I've picked up two phrases from ActiveRain mainstay Bill Roberts: "Highest and best use" and "path of progress."
What is the "highest and best use" for a 3,500 sq ft structure that is more than an hour away from the "path of progress?" I'm thinking boarding house or multi-unit rental. Heck, I live pretty close to the path of progress in Willow Glen, California. I live fifteen minutes from Google, e-Bay, and Adobe, yet I already see extra cars sprouting like weeds as my neighbors rent out extra rooms to try to make ends meet.
The homes in my neighborhood aren't boarding houses, they are 2000 sq ft ranch style homes and duplexes, yet the sublease phenomenon continues to grow despite our attractive location. I can only imagine the pressure to generate rental income in areas further from the path of progress. Sooner or later, many of those McMansions will house several families, even if they aren't formally divided into separate units.
That brings me to Phoenix, Arizona.
The thought of three families renting units in a McMansion won't excite any single family McMansion owners living nearby, but it beats having the property stand vacant. Las Vegas may recover due to their relatively unique ability to sell vice, but what happens to Phoenix? Will Phoenix legalize gambling and prostitution to bolster their economy? Would anyone bypass Vegas (or their local Indian Casino) to go to Phoenix?
There are currently 65,000 listings in Maricopa and Pinal Counties. That's you and over 200,000 of your friends and family members deciding to relocate to Phoenix because you want to own there. Can you imagine 65,000 families who can currently afford to buy a home packing their bags and relocating to Phoenix? We're staring at a gaping hole in that market that simply isn't going to be filled any time soon.
What's going to happen to the outlying subdivisions? Will they become slums or ghost towns?
Frank
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