It’s been awhile since we’ve looked at sales data out of Phoenix. One of the more interesting trends I’m seeing in sales is actually how it relates to rental data. [Thanks L for the data!]
Rental data from ARMLS (The Phoenix area MLS service) is not as comprehensive as the sales data. Many homes and apartments are not rented through the MLS. However, I believe that for comparisons over time, the information is useful. Here’s how the data compares:
Note that even though there have been significant swings in home sales over the past 11 years, rentals have grown in popularity every year.
Note that while home sales are nearly as strong as they were during the “bubble” years, the makeup of home sales have changed. During the boom years investors were in the market looking for gains in appreciation and homes were selling well at all price points. Now the majority of home sales are happening below the $200K level, often by cash buyers looking to invest in rentals. Consequently, even the current level of home sales reflects an interest in the rental market.
There are fears that a decrease in the number of traditional homebuyers will cause Phoenix rents to increase. I do not believe that this will be the case. Lower real estate prices and concern about the performance of other investments have made purchasing rental properties popular. Supply should be plentiful in the Phoenix area for the foreseeable future.
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