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Appreciation rate, Trends, and Arizona Housing Market data, by Yvonne McFadden.
By Yvonne McFadden
Appreciation Rate, Trends, and Arizona Housing Market data
The housing market in Arizona, for most of 2021 has been booming despite the global pandemic shaking the economy to the core. In fact, the market has even performed better than predicted by experts in 2020. A boom that can be confidently attributed to the historically low-interest rates, has greatly influenced housing affordability. The current demand for homes and the low supply have also played a role in Arizona’s housing market success. It is good news to see the housing market thrive and bounce back from a COVID-19 induced slump.
PRICE APPRECIATION.
The Arizona market has seen average prices of homes and median prices go up more than the previous years. The median
sales price went up to $390,000, while the average sales price hit $504,600 in May. The low inventory and high demand have culminated in a spike in home appreciation. For example, according to ARMLS, Phoenix home appreciation has gone up to a whopping 237.84%, as per the median sales price. This appreciation has made Arizona rank first in the U.S. for the year-over-year home price increase.
The price appreciation and high demand for homes have made the home value of Arizona homes go up by 22.7%, an increase that is expected to go even higher in the coming months. For those thinking of moving to Arizona, Austin, Tampa, Denver, Phoenix, and Nashville are, in 2021, the most affordable metro areas to settle in compared to the sunny coastal cities.
INVENTORY.
As 2020 drew to a close, the number of homes listed hit a record low, but that seems to have changed with the new year. New listings in April this year were up 10.4 % year-to-year, while the total active listing saw a month-over-month increase of 5.3%. However, despite the entry of new homes into the market, the supply is nowhere near meeting the demand. The year-over-year listings have seen a deep of -43.1% with a 1.5 months’ home supply. The latter means that homes are selling faster than the year before.
It is important to point out that home sales for May 2021 have grown by 33% compared to the previous years. And it is keeping in mind that this was a month that saw sales drop by 3.7% compared to March. April and May experienced a sales slump, but the slump lasted for a short while as the market picked up quickly in June.
SELLERS’ MARKET.
The Arizona housing market has in 2021 been a sellers’ market. People looking to buy are facing a very competitive market, and the market is set to remain so for the rest of the year. The high prices of homes are responsible for creating an environment where would-be-homeowners can afford homes in Arizona. Many of these would-behomeowners are being out-priced in bidding wars and are ultimately dropping out of the housing market.
RENT IN ARIZONA.
According to the National Low Income Housing Coalition’s (NLIHC) report, 36% of residents in Arizona are renters. That makes over 900,000 households in Arizona renters. Rent prices in Arizona have climbed up, making renters find it hard to make payments. Low-income earners have been unable to keep up with these soaring rents. Noradarestate.com, in an article, stated that a worker had to make at least $21.10 per hour to find the rent affordable. In reality, these workers make a minimum wage of $12.00/hr.
The housing market in Arizona is currently very strong. The demand for homes is driven upwards as the population grows as more people move into the metro area. The low-interest rates are also influencing the buying power of Americans looking to buy homes. As the vaccine continues to roll out, the listings could go up.
Source:
https://www.noradarealestate.com/blog/phoenix-real-estate-market/.
Watch Yvonne McFadden talking about market updates on The Power Is Now Youtube Channel
