In 2006 I flew back to Phoenix from New York and was seated next to a gentleman who was a “mortgage broker”. We discussed the housing market, and he informed me that they were already employing “foreclosure experts.” He predicted the market was “set to implode.” I had been in Europe two years earlier and the market prices had more than DOUBLED on the properties I was interested in.
Because of the present economic situation, there has been a unique market and circle of opportunity created in the Phoenix metro/ East Valley area, more specifically, the Gilbert, Mesa, Tempe and Chandler areas.
Phoenix is a key defense hub according to Phoenix Business Journal (see www.clearancejobs.com) Companies like Boeing, Honeywell and Raytheon top the defense list. Intel, Oracle and Cisco Systems are on the technology list. We are a major airline hub, and as a result of these employers and new jobs created there is an increased need for homes to lease. We are a big college town with ASU, University of Phoenix, MCC and Thunderbird International to name a few–a boon for real estate investors. Hence, THE OPPORTUNITY ZONE— PHOENIX VALLEY.
You can’t rely on old investing habits to guide you in this market. I’m not going to preach about investing for the long run, but it’s important to think about time in relation to the current real estate market. In AXIOMetrics’ January survey of 88 markets, 55 had increased rents, the first positive monthly growth since July 2008. This was partly due to landlords scaling back concessions. Occupancy rates were mostly flat. While optimistic that rent levels will start to recover this year, this will depend mostly on job creation. (Venessa Wong, Business Week)
As a very active property management firm, on the properties we have listed and advertised in the Gilbert, Mesa, Tempe and Chandler areas, we are experiencing:
- More applications on a property
- More 700 and above FICO score applicants
- Property leased before released as “rent ready”
- Property leased in seven days or less
- Better overall tenant paying higher rent
Properties in these areas may sell for more initially, but consider:
- They are in better condition when you take possession making rent-ready expenditures less — both in initial rent and getting ready to re-rent when the tenant moves out.
- Less damage to property and easier clean-up and maintenance
- Leased for a longer period
- WHEN YOU DECIDE TO LIQUIDATE, PROPERTY IS IN A BETTER LOCATION FOR MAXIMUM GAIN—property will appraise higher for sale.