Phoenix - 2013 forecasts for SFR rentals

Investor-friendly agents in Phoenix, AZ

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    Hi Ben,

    I am not an expert on that market but I do talk with investors across the country.

    Some have bought properties in 2009 and 2010 at the bottom and now their properties have increased by 40% to 50% in value from acquisition price. They are seeing multiple offers on property when it is listed for sale.

    If the numbers work out for the rent you are getting then I wouldn't see an issue in an upswing market.

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  • Tracy RoycePro Member
    Investor · Scottsdale, AZ · Member since 2012 · 172 posts · 34 votes
    13y

    Hi Ben, here's some info I just posted on my facebook page from the Cromford report, a local and trusted source on the arizona real estate market and economy.

    "*Arizona Phoenix Metro Single Family Rentals* - Inventory Update

    There are 5,797 active single family rentals on ARMLS (Arizona multiple listing service) representing 73 days of inventory.

    Last year on this date there were 4,997 representing 66 days of inventory.

    Average lease prices through ARMLS were 67.1c per sq. ft. over the last month, up slightly from 65.3c per sq. ft. one year ago.

    Two years ago we had 58 days of inventory (3,757 homes) leasing at 65.5c per sq. ft. We may be seeing the first tentative signs that the supply of rental single family homes exceeds the demand.

    However, average days on market is 43 at the moment, down from 44 at this point last year, so any imbalance is not serious just yet.

    Given the large scale conversion of owner-occupied single family homes to rentals, it would seem to be inevitable that the supply will exceed the demand at some point.

    If the days of inventory of single family rentals goes above 90, then that situation will have arrived. At that point we would expect the average days on market to head north too."

    As well, trying to find properties under 100K is a sport here at the moment. Happy Hunting

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  • Tracy RoycePro Member
    Investor · Scottsdale, AZ · Member since 2012 · 172 posts · 34 votes
    13y

    And @Joel Owens is right, properties in that price range have gone up 60% over the last year.

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  • Account Closed
    OP
    Lyons, CO · Member since 2011 · 57 posts · 1 vote
    13y

    Many thanks to both of you. Interesting read Tracy.

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  • Richard Low
    Peoria, AZ · Member since 2012 · 51 posts · 10 votes
    13y

    Thanks Tracy, super helpful info!

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  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    I am not from AZ nor do I invest in AZ but I do have several clients that came to invest in Las Vegas because they could no longer find good deals in AZ. They had a shortage of inventory before we did.

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  • Erik Kubec
    Real Estate Investor · Denver, CO · Member since 2012 · 83 posts · 17 votes
    13y

    Completely anecdotal with a political angle as well to boot:

    I was working on a property I had just closed on here in Denver and next door to it was a similar property in really bad disrepair. A couple of investors were looking at it, so I went over and chatted them up.

    They told me they had a bunch of rentals in AZ, but when the anti immigration law passed, it killed their rental business and vacancies sky rocketed. They sold a bunch of their properties.

    Again, completely anecdotal.

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  • Helene R
    Phoenix, AZ · Member since 2012 · 24 posts · 10 votes
    13y

    I do live in AZ. And the market has improved alot from a couple years ago. It will be tough to find investments in that price range in decent areas.
    There are also several well established investors in the area that normally scoop up the really good deals so you might be able to get a wholesale deal from one of them if you are just looking for rentals.
    It's a very competitive market out here in regards to investors that's for sure.

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  • Craig Rismiller
    Real Estate Investor · Chicago, IL · Member since 2011 · 139 posts · 101 votes
    13y

    We several single family homes in west PHX in 2011. Our criteria was homes built after 2000, priced under $100k, 3 Bdrm + and in solid working class communities.

    We did and still check the MLS daily. In mid 2011 there were typically 70 to 80 homes that met the above criteria in our target zip code. I just checked the MLS and there were 3...and all hugging $100k. Our realtors just sold 2 houses in the $120k range and received a total of 42 offers; and they were listed active for less than 48 hours...

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  • Mark H.
    SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes
    13y
    Originally posted by Erik Kubec:
    Completely anecdotal with a political angle as well to boot:

    I was working on a property I had just closed on here in Denver and next door to it was a similar property in really bad disrepair. A couple of investors were looking at it, so I went over and chatted them up.

    They told me they had a bunch of rentals in AZ, but when the anti immigration law passed, it killed their rental business and vacancies sky rocketed. They sold a bunch of their properties.

    They probably left a lot of money on the table if they sold in the past few years.

    Ive only got a couple of rentals here, but vacancies havent been a problem at all for me. Putting properties on mls gets them rented in a week or two if the listing is good.

    I have seen other investors stumble by only using yard signs & craigslist, overpricing, or allowing their agent to post rentals on mls with no pics, or only one pic taken at 50 mph..

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  • Mark H.
    SFR Investor · Phoenix, AZ · Member since 2009 · 484 posts · 181 votes
    13y
    Originally posted by Tracy Royce:
    Hi Ben, here's some info I just posted on my facebook page from the Cromford report, a local and trusted source on the arizona real estate market and economy.

    "*Arizona Phoenix Metro Single Family Rentals* - Inventory Update

    There are 5,797 active single family rentals on ARMLS (Arizona multiple listing service) representing 73 days of inventory.

    Last year on this date there were 4,997 representing 66 days of inventory.

    Average lease prices through ARMLS were 67.1c per sq. ft. over the last month, up slightly from 65.3c per sq. ft. one year ago.

    Two years ago we had 58 days of inventory (3,757 homes) leasing at 65.5c per sq. ft. We may be seeing the first tentative signs that the supply of rental single family homes exceeds the demand.

    However, average days on market is 43 at the moment, down from 44 at this point last year, so any imbalance is not serious just yet.

    Given the large scale conversion of owner-occupied single family homes to rentals, it would seem to be inevitable that the supply will exceed the demand at some point.

    If the days of inventory of single family rentals goes above 90, then that situation will have arrived. At that point we would expect the average days on market to head north too."

    As well, trying to find properties under 100K is a sport here at the moment. Happy Hunting

    I think the one thing to keep in mind when youre using mls data for rentals is that a huge percentage of rentals in phx are (were) never on mls - more out-of-area investors means that at least some of the increase in *listings* isnt actually new "product", its the same house advertised on mls, instead of being held as a captive listing or marketed via craigslist, yard signs. Etc.

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  • Tracy RoycePro Member
    Investor · Scottsdale, AZ · Member since 2012 · 172 posts · 34 votes
    13y

    Thanks for the further insight Mark H.. "They probably left a lot of money on the table if they sold in the past few years." - agreed. "allowing their agent to post rentals on mls with no pics, or only one pic taken at 50 mph.." - ;) good one. Pet peeve of mine.

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  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    Craig Rismiller Your post confirms what I have been hearing from my investors in Phoenix.

    Tracy Royce agreed...take the 6 minutes it takes to walk through and take a dozen pics. It is not rocket science and it improves your response tremendously. Some agents are just lazy.

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  • Tracy RoycePro Member
    Investor · Scottsdale, AZ · Member since 2012 · 172 posts · 34 votes
    13y

    Craig is spot on, it's insane here, like I mentioned in my post. "Lazy" is generous, but I'll reserve my comments to myself.

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