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ExecutiveChronicles | What Factors Affect Phoenix Home Values? | The median sale price for homes in Phoenix has been increasing month to month this year. Experts expect this trend to continue.
Phoenix is a seller’s market; buyer competition has kept prices high. However, higher mortgage rates could reduce affordability.
Some analysts fear the market may crash. But others believe it’s simply normalizing after a hot period.
1. Location
In the last two years, Phoenix homes have appreciated more than two hundred percent, a feat only a few cities can boast. This meteoric rise is the result of a combination of factors, including strong demand and a lack of inventory. This limited availability puts a strain on the market, driving prices up even in the face of economic difficulties.
As a result, it can be difficult for people to find the right property in Phoenix. Buyers may be able to ask for concessions in an offer, but they should be realistic about their expectations. The Phoenix market tends to be busier in winter when snowbirds move to the area, but it is also a popular destination for people looking to relocate for work or retirement.
The city offers a business-friendly environment, attracting corporations and entrepreneurs. This growth has increased the number of jobs and boosted demand for housing. In addition, Phoenix has a relatively low unemployment rate, which helps to stabilize the market.
Despite the robust growth in the job sector, Phoenix has not been able to keep up with demand. According to research conducted by Up for Growth, Phoenix is one of the states with the most severe housing underproduction. In fact, the city has only enough housing inventory to meet its needs for four months.
As a result, home prices are high, and buyers have little bargaining power. This combination of high demand and limited supply will likely lead to a stronger seller’s market in 2023. However, if interest rates increase dramatically and mortgage application activity declines, Phoenix home values could begin to fall again. In this case, homebuyers would face a long market stay and might have to settle for less than they want.
2. Size
In 2022, Phoenix was a hot market for real estate, but prices and demand have begun to cool down. It’s no longer common to see bidding wars for homes in the area, and it may be harder for homeowners to sell at their asking prices. In fact, according to one study, 25% of Phoenix sellers had to lower their prices when selling their homes this year compared to last year.
A big reason for the cooling market could be mortgage rates. When interest rates rise, it can make it more difficult to afford a mortgage and increase the amount of money that homebuyers will have to put down upfront. This can impact how much house they can afford, and it’s important to keep in mind if you’re planning on purchasing a home in the near future.
Another factor that affects home value is the size of the home. The bigger the home, the more expensive it will be. And smaller homes tend to be less expensive. This is because there are fewer expenses associated with smaller homes, such as utilities and maintenance.
The size of the home can also impact how long it takes to sell. If a home is too large, it can be more difficult to find buyers, and will take longer to sell than a smaller home.
In addition, the size of the home can have a significant impact on how much people pay for rent. For example, if a home is too small to fit most people comfortably, it’s likely that the rent will be higher than a larger home. This is why many investors and developers look for opportunities to build BTR homes in Phoenix.
3. Features
The type of home you choose to live in can have a big impact on how much your Phoenix property will appreciate. The city has an incredible selection of homes to suit virtually any lifestyle, including everything from modern construction to quaint ranch-style properties.
Here are a few of the most valuable home features in Phoenix that can help you sell for a great price:
Modern home designs are incredibly popular in Phoenix. These homes feature clean lines, neutral color schemes, and simple forms. They are often built with specialized building materials and include the latest technology. You can find these homes in many areas of Paradise Valley, Scottsdale, and around the city of Phoenix.
Many people think that Phoenix real estate is expensive, but the truth is that it’s actually relatively affordable compared to the national average. This makes it a good option for those who want to live in the West but cannot afford California or Nevada prices.
If you’re looking for a unique and historic Phoenix home, look no further than the Coronado neighborhood. This area has plenty of older houses in the Mediterranean style, which feature a rectangular floor plan and are accented by arches, circles, and wrought iron. You can also find this architectural style in some of the city’s most historic districts, such as Willo and Arcadia.
Historically, Phoenix has been one of the fastest-appreciating housing markets in the country. However, it’s worth noting that recent mortgage rate increases have slowed the city’s home value growth. If these rates continue to rise, it may be difficult for buyers to afford the high asking prices of Phoenix homes.
4. Mortgage Rates
As mortgage rates rise, people are finding it harder to afford homes and may choose not to sell their existing properties. This can cause the supply of housing to decrease, which in turn leads to lower sale numbers and higher prices. This is what’s happening in Phoenix right now. In addition, rising interest rates have also made it more expensive to build new homes, so there are fewer construction projects underway. This is a big factor in the slowdown in home sales.
It is unclear whether mortgage rates will rise above historically low levels or remain at current levels for a long time. The key is to keep a close eye on the trends so you can make a wise financial decision when it comes to buying or selling.
There are many factors that affect home values in Phoenix, but the most important one is demand. If demand remains high, then sellers will have the power to set prices as they wish. However, if mortgage rates rise to an unmanageable level, then the market could crash.
Overall, the real estate market in Phoenix is expected to slow down this year, but it is not likely to crash. Most experts believe that the housing market will see a more moderate growth as mortgage rates have stabilized and people are feeling more confident to enter the market. In addition, it is still a seller’s market, with limited inventory and high demand. This means that buyers are going to have to compete with each other for the few properties available, which can lead to bidding wars and higher price tags. However, if you have a good financial situation, then buying a home now is a great option.
5. Demand
Phoenix is a popular homebuyer destination for many reasons, including its affordable real estate. However, this city is facing a housing market crisis that may affect its popularity in the future. Housing production is not keeping pace with demand, which has led to a housing shortage. This will cause prices to increase.
Fortunately, there are some positive signs that the Phoenix housing market is stabilizing. The decline in sales volume has slowed down as of summer 2023, and the month-to-month price changes have begun to ease. The general consensus is that Phoenix home values will hit bottom in the near future and then begin climbing again at a more moderate rate.
As of now, it is still a seller’s market in Phoenix. The demand for homes exceeds the supply, leading to bidding wars and skyrocketing home prices. However, rising mortgage rates have reduced buyer enthusiasm and made it harder for people to afford homes. If interest rates continue to rise, it could spell trouble for the Phoenix market.
If you are thinking of buying a home in Phoenix, it is important to work with a knowledgeable real estate agent to find the right property for your budget and preferences. The right real estate agent can help you narrow down your options, negotiate a fair price, and make the process of purchasing a home as stress-free as possible. In addition, they can also provide valuable insight into the local market trends. For example, a real estate agent can tell you how much the average Phoenix home costs in your neighborhood and how long it takes to sell. This information can be used to gauge the value of a home and determine whether it is worth the asking price.
Photo by Tierra Mallorca on Unsplash
