With the new year, will the market continue an upward trend in home prices or is a correction, perhaps even a fall, expected? Although Phoenix has experienced consistent population growth, the real estate market hasn't grown at the same rate. Economists at the Common Sense Institute Arizona (CSI), a non-profit research organization specializing in topics related to economic development, discovered that Arizona's real estate market is on a precipice. The homes that were put up for sale suffered fierce bidding wars with buyers willing to distort themselves to meet seller demands, including concessions such as renting the house to sellers for a period while finding a new home to buy. In particular, formerly owned single-family homes account for the majority of residential sales in the Arizona real estate market, approximately 80% of all sales.
Home prices in the Phoenix area are expected to continue to rise at a slower pace over the next twelve months. The continued rise in house prices has prompted warnings of an imminent decline in the housing market, but an analysis has shown that a city with sky-high prices is already experiencing a drop in property values over the past month. Don't forget that the large retirement market means there's a strong demand for one- and two-bedroom homes and condos here, and those units cost a fraction of the cost of a three-bedroom home. The current home inventory in the Phoenix real estate market would take about 3.48 months to sell, given the current sales rate.
That makes this area and the surrounding neighborhoods a great place to invest in the Phoenix real estate market. However, an analysis that has just been published has shown that prices in the capital of the state of Arizona may be falling. According to CoreLogic HPI, large cities continued to see price increases in June, with Phoenix leading the way, up 26.1% year-on-year. The Phoenix real estate market is the best performing, not only in the Arizona real estate market but also across the country.
The city also recognizes the need for affordable housing and allows people to build and rent ADUs as affordable housing, especially if the property is within walking distance of public transportation. With a housing crisis due to a lack of units to rent, homeowners will continue to earn money even in a recession.
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