The Metro Phoenix Light Rail System is a relatively new piece of infrastructure that has had a profound impact on the real estate market along its 20-mile path. From its beginning in east Mesa to its terminal in north central Phoenix, the light rail has spurred numerous new developments, both residential and commercial in nature. And while Phoenix has long been a car-centric city, shifting demographics, the new projects built in response and the timing of the light rail’s construction are well positioned to change that and make Phoenix far more in line with other urban areas around the country. Young people flocking to college campuses in all three of the cities connected by the light rail, as well as workers commuting to offices at law offices and tech companies filling the same area mean that demand for public transportation and the popularity of the light rail are soaring. And, by extension, the competition for Phoenix real estate near the light rail is hotter than ever before. Since 2014, property values near the light rail have been increasing in value faster even than the surrounding Phoenix real estate market.
How the Light Rail has Impacted the Phoenix Real Estate Market
Before the Phoenix light rail began service, there was much speculation about the impact it would have on the surrounding Phoenix real estate market. Developers were quick to bet on the transportation project’s success, but other economic forces would endanger their investments.
When it began service in 2008, the simultaneous crashes of the economy and Phoenix real estate market left many experts pessimistic about the long-term viability of the installation. However, a partnership of more than 35 groups and government (known collectively as the Sustainable Communities Collaborative) took advantage of $20 million from the Local Initiatives Support Corporation and the Raze Development Fund to leverage financing for more than $375 million in development. Development projects along the Phoenix light rail’s track that were in jeopardy as a result of the Great Recession were suddenly revived and, among numerous other projects, the location of the former Beef Eaters Restaurant at Third Avenue and Camelback has been redeveloped as a mixed-used center known as Newton Place. In Tempe, the old Grace Community Church building is now Gracie’s Village, comprised of affordable housing as well as the church’s thrift store and recreational spaces. Encore on First is a downtown Mesa fixture that includes 81 housing units for seniors in need of simple public transportation to maintain their independence.
Developing real estate near the light rail
It is unclear how the nonprofit plans to continue its efforts to develop real estate near the light rail. However, the work the organization has already completed will continue to have an impact for the foreseeable future. Now that the economy and Phoenix real estate market have largely rebounded from the economic woes of the last decade, the work of the Sustainable Communities Collaborative ensured that rather than starting from square one in terms of developing the land surrounding the Phoenix light rail, the areas were ready in time for the Phoenix real estate market growth we have been seeing over the past couple of years and are projected to continue seeing in the coming years.
Light rail and the Phoenix real estate market
The Metro Phoenix Light Rail System has already realized billions of dollars of new development in those areas within a half mile of the rails. Now, developers are eager to purchase what little land has yet to be developed along the light rail and the Phoenix real estate market in those areas is seeing a dramatic transition. While still surprisingly affordable, new luxury apartment buildings in downtown and along the Tempe waterfront are quickly filling up while the historic homes in the park districts are undergoing lavish makeovers. Folks interested in living near the light rail, investing in profitable rental properties in the Phoenix real estate market or even securing housing now for children who will one day go to one of the colleges with campuses along the route, the prices will likely never get better than they are today.
Phoenix Real Estate Investment Opportunity
If you are interested in snagging a residence within walking distance of the light rail, or if you want to take advantage of the investment opportunity of a lifetime before interest rates go up, be sure to contact us. The agents working out of our Tempe office are incredibly familiar with the area and can help assess your priorities to help you find and negotiate a great deal on the perfect property for you.
Or, to find out more about the Phoenix real estate market in general, be sure to read our 2017 Phoenix, Arizona Real Estate Market Report as well as our analysis about why Phoenix home prices will increase in the coming year.