1. The Next Wave of Buyers
All Residential Leases Single Family Detached Leases
2006 17,985 14,143
2007 22,502 17,845
2008 25,429 19,928
95,214
2009 27,409 21,274
opportunities
2010 29,150 22,024
Total 122,475 95,214 78%
Data from ARMLS 1/22/11
2. Single Family Detached Residential Rentals
95,214 prospective buyers
30,000
2 year FHA waiting period to finance after
Bankruptcy
3 year FHA waiting period to finance after
Short Sale or Foreclosure
21,274 22,024
22,500
19,928
17,845
15,000 14,143
7,500
0
2006 2007 2008 2009 2010 2011 2012
Data from ARMLS 1/22/11
3. Leases by Property Type
Category Inventory 12/10 December leases signed Estimated months supply
Single family detached 4,527 2,295 2.0
Apartment style 1,486 268 4.6
Townhouse 1,129 258 3.6
Patio homes 232 48 4.8
Totals 7,374 2,869 2.5
Leases signed in Phoenix 2006 -2010
All Residential Leases Single Family Detached Leases
2006 17,985 14,143
2007 22,502 17,845
2008 25,429 19,928
95,214
2009 27,409 21,274
opportunities
2010 29,150 22,024
Total 122,475 95,214 78%
Data from ARMLS
4. Number of properties that have gone through foreclosure
or short sale process
Greater Phoenix January 2010 - January 2011
Number of Transactions
Transaction Type
January 2010 - January 2011
Foreclosures/REO: some of these were investment
properties and commercial properties, but the majority 31,052 49%
were single family properties
Third party purchases (non-REO) at trustee’s 21%
12,364
auction: property did not go back to the bank
Short sales 17,149 30%
Total 60,565 100%
Data from NetvalueCentral.com and ARMLS 1/22/11
5. Maricopa County Rental Properties
Total number of potential rental properties
369,782
Total number of potential single family rental properties
250,931
Data from ARMLS 1/22/11
6. N
W E
S
95,214 Single family renters 1/06-1/11
Data from ARMLS 1/22/11
7. 4,237 Single family rentals in direct vicinity of six SE Valley
Meritage Communities
(1/1/08 - 1/22/11 ARMLS)
Warner Road
Arizona Ave Power Road
Riggs Road
8. Rent vs. Own Southeast Valley
*4,237 Single family residential leases signed 1/08 - 1/11
Arizona Ave - Power Rd, Warner Rd - Riggs Rd
# Of renters by range MLS listings by $ range **Monthly payment
• $1,000-$1,250 - 2052 • $135K-$160K - 203 $1,100-$1,275
• $1,250-$1,500 - 1488
84% • $160K-$200K - 276 $1,250-$1,500
• $1,500-$1,750 - 439 • $200K-$250K - 224 $1,500-$1,750
• $1,750-$2,000 - 178 • $250K-$300K - 133 $1,750-$2,000
• $2,000-$2,500 - 70 • $300K-$325K - 44 $2,000-$2,200
• $2,500-$3,000 - 10 • $325K-$350K - 50 $2,200-$2,300
• Over $3,000 -0 • $350K-$375K - 22 $2,300-$2,500
* Information from Arizona Multiple Listing Service as of 1/22/11
** PITI + HOA with FHA Loan, 3.5% down-payment, 30 yr fixed @ 5% APR
9. 545 Single family rentals within 5 mile radius of Cibola Vista
Paying $1,750-$4,000/mo. rent
(1/1/08 - 1/22/11 ARMLS)
Lake Pleasant
Vistancia New River
Arrowhead Ranch
10. 170 Single family rentals within 2 mile radius of Verrado
paying $1,500 - $3,500/mo. rent
(1/1/08 - 1/22/11 ARMLS)
Indian School Rd
Raven Golf Club
I-10
11. 127 Single family rentals paying $2,500-$6,000/mo.
within 4 mile radius of Mirabel
(1/1/08 - 1/22/11 ARMLS)
Desert Mountain
Black Mountain
Mirabel
The Boulders Legend Trail
12. 1,165 Single family rentals paying $800 - $1,500/mo.
within 3 mile radius of Rancho El Dorado/Maricopa
(1/1/08 - 1/22/11 ARMLS)
13. Top Ten Cities to Buy vs. Rent
Trulia.com Rent vs. Buy Index Interpretation Key
City Price-to-Rent Ratio
1 Minneapolis, Minnesota 1:8
2 Arlington, Texas 1:8
3 Miami, Florida 1:8
4 Fresno, California 1:8
5 San Antonio, Texas 1:8
6 Mesa, Arizona 1:9
7 Jacksonville, Florida 1:9
8 Phoenix, Arizona 1:10
9 El Paso, Texas 1:10
10 Las Vegas, Nevada 1:11
Price-to-Rent Ratio of 1:15 = It is much less expensive to own than to rent a home in this city
Price-to-Rent Ratio of 16:20 = It is more expensive to own a home in this city. The total costs of home
ownership in this city are greater than the costs of renting.
Price-to-Rent Ratio of 21+ = The total costs of owning a home in this city are much greater than the costs of
renting. On Trulia.com, the price-rent ratio is calculated comparing the average list price to the average rental
cost of two-bedroom apartments, condos, and townhomes. To create this list, Trulia analyzed the largest 50 U.S.
cities by population.
Data from trulia.com
16. They don’t build houses like they used to, they build them
Better
Advantages of purchasing a brand New Home
1. Brand new homes are one of the easiest ways for any home buyer to get on the property ladder and start generating substantial equity over the first few years.
2. New homes are safer than older homes! They feature better wiring systems and have to adhere to today's strict building codes and standards.
3. New homes are healthier because asbestos, lead and other hazardous materials have been eliminated from home building products.
4. New homes are much more energy efficient. Due to better windows, more efficient heating & cooling equipment, better control of air infiltration and greater use of new
insulation technologies - new homes are TWICE as energy efficient as homes built prior to 1980!
5. New homes are less expensive to maintain than older homes. A new home can be operated for 20-30% less than a used home.
6. New homes often sell at higher resale values than older homes and carry better warranties.
7. A new home, in a new community allows you to make friends quickly - everyone in the neighborhood is new and that allows you to establish bonds and create long lasting
friendships.
8. Pride in being the first owner of a new home - which is an expression of your style, lifestyle and opinions.
9. You don't have to worry about replacing old carpeting, counter tops, appliances or the roof! You get to choose exactly what you want and it's ready as soon as you move in!
10. Today's new homes are being wired to take full advantage of the latest communication, security, home office & entertainment technologies.
17.
18. QUICK REFERENCE GUIDE FOR WAITING PERIODS TO FINANCE
Waiting Periods to Finance Conventional FHA
Deed-in-Lieu of Foreclosure 2 years - 80% Max LTV 3 years from completion
Short Sale, Pre-Foreclosure 4 years - 90% Max LTV (no waiting for extenuating circumstances)
7 years from completion 3 years from completion
Foreclosure Sale
(3 years extenuating circumstances) (Short Sale w/90 day late considered foreclosure)
4 years from discharge
Bankruptcy (except Chapter 13) 2 years from discharge
(2 years extenuating circumstances)
2 years from discharge A minimum history of 1 year of on time
Chapter 13 Bankruptcy
4 years from filing date payout period
19. Executive Summary
The high number of properties exchanging ownership because of foreclosures or short sales has created a boom in the single family
rental market. For the first six months of 2010, approximately 34,000 properties in greater Phoenix went back to the lender, were
purchased by a third party at a trustee’s auction or sold through a short sale. The majority of these properties were single family
detached homes. ARMLS reports that for the first six months of 2010, 14,142 residential leases were signed of which 10,736 were
single family properties, representing 76% of the total. Most single family home owners who lose their home would prefer to
continue living in a single family house rather than renting a patio home, townhouse or an apartment. As of January 22, 2011,
single family detached rentals were at a two month supply.
At the current demand for renting a single family home, 2010 most likely will be the record year this decade for the number of
signed single family leases.
Before a buyer may obtain a loan and purchase again there is a waiting period, depending on the loan type. Many single family
renters will purchase again once they are through the required waiting period, have improved their credit, have obtained the
funding for their down payment and are employed. This group represents a future home buying boom.
Strategic Plan
The Arizona Regional Multiple Listing Service enables subscribers to extract detailed property and contact information,
price points, and contract terms of residential leases signed within specific geographic locations and time frames in the
Phoenix area.
Strategically locating, marketing, educating, and following up with these renters as they approach the termination of their
lease and required waiting periods will enable sales agents to create action plans that identify more potential buyers in
their direct market and sell more homes.