Bargain Hunting for Condos

When most people think of retiring to Arizona, they picture a quiet life in a development on a golf course. But in the past five years Arizona's sprawling metropolises - Phoenix, Scottsdale, and Tempe - have begun to go vertical, adding luxury high-rises to markets in which condos have typically meant low-rise starter homes or senior-citizen-friendly "active communities." In Phoenix at least five high-rises are planned, touting proximity to downtown and swanky amenities like concierge service.

The big question is whether the Manhattanization of this market, where condos make up just 8 percent of the housing stock, will take off. The real estate rush that triggered this spurt has waned, stalling Arizona's single-family home market, which has seen sales slide 47 percent from 2005. It's still early for the condo market, though, and analysts say its late start prevented overbuilding. Already, some projects have been put on hold.

The early buildings, on the other hand, have already given buyers opportunities to pick up units from overleveraged speculators. Last fall Ray Slomski, a Phoenix attorney, bought a $1.7 million apartment in a new luxury mid-rise - for exactly what an investor paid in 2005. Slomski leases the unit now, but it's an option if he and his wife decide on apartment life when their kids go to college. "If we were going to downsize, this is the place we'd want to live," says Slomski. Among the building's perks: valet parking and an entertainment terrace for parties.

Selling the urban lifestyle in Phoenix may be a challenge. But bullish brokers say these new condos offer exactly what retirees flocking from cities like Chicago have long sought here - not just another home in the suburbs.