Trends around the country show homes sales, new starts are slowing. The craziness of the past few years may well be catching up to us. In Sun City, i have argued we are less likely to suffer those slowdowns, but are we? I went to the treasurer's financial reports for the last six months and it looks like that may well be the case. The PIF amounts are averaging around 550 k for those months with several of them under $500,000. Obviously we need to see longer time lines for a more clear picture, but it is important to follow the rest of the year to see whether we are dropping off. It matters as the board has a number of large ticket items they want to work on and those PIF dollars all matter as to how much gets done and how fast. The good news is there is 16 million dollars in the Preservation fund. What we don't know is how much is owed on the Willowbrook/Willowcreek project (if anything). We do know the solar payoff is 5 million plus (up somehow by a million dollars from the original buyout). We don't know the final costs of the South golf course pro shop but i suspect it will be in the neighborhood of 2 million dollars. And, we have yet to see any costs for the Grand Ave project. Interestingly they didn't have an updated budget for it, they are waiting for the builder to tell them their cost. Odd. The point being a good share of that 16 million dollars in the PIF is already accounted for. Nope, no reason to panic, just always interesting to get folks to pay attention to what is going on within the community. Sadly, too few people pay any attention...at all.
The most reliable information that I am aware would be through the Arizona Journal of Real Estate & Business. It is published monthly and can be subscribed to and/or viewed on line at www.asreb.com., 480-946-5388. Each month there is a theme that is written about by many leaders in real estate and the business world here in Arizona. There is a particular contributor that supplies monthly statistics regarding the real estate market in the Phoenix area. The contributor is Fletcher R. Wilcox, V.P. Business Development and Real Estate Analyst for Grand Canyon Title Agency. I find that his information is reliable and is not limited or based upon the opinions of your friendly neighborhood real estate agent. You may find that some information may not be specific to Sun City or other age restricted communities but what happens elsewhere in the Phoenix area also occurs to the senior communities as well.
Gary: Have you seen comparative stats for sales from year to year. t would be interesting to see what has happened in calendar years, 2017, 2018 and the first two months of 2019. I can look at PIF revenue on a monthly basis, which actually was what got me started on this thread.
BP: Based upon the February Journal article the residential closed sales for 2017 and 2018 were basically equal with less than 1% variance. A decline in sales started in the summer of 2018 offsetting the increases in the earlier part of the year thus bringing down the activity in 2018 to equal the activity in 2017. The second have of 2018 show a slow down of closed sales which may continue into 2019. The author has not addressed the first two months of 2019 yet. Prices continue to rise which decreases the affordability which creates less sales. Overall new listings were down in 2018 compared to 2017 totaling about a 1% decrease. The good news that should still keep the market active is that the job market is good, the interest rates have dropped a little and the Phoenix area has continued growth. On a personal note I have seen a slow down in activity, a tremendous amount of price lowering on existing listings which is basically a longer time on the market and for the first time in years the appraisals coming in at less than the agreed upon purchase price on pending sales. It is my belief that we may be in for a "correction" in the market. I have seen this occur four times now at about an average of 12 year intervals.......the timing is about right for the next "correction". Sun City and other age restricted communities are not exempt from market conditions although when corrections or shifts occur it may happen slower and not be as drastic as some other areas. The figures that we see from RCSC for the numbers of transactions whereby by a PIF fee is collected is not necessarily a 100% reflection of market conditions. There is a certain amount of PIF fees collected where a "sale/purchase" has not occurred. I have no information as to what percentage of the total that may be.
Thanks Gary. I didn't think the falloff was great, but clearly there is some. The correction you talk about is cause for concern. The PIF is how we get things done and with the commitments already in place, future plans rely on those 2000 homes sales per year. It is imperative the board pay close attention to these trends. You are right, we aren't impacted as bad as non-age restricted communities, but we still feel it none the less. I agree, the spike in home prices, which has been significant, has played a role. Many of the homes in the 1400-1600 sq that used to sell for 150k to 180k are being placed on the market for $230 and more. There's so many flips out there that are driving home prices and the funny thing is people that have done nothing to their home run comps and think their vintage home should sell for one that has been redone. Comparing apples to antelope.
