PEORIA, Ariz. — Johnathan Chau has a wife, two kids – and high interest rates.
The real estate market is still hard for many people to get in. And Chau said he just can't buy right now.
"I wouldn't think so, just yet," he said.
Instead, Chau is in a build-to-rent community in Peoria called The Village at Pioneer Park. He rents his own detached home, but in an apartment-like community. Parking is in an apartment-style parking lot, there's a community pool, clubhouse and gym, but little to no yard.
"We sort of sit between a for-rent apartment and an entry-level starter home," Empire Group Partner Randy Grudzinski said.
Empire Group built this and three other completed build-to-rent communities in the Valley. And the company said it has another 20 on the way, with about 5,000 units in all.
The homes in The Villages at Pioneer Park range from 600 square feet for a one bedroom to about 1,100 square feet for a three bedroom, two bath. The largest rents for $2,800, Empire said.
“People who barely qualified a year ago," Grudzinski said, "the ability to get into a home right now, it's just out of reach."
Rising interest rates mean it's harder for people to qualify for mortgages. And housing prices, though declining, are still high in many places. Experts say the build to rent communities fill the space in between renting and owning.
“It was born here," said Mark Stapp, professor of real estate at ASU's WP Carey School of Business said. "Which is why you see the largest number of projects here."
Stapp said these projects make sense for companies financially, though the cost of labor, materials and inflation are eating into that profit margin.
"But you have a lot already in the pipeline. So I think we're gonna continue to see these," he said.
Boomtown
In our “Boomtown” series, 12News takes a look at the Valley’s explosive growth over the past few decades, the consequences that came with it and a look at what it all means for our future as more than 1.5 million people are expected to move to the valley by 2040.