Experts believe Phoenix market is sustainable
Real estate in Phoenix has been reported at a similar price per square foot as those found in the area in late 2004 and early 2005. However, these rising prices are causing concern for residents of the area that experienced a similar increase before the housing bubble burst. Experts believe that this rise is a sustainable one, as the city’s job market is also improving.
A major part of the increase in demand for homes is fueled by the large market of distressed homes, or homes that have been foreclosed or are in a short sale. Many homes are being bought by large investment companies, which leaves less for the traditional buyer but helps improve the market as a whole.
Areas in west Phoenix are taking a longer time to recover, but once home prices begin to rise at a steady and consistent pace, experts believe investor purchasing will dwindle. As home purchases are often more frequent during the summer months, the upcoming fall and winter statistics will be important factors in determining the true pace at which the market is growing.
Buyers that can purchase right now are at an advantage, because although there are reports of 25 percent or more price appreciation, homes are still listed for less than they would have been in the past, according to KTAR. Mortgage rates are also down, making it less expensive than it may seem.
According to MSN Real Estate, the income that a home buyer in Phoenix needs is $21,702 and the average cost of a home is $148,800. Home prices in the area have risen, but mortgage rates are down 0.7 percent to 3.91 percent. This low rate has made the required income only a few hundred dollars more than it was in 2010 when the housing market was hurting.
As the housing market is looking up, the the job market is on a similar incline. The recent construction of a 500,000 square foot warehouse in the southwest part of the city will aid in the progress. The industrial building is the largest speculative warehouse to be built in the metro area since 2008 and is expected to open by next April. Fortune 500 retailer Marshalls is building a 1.2 million square foot distribution warehouse in the same business park that will hire 300 people once the project is completed.