By: Mark Beauvais, CMO – PTE Real Estate Group

 Last month we discussed how dominant cash buyers had become in the Phoenix real estate market. It is truly remarkable that 72% of January 2011 purchase and sale transactions that took place in Maricopa County were for CASH, whereas the national average was only 32%.

[1]

 In the last 3 calendar years (2008-2010) over 200,000 residential properties in the Greater Phoenix market have either been foreclosed upon, short sold or been part of personal bankruptcy proceedings. With just over 1 million homes in Greater Phoenix, this represents approximately 20% of the total.

 When “grey” or “shadow inventory” is considered – properties in some form of inevitable default, “frozen” foreclosures or bank inventory held off the market – the numbers may be closer to 300,000 or 30%.

 The great majority of these former owners stayed in the Valley, many in the same neighborhoods, and became renters. In fact, rental demand for quality single-family properties is stronger than purchase demand in many areas.[2]

 We are probably 2 or 3 years into a 5 year cycle. By the time this cycle is complete, some 35-40% of the Greater Phoenix market will have moved from owners to renters. To call this shift unprecedented is an understatement.

 This is the biggest ownership shift the Greater Phoenix residential real estate market has ever seen, including the RTC days of the 80’s and 90’s. It’s the biggest shift nationally since the Great Depression.

 Opportunities for the real estate investor are numerous. If you like to fix and flip, the opportunity is there. If you’re a buy and hold investor, now is the time. Lease-Option, Rent-to-Own or Seller Carry strategies work well in this market. Properties are cash-flowing.

 The question for the real estate investor is, “How are you participating in this unprecedented shift?”

 Tag: PTE Real Estate Group is a Phoenix-based real estate holding company that owns AZPropertyWholesalers.com, AZAuctionBidder.com, US Investment Realty and other companies. They are the largest buyer and seller of distressed real estate in the Greater Phoenix market.


[1] According to NAR and National Mortgage News, February 28, 2011.

[2] According to The Arizona Republic and Cromford Report.