According to a report, Phoenix Arizona is one of the top housing markets to watch this coming year. The real estate company examined the 100 largest US metropolitan areas based on job growth, vacancy rates, starter home affordability, and percentage of the population under age 35. All of these factors are favorable for real estate investors looking to buy rental properties for profits.
1. Home Prices in Phoenix
Home prices in most of the US housing markets continue to see a rapid increase, and Phoenix home prices are no different. In-migration growth and growing demand from millennial are the main reasons for the increasing amounts of the Phoenix housing market.
2. Home Sales and Inventory
Phoenix has 2.4 months of inventory which is super tight (experts believe a balanced real estate market and has 4 to 6 months of supply of homes for sale). In the real estate industry, this combination of increasing home prices and decreasing sales affect the real estate rental market. It increases the demand for rental properties and rental units.
3. Economy and Job Growth
The economy in Phoenix is strong and projected to stay that way. The city enjoys a thriving job market which has risen by more than 3% in the past year. This year Phoenix is expected to see employment growth of at least twice the US rate. The employment rate is mainly due to the trend of companies relocating to from more expensive to Phoenix because it has a low cost.
Phoenix, Arizona projects an image of profitability for real estate investors. The combination of a strong economy and growing population results in high demand for rental properties, especially multi-family homes.