You are asking why you should be investing in Phoenix real estate 2017? Well, because according to experts, Phoenix is expected to be one of the top 20 real estate markets in the US this year. So, hurry up with a smart move and buy a Phoenix investment property now.
What’s Up with Phoenix Real Estate 2017?
All across the US, real estate market dynamics are changing quickly, with some of the top markets losing their leading positions, while other secondary markets emerging as the new best places for real estate investing. In 2017 Phoenix is expected to retain the strong position which it gained over the past decade. Forbes and Local Market Monitor, a North Carolina company tracking the housing markets in 320 metro areas across the US, forecast that Phoenix real estate 2017 will be among the top 20 choices in real estate investing. Actually they ranked investing in Phoenix real estate at #19 for 2017, based on a methodology which combines analysis of housing indicators and more general growth trends. All 20 top real estate markets expect strong population, jobs, and home prices growth. In 2016 the prices for Phoenix real estate investments increased by 7%, and job growth was 1.8%. Forbes and Local Market Monitor expect the 3-year price growth for a Phoenix investment property to be 18%, above the national average of 17%.
Other real estate experts go as far as forecasting Phoenix real estate 2017 to be the top housing market, with a 5.9% growth in property prices and a 7.2% growth in sales. In this ranking, investing in Phoenix real estate will be followed by Los Angeles, Boston, Sacramento, and Riverside. According to this forecast, the nation-wide real estate market will achieve an average growth of 3.9% in home prices and 10% in new home sales. This means that short-term appreciation in the Phoenix real estate 2017 will significantly outperform the national market.
Phoenix Real Estate 2017: Mashvisor’s Investment Property Calculator
When deciding on a location for your next income property, you should first perform a real estate market analysis to determine the real estate comps. Any seasoned real estate investor knows that this is an exhausting, time-consuming process. Well, now there is no need to waste time and money on gathering all required data, entering it into spreadsheets, and then analyzing it as Mashvisor’s investment property calculator does that for you for hundreds of US real estate markets. Let’s look at what Mashvisor’s rental property calculator has computed for Phoenix real estate 2017, based on actual properties performance and predictive analytics.
- Median Property Price: $348,000
- Traditional Rental Income: $1,370
- Airbnb Rental Income: $1,890
- Traditional CoC Return: 2.7%
- Airbnb CoC Return: 3.5%
- Traditional Cap Rate: 6.1%
- Airbnb Cap Rate: 5.6%
- Airbnb Occupancy Rate: 33.0%
As you can see, the Phoenix real estate market will remain relatively affordable in 2017, especially compared to some of the other top markets in the Forbes and Local Market Monitor ranking: Seattle ($656,000), West Palm Beach ($383,000), Nashville ($376,000), Sacramento ($449,000), Charlotte ($441,000), Raleigh ($492,000), San Diego ($828,000), Los Angeles ($939,000), and Boston ($1,025,000). This means that you should hurry up and buy your Phoenix investment property soon as long-term expectations are of major appreciation in the local market. Profitability as measured by both CoC return and cap rate is good. It is hard to say which is the better rental strategy for investing in Phoenix real estate – traditional or Airbnb – as the CoC return is higher for Airbnb, while the cap rate is better in case of traditional renting.
Investing in Airbnb Phoenix Real Estate 2017: Is It Legal?
One of the major factors which will point out whether traditional or Airbnb is the better strategy in Phoenix real estate 2017 is the legal status of Airbnb rentals in the city. Real estate investors like you will be happy to learn that in early May 2016, Governor Doug Ducey signed Senate Bill 1350 into law, preventing Arizona cities and counties from banning Airbnb activities, in addition to setting state rules for taxation of short-term rentals. This was a very progressive move on behalf of the State of Arizona, in support of the growing sharing economy and of Airbnb Phoenix in particular.
Best Neighborhoods for Phoenix Real Estate 2017
The next important question the answer to which you should know before deciding whether to go for Phoenix real estate 2017 or not is which is the best neighborhood for Phoenix real estate investing. Let’s have a look at the numbers computed by Mashvisor’s rental property calculator:
1. Camelback East
- Median Property Price: $390,000
- Traditional Rental Income: $1,760
- Airbnb Rental Income: $2,920
- Traditional CoC Return: 2.7%
- Airbnb CoC Return: 5.9%
- Traditional Cap Rate: 5.6%
- Airbnb Cap Rate: 9.0%
- Airbnb Occupancy Rate: 48.3%
If you are in favor of Airbnb Phoenix, then Camelback East – one of the 15 urban villages making up Phoenix – is the right neighborhood for you. The area offers excellent opportunities for outdoor activities in nature or in an urban setting, in addition to numerous dining options. Although a bit less affordable than the rest of Phoenix, a Phoenix investment property in Camelback East will yield the highest CoC return and cap rate for Airbnb.
- Median Property Price: $294,000
- Traditional Rental Income: $1,140
- Airbnb Rental Income: $1,720
- Traditional CoC Return: 1.8%
- Airbnb CoC Return: 4.2%
- Traditional Cap Rate: 4.9%
- Airbnb Cap Rate: 7.4%
- Airbnb Occupancy Rate: 56.0%
Encanto is another top neighborhood for buying an income property in Phoenix real estate 2017. Here the preferable strategy is once again Airbnb even though it is less profitable than in Camelback East. However, this neighborhood benefits from the additional advantage of being more affordable, with a median property price below the city-wide average.
- Median Property Price: $123,000
- Traditional Rental Income: $890
- Traditional CoC Return: 4.1%
- Traditional Cap Rate: 8.7%
Those who would rather go for traditional should look at Maryvale, a master planned community which offers excellent residential conditions. Phoenix investment properties here are particularly cheap, which allows for good profitability.
This article gives you some very strong incentives to go for investing in Phoenix real estate 2017, namely the forecasts of major experts. Thus, hurry up with your purchase of Phoenix real estate investments before prices go beyond the currently affordable level. In your search of the best Phoenix investment property for you, don’t forget to check out Mashvisor for hundreds of actual properties.