Phoenix Real Estate has witnessed a huge bust followed by strong investor buying. According to the Arizona Regional Multiple Listing Service (ARMLS) reports, inventory of the real estate business has been slashed by 5.5% year-over-year, though managed 8.7% increase in year-over-year overall sales in 2015. Meanwhile, cash sales to frequent investors have been reduced to 27.4% over total sales.
More inventories and less investor buying have caused reduction in prices during 2014. But in 2015, prices have been increased by 5.3% through November with fall in inventory. This increase may be compared with 2.4%, which has been recorded during 2014. The increase has been accounted as double compared to that in 2014, reports Calculated Risk citing the Case-Shiller as the source.
The Phoenix market has been hit hard with the crash of housing industry. With recent increase in demand due to insufficient inventory, the real estate company expects an influx of multifamily developments in the area.
2016 has appeared as booming year for Phoenix since it has managed to sell the highest volume since 2013 and the third highest since 2006. The real estate seller's market in 2016 has been fueled by the lack of inventory rather than increased demand by buyers. No new home construction during the last seven years has caused the fueling, analyzes MarketWatch. Phoenix and other developers are building more apartments with competitive features and amenities with the expansion of light rail public transportation in downtown. Record high rents have also been held responsible for the high demand of the multifamily housing, according to a report published in Builder. These facts have led to an influx of multifamily developments throughout urban Phoenix, South Scottsdale, the city of Tempe and home of Arizona State University. Home buyers now a day seek for new upgrades, new features and new gadgets. Thus new Phoenix homes are getting smaller with increasing higher prices. Difference between the cost of home ownership and rent has never been higher. The real estate developers are now betting on this trend to continue. Rising house rent has made the difference even lower and thus appears as the driving factor for increasing demand of multifamily housing.
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