June Market Update
WHY PHOENIX HOME PRICES WILL KEEP RISING INTO 2020
By Brandon Cornett
© HBI, all rights reserved.
Used with permission.
Home prices within the Phoenix real estate market have risen steadily over the past few years, and that trend is predicted to continue through 2019 and into 2020. A lack of inventory is one of the main reasons why home prices are climbing in Phoenix.
FORECAST: PHOENIX HOME PRICES WILL CONTINUE RISING INTO 2020
According to a recent forecast from the real estate research team at Zillow, home prices in Phoenix, Arizona are expected to continue climbing through the rest of this year and into 2020.
In April 2019, the company wrote: “Phoenix home values have gone up 7.5% over the past year and Zillow predicts they will rise 5.4% within the next year.”
As of April, the median home price for this housing market was around $242,000. The median for the broader Phoenix-Mesa-Scottsdale metropolitan area was roughly $266,000, during that same time frame.
Housing prices are affected by supply and demand-related factors. In Phoenix’s housing market, it’s the supply situation that is mostly responsible for rising home values. In short, there aren’t enough homes listed for sale to meet demand.
According to the latest real estate industry reports, Phoenix had about a 3.2-month supply of homes for sale as of March 2019. That’s quite a bit below the 5- to 6-month level that economists consider to be “balanced.”
From a supply perspective, the Phoenix real estate market still favors sellers over buyers. There are plenty of people out there looking for houses to buy, but not enough inventory to go around. This also puts upward pressure on home prices.
As is often the case, inventory is especially tight at the lower end of the pricing spectrum. More affordable “starter” homes are in short supply right now. This is something Phoenix home buyers should keep in mind, if they’re planning to enter the real estate market soon.
In some cities across the country, home prices have begun to slow down or even level off as buyers pull back. But Phoenix is one of those housing markets where prices are expected to continue climbing for the foreseeable future. And supply shortages have a lot to do with that.
“The shortage of starter homes across the country is finally starting to ease, and that’s good news for would-be first-time buyers who have been saving up to make the leap into homeownership,” said Skylar Olsen, director of economic research at Zillow. “Unfortunately, prices of homes in the lower third of the market have risen
so much in recent years that for many households’ budgets they no longer
qualify as affordable.”
Still, some major cities offer plenty of bargains for fist-time home buyers in 2019. They include Tampa, LasVegas, Phoenix and Atlanta.
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