By Shelley Sakala
W ith the TSMC facility coming to the area, you would think investors are buying up homes in North Phoenix. Yet, in the last quarter of 2022, investors bought 72.2% fewer homes in the 85085 and 85086 zip codes of North Phoenix than they did in the same period of 2021. This decline is similar to what happened nationwide. In the U.S., investor purchases fell by nearly 50% in the last quarter of 2022.
There are a few factors that have contributed to the decline in investor activity in North Phoenix. Rising interest rates have made it more expensive for investors to borrow money, and steady home prices have made it less profitable to flip homes. Additionally, a slowdown in rent growth has made it less attractive for investors to purchase homes to rent out.
The decline in investor activity in North Phoenix is even more pronounced than the decline in investor activity in Phoenix as a whole. This is likely because these zip codes are home to some of the most desirable neighborhoods, and the homes in these neighborhoods are more expensive. As a result, investors are less likely to purchase homes in these zip codes, especially in the current market conditions.
Here is a Q4 2022 breakdown of the number of homes purchased by investors:
• 85085: 140 homes
• 85086: 144 homes
It is important to note that these numbers are only from Redfin, and it is possible that other real estate companies have different data. However, these numbers do provide a general overview of the decline in investor activity in our area.
In contrast, other areas of Phoenix are experiencing an increase in investor activity. For example, the 85044 zip code, which is home to the Phoenix Airport, saw a 30% increase in investor activity in Q4 of 2022. This is likely because the Phoenix Airport is a major economic driver for the region, and there is a high demand for rental properties near the airport.
We’ve seen investors shifting their focus to lower-priced homes. For example, the 85040 zip code, which is home to some of the most affordable neighborhoods in Phoenix, saw a 20% increase in investor activity in Q4 of 2022. This is likely due to the fact that lower-priced homes are more affordable for investors considering current interest rates.
The decline in investor activity in the 85085 and 85086 zip codes is good news for homebuyers who are looking to purchase a home in our communities. It means that there will be less competition from investors, and our buyers may be able to negotiate a better price. However, it is important to note that the housing market is still competitive, and we’re advising homebuyers to act quickly when they find a home that they want.
Shelley Sakala is a local realtor and owner of The Sakala Group Real Estate.