Best of Living in Scottsdale & Phoenix Arizona Newsletter
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🚙 Mesa Auto Mall, Roadwork, and Mortgage Rate Predictions

🚙 Mesa Auto Mall, Roadwork, and Mortgage Rate Predictions

Check out what's shaping Phoenix and Scottsdale's economy right now.

Josh Zuniga
October 31, 2024

Happy Thursday!

I hope that you and your family have a safe and fun Halloween if you participate in the festivities.

There are a ton of great things happening in Phoenix this week. An auto mall is expected to bring in a lot of revenue in Mesa and our road infrastructure just got backed with federal funding.

We’re also looking at whether or not mortgage rates will continue to fall and what that means for you.

Enjoy!

— Josh

🚙 Mesa Greenlights Gateway Auto Mall: $156M in Revenue Expected by 2049

Driving the news: Mesa City Council has cleared the path for the construction of Gateway Auto Mall, a new auto dealership hub, by approving several key development plans. The 60-acre project, spearheaded by Horne Auto Group, will be located at the recently opened Signal Butte Road and State Route 24 interchange in southeast Mesa.

Details:

Location: Gateway Auto Mall will be built at the southwest corner of Signal Butte Road and State Route 24, near the Mesa-Queen Creek border.
Size: The project spans over 60 acres and will feature multiple auto dealerships, with plans including a Hyundai dealership.
Incentives: Horne Auto Group is eligible for $11.6 million in reimbursement tax incentives if they complete public infrastructure improvements and right-of-way dedications.
Revenue Impact: The project is expected to generate $156 million in revenue for the city of Mesa by 2049 if all five dealerships are built and operational.
Timeline: Infrastructure improvements must be completed by April 1, 2028, and the first dealership is slated to open by July 1, 2029.

Why it matters: The new auto mall will enhance economic development in the southeast Valley, bringing substantial new revenue streams to Mesa while contributing to the growth of the local auto retail market.

The development is also a key step in transforming the Signal Butte Road and State Route 24 interchange into a regional hub for auto dealerships, driving future job creation and business opportunities.

The big picture: Gateway Auto Mall joins Berge Destination at Gateway, a 114-acre auto mall development also under construction in the same area. Both projects reflect Mesa’s strategic focus on attracting large-scale commercial investments and establishing the city as a key destination for the automotive industry.

Between the lines: Horne Auto Group, a Gilbert-based company with 16 dealerships across Arizona, is making a major investment in the local economy. Their development, alongside the neighboring Berge project, represents a significant push to create a thriving commercial center in the rapidly expanding southeast region of Mesa.

What’s next: As the project moves forward, Horne Auto Group must meet key milestones to qualify for tax incentives, including completing public infrastructure by 2028 and opening their first dealership by 2029. The next few years will see the transformation of this area into a bustling automotive hub, adding to Mesa's growing influence in the region.

The bottom line: With the approval of Gateway Auto Mall, Mesa is set to see both economic and infrastructure growth, establishing the southeast Valley as a key destination for auto dealerships and creating long-term benefits for the local community.

🎥 NEW WEALTHIEST Area in Phoenix

Paradise Valley has been dethroned! In this video, I will guide you through Scottsdale, Phoenix's new wealthiest zip code, and why this is such a big and important change!

🚧 $356M Phoenix Intersection Overhaul Secures Federal Funding

Driving the news: Two major road infrastructure projects in Arizona have secured a combined $172 million in federal funding from the U.S. Department of Transportation.

The bulk of these funds, $146.6 million, will be used to alleviate congestion at the highly trafficked intersection of Grand Avenue, 35th Avenue, and Indian School Road in Phoenix.

Details:

Project Scope: The improvements target a six-legged intersection that serves over 140,000 vehicles daily and includes two rail crossings.
Key Upgrades: Plans involve elevating 35th Avenue over Indian School Road and Grand Avenue, converting the intersection into a four-legged design. New bridges, wider sidewalks, additional bus shelters, and right-of-way acquisitions will also be part of the project.
Total Cost: $356.6 million, with the balance covered by Proposition 400, Maricopa County’s half-cent sales tax.
Additional Funds: BNSF Railway Co. has contributed $5 million for the project, which will also feature new rail line bridges.

Why it matters: This intersection is critical for Phoenix, handling a large volume of traffic that affects not only drivers but also transit services, school buses, and emergency vehicles. The upgrades will help reduce delays, enhance safety, and accommodate future growth in the area.

The project is expected to significantly improve mobility and reduce congestion in one of the city's busiest corridors.

The big picture: This project is part of a broader national infrastructure initiative funded through the Infrastructure Investment and Jobs Act, which aims to modernize transportation networks across the U.S. Phoenix's intersection project is one of 44 national infrastructure efforts announced, receiving over $4.2 billion in total funding.

Between the lines: Maricopa County voters will decide the fate of Proposition 479, which would extend the current sales tax (set to expire in 2025) for another 20 years, ensuring continued funding for large-scale transportation projects like this one.

What’s next: The project is in the design phase, with construction set to begin after securing all necessary funds. Proposition 479 will play a crucial role in determining the future of this and similar projects in the region.

Meanwhile, the other federally funded Arizona project will widen U.S. Highway 93 near Wickenburg, improving traffic flow and safety.

The bottom line: With the help of federal funding and local initiatives, Phoenix is set to address one of its biggest traffic bottlenecks, paving the way for smoother commutes and a safer, more efficient road network for the growing region.

📉 Why Falling Mortgage Rates Could Be Short-Lived

Driving the news: Mortgage rates, which recently dipped after Federal Reserve rate cuts, may not continue their downward trend as many potential homebuyers hope.

While some areas will feel the impact of these changes more than others, the overall picture shows a complex, fluctuating market.

Details: According to a recent realtor.com analysis, 60.2% of U.S. homeowners have a mortgage, with significant variation by state.

In Washington, D.C., for example, 77.3% of homes are mortgaged, while in West Virginia, only 44.4% are. This data highlights that rate changes are likely to hit hardest in areas with a higher percentage of mortgaged homes.

While the 30-year fixed mortgage rate dropped from 6.8% in 2023 to around 6.1% in early October, it has since risen again to 6.6%. Zillow researchers note that this volatility makes it difficult for buyers to lock in monthly payments, and refinancing may no longer be the best option.

Why it matters: Despite the Fed's efforts, mortgage rates remain unpredictable. For prospective buyers in heavily mortgaged states like Maryland or Utah, the rate hikes could mean higher monthly payments and fewer refinancing opportunities.

However, in regions with more outright homeownership, like West Virginia or Mississippi, the impact will be less dramatic.

The big picture: The Fed's rate cuts alone aren’t enough to ensure a drop in mortgage rates. Buyers need to consider other factors like housing inventory and regional market conditions when making their decisions.

With inventory improving in many areas, some homebuyers may still find opportunities, but the window for favorable rates could be closing.

What’s next: Potential buyers and those looking to refinance should keep an eye on market shifts in the coming months.

Experts suggest that while rates might fall again, there’s no guarantee of consistent declines.

📊Market Insights

The housing market in Phoenix is still competitive as we approach enter the final stretch of the year.

If you are looking to buy a home in this market, new construction is a great option that I highly recommend if you want to avoid competing with other offers.

You’ll want to have a good search and offer strategy when looking for existing homes and be patient because it could take a while to find the right one at your desired price point.