Two things are historically true when it comes to investment dollars floating around the Arizona real estate market. In the best of times, investors move full force onto the real estate bandwagon – most recently writing loans for everything from subdivisions way in the outskirts of Phoenix, to very attractive urban condos in Downtown Phoenix, Tempe, and Scottsdale. In the hardest of times, investors also gravitate toward real estate, hunting for bargain buys on foreclosed homes and commercial properties as they leverage off continued population growth to help Arizona’s economy rebound.
Stan Barnes, CEO of Copper State Consulting in Phoenix and a former state lawmaker, said those with established money in the Valley still feel much more comfortable investing in real estate developments – even after market falls apart like the current one – rather than taking chances on risky start-up companies or unproven entrepreneurs. Traditionally, property prices have always rebounded in this country.
“People in California chase new high-tech companies. People in Texas drill for oil. People in Arizona invest in real estate. That’s just the way it is, and likely will be as long as we are the fastest-growing state in the union,” said Barnes, whose firm does political and communications consulting for private-sector professionals. Stan is probably right there, I moved my family to Arizona to do just and sell homes and help others do the same. It has certainly been a roller coaster of a ride, but it is said that there are more millionaires made in a “down” economy than in an “up” economy.
In many neighborhoods in Arizona, specifically the Phoenix Metropolitan, there is a shortage of traditional sales. In some areas, up to 75% of the market may consist of short sales and foreclosures, limiting the choices of many buyers due to the long waits of some of these transactions. Arizona property investors looking to flip investment properties see great opportunity in fixing up and selling homes to these buyers, eliminating the wait time of short sales, or the challenges many bank-owned homes may come with.
Arizona investors are also seeing the opportunity in holding properties for the long term, as both prices have come down and in many areas rental rates are rising. We have probably never seen a mix of excellent conditions to invest in real estate as we do this year, as properties can cash flow and return on investment are the best they have been in over a decade. Further, interest rates have remained very favorable for qualified buyers. Whether you are waiting for the market to bottom out, or you feel it’s already making a industry has always rebounded.
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