We haven’t seen 80% inflation yet. We have not seen 21% interest rate yet. Rental Market Evaluation 4/26/2023 in Phoenix Metro Arizona.

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By Payam Raouf
Designated Broker

We have had it too good for too long. No one wants our money (dollar) any more. We might as well print it on the toilet paper. A box of 8x11 copy paper at Staples was $89 today. We used to buy it for $29 two years ago. I bought the last box on sale for $59. 

We haven’t seen 80% inflation yet. We have not seen 21% interest rate yet. It is not quite around the corner. I have heard from some experts it’s 5 to 7 years away. It is a work in progress and not going to happen overnight.

Saudi Arabia is not dropping the petrodollar yet, but their activity suggests they might be considering other options. Saudi Arabia might be the keystone in the petrodollar too, and if for example, they begin to trade oil in yuan, this may cause a domino effect, and the other members of OPEC might follow suit. 

Homes that are $400,000 now could be $1,000,000 and then $2,000,000 and so on and a $2500 rental will be $5000 and $7500 accordingly by then (2027-2029). 

Of course, average household income will have doubled by then as well and is going to be around $150,000 to $200,000 per year. I look at credit applications all day. Average household income has increased substantially in the last two years and so have the rents. A $1200 rental is now $1700 and a $1700 rental is now $2400 just within the last 2 years and I don’t see most renters having any difficulty paying it.

Folks, I am buying rentals as we speak. I put my money where my mouth is.  That’s how you can keep up with a runaway inflation. Everyone needs a roof over their head. They will find a way to pay.

If I were a tenant, I would get off my butt right now and start looking for a house to buy today.

Institutional landlords are building multifamily and bungalows for rent everywhere you look in phoenix metro area. They want your money and will keep you a renter for ever if they can.

New home builders are literally giving them away.  It was on the news today that you can buy them cheaper than resale. Realtors receive emails from new home builders constantly that they are offering substantial discounts up to $90,000 on some standing inventories and even buy the rate down to make them more attractive. They are in the business of building homes. They sell more houses with less profit they get the same result as if the sell less at higher prices. EX: email from ******* Homes April 14, 2023: Our HUGE incentives will continue through this weekend!!  Please do NOT miss out on ‘up to’ $90,000 incentive :-) WOO-HOOOOOOO!!  

 

Banks are making money hands over fists. Did you see how much profits the bank made in the last quarter? They also go out of business if they don’t give loans. They will find a way to take your money. Don’t worry. Either you are paying rent or a mortgage. It’s your preference.

They say I write this because I am a Realtor and are pumping it to sell more homes. That’s fine I don’t care what they say. I am very blessed with a lot of clients. I am in rental management business. I see how investors and tenants are taking advantage of this market.

There goes not a month that I don’t get a few phone calls from tenants that we are giving our notice to move out, we bought a house and from investors asking where is a good place to buy and what rent they should expect to get.

As of today 4/26/2023 at 1: 52 PM, there is only 515 resale homes on MLS in the entire Maricopa county with 4.5 million residence with the following description: detached single family homes between $350,000-$450,000 with 3 to 4 bedrooms and more than 2 baths , 1700-2500 sq ft, build after year 2000 with no pool. These seem to be the most desirable homes to buy in the valley.

Once the new homes standing inventory runs out the resale home prices will go back up even higher. We have seen a substantual price increase in March 2023 already in Metro Phoenix 

Life is beautiful. Enjoy it and God Bless.

https://finance.yahoo.com/news/home-prices-rose-more-than-previously-thought-in-the-first-three-months-of-2023-202355995.html

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Disclaimer: Please do your own due diligence. This is only my personal observation and opinion. Do not make a decision solely on the content of this blog.