Phoenix Real Estate Market Analysis

Houses for Sale in Phoenix

Discover Phoenix

Phoenix is the capital of Arizona and is located in the south-central part of the state, falling within the northeastern regions of the Sonoran Desert. The city has a population of over 1.6 million, making it the most populated city in the State of Arizona and the 5th most populous city in the United States. The city is expected to experience population growth that is well above the national average thanks to the strong net migration. This, along with the fact that the percentage of the population under the age of 44 is high, boosts economic activity in Phoenix. And with around 47.2% of residents living in rental properties rather than owning their own homes (according to NeighborhoodScout), investing in a Phoenix rental property is a great option.

Phoenix is not only the capital of Arizona, but with a diverse and strong economy, it’s the state’s economic center too. The Phoenix rental market will benefit from the fact that employment growth in the coming years will be twice the national growth rate. This is likely due to the continuing trend of major companies relocating their offices to Phoenix from more expensive cities. These companies can find more affordable real estate in the city than in other major metropolitan areas around the country. A leading industry in Phoenix is tourism. The city welcomes more than 10 million visitors who come to enjoy the major attractions like the Desert Botanical Garden and the various hiking trails and national parks. This provides ample real estate investment opportunities in the Phoenix short-term rental market. Other major industries include manufacturing, technology, and service industries.

The Phoenix real estate market is one of the top 3 markets in the Western Mountain Region of the US according to the annual PWC real estate report. Based on the report, activity is strong in all real estate sectors. However, the affordability for single-family homes is down, while housing development is up, which should balance the Phoenix housing market in the near future. And because it is affordable compared to other major population centers, Phoenix is actually one of the best places to invest in real estate.

Phoenix Real Estate Investment Performance

Facts and Market Trends in Phoenix

Homes For Sale2,896

Airbnb Properties2,529

Rental Properties3,676

Traditional Vacancy rate6.00%

Airbnb Occupancy Rate51.51%

Mashmeter46.80%

Median Price$499,450

Median Rent Price$3,021

Price/sqft$368

Median Days on Market52

Price to Rent Ratio25.6

Average Cap Rate

Airbnb3.78%

Traditional4.87%

Average Rental Income

Airbnb$2,440

Traditional$2,068

Median Household Income$64,927

Population1,625,000

Transportation in Phoenix

41 / 100

Car-Dependent

36 / 100

Some Transit

56 / 100

Bikeable

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Phoenix Rent Prices

RENTAL STRATEGY	STUDIOS	1 BEDROOM	2 BEDROOMS	3 BEDROOMS	4 BEDROOMS
Airbnb	$1,358	$1,437	$1,641	$2,577	$3,357
Traditional	$2,056	$1,520	$1,950	$2,249	$2,791

Phoenix, AZ - Homes for Sale - Newly Listed

Find Investment Properties

$265,000

MLS 6613647

10919 W HEATHERBRAE Drive
Phoenix, AZ 85037 Maryvale

Other

3 beds2 baths1,522 sq.ft.

CAP RATE

Trad. 6.65%Airbnb 4.61%

$449,000

MLS 6612266

8141 W Pueblo Ave
Phoenix, AZ 85043 Estrella

Single Family Residential

3 beds baths1,830 sq.ft.

CAP RATE

Trad. 2.39%Airbnb 1.11%

$925,000

MLS 6609313

719 E Circle Rd
Phoenix, AZ 85020 Alhambra

Single Family Residential

4 beds baths2,715 sq.ft.

CAP RATE

Trad. 1.00%Airbnb 0.60%

$489,900

MLS 6611469

17434 N Paradise Park Dr
Phoenix, AZ 85032 Paradise Valley

Single Family Residential

3 beds baths1,310 sq.ft.

CAP RATE

Trad. 3.51%Airbnb 2.78%

Top Performing Phoenix Properties

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$114,950

MLS 6601617

2814 E Roeser Rd
Phoenix, AZ 85040 South Mountain

Single Family Residential

1 beds baths408 sq.ft.

CAP RATE

Trad. 7.31%Airbnb 7.62%

$320,000

MLS 6586354

1625 W North Lane
Phoenix, AZ 85021 North Mountain

Other

4 beds1 baths1,385 sq.ft.

CAP RATE

Trad. 7.10%Airbnb 7.48%

$415,000

MLS 6606210

1602 W MARCO POLO Road
Phoenix, AZ 85027 Deer Valley

Other

4 beds2 baths1,559 sq.ft.

CAP RATE

Trad. 4.93%Airbnb 7.43%

$399,000

MLS 6587818

6320 N 30TH Drive
Phoenix, AZ 85017 Alhambra

Other

5 beds2 baths2,358 sq.ft.

CAP RATE

Trad. 3.67%Airbnb 7.43%

Recently Sold Homes in Phoenix, AZ

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$839,000

MLS 6592453

6629 N 14th St
Phoenix, AZ 85014 Encanto

Single Family Residential

3 beds baths1,890 sq.ft.

CAP RATE

Trad. 1.51%Airbnb 0.59%

$439,000

MLS 6601132

5124 N 31st Pl #537
Phoenix, AZ 85016 Camelback East

Condo/Coop

2 beds baths1,319 sq.ft.

CAP RATE

Trad. 1.15%Airbnb -0.70%

$968,740

MLS 6601120

6042 E Quail Ave
Phoenix, AZ 85054 Paradise Valley

Single Family Residential

5 beds baths3,487 sq.ft.

CAP RATE

Trad. N/AAirbnb 3.49%

$784,000

MLS 6591196

108 W Elm St
Phoenix, AZ 85013 Encanto

Single Family Residential

4 beds baths2,111 sq.ft.

CAP RATE

Trad. 2.34%Airbnb 2.27%

Property Value Changes and Real Estate Appreciation in the Phoenix Housing Market

Historical real estate appreciation has placed the Phoenix housing market among the top markets for growth in the US. Since Q1 of 2000, Phoenix properties have experienced a total appreciation of 107% with an average annual growth rate of 3.9% (according to NeighborhoodScout). Zillow forecasts a 5.4% appreciation of local property values over the next year. So, buying a Phoenix investment property now - while it’s affordable - will be a smart move and will allow you to enjoy appreciation in the coming years.

Real estate investors should keep in mind that the Phoenix real estate market is currently a hot seller’s market. This is mostly due to the tight housing inventory which most major cities across the US are suffering from. Still, property prices have not been driven up to unaffordable ranges, which makes the market a great entry point for beginner investors nonetheless.

Phoenix, AZ Top Multi Family Homes

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$475,000

MLS 6604925

320 N 20th Ave
Phoenix, AZ 85009 Encanto

Multi Family

beds baths0 sq.ft.

CAP RATE

Trad. 3.30%Airbnb N/A

$775,000

MLS 6602872

8841 N 2nd Way
Phoenix, AZ 85020 North Mountain

Multi Family

8 beds baths0 sq.ft.

CAP RATE

Trad. 3.13%Airbnb N/A

$699,500

MLS 6601899

2020 W Cactus Rd
Phoenix, AZ 85029 North Mountain

Multi Family

8 beds baths0 sq.ft.

CAP RATE

Trad. 0.51%Airbnb N/A

$670,000

MLS 6603978

2850 W Pierce St
Phoenix, AZ 85009 Encanto

Multi Family

beds baths0 sq.ft.

CAP RATE

Trad. 0.37%Airbnb N/A

Homes Below Median Price in the Phoenix, AZ Real Estate Market

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$114,950

MLS 6601617

2814 E Roeser Rd
Phoenix, AZ 85040 South Mountain

Single Family Residential

1 beds baths408 sq.ft.

CAP RATE

Trad. 7.31%Airbnb 7.62%

$320,000

MLS 6586354

1625 W North Lane
Phoenix, AZ 85021 North Mountain

Other

4 beds1 baths1,385 sq.ft.

CAP RATE

Trad. 7.10%Airbnb 7.48%

$415,000

MLS 6606210

1602 W MARCO POLO Road
Phoenix, AZ 85027 Deer Valley

Other

4 beds2 baths1,559 sq.ft.

CAP RATE

Trad. 4.93%Airbnb 7.43%

$399,000

MLS 6587818

6320 N 30TH Drive
Phoenix, AZ 85017 Alhambra

Other

5 beds2 baths2,358 sq.ft.

CAP RATE

Trad. 3.67%Airbnb 7.43%

Phoenix Airbnb Growth and Regulations

Because the city sees so many tourists annually, it’s no surprise that Airbnb growth is massive in the Phoenix housing market. Airbnb Phoenix hosts received the highest number of guests in the state in 2016, bringing in a revenue of $4,112,000.

Luckily, Airbnb real estate investors can benefit from this rental strategy in the city as the practice of renting out non-owner occupied properties is legal in Phoenix. In fact, Arizona Airbnb regulations state that all local municipalities must allow short-term rentals and place no limit on the number of Airbnb investment properties an investor can own and operate in the city. There is also no cap on the number of days an Airbnb rental property can be occupied by guests, which is a common regulation in many cities across the US.

As an Airbnb hosts, you may have to apply for a license depending on your Airbnb rental property listing, so make sure to check with the city codes. Airbnb and other vacation rental websites are responsible for collecting taxes on bookings and remitting them to the state. Keep in mind that while the practice is legal, Homeowners Associations may still legally ban short-term rentals in their complexes.