PHOENIX REAL ESTATE: SHOULD I BUY OR RENT?

Real estate have been changing dramatically in the last several months since short sales and bank owned sales dominated the residential real estate market in greater Phoenix.

The number of bank owned homes (REOs) sold last month accounted for 49% of total sales in Phoenix, 50% in Glendale, 58% in Avondale, 62% in Tolleson and 64% in Buckeye. Median bank owned home price dropped to the level of 2003 (read my previous blog for details).

Now, some of you may ask: shoud I buy or rent? The right answer depends on wheather you qualify for a loan or not.  If you're qualified for a 90% financing (with 10% down), you may find that buying is cheaper than renting in many cases.

Let me elaborate a bit more on my point.  This afternoon, I previewed 3 bank owned homes in Avondale. They all have 3 bedrooms, 2.5 bathrooms, and asking price below $90,000. These homes have a living area of 1295 square feet and lot size approximate 4000 square feet (built in 2002).  I also check rents in the area for 3bed/2bath rentals and found no rental homes offer for less than $850 per month. (see rental homes available in Avondale).

If you borrow 90% of $90,000 and pay 7% interest rate (30-year fixed program), your monthly principle and interest payment would be below $540 per month.  Adding $120/month for tax and insurance will make you PITI approximate $660/month.  Also, think about all the benefits of owning a home. 

Investing in bank owned homes that give you positive cash flow every month is not a bad idea at all.  With price dropped more than 60% within the last two years, many bank owned homes become "hot deals" for many investors and first time home buyers. 

If you want to view bank owned homes in greater Phoenix, please follow the link below. Kellson Team offers live search for bank owned homes with full details.

http://activerain.com/groups/ArizonaREOs

Please contact me should you have any question.