Phoenix Rising? No, No - This Bird Be Broken

Swarm…infestation…these are the only words to describe what’s happened and happening in Phoenix. On the West side there are miles and miles of developments peppered amongst feed lots, construction and streets littered with potholes big enough to take down large vehicles. Getting to the sites was enough of an adventure - I can’t even imagine living there. Two-lane roads in and out with no stoplights.

On the East side, a little ritzier, but that’s where you find your bridges to nowhere…completed subdivision walls in the middle of empty fields and no homes….completed playgrounds, but only half-built homes or empty lots. Gotta be able to imagine your kids swinging on those swings to stomach this bezzle and con.

A combination of Austin with plenty of completed inventory, but also much like Florida with brand-new developments just getting started.

As I went to site after site after site the only thing in common was the sound of the builder flags snapping in the wind which reminded me of ole-timey westerns and ghost towns. Eerie and overwhelming. But, as I continued to drive I found myself moving from disbelief to conviction. This is so bad.

While I was on the road someone asked me why no one was talking about this. My only answer is that you have to see it at scale to be convinced…otherwise you can just attribute it to one neighborhood or an isolated incident. But, you cannot deny it when you drive - avoiding highways - to ensure you see everything. Phoenix, like so many of the other boom towns, has been invaded with locusts in the form of spec homes.

Today, the NY Fed released a report about consumers home price expectations.

Short-Term Home Price Expectations Drop Sharply; Rental Price Growth Expectations Remain Elevated - FEDERAL RESERVE BANK of NEW YORK (newyorkfed.org)

The headline grabbers on FinTwit focused of course on the lower expectations, but the important thing in the report in my opinion is just how confident everyone is that home prices will stabilize and go up. As I continued to drive, passing signs for pools, blinds, solar, house-cleaning, new daycares, furniture, etc. I became more convinced the consumers belief in their home as an asset - more than anything else - has wrapped them in confidence that things are going to be ok and that’s why they continue to spend and charge. And for small business owners and porta-potty providers their belief persists because at this moment (most) of the builders are still building.

I told fellow Twitterers I was running out of words to describe this as it is just the same, mile after mile. My fear is that if people don’t wake up soon this crisis could become a destroyer of cities. My hope is that others heed Rudy H’s sage advice this week to get local. It’s our only hope.