PHOENIX - Out-of-state buyers and investors are purchasing nearly one out of every four homes sold in the Phoenix area, a rate that has doubled in two years.
Californians are the biggest group of out-of-state investors here, making up almost 50 percent of the market. Nevada recently passed Illinois to become the No. 2 source of nonresident buyers.
Zareh Tahmassebian lives in Las Vegas, but has bought 15 houses in the Phoenix area since summer.
The 23-year-old mortgage banker sold houses in Los Angeles when prices began to shoot up there a few years ago. He then began buying homes in Las Vegas, but when housing prices there broke national records by climbing 50 percent in a year, Tahmassebian started looking for the next hot real estate market in the West.
He turned his sights to the Phoenix area.
"Why buy one house with cash when you can buy 10 of them at 10 percent down?" he said.
Despite double-digit increases last year, homes prices in the Phoenix area are relatively low for the West. The median price of a new house at the end of 2004 was $195,000 and $175,000 for a used home. Houses in metro Phoenix cost one-third of what the typical home sells for in California and at least $100,000 less than houses in Las Vegas.
"Investors in Las Vegas got their awakening late last year," said Gadi Kaufmann, CEO of national real estate consulting firm Robert Charles Lesser & Co.
He said Phoenix needs to be careful not to mimic Las Vegas' recent home price run-up and overinvestment boom, or it will lose out on drawing residents and businesses.
Builders such as Pulte Homes cut new-home prices in Las Vegas by 10 to 15 percent in September after skyrocketing housing costs dampened demand.
