Phoenix Real Estate Market Report May 2017
Phoenix real estate is on the rise. Home prices are increasing steadily, and properties--especially those priced on the lower end of the market--are receiving multiple offers when they hit the market. Rising prices aren’t necessarily bad news for buyers—the recovery means that buyers are now entering a more stable housing market that is still among the most affordable in the West.
If you’re thinking of buying in Phoenix this year, here’s what you need to know about the state of the market right now.
Cheap Homes are Harder to Find
Home prices climbed 6% in 2016, and are now up another $1,500 since December to hit a median of $245,208, according to Valley real estate expert Mike Orr’s Cromford Report. That puts prices nearly back at the $260,000 peak of from the height of the market in 2006. But this time around, growth is backed by solid employment opportunities and prices that are increasing at a measured rate compared to the rapid growth of the housing bubble.
There are fewer homes for sale now than there have been over the past few years, with active listings down 15% from the same time in 2016. Buyers at the lower end of the market are seeing the highest levels of competition, with listings from $200,000 to $300,000 down 10% even as properties selling for under $300,000 making up 70% of all home sales in the Phoenix metro area. A recent Trulia report notes that the average price for a “starter home” in the Phoenix area is $255,633, up
drastically from $69,300 in 2012, and that starter homes make up just 16.6% of all for-sale inventory in the Phoenix area.
Buyers Should Come Prepared
So what does all of this mean for buyers? It’s still very possible to buy a great--and affordable—home in Phoenix, but the market is much more competitive than it was a few years ago. That means that buyers can to see expect multiple offers on properties, and homes will sell much more quickly than they may have a few years ago. In Gilbert, a popular Phoenix suburb, homes are receiving an average of 4 offers each, according to recent Redfin statistics, and are selling for 98.5% of list price on average. Buyers should be prepared to move quickly if they see something they love on the market in Phoenix right now.
In a competitive market, it’s important to get a pre-approval letter before putting in any offers on homes. Buyers who have a fully underwritten pre-approval letter are preferred by sellers because their financing has an initial stamp of approval.
Be Prepared to be Flexible
Buyers should also come into the hot Phoenix market with a willingness to be flexible on their home requirements. Some neighborhoods and suburbs are shooting up faster than others, while pockets of more affordable homes continue to exist in the metro area. And while you may have to compromise on some of your home wishlist items to stay within your price range, it’s still very possible to find a great house for a reasonable price in Phoenix.