How is the Rental Market in Arizona?
December 6 2009
Arizona Property Management and Investments
PAYAM RAOUF, Owner/ Associate Broker
Rents are going up specially in most areas of the central valley. There is a bidding war going on out there! There is about 25% less single family residential rental homes on the market than a year ago but apartment rentals are still suffering so are the condos. Rent for homes in the outskirt of Phoenix Metro have not changed much either.
Banks are foreclosing on properties much faster, "you don't pay in three months, you better find a place to live quickly" policy. With the dollar value falling so rapidly against most major currencies, Dubai maybe forced to sell off 20% of London Stock Exchange and credit card defaults being on the rise, a lot of banks have to cash out quicly to pay off their debts or they will go under.
Loan modification aren't happening like they used to either. According to a loan modification officer in Arizona,"It is getting tougher. Some national banks like Chase used to be a lot easier but not any more".
Fannie Mae "deed-for-lease" program is already falling apart. Chase and some other major financial institutions were also considering it but it doesn't seem they are moving forward with it. 90% of homeowners don't qualify, they have hefty second and third mortgages and the ones that do, don't want to go through with it. It's more in favor of the banks than homeowners.
On the other hand, some smaller banks that guaranteed the notes, have no choice but to hang onto their homes untill the market turns, meanwhile, they have to rent them but they have much restricted guidelines.
Several troubled financial institutions are turning and burning their foreclosed inventory at the court steps at fire sale prices. Investors are making a killing in the process by putting them back on the market for a hefty profit and surprisingly they appraise! The $8000 tax credit has also been extended for six more month and interest rates should remain low for a while longer. We should see home prices continue to rise through first half of 2010 and so should the rents. But Zandi, lead economist at ecomony.com predicts home prices going down or at least going side ways in the second half of 2010 in Arizona, Nevada and florida.
With the Fed printing money 24/7, we should see the real inflation kicking in sooner than later, increasing home values substantially in a few years. Meanwhile, Rents will continue to rise, maybe you will have a good residual income to retire on or pay for your kids college or etc. In my opinion, anything is better than keeping your cash in the bank or investing in securities right now. Dow at 10500 is 2500 points below what it was 10 years ago! With real estate, you are always in charge of your own finances, not a market maker or a fund manager gambling with your future.
THIS IS A GREAT TIME TO BUY. You will have positive cash flow going in and hedging against inflation at the same time. Hasn't real estate been the the safest bet throughout the history? What did you pay for your house 20 years ago? What is it worth now? I rest my case. Any other Ideas?
LONG LIVE CAPITALISM AND HAPPY HOLIDAYS.
This is just my opinion, you should do your own research when making any investment decision.