Investing in Arizona Real Estate
The Arizona real estate market has been one of the hottest real estate
markets to invest in for the past two or three years. Initially,
investors were seeking real estate in California when they happened upon
the state of Arizona and saw the potential for growth. In recent years,
the Arizona real estate market has been providing excellent
returns for investors. The Arizona real estate market is good for both
investors that deal with single family homes and with condominiums or
apartment-style housing.
While Arizona real estate continues to grow at a 20% rate, this growth
rate is somewhat lower than it has been in recent years. As a result of
the fact that rising interest rates are making it harder for families to
afford loans in the similar way that they have been in the past. Once
the mortgage rates increase some families could begin to lose their
homes to foreclosures.
Arizona's Home Market is Cooling Down
According to an article published by
The Arizona Republic, June was a "dismal" month for home resale in a
region in the metropolitan Phoenix area. The Arizona local housing market showed its worst performance that month since 2000,
according to the
paper. The number of existing homes sold in June fell 20% from May
2006 and 25% from March of this year, when local sales were at their
peak. The Arizona Republic says, sales are 38% below peak
levels of 2005 for the year to date. Among the areas showing price
declines in June were Mesa, Peoria and Chandler, while prices remained
the same in Phoenix and showed the biggest increase in Scottsdale, the
article says. A regional real-estate professional quoted by the paper
comments the current housing market transition as "a very healthy
adjustment." While another area real-estate agent calls the selling
atmosphere a "very strong buyer's market".
That said, there are still options available for investors interested in
Arizona real estate. It is not advisable to buy Arizona real estate at
this point in time unless you plan to rent it out. Why is it so? As
mortgage interest rates are rising, many people will not be able to
afford homes. When this happens, many of these people will opt to rent a
home rather than attempting to live outside their means in order to
purchase a home. Investors that hold Arizona real estate can then take
the opportunity to make money by renting homes.
Alternatively, investors who are interested in Arizona real estate can
wait for the growth rate in home prices to settle down before buying a
home. At that time, the Arizona real estate market will be more
favorable for buyers. It will be easier to negotiate lower prices.
Timing is everything with this kind of investment strategy. Once the
tide turns, home buyers will have more influence over the price.
Investors that are new to the Arizona real estate market will have a
better chance at making a profit from turning property.
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