Renting over buying leads to apartment boom in Scottsdale

SCOTTSDALE, AZ - Skysong, Sonoran Village, Envy, Blue Sky; those are the names of just a few of the apartment complexes currently being built near downtown Scottsdale.

A construction boom is creating hundreds of jobs and thousands of apartments.

"My numbers show that in the downtown Scottsdale area near Camelback and Scottsdale Road, there are 2,000 apartments units that are either available right now or will be completed in the near future," said Will Daly of We Know Urban Realty.

Building the apartments has had a big impact on employment numbers. According to economic data from the Arizona Office of Employment and Population Statistics, 1,500 new construction jobs have been added since the first of the year.

Filling all of those new apartments may mean some changes for Scottsdale's real estate market.

Daly said that under current conditions all of those apartments won't be filled for a long time, unless of course prices start to drop.

"If all of these come to market around the same time I believe it will take approximately two to two and half years for all of these apartments to fill up. It sounds excessive because the normal fill up time for an apartment is 45 - 60 days. I suspect many of the owners of these buildings don't want to wait two and half years and as the competition increases the prices will go down," said Daly.

While previous developments in downtown Scottsdale have focused on for sale properties, experts say this boom is focused on rental properties.

Daly said the change is a symptom of fear.

"Right now we are seeing 4 times as many renters as we would in a normal market. So, is that out of need or want? Are people finding it makes more sense to rent rather than buy or are they renting because they don't have a choice? Sadly I think its the later. It's harder to get loans, prices have gone up, it's harder to get appraisals. The buying environment is tougher, plus you might have lost a lot of money or watched friends lose a lot of money during the last few years so there's some fear. And when there's fear people wait to buy," said Daly.

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