Donna Reiner, has written many articles over the years for the Arizona Republic and others about Phoenix history and memorials.  She is a regular contributor to our newsletter. This month, Donna tells us about the Knickerbocker Apartments at 2nd Ave and Roosevelt.

A few weeks ago, a neighbor asked if I knew anything about a cute old apartment building on Second Avenue in the Roosevelt Historic District which she often passed while out walking. I quickly googled the site and realized that no, I didn’t know anything about the building. However, I told her to give me a week and I would see what I could find. And herein lies the story of The Knickerbocker Apartments and its two neighbors: The Westminster and the Buntman/Cathedral.

Surely the inventory report found in the Roosevelt Historic District National Register for Historic Places nomination would offer some clues. Initially it did not; but later as the pieces of the puzzle began to materialize, they were there, staring me in the face. Off to search the newspapers online, first using the address and then using the name of the building. What seemed like hours later and hundreds and hundreds of articles which contained the word “Knickerbocker,” the key piece to the puzzle arose to the surface.

An obit for Philip Buntman in 1943, credited him as the person responsible for the building of not only the Knickerbocker, but also the Westminster and the Cathedral (formerly the Buntman). Apparently he had also built another complex, the Maryland Terrace Apartments just west of the capitol on 18^th Avenue and Washington. You would correctly assume that that one is no longer there. Today, sadly, it’s a surface parking lot.

In order to adequately answer my neighbor’s question though, I continued to pore through more newspaper articles and ancestry.com which gave me access to city directories.

Buntman was born in Edinburgh, Scotland in 1875, and came to the US before 1900. He resided in Chicago for a time where he met and married his wife Ida. They came to Phoenix shortly after 1910, with their daughter Gertrude who married Chester Goldberg in 1923.

Buntman quickly became involved in real estate development and sales, plus mining. He also saw the opportunity to offer a commodity, luxury apartments, to Phoenicians and visitors to Phoenix.

First, he built the two-story Buntman in 1913, where he and his family resided. Advertised as the “finest and most complete’ in Phoenix, the apartments had sleeping porches, built-ins, a gas log fireplace and many other accoutrements. A later remodel to the exterior, and the filling in of the porches in c. 1924, changed the look of the building.

The next, and largest of the three apartment complexes was the two-story Westminster on the corner of Second Avenue and Roosevelt built in 1914. Furnished and complete with telephone, maid, and janitor service, the Buntmans moved in. It too had sleeping porches that were later enclosed. The Maryland Terrace Apartments was also completed in 1914, but was only a one-story complex with six apartments.

Mr. Buntman was in the mood to build his last set of apartments in 1919, and that was the Knickerbocker. Another two-story luxury apartment complex, it boasted of being “strictly modern in every respect.” Furnished and providing maid service, the Knickerbocker was a testament to Buntman’s success.

All three of these apartment buildings on Second Avenue were home to many of Phoenix’s successful businessmen.

I contacted my neighbor and thanked her for the “hunt” and that I found enough to write an article.

For this December market report, I want to share observations from a webinar put on by the Cromford Report‘s Tina Tamboer.

She addresses some questions that she’s been getting about the market.

“When will we see prices go down?”

Tina says, “not any time soon.”

She shared this slide, which shows a long-term perspective of how the Cromford Index relates to supply. If you look at this slide, you might think that we are overdue for a crash and a switch from seller’s market to buyer’s market.

After all, the faint Cromford Index line is high, just like it was at the market crash in 2006.

See that red circle?

That represents the time that the Cromford Index hit a historic high — at least for as long as they had been tracking at that time.

But that index dropped, not because it hit a magical button in the sky, but because there had been a historic over-building of homes in the years prior to the crash.

People like to blame the Great Recession on either loosening of lending standards (which was definitely a problem) or government trying to get everyone in a house (which is a political talking point, really).

But another major driver that people tend to ignore was the over-building of homes prior to this time. People were buying homes in hopes to re-sell them at a profit. But the demand was simply not there and prices fell, causing people to lose their shirts and triggering all those questionable mortgage-backed securities to fail.

So, what’s happening today? Well, there is a huge demand and not enough homes. Kind of the opposite of backthen.

As Tina says, until that supply and demand meet again, the Cromford Index will stay high and there will be an upward pressure on prices.

To be sure, there is a lot of uncertainty and many differing opinions about where this could go.

And that will stay the same until we build many, many more units –as many as 270,000 over the next 10 years, by some estimates. Not that it will take 10 years for prices to come down. But, we need more units.

“Why do we still have a housing shortage?”

Well, look back at those last 10 years of under-building. Add to that the senseless purchasing of residential homes by investment companies like Zillow, and short-term rental investors., which sapped tens of thousands of homes out of the available pool of homes.

Developers have not been building as quickly as they would have liked, in part due to labor shortages. Those shortages came from the fact that we don’t have a path to immigration for many foreign workers. More recently, it comes from COVID and supply chain disruptions.

“Will houses get more or less affordable in 2022?”

So long as we don’t have more supply and people continue to move in to AZ as quickly as they have, affordability will be a problem.

Add to that the possibility that interest rates will have to go up at some time –certainly they will if there are fears of inflation on the horizon.

Have a look at this chart. Interest rates have gone up from 2.77% to 3.10% over that last year. That 31% increase in interest rates equates to a 40% increase in mortgage payments on a median-priced home.

The best thing that could happen is that prices could come down on homes. Barring an unforeseen crisis, like water shortages (like I’ve written about in the past), this is not likely. Based on incoming population and the foreseeable shortage in homes, you can feel relatively safe that a home you buy now (even if it is more than you want to pay) will hold its value.

“Should I buy now?”

As we often tell people, the real estate market is not the stock market (and shame on companies like Zillow and others that treat it as if it is). Buy a home if you need it and if you can afford it. In fact, buy a home that is cheaper than you can afford and pay down that debt aggressively. You should be okay.

“Should I sell now?”

If you need to, and if you bought more than a couple years ago, sure. If you own a home that you’ve been using as a short-term rental, I’d almost beg you to sell. Families need places to live more than vacationers need a place to stay.

Contact us if you’d like to dig deeper in to your particular situation at 602-456-9388.

For now, you might find this summary slide from the Cromford webinar to be a great summary.