Back in 2003 Phoenix had one of the nation’s highest homeownership rates, but the housing bust has changed that. According to the 2010 Census, Phoenix homeownership rates dropped to their lowest level since 1997, and that still might be overestimating the case:
But the measurement accounts only for occupied homes.
Calculate owner-occupied homes as a portion of all homes – including vacant ones – and the actual homeownership rate would be far lower.
The number of vacant homes in the Valley – those that are not second homes or vacation properties – has climbed by nearly 200,000 since the last census in 2000. Those empty homes aren’t included in the usual homeownership rate.
While homeownership is down, renting has been rising. Take for example the average number of rentals on the MLS for the past 10 years:
This only represents rentals that were listed on the MLS. Most rentals are either done through leasing agents or individuals, so this probably understates the rise in rentals.
While the rise in rentals and the drop in home prices can make for attractive opportunities for investors to purchase properties with a positive cash flow, there are a lot of investors who have had the same idea. While Phoenix has had a large number of foreclosures, many of those foreclosures have been purchased by investors and turned into rentals. Investors who need to have 100% occupancy all the time to make the numbers work could find themselves in trouble. Average days on market was 41 days in November 2011. In Feb 2012 the average DOM is 51.
Thanks to L for the data!