Friday, March 25, 2011

Arizona Rental/Investment Market Update as of 3/25/2011

Payam Raouf
President/Associate Broker
Arizona property Management and Investments

Arizona Rental/Investment Market Update as of 3/25/2011

Total Homes for sale on MLS: 38185 Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions

14582
pre approved short sale, pre-Foreclosure or short sale approval required in Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions

5239 Active foreclosed properties for sale ( less than 10% make sense to invest in )

Only 2135 unfurnished rental homes with 3 bed rooms or more Valley Wide, i.e. the entire Phoenix Metropolitan Area!

If this does not call for a panic, what does? There are 4 applicants per house as we speak. Rents have gone up 25% since 2009, most of it just in the last 6 months! Should this trend continue once these homes are foreclosed on, where should renters set their tenants up?

Cash buyers, investors have flooded the market. There are 2 to 3 offers on decent properties in good locations. Prices as the result are going up. Cash offers are coming in at 5% above asking prices. We have never received so many calls from cash buyers. When ask why, everyone almost says the same thing, hedging against dollar devaluation and cash flow and boy are they getting it. We used to calculate 1% of purchase price as a gauge for rent, giving investors 6 to 7 percent net return. Now a day, with the rents going up through the roof, that is moving up to 8 to 9 percent.

I just read in Arizona Republic yesterday, there are so many investors wanting to buy homes here that HUD is not accepting investors in the upcoming Auction.

Of course, bear in mind that is not on everything you buy out here. You have got to know, what and where to buy and what it rent for. That’s what we do. If you need additional information give us a call. 888-777-6664 ext 111. Payam Raouf