Phoenix investors boost economy, but should lay low

The housing market in Phoenix, Arizona, is proving to be a hotbed for commercial and residential real estate investment opportunities. Real estate in Phoenix can often be purchased at a very low price tag, due to the abundance of bank-owned properties in the area. According to The Arizona Republic, the median sale price of a home has gone up 40 percent.

Tough competition 
Since 2009, major investors have been snatching up up properties with cash in hand, which has been driving the median price up. Some real estate experts believe this is a good sign because short sale and foreclosed properties are being fixed up and put back on the market, but this leaves a smaller inventory for homebuyers and traditional investors. Analysts are also concerned because big-name investors are purchasing properties at quick rates, driving up prices more quickly than they would rise under normal circumstances.

The competition for homes is tougher than it has been in recent years, making it more challenging for people like Phoenix real estate investor Julie Bieganski, who has been purchasing homes to flip for 12 years. She told The Arizona Republic that there are many investors who are purchasing homes “as is” before others have a chance to bid on a property.

Neighborhoods with the most flips
In Phoenix neighborhoods like Avondale in the West Valley, The Republic reported that 32 percent of houses are investor-owned rentals. Although Avondale has the highest number of these types of properties, other neighborhoods like East Valley and the Valley’s core have 30 percent and 25 percent of residential investor-owned properties, respectively.

"Investors helped stabilize Phoenix's housing market," Mark Stapp, director of real-estate development for Arizona State University's W.P. Carey School of Business, told the publication. "My concerns are that too many investors are treating Phoenix's homes as a commodity, and not the area as a community."

Before the real estate market crash, investors owned about 8 to 10 percent of houses, and currently they own about 18.2 percent of properties. Experts are hoping that investors will keep properties for several years and slowly start to sell them to regular buyers to help inch up the median home sales price. When investors came into the metro area and purchased homes when no one else was buying, it helped the market improve, but allowing regular buyers to have a chance would be beneficial to the overall economy of Phoenix.