Samantha Goodman PLLC
Integrity & Experience
Mobile: (602) 526-7486     Fax: (623) 877-5455
December 1, 2011

Examining the Rental Trends over the last 10 years….might be an early indicator of where we are headed:

 

Month/Year

Total # of Closed Rentals

November 2002         -

576

November 2003         -

675

November 2004         -

1048

November 2005         -

1383

November 2006         -

1470

November 2007         -

1769

November 2008         -

1740

November 2009         -

2200

November 2010         -

2298

November 2011         -

1920

*Table above is for ALL dwelling types of rental properties in Arizona Regional Multiple Listing Service Database that reported as closed for the corresponding month/year.

 

As I am sure you are well aware, a lot of homeowners who rent out their properties do not use a Realtor.  In that case those numbers are not reflected as those properties are not part of the MLS system.  However, it does raise the question as to why numbers have increased so significantly in the last 10 years.  Could it be that there are so many more owners trying to rent out their homes that they are looking to professional real estate agents for assistance?  Could it be that there are simply so many more investors and rental homes available? 

 

In my observations of rental properties, it certainly seems that the large increases would reasonably correspond with such a huge increase in investor buyers.  Many that I know are looking for professional assistance to get their properties rented, but typically will manage the properties themselves.  There are currently 6,936 active rental listings in the MLS.  Wow, that is a huge number and with what the current number of closed rental sales show, you are looking at about only 1/3 of the properties available are getting rented.  It has become tougher & tougher for owners to rent out their properties as the competition consistently increases. 

 

Where are we headed?  Well, doesn’t look like we are headed anywhere very quickly…..diminished available listings for sale, lots of investor buyers still…..it seems we will be in this for a while longer.  Although, the interaction I have had with other professionals seems to mostly come to the same consensus.  It seems we are really at the bottom of the market and it has been there a while and will likely stay there next year (2012).  Optimistically; looking into the next year (2013) as seeing the market becoming more stable and possibly seeing prices begin to slowly increase.  Because we are in Arizona, where prices came crashing down so significantly, we may see the recovery sooner.

 

Tips & Strategies I recommend to my landlord clients:

 

1)       If you have a pool, I would recommend you provide pool service to the tenant and make sure the rent you are asking for covers the cost.  It will increase the desirableness of your property and it will also protect your investment.

2)       I also recommend if there is a lot of landscaping maintenance to consider providing the landscaping service.  Again, build that cost into the rent you are asking for. Not only will this make your property more attractive to a tenant, it protects your investment.

3)       Many potential tenants have credit issues.  Be open to allowing the tenant to provide alternatives forms of good credit to give an overall view of their financial situation.  For example:  allow them to use utility bills, mobile phone, car insurance, etc.   These types of reoccurring payments showing a 1 year payment history can be a good indicator of credit worthiness.

4)       Potential clients should have a credit/criminal check done as part of their application.  In today’s world with such great resources you can have the potential tenant pay for the report online and have the credit/criminal report sent directly back in minutes. 

5)       Get the home ready as if you were selling.  Clean windows and doors, make the house fresh and if at all possible, keep the electric service on so that if the property is being shown at night it won’t be skipped over.  Sweep off the front & back patios.  Typically rental properties are vacant and you don’t want to have it looking uncared for. 

6)       Keep the yard nice and if you want to spruce up with new plants or trees, just be sure you are installing ones that will be cohesive with your ability to get to the house to keep them watered and maintained.

7)       Investigate the benefits of an LLC as a homeowner of a rental property or properties.  Check with an Attorney/CPA for details.

8)       Be sure your insurance carrier has your property covered properly. 

9)       Have the tenant and/or you be responsible for providing a new air filter(s) every 30-45 days in your lease.  It is a very inexpensive item, but extremely important.  Personally I would recommend you provide 12 filters at time the tenant takes over the property so they have them readily available.  If you are close to the property and pick up your rental check directly, drop off a filter at that time each month. 

 

Here are your weekly Inventory Levels: 

 

Supply numbers are based on the number of closings in the previous month, divided into the total number of active listings today.   

This data is for Single Family Detached homes only and does not include Patio Homes, Condos, or Townhouses .

The total number of single family homes on the market in the Arizona Regional Multiple Listing Service is currently 15,173.

A slight decrease since last week.    

We are seeing an average supply rate of just over 2 months.

The current number of pending sales are 8,868.  A decrease since last week. 

The current number of pending listings that are “active with contingencies”, are 6,314.  An decrease since last week. 

  

           Search #1 – Phoenix (City of Phoenix) 

 

·         Total of 2,741 active listings.  About a 1 3/4 month supply.   A slight decrease since last week.

           Search #2 – West, Far SW & Far NW Valley

·         Total of 4,367 active listings.  Just over a 2 2/5 month supply.   A slight decrease since last week. 

 

(Cities of: Cordes Lakes, Bumble Bee, Crown King, Wagoner, Yarnell, Date Creek, Constellation, Black Canyon City, Castle Hot Springs, Wickenburg, Aguila, Gladden, Morristown, Circle City, Wittmann, Harquahala, Tonopah, Paloma, Sentinel, Gila Bend, Mobile, Arlington, Hassayampa, Palo Verde, Congress, Peeples Valley, Yarnell, Cleator, Cordes, Glendale, Litchfield Park, Goodyear, Avondale, Tolleson, Cashion, Estrella Mountain Ranch, Laveen, Peoria, Surprise, Sun City, Sun City West, Glendale, El Mirage, Youngtown, New River, Anthem, Buckeye) 

 

Search #3 – Northeast Valley 

 

·         Total of 675 active listings.  About a 7 3/4 month supply.  An increase since last week.   

 

 (Cities of: Rio Verde, Fountain Hills, Sunflower, Camp Creek, Desert Hills, Cave Creek, Carefree, Fort McDowell)

 

Search #4 – East Valley

 

·         Total of 3,046 active listings.  Under a 2 month supply.  A slight decrease since last week.    

 

(Queen Creek, Chandler, Gilbert, Apache Junction, Gold Canyon, Tortilla Flat, Mesa, Tempe, Ahwatukee,Guadalupe, Komatke)

 

Search #5 – Southeast Valley  

 

·         Total of 763 active listings.  About a 2 2/5 month supply.  A slight decrease  since last week.

 

(Arizona City, Eloy, Picacho, Toltec, Arizola, Casa Grande, Randolph, Coolidge, Valley Farms, Florence, Johnson Ranch, Sacaton, Bapchule, Stanfield,

Maricopa, Ak Chin, Santa Cruz)

 

Search #6 – Scottsdale (Over 1 Million)

 

·         Total of 578 active listings.  About 20 3/5 month supply.  An increase  since last week. 

 

Search #7 – Scottsdale (Under 1 Million)

 

·         Total of 1,201 active listings.  About a 4 month supply.  An increase  since last week.   

 

Search #8 – Paradise Valley (Over 1 Million)

 

·         Total of 281 active listings.  About a 9 3/4 month supply.  A slight increase since last week.     

 

 Search #9 –    50K-100K (Single Family Homes)

 

·         Total of 1,912 active listings.  About a 1 month supply.  A slight increase since last week.    

 

 Search #10 –  Under 50K (Single Family Homes)

 

·         Total of  497 active listings.   About a 1 month supply.   A slight increase since last week.    

 


If your property is currently listed with a real estate broker or if you are currently working with another real estate agent, please disregard. 

It is not my intention to solicit the offerings of other real estate brokers.  I am happy to work with them and cooperate fully.


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West USA Realty
16150 N Arrowhead Fountain Center Dr. Suite #100 • Peoria, AZ 85382
Mobile: (602) 526-7486 • Fax: (623) 877-5455
Office: (602) 375-3300


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