Phoenix was predicted to be the number one real estate investing market in 2017. The Valley of the Sun went from an almost worst to the best real estate market in the nation – which is an indication not only of how well the city is doing, but that the US housing market in general.
Related: 6 Real Estate Market Trends of 2017
Phoenix Real Estate Overview
There’s no doubt that Phoenix has a strong economy that is characterized by job and population growth. Jobs are being created twice the national rate. This is pushing more people to move into Phoenix in search of job opportunities as well as property to rent or buy, driving up demand forces. The increase in demand for investment properties in Phoenix is also associated with the fact that many retiring baby boomers chose to relocate to Phoenix. In 2016, the state of Arizona was ranked 10th among inbound states among US states. Phoenix is definitely growing in general and is no longer solely considered the haven for retirees.
Phoenix real estate is also becoming popular because it is an affordable alternative where the average median home price is $347,926. The ratio between home prices compared to rents is more favorable in Phoenix than other states, which is why investing in single-family homes is good. Property construction and developments will add to inventory, which will in turn help relax and moderate the increase in prices.
The Time is Now
If you’re considering investing in Phoenix real estate, now is definitely the right time. Phoenix is on its way to achieve pre-recession prices, and a recovering and balanced market where buyers and sellers may do business easily.
Prices as well as mortgage rates are expected to continue to increase for Phoenix real estate, which is another reason why you should invest now. Realtor.com anticipates a 5.94% growth in prices and a 7.24% growth in sales for Phoenix in 2017. Moreover, interest rates are likely to continue to increase post elections, which is another reason investors should consider jumping into Phoenix real estate as soon as they can.
It’s also important to mention that the Phoenix real estate market is not a bubble market, nor is it expected to become one. The rise in prices is a result of an increase in demand due to growth, which is a sign of a healthy and prospering market.
And How’s Airbnb Phoenix doing?
It’s no surprise that Arizona’s #1 export industry is tourism. After all, there’s something for any traveler’s taste. Tourists can pay a visit to the Musical Instrument Museum, the Papago Park, Arizona Science Center, The Heard Museum, Desert Botanical Garden, and many other attractions.
To top things, Airbnb Phoenix is doing very well. It is certainly a growing and profitable investment, which is why most of Mashvisor’s data on top city neighborhoods displays Airbnb as the top investment strategy. Additionally, the state of Arizona is both promoting and protecting the home-sharing business. The state signed Senate Bill 1350 earlier on in 2016 in an endeavor to limit regulations. The law outlaws cities in Arizona from banning the usage of several short-term rental services, including Airbnb. The bill also permits Airbnb to collect taxes from renters and then pay them to cities and towns in the state on its own. The city’s pro-Airbnb stance is definitely encouraging investors to consider Airbnb Phoenix among different investment options in Phoenix real estate.
At the same time, there are a few legal concerns associated with Airbnb Phoenix. Most of the revenue that Airbnb receives from Phoenix is from illegal listings. This is why things have become rather controversial among locals in regards to Airbnb Phoenix. If Phoenix wants to maintain and further help the Airbnb business to grow in the city, it’s got to push towards eliminating illegal and unregistered properties from its website.
Phoenix Real Estate Top Two Neighborhoods
The neighborhood’s got an extremely convenient location which makes it popular among locals and tourists alike. And while a better Airbnb investment, Camelback East is also a great traditional investment opportunity. It’s one of the more expensive parts of Phoenix, but it definitely pays back in ROI.
- Median Home Price: $390,000
- Airbnb Occupancy Rate: 48.30%
- Cash on Cash Return
- Airbnb: 5.87%
- Traditional: 2.66%
- Average Rental Income/month
- Airbnb: $2,922
- Traditional: $1,764
Is a neighborhood located in close to the center of Phoenix, which makes it attractive to tourists as well as locals. The neighborhood’s also close to Encanto Park and its surroundings, which are mostly historic areas that are preserved and restored beautifully. The neighborhood’s also characterized by offering many local amenities. Encanto is popular among Phoenix investors because it’s an affordable investment opportunity. The median home price in Encanto is lower than that of the city average.
- Median Home Price: $293,900
- Airbnb Occupancy Rate: 55.97%
- Cash on Cash Return
- Airbnb: 4.18%
- Traditional: 1.81%
- Average Rental Income/month
- Airbnb: $1,723
- Traditional: $1,138
Mashvisor’s multiple tools will help you assess investment opportunities in these neighborhoods, and others, and use them as comps to optimize your investment in Phoenix real estate.
Final Words on Phoenix Real Estate
Overall, Phoenix real estate market can be identified as a healthy, strong, and growing market. Being the nation’s number one market makes it a great investment opportunity. And experts are expecting a very strong year for Phoenix real estate. To make the best investment in Phoenix real estate, make sure to use Mashvisor to view information on CoC return, cap and occupancy rates, rental income, optimal investments in each neighborhood, property comps, and much more.