Current Market Conditions and Opportunities
The Phoenix metropolitan area offers a number of excellent real estate investment opportunities.
The real estate downturn, which started to emerge in late 2006, precipitated a flood of short sales and foreclosures. Inventory levels stemming from the market downturn peaked in 2007. Since then, inventory has continually decreased, and very little new construction has taken place to fill today’s high demands.
Simultaneously, Phoenix has remained an attractive destination to which businesses and families move. The continued influx in population, coupled with the lack of construction and gradual supply and demand, has resulted in the current inventory of homes for sale being at the lowest levels since 2005.
With the wave of short sales and foreclosures becoming ever sparser, and despite a recovery currently taking place in the real estate market, the economy, as a whole, remains sluggish and troubled. The U.S. economy is beginning to enter a period of stagflation, and many are predicting a rise in inflation in the coming years.
Since the collapse of the real estate market and general economic recession in 2007, many investors have placed their money in low yield bonds as safe havens. As inflation increases, the yield on bonds is diminished to the point where large inflation could result in ostensibly negative returns.
Real estate investments, being hard assets, are able to offer highly competitive yields. They act as a hedge against impending inflation without excessive risk associated with other potential investments, such as in the futures market.
For additional information about real estate investments opportunities, contact Ron Brown at (480) 355-4700, Certified Real Estate Investment Specialist.