Rim Country Goes National

Payson among nation's top-10 retirement towns

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The countless perks of living in Payson have long been secretly appreciated by the people who reside within its zip codes. But this past year, the joys of living in the Rim country went national.

For its Feb. 11 cover story, USA Today published a national survey in which Payson was listed as one of the most popular places in the country for second homes and vacation properties with absentee owners.

With 58.8 percent 204 homes of its 1999 real estate market share falling into that category, Payson was listed in 25th place the highest Arizona ranking on the 32-city list. Three notches lower, with 56.8 percent 118 homes was Sedona, the only other state entry.

Top retirement hot spot

In another, more highly publicized study released in December 1999, Payson was named the nation's 10th-fastest-growing retiree magnet due to the town's 46-percent influx of seniors in the past nine years.

Conducted by sociologists at Jacksonville State University in Alabama, the study confirmed that Payson offers just what retirees all over the U.S. are looking for: a moderate climate, a rural setting with easy access to metropolitan areas, quality housing, recreational amenities, accessible health care, lower crime rates and employment opportunities.

Ready or not, Payson is primed for a surge in growth, survey leader Mark Fagan said.

So after the study was released, did the telephones at Morgan Realty Associates Better Homes and Gardens start ringing off the hook?

"For a very short time there was a spike in interest and people were calling from all over the country," said owner/broker Jill Morgan, who's also the current president of the Central Arizona Board of Realtors. "Now, perhaps it's still motivating some people to contact us, but they don't mention it as often anymore. And as far as I know, whatever interest that list created has yet to translate into any real sales."

Market challenges

So much for national publicity and predictions of Prescott-style boomtown growth.

In fact, Morgan said, at least one corner of the local real estate market residential lot sales, once the "bread and butter" of her agency is "way, way down."

The drop can be traced back to the development impact fees implemented by the Town of Payson in mid-1997, she said. The fees, which the town uses to help pay for water development, new streets, additional park facilities, and added law enforcement, can range from $7,000 to $11,000 and must be paid up front before ground is broken.

"Impact fees, definitely, have slowed down lot sales considerably," Morgan said. "They scare a lot of people. If they want to buy a lot today and build on it later on down the road, they can only guess how high the fees might be five or 10 years from now."

But it's the people who aren't properly warned about the impact fees who can really get hurt, Morgan said.

Example: "One woman bought a lot in Payson Ranchos for $13,000, found a manufactured home she wanted to put on it, and was good to go with her retirement dream house. But no one had told her about the impact fees, which in her case amounted to more than what she'd paid for the lot. Dream over.

Political pressures

"I won't quote anybody, but I've heard (town officials) say they're very proud that our growth rate has slowed down from 5 and 7 percent down to 3.1 percent, and their goal is to make it 2 percent.

"In my opinion, that has happened because of those impact fees, and the difference between 5 and 3.1 percent is how badly they have hurt the local real estate market.

"Not long ago, people would come to Payson with a dream of having a summer home or retirement home here, and would typically be able to find a lot and hold onto it. We'd probably sell three or four lots a month. Now, we're lucky if we sell one or two lots within six months. And even though prices haven't increased that much, the time on market has gone up dramatically."

Under normal circumstances, Morgan said, outlying areas would benefit from this situation. But residential lot buying outside of town has its difficulties, too, such as the current moratorium on water meter hookups that's created a 17-year waiting list in most Pine subdivisions.

"The moratorium will probably not actually last that long, but you must tell your client that, yes, you can buy this lot, but as of today, you may not be able to build on it for 17 years."

Back in Payson, there is another side to the impact-fee coin, Morgan said.

"Although many prospective buyers are opposed to the fees and may choose to buy elsewhere because of them, we're also seeing a lot of people for whom money is simply no object. They go out to Chaparral Pines and the Rim Club and don't blink at paying $350,000 for a lot. So an $11,000 impact fee doesn't phase them."

But on yet another side of the coin, Morgan said, "Payson is pricing the working class out of town. Pretty soon, the retired people here aren't going to have anyone to serve them dinner at the restaurants or sell them gas at Circle K. When these minimum-wage earners come here from the Valley and find out how high our rents are, or that the average three bedroom, two bath house costs $150,000, they go, 'Oh, my gosh, we should just stay where we are.'

"That is a situation that needs to be addressed somehow. But frankly, I don't know who has the answer."

Strictly in terms of real estate sales, Morgan sums up 1999 as "a fairly good year. Not a banner year. It could have been better. We're a little bit spoiled; we now have to work a little bit harder to get sales accomplished because of the impact fees and high prices and other things which many buyers don't anticipate.

"They don't realize that, in northern Gila County, we're dealing with 1-percent privately owned land. Or they don't realize the value of the land, or its worth when there's no tract housing.

"The shortage of amenities is also a factor. When people ask, 'What is there to do in Payson,' what can you say? 'Well, there's Wal-Mart and a bowling alley.'

"So I think we're struggling more than we had to 10 years ago to sell Payson. But it's still a good market to be in."

Turning to the future, Morgan forecasted the year at hand.

"I'm optimistic," she said. "I think it has helped some that there have been news articles of other areas where they're starting to charge impact fees, so we can now say we're not the only place that has them.

"We're also going to continue to do well because the climate is perfect, and because (the Beeline Highway construction between Payson and Phoenix) is being completed. I really feel that 2000 will be as good and maybe even better than last year."

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