BUSINESS

from Scottsdale Progress - 8.1.2021

by Times Media Group

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Karma charges into the Scottsdale Airpark

BY CHRISTINA FUOCO-KARASINSKI

Progress Staff Writer

on Parske has become accustomed to people pointing and staring at him in the last month.

Parske is the general manager of Karma Scottsdale, the Airpark-based dealership with the exclusive rights to sell the luxury electric vehicle in Arizona.

“The one thing that’s drawn me to Karma is it’s the only vehicle I’ve ever driven that every single person who sees it turns their head,” Parske said.

“The lines are unbelievably elegant. For that, it immediately turns heads. Karma is a car manufacturer. Tesla is an electronics company. That’s why Tesla is in the mall. Karma has a great fit and finish. It’s on the same level as Bentley and Rolls-Royce.”

The sleek cars, which start at $144,000, feature an elegant exterior design, along with an interior made of sustainably sourced, high-quality materials that are completely customizable.

“When clients are purchasing a car, they can pick out colors and woods,” Parske said. “If you wanted to lay your whole vehicle in mother of pearl instead of normal wood, Karma will source the product. You can customize your vehicle.

“The cars are built in California, so there’s less wait time. It’s a max of four to six weeks, versus three to six months. We have our regular paint choices, but if you want to paint it a certain color, they’ll do that as well. We’ll paint it whatever color you want if you’re willing to pay for it.”

Anyone driving under 50 miles a day will never need gas, and those driving more will get 300 miles per battery charge with the Revero and up to 360 miles with the Revero GT.

Joe Parske says Karma is a head-turner that he puts on the same level as a Rolls or

Bentley. (Pablo Robles/Progress Staff Photographer)

seeKARMA page 23

Valley renters caught in housing price squeeze

BY PAUL MARYNIAK

Progress Executive Editor

Valley renters are increasingly finding themselves caught between rapidly rising rents and soaring home prices that make buying a house next to impossible.

Starter-home prices are rising seven times faster than a typical renter’s income, making saving for a down payment even harder, according to Zillow.

The online real estate marketplace earlier this month said its analysis shows first-time buyers need a year longer to save enough for a 20 percent down payment than they did in 2017 and must put away an additional $369 per month in the coming year just to keep up with the forecasted growth in home values.

But a report from Arizona Regional Multiple Listing Service on July 19 carried depressing news for any buyer, let alone first-timers: Year-over-year sale prices in the Phoenix metro region rose a whopping 46.26 percent in June and the current average price of a home is $507,936.

Realtor.com reported, “High demand for a limited supply of rental housing has resulted in skyrocketing prices across the nation – and desperation from those seeking more affordable housing options.”

Zillow offered a sunny outlook for renters by noting “monthly payments can remain affordable even with a smaller down payment, and flexible work op-

“The one thing that stands out for me is the owners of electric cars have ‘range anxiety,’” he said. “If they’re taking it to California or up north, a lot of the time Tesla owners try to plan when they have to stop to charge. They worry about if a charging station is available and the wait time.”

Karma boasts a four-cylinder BMW engine that works as an alternator. It has an electric port and a gas tank.

“If you don’t have time to charge or sit in line, you just throw 10 gallons of gas in the vehicle and it works as an alternator and recharges the vehicle,” Parske said.

“It shoots the range up to 360 miles. It’s not a hybrid. You can literally drive the car from California to the East Coast and never stop to charge the vehicles. That’s the big thing compared to Tesla. They get that range anxiety.”

Parske manned a Karma booth at last month’s Barrett-Jackson to get the word out there.

“Once people actually see the car and drive the vehicle, they’re blown away,” Parske said. “I try to drive on as my daily drive. At stop signs and lights, people ask me to roll the window down and tell them what it is. The designers came from Ferrari and other high-end exotics.

“The way it drives, not everyone’s going to have one. Most consumers like that exclusivity.”

Parske partnered with Karma North America about a year ago. He obtained the new car license about a month ago and he delivered the first Karma in midMarch. In 2020, Karma added more than 16 new dealer partners globally.

“They were really looking for likeminded people to partner with,” Parske said. “We fit the bill. We had a client we’ve dealt with who had purchased a Karma out in California. They were hitting high-end independents like ourselves. With Karma, you’re not going to park next to another at Whole Foods. They only make a few thousand a year.”

Formerly with Penske, Parske is the general manager of Auto House, which has 600 cars in stock in Tempe, Peoria and Scottsdale.

“We’re on a mission to change the perception of buying vehicles,” he said. “When I started with Penske in 2000, it was more about building relationships and changing the perception of buying a vehicle.

“Clients stay with the same person throughout the whole process, instead of 10 people. We brought that into Karma, too. Whether someone’s buying a $10,000 car or a $150,000 car, we treat them the same. We want them to enjoy purchasing a vehicle and not feel like they’re hitting their head against the wall.”

RENT �� page 22

tions are providing new opportunities for many to buy a home in a less-expensive city.”

That likely doesn’t include the Phoenix metro area, where both rents and house prices are skyrocketing.

The Cromford Report, one of the region’s premier analysts of the Valley housing market, said the market appears to be cooling as inventory steadily increases, but warned home prices won't fall – or even weaken. “You would be mistaken if you think most sellers are asking less for their homes,” it said. Cromford put the median home price in the Valley at $400,000 – higher than the nationwide median of $363,300 for June that the National Association of Realtors released last week.

It’s not only home prices that are soaring for renters.

Nationally, Realtor.com reported, the median rent hit a new high of $1,575 in June, up 8.1 percent compared with last year.

Phoenix is among the 44 of the nation’s 50 largest cities that “posted new highs, squeezing renters even tighter,” it said. It

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added that Phoenix median rent soared in June 20.9 percent to $1,590 – a higher median than the national figure.

“We are seeing an excessive amount of people showing up for rental properties and turning applications in, probably five times the amount it was a year ago,” one broker told Realtor.com.

seeRENT page 24

“Similar to the shortage of homes for sale, the number of homes available to rent is historically low, driving prices up,” it said. “That’s hurting cash-strapped renters vying for places to live that fit in their budgets.”

The pandemic’s economic pressures “have not affected everyone equally,” said Danielle Hale, chief economist at Realtor. com. Realtor.com surmised the shrinking rental inventory may have been partly impacted by landlords “throwing in the towel” as eviction moratorium make it harder for them to pay their own bills.

“Across Arizona and the nation, a lot of protections “are still in place but are close to expiring,” Hale said. Renters who are ultimately evicted will need to find new housing going forward, making it harder to find a place to rent, he added.

Zillow based its affordability analysis on a starter home price of $148,500.

“If an average renter household saves 10 percent of its income, it would take about six years and five months to save enough for a 20 percent down payment on today’s typical starter home worth about $148,500,” it said.

But Zillow also noted that in reality, the typical starter home – the median home in the bottom third of home prices – is worth $270,560. “Without the equity from a previous home sale, firsttime home buyers face more challenges in coming up with a down payment,” said Zillow economic data analyst Nicole Bachaud, adding:

“In a housing market where prices are rising at record rates, especially when compared to renter incomes, the ever-increasing sum of a 20 percent down payment can feel out of reach.

“The good news is that buyers who want to take advantage of today’s low mortgage rates can do so without putting a full 20 percent down – most conventional mortgages allow as little as 3 percent to 5 percent. That lower upfront payment comes with higher monthly payments, but the opportunity to build equity can outweigh those extra costs for many.”

Zillow forecasts 14.9 percent appreciation over the next year, which would mean renters need to save an additional $369 per month just to keep up.

Pegging a starter home price of $270,560 in Phoenix, Zillow said it will take 10 years and six months to put away enough for a 20 percent down payment but only just under three years for a 5 percent down. The difference in a mortgage payment at those percentages would be $1,133 and $1,551, respectively, it said.

“A smaller down payment, of course, comes with tradeoffs on the monthly mortgage payment, such as the private mortgage insurance lenders often require borrowers to carry,” Zillow said. Zillow also reported that its analysis found people of color who rent have even greater obstacles saving for a down payment.

“Because of differences in incomes and the lingering impacts of historical inequities, it is more difficult for Black and Latinx renters to come up with a down payment on their first home,” it said.

“It would take six years and one month for a white renter earning the median income, and four and a half years for an Asian American renter earning the median income to save for a 20 percent down payment on a starter home, compared with nine years and seven months for a Black renter, and seven years and eight months for a Latinx renter.”