Today well start of series of posts looking at downtown and central Phoenix real estate performance by zip code. Our market analysis will begin with 85006.
Zip Code 85006 is bounded by Thomas (N), Van Buren (S), 7th St (W) and 24th Street (E). The population is younger than average, 58% are renters and the median income is under $30,000 with 41% living at below established poverty levels.
The market distress graphs pretty much sum up the performance of the region... not doing too well. A large portion of the sales in April 2009 (83%) were bank owed homes. Likewise, the "for sale" inventory is dominated by bank-owned or soon to be such. Prices have plummeted, giving a struggling region of Phoenix even less stability. As little as two years ago, home values in 85006 were in the low $200,000 range while today $80,000 may be considered optimistic. As of this writing there were 20 homes being offered at less than 50K and nearly 50 for under 100K.
So, what's the good news? Sales have been cconsistently rising in 2009 and prices are beginning to stabilize, if not outright rise. Pending sales, a strong indicator of market strength, have shown consistent upward numbers for over 6 months. In addition, the inventory in down to about 3.1 months... a very low number.
Our concern for the area is that most of the sales are probably investor owners. The likelihood for property improvements is low and the area is already distressed.
Investor owners may continue to do well in this area as prices suggest the potential for positive cash flow and some increase in values during the coming years. Since nearly 60% of the residents rent, a number many think will rise with the increase in area foreclosures, a good rental base is in place. Much of the area may be to distressed to attract the increasing ASU downtown population, yet some pockets may be viable. Investors shuld be aware of potential for rent rates to be on the decline due to competition and low-income demographics.
