Investment News
3-4 Unit Income Property Stats For Greater Phoenix 2010
Over the last year there have been quite a few changes in the small multifamily market. It’s also interesting that the bottom, seemingly, per unit was hit around the same time as the single family home market: April/May 2009.
While the average price per unit gone up much, it does look as if the price is fairly steady and maybe trending up, up ever so slowly and that’s good for now.
The average price is now around $24,000 per unit and it’s been hovering from $22,000 to $27,000 over the past 6 months.
What’s really changed are the total number of units being sold. The small multifamily market also follows the seasonal trends of single family homes, that’s why you see the summer high. Look at the number of units sold for the same period in 2010 to 2009 an notice the very huge difference.
An now with 96 pending properties and 87 in AWC mode the forecast for sales looks very strong in deed and we may even get an up tick in the average price per unit with such a low inventory of active properties compared to the demand. As of May 12th there were 272 3-4 unit properties active with 62 of those short sales and 31 lender owned.
All the good stuff is going fairly fast and much of what’s for sale is the same stuff that was on the market half a year ago and even a year ago, so not really part of the game.
With the current sales pace there is only a 4.5 month supply of properties and if you remove the over-priced stuff it’s more like 3-3.5 months of supply pegging it squarely in the sellers market. A seller’s market indeed, but as you know investors are fairly savvy and in this market every one is looking for a deal so sellers can’t really push up the price.
In order to get the better properties, investors are advised to have cash if possible and act quickly. Don’t expect much more inventory, distressed inventory that is, to show up on the market anytime soon. We’ll have a steady trickle but no major floods.
If you would like to discuss this in more detail please call me, Artur at 602.628.4349
Downward Pressure on Current Rents
There are a lot of pressures on rents our there, but little in terms of help for current owners.
It’s simply supply and demand, but also the quality of the supply and the tenants perceptions that govern the rental market.
Drive almost any area in the valley and you’ll see lots of discounts on rents. While many times those discounts are a rouse to get people calling the perception is still there that deals are abound for the tenant.
And they are. The combination of increased inventory and also new inventory from owners who got a good deal and can undercut the competition, is driving rental prices down.
If someone purchases a fourplex for $170,000 with renovations it will be much easier to compete for a tenant then for an owners who paid more and has higher obligations. They may still have to in order to get tenants, but it will take them longer the actually bite the bullet and lower rents.
Current tenants and potential tenants know this and are able to take advantage of the situation, but asking for reduced rents, improvements to the properties or a combination of the two: actively looking tenants want low move in cost and as little in additional expenses as possible.
Having a nice apartment, a washer and dryer and especially as a small patio or yard is a definite plus and will help lower vacancy rates. If you can, add these items and you’ll get a long term benefit.
Be prepared for this to continue for a while.
From High Returns to Moving Neighbors to a Lack of Properties.
The Phoenix real estate market seems, to many, to be a bargain basement store where the owners of the store have no sense or are giving things away. It’s not. And, that is what cover in the article, 15% Return Cash on Cash On Phoenix Real Estate. High returns are possible, but not with little or no input from the investors. It is as it always was, the more astute investors get the better deals, which most educators don’t teach you.
The article, The Greater Phoenix Population Is Moving, Most Of It Down The Street, To The Home Next Door. covers how the population of Greater Phoenix is moving but simple within the same neighborhood from one house which is being sold short or going into foreclosure to another often one purchased by an investor.
There has always been some interest from people who want to combine the need for shelter and investment with purchasing a fourplex. In the article, Where Are The Triplexes and Fourplexes More Suitable For Owner Occupants in Phoenix, I gripe a little bit and explain whey the choices for owner occupants are so limited.
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- high returns multi family
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- small multifamily cash-on-cash returns 2012
