I’m sure you have heard the old saying that “all real estate is local.” I know it might sound a bit cliché but in markets like the one we are in now, it is the best way to help explain why some real estate markets are doing better than others. If you listen to the news lately, you might conclude that the real estate market is softening or even correcting – and in some cases this is true. But it depends on your location since LOCATION is the primary factoring in determining real estate value. Why? Because the only thing that truly appreciates is land and land cannot be moved.
National factors can play a part in the overall real estate market as we last witnessed during the correction of 2008. But today, we are witnessing strong jobs and economic growth along with a continued supply problem in the real estate market. Interest rates are also at record lows. And finally, unlike 2008, there is no sign of a subprime real estate crash looming that lead our economy into the last recession. None of this would indicate a repeat of 2008 on the national level. But when you look locally, Arizona has other advantages as well.
As I recently noted on my Facebook page, Phoenix recently surpassed Dallas as the fastest growing city based on net population growth in the United States. This comes as New York was rated as the city that is losing population the fastest. No surprise then that our real estate market continues to grow while many areas around New York are now correcting. In the end, it is simple supply and demand.
Additional factors working to our advantage include such things as our weather, low cost of living, and even our lower taxes. This was also helped nationally with the recent tax reform act that now favors lower tax over higher tax states based on the new capped tax deductions allowed federally on taxes. Arizona also provides a business-friendly environment compared to some neighboring states resulting in the nations #10 state economy. When you add this all together, it is little wonder why Arizona was recently rated as the #2 state in the nation people are now moving to, second only to Florida.
So the next time you turn on your TV and wonder why real estate agents on the popular shows selling real estate in New York and LA are sweating while you continue to see growing appreciation in real estate located in Paradise Valley and Arizona, just remember that all real estate is local and it is a good time to be local here in Arizona.
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