Phoenix has been hit harder than just about any housing market, but the city may be poised for a recovery
Part of our 2009 Market Leaders coverage.
If there's a ground zero in the housing crash, Phoenix may be it. No city on our Market Leaders list has seen a bigger decline in home prices and only Las Vegas has been hit harder among all major metros, according to the S&P/Case-Shiller Home Price Index.
With prices down 31.8 percent in the last year and 53.9 percent since the market peak in mid-2006, it's no surprise that remodeling has been hard hit.
"Many homeowners just don't have equity in their homes anymore," says Tom Sertich, president of Kirk Development Co. "The banks just aren't loaning. Everyone's just kind of scared."
Kirk's leads are barely 25 percent of what the company normally gets. Even those who can afford to remodel and don't need financing are reluctant to spend their money on a home that could continue to lose value in a recession.
"I don't think they want to start doing things until they know their home values aren't going to go down any further," Sertich says.
There's some evidence that Phoenix may be at or close to bottom. Sales continue to pick-up this summer as buyers look for bargains in the foreclosure market, and home prices were up slightly from May to June, the first month-to-month increase in Phoenix prices in three years, according to the Case-Shiller index.
The remodeling market is also starting to improve recently, albeit slightly, Sertich says.
"I wouldn't say that it's great, but it's getting better," he says. "Because of what we've been through, I think Phoenix is going to be one of the first ones to start coming back."
|No. 3 in Phoenix|
|President: Tom Sertich|
|Specialty: Design/build remodeler|
|2008 projects: 86|
|2008 volume: $3.2 million|
|Projected 2009 volume: $2 million|
|Years in business: 31|