STILL A HOT MARKET…
The Greater Phoenix real estate market has been going strong for an extended period of time, and shows no signs of slowing. Who wouldn’t want to live in this gorgeous place where we have 300+ days of sunshine, championship golf, classic cars and a growing job market? You may have heard some people say that it sounds “too good to be true”, or ask “how long can this seller’s market possibly last for?”
But for us in the Scottsdale and Phoenix areas, real estate trends are projected to stay strong for the foreseeable future. People from all over the country continue to relocate to our state, whether it be for primary residence or the ultimate vacation spot. This has caused demand for homes to be high, and the supply to be low. When inventory is low, rental rates go up and then so do home sales. Why? Because the health of the rental market is often an indicator of the health of the resale market.
Ever heard of Price-to-Rent Ratios?
Because home values have escalated rapidly here in the Valley, some people are now wondering if they are better off renting for the time being. The Price-to-Rent Ratio is a metric that can actually be used to determine whether it is more affordable to rent or own in a home in a particular city.
In cities like San Francisco or New York, their Price-to-Rent Ratios are the highest, meaning they are least friendly to homebuyers. Out of a Price-to-Rent Ratio list of 54 major cities from the Census Bureau, Phoenix sits right around the middle at 20.07%. CLICK HERE to view the full list.
Conclusion
So, what does this ratio for Phoenix mean? What about those who are asking, “isn’t it just more affordable to rent here instead of buy?” It’s a valid question, but when it comes to investing in a home here, “affordability does not factor in appreciation.” At this time, we know that the market will stay hot, demand to live in our state will remain high, and home purchasing is still a wonderful investment option!
