www.nytimes.com/2008/04/06/realestate/keymagazine/406ariz-t.html
Article Tools Sponsored By By SAMANTHA M SHAPIRO Published: April 6, 2008 Halfway through our second bowl of tortilla chips, Daryl Fox got a call from the bank, which was threatening to begin foreclosure proceedings on his house. When Fox moved to Maricopa in the spring of 2006, he was recently divorced, almost 40, sitting on his half of the proceeds from the house that he and his ex-wife had just sold in Chandler, a suburb of Phoenix.
Arizona, and Fox was determined to find something to buy. after his parents' marriage ended, Fox had watched his father's savings slowly slip away, and he didn't want to make the same mistake.
Enlarge This Image Paul Graham for The New York Times Just Add Water Using artificial lakes and underground irrigation systems, developers turned Maricopa from a dusty farming community into a grassy exurb of Phoenix. Fox knew he couldn't afford a house in one of the smaller cities that make up Phoenix's metropolitan area, like Scottsdale, Tempe or Mesa. So he started searching farther out, in the exurban boomtowns that seemed to be springing up from the desert floor all over southern Arizona. He took a shine to a planned community called Anthem, about 30 miles north of Phoenix, because it had good shopping and a water park that he thought his kids would like, but in the end, Fox found he was able to get more house for less money in Maricopa, 40 miles south of the city. Because Maricopa was still growing fast, he and his real estate agent figured it would be a better long-term investment. Fox is easygoing and blond, a cosmetics salesman with a goatee and slightly forlorn blue eyes. At Penascos, he was sitting next to his new wife, Teri, and across from her best friend, Rita Weiss. Like most residents of Maricopa, all three were recent arrivals. They had come to this city to take part in its biggest industry: buying and selling houses. They had viewed their houses as a retirement fund or an investment, and now that the city's industry was failing, they were a bit lost, stuck in the middle of the desert, saddled with spacious new houses that had become not a promise of a future but a burden. Penascos is on Highway 347, the one road in and out of Maricopa.
Napa Auto Parts franchise, a feed store and an old saloon and cafe called Headquarters, where the walls are lined with portraits of the past presidents of the local Rotary Club. On that side of Maricopa, most of the housing is trailers or one-story ranch homes that sit low to the ground on large lots, dwarfed by the vastness of the sky and the gray mountains in the hazy distance. But if you leave Penascos and head north on 347, you soon hit a very different Maricopa, one that didn't exist at all a few years ago: a sprawling matrix of neatly planned subdivisions lining both sides of the highway. Newly paved roads with names like West Magic Moment Drive and North Enchantment Pass wind past outsize houses with tiled roofs and stucco exteriors, painted in a limited palette of adobe shades. Artificial lakes feed underground irrigation systems that keep lawns green despite summer temperatures that regularly hit 100 degrees.
golf course, two strip malls with big supermarkets, a few sports bars and a couple of pool-supply shops. There are also plenty of open lots where developers have prepared land for future Maricopans. In April 2006, Fox closed on a three-bedroom home in one of the biggest developments in town, Rancho El Dorado. The price had dipped to $212,000, after steadily rising for a year, and Fox put 15 percent down, his life savings. From Chase Bank, he got a so-called 2/28 adjustable-rate mortgage, which meant that for the first two years he would pay 75 percent interest and then a higher rate for the remaining 28 years. He knew that he might not be able to afford the higher rate, but as many home buyers did at the time, he assumed that two years down the road his house would be worth significantly more, and that he would be able to refinance. Fox thought he had entered the market during a slight downturn, which, he figured, made it a great time to buy. IN FACT, HOUSING PRICES in Maricopa topped off in the third quarter of 2006, a few months after Fox closed on his house. Concern about subprime mortgages, which had financed much of Maricopa's boom, began to grow among the country's bankers and investors, and the easy credit that had enabled so many of Maricopa's new residents to stretch to buy a house suddenly disappeared. The city very quickly went from being a seller's market to the opposite. Builders started offering incentives on their inventory of unsold homes, cutting prices by tens of thousands of dollars and, in some cases, auctioning off unsold houses to the highest bidder. The oversupply meant that Fox's house depreciated every month. The median new-home price in Maricopa fell steadily, from $263,000 in the spring of 2006 to $245,000 that fall, and then to $227,000 in early 2007, and then to $180,000. Fox had refinanced shortly after closing on the house, in order to pay for some renovations he wanted to do. "I made it a beautiful little house," he told me wistfully. by this January, when we sat down for tortilla chips, his house was worth much less than he owed on it. He had moved into Teri's house and was renting out his place at a loss: his monthly mortgage payment was $1,800, but the house could command only $900 in rent.
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