Liquidity Trap: Why Arizona Investors Need More Than Just Equity in 2025

Liquidity Trap: Why Arizona Investors Need More Than Just Equity in 2025 
By Jason K. Powers 

Arizona’s real estate market has always been defined by its cycles. From the explosive growth of the early 2000s to the sharp downturn of 2008 and the recent post-pandemic surge, investors in Phoenix, Tucson, and the surrounding areas are no strangers to market shifts. But what’s happening now is catching even seasoned investors off guard. 

In the summer of 2025, Arizona is still seeing strong population growth and steady demand for housing. But the numbers are starting to send mixed signals. According to the latest data from the Arizona Regional Multiple Listing Service (ARMLS), home prices in the greater Phoenix area have plateaued in recent months, while active listings have quietly increased by more than 15% compared to this time last year. That doesn’t scream crash, but it does suggest the tail end of a seller’s market. 

Meanwhile, mortgage rates continue to hover around 6.75% for 30-year fixed loans, according to Freddie Mac. That’s a far cry from the sub-3% rates that fueled the buying frenzy of 2020 and 2021. Add in higher insurance costs, stricter lending standards, and inflation’s slow drag on household budgets, and you’ve got a rental market that’s growing tighter by the month. 

For buy-and-hold investors, this environment presents a unique challenge. Rents are still high, but margins are tighter. Properties are taking longer to rent, and operational costs continue to climb. Investors need more than just good deals. They need financial agility. 

Enter the Infinite Banking Concept. While many investors think of it as a long-term wealth strategy, IBC can actually serve a very immediate function for Arizona real estate investors. At its core, IBC allows you to build liquidity within a properly structured whole life insurance policy and then borrow against that cash value to fund investments, repairs, or even float expenses during vacancies. 

Let’s say you’ve got a rental in Mesa that’s sitting vacant for six weeks. You’ve still got a mortgage, property taxes, and possibly a contractor invoice waiting to be paid. Traditionally, you’d pull from reserves, tap a HELOC, or reach for a credit card. But with IBC, you can borrow from your own system and pay it back on your terms. There are no rigid schedules, no credit checks, and no explaining your business to a banker. 

It’s not just about emergencies. Some investors are using IBC to time their acquisitions more strategically. Instead of being subject to the whims of traditional lenders, they can act quickly on deals, cover earnest money deposits, or make competitive cash offers. The opportunity cost of missing out can often outweigh the interest owed on a policy loan. 

There’s also the overlooked benefit of consistency. In a market like Arizona’s, where expenses are unpredictable and growth is no longer linear, having a financial system that provides stable, tax-advantaged growth while remaining liquid is a game changer. Even if you never borrow from your policy, just knowing it’s there creates peace of mind. 

Now, to be clear, this isn’t about replacing your other strategies. IBC is not a silver bullet, and it’s not a one-size-fits-all solution. It’s a way to create financial infrastructure. A reliable foundation that supports the rest of your investing activity. 

It’s not just high-level theory, either. I work with real estate investors across Arizona who use IBC daily. One client in Flagstaff keeps his property taxes and insurance escrow in a policy throughout the year, earning uninterrupted growth until those bills come due. Another in Chandler uses policy loans to fund turn-key rehabs, then pays himself back once the property is stabilized and cash flowing. 

This is especially powerful when you begin stacking strategies. A life insurance policy properly structured for Infinite Banking does not compete with your real estate business. It complements it. And while the financial industry often pushes products that lock up your money for decades, IBC gives you options. 

So what does this have to do with the Arizona market right now? Everything. When the market slows, the investors who have capital win. Not just those with equity or big lines of credit, but those with actual liquid dollars. Having access to capital without the red tape is what allows you to survive shifts, capitalize on softening prices, or fund upgrades that make your rentals stand out. 

It also creates long-term staying power. Because let’s be honest. Arizona real estate is still a solid bet over the next 10, 20, or 30 years. The key is staying in the game. That means adapting to the cycle, preparing for volatility, and building a system that lets you move when others can’t. 

The market doesn’t care how passionate you are or how many books you’ve read. It rewards preparation, flexibility, and capital. Infinite Banking can help provide all three. 

Jason K Powers is a multi-business owner, real estate investor, and financial strategist. Partnering with the National Real Estate Investor Association, Jason helps real estate investors around the country integrate Infinite Banking and life insurance into their long-term strategies. To learn `more, visit 1024Wealth.com/NREIA