Good News for the Neighborhood

…maybe not the greatest good news for my neighbor, but it looks like the ’hood is on its way to major gentrification. At worst, our property values are likely to stay stable no matter what the overall Phoenix-area market does; at best, they’re poised to head for the stratosphere.

Turns out a young couple has bought my neighbor Maria’s house. They have four kids, and Dad is a bright-eyed and bushy-tailed young fellow.

This is good: it’s what happened in the Encanto District back in the day, when my then-young husband and I bought a beautiful old house down there. We were among the first to buy in a neighborhood called Willo, where unique and solidly built houses dating back as far as 1929 stood in stark contrast to the seas of ticky-tacky stick-built tracts sprouting in the suburbs.

At that time, the area was just being discovered by young professionals — mostly lawyers and doctors — who didn’t want to commute an hour each way from some look-alike tract of stucco throw-aways. A buying frenzy ensued. And a fix-up frenzy ensued. The area is still gorgeous, and now if you earn a median Arizona income, you can’t afford to buy a two- or three-bedroom house down there for love nor money. These were folks who could afford to put their kids in private schools, mooting the problem posed by the dreadful inner-city schools that served the area. Or disserved it. 😉

Well, the area where I’m now living presents an almost exact parallel to the Willo of 35 or 40 years ago: it’s centrally located; houses are solidly built of block (not sticks and styrofoam) with mature trees and landscaping; it abuts a very upscale neighborhood on one side (similar to Willo’s neighboring tract, Palmcroft) and a very downscale area on the other side; schools suck but a number of good private preschools and K-12 schools are nearby.

The centrally located part is huge. Not only are we fifteen minutes from downtown (law offices, courts, two enormous regional medical centers, baseball stadium, increasingly vibrant downtown cultural life), the lightrail is being built within walking distance. Read: doctors and lawyers.

The young man I met yesterday when I strolled across the street to pick up the vacationing Carol & Tom’s newspaper was so excited about getting the house! And he was delighted to hear that the place is filling up fast with growing families. His will be the fourth on the block to move in with small kids — and two of those families have twins! 😀

It really is extremely good news. Young, upwardly mobile buyers will fix up the homes, become active in the neighborhood association, and most of them will stay here for at least ten years. As their careers mature and they build affluence, they also will acquire political clout, and that will go a very long way toward preserving and improving our area. The result? $$$$$

My DXH and I bought our house in the Willo district in 1969. We paid $33,000 for it — more than we could afford, but we were so enamored that we just had to have the place. Three months later, the doorbell rang and when I answered it, I found a real estate agent standing there. He offered me $100,000 on the spot.

I sent him away, because I loved the house so much that I wouldn’t have taken any amount of money for it. But…you get the picture. Housing in the area inflated that much, that fast, and with the exception of the Great Recession, values have really never dropped. They certainly never dropped proportionately: even during the GR, for what I could have gotten in a sale of this house, I couldn’t have afforded a two-bedroom fixer-upper in Willo.

The only loser here, I’m afraid, is Maria. Her agent listed the house for a good $30,000 under market. They asked $233,000, when two houses in the same or a similar model are on the market for $280,000. She was persuaded to go that low because the house does need some fix-up. She never got the roof replaced after the hailstorm — I suspect that, because she lost her job during the Recession That Was Not a Depression and is, like me, of an age that no one will  hire, she had probably dropped her homeowner’s insurance. The pool needs work. The trees could use some pruning. The lawn needs aerating and fertilizing. And I expect there’s probably stuff inside that needs renovation. But at base, the house is quite pretty: it has Saltillo tile flooring throughout, professionally designed (though aging) landscaping front and back, spectacular trees in front, and it still has grass.

Because of the roof and pool issues, Maria’s agent engineered a further discount. So these kids are practically stealing the house. It’s a very good deal for them. Not very good for her: the house was seriously underpriced when it went on the market just a few days ago (when something sells in less than a week, you know the price is too low), and pushing it down another 10 grand to pay for the roof is amazingly advantageous for the buyers and amazingly disadvantageous for the seller.

It will depress prices for other houses, temporarily: those two $280,000 shacks were overpriced from the git-go. One has been on the market for several months; the other for weeks. Probably about $260,000 is a fair price for a house here that’s been renovated and attractively updated; maybe $250,000 for one that could use some work (that would be Maria’s), and $230,000 to $240,000 for a fixer-upper.

Except for the roof, which was damaged in the hailstorm, Maria’s house is not a major fixer-upper. If she’d listed it for $250,000 and paid for a new roof and light pool renovation, she would have come away with $230,000 to $235,000 — her initial asking price. So she comes away with the short end of the stick.

The neighborhood loses Maria, a beloved neighbor. However, we gain a vibrant, lively young family with children who will play in front and parents who will upgrade the house and, from the looks of that guy, earn a good living.

These are good things. Very good.

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