“Welcome to life off the lead, puppy.”
It’s not well-reported, except in the form of secondary evidence like U-Haul rates and MLS listings and closings, but very-vertical cities are emptying themselves to the benefit of very-horizontal communities. Congratulate yourself again for investing in Phoenix, the world’s largest suburb.
At the moment, we are on fire, and that is unlikely to abate quickly. Demand far exceeds available supply, and the builders are better at writing contracts than erecting structures, for now. Rental demand is strong, too.
Prices have been strongly upward since the first wave of the exodus, surging with the second wave. The absolute strongest marketing characteristic for a home in Metro Phoenix right now is availability.
That’s good, but will it last? The big short-run fear would be whiplash from mortgage forebearances. Foreclosures or sales in lieu of foreclosure could be enough to cool our overheated demand. On the other hand, late-adopter first-time home-buyers are scooping up suburban parcels, too, as a part of the urban exodus.
We were nearing the top of this market in March, and the top is out there still. There is now nothing like a national real estate market, and it could be that 10%-20% of the nation’s housing stock is being abandoned. What seems certain is more rather than less volatility.
Every one of our investors is sitting on a huge amount of accrued equity. That creates a tax problem, if you sell, unless you can effect a 1031 exchange into another real estate investment. But: If you can, now or sometime soon might be the time to think about banking a riskier win into a safer refuge.
Meanwhile: Excelsior!
