Phoenix: A Sizzling Market
by Marco Santarelli, Norada Real Estate Investments
T he Phoenix, Arizona real estate market has thrived the past couple years; even the rise in mort- gage rates was believed not to affect it. Real estate appreciation rates have been increasing year-over-year in the entire metro area. Phoenix, the fifth largest city in the nation, is the only state capital with more than a million people. And, the Phoenix housing market is much larger than Phoenix itself; it encompasses the entire Valley of the Sun, Phoenix’s sprawling suburbs that are home to another five million people. That makes the Phoenix metro area the twelfth largest in the country. The Phoenix housing market started so strong this year that only something as drastic as the pandem- ic could have impeded the real estate sector. With the extreme shortage of inventory and an increasing number of sales over asking price of prop- erty owners, many experts expected moderate growth and moderate price appreciation in 2020. The medi - an sales price in Maricopa County for
Q1 was up by more than 12.7 percent from last year. Even in the pandemic, the sales prices in the Phoenix hous-
average of 3.26 percent. Last year at this time, mortgage rates were 4.1 percent. This is the time for buyers to take advantage before they are increased again. The only con is that lenders are requiring higher credit scores because of looming economic uncer- tainty. As more sellers are offering concessions, there isn’t going to be a big decline in home prices in the Phoenix housing market. If job losses get even worse, then it could affect the demand going into the last quarter of 2020. The Phoenix metro area market is so hot that it cannot shift to a com- plete buyer’s real estate market, for the long term. In terms of months of supply, Phoenix can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Phoenix real estate market remains strong and skewed to sellers, due to persistent imbal- ance in supply and demand. •
ing market are not declining. The good thing for buyers in
Phoenix is that while supply remains at historically low levels, the price growth rate has slowed down a bit. Also, as some investors are pulling out of the marketplace, the regular homebuyers are getting in a better position to scoop up properties. For sellers, this is the best time to sell for a profit as housing inventory is reported to be at an eight-year low. The question now is what happens moving forward. These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the ongoing pandemic has not had any major impact on Phoenix’s housing market. The biggest mistake buyers make is sitting around waiting for sale prices to decline while their poten- tial mortgage payment plummets. Mortgage rates have declined to an
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