OK, everyone knows the Phoenix real estate market is HOT! (photo: Phoenix Bird- Skylarvision Pixabay) How hot? Well, here we go:
1. The average homeowner has seen their home value go up 27% during the past 12 months.
2. House prices have doubled in the past 5 years.
3. May will be another record median home sold price... based on early contracts expected to be $475,000.
4. Multiple offers continue on most homes priced less than $500K. Usually homes go on the market for the weekend and the best offers are chosen on Monday.
5. Sellers choose the highest price, followed by highest down payment (cash is king) and fastest close. This leaves families with a relatively low down payment such as the 3.5% minimum for a FHA loan feeling left out.
6. More Buyers than Sellers. Fixer uppers are usually what is left but they still are in short supply and don't expect a discounted price.
7. The cash buyer investors (30% of purchases) are buying up homes to serve as rentals with rental prices soaring.
8. Apartments are being built everywhere where there is vacant land as people are moving to Arizona in record rates from California, other densely populated big cities and other countries.
Median House Prices Last 3 Years in Phoenix Arizona Metro
$475,000 May 2022 (forecast from MLS contracts in system)
$470,000 April 2022 (Expected pending final numbers)
$460,000 March 2022
$450,000 February 2022
$427,000 December 2021
$333,000 December 2020
$290,000 December 2019
Today, May 24, 2022 Catherine Reagor of the Arizona Republic newspaper reported more details on the market and the hot real estate issues behind the scene. The really HOT need for rentals is driving up the price of homes sought by homebuyers.
"Metro Phoenix’s median home price is double what it was five years ago. That jaw-dropping indicator is one more blow to homebuyers grappling to afford a house.
Arizona’s need for housing that people can afford is a big and growing problem. Roadblocks to building include not-in-my-backyard-ism and political backlash. These are shutting the door on new developments, particularly in metro Phoenix, where the affordable housing crunch is the worst.
Buyers left in the cold while metro Phoenix construction of single-family rentals booms
Metro Phoenix has long been a hotspot for homebuilding, and now it’s the top market in the U.S. for single-family rental construction. The rents on these new houses are climbing nearly as fast as home prices. The Phoenix area is second to only Miami for single-family rent hikes during the past year.
Metro Phoenix apartment sales soar as investors buy up rentals.
Will rents keep climbing?
Metro Phoenix renters, brace yourselves for more tough times. The Valley’s apartment market is drawing big investors paying record prices for complexes, and that is a sure sign rents will keep climbing.
Backlash against apartments
Backlash against affordable homes intensifies Arizona housing shortage
Arizona needs as many as 270,000 additional homes with rents and prices below what apartments and houses are going for now to keep the state’s growing affordable housing problem from becoming a crisis.
Growing NIMBYism in metro Phoenix
At least 30 apartment developments stalled or were shelved across metro Phoenix in 2021 due to not-in-my-backyard-ism, zoning issues and political backlash."
My advice for buyers?
1. Be prepared to offer OVER the listing price. There will likely be multiple offers.
2. If you have a low down payment where the home will not appraise, think about getting a higher down payment.
3. Ask family or friends for a gift for down payment
4. Look into some of the free grants for down payment assistance like Home in Five, Home Plus, Wish Grant, Hero Grants etc. You are competing against institutional cash buyers in many cases.
5. The good news? Although mortgage rates have increased recently to over 5% for a 30 year mortgage they are still closer to record lows than record highs.
6. Fight inflation: You can lock in your monthly payment over 30 years as home prices and rents will continue to escalate over the long run.
Give me a call (call/text 480-242-6500) to review your home purchase or sell options and let me help you put your best offer together.
For more information on, see: Arizona Homes For Sale.
Meet Jeff Masich REALTOR®
Meet Jeff Masich, REALTOR® and ask about homes for sale anywhere in Phoenix metro