I have the opportunity to review many articles and publications regarding both local, regional and national real estate news, trends and predictions. Occasionally, I’ll grab a snippet or nugget of the story to post here. Today, I’m going to post the whole forecast article written by Marco Santarelli at Norada Real Estate Investment. All credit goes to Marco! The only other input I would add is the attraction the Phoenix valley has to the technology industry relocating to Arizona. The valley has a great pool of young, tech-savvy
Phoenix Real Estate Market Predictions 2019
The Phoenix real estate market was a headline in the news a decade ago when the housing crisis of 2007 and 2008 caused home values here to fall by as much as half. The slow recovery of the national housing market has taken a decade. Many may be surprised to hear that the Phoenix housing market is back on the recommended list for investors. Let’s take a look at the current state of Phoenix before sharing ten reasons to invest in the Phoenix real estate market.
Phoenix remains the biggest city of Arizona and the state’s capital. However, Phoenix itself is massive. It is the only state capital with more than a million people. It is the fifth largest city in the country. The Phoenix housing market, though, is much larger than Phoenix – it encompasses the entire Valley of the Sun, Phoenix’s sprawling suburbs that are home to another five million people. That makes the Phoenix metro area the twelfth largest in the country. Let’s look at the top ten reasons to invest in the Phoenix real estate market.
10 Reasons to Invest in the Phoenix Real Estate Market In 2019
1. The Major Wave of Renovation in Downtown
The section of Phoenix wedged between Seventh Street and Seventh Avenue is undergoing a wave of commercial redevelopment, fueled by more than five billion dollars invested to date. High rise developments and mixed-use projects have been built, and several more are underway. Public transit in this area is significantly improved. That is making this area and neighborhoods bordering it an excellent place to invest in the Phoenix housing market.
2. The Dozen Other Development Opportunities
Phoenix isn’t just redeveloping downtown to create a dense, walkable urban core. It is cultivating fifteen complete walkable communities across the metro area with strong public transit, denser housing, and locally provided services. This is a radical shift from the suburban sprawl the area has long been known for.
3. The Large Student Market
The capital of any state will be home to its flagship university, and Phoenix is no exception. Phoenix is so large that it doesn’t just host the flagship Arizona State University campus in Tempe. There are secondary campuses in downtown Phoenix, northwest Phoenix and neighboring Glendale. These schools alone have more than seventy thousand students. The Arizona Summit Law School, Grand Canyon University and a number of others are located here. There are easily 100,000 college students renting in the Phoenix housing market. You could invest in large single family homes or multi-unit buildings to rent to students at any of these campuses.
4. The Large Tourist Population
There are more than 200 of these golf courses in Arizona, but most are located in and around the Valley of the Sun. There are a number of sports teams located in Phoenix and a wealth of tourist attractions. What makes Arizona unusual is the state’s open relationship with rental sites like AirBnB. A law that went into effect in 2016 made Arizona a leader in AirBnB rentals. The sites are required to collect taxes on the rentals, simplifying revenue collection for the state and the landlords. That probably explains why AirBnB guests grew by 150% in 2016 alone. This makes Arizona a great place to buy a single family home or condo to rent out to tourists.
5. The Massive Snowbird Market
The snowbird movement is somewhat different than the conventional tourist market. Arizona has long attracted retirees who couldn’t afford Florida or wanted cleaner, allergy free air that never included storm clouds. Quartzite, Arizona in particular draws two million snowbirds and tourists. The city stands out for its sixty plus RV parks. An estimated 300,000 people stay all winter before returning home. Some own second homes in Arizona communities restricted to active adults, while others stay in trailer parks. This creates an unusually diverse opportunity for those considering investing in the Phoenix real estate market.
6. The Growing Retiree Market
The same things that attract many people to Phoenix as snowbirds causes many to retire here permanently. This means that many snowbirds end up staying permanently in the Phoenix housing market. Sun City stands out as a mecca for seasonal and year-round retirees, but it is far from the only retirement community in the Phoenix real estate market. The aging of the U.S. population makes investing in communities catering to older adults an excellent idea.
7. It Is Landlord Friendly
If you want to invest in real estate, you typically want to do so in a market where you can quickly evict people who don’t pay their rent or damage property. You’ll be glad to know that the Phoenix real estate market is among these compared to surrounding states. Arizona, unlike California, allows landlords to serve an unconditional quit notice. If the tenant violates the rental agreement or doesn’t pay rent, they can be evicted quickly. Renter-friendly rules like requiring a landlord to return a rental deposit within two weeks are not a burden. Conversely, laws that say you can evict a tenant within ten days for lying on a rental application are a definite plus.
8. It Has Low Taxes
Kiplinger listed Arizona as the 8th most tax-friendly state in the U.S. in 2018.The state income tax is 2.59% for low income earners, 4.54% for wealthier families. The median home is worth around $177,000 and came with a property tax bill of around $1400, well below what you’d pay in Texas. Arizona has been lowering its capital gains tax rate, as well. The state has a relatively low transfer tax on deeds or land contracts, too.
9. You Can Find Cheap Property across the Market
While California and Florida are seen as hot real estate markets, one of the major attractions of the Phoenix real estate market is the affordable real estate. The median home is worth $177,000. The prices in the Phoenix real estate market are a little higher. Homes in the Phoenix housing market are approaching the 2006 record. But before you panic, remember that you have more than a decade of inflation to erode the value of that $300,000 price tag compared to what it was worth at the peak. Just for the record, that puts the median Phoenix home’s value at $260,000. That’s still cheaper than a starter home in coastal California. Don’t forget that the large retiree market means there is actually strong demand for one and two bedroom houses and condos here, and those units are a fraction of the cost of a three bedroom home.
10. Value-Added Enhancements Are Frequently an Option
Suppose you buy a house to renovate and rent out. Phoenix deals with a large retiree population, both permanent and seasonal. To accommodate aging in place, they’ve loosened the rules on building “accessory dwelling units”, commonly known as mother-in-law suites. The city also recognizes the need for affordable housing, and they allow people to build and rent out ADUs as affordable housing, especially if the property is within walking distance of public transit. Buy a house, rehab it and build a granny flat, and you have two rental properties for not much more than the price of one. And the city is almost certain to approve it, because they want denser development.
Investing In The Phoenix Housing Market: The Conclusion
If you are a beginner in the business of real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the hottest real estate markets. The strong US real estate market shows no signs of slowing and is slated to remain among the world’s top performers in 2019. Phoenix housing market is one of the hottest markets for 2019. Don’t let memories of the Great Recession bust that cut home values in the Phoenix housing market keep you away. There are plenty of reasons to invest in the Phoenix real estate market, only ten of which we’ve provided here. We encourage that you invest in Phoenix real estate market today before prices rise higher. Have a look at the Phoenix real estate market numbers we have provided from various real estate sources and make the best possible decision for yourself.