The biggest city in Arizona was an epicenter of the real estate bubble. Not only were local residents driving prices up, but the city also drew investors who were priced out of more expensive markets, like Los Angeles.
The investors helped send home prices soaring: They doubled from early 2000 to their peak in mid-2006, according to the National Association of Home Builders.
Many of the purchases made during the bubble were financed with low down payment mortgages, which defaulted in high numbers during the bust. The Phoenix metro area has one of the 10 highest foreclosure rates in the nation.
That has left a glut of homes on the market, many priced at nearly half of what they sold for at their peak. Meanwhile, according to Phoenix-based real estate investor Tanya Marchiol, rental prices have been stable. Investors are able to purchase properties low enough that they can make substantial profits renting them out.
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