Arizona Real Estate Market, by Yvonne McFadden.

Arizona Real Estate Market

By Yvonne McFadden

PHOTOS FROM 123RF For many years Arizona has been a destination for retirees and those people who love spending time in the great outdoors. It offers a moderate climate that provides opportunities for outdoor activities and a wide variety of dramatic landscapes. Right now, homes in the Arizona market are at price higher because the demand is high but this varies depending on the market, the city, county, neighborhood or town. Currently, the median sale price is $ 444,400 and homes are spending an average of 35 days on the market. The average home value is at $ 436,441 which is an increase of 2.32% month over month. There are about 6,774 homes currently listed on the market which means a 0.4 months of housing supply. This is so below the recommended 3 months worth of supply for a normal market. Arizona has been one of the greatest markets for buyers and investors alike and it is likely that this trend will be sustained for the foreseeable future. The homeownership rate is increasing compared to the past two years when the pandemic was at its peak. The listing price is much high than the home value and population growth is increasing rapidly. However, the inventory rate is low.

In just one year, the population in Arizona has grown to 7,276,316 from a population of 6.6 million. Population growth has been a result of most people migrating to the state to occupy affordable homes as compared to other areas. This has increased household demand which has over 900,000 renters household accounting for 36% of the total number of the house. As a result, home prices increased. In 2020, there were about 3,080 000 housing units in Arizona which was

an increment of 8.3% from 2010. This year, the household has increased by 6.7%.

Property value in the Arizona market has increased to 30.9% between 2021 April and 2022 April. This is a great growth as compared to the 21% that was recorded in April 2020. And 8.48% which was between 2019- 2020 April as drawn from the Zillow home value index. This data is a clear indication that property value is increasing annually. In October 2021, the average home price was at $ 396, 235 which was a 31.5 % increase, and the rent price change is 27.6%.

In January of this year, housing prices in the Arizona market have risen by 31% as compared to the 12.5% that was recorded in 2019. However, the house price increase rate may slow down in 2023 as forecasted by many experts.

The current trend on home prices and real estate appreciation this year is likely to raise. Last year’s appreciation rate was 11.85% which is equal to an annual appreciation of 56.50%

The pandemic has eased and most people have gone back to their jobs this year. This has significantly raised house demand, increasing the home price while the supply is seemingly dwindling. People have started going back to expensive homes and classic ones because they can now afford them. Children have also gone back to school as well as university students who are now renting homes in Arizona. The pandemic has made people create new opportunities trying to make a move and they are now back in the market.

Moving forward, people will have a better chance to find a home in Arizona although they will face high competitive sellers market. This is because the first-time buyers’ demand outmatches the inventory available. The mortgage rate is rising as well as the listing price and people need to raise their income by looking for an extra income to overcome unaffordability challenges. Home sellers are expecting to enter the market as buyer competition remains high and home sales are expected to grow more at a better sustainable pace as compared to last year.