Tuesday, July 5, 2016

Blackstone Tenants Get a Shot at Buying Their Rental Houses

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Dear Subscribers, If you are planning to take some profits off the table or can no longer afford hanging on to your rental propertiy(ies), this could be the right opportunity to sell it.

Home values have substantially gone up in Arizona since it bottomed out in 2010. In some areas we have surpassed the values at the height of the market in 2005!!!

There are approximately over 300,000 rental properties in Phoenix Metropolitan Area. Majority of them are held by large Equity Funds. They have now quietly started taking some profits off the table by selling to our #1 buyers, the tenants. This trend will accelerate next year and as fierce competition amongst these equity funds heat up, they are going to flood the market with thousands of unsold inventory driving prices back down again.

If you are planning to sell your property, you should price it according to the market and offer the right terms to avoid getting caught at the exit. We have years of experience selling rental properties with or without tenants in place and short sale.
 

 _____________________________________________________________
 
Blackstone Tenants Get a Shot at Buying Their Rental Houses
 
BY: Heather Perlberg
July 5, 2016 

Firm’s Invitation Homes unit is selling in Arizona, California

Single-family landlords have been losing renters to home buying

Melissa Suniga and her mother had been renting a three-bedroom Phoenix house for less than a year when their landlord, Blackstone Group LP’s Invitation Homes, gave them the chance to buy it.
Suniga, a 40-year-old childcare worker, used her security deposit and $2,000 she’d saved from her income-tax refund, along with a county grant and a credit from Invitation Homes that together provided her with $10,600 more for her down payment and closing costs. She expects to complete her purchase of the $150,000 house this week.
“When I started renting, I thought, ‘I wish I could buy this home,’” Suniga said in an interview.
U.S. landlords who built rental businesses by buying homes en masse are now consolidating and streamlining their operations, in part by selling for a profit properties that have soared in value or no longer fit their business models. Invitation Homes is the first of the large rental companies to give residents a shot at owning their houses, seeking to benefit from having its own pool of ready buyers who are constrained by a market starved for affordable homes.
Blackstone has amassed about 50,000 rental houses in the past four years. While Invitation Homes is still buying selectively, spending about $5 million a week, it expects to cull about 5 percent of its properties annually, Chief Executive Officer John Bartling said.

Staying Put

Selling rental homes to tenants is a way for investors to make more money than they would selling in bulk, and saves them the costs of renovating and carrying the properties until they sell on the open market. It’s also a way to help people stay put, keep their kids in the same schools and stabilize neighborhoods, according to Bartling.
“This is an important part of the maturation of the industry and for Invitation Homes as we grow over time,” he said in an interview.
About 25 percent of Invitation Homes renters who move out each year are leaving to become buyers, according to the company. That’s similar to what the industry’s other large firms are experiencing. Colony Starwood Homes has reported losing about 23 percent of departing tenants to homeownership, and American Homes 4 Rent has said its figure is about 30 percent.


American Homes 4 Rent, the No. 2 single-family landlord, with about 48,000 houses, didn’t respond to requests for comment about whether it would be selling homes to tenants. Colony Starwood, the third-largest, with about 31,100 homes, declined to comment, spokeswoman Caroline Luz said.

Homebuying Option

Selling homes to renters is “an evolution of the business model,” said Jade Rahmani, a Keefe Bruyette & Woods Inc. analyst. “The differentiating factor in this industry is they can sell to an owner-occupant as well as an investor.”
Renters may have better luck buying a home from their landlords than venturing into the open market. Inventory is tight, and home prices nationally are up 32 percent since the 2012 low -- and have risen even more in areas hit hard by the housing crash, with increases of greater than 50 percent in Phoenix and Miami from their troughs. And soaring rents are causing some tenants to view homeownership as more economical.
Invitation Homes started selling houses to renters in Phoenix and Sacramento, California, this year, with plans to expand the program, to be called “Resident First Look,” in all 14 of its markets across the U.S. in the next few months.
The company’s decision to sell a home is based on a variety of factors, including the concentration of properties it wants to have in individual markets, prices and whether it wants to reallocate funds in other parts of the country, Bartling said.

Rising Prices

Invitation Homes bought Suniga’s house for $83,000 in 2013, according to property records. Values in Phoenix have since risen about 25 percent, and rents in the area have climbed 15 percent in the same period.
Now, Suniga is buying the renovated place for $150,000 with a loan from the Blackstone-owned Finance of America Mortgage LLC. A bankruptcy from more than a decade ago, along with a past sale of a home for less than what was owed on it, had raised flags with other lenders Suniga talked to, even though she’s brought her credit score up to 660, she said.
While Invitation Homes said its renters-turned-homebuyers are free to use any lender they want, the company is working with a small number of mortgage providers that are more familiar with the new buying program, including Finance of America.

Similar Payment


Suniga’s monthly mortgage payment will be $920, about $65 less than her rent, she said. Her down payment wouldn’t have been large enough without the help of the Maricopa County, Arizona, homebuyer-assistance program, which required both her and her mother to take an eight-hour online course. She also received a $5,000 credit from Invitation Homes for closing costs and used her security deposit toward the down payment.
That kind of help might lead to questions from lawmakers and regulators in Washington, according to Isaac Boltansky, an analyst in Washington with Compass Point Research & Trading LLC.
“There’s inherent skepticism in D.C. regarding Wall Street’s motivations in the mortgage-finance market,” he said. “Novel forms of credit access are going to be scrutinized closely even though they purport to increase homeownership.”
Some housing advocates have pressed rental companies to allow renters the opportunity to buy their homes before properties are sold to investors.

‘Help Households’

“A first look for renters, as long as the renter can afford the home and purchases it on fair terms, could help households get on the road toward building equity and limit turnover in the neighborhood,” said Sarah Edelman, director of housing policy at the Center for American Progress in Washington. “It’s important, though, that they shop around for a mortgage.”
Smaller investors, such as Axonic Capital LLC, have been offering renters the chance to buy their homes for years.
“We definitely see it as one of the best ways to sell, because there’s no down time or rehab cost between tenants,” said Jonathan Shechtman, portfolio manager for residential strategies at the $2.7 billion investment firm.

More Flexibility

Like Invitation Homes, Axonic -- which owns fewer than 1,000 properties, all in Florida -- has more flexibility on timing when selling to existing residents, many of whom are getting low-down-payment loans insured by the Federal Housing Administration, Shechtman said.
Suniga, the Blackstone tenant, is planning to replace some carpeting and upgrade the kitchen cabinets once she officially owns the rental home she had thought was unattainable.
“I’m thankful for the opportunity,” she said. “It’ll be a shock until I know it’s mine.”
 


 
 

Monday, June 6, 2016

Metro Phoenix housing market has best month in a decade.

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  Catherine Reagor, The Republic | azcentral.com 10:19 a.m. MST May 27, 2016

Foreclosures low, home building high, prices affordable and buyers are moving to the area.

 
April just might have been the best month for metro Phoenix’s housing market in a decade.

A look at key indicators and some national rankings show why the Valley’s housing market appears to be stronger than it’s been since the boom and crash.

Foreclosures fell to the lowest level since 2006. Home building continued to rebound. Phoenix kept its spot as one of most affordable big metro areas for home buyers. And a national moving survey shows the Valley is one of the top 10 U.S. areas where people are moving.

Also, many of the buyers needed for the Valley’s housing market to finally fully recover are here.
An April Street Scout survey of Valley home buyers and sellers found Millennials and boomerang buyers who lost houses to foreclosure during the crash are buying metro Phoenix homes at a pace the market hasn’t seen before.
  • Home sales in metro Phoenix climbed to 9,041 in April, an almost 8 percent jump from last April, according to data compiled for this column by Arizona housing expert Mike Orr of The Cromford Report. Condominium sales reached 1,637 last month, up 1,514 from April 2015.
  • The Valley’s median home price rose to $235,000, up from $215,000 a year ago. The median condo price reached $146,500 last month, compared with $142,000 a year ago.
  • Banks foreclosed on only 231Phoenix-area houses in April, the lowest level since December 2006, according to The Information Market.
  • Home building in the Valley is up 25 percent from last year’s pace, according to RL Brown Housing Reports.
  • Despite home-price increases, metro Phoenix is still the eighth most affordable big U.S. metro area to buy a home, according to the latest quarterly ranking from national mortgage firm HSH.com. The Valley has held that spot for the past year.
  •  And finally, moving company U-Haul’s annual survey for the most one-way rentals in 2015 came out this week. Metro Phoenix ranked 10th nationally for the most popular place for people to move.
Despite the upbeat signs for the housing market, Orr is careful in how he describe its current status.
He told me the Valley's housing market is a bit "complicated" now.


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Saturday, March 12, 2016

Inventory for sale is low, demand is high and prices are holding steady but rents are going up.

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3/12/2016
BY: Payam Raouf
Designated Broker


Inventory for sale is low, demand is high and prices are holding steady but rents are going up.

Market is moving at a moderate pace. More tenants and first time home buyers are purchasing homes. Cali-vestors are back at it as they get more bang for their buck in Arizona. Not much flipping is going on. Margins are not simply there.

There is a shortage of rental homes throughout the valley. Rents have gone up considerably and homes prices are holding steady in most areas. It looks like market is leveling off.

Multi-Family sale prices have skyrocketed. As they are a more affordable alternative to single family home rentals.

Inventory of single family Homes for sale is low. We are hovering around 18500 (3/12/2016) active homes for sale on MLS. For a city the size of Phoenix Metro, normal is around 35000. This has made the condo prices go up substantially.

Many investors are holding on tight hoping the shortage is going to help the rents and home prices to  higher.  One good indication that home prices have reached their peak is when condo prices per sq ft get close to home prices in the same neighborhood.



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Wednesday, December 30, 2015

Forecast Says U.S. Home Prices Are Overvalued, Will Peak In 2016

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By Nick Timiraos 
Wall Street Journal
The U.S. home price rebound has nearly run its course, and Americans should prepare for several years of home prices that don’t increase much, if they rise at all, according to a report published by bond strategists at Bank of America Merrill Lynch.

Most economists expect home prices to rise around 5% this year, before rising at around 3% over the next few years. Home price increases in recent years have been driven primarily by supply shortages, and some economists have said that prices could continue to outpace income or rent growth if more homes aren’t made available for sale.

To be sure, U.S. home prices have been especially difficult to predict in recent years. Many analysts prematurely called a bottom in 2008 or 2009, and others called for continued declines in 2012, after prices had started rising.

Analysts Chris Flanagan and Gregory Fitter concede that their view is “well out of consensus.” They say that U.S. home prices, after being undervalued relative to household incomes by around 6% at the end of 2011, have now rebounded to levels that are 9.7% overvalued. Their model uses the S&P/Case-Shiller home-price index.
They estimate that home prices will rise another 3% annually in each of the next two years, well below the 9.5% annualized growth rate since the end of 2011, when the market hit bottom. That would leave prices around 12% above the “fair value” level implied by household incomes. The model then forecasts modest declines in the following years, resulting in net annualized home-price gains that are flat through the middle of 2022.

So does this mean U.S. housing markets are in another bubble? If it is, it’s much less pronounced than in 2006, when home prices peaked at levels that were overvalued by nearly 59%, resulting in price declines of nearly 35% over six years.

Messrs. Flanagan and Fitter say that the regulatory framework enacted since the financial crisis in 2008 should largely prevent a return to the loose-lending standards that inflated the housing bubble. Against that backdrop, flat home prices between 2016 and 2022 “seems to us to be a fantastic outcome and exactly what policymakers had hoped for when establishing the new regulatory framework,” they write.

They also point to recent home-price indexes that show that the pace of increases has already slowed, suggesting that the post-crisis boom in home prices witnessed over the last two years “is most likely over.” A new period of “exceptionally low home-price growth” in which prices will rise by just 1% a year, on average, over the next eight years “most likely has started,” they write.

Why Arizona real estate may not be a good economic bet in 2016


If I were the type of person who extrapolated from data to form a conclusion I wished would be true I’d say that there will be much more money for Arizona entrepreneurs in the future than there has been in the past.
The reason is that an economic forecast for 2016 I attended last month predicted real estate would be a lousy investment in the foreseeable future. And if Elliott Pollack is saying that – he of the endlessly optimistic forecasts since the '80s – it must be grim for the money in Arizona that knows no other investment.

According to Pollack, next year will be just like this year. There’s no irrational exuberance and the debt ratio is low, as low as it was in the 1980s. Inflation is low, and oil prices are low. We are now down to importing only 21 percent of our oil, compared to 65 percent in 2005, which means as a nation we’re saving about $420 million a day on oil.

The dollar is stronger, mostly because the U.S. is the prettiest house on an ugly block. In times of crisis, people flee to the dollar, and that means foreign goods are cheap here, but our goods are expensive overseas. It’s a good time to go on an international vacation.

So there’s no recession coming.

However, the remaining debts are auto debt and student loans. In manufacturing, which largely means automobiles, inventory to sales ratios are out of line, which means cutbacks in manufacturing even though the average age of a car in the U.S. is 11.5 years.

For the first time in 40 years people have had to live within their incomes, because there are no bubbles, either in the stock market or housing, which would allow them to feel wealthy.
Moreover, the number of people in their peak earning years (45-54) is decreasing and won’t increase again until 2023. Only 26 percent of people 18 to 34 are married, so millennials won’t get to the suburbs with their kids until the mid 2020s.

Predictions for the 2016 Housing Market


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Thursday, December 10, 2015

Here’s what the housing and mortgage industry will look like in 2016

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Payam Raouf
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TO BUY / SELL INVESTMENT RENTAL PROPERTIES  IN ARIZONA PLEASE E-MAIL PAYAM RAOUF AT INFO@AZEZRENTALS.COM OR CALL 623-435-6633 EXT 105. 

One insider's look at 2016
http://www.housingwire.com
December 8, 2015

Lynn Effinger

Lynn Effinger is a veteran of more than three decades in the housing and mortgage servicing industries. He serves as president of Effinger Consulting and is the author of the inspiring memoir, Believe to Achieve – the Power of Perseverance.

As an interested observer and active participant within the housing and mortgage servicing industries for more than three decades, I have opined on many industry-related subjects over the years, and each year also present my own predictions for the coming year. Why not, since predictions are like opinions and noses… most everyone has one?

There are numerous reports and other predictions out there pointing to positive improvement for the housing sector in 2016, or that indicate there are signs that we will continue to experience a housing recovery next year (which has actually only been true in specific markets, i.e., the Bay Area, Manhattan, Southern California, Denver and Salt Lake City to name a few). My opinion is that although 2015 looked a lot like 2014, next year will not mirror them in this vital sector.

Before I list my predictions, it is important to note that everyone’s predictions are relative to the economy in general, and the housing sector in particular is subject to unforeseen domestic and global disasters, man-made and otherwise.

Therefore, since 2016 is shaping up to be a potentially chaotic, unstable and unprecedented year of upheaval around the world, and is perhaps the most important national election year of my lifetime, it is quite possible that my predictions will not come to pass after all.
That being said, the following are some of my housing and mortgage industry-related predictions for 2016:

1. Interest rates 
Interest rates will rise not only in December by at least one-quarter percentage point, but will continue to rise throughout the year for a total increase of more than 1%, due to actions of the Federal Reserve. Each uptick in mortgage rates will prevent many potential first-time buyers (and others) from qualifying for a loan. This will impact days on market of homes listed and will put pressure on listing prices to be reduced. If there are not enough first-time buyers entering the housing market there is less opportunity for existing homeowners to move up, which will also add days on market and impact pricing.
2. Luxury housing 
A continued drop in luxury home prices, as reported in HousingWire, will influence a similar drop in home prices of nearly all price categories, which, combined with higher interest rates as stated above, will have a negative impact on the health of the housing sector.
3. Mortgage credit 
Credit will remain tight in 2016, despite efforts by Fannie Mae and Freddie Mac to make more 3% down payment loans. This means that rental properties will continue to be in high demand causing ever increasing rents, which, like many mortgages today represent 40% – 50% of the income of renters and homeowners, which, with stagnant wages is unsustainable. This will negatively impact consumer confidence.
4. Consumer confidence 
Consumer confidence in general will be negatively impacted because of the continued lackluster growth of our domestic economy. Until there is a dramatic change in the direction of this country with respect to deregulation of businesses (especially small businesses) and the creation of meaningful full-time jobs, the housing sector will not gain the strength it has had in the past.
5. Delinquent housing inventory 
Inventories of delinquent and foreclosed loans have not disappeared and will only grow, further negatively impacting home prices in many markets, as reported by Ben Lane in HousingWire. In his article, Lane said, “Based on the number of past distressed loan sales and the amount of non-performing loan sales and re-performing loans that still exist on the books of Fannie, Freddie, HUD and commercial banks, even if the number of NPL and RPL sales stays at its current post-crisis high, there are still four years’ worth of potential NPL sales volume and six years worth of RPL sales volume left to sort out.”
And that is assuming, as Lane noted, that no more additional loans become delinquent, which is unlikely in the extreme.
With dramatic improvement in the quality of leadership in Washington and elsewhere, perhaps a more positive outlook is possible, but I can only call ‘em as I see ‘em.


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Saturday, September 26, 2015

Where are we going from here? REAL ESTATE MARKET IS HOT HOT HOT IN ARIZONA.

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Where are we going from here?

On the one hand I wish the phones stopped ringing, on the other this is best market we have had since the crash of real estate in 2006/2007.  In some areas prices have surpassed the heights of 2004/2005, in others they are getting very close to it. 

Unemployment is at its lowest level in Phoenix Metro since 2006. Good luck finding a handyman, a skilled construction worker or even a skilled office manager at a reasonable hourly rate! In June 2015 unemployment rate dropped to 5% less than the 5.3% national average.  There have been 61,400 new hires in Maricopa and Pinal counties since February 2014, according to the Arizona Department of Administration ---  a pace higher than the average number of new jobs created during February over the last 10 years.

Mortgage companies are back logged 45 to 60 days. Days you put an offer with closed of escrow within 30 days are over! Rates are low, down payment assistance programs are back, financial institutions have eased up, first time home buyers and renters are swarming the market and multiple offers jamming up the fax machines. 

Title companies, I call them the “Moo Cow Corrals” offer no incentives to Realtors to get their business, let alone offering their clients a glass of water going to sign their docs. Buyers, Seller check your HUDs twice before you sign on the dotted line. They are making a ton of mistakes.  
Who is buying who is moving to Phoenix? 


Renters who lost their homes are on the top of the chart, second to that are the first time home buyers and thirdly savvy investor, Californians and opportunists.

From 2008-2011forclosures and short sales had become the norms of the market. As the result, too many home owners lost their homes and entered the rental market. 7 out of 10 of our tenants when they give their notice to vacate, “BOUGHT A HOUSE” is their answer to why they are moving out.  
With rent increasing 15 to 30 percent in most areas in the past 18 months and how affordable homes


are still out here in Phoenix Metro, rates being so low, banks competing and sellers contributing up to 3% towards buyers closing costs, it will be foolish not to buy a home. We see a lot of first time home buyers entering the market. For just a little more than their deposits and first months rents combined, they are buying homes and their payments are equal or a bit higher than the rent. 

Savvy investors sold their investment properties in California where prices have sky rocketed and it feels like we are back in the 2003 area where speculators were sleeping behind the new home construction offices to enter into a drawing to buy a home. Owning rental properties in Phoenix Metro pencils out way better than in larger metropolitan areas, especially in California. I heard from one investor in California that the exchange boards at her 1031 exchange office are filled up with investors looking to complete their exchanges and no properties to exchange it with in California that makes any sense. A lot of them are coming to Arizona from buying one to multiple single family homes to mid and large size multiplexes. I know first hands because we are getting those calls.
Younger Californians especially from Silicon Valley area are moving to Scottsdale. They tell me, you cannot get a decent condo for $700,000 up there. A 3000 square feet home with pool on a large size lot in a decent area costs a fortune. Most tech guys work from home anyway. So we get a lot of those calls too. Quite a few that have already moved down here seem to be very happy with their decisions specially the ones with children.

We also see a lot of big corporations in the east coast transferring their head honchos to Phoenix Metro looking to expand their operation. Cooperate relocation has picked up by at least 6% in the last 12 months and a few more applications are under review as we speak. 

Recently there have had quite a few tenants with good credits from Los Angeles and Orange County moving to Arizona in search of new opportunities.  Soon they will enter the home buying market as well. 

Who are the sellers? 

A)     Owners that have been under water with their mortgages for the last ten years finding it now make sense to sell.
B)      Canadians investors: Most of the Canadians who bought investment properties in Phoenix Metro bought in when Canadian Dollar and US Dollar were at par in 2011. Now one US Dollar equals to 1.33 Canadian Dollar so they enjoy the property value appreciation plus an additional 33%.
C)      Owners who are up sizing/downsizing. Regular sellers.
D)     Flippers. There are still some opportunities not as much in the lower end homes out there to fix and flip. Higher price homes make more sense as long as the economy is doing well. A fine line to walk in that area. Be careful.  
E)     Very little foreclosure.

We specialize in buying and selling investment opportunities from a single family home to multi million dollar multiplexes. Our team at Global Real Estate Investments consists of seasoned Realtors that have got the pulse of the market and can lead you to the right opportunities. Our property management Company, Arizona Property Management & Investments is an award winning property Management Company in Phoenix Metro ready to get your vacancies filled and get those dollars into your back account reducing your liabilities. Our Maintenance Company, Arizona Handyman and Remolding Services LLC makes sure your investment is maintained well and up to date at a reasonable cost reducing your overhead  adding to your bottom line.

Please call me directly at 888-777-6664 ext  114 ( please make sure you tell the receptionist  you are an investor, they screen all my calls) or email me at info@azezrentals.com.
By looking at the articles below, you will see that we have been preaching those areas to our investors for the past two years.  We know what, where and how to help you make your next investment move to maximize your long and short term gains. Don’t make this decision on your own even if you live in Phoenix yourself. This is a free consultation.

Thank you.
Payam H. Raouf
(888) 777 6664 ext 114
info@azezrentals.com


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8 Phoenix-area cities hit top 50 healthiest US housing markets

 

Eight Arizona cities are rising in the ranks of healthiest housing markets in the U.S., according to a WalletHub study. They all landed in the top 50 healthiest U.S. housing markets for comparably sized cities based on population.
Gilbert, a midsize city, ranked the highest of the Arizona cities at No. 11. Chandler was next at No. 22 and Tempe ranked No. 28 in the midsize cities. Among large U.S. cities Mesa ranked No. 40 and Phoenix was No. 46.





The website consolidated rankings in 14 criteria, including pricing, percent of homes still under water, days on market, affordability, and other measures to determine the healthiest markets in the U.S.


Texas topped the healthiest markets list with No. 1 positions for Austin (large), Plano (midsize) and Frisco (small).
Other Western markets ranked high as well. Seattle (No. 2, large) and Denver (No. 3, large) ranked higher than all Arizona cities. Salt Lake City (No. 21, midsize), trailed Gilbert, but was just one ranking ahead of Chandler.
Rank of Arizona cities among healthiest U.S. residential real 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
Source: WalletHub
Eric covers economic development, banking and finance, infrastructure, transportation and utilities.

Monday, June 22, 2015

US home sales jump in May, average prices close to 2006 peak

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Rents have increased by 10% or more in most Phoenix Metro Areas since January of 2015! The inventory is low and demand is very high specially in areas where school districts are most  desirable such as Anthem, N Peoria, Deer Valley, N Glendale, Gilbert, Chandler, Mesa, Ahwatukee and N. Phoenix. 

Even with the home prices rising, the demand to purchase rental investment
properties in Phoenix Metro Area has picked up. Quite a few investors from California and New York  where home prices has gone up substantially in the past two years have started investing in rental properties in Phoenix Metro again. Their focus is long term. They are buying prime real estate in the $180,000 to $300,000 in the most desirable areas. 

If you are interested in knowing where and what they are buying and need some recommendations, please contact Payam Raouf, Owner/Designated Broker at (888)777.6664 ext 114.  Thank you. 



US home sales climb 5.1 percent in May; tight supplies drive up prices

By Josh Boak, AP Economics Writer 

WASHINGTON (AP) -- More Americans bought homes in May, a sign of economic strength that is pushing up average prices.
The National Association of Realtors said Monday that sales of existing homes climbed 5.1 percent last month to a seasonally adjusted annual rate of 5.35 million. May was the third consecutive month of the sales rate exceeding 5 million homes, putting home-buying on pace for its best year since 2007.
Solid hiring since 2014 and relatively low mortgage rates have stirred up demand and helped generate more first-time buyers, though rising sales have fueled spiking prices because relatively few properties are listed for sale.
"We can credit that to the stronger job market, a more confident consumer" and some additional listings in an otherwise tight market, said Jennifer Lee, a senior economist at BMO Capital Markets.
Some of the buying might also reflect a rush to capture the benefits of lower interest rates and relatively cheap prices that are jumping higher each month.
"There may be some anticipation of prices going even higher, which is sparking a move off the sidelines," Lee added.
Median home prices climbed 7.9 percent over the past 12 months to $228,700, about $1,700 shy of the July 2006 peak.
The market has just 5.1 months' supply of homes, versus an average of six months in a healthy market.
Economists say that the sales gains of recent months could be short-lived if prices increase so sharply buyers are priced out of the market. The recent rise in mortgage rates could also curtail sales, similar to the higher mortgage rates slashing into sales in the middle of 2013.
Still, real estate has begun to show some strength after muddling through much of the six-year recovery from the recession that has left millions of Americans still owing more on their mortgages than their homes are worth.
Sales jumped in all four major geographic regions: Northeast, Midwest, South and West. First-time buyers also accounted for a growing share of sales, a sign that younger buyers are returning to the market after enduring an economic downturn and sluggish rebound that delayed their purchases.
About 32 percent of the homes sold last month went to first-timers, compared to 27 percent a year ago. The improvement is substantial but still lags behind the historical average of first-time buyers composing 40 percent of the market.
More Americans signed contracts to buy existing homes in April — which should translate into more finalized sales in the following months. The Realtors' seasonally adjusted pending home sales index climbed 3.4 percent to 112.4 in April, the highest reading since May 2006.
Sales of newly constructed homes through the first four months of the year are up 23.7 percent compared to the same period in 2014, according to the Commerce Department.
Builders are gearing up to meet the additional demand.
Approved building permits in May surged 11.8 percent to an annual rate of 1.28 million, the strongest reading since August 2007, according to the Commerce Department. Construction firms are breaking ground on more houses and apartment complexes, with the government reporting a 6 percent increased year-to-date.
Much of that growth stems from the spillover effect from a stronger jobs market. Employers have added 3.1 million jobs over the past 12 months, increasing the total number of paychecks in the economy and the likelihood that more Americans will shop for homes.
Low mortgage rates have also helped, although rates are now starting to steadily rise in ways that might limit sales later in the year.
Average 30-year fixed rates were 4 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.
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