The condo building boom under way in metro Phoenix started in downtown Tempe, a popular neighborhood for high-rise and cool urban attached-homes.
Downtown Mesa could be the next Southeast Valley city to see more condo development, with a few infill housing projects already underway or recently completed near light rail.
Developers also are eyeing the downtowns of Chandler and Gilbert for new condo projects.
More than 4,000 condos are underway or recently completed across the region, mostly in central neighborhoods of Phoenix, Tempe and Scottsdale.
Condominium developers are building high-rises near downtowns, luxury loft-style homes next to shopping centers and smaller infill-connected homes in popular neighborhoods at a record pace.
In the southeast Valley, plans are underway for a new condo tower that could top 20 stories with a Whole Foods on the ground floor near downtown Tempe. At 225 S. Roosevelt, a new project with 32 townhomes is underway.
And in downtown Mesa near the light rail, construction recently started on Mesa Artspace lofts that will bring 50 live-work attached homes to the area.
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Since last year, condo sales throughout the Valley have almost tripled, while prices are up 17 percent, outpacing gains for the housing market as a whole.
“Condos are gaining market share in the Phoenix area, selling in larger numbers and seeing higher prices,” said Mike Orr, real estate analyst with the Cromford Report.
A shift toward denser infill housing for metro Phoenix is occurring mainly because of changing lifestyles of Baby Boomers and Millennials, who want luxury residences with the amenities of an urban setting. Also, rising home values, in general, are helping people sell homes farther out and move closer in.
Downtown Tempe launched the post-crash condo trend in 2012, with high-rise projects on Mill Avenue and near Tempe Town Lake. At least two more high-rises for the area are currently planned.
Downtown and south Scottsdale are hubs for new condo development as well.
Downtown Phoenix, which went without any new housing for decades, has new high-rise condo projects planned on several prime corners.
At Portland on the Park, a 149-unit condo project at Portland Street and Central Avenue, 75 percent of the condos have sold. Prices start in the $400,000s and top out at $1.3 million.
“Our first residents are a part of a movement writing the next chapter in a more connected, more robust downtown Phoenix,” said developer Tim Sprague, principal of Habitat Metro.
Millennial Sean Coleman has always been keen on the urban lifestyle and bought a condo in Tempe when he went to Arizona State University.
He still owns that home and is buying another condo at Contour on Campbell near the Biltmore area in Phoenix, where prices start in the $300,000s.
“I've always lived in condos or apartments and prefer urban living," said Coleman, director of technology at Drawbackwards. “I never had a desire to live in a big house and accumulate stuff. I am more interested in collecting experiences than physical possessions.”
But not every infill housing project is drawing buyers at the rate developers had hoped. Experts attribute the slack sales in those cases to location and pricing.
“Attached projects dominate the landscape in many parts of the Valley, but the reality is that about one in five infill projects is selling really well and others are struggling,” said real estate analyst Jim Belfiore of Phoenix-based Belfiore Real Estate Consulting,
Developers are trying to figure out where the next great hub for new condos will be outside central neighborhoods in Phoenix, Scottsdale and Tempe.
Home builders are already developing smaller and denser communities in the southeast Valley, near shopping, jobs, restaurants and freeways.
“Behind the Valley’s infill growth is a trend toward people wanting to live near places they can interact with their neighbors more,” said Arizona real estate analyst Mark Stapp, director of the Master of Real Estate Development program at ASU. “More suburban developments in the Valley can have that urban feel."
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