Investors searching for a safe haven from a dismal year on Wall Street put their money into housing last year, which helped the Valley break sales records and kept prices moving up.
They bought second, third or even fourth homes. Some kept the residences for vacation retreats, while others turned them into rental properties.
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There are no exact numbers
tracking the increased interest in homes from investors, but real estate
agents and lenders said they have worked with plenty of people wanting to
buy investment property.
Jay Butler, director of the Arizona Real Estate Center, said investing in
homes was one of the top reasons Valley home sales hit a record last year.
Just looking at the numbers explains why. The median price of a used Valley
home climbed almost 7 percent last year; the stock market fell 22 percent.
Arizona's hot housing market enticed investors from across the country
because of its relatively inexpensive home prices for the West and
projections for continued population growth during the next few decades.
"Investors, particularly from California, have been putting a lot of money
into Valley homes," said Jay Luber of Lifestyle Lending Group.
He said the Valley's lower prices, even for upscale homes in Paradise Valley
and Scottsdale, are appealing to buyers in other states, even if those
buyers don't plan on moving here.
North Scottsdale reaped the benefits from this speculative buying by posting
double-digit increases in prices at a time when many other Valley
communities saw an increase closer to 5 percent, according to The
Republic's annual housing market survey.
James Wyatt, who lives in the San Francisco area, was among those buyers. He
bought two Scottsdale homes with friends last year.
"We got tired of watching our money disappear in the stock market," the
retired bank executive said. "A $1 million house around a golf course in
Phoenix looks like a pretty good deal from here."
Americans rate homeownership as the best investment they can make, putting
it ahead of 401(k)s, retirement accounts and stocks, according to recent
survey from mortgage giant Fannie Mae.
The Arizona Republic
Mar. 2, 2003