Arizona Cities Seeing The Greatest Real Estate Growth In 2017

With the addition of approximately 217,000 new residents, the state of Arizona is one of the country’s fastest growing states. The new growth has resulted from an enormous economic turnaround, specifically the opening of the Apple plant in the Phoenix suburb of Mesa. There are an estimated 10,000 places available for new residents and homeowners, making the silicon Desert the place to be.

Are homes available? What you want to look for when analyzing areas for relocation and availability of homes, check ownership rates. A high ownership rate leads to a higher overall score, whereas a lower one shows high competition and more options for renters over buyers.

Can you afford to live there? To determine whether a place is affordable you want to use monthly homeowner costs and median home values. The higher score in our report go to high median homes with low coasts of living.

Is the area growing? To answer this, population growth will tell you if an area is attracting new residents. A thriving local economy will usually bring in more home buyers.

Using the above measures, the best places to live in Arizona are provided below. Each of these towns are ideal if you are looking for a place to buy a home. Evaluate what you are looking for regarding incomes, median house values and area growth you can determine which town is a better suit your needs.

1. Maricopa

With a population jump of 19.6%, this area located in the Gila River Valley is a top spot for relocation. More that 805 of homes are owned versus rented, and the median cost for a house is $132,000. Hosting the popular Harrah’s Ak-Chin hotel and casino, the town features a great historical collection of the Ak-Chin people. The casino is the largest employer in the area. The community additionally offers the Ak-Chin-Him-Dak Eco Museum which showcases stone tools, arts and crafts and jewelry.

2. San Tan Valley

This suburb in the Greater Phoenix Area had the highest population spike has not yet been incorporated as its own town, but did get its own postal code in 2009. With a median home value of $126,300 and an ownership rate of 74%, this area is quickly becoming a popular place. There is potential for growth here and the low cost of living makes it ideal for first time home owners.

3. New River

The residents here earn a monthly income close to $7,185 with 28% of that going towards home ownership costs. Situated to the north of Phoenix, the average home value is $312,200 and it has the highest ownership rates (90.7%). Overall the town has seen 11.23% in population growth. The attraction to this area comes largely from the low numbers of rentals, showing this is a preferred place for those looking to settle and purchase a home.

4. Sahuarita

A more technologically advanced area located south of Tucson; Sahuarita has median incomes around $5,700 and a relatively low cost of living. The majority of homes in the area are owned rather than rented. Most employment stems from the huge organizations located there such as Raytheon which is an international defense and aerospace company and the University of Arizona Science and Technology Park.

5. Queen Creek

Thanks to local festivals such as the Roots n’ Boots Rodeo and the American Heritage Festival, this area saw a boost in population numbers of 12.1%. One of the highest household incomes of the places on the list, averages for the area is close to $7,343 a month. Most homes are owned and cost of living is higher than other places on this list, but is still relatively low. Residents can enjoy an amazing Parks and Recreation department, with programs and activities for all ages and coming soon will be a new 14 screen movie theater.

6. Buckeye

Buckeye is located in the Maricopa Valley and supports slightly higher number of renters than the previous location; however it is still primarily homeowners. This suburb of Phoenix has not had as large of population increases either, but has a very decent median household income and low cost of living. The town is famous for its old times western theme and annual Buckeye Days festival and the Helzapoppin’ Rodeo.

7. Marana

A relatively young city, when compared to most of Arizona towns, the population soared by 2012 to reach a little over 34,000, which is a big jump from its previous 1977 count of 1,500. Although the city is not very big, it has its own airport and a decent monthly income close to $6,000. There is definitely room for growth here and the cost of living is low, which makes a potentially ideal spot to settle and buy a home.

8. Anthem

A relatively small town of 23,000 residents, this community is still a very busy one and offers a lot to its members. The cost of living here is slightly higher than others on the list, but monthly median incomes are also a little higher. You can enjoy the veterans’ memorial, Liberty Bell Park and the Splash Pad as well as the beautiful 64-acre community park hosted by the Community Council Parks and Facilities.

9. Green Valley

30 miles south of Tucson, there has not been a lot of growth here in regards to population and the median monthly income is significantly lower than the other places listed. Most of the residents are employed in the local copper mines or the Smithsonian Institution’s Whipple Observatory (located in the nearby town of Amado). The lower growth rates, incomes and home values ($182,000 on average) are most likely due to this largely being a retirement community.

10. Goodyear

The original land for this town was bought by Paul Lichfield (Goodyear Tire and Rubber Company). Affordable to live there with decent incomes and steady growth rates, the town has an excellent economic standing for potential homeowners. Jobs are provided mostly by Macy’s and Amazon fulfillment centers as well as the popular food production companies of Snyder’s of Hanover, Del Monte and Poore Brothers. This town is great for baseball fans, as it hosts both the Cincinnati and the Cleveland Indians spring training camps.

The Arizona Real Estate Market Prime for Rental Investors

With the Arizona Real Estate market experiencing a strong recovery, it is only to be expected that investors will be drawn into putting money into rental properties. Certainly, real estate investors within the state recognize the potential as the market continues to strengthen, but investors from other neighboring states are also finding the growth in Arizona irresistible.

If you are new to the idea of real estate investing it may not be clear to you all of the advantages of doing so. It takes time to learn the pros and cons, become familiar with the pitfalls and how to avoid them, and then once you begin investing it can take several years to build up a valuable portfolio.

Buying Rental Property: Overview

With diversification being the ‘buzzword’ in investing many people are taking the time to learn how to successfully invest in real estate. It is likely that you have already purchased Arizona Real Estate at some point in your life i.e. your home. Doing so gives you some idea of what it takes to go through the purchasing process. Buying investment properties is very similar but with some additional knowledge required.

You will go through the same research and assessment of your financial position to determine the value of the property you can afford and your ability to pay back a mortgage, and then armed with those numbers you go ‘shopping’ for funding. Where rental properties are a little different than residential homes is that the goal is to gain the largest return on your investment as possible.
Due to the goal of realizing the best return possible you are likely to find yourself looking at properties that you would never consider buying to live in yourself. Cash flow is crucial, and therefore you will be looking to buy properties that the rental income provides sufficient money to cover the mortgage repayments as well as all other expenses associated with the property.

Maintaining high occupancy with reliable paying tenants is critical, and at the same time keeping expenses to a minimum is also of utmost importance. The act of advertising a property for rent, vetting prospective tenants, and other issues that come with the management of real estate is what makes many real estate investors turn to a professional, knowledgeable and well-respected property management company. The value they bring to an investor makes their cost worthwhile.

Foreign Buyers Increasingly Attracted To Arizona Real Estate

Foreign buyers like to purchase property in the United States because they see the real estate market in areas like Phoenix, Arizona are stable. According to a study by the National Association of Realtors, the international sales of US homes is at the second highest it’s ever been in recent years. Owning property in the US is a significant investment. Foreigners are purchasing homes not only to live in them, but to rent out as well.

In the past five years, 70 percent of Realtors have stated that international clients have contacted them looking to potentially purchase a property. From April 2014 to March 2015, international buyers purchased $104 billion in American real estate.

Arizona is the third largest state for international sales. Florida and California are the top two. Texas and New York also sell a lot of homes to foreigners. These states make up 61 percent of international sales.

Arizona real estate is popular with foreigners because of the warm weather. There are some other factors as well. This includes the distance to their home country, if they have relatives already living there, and if there are opportunities for both jobs and education. Out of the 68 foreign countries that purchased homes in the USA, there are five the make the majority of purchased real estate. They are Canada, China, Mexico, India, and the United Kingdom. These countries make over half of all purchased real estate, with Canada and China leading the way.

Not all people from different countries like to make purchases in Arizona. Chinese buyers do not rank very high in the purchase of Arizona homes. Chinese buyers make the bulk of their purchases in California. They also like to make purchases in Washington State, New York, Massachusetts, Illinois, and New Jersey.

In the state of Arizona, Canadians make up 46 percent of the foreign home buying market. They are likely to purchase a home for a vacation use or as a rental property. They also are buying condos and apartments instead of single family home. Many Canadians are also purchasing homes in the state of Florida. They prefer the Sarasota and Venice areas as well as Palm Beach as opposed to Miami.

Foreign buyers are important in the real estate market. They spend on average just under $500,000 on a home. Other buyers average a purchase price of $255,000. In addition to paying more for a home, they also spend more money on furniture, eat out more often at restaurants, and attend more sporting events. This is good for the economy. They are not only spending more on the home but spending more in general. Businesses are seeing an increase in their profits due to international buyers.

Realtors need to improve their skill sets when they work with foreign buyers. They need to have a global perspective of things and have experience working with those from a different culture. They need to learn different real estate practices to get along with others as well. The NAR will help realtors expanding their skills and work with those on an international level. A realtor can train to be a Certified International Property Specialist. Be sure to visit this association online to find out more information.

Can Phoenix Live Up To Rising Real Estate Investment Expectations?

Phoenix is projected to be ranked as top housing market by realtor.com in the year 2017.

Brad Hunter, the chief economist with Colorado-based homeAdvisor Inc, also said that Phoenix should be expected to see better gains in the year 2017 as compared to other competitive real estate markets.

The last recession and crash that hit the real estate market in the US saw other markets have a better opportunity of recovering as compared to Phoenix.

Regarding prices, Phoenix has a greater chance of improving than the rest of markets such as the Denver and Coastal market. According to Brad Hunter, Phoenix began its recovery later than many other markets, as they had to start from the bottom to ensure that there is a good strategy to help in attaining healthy gains in the year 2017.

Realtor.com estimated Phoenix to increase 5.9 percent in price and expects a sales growth of 7.2 percent by the end of 2017. Other people who see the prosperity and healthy development of Phoenix are Andrew Glenn and Bryce Lugo who are agents with my Homegroup Real Estate LLC. Glenn stated that there would be a continuous growth of year over year of up to 5 to 6 percent in Maricopa County Arizona.

Therefore we can boldly conclude that a lot of people have faith in the survival and growth of the Phoenix market. The market had its best-selling year in 2016 since 2006, and the sales of the existing as new homes are worth 115,837 as stated by RL Brown Housing Reports.

For existing homes, the sales from the year 2015 went up by 99,955 dollars which is estimated to be 7.2 percent increase, while new homes went up to 32 percent from 2016 and closed with an increase of over 15 thousand dollars.

According to RL Brown, Phoenix needs to come up with a new pricing structure so they can be able to catch up with the rest of the United States. This is because the median resale of the existing homes in Phoenix market was estimated to be 216000 dollars and had a percentage increase of 0.23% which was quite small in the earlier year. After increasing their prices to 315,157 dollars, the percentage sales rose from 0.23 to 1.38 percent which is good markup. Lugo stated that the high increase of rental prices might also lead to people opting to buy homes instead. If the rental prices shoot to 1600 dollars to 1700 dollars per month, the incentives to rent a house goes down.

The Metro Phoenix Apartment Market’s Promising Outlook

The Phoenix metro rental market continues a two-year ascent, showing no signs of stopping anytime soon. What really could be the reason behind the increasing demand for rental property in Phoenix?

An aerial of recently developed areas in the Phoenix valley. Photo courtesy of the International Space Station.

According to Stephanie McCleskey who is the vice president of Research for Axiometricks, outstanding job growth is the most important factor. McCleskey asserts that with over 3% annual Phoenix job growth rate, the huge demand for accommodation is consuming a huge portion of new property supply.

According to his organization, Phoenix businesses created 56,800 in 2015. The data provides evidence that real estate companies are in a rush to add another 4612 housing units in 2017, after supplying 7093 units in 2016. Looking at 18 submarkets with over 1000 units, the 2016 data ranked the valley cities with the most growth as follows;

  1. South Glendale—11.0%
  2. South Mesa—9.1%
  3. Sunny Slope—8.2%
  4. East Mesa—7.9%
  5. North Glendale/Peoria—7.3%

Despite mortgage rates currently being at their historic lows, Phoenix remains one of the most promising property markets across the nation. The cost of rent has gone higher for the 23 of the past 24 months so is the apartment occupancy.

Nathan Pierce—principal at Strong Tower Realty in Scottsdale advises tenants to consider low or no down payment programs and acquire homes rather than rent. He believes that renters are spending more than they would on a mortgage payment. “In our market, you could save 25% by buying a house outright instead of renting,” says Nathan. He goes ahead to point out that people are spending more when they sign a lease and they are missing out on tax breaks like interests, property tax as well as mortgage insurance by not choosing property acquisition over rental.

Arizona Real Estate Will Be An Excellent Investment In Coming Years

If you are looking to purchase a home in the Phoenix, Flagstaff, or Prescott areas in Arizona do it now. In the next couple of years, the prices are expected to increase. A single family home is a significant investment in the Phoenix area. Apartments also have a real potential in this area. Homes are also being split into different rental units. Mortgage, as well as construction loans, have a lower risk to lenders than before. Rentals are great investments in Phoenix as well as Tuscon and Prescott.

Investing in Arizona provides many great opportunities. This is like the Florida of the west where people go to retire only without the swamps. There are so many opportunities for investors. In addition to the proximity to the major cities, Prescott has a lot of offer retirees. Flagstaff has a younger population, and Yuma is a location where immigrants tend to start off. Each of these cities have different housing needs.

The need of homes will increase as the economy increases in a city. Phoenix sees the development of new jobs at twice the national rate. These jobs are in the healthcare industry, retail, and finances. Prescott also sees job growth and development. They need people to work in healthcare and retail to serve the elderly population. Tuscon sees a decrease in growth. Flagstaff relies on the tourists for most of their industry.

Home prices in the state of Arizona rose and then drastically fell. The prices in Phoenix and Prescott went up again when people purchased properties that have been foreclosed. There has been a spike in sales again in the cities of Phoenix, Flagstaff, and Prescott. The sales have been weaker in Yuma and Tucson. Over the next three years, home prices in Phoenix are expected to increase by 25 percent. Now is the time to buy. Pries in Phoenix are very strong but not as strong in the surrounding areas.

Almost 40 percent of the population in Flagstaff, Tucson, and Phoenix are renters. The price of home ownership is very high. Investing a single family home is more reasonable in Phoenix. The homes can be split into several rental units. The health care sector, as well as the retail sector, may not pay that well but people will be looking for rental units for years to come.

Mortgages are a sound investment in this area. The prices for homes will continue to rise, the equity will continue to grow, and the risk of default will stay around the national average. Construction loans have an average risk. It is expected that over 60,000 new homes will be built in Phoenix over the next three years as well as an additional 60,000 apartments. In Prescott, it is estimated 5,000 homes will be built and in Tucson 5,000 apartments. Flagstaff and Yuma may have less than 1,000 new construction projects, and many of them will be apartments.

Due to the growth in population, it may be wise to invest in retail stores and eating establishments in Phoenix. Pinal County does not have enough of either. Flagstaff has more competition and pay will go with the cycle of tourism. There is no growth in retail in Prescott, and the retail market has declined in Tuscon. Office space is a good investment in Phoenix due to the increase in the financial and the health care sectors.