Have you heard the word '
exurb' yet? Loosely defined, exurbs are simply the residential housing areas that are farthest from the urban core, or what I like to call suburbs to the suburbs. Exurbs, short for extra-urban, are not a new phenomenon, as they've actually been around since the 1950's. But they really exploded the past 5-7 years. In the metro Phoenix area, towns like Anthem, New River, Buckeye and Maricopa fall into that category. The appeal has primarily been that a Buyer can usually get a bigger house and/or larger lot for less money. Some folks also like the idea of a more country-like lifestyle that gets them out of the fast-paced city and yet is still close enough to enjoy city amenities. So how is it going with exurbanites these days?
According to a recent release by the
National Association of REALTORS®, exurbs have been hit very hard by the slow-down in real estate. Compared to their suburban neighbors, property values and home sales have fallen more. I personally think builders borrowed a line from the movie
Field of Dreams, and made it their mantra: "If you build it, they will come." They built, and built, and built - and they are STILL building! The problem is that there are way too many houses on the market in the metro Phoenix area, and an even greater percentage of them in the exurbs.
Investors originally bought many of the exurb houses, but starting in mid-2005, the speculative professional investors started bailing out. In fact, a lot of the 'amateur investors' starting unloading their property, too. And of course, many folks just wanted or needed to sell for various 'life reasons.' The result was, and still is, that inventory levels of houses for sale have shot thru the roof!
Another factor that I've heard from several of my exurb clients in the couple of years is that they got sick and tired of the commute. Driving as much as 3-4 hours every day, often in heavy traffic, finally took its toll on them (as well as their gasoline bills and vehicles) and they found out the hard way that the negatives more than offset the positive aspects of their exurb lifestyle.
So what's an exurbanite to do? The basic economic laws of supply and demand will always prevail, so
eventually the supply of exurb houses should decline and/or the demand for exurb houses will increase. The kicker and 64 million dollar question is,
"When?" So if exurbanites have the staying power, one option is to simply settle in and ride out the slump. Another option is to bite the bullet, sell the house at a discounted price and bail out now. The silver lining with this option is that now is a GREAT time to buy. One other option is to buy another house closer in, and rent the exurb house. Just be careful with this approach, because there are many exurb areas with huge numbers of available rental properties ~ so be prepared with a backup plan, in case a good tenant cannot be secured.
Either way, let me know if you need more details on your specific neigborhood/subdivision. And hang in there!
...randy
Labels: Arizona, buyers, exurb, growth, Phoenix, real estate, sellers
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