@Peter Bui AZ is doing great and we have CA to thank for some of our success. lol
On a little more serious note we are experiencing growth in the job market and population! We have relatively cheap land available for growth, limited natural disasters, a nice climate (a bit warm in the summer), a business and personal friendly tax structure etc.
The rental market is strong, we receive multiple applications on most properties in days. We have been able to raise rents of most properties at renewal and or turnover.
@Doug McVinua Sweet! that's good to hear. Been reading great things about Arizona's economy in terms of growth. I was asking because I wanted to purchase a property from a coworker and I wanted to see at what point in the real estate cycle we are at. Looks like it might be going towards a seller's market as rents are increasing? Would you still consider the market on the verge of buyer/seller market or completely a seller's market?
Thanks in advanced
@Peter Bui We have been a Seller's market for most of the Market sectors. Anything decent priced correctly below $300,000 is selling quickly. Higher priced properties can lag some but that is almost always the case in this market.
Investors have struggled of recent as the purchase to rent ratios haven't offered the returns some desire. Appreciation has been strong over most of the market.
Most of the professional analysts have continued to be positive on the Phoenix market even though prices have risen. I see a few amateurs speculating that Phoenix is at the top and ready to crash. Personally, I don't see the same overextensions etc that I saw in 2005-2006 that caused the big crash.
Crystal Ball I don't have!!!
Happy to evaluate an individual property for you if it would help you? We might want to do that off-line so as to not create a feeding frenzy.
The Arizona Sun Corridor (Prescott to Nogales) is set to explode in population over the next 30 years and double in population to over 12 million. Phoenix is obviously going to be leading the charge on that.
The main population segments moving here are going to be:
1) Retirees from colder states (Florida #1 destination, Arizona #2) Over 10,000 people turn 65 every day.
2) Younger Generations from California (mostly from SoCal - Median home price is double Phoenix's)
The main thing that'll keep the ball rolling is young families from more expensive markets like California. You can buy twice the home for half the price so everything out here seems like an absolute steal.
As long as interest rates don't get too high and we don't run out of water (or get nuked by North Korea!) I don't see anything really slowing down -- at least for a few more years.
As for the economy, here are 10 Things You Should Know About The Phoenix Economy In 2018:
- Arizona ranks 13th for job growth so far this year among U.S. states with a 1.8 percent gain.
- Arizona ranks first in the U.S. for growth in finance and insurance (4 percent), food service (8.5 percent) and fifth for health care (3 percent).
- ASU’s McPheters expects Phoenix to end 2017 with 51,000 jobs and a 2.5 percent employment growth. That is down a bit from the 60,100 jobs and 3.1 percent gains in 2016. But it is better the rest of the state, which is slated to add 49,000 jobs this year. That means the rest of the state is losing jobs.
- Three sectors — retail, business services and government — are hurting overall job growth.
- Businesses are spending more on equipment (automation), and that was one of his highlights of yesterday’s third-quarter GDP revisions up to 3.3 percent growth.
- Regardless of politics and feelings about tone and Twitter storms from President Donald Trump, the U.S. economy is performing well – at least for investors, businesses and the wealthy.
- Trump’s rhetoric on trade — including China and the North American Free Trade Agreement with Mexico and Canada — hasn’t resulted in all-out trade wars.
- Geopolitical turmoil, including North Korea’s missile tests, could be the biggest threat to a continuation of the current positive economic climate. (Hence the North Korea nuke joke earlier)
- There is a chance Republicans and Trump could fumble tax cuts and not get them passed, just liked failed to rollback Obamacare.
- Arizona Sens. John McCain and Jeff Flake, both GOP critics of Trump, could be deciding votes in the Senate for tax cuts. McCain previously killed GOP and Trump efforts to repeal Obamacare.
Hope this information helps you make a better investing decision! If you have any other specific questions about the economy just let us know and we'll try to get it answered for you! :-)
Always done well investing in the sunbelt. Nice to know Bill Gates feels the same way as he invested in 25 thousand acres next to Phoenix.
The tech job market seems strong. Houses that sell for 250-300k are renting for 1.5k in the east valley. I am new at analyzing these things, but it seems difficult to make a rental work when the mortgage will be a couple 100 below the rent.
@Steve Haight where exactly did Bill buy the land, I heard about this some time ago, and believe it was in the Tonopah area. I didn't see specifics on exactly where.
Its down by rural Buckeye, near Tonopah, where they could get dirt cheap lots.
The rental market in the core urban areas might have reached the saturation point, with permitted builds coming online, but they still forecast that we're short of the 30k new renatals that the Greater Phoenix area will need in the coming years. But it all depends on which economic forecast you listen to.
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