Author: David Comeau
Source: articleage.com
With the current appreciation of real estate in recent years, you can not go anywhere without someone talking about his latest real estate deal. With the bitter taste of the Internet bubble is still fresh on everyone's lips, one can not help but worry about a bursting housing bubble like in the near future. As to the facts is the only measurement of real property or not in the Phoenix-Mesa-Scottsdale metropolitan area will see a sharp decline. Property Price Income Ratio – This ratio is often used to imply an imminent housing bubble forming, but this is not correct. While revenues have not kept pace with home prices in Maricopa County, the best figure to consider is the cost of servicing mortgage debt to income rate. This number allows us to see if people can pay their mortgages on their property, since most people carry debt on their property. For the Phoenix metropolitan area, the figure is currently 21% for the Phoenix metropolitan area, compared with an average of 30% for the top 20 U.S. metropolitan areas. This makes property in the Phoenix metropolitan area surprisingly attractive, with 3-year appreciation of 69%. The "Catch Up" Effect – Much of the current appreciation we are seeing in the Phoenix metropolitan area can be attributed to poor performance during the '80s and '90s. During this period, house prices were relatively flat, so that the current increase in prices can be viewed as a "catch up" effect. Future employment in the Phoenix metropolitan area – A drop in home prices is rare, and the median home price in the U.S. has not decreased since the Great Depression of the 1930s. Local markets have experienced declines accompanied by sharp declines in the local labor market. The 3 years of work for the growth prospects of the Phoenix metropolitan area is a solid 4.8%, compared with the national average of 2.4%, making a strong argument that housing prices will not fall. Climate of the mortgage for the Phoenix metropolitan area – 18% of mortgages in the Phoenix metropolitan area are over 90% of the value of real estate, making the risk of exclusion in the minimum area. While a rising interest rates cool the recent growth we've seen in home values, would only make the area in line with the national average cost of debt service to revenue rate mortgage. After looking at the numbers, it is clear that Phoenix AZ real concerns of the property bubble are overblown. Employment growth for the area is good and foreclosure risk is minimal. While past performance can not guarantee future growth, the future looks very bright for real estate investment in the Phoenix metropolitan area. A cooling in the assessment may occur if interest rates rise quickly, but this would be far from the stock market bubble was. But even with the current increase in mortgage rates, the Phoenix area is still seeing appreciation in real estate. For more information about real estate in Maricopa County, Arizona, please visit http://www.maricoparealestate.net/