Phoenix Housing Supported by Strong Economy, High Wages

The aftermath of the real estate market crash. Is it over? Time to get back in or has all the opportunity in the real estate market passed?

Real estate investing can appear to be overwhelmingly dominated by opinion rather than fact.

Few non-institutional investors bother to collect the scarce bits of data that can truly determine whether or not that investment property in your municipality would make sense from a financial standpoint.

Look for mega-trends to inform your investing choices. Market trends help you understand the movement of key price indicators.

Economic contributions are derived from home construction, real estate brokerages, mortgage lending, title insurance, rental and leasing, home appraisals, moving truck service, and other related activities.

Trends in Phoenix show a 10% year-over-year rise in median sales price to $202,000 and a 3% rise in median rent per month.  The median rent per month for apartments in Phoenix for Jan 16 to Feb 16 was $1,329. The average price per square foot for Phoenix was $141, an increase of 8% compared to the same period last year.

Time to open those eyes. When investing in real estate, potential residents have to have jobs and amenities that make your property desirable.

What trends are happening now that you can capitalize upon? It makes sense since one of the Valley’s top selling points for buyers is more affordable home prices, particularly in the West.

Strong economic growth contributes to a strong demand for housing and real estate.  For the Phoenix market, the high median income and wages have been attracting new residents and adding to the city’s growth.

Cities with only one main industry feel the burn first. This isn’t the case of for Phoenix with job growth being twice the national average. Diversified industries comprised of retail, healthcare and a large finance sector insulate the job market.

Home prices will keep rising the next few years, the equity cushion for new mortgages will grow quickly; yet prices are in balance with local incomes, so the risk of default will stay average.

Two major trends to be aware of are the needs and demands of the Baby Boomers and Millennials.

Baby boomers are retiring and downsizing. This is a double opportunity. A lot of people are willing to sell their homes – which means there will be a lot of inventory coming soon. These same people also want to downsize to something smaller, easier to maintain. That means that they may be willing to rent a smaller home (from you!) that they don’t have to repair.

Next up, millennials now coming of age. Millennial are starting to form their own households independent of their parents. Being cool and progressive, Millennials also prefer to rent instead of own. Renting allows more flexibility and freedom to easily move from city to city at will.

Millennials may be more mobile, but property ownership is a proven path to wealth. There’s a reason homeowner net worth is estimated to be 45 times more than their renting friends. Since this group disproportionately favors renting, this is an excellent example where you could provide housing to millennials as they pass through your town.

It can be very difficult to properly gauge how profitable real estate is, but it’s good to be as quantitative as possible when making comparisons. Some people lose money every month, while others make enormous fortunes off of real estate investing.

The dividing line between the haves and the have-nots in real estate is top-notch quantitative analysis of the market and following a well outlined business plan.

When mainstream media starts talking about buying real estate or investment property, you should know that’s a red flag. Contrarian logic works at its best when it comes to investing. This is an old Buffet-ism – “Be fearful when others are greedy and be greedy when others are fearful.” _Brought to you by Highest Cash Offer. Phoenix’s “sell my home fast” experts!