates use it as a down payment on a house.
"We are hearing that (housing costs) are a challenge, but it only seems to come from folks from the Midwest or those who live in less suburban, less populated states," Holliday said.
Recruiters at Schaller Anderson also spend time talking up the company's culture and benefits, the weather, Phoenix's proximity to other areas of Arizona and the Valley's growing entertainment options.
"It's not realistic for us to expect that any organization in the U.S. today can have wages that match the real estate growth in Phoenix," he said. "You make the most creative use of dollars that you do have."
Get rich quick artists are attracted to cities with limited social structure, education level and family values: Las Vegas, Southern California and Phoenix stand out in those respects
What about Honolulu? Can't leave out the biggest ripoff city on the planet.
Because people from the overpriced Cali Market swooped in and bought houses without negoation.
I can't wait until Greg Swan = Idiot ("that Casey guy with the BLOG is such a Greg Swan")
My fruity nephew has lived in Phoenix for several years. Works in the city planning dept., so he probably doesn't have much to do.
Phoenix is already approaching 52,000 in inventory and we’re only in the third week of the month.
Where do you get this from? On housing-watch.com it is around 26,000.
I don't get all this Phoenix bashing from you people. I go there 5 or 6 times a year for bidness and always enjoy myself. I'm also going there Thursday for a wedding. The dude who's getting married lived in NY most of his life then moved to Phoenix for the weather, golf and cheap housing - in that order. His wife graduated from Wesleyan. Do you people actually know anyone in Phoenix or do you simply regurgitate the same tired stereotype of the redneck SW from the 1980s?
It's also high-larious to read from you SoCal yahoos about the lack of culture in Phoenix - or anywhere else for that matter. Something about a kettle and pot being black.
Why? Because bar bouncers and strippers could get $500,000 mortgages for the first time ever!
Why not? I didn't realize only certain professions are now eligible for home ownership. I fix airplanes for a living, am I allowed to own one, oh great arbitrer or home ownership?
I'm willing to bet the average stripper make more than 70% of the posters here you pompous douchebag.
"It's always been at the core, a right-to-work state, run in the 40's, 50's, 60's and 70's by an elite group of right wing ranchers, mine owners and bankers. It will take a few decades of those geezers dying off and newcomers from other more progressive states to undo the damage done by the old timers."
1. Right to work and produce results, goods and services, rather than living on the gov't dole...
2. right wing ranchers, mine owners and bankers
People with morals and some ethics, who at least had their own "skin in the game."
as compared to the Casey Serin's and "Gordon Gekkos" of the world
3. newcomers from other more progressive states to undo the damage done by the old timers
You mean like homosexual perversions, economic insanity, and "art" where the US flag is draped into a toilet on Veteran's Day? That kind of "progressiveness?"
Maybe what AZ, and other states needs is just that:
Workers, business owners with morals, and a little less of this twisted world's idea of "progressive."
Of course, if you don't like AZ, there are at least 49 other states you can move to!
Oh... and yes, Keith! Thanks for getting back to RE related matters!
To the Phoenix boosters and shills,
I do KNOW..its a dump and a shithole for third-string losers.
What's with all the anonymous Phoenix bashers? I moved to Scottsdale from LA a few years ago, and haven't looked back! I'm in a much better neighborhood than I was back in LA, and paid less than half as much as a comparable place in LA would have cost. Even though I think Phoenix is now about 20% overpriced, it is still a much better value than most anywhere in California.
god forbid a right to work state where someone can't be forced to join a union. My goodness it's like we're back in the 1840s!!
But I guess renters like yourselves need strong unions and a nanny state to take care of you since you obviously can't make it on your own.
sum gai said:
What's with all the anonymous Phoenix bashers? I moved to Scottsdale from LA a few years ago, and haven't looked back! I'm in a much better neighborhood than I was back in LA, and paid less than half as much as a comparable place in LA would have cost. Even though I think Phoenix is now about 20% overpriced, it is still a much better value than most anywhere in California.
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Scottsdale? are you kidding? Even the losers of metro Phoenix look down on Scottsdale as a big empty hole populated by phonies and bimbos..and you talk about housing "value" as a paramount achievement?
looks like with those kind of values, you do belong in Scottsdale, the armpit of AZ.
Your problem is, you can't make it in LA and skulked away to a place to live with underachivers and mooks.
Yep, its going to be bad in Phoenix. Still, the place that will get slammed hardest will be Miami. They have an inventory of nearly 100k condos and houses. They have 4 times the inventory of say D.C. and half the income and almost the same price. Phoenix is bad, but need to look at South Florida. I suspect we do not see many Florida posting cause most of the state is REIC oriented and in deep denial. Plus they are not the brightest bunch.
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