As a property investor, it’s essential to understand the latest Phoenix real estate market trends to make better investment decisions. Here’s what to consider.
Being a real estate investor involves more than just investing money. Well, that is assuming you want to be a successful investor.
Paying attention to the world around you – the bigger picture – gives you a bit more insight when making investments. It means being able to understand the Phoenix real estate market, market trends, future predictions, and so forth. The more you learn about what is going on, you get a greater sense of when you should make an investment and when to walk away.
If you are an investor in the greater Phoenix area, then there are a few Phoenix real estate market trends you should know about.
Local Financial Health is Heading in the Right Direction
As investors, we want to make sure that the area we are investing in is thriving – or has a positive outlook at the very least. And the greater Phoenix area has that. Foreclosure and mortgage delinquency rates are lower than the average nationwide – and so is the unemployment rate. Home prices are going up – and so is the median rent price, coming in at just $1,587. And while this is lower than the national average, it is higher than what it was in Phoenix last year – up by 8.4%.
The Rental Vacancy Rate is Looking Good
Looking at the local renters market – especially the rental vacancy rate – is important. If the vacancy rate is too high, it could signal that the demand just isn’t there. But, currently, in Phoenix, that is not the issue at all. In fact, the rental vacancy rate is currently 3.9% – which is lower than the national average and low for the Phoenix metro area, too.
Do you know what that means? It means that for those choosing to purchase a rental property, there is a good chance that you will have no problem renting out your property to tenants, with very little downtime.
New Construction is a Mixed Bag
With construction costs on the rise and the loss of construction jobs, there is an indication that the construction industry with Phoenix is struggling. It has been reported that costs are up 6.7% and approximately 1,300 jobs were lost.
By looking at the permits, we are able to see that the people of Phoenix want that new construction number to go up. Permits for single-family homes are up immensely. But that’s not all – multi-family properties are on the rise, too. Looks like there could be some positive turnaround for new construction in the near future.
Phoenix Real Estate Neighborhoods to Keep an Eye On
The Phoenix metro area is huge, encompassing some growing areas, too. It is important to take a look around at the areas that appear to be doing well and growing — and find those that are gaining recognition and new residents.
After all, the more growth in a neighborhood, the better chance you may have with your investment. Here are a couple of areas to monitor.
- East Mesa / Queen Creek / San Tan – It’s no surprise for any resident living in Phoenix to hear the East Valley is growing like crazy. As major tech companies expand into the wide open desert spaces available in the East Valley, new homes are being built and existing home prices are starting to increase. Rental prices in this area are still exceeding mortgages.
- Buckeye – We can all agree that COVID changed a lot in our country. One of the trends we noticed during this time was a shift in location for new home buyers. We have seen more home buyers looking in cities like Buckeye as they can purchase larger homes with ample land space for the same cost a downtown high rise. In addition, cities like Buckeye are starting to bring in larger companies establishing their manufacturing facilities in this area. More jobs in the area = more profit for investors like you!
- Happy Valley / Surprise – Another great area with more tech companies, and manufacturing facilities building new spaces. This area is expected to see an increase in new jobs by over 10,000 in the next few years!
Keep in mind that there are all sorts of neighborhoods throughout Phoenix, as well as in the surrounding areas of Gilbert, Mesa, Peoria, Scottsdale, Tempe and more. You are sure to find what really works well for you, your interests, and your investment style.
The Job Market is Alive and Well
Many major industries like to call Phoenix home. And Fortune 500 companies make up a big part of that. With the unemployment rate down, it seems like things must be moving in the right direction. The economy of the Phoenix metro area is propelled by the following healthcare, finance, tech, and retail companies:
- Magellan Health and Banner Health employ a large number of residents (over 10,000), as well as Dignity Health, Phoenix Children’s Hospital, and the Mayo Clinic.
- Three main companies bring the greatest presence in the area, Avnet, Amazon, and Honeywell.
- This is a busy sector in the Phoenix area. Big corporations such as American Express, JPMorgan Chase, Bank of America, Wells Fargo, and Charles Schwab are all found here.
- There are a couple of retail giants that have their headquarters in the Phoenix area. They are Petsmart and Sprouts Farmers Market.
- A lot of jobs – and a lot of students – come from the education sector in Phoenix. And, it includes Arizona State University, the University of Phoenix, Phoenix College, and Grand Canyon University.
- We can’t talk about jobs without talking about the Tech growth! IBM, Intel, and even Facebook are all establishing operational facilities in the Phoenix metro area. Phoenix has been labeled “the new Silicon Valley” of the southwest.
Is Phoenix Right for Your Investment?
The sign of a good real estate investor is one who looks closely at all the opportunities available and all the data that support those opportunities — and then chooses the best choice. You can go anywhere in the world to invest in real estate, but why would you when the market in and around Phoenix is looking so fantastic right now?
There are a lot of opportunities for growth seen with these Phoenix real estate market trends. Lots of space and signs of new construction, a growing population, a stimulated economy, and more.
The future is looking bright for investing in Phoenix and the surrounding metro areas. And, if you decide to take that leap, you will feel confident that you will find the best property management company to handle your investment right here in the local area.
At Real Property Management Evolve, we understand the local Phoenix real estate market and follow the trends closely. So, whether you are interested in investing in rental property in Mesa, Glendale, Scottsdale, Tempe, Phoenix, or the surrounding areas, it is probably a wise decision. We know how successful rental properties are doing right now in the area — and are very optimistic about the future.