3 Trends in the Phoenix Real Estate Market
The Phoenix real estate market is easily among the hottest in the nation.
In fact, Phoenix real estate has been booming so much lately, it now represents the top housing market to be negatively impacted by investor purchases. Meanwhile, real estate in Arizona as a whole has been experiencing sky-high demand, as people flee California and other less affordable states and cities.
So just what are the most important trends impacting Arizona real estate, especially in the Phoenix area? Let’s take a look at the three biggest trends currently affecting home buying in the Valley of the Sun.
1. Population Growth
First of all, any analysis of Phoenix real estate must acknowledge the remarkable population growth the city has experienced over the past decade.
The city has added a staggering 200,000 new residents during the course of the past ten years. Most of these have been retirees from other states, or middle-class families squeezed out of the sky-high California housing market. Phoenix has largely been more affordable, and its warm climate is attractive to those from colder states.
The population of Arizona’s capital city now stands at 1.6 million people, with a further 5 million in the greater Phoenix-Mesa-Scottsdale metropolitan area.
2. Burgeoning Phoenix Real Estate Demand
So what does this mean for the Phoenix real estate market?
For one thing, Phoenix is now leading the nation when it comes to increasing home prices. The median home price in Phoenix is hovering around $460,000, with the average sale price up 21% year-over-year. Much of this is driven by the enormous influx of new residents from other states, particularly California, as well as investors gobbling up rental properties.
Likewise, former renters or apartment tenants moving to suburban areas may account for some portion of the surging home demand in the city.
3. Booming Rental Market
Finally, we can’t overlook Phoenix’s booming rental market.
As we noted above, investors are snatching up homes to turn them into rental properties. Part of the reason is the city’s inordinate price-to-rent ratio, and the skyrocketing rental prices.
The proliferation of rental properties has also led to the growth of property management companies around Phoenix. For out-of-state or hands-off investors, these property management services are indispensable when renting a home. So the growth in renters has fueled a booming secondary ecosystem. Still, Phoenix will have to struggle with the effects of low housing inventory for many years to come.
Phoenix Is the Place to Be
Phoenix has a lot going for it.
It has a mild climate in the winter…even if it is unbearably hot during the winter. It has many outdoor attractions, including the Desert Botanical Garden and the Phoenix Mountains Preserve, and its city life and amenities are second to none.
And as more people flee or are pushed out of the West Coast cities, things are only liable to become more crowded in Arizona’s largest city. So, for the foreseeable future, the Phoenix real estate market shows no signs of cooling down.
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