The 10 best neighborhoods in Phoenix for real estate investing

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Devyn Gillespie, a third-generation Arizonan, has spent a good chunk of his career around the Phoenix real estate market, and so he’s seen a few things.

What he’s been seeing in the last year or so is a market as hot as the weather in this Southwest desert city — the average temperature in June was the highest ever, at 95.3 degrees, and a high of 118 was hit on June 17. 

In July 2021, the median list price of homes in the Phoenix Metro area was $410,000, up 24.4 percent year-over-year, according to the Arizona Regional Multiple Listing Service. The median sale price was $405,000, up 27.3 percent year over year. The average number of days on market was 27, down from 55 last year.

Rents are up as well. 

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The average price for a 2-bedroom apartment in Maricopa County has gone from $908 a month in 2015 to $1,281 a month in 2021, according to the U.S. Census Bureau. According to a recent Zillow survey of the 50 largest metro areas, Phoenix led the top 35 metro areas, with 8.4 percent annual growth in single-family rental homes.

Because the market in Phoenix was hit so hard during the housing crisis in 2008, the affordability index is not completely out of whack. A family making the median income of $79,000 in Greater Phoenix could still afford 62.8 percent of what sold in the first quarter of 2021, according to the May market report for Arizona from Metro Realty.

“Since we had such a drop during the crisis,” Gillespie said, “we’re still about where we should be if we had normal increases in the last 13 years or so.”

Gillespie, who is 38, ranked 10 areas in Phoenix where the savvy investor can look for deals that should provide nice returns.

1. Apache Junction

This largely blue-collar area, where the average household income is around $55,000 a year, is about 35 miles east of downtown Phoenix, near the Superstition Mountains. The population today is over 40,000, up from about 35,000 in 2010. It is named for the junction of the Apache Trail, the stagecoach route that ran through the Superstition Mountains, and the Old West Highway, which follows the paths of early Native American Tribes that migrated between modern-day Arizona and New Mexico. 

Apache Junction appeared on the 1970 census as an unincorporated village, and was incorporated as a city in 1978. 

“A savvy investor could find a great deal on a multi-family property in Apache Junction,” Gillespie said, who pointed out that other locations with newer construction in the area would make for safer bets for less experienced investors.

“If you have a solid real estate investing background,” he added, “and understand how to get multiples on your investment, which requires a different level of analysis, be intentional about hunting deals in Apache Junction.”

He said Mynd’s team can help identify properties that are not available to the general public.

Small homes in Apache Junction can be had for around $200,000, but there are higher-end properties that sell for more than a million. The median list price was $300,000 in August, double what it was a year ago, and there were about 275 homes on the market as of mid-September.

As for the multi-family properties Gillespie refers to, there were only a few for sale as of mid-September. The single-family rental market is strong, however, and homes rent for about $1,600 a month upwards to $3,000 a month. Mynd has a rental return calculator that can help investors figure out their return on investment.

2. San Tan Valley

This area on the east side of the Phoenix metro area is making a comeback after being hit hard during the housing crash back in 2008. These days, there is more infrastructure in place, more options for shopping, new restaurants and more grocery stores. 

“The builders had a whole bunch of land over there, so they are going back,” Gillespie said. “It’s an area where you can find good deals, and it’s a lower price point to get in.”

Signs of the upswing in the San Tan Valley could be seen in the numbers:

  • Prices were up 38.4 percent in August compared to the year before. 
  • Homes were selling for a median price of $400,000, according to Redfin. 
  • There were 767 homes for sale on Realtor.com as of mid-September.
  • Choices ranged from small ranches that can be had for less than $300,000 to high-end homes that go for up to $1.5 million.

3. Queen Creek

queen creek a good neighborhood to invest in real estatet

Facebook/Queen Creek, AZ Town Hall

The population here has more than doubled in the last 10 years, and almost 60,000 people now live in a town originally founded as a railroad stop in 1919 by the Queen Creek Farms Company to ship produce from the farm. Located in the southeastern corner of the Phoenix Metro region about 40 miles from downtown, the city straddles Maricopa and Pinal counties. It was incorporated in 1989.

Properties in Queen Creek are more in demand these days since they offer more square footage for the dollar, a selling point as the age of remote work appears to be here to stay, providing a boost to second-tier cities.

“Everything is new and it’s an affordable town today,” Gillespie said. “The remote work option is attractive here because the houses are bigger.”

These were the key stats as of mid-September:

  • There were some 660 homes for sale in Queen Creek, with a median sale price of $549,000, according to Realtor.com. 
  • Prices range from just over $200,000 to over $2 million. 
  • Home prices were up 21.1 percent compared to last year, selling for a median price of $472,000, according to Redfin.

4. Morrison Ranch

This is a master-planned community over 3,000 acres being built at the eastern edge of the Town of Gilbert in Phoenix’s Southeast Valley. It has seven residential neighborhoods, a town center featuring a variety of shops, restaurants, professional services, and a 280-acre business center at its far eastern edge. There are some 400 acres of parkland, three lakes, and playgrounds, all linked by pedestrian footpaths lined with trees.

“This is where I would buy if I was looking for a buy and hold for 20 years,” Gillespie said.

These were the numbers as of mid-September:

  • There were 27 homes for sale in Morrison Ranch, ranging from a low of $535,000 to a high of $1.375 million. 
  • The median sale price was $650,000 in August, which is almost 35 percent higher than last year. 
  • Sale prices are off almost three percent in the last three months. 
  • And it appears there may be a ceiling on how high prices can go at Morrison Ranch; they are 16 percent below the high of three years ago.

5. Verrado 

Construction began in 2002 on this master-planned community in the northern reaches of the city of Buckeye, tucked into the foothills of the White Tank Mountains, about 35 miles west of downtown.

In Verrado, “you can buy new construction to hold,” Gillespie advises, and when it is finally completed, in the next 8-12 years, it will number some 14,000 homes and four million square feet of light industrial, office and retail space on a 3,500-acre parcel. 

It’s a community guided by the spirit of New Urbanism, which encourages sustainable development and walkable downtowns, and about 5,500 homes have been built so far, according to DMB, the community’s Scottsdale-based developer.

  • The median sale price in Verrado in August was $497,000. 
  • Home prices were up a whopping 57.3 percent year-over-year. 
  • The cheapest home of the 93 for sale in mid-September was $180,000; the most expensive was $4.3 million.

6. Litchfield Park 

Located about 20 miles west of downtown Phoenix, the city is one of the older communities in the metro area. It was founded by Paul Weeks Litchfield, an executive of the Goodyear Tire and Rubber Company. Litchfield was looking for land to farm a type of long-staple cotton that was used to strengthen the rubber in the production of tires. (The city of Goodyear, just five miles south, was named after the tire maker.)

The city is home to the Wigwam, which started out as a small lodge catering to cotton farmers in the early 1900s and then served as a meeting place for Goodyear executives (see photo), before it was turned into a luxury resort that opened its doors in 1929. It has three 18-hole golf courses, three restaurants, a 26,000-square-foot spa, all spread over 440 acres. Many of its 331 rooms are built in the traditional adobe and timber style. The Wigwam partners with the city on an annual Oktoberfest in the fall.

  • Home prices in Litchfield Park have shot up 32 percent in the last year, and 
  • The median sale price in August was $495,000. 
  • The lowest-priced home listed in mid-September was $195,000 and the highest-priced was $4.5 million.

7. Arrowhead Ranch

Located in the city of Glendale, Arrowhead Ranch is east of Fletcher Heights and Camino a Lago. It was once a citrus ranch where oranges and lemons were grown, and then in the mid-1980s, about 5,000 acres were developed for a master-planned residential community. 

  • The median list price in Arrowhead Ranch was $520,000 in August, up 24.3 percent year-over-year.
  • There were 81 homes for sale in Arrowhead Ranch as of mid-September, ranging from the low $200s for a condo to a five-bedroom, three-bath home of about 3,000 square feet for $1.2 million. 
  • A modest ranch house starts in the mid-$300,000s.

West valley of Phoenix metro

8. Peoria

Peoria a good neighborhood to invest in real estate

This is one of the towns in the West Valley of the Phoenix metro area that offers opportunities for investors, according to Gillespie.

“There are pockets in Peoria that are phenomenal investments,” he said. “It has some really good pockets of different neighborhoods.”
One of those neighborhoods is Camino a Lago, (rank #9) which has numerous parks. Price points are higher here, with many homes selling from $500,000+ to up well past $1 million.

Fletcher Heights, (which rounds out the top 10) was built between 1999 and 2002 and is another neighborhood in Peoria that offers opportunities to invest. There are a total of 2,098 homes, and the 15 homes for sale as of mid-September ranged from the high $300,000s to the high $700,000s. The Fletcher Heights Community Association offers such amenities as walking paths, children’s playgrounds, nine acres of turf fields, 40 acres of desert granite common area, two shelters for shade and benches throughout.

Advice for property investors: think about a pool

As a lifelong resident of this city in the Sonoran Desert, Gillespie has learned how to cope with the brutal summer heat. Like most locals, he doesn’t spend much time outside after 9 a.m., and makes sure he’s never far from air conditioning. And he looks forward to the winter temperatures in the 70s. 

For those who are looking to buy and rent out in Phoenix he had some advice on how to make the heat more manageable.

“If you are an investor,” and buying in a community that offers amenities, he said, “it may be worth it to pay the extra HOA fees to give your tenants access to a pool.”

This article originally appeared on Mynd.com and was syndicated by MediaFeed.org.

More from MediaFeed:

44 facts about real estate that even Realtors don’t know

44 facts about real estate that even Realtors don’t know

Real estate is a lot of things — it’s a great investment, it’s a major engine of the economy, it’s how we build community as well as wealth. But one thing it’s not is exciting — or is it?

Actually, real estate can be downright fascinating if you dig deep enough. From how people feel about living with ghosts, to the most expensive home in the world (valued at $5 billion), to why there are no old houses in Japan, there are plenty of fascinating facts about real estate.

Besides, fascinating is relative! If you’re in the market to buy or sell, there’s nothing more interesting to you than the question of how to choose a realtor, what companies offer the lowest real estate commission fees or how to sell your home without a realtor

Read on for some surprising real estate facts — some fun, some practical.

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This statistic comes from a survey by Real Estate Witch and is especially striking when you consider that 76% of Americans believe in the existence of the supernatural. 

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However, only 52% would consider paying market value for a haunted house. 

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That percentage stayed remarkably stable when respondents were asked about living with ghosts versus living near the scene of a violent crime (47%), a former meth lab (45%), or within one mile of a prison (44%). Have these people not seen The Exorcist?

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With a population of about 330 million, that’s a about 2.3 people per housing unit.

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However, only about 10% of sellers actually get their FSBO listing across the finish line; the rest give up and hire a real estate agent.

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Compare this to the stock market, which has returned 13.9% over the past decade. But keep in mind that the stock market is much more volatile than the real estate market — and you can’t live in your stock investments.

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Renters are a little over a third of all households; 64% of households, or around 75 million, are homeowners.

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However, corporate landlords are buying up a lot of units. In 2008, 20% of rental units were owned by corporate landlords; today, they own 50% of all rentals.

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According to data from Realtor.com, rents skyrocketed 11.5% between August 2020 and August 2021 — the first double-digit rent increase ever recorded. 

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Louisiana saw the largest increase, as rents rose a whopping 38% in the state. 

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Illinois saw the largest dip, as average rents decreased by 9.6%. 

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As the saying goes, they’re not making any more land.

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The queen’s residence is valued at around $5 billion, which is five times the value of the second most expensive home in the world — Antilla, which is located in Mumbai, India, is valued at $1 billion. Antilla has six stories just for car storage and requires a staff of 600.

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That means anyone, from anywhere, can buy a downtown Tokyo townhouse. (However, keep in mind that Tokyo is one of the most expensive real estate markets on earth.)

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In Japanese real estate, a home loses all its value after 20 or 30 years. When someone moves out, the house is typically demolished, and a brand new home is built on the lot. Experts say this tradition stems from poor quality post-war construction, constantly revised earthquake-proof building regulations, and zero incentive for any home maintenance, as it’ll just be torn down in a few decades.

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Scotland isn’t the only country with a red front door tradition; in American history, a red front door often symbolized a safe place to stay, and in Chinese feng shui tradition, a red front door wards off evil and attracts luck.

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The average Australian home is around 2,500 square feet. American homes, which are the second largest in the world, average around 1,900 square feet. 

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On the island of Hong Kong, homes average a cozy 345 square feet.

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The average home in Hong Kong costs $1.25 million in U.S. dollars. 

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The swanky six-story mansion, formerly the Yugoslavian embassy, is now co-owned by Macedonia, Bosnia, Croatia, Serbia, and Slovenia. A recent sale fell through because the bickering countries couldn’t agree on a sale price.

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Unfortunately, over half of Americans (51%) say they can’t afford to buy a home.

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That’s a lot of boxes and masking tape.

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In 1981, the average homebuyer was only 31 years old, which says a lot about economic trends over the past 40 years.

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Although it’s getting more difficult to buy a home, lots of people are finding a way.

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That means the average American home sale consists of a 57-year-old selling a home to someone only ten years younger.

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This statistic is even more notable when you consider that, on average, women earn 82 cents for every dollar that men earn.

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16.4% of all homeowners in Tampa are single women.

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On the other hand, Vermont has the fewest realtors of any U.S. state.

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Located at 220 Central Park South in Manhattan, this penthouse spans the 50th through the 53rd floor of the building and was purchased by a hedge fund billionaire in 2019.

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No, it’s not 90210. This zip code, located in the Bay Area, has a median home value of more than $7 million. 

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List prices overall have risen nearly 33% since March 2020; in hotter urban markets such as Dallas and New York, prices have increased even more, by 43%. 

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This partially explains why prices have gone up so much — high demand, low supply.

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This represents a staggering 45% increase since May 2020. Housing inventory hasn’t significantly increased over that time, either, suggesting that prices are going to continue to rise. 

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Rents in this small California city have risen nearly 29% in a five-year span, compared to a national increase of just over 11%. (Stockton’s precipitous rent increase prompted the city government to pass a rent control ordinance in 2019.)

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In this mid-sized Missouri city, one-bedroom apartments rent for an average of only $626, or about a thousand dollars less than the national average rent for a one-bedroom apartment.

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Using the metrics of average credit score, amount of down payment, and mortgage selectivity, San Jose had the most serious, highly qualified buyers. Other cities rounding out the top three are San Francisco, and Raleigh, North Carolina.

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There was a two-way tie for the second-least competitive market, between Atlanta and Riverside, California. If you’re a highly qualified buyer in one of these cities, you can write your own ticket.

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Data shows that homes listed on Thursdays sell for $3,000 more than the list price, on average. Why? The leading theory is this is when serious buyers start compiling their list of open houses for the weekend.

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Buyer’s remorse is real! The top reason cited for their regrets was maintenance and unforeseen expenses.

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According to statistics, 2020 buyers only looked for eight weeks before purchasing and checked out nine homes — only four of which they viewed in person. 

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Gen Xers purchased homes with a median size of 2,100 square feet and a median price of $305,000. 

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Coming in second were single women, who made up 19% of homebuyers. Single men made up 9% of homebuyers, and unmarried couples made up the last 9%. 

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With a median home value of just over $764,000, this island state is the most expensive place in the U.S. to buy a home, narrowly edging out California. (Keep in mind, this average price doesn’t include fees and commissions, which can be substantial.)

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West Virginia has a median home value of just under $119,000, or about one-sixth of Hawaii’s median home value.

Related:

This article
originally appeared on 
RealEstateWitch.comand was
syndicated by
MediaFeed.org.

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Featured Image Credit: DepositPhotos.com.

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