Wednesday, July 4, 2018

What More Is Possible? Arizona Real Estate Semi-Annual Market Report

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By: Payam Raouf
Owner/Investor/Designated Broker
7/4/18

We are halfway through the year and it’s time again to give you an update.  Good news if you are the seller and better news if you are the buyer!

Prices seem to be continuing to go up. If you have to sell, sell. Otherwise, keep renting it. We have less than 2 to 3 months of inventory on mls. No matter how fast builders continue to build, they cannot build fast enough to keep up with the demand.  I just checked on mls there is only 12973 single family homes active on the market and 8885 under contract as of 3:24 pm. Do the math. There is not even 2 months of inventory left!!!!
More people moved to Maricopa County than any other county in the country last year, according to U.S. Census Bureau population estimates released March 2018.
Population growth in Arizona is forecasted to be 120,000 new people from domestic and international locations in 2018. If this growth accelerates, we will be expecting over 1.5 to 2 million more people moving to Arizona in the next 10 years. Are you surprised?

Phoenix has seen the job market increase by 3.2% over the last year.
Future job growth over the next ten years is predicted to be 40.8%, which is higher than the US average of 38.0%.
Greater Phoenix’s tech sector is experiencing rapid growth, with more and more tech companies locating to the Valley like never before and others being launched here seemingly every week. In the 1980s and '90s, most of the tech jobs in metro Phoenix focused on back office and customer-care centers for companies with headquarters elsewhere. Now, places like Phoenix, Tempe and Scottsdale are buzzing with entrepreneurs and new companies in the tech space.
“We’re beginning to gain a reputation that there’s a real tech community here,” according to Steven G. Zylstra, president and CEO of the Arizona Technology Council.
Our rental inventory mostly consists of Single Family Detached Homes in the $300,000 price range with rents averaging $1850 per month. We cater mostly to upper management of the companies relocating to Phoenix Metro Area. There definitely is a shortage in this niche marketplace.
We see desirable homes suited for our niche market go up to $350,000 to $400,000 soon with rents averaging $2100-$2500 per month. Where else can you get such a return on your investment without risking losing it all? That is not even taking into consideration the historical average real estate appreciation of 6% year over year. In only 10 years, you literally could double your initial investment.  
With that in mind, we stay away from homes under $280,000 for now unless it is a great deal. It’s a crowded market with all the fha home buyers.
Our tenants focus on quality of life, good schools and desirable neighborhoods. There are pockets within subdivisions in certain locations of cities we choose to buy that not only offers just that but also have greater potential for future growth.
What is your investment strategy? Are you looking for a steady stream of income? Is someone else being in control of your financial destiny a concern? Or do you prefer to totally be  in charge?
Give me a call. Let’s see what else is possible. It's that easy. We do the rest.
Payam Raouf, 623-435-6633 Ext: 111

Monday, December 25, 2017

ARIZONA / PHOENIX METRO; 2018-2020 REAL ESTATE INVESTMENT MARKET PREDICTIONS



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By: Payam H. Raouf
Owner/Investor/Designated Broker


When you have your team working hand in hand running your business is when you know you are ready to take on more clients.

Property Management is not only collecting rent and paying you; It is a big responsibility both on yours and our part. It’s a financial marriage that, in exchange of a fee, one makes a promise that they will take mental ownership of your property while it is under their management.

It takes years to build a team that has the credentials, knowledge, and training it takes to earn your business.

Technology is a big plus if you know how to best utilize it to cut cost and mange time more efficiently, yet be personal, accurate and responsive. Target marketing adds to your bottom line by reducing your vacancy loses. Tenant placement is more than credit scores and rental and employment verification; It is the right shoe that fits you. Sometimes it is the first, sometimes the last, but either way it’s worth waiting for. Penalties are only due when the laws are broken. Paying detail attention to the changes in laws, rules and regulations whether it is national, state, county or city or at the community level are enough to keep you on your toes. All monies including rents, security deposits , maintenance reserves held by the broker should be accounted for 24/7 at the tip of your finger as if you were logging into your own bank account. 

You know your tenants respect you when they pay rent on time and call you to tell you they got married, had a baby, or are going through hardship in spite of receiving a notice of non-payment.

When you help them make their rental house their home, that’s when the magic happens and everybody wins. A well maintained property is cash in the bank. 

A wise investor picks the right business partner; one that helps them meet their financial objectives with the least amount of worry.

Rental Market Condition in Phoenix Metro:

We have hit a wall! Regardless of substantial rent increase, it’s getting cheaper to rent than to buy and renters are sitting it out!

In 2017 there were three kinds of investors selling: 1. The owners that had their nose barely above water. 2. The ones who bought dirt cheap in 2010 and 2011 and took some money off the table. 3. Canadians who took advantage of the currency exchange in their favor.

Who was buying? A lot of renters and first time home buyers dominated the market in 2017.  There were a lot of down payment assistance programs and sellers contributing up to 3%  towards buyer’s closing costs which fumed the buying frenzy and prices shot straight up.   

Bam! We have hit a ceiling. Buyers are having second thoughts right now: Should they stay put or take the plunge? Leases are renewed for one or some even two years as the result. It is the year of saving for a bigger down payment to avoid paying the private mortgage insurance (PMI). For FHA home buyers with only 3% down, the PMI of ½ or 1% of the loan amount is the deal breaker. Banks are rolling out programs to put them over this hurdle. This year we are going to be kind of flat. Many industry sources predict 3% growth rate up to the 4th quarter of 2018 but by early 2019, watch out! Sellers' market is going to roar back taking prices to new highs continued through mid 2020. 

That should be music to investor’s ears, loading up on good merchandise while it lasts. Looking to throw out some low ball offers? Timing is just right. Now listen:

The dead spot of the market is the $230,000 to $260,000 price range.

Total out of pocket cost of home ownership, PITI, PMI, and HOA for homes between $190,000 to $220,000 is around $1,350 to $1,500 per month. That is just about the same as what they would pay for rent for similar homes. 

$230,000 to $260000 price range, payment is about $1600 to $1750. You can rent those for $1550 to $1600 and someone else pays for major repairs. These are nicer homes of course but its out of their reach. homes in this price range are kind of suppressed now but not for too lone. If you come across one, make an offer! 

I would probably hop over the $260,000 to $275,000 range unless it is an opportunity you cannot pass on!

The $295,000 to $335,000 is the sweet spot right now as long term investments. That’s where the money talks and there is less competition. More desirable areas, loaded homes, better managed cities and communities, top notch school, sounds like we are back to the location, location, location. Does it not? Some pockets in North Phoenix, N Peoria, N Glendale, Chandler, Gilbert to name a few.

So who is buying investment properties? Lots of cash buyers! New Money, Old Money, IRA conversions money, 1031 exchange money etc. Real estate is a tangible asset. Plus you have full control over it yourself as oppose to a fund manager. With DOW over 25000, Bitcoin over $15000 just in 12 month, taking some chips off the table and investing it in real estate maybe a good option. 

Next time you are heading over to Phoenix by plane take a look around you. A) Isn’t the plane full? This is not only a winter destination; It is a place for doing lots of business. Phoenix Metro was sitting somewhere close to 4.5 Million people according to Google Data in 2015. It has grown by a good 100,000 plus since and the pace is accelerating. At the current growth rate, it should reach 10,000,000 people by 2035-2045. B) Is there enough water to support this tremendous growth? Water is never enough!  Even if they keep some of their large farming operations intact, there is more water under this land than it is above it. The more homes, the more the parks, greenbelts and landscaped homes are going to make the hot summer a thing of the past. C) Most infrastructures are in place. National Big Box Distribution Centers open up on weekly basis somewhere in the Valley. Unemployment is averaging 3.25% and in some towns as low as 2.7 %. Both High and Low tech workers are needed. Is the person sitting next to you coming to Phoenix for business? Maybe even planning to buy a house. One out of 3 chances they are. We're building highways to nowhere!? Enough said.

Everywhere you look, they are turning dirt to built homes.

If you invest $300,000 in the right real estate opportunity in Phoenix Metro, you could walk away with $600,000 NET in your pocket in 10 years!!! There are similar opportunities for investors with only 30% down payment!

Please click on this link and join Arizona Real Estate Investments and Management Group on Meetup and let me show you how.




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Wednesday, July 19, 2017

THE REAL INVESTORS ARE BACK! TIME TO INVEST AGAIN IN ARIZONA.


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 Phoenix Real Estate Update. Show me the money.

By: Payam Raouf
Owner/Investor/Designated Broker
THE REAL INVESTORS ARE BACK! TIME TO INVEST AGAIN IN ARIZONA.
I am so excited to report that THE REAL INVESTORS ARE BACK!
(NOT SPECULATORS)
This time it is all about long term investment, up to 10 years or so. They are NOT buying just ANYWHERE. They are buying QUALITY homes in SELCTED AREAS of the market. It is easy to generalize and say buy in N. Phoenix for example. However, that is not going to cut it any more. Where in N. Phoenix? Which subdivision? What are the school ratings in the area? Who manages the H.O.A.? Who is the builder? What is the percentage of the owners' vs tenant occupied? Floor plan, Location, Location, Location.
Tenants have not seen rents so high in Arizona EVER. $1250 is the norm plus lots of $1500 to $2000 even some up to $3000 a month for single family home rentals. I have never seen so many 700 credit score applicants fighting over $1500+ rental in the past 10 years.
We were renting the same homes 3 years ago for $250 to $350 less per month and rents keep going up along with the prices.
Individual Investors, or a pool of them, are buying rentals in the low to mid $300,000 range. It makes a lot of sense!
A)  They get top dollar for it from more qualified tenants. Good tenants take care of the property better. They have less maintenance charges, less turn overs and more money in their pocket.
B)  They get better yield in the long run, higher percentage of return and highest appreciation.
C) Desirable areas sell faster for more money so when they want to cash out, it’s quicker.
D) Fewer headaches mean more time to make more money.

Grnprpcrdsuk

These are the most desirable properties which bring you the most rent on Monopoly Game.
I read the following report below - very informative. I would  like to share with you this:
"According to WalletHub 8 Phoenix-area cities hit top 50 healthiest US housing markets. The website had 14 criterias to determine rankings. Those criterias included pricing, days on market, affordability, and other factors.
Texas topped the healthiest markets list with the number 1 positions for large, midsize, and small markets. Those cities were Austin, Plano, and Frisco. Overall Arizona had a good showing on the list. Seattle and Denver were #2 and #3 for large cities. 
Here are the Arizona cities that ranked among the healthiestreal estate markets


·        11 Midsize - Gilbert

·         22 Midsize - Chandler

·         28 Midsize - Tempe

·         35 Midsize - Peoria

·         36 Midsize - Scottsdale

·         40 Large - Mesa

·         46 Large - Phoenix

·         49 Large - Tucson

·         55 Midsize - Glendale

·         88 Small - Surprise

·         123 Small - Yuma

Overall Arizona rental market has seen an increase in rents since January 2015 and inventory is low. This has increased demand all throughout the Phoenix area including Tucson. Particularly areas of strong demand where schoold districts are ranked high among National average.
With the surge of rental prices investors are finding tenants quicker that pay a premium. Average annual return on investment has stuck around 9% but we have seen better tenants and have been able to minimze investment risks. It is a great time to buy and hold investment properties in Arizona. 
Not every home in the valley is a good investment. Look for desireable areas that have good school districts, low crime, shopping close, and good neighborhood zoning. These factors can help attract the right tenant for your home."

Please give us an opportunity to help you with all you rental investment properties from acquisition to leasing, managing and sale. Thank you.



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Sunday, January 15, 2017

Phoenix Real Estate Update. Show me the money.

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 Phoenix Real Estate Update. Show me the money.

By: Payam Raouf
Designated Broker

I don’t want to be misleading but I have to be honest, this is a tough market to predict. I have over 70,000 readers and in the past 10 years this is the first time I am going back to the basics!!!!

Overall, rents and home values have substantially gone up  throughout the valley in the past 6 to 12 months and you never know what the BEST price to buy, sell or rent is till you do extensive research and try it out. 

I would not rely as much on Zillow, Trulia and other zestimator web based real estate companies to figure out the true value of my properties as I would on MLS. On MLS, you can get down to the differences or similarities of all the homes that were sold in the past six to 12 months. Take EVERYTHING into consideration,  the floor plan, subdivision, the  builder etc, etc, etc. Then you must go see the house, drive the neighborhood maybe even pull over talk to a resident or two... to come up with as close as a market value you feel is right and up that by a reasonable percentage just to be safe. Of course you MUST take into account the buyers/sellers or tenants it may attract and have your marketing plan A, B and Cs in Place. 

It is such a mixed market, some of our investors are selling and quite a few are buying!!!  Most of the ones selling are the ones that were upside down in the past 7 to 10 years on their mortgages.  The ones buying are pretty solid investors. They are buying location, location, location! Homes in the mid 2500 to 3000 sq ft with all amenities in $275000 to $400000 range. N Peoria, N Phoenix, Gilbert, Chandler, Scottsdale are among a few to mention.

The other group buying homes are the first time home buyers or tenants who have been  renting for the past 5 to 6 years. They have got the home prices in the $150000 to $275000 going through the roof.  30% of tenants are buying homes and the same ratio of landlords seem to be selling as well. There are a lot of grants available for the first time home buyers and sellers make a decent contribution towards their closing costs.

Too many apartments are either build already and or are in the process of and that market is not looking as good right now. It looks like rents are leveling off and are heading down a bit from their highs. On the other hand, with 30% of investors selling and the lack of affordable single family homes, many tenants see apartment living specially the new ones as an alternative and that may level things off or even raise the rents in the future. We will see.

Older buildings in the central Phoenix may not be the best rentals but may be good flips. Downtown Phoenix, Tempe, Arcadia Area, Scottsdale are in play to name a few. If you can find a deal and have the right contractor to team up with, go for it otherwise, be careful. That market is softening a bit as prices have skyrocketed and real comps are hard to get.

We have managed up to 1600 properties throughout the valley in the past nine years and as a hands on Owner/Designated Broker, my team and I can help you accomplish any residential real estate goals you may have throughout the valley. We can help you buy, remodel/fix, rent/lease, maintain/manage and sell your properties. Please either give me a call directly at 1-888-777-6664 ext. 111 or give me your information and ask me any specific questions you may have. I will be happy to share my thoughts with you. Thank you for your business.

________________________________________

Realtor.com: Phoenix will be No. 1 housing market in 2017

 Catherine Reagor , The Republic | azcentral.com 

Real estate website predicts Valley home prices to climb 5.9 percent, and sales to jump by 7.2 percent next year; LA is No. 2

Drum roll please….
The top housing market in the U.S. in 2017 will be metro Phoenix, according to a new realtor.com
forecast.
It’s about time.
The Valley’s steady growth in sales and price increases, tighter new home market and short supply of foreclosures make it one of the healthiest in the country. Plus a wise housing analyst who tracks home sales and trends every day told me last year that 2017 would be the big year for the Phoenix-area housing market. Realtor.com, a national real estate website, is predicting Valley home prices to climb 5.9 percent, and sales to jump by 7.2 percent next year. That’s not the biggest projected price increase on its list of top 10 markets in 2017, but it’s the biggest sales increase.

It makes sense since one of the Valley’s top selling points for buyers is more affordable home prices, particularly in the West. And that’s the intro for Los Angeles, which ranked No. 2 on the list with a predicted 6.9 percent rise in prices and 6 percent increase in sales. Two other cities in the West, Sacramento and Riverside made the top five for housing market gains. All are pricier to buy a home in than the Valley.

There's also good news for Phoenix’s southern neighbor Tucson. The real estate group ranks it as the ninth best housing market in 2017 with an expected 6.1 percent jump in prices and 5.5 percent gain in sales.

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Thursday, September 15, 2016

Should You Invest In Arizona Real Estate?


Arizona Property Management and Investments
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Forbs (Business)
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Quick Hits: If you’re planning to buy a home in Phoenix, Flagstaff or Prescott, do it now, because prices are going up for the next few years. Investments in single-family rental properties have good potential mainly in Phoenix. Apartment developments have the best potential in Phoenix, where splitting homes into rental units is also attractive, and in Tucson. Mortgages and construction loans have average risk. Best bets for investments in retail are Phoenix, especially the southeast suburbs; worst bets are Tucson and Prescott.
Investing in Arizona no longer means dubious retirement projects in the desert – a kind of Florida West with sand instead of swamp. You can find those too, if you like taking a flyer, but Phoenix and Tucson have grown up and offer investors a range of  possibilities. In addition to the big cities, Prescott does cater to retirees, Flagstaff has a younger demographic, and Yuma has a heavily immigrant population; all have different housing needs.
The strongest economic growth, and therefore strongest demand for housing, is in Phoenix, where jobs are being added at twice the national rate many of them in healthcare, retail, and the large finance sector. Job growth has also been strong in Prescott, mostly in the retail and healthcare sectors as you would expect from the retiree population. Growth in Tucson, on the other hand, has recently been slow. Flagstaff depends heavily on the cyclical tourist trade.
Home prices in all Arizona markets rose and fell sharply in the boom and bust; but afterwards prices in Phoenix – and somewhat in Prescott – went through a mini-boom of speculation in foreclosed properties. It looks like those have now been flushed through the system, so we can take at face value the recent price increases – strongest in Phoenix, Flagstaff and Prescott, weaker in Tucson and Yuma. I expect Phoenix prices up at least 25 percent over the next three years, which means you shouldn’t wait if you plan to buy there. Prices have been strongest in Phoenix itself, slightly weaker in the southeast suburbs.
Flagstaff, Tucson and Phoenix have a high proportion of renters, almost 40 percent, but because home prices in the former two are high compared to rents, investing in single-family properties to rent them out is most feasible in Phoenix – where the ratio is much more favorable and where housing needs encourage splitting single-family homes into multiple rental units. The relatively lower pay in the growing retail and healthcare sectors will expand renting in future years.
Mortgages are a good investment right now. Because home prices will keep rising the next few years, the equity cushion for new mortgages will grow quickly; yet prices are in balance with local incomes, so the risk of default will stay average. Construction loans also will have average risk in the growing markets, especially Phoenix, where I expect 60,000 new single-family homes built over the next three years and 60,000 apartments. In Prescott I expect a modest 5,000 homes built and in Tucson 5,000 apartments. In Flagstaff and Yuma I expect less than a thousand new housing units, mainly apartments.
Because of the rapid population growth, investments in retail stores and restaurants are favorable in Phoenix; the suburbs in Pinal County are greatly underserved for both. Such investments in Flagstaff face stronger competition and the cyclicality of tourism. The retail sector has been flat in Prescott and has actually shrunk in Tucson. The large growth of finance and healthcare in Phoenix will probably call for more office space.



Should You Invest In Arizona Real Estate?
Arizona Property Management and Investments
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 (888) 777 6664
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