In the past, the investor involvement in the Phoenix housing market has certainly had its impact. During the previous housing crisis, the value, inflated price index, and subsequent burst of the market all were directly tied to the amount of investor owned property. Residents in Phoenix have been wary of the amount of investors overall since that time. During the recovery of the Phoenix housing market, values have risen and inventory decreased, and for the first time since coming back, investor backed property is decreasing.
According to Michael Orr, real estate expert at ASU’s W.P. Carey School of Business,
As a result, both small and corporate investors have been tapering their Phoenix buying sprees, which peaked last summer.
In the past year, foreclosures have also decreased 50 percent, making the values increase and seemingly less of a bargain for investors versus traditional home buyers. Buyers, faced with lesser inventory were less reluctant to offer low prices. Instead, sellers often saw competing offers and fast turnaround times for homes on the market. The average home price increased over 26% in the past year, according to Arizona State University research, making the median home price $185,000.
For traditional buyers and sellers, the exit of investors is welcomed in the Phoenix housing market. Many investors have chosen to utilize their purchases as rental properties, meeting that type of need in Phoenix. However, for those wishing to purchase a home, less investor purchasing translates into a better chance for buyers to find and buy their dream home.