Arizona property in the Greater Phoenix Area dropped, on average, close to
50% from 2006 to 2012; a greater percentage drop than in the Great Depression. By 2019 they are edging up but still have a little way to go to match their 2006 values.
Rental rates, however, have hardly changed at all; if anything they have continued to rise. Clearly, ownership and rental are separate and distinct markets. So, for anyone intending to spend time in the Phoenix area for three months or more, on a regular basis, buying could still make sense.
In Sun City, a Dell Webb fifty-five plus retirement development in the north-west Phoenix area, the yearly recreation center fees, for two people, are $490 per household.
This is a mandatory charge and it covers the use of several sizable centers with gyms, libraries, swimming pools and hobby workshops as well as many associations and clubs.
The development of Sun City began in the early sixties. It now stands at 22,000 homes with a population close to forty thousand. There are eleven golf courses; three are private and eight are public at which homeowners can play for a reduced rate. Properties generally are detached homes and patio or duplex style condos.
Condos are governed by Home Owners Associations (HOAs) comprising 20 or so residences on average. HOA fees are typically $200 per month. This covers common area maintenance, sewage, water and building envelope fire insurance (excluding contents). There is usually a board of directors and they administer matters such as maintenance and architectural control.
In Sun City, most property taxes are low-about $850 per year (there are no schools). Based on buying a condominium style home, here are some numbers:-
Assume electricity and gas runs about $100 per month (seasonally adjusted) then the total is 432 + (12x200) + 850 + (12x100) = $4,882. If you stayed at your Sun City, Arizona property for four months this would be equivalent to $1,220 per month.
To rent a property is typically $1800 per month or higher so if buying is for you, then at this time, the numbers still make sense.
Of course there are usually improvement and furnishing costs. However, it’s hard to imagine medium term Arizona property prices going any lower so any price rise will help cover these costs.
still bargains to be had, but it’s best to actually look around the area. There
are still some bank owned properties and homes for sale by owner.
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