Arizona Sucks

Many thanks to member, Out of AZ, for recently posting this invaluable, honest look at how life really is in Arizona. I wanted to be sure everyone got a chance to read it, so enjoy!

I lived in the Phoenix area of AZ for eight years and just moved back to CO this summer. There are definitely negatives about anywhere, but there seems to be more in Phoenix than most. I’ve lived in NY, CA, CO, and NE and AZ is definitely the worst of all the places I’ve been.

For the nation’s fifth biggest city, there is absolutely nothing to do. You can go to one of 1235 shopping malls around the valley to escape the heat or go watch a movie, but you can do that anywhere in the country. You can go to an indoor baseball game if you can afford it. If you don’t have a swimming pool, your time in Phoenix will be miserable. If you do have a pool, expect crazy APS/SRP electric bills due to the pool and 24-hour air conditioning your house will need to keep it livable.

Your car will take a beating, the heat notwithstanding, but also the AZ drivers that you’ll drive defensively to avoid slamming into. Constant road construction is also a negative. There is approximately 15 miles of valley freeway closed every weekend for construction.

The job scene isn’t all that great. Not only is this place a right-to-work (more like right-to-get-fired-for-no-reason) state, the economy is heavily dependent on construction, which has all but ceased to exist right now.

There are like 21236 strip malls in Phoenix that look exactly like the 21235 others in the area. Same stores, same restaurants, same landscaping. It’s pretty hellish. And now, roughly half of most of the strip malls stand empty because of Arizona’s economy (and the broader US economy as well).

There’s no culture here. I’m not kidding. The best Mexican food here comes from chain restaurants. Or at least that’s what most Phoenicians think. Most Phoenicians love spending long weekends in Mexico but look down on Mexicans, Mexican food, and Mexican culture. Any other culture? Forget it, the best Italian food in the valley is at Olive Garden, the best Chinese is at Panda Express. For a metro area with a population over 4 million, it’s pretty pathetic.

The homes/neighborhoods/cities all look the same. Stucco brown boxes with eight tons of crushed rock in the front yard. You don’t know if you are in Ahwatukee, Tempe, Peoria or Chandler. It’s all the same.

I don’t know about public schools, I don’t have kids. But I will say that if you really think you’re going to receive a world-class education in a college with 70,000 others like at ASU or by paying tens of thousands for a degree people may or may not take seriously like at University of Phoenix, this may be a good place.

Phoenix is a waste. Truly. They waste water for miles of grass for golf courses or huge resorts. There are fountains and fake lakes everywhere. It’s great if you want to live near a body of green water so you can be eaten alive by mosquitoes. They waste electricity. How else do you justify living in a town that can get upwards of 120 degrees?

Phoenix is a demonstration of human accomplishment and hubris all at once. The fact that you can take a desolate, uninhabitable desert and turn it into the nation’s fifth-largest city shows what we can accomplish as a society. But for what purpose? So your kids can stay indoors for six months watching tv and playing video games because it’s too hot to play outside. So you can drive in your air conditioned car to your air conditioned office and back to your air conditioned home. So you can earn less money than most people doing the same job in the rest of the country. All this, with fluctuating real estate values, increasing crime, decreasing job opportunities, it’s all reason to stay out of Phoenix.

Looking at the current situation we are in here in Arizona, it is hard to believe that just a few years back houses could not be built quick enough out here. People were ready to buy and many homes were selling before they even hit the market. It was during this time that apartment conversions skyrocketed in the Phoenix area to try and keep up with demand, especially in areas like Scottsdale. It is certainly much easier, as well as a great deal cheaper, to take these preexisting apartments and drop in a few upgrades, instead of building from the ground all the way up. Transforming former Arizona apartments into so-called condos also allowed you to make the most out of older apartments that are located in areas which are seen as more desirable. You can charge quite a bit more for real estate that is more centrally located in the Phoenix area, as opposed to all the new builds way out in Buckeye or Apache Junction. Sure the location might be great and these newly named condos might look super nice when you first step inside, even though the outside of most still screams trashy apartment, but are they really a wise buy for your money?

Looks can surely be deceiving and this could not be any more apparent than when it comes to most of these Arizona condo conversions. It was imperative that these Arizona condo conversions were done quickly, cheaply, and efficiently in order to maximize profits before the market turned – if not, you would be the one taking the financial hit when Arizona’s housing market went south. So, how much time, effort, and cash was actually put into the majority of these recent conversions? Well, it’s not that hard to rip out the brown or green 1970s appliances and replace them with new, bottom of the line stainless steel appliances. Add cheap, knockoff granite counter tops and update some of the archaic light fixtures and you have already made the place look a thousand times better while keeping your costs extremely low. Now just repaint the aging walls and replace the stained carpet with the cheapest tile you can find, and you have successfully finished your Arizona condo conversion. This is reality – most Arizona condo conversions consist of not much more than new paint, appliances, lighting fixtures, and flooring.

The motto and underlying sales tactic for anyone trying to sell you one of these properties is, when in doubt or questioned about anything, rave about the resort like pool. A number of these Arizona conversions spent a significant portion of the cash set aside for the conversion on upgrading the pool area. Many added new palm trees, maybe some tiki torches, and newer bamboo chairs and umbrellas. Some spent a fair amount on resurfacing the old pool, while others did nothing except for making things appear better than they actually are. Almost every one these Arizona condo conversion brags about having resort/Vegas style pools with all the same amenities you would find there which is really not the case. Don’t be fooled – how much time do you think you will actually be at the pool anyways and don’t forget you are sharing this pool with all your loud, drunk, disease ridden, meth dealing neighbors.

Before you even consider buying one of these properties, you must remember that many of these units were sold without consideration for the future of the community or its residents – this is not a planned community, it is essentially a get rich and get out scheme. HOA fees are often absurdly high to ensure maximum profit for those part of the conversion process – funds in the HOA capital reserve for potential large expenses such as pool maintenance and roofing repairs are pretty much non-existent until you have owners regularly paying their dues. But, remember most of these properties were sold when the housing market was at its peak and everything was way overpriced. Many have since been foreclosed on or have renters who are paying extremely low rent, and many units still sit vacant because most were picked up as investments. When you rely on HOA funds for general maintenance, pool upkeep, and other community repairs with so many units in foreclosure, you really have an issue on your hand. A number of these condos also suffer from being poorly managed and developed since these old apartments were purchased to get them on the market as quickly and cheaply as possible. If you still plan on purchasing an Arizona condo conversion, make sure you know exactly what your monthly dues are, what they cover, and how the reserve funds are handled.

Are there are condo conversions that might be worth looking at in Arizona? Sure, there might be, but good luck finding them. Many of these Arizona condo conversions were done as quickly and cheaply as possible in order to get them on the market while it was still promising. Be warned, most of these Arizona condo conversions are the equivalent of a cheap paint job – it might look nice the first few weeks but will quickly show just how imperfect it is. And unlike the apartment it once was, you can’t just terminate your mortgage like you could with that lease. Condo conversions are often cheaper than original condos/townhomes because all they really are would be apartments with stainless steel appliances and often a large HOA fee. You are still living with paper thin walls, aging and possibly deteriorating plumbing and electrical lines which are often overlooked since they are hidden from view, and usually a thoughtless design and layout inside your unit and that of the entire community. Save your money and buy a real condo or a house or just avoid the mess of Arizona real estate all together.

If you’ve been to or lived in Arizona, then I am sure you know that many of the newer home developments and apartment/condo complexes are now gated. I’m also sure that if you watch just a few moments of the Arizona local news, you have seen the growing and obscene amount of crime within state lines. Stabbings, shootings, rape, abductions, robberies, and children being maliciously abused are all on the news every single day out here – and these are only the stories that make the Arizona news. You watch just a few of these stories and you might start questioning your own safety in Arizona. Commercial home and apartment builders quickly caught on and started building communities with electronic gates for access in-and-out of the community. Being in a ‘gated community’ has become a main selling point when it comes to Arizona real estate since there really is nowhere to hide from all the violence in Arizona . Many feel these gates keep the bad guys out and some actually say that they feel safer while being imprisoned within their own community. If you must live in Arizona, is it really worth your time to look around for a place in a gated community or to rule out a home because the community is not gated?

The easy, quick, and simple answer to this one is, NO. Take a look around – most of these gates don’t even work properly, and even if they do, most have no mechanisms from preventing someone from following someone else in or from coming in through the exit lane when someone else leaves. If someone wants to get in, they will find a way. Really, the only benefit to a gated community is it prevents most of the thru traffic – how often do people cut thru residential roadways anyways? In the end, it is not that Arizona gated communities are a bad thing – it is just that they give you a false sense of safety and security which is not really there at all. Want to really feel safe – get out of Arizona and away from the illegals, Mexican gangs, drug lords & mafia, white trash, drug dealers, and the rest of the meth heads out here.

The shadow market has been getting a lot of media attention here in Arizona during the last few weeks. Some of you might wonder what it is or how it could affect you if you own an Arizona property or plan on purchasing one. It is important to point out that these shadow properties always exist in the market to some degree, but nothing like the current level and you have to wonder how long anyone can keep these properties on their books. Anyways, first the facts:

Arizona has come pretty close to leading the country in number of foreclosures in recent years and this trend is likely to continue for some time. Too many people, bought too many houses in Arizona which they knew they had no chance of ever making the payments on. Remember just how low the average Arizona salary is and that equates to a large percentage of people being priced out of the Arizona market even when prices are the lowest. This would prevent most rational people from trying to purchase a home, but not in Arizona. Back during the Arizona gold rush of 2005-2006, everyone, and I mean everyone, in Arizona thought they would become real estate tycoons and retire early. The plan was to buy Arizona real estate and flip it for a profit, since prices are only going to get higher, right? And it did work, except for the tens of thousands who were late to the game and stuck in a mortgage or two they could never really afford. Even if you were one of the few good people who actually took out a loan you could afford, you were now stuck with an Arizona home that you considerably overpaid for. And a new weekend activity in Arizona was born – driving through neighboring subdivisions and counting the number of homes in foreclosure.

With so many foreclosures in recent years, the majority of Phoenix homes are now owned by banks and many estimate this number could be 75% or higher. A huge percentage of these Arizona properties going into foreclosure are not even making to the market. Instead, Arizona homes and condos are being held and sit vacant, or they are being rented out for the time being. Why? Banks and homeowners are trying to cut their losses on these failed investments as much as possible and trying to wait for the market to inch upwards. And, if you have yet to sell your investment for a loss yet, then it would still be considered an asset, right? Short-term this will prevent home prices in your neighborhood from dropping as much as they really should be right now – don’t get too excited though.

As the market really begins to show signs of moving upwards, a lot of these homes will hit the market. It is predicted a lot of those people who are actually not in foreclosure may also try and sell when the market starts to really turn around. What happens then? Prices go back down. What happens when the foreclosures in your neighborhood hit the market? The value of your home goes down too. There were so many new homes that shot up during the Arizona gold rush that there is far too many homes and not enough qualified home buyers in Arizona. As hard as foreclosures hit the Phoenix area, it is going to take a long time to really recover. It may never recover in some areas – many aren’t going to jump at the chance of moving to Buckeye, Queen Creek, far east Mesa, Surprise and other fringe cities unless they are in retirement or work at the local Safeway.

You really probably aren’t ever going to win again in the Phoenix real estate market. If you must live here – buy what you want, where you want, and plan on staying for a while.

Creative lending schemes and ARM’s were all the rage just a couple years ago during the peak of the Arizona housing boom. Just about anyone and everyone was buying real estate – most were buying homes they could never even afford and should have never qualified for. Everyone believed he or she would be the next real estate tycoon and would be retired months later from buying and re-selling these grossly overpriced homes. In typical Arizona fashion, many of these home debtors never considered that the boom would have to end and their ARM’s would adjust at some point. Well, the fake Arizona housing boom is definitely over and done with, but what about those ARM’s?

In the coming months, a number of these ARM’s will adjust and those who are already struggling to make their mortgage payments will no longer be able to continue to make the payments. What does this mean for you? The prices of these homes will be slashed in order to try and avoid foreclosure – which also means all the property values in the area will go down as well. Or these homes will enter foreclosure which will also drive down home values. Keep waiting, because Arizona real estate prices sure have not bottomed out yet.

What are Arizona Realtors to do these days? Homes are not selling like they were just a couple years ago and there are tons of overpriced homes on the market. It is truly a buyer’s market, but why buy now when it will be even cheaper tomorrow? How is a Realtor going to earn your business, if for some reason you decide to buy into the Arizona market even after reading this blog? Lie, lie, and more lies. Here they are in no particular order:

‘Now is a great time to buy’ – when is it not a great time to buy when you are earning an over-inflated commission on every piece of property that sells? The fact of the matter is that the home that you are looking at today will only be cheaper tomorrow. Why rush into buying anything, but your absolute dream home?

‘Arizona real estate is still a great investment’ – not so fast. Real estate can be a great investment if done correctly, but it can also be the complete opposite. Historically, the rising value of your home will barely beat out inflation in the long run. Of course, this was not the case if you had bought an Arizona home 5-10 years ago and were able to sell it at the peak of the real estate bubble back in 2006. So … invest in a home you can feel safe and enjoy living in for a while, and not your ticket to becoming a millionaire.

‘This is one of the safest, most affluent, and nicest neighborhoods in the Valley’ – except for the illegals, the meth-lab next door, the unspeakable number of foreclosures, home invasions, the over-controlling HOA, and the Repo guys who are constantly cruising the streets.

‘Trust me’ – no comment.

‘This one won’t last much longer at this price’ – it will and it will more than likely still be around in a couple weeks, if not months. Arizona real estate is definitely not selling as soon as it hits the market, and there are more than enough homes to meet the current demand. In reality, this home will still be for sale in a couple weeks AND it will be even cheaper. What’s the rush? Remember, you are going to be the one living in the house – not the Realtor!