HOT PHOENIX REAL ESTATE MARKET TO SEE CONTINUED GROWTH IN HOME VALUES

The residential real estate market in metro Phoenix is one of the hottest in the country. The latest numbers from S&P CoreLogic Case-Shiller home price index show that we have the highest home price appreciation in the United States.

Across the country, home appreciation has risen 3.3% year over year but in Phoenix, the increase is more like 5.8% year over year. One of the biggest reasons for this stunning rise is an influx of new residents.

According to Bloomberg analysis of U.S. Census data, an average of 200 people a day move here from other states as well as from other countries. As the cost of living becomes more expensive in those areas, metro Phoenix has remained relatively affordable. Newcomers are paying cash from the sale of the homes they left behind and don’t hesitate to pay full price or more for properties here, which drives up neighborhood values.

In addition, a shortage of new homes and an emerging trend of people staying in their existing homes longer has made home ownership out of reach for many families. Seniors, especially, are planning to retire in place for as long as they possibly can. A recent AARP survey found that 71% of homeowners ages 50-plus plan to do so.

With a scarcity of affordable homes, which is what we’re experiencing now in the Valley, even distressed properties and former hoarding houses get snapped up almost as soon as they go on the market. These properties are usually priced at the lower end of the pricing scale. If someone is willing to repair and renovate, a buyer also stands to benefit from an increase in value.

Predictably, this rise in home values has generated growth in the rental market. Thousands of square feet of multi-family housing are popping up on an almost daily basis.

So, what’s in store for metro Phoenix in 2020? The Zillow Price Expectations Survey (consisting of a panel of real estate experts, economists and investment strategists) has Phoenix tied for fifth place with Dallas for top housing markets this year.

Home values nationwide are expected to increase 2.8%.  However, 46% of panelists expect home values here to grow faster than the national rate, and 42% expect values to grow about the same as nationally. But, no matter how you look at it, Valley real estate is still a great buy.