Same can be said of the SF Bay Area market (where I live). Hit a peak, now settling lower. Sold a condo here for 10K more than the next 4 of the same floorplan in the same complex sold for. I track MLS numbers in Phoenix and the prices have been settling back a little. One friend of mine sold 10 houses last summer and not one OFFER was from a local owner or invester. That makes the market a LOT smaller as only out of state investors have been driving the peak prices.
Re: How is Phoenix Market for new investors? - Posted by Mark (SDCA)
Posted by Mark (SDCA) on March 25, 2006 at 15:44:08:
IMO, the Phoenix market has gone the way of Cali. Very hard to find properties that cash flow. You are probably looking at buying and holding for appreciation. I sold one property I had there last summer to get a little more liquid and diversify some.
I’m not looking to buy more in Phx anytime soon. I don’t see the reasons for it.
I am looking for some cash flow (like duplex which might be hard to cash flow in hot market?) and decent appreciation. I will hold for a few years and maybe sell them or keep some. Rehabbing and flipping might be hard from me to do from CA.
What would be good approaches: buy new construction, buy from nervous investors, what area to concentrate on for good values, any good sources to search for deals? Thanks again for your response.
Posted by Joe Kaiser on March 21, 2006 at 16:31:24:
I’m guessing it’s the same for old investors, too.
If you’re in the business of holding properties, then I suppose market
condition matters. If you’re just rolling one property after another, then
markets don’t really make much of a difference.
Re: How is Phoenix Market for new investors? - Posted by Luke Hoppel
Posted by Luke Hoppel on March 21, 2006 at 16:14:22:
You will probably get several different responses but I would compare the phoenix market to the San Diego market.
Both are at their very peak and heading back down.
On that note, you may be able to pick up some good deals from nervous sellers. There is alwasy opportunity regardless of the market, you just have to use different techniques to maximize your return.
Good Luck,
Luke
I have been in the Phoenix market for 2 years now, following on from some friends who had been there 4 years prior to that. Phoenix has pretty much hit the appreciation mark and is settling down to a solid annual rate of appreciation but nothing like the last two years.
Prices are high enough that you should not expect 1 - 4 family properties to make their expenses even with as much as 30% down. Apartments might be doing better, but there are a LOT out there with “for rent” signs. The occupancy rate is under 80% right now, which means these complexes will make a small profit, but its kind of borderline.
I looked at rehabs from CA there last year (I’m in the SF area) and you really need to have someone on site to look after things for you. Like the people who SAY they worked but a visual inspection leaves you wondering if they even showed up. Additionally, the wholesalers have gotten a lot of the lower priced properties tied up, so the profit margins are not very good. Its still a living but there’s more work to it than there was.