Real estate market in Arizona (Phoenix and surrounding areas)

18 Replies | Phoenix, Arizona

Hey guys,

I will be looking to relocate to Arizona. I will be working in the Casa Grande area and more than likely living out there too. How is the real estate market there for investors? 

I am looking to buy and hold but also interested in flipping. Any advice or information is valuable. Thanks in advance.

Originally posted by @Taronda Ransom :

Hey guys,

I will be looking to relocate to Arizona. I will be working in the Casa Grande area and more than likely living out there too. How is the real estate market there for investors? 

I am looking to buy and hold but also interested in flipping. Any advice or information is valuable. Thanks in advance.

 Jump on in, the market's fine.

Hi @Taronda Ransom , it's good to see another Cali person coming to Arizona!

The market is great right now in Phoenix. Most investors are doing fix/flips or even scrape/rebuild and seeing great returns. It's very competitive but there are still deals to be found. Casa Grande is one of my favorite markets right now because you can fix/flip but you can also cash flow as well. Most of the Phoenix Metro is too overpriced compared to the rents to cash flow very well (Although rents are on the rise) so Casa Grande, Apache Junction and San Tan Valley are all places investors are picking up rentals and doing lease options.

I'm an investor/agent/wholesaler in Tempe, feel free to reach out if you need anything!

Both rentals and lease options seem to be solid down here, and there are still quite a few homes in Casa Grande that could use rehabbing. In addition to CG, Coolidge and Florence tend to have better Price:Rent ratios than most of the metro Phoenix area. As @Dustin P. mentioned, AJ and San Tan Valley are popular as well.

@Randy K. Stop sharing my favorite investing cities. It like sharing all of my secret fishing spots. Ignore those cities everyone. Focus on Gilbert and Scottsdale.

I see higher rents on average in Casa Grande than in similarly priced homes in coolidge & florence.  So I think its a great area to invest. Although Casa Grande, Coolidge, florence, Apache Junction and San Tan Valley are all lower priced areas, I feel like Casa Grande is one of the most affordable ones with higher rents.  You can buy a lower priced, newer homes in coolidge, but might not be able to get $1200/mo rent for it like you could in Casa Grande.  Depending on what kind of environment you want to live in Coolidge has a nice small town feel & low housing costs.  I guess it all depends on what you're looking for.  We live in San Tan Valley, but my husband works in Casa Grande two days a week so we always keep that on our radar.  Welcome to the area.  Look forward to meeting you when you get here.   As you're evaluating properties if you would like me to go out and take some videos of them or the area or if you just want a second opinion, feel free to contact me.

Casa Grande has some job growth too. You cannot have a prosperous RE market without a sustained or growing employment base. 

Not sure of your personal situation, but you may wish to pursue a house-hacking strategy with 2-4 units to get a solid start right out the gate.

Welcome to AZ and good luck in your investing.

Thanks everyone for the responses. I have finally settled in to Casa Grande and want to go head on into investing.

What are the best REI meetings to attend to start networking? And building a team?

@Taronda Ransom Note sure if you made your move 2 years ago. As of first quarter of this year, Casa Grande (Pinal County) is 7% overvalued based on historical incomes, below the state over-valuation of 12%. 

2006-8 Peak-to-Current price performance is negative 15%, so the market has performed weakly in price terms. Overall incomes have grown slowly in Arizona, which has rendered nearly all markets there overvalued in spite of not so strong long term sustainable price performance.

Can PM me if any questions.

@Stefan Tsvetkov I own about 15 properties in Casa Grande, AZ. I’m not seeing the same thing you’re describing. The market here is driven by supply and demand. The market was over built in 2006 - 2008. There was a greater supply at that time. Now they are just starting to build again but because of so many move-ins there is a low supply of housing driving up both home prices and rental rates. Rents are on average 1100 - 1300 for a 3/2, 1500 square foot home priced at around 150k - 200k.

@Shiloh Lundahl Above is purely a price and income story, just data. Naturally, you have inside knowledge of the market you operate in. As for housing shortage i.e. population/housing supply ratios, that would have shifted valuations upwards, correct, towards a new "steady state" regime. 

Looking back at it, I see Casa Grande at +19% price performance vs. its "fair valuation" post 2007, less than say Phoenix at +63%. Price performance since 'bottom' would be of course higher.

Valuations are hard to "see", it is purely in the data, and yes there is a mild overvaluation (7% I mentioned) in that area, less than in Maricopa county. Housing shortage, if there as you describe intuitively (can verify with Census population and housing units data), would have made the place less overvalued, though the above 7% should reflect it due to using a trailing historical average in its denominator.

@Stefan Tsvetkov I think you may be complicating the matter. The simple truth is buying well under market and adding value though forced appreciation on cash flowing assets is the formula to wealth building in real estate. The Casa Grande market accomplishes this very well. This is not speculative. These are my results.

@Shiloh Lundahl Yup, all for market inefficiency at time 0 :)  not gambling etc. It is just one component of 'total return' though. Overall Arizona an overvalued market right now, and in fact very few states are. So a bit precarious there, thus my post here. Casa Grande doesn't look so bad though. Not gonna matter until a peak happens, typically momentum until then.

Originally posted by @Shiloh Lundahl :

@Stefan Tsvetkov I think you may be complicating the matter. The simple truth is buying well under market and adding value though forced appreciation on cash flowing assets is the formula to wealth building in real estate. The Casa Grande market accomplishes this very well. This is not speculative. These are my results.

 Shiloh, I absolutely LOVE your posts here! This reminds me of the often significant difference between 'book knowledge' and experiential knowledge. For someone who doesn't know the Casa Grande market for example (and who may be looking to invest) they might look at a 'book knowledge' post and decide to look elsewhere. Whereas, when you have boots on the ground (combined with data) you have a much clearer picture of what's really going on. What a critical and valuable lesson to learn! 

Btw, I almost bought that "castle house" in downtown. My friend Casey has in under contract on seller finance at 0% interest. The rehab costs to just to rich for my blood but I totally agree with you on Casa Grande!

Love it.