Phoenix real estate investments

For the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year, and home values nearly double every 10 years.

Home prices typically beat inflation by three percentage points.

If the national median home price is about $217,000, a 1.9 percent decrease would make it worth about $212,877, on a national scale. That's $4,123, or about the same annual hit you just took on your SUV.

If you've owned your home for only a year, you've got reason to be upset. But if you've owned your home for 10 years, as most buyers do, you've accumulated $108,500 in capital gains, which are non-taxable under $250,000 thanks in large part to NAR lobbyists. Take away the 4,123, and you're still $104,377 ahead!

So if your Chevy Tahoe doesn't have your panties in a twist, housing shouldn't either. Especially when it's expected to go up 3.1 percent in 2009, which I guarantee, your SUV won't do.

Today's Phoenix real estate market offers many opportunities to investors looking for good buys. It's a "buyers Market" and I think it will remain so until early 2010. There after, we expect to return to the days of 5 to 8% appreciation per year we experienced from the early 90's to 2004. The sharp escalation of prices in part of 2005, and 2006 are behind us but the huge increase in population, (80,000 to 100,000 per year in the Phoenix area continues unabated. For those of you who are long term investors, now is a great time to select properties for your portfolio at a good price. Phoenix Homes by David will assist you in the selection of properties, provide property management to protect the properties value, and get the maximum return on your investment for you. We have lots of prior experience in assisting investors locate, and purchase single family homes, or commercial projects.

An open letter to those of you who are interested in Phoenix Real Estate.

I'm a political Junkie and follow local, state and national actions or inaction's of our elected Government officials. Over the past 6 months I have formed several opinions on how Government actions are going to effect the Phoenix Real estate market.

While I have been selling Phoenix Real Estate for the past 38 years, I have seen many ups and downs in the Phoenix Real Estate Market. Those that purchased homes through me in the early 70's, now have free and clear properties that provide them with a substantial income for their retirement years. I don't have a Crystal ball that gives me perfect predictions for the future but I do have experience that I gained in several up and down markets.

The following observations and opinions are presented for your consideration.

Locally, our State government from the Governor on down is working hard to provide a business friendly environment for business's of all sizes.

Phoenix, in my opinion, will be among the first states to recover and show dramatic improvements in our economy.

The Federal Government has manipulated the economy to the point that inflation IS going to happen.

Inflation is Real Estate's best friend. Real estate will protect your investment dollar and depending on the demand, may in fact, increase your investment dollars. Prices and rents will escalate as inflation increases the cost of everything.

Your costs of holding the property will remain the same, so inflation will work in your favor. Of course, the longer you hold the property, the more the tenants rental payments will reduce the principal balance on your property.

Holding Gold will protect you investment dollar but offers no depreciation, no tax deductions and any gains you might have, will only be those of the diminished value of the dollar due to inflation.

Interest Rates are at 50 year lows and WILL go up soon......The Fed will have to increase the interest rates to keep China and others from dropping our T-Bills. Already, the Dollar is loosing favor with other countries.

The quality of tenants is improving as more and more families lose their homes through foreclosure or short sales and they tend to stay longer than past tenants, This means less vacancies and loss of rental income.

Foreclosures and Short sales present an unknown factor in what it will cost to make the properties rent ready. We have vendors that can make the necessary repairs at a reasonable cost. It is very important to have a home inspection done on purchased properties to minimize the potential risk in purchasing a foreclosure or short sales.

In my opinion, New homes are a better value, with the standard two year warranty providing you with no risk on your investment. New homes will attract better tenants, families who have lost their home through foreclosure or short sale want to replace their home with one that's similar to the one they lost.

Of course, we will be able to provide the very best property management services for your properties to maintain and increase it's value.

New home builders are very competitive to foreclosure and short sales in the Phoenix area.

In the 80's when millions of families lost their homes through foreclosure because of the high interest rates, I was able to get financing for them, in most cases, with in two years of the foreclosure. Because of the high volume of foreclosures across the nation, a simple letter to the bank expelling the circumstances of the foreclosure and re-establishing of good credit was all it took to get a new loan for a home. I expect the same will apply with those that have gone through recent or future foreclosures or short sales.

I expect in the next few years we will have a large demand for housing in the Phoenix area.

Below is a recent letter I received from a friend that he is sending to his clients.

"The tenant quality now is vastly improved from the "Bubble Years" and as the "Bubble" transitioned into "The Great Recession", many former homeowners have now become tenants.

It is even now a media story; there is a growing segment of our expanding population that does not want to own!!

That is Great News for Investors! In my home market of Metro Phoenix, many "Short Sales" and "Foreclosures" as well as "Lender Workouts" are selling for below replacement value.

In Metro Phoenix, a market of 4 million individuals, there is next to no new Apartment construction and Builders are having difficulties competing with the distressed inventory which is limiting the supply.

As a distressed property is cleared, the occupant must move but typically not to an apartment, but to a single-family home. The usual tenant filling our rentals is accustomed to a yard and storage for cars and toys. Homeowners from the "Bubble Years" financed mortgages with payments usually twice what they can now lease comparable homes. This is very good for them and allows a re-building of their finances; it is also Extremely good for Investors which allows for immediate cash-flow and future rent increases.

The window to purchase distressed properties is still open; there is probably another wave of properties to clear. However, if unemployment has peaked, then Beyond 2010 may be the road to recovery and rents may soar giving the supply-demand equations. Investors should be keenly aware of diversification in their finances and most should consider a portion to Residential Rentals as a cash flow enhance, an inflation hedge, and a vehicle to produce potential capital gains.

If you have not added to your portfolio, please review your goals and ascertain if another cash-flow component is needed."

Please pass this letter on to those that you think have an interest in investing in Phoenix Real Estate.

I am available should you or your investment counselor or tax professional wish to contact me for personal consultation.p> David Oliverson Broker Owner e-PRO http://www.phoenixhomesbydavid.com/ email. doliverson@earthlink.net 602-942-0377