Here’s My Maricopa County Real Estate Forecast For The Next Two Years!

By
Real Estate Agent with West USA Realty #1

Phoenix Scottsdale, Arizona.

Here's what going to happen with Phoenix Scottsdale real estate for the next 2 years - about your home and the ones you want to purchase or sell....

 

Richard Bazinet, MBA, CRS, ABR, Realtor at AZuRE Team @ Realty ONE Group. 602-300-7007, richard@azrteam.com

In Maricopa County, our biggest real estate challenge remains the low inventory of available homes and the short absorption rate of existing homes despite the growing pace of home construction (aka new builds) in the valley. This shortage of homes means home prices will continue to rise further this year, and likely for another year to 2020. In the micro-economies of many areas and or subdivisions, prices have risen significantly and more so than other areas, while having too few houses listed for sale with a low average listed days on the market. This further has the effect to keep the discount rate between the listed price and the sales contract at about 3%. This hinders affordability, as in many areas, it’s becoming difficult to find properties under the $225,000 market range.

And this despite the normal seasonal fall market real estate activity slowdown.

Nonetheless, it is a seller’s market.

As the American economy is doing absolutely great since the last election, its rock and roll, firing on all cylinders. The market performance is unprecedented in US history, as the economy is experiencing monster numbers. The benchmark 10-year U.S. Treasury yield rose to near 3.2%, continuing to climb after hitting a seven-year high. The economy is booming for at least the next few years.

More Americans are employed than ever before, the lowest in 49 years! ….as the economy continues to improve, more Americans are able to buy homes. 18 % of adults that do not own a home, plan to buy one in the next five years. But only 13% of Americans who own a home plan to sell it in the next five years. This means a shortage as more Americans plan to buy than to sell, thus a seller’s market will remain in the near future.

Based on income, mortgage rate, and home price, the rising cost of rental homes caused by low availability, affordability is at its lowest in the last few years, and I believe it will get worse. There is a significant disparity between earnings and home prices, as income grew about 15% from 2011 to 2017, while home prices increased about 48 percent over that period. The Year Over Year home price increase as of August 2018 was 7.5%. Of course, increasing mortgage rates from the extreme lows we experienced in the last few years will also affect affordability – in other words it will cost more to buy a home than just the increase in home prices.

The other major influencer on the demand for homes is the population growth in the valley pushed by net migration. Arizona, Phoenix Scottsdale remains a destination for many as the net corporate, professional and retirement migration is significantly positive. Fountain Hills, Rio Verde/Verde River, Scottsdale, Queen Creek/San Tan Valley and many areas in the West Valley are net positive destinations.

Silicon Valley has long been considered the tech hub of the U.S., with many of the top companies in the world keeping their headquarters there. However, as housing prices and the overall cost of living have increased in the San Francisco Bay Area, many startups are jumping ship and choosing alternatives, bringing jobs and economic growth to Phoenix.

So, the best way to fix this is by encouraging more home construction and mortgage loan deals as construction loans become retail mortgage loans.

Sources: Gallup Poll, NAR Market Research, Arizona Regional MLS, Federal Reserve, Bloomberg, Residential Real Estate Council, Yahoo Finance.

 

Posted by

 

RICHARD BAZINET PLLC

MBA,CRS,ABR

West USA Realty

richard@richardbazinet.com

602-300-7007

 

7077 E Marilyn Rd, Bldg 4, Ste 130 

Scottsdale, AZ 85254

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Richie Alan Naggar 10/20/2018 08:56 AM
Topic:
Real Estate Market Trends
Location:
Arizona Maricopa County

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Show All Comments
Rainmaker
2,569,593
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Intelligent  communications in regards to the Real Estate industry

Oct 20, 2018 08:48 AM #1
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Thank you Richie Alan Naggar for your very kind words - they are much appreciated.

Oct 20, 2018 10:50 AM #2
Rainmaker
730,922
Chuck Willman UtahHomes.me
Utah Homes - Alpine, UT
Utah Homes

Richard Bazinet /MBA, CRS, ABR - Interesting. Solid findings. As a person who used to live there and who still tries to keep a finger on the pulse of the Phoenix metro, it's nice to see an update from a person who I feel is one of the experts.

Oct 20, 2018 03:40 PM #3
Rainmaker
3,032,921
Brian England
Vacasa - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

That is a solid forecast for the market in the Phoenix area, I hope you are having a nice weekend my friend!

Oct 21, 2018 06:02 AM #4
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Thank you @Brian England for stopping by and your comments. Always appreciated.

Oct 21, 2018 06:46 AM #5
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Hi Chuck Willman UtahHomes.me .  I hope this helps you keep connected to Maricopa County. Thank you for your comments.

Oct 21, 2018 06:47 AM #6
Rainmaker
3,561,067
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

HI Richard... it remains a seller's market here in Charlotte (for now), but with rising interest rates I think it will become somewhat more balances... I think out market is more sensitive to interest rates than yours might be.

Oct 22, 2018 11:51 AM #7
Ambassador
3,763,217
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Very well researched and reported, Richard - you know your numbers and your market. I'm happy to hear that you're having some migration from the Bay area and agree that you're going to have to have some new construction to open up your market for buyers. 

Again, great report and Happy Monday!

Oct 22, 2018 10:30 PM #8
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Our biggest downfall right now is the low availability of homes Nina Hollander . It keeps the pressure on prices (rarity).

Oct 23, 2018 06:51 AM #9
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

A new report just came out Debe Maxwell, CRS from the Mortgage Bankers Association and their prediction is 5 years of strong housing growth.

Oct 23, 2018 06:53 AM #10
Rainmaker
4,437,657
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Richard, nice market update for Maricopa County, and think many areas of the Country is seeing a slight slowdown, but still have a Seller's market.

Nov 27, 2018 07:04 AM #11
Rainmaker
705,949
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Thank you Joan Cox , appreciate the kind words and comments.... My next update is coming up early December....

Nov 27, 2018 07:18 AM #12
Rainmaker
5,972,853
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Families on the move will appreciate your local market reports.

Nov 28, 2018 06:25 AM #13
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Rainmaker
705,949

Richard Bazinet /MBA, CRS, ABR

Phoenix Scottsdale. Sellers, Buyers & Relocations
Feel free to ask me a question
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