As 2016 comes to a close, we look back on the year to learn how the real estate market has fared and consider what the market looks like for the year ahead. Fortunately, this year the news was good; the Phoenix housing market has finally recovered, going from one of the worst in the country to one of the best. The Phoenix housing market is outpacing the other major cities across the U.S. in growth and recovery, which is reflected in home appreciation that is once again on the rise.
Looking at projections for 2017, we expect the positive outlook for Phoenix to continue. To understand why, we identified five factors that are making an impact on residential real estate in greater Phoenix:
Homes in Phoenix remain affordable, especially when you consider we are living in one of the top 5 metro areas in the U.S. The average home price for greater Phoenix is approximately $255, 000 compared to the average home price in greater Los Angeles, which hovers around $595,000.
- Job growth
Arizona is experiencing an increase in jobs, thanks to the combination of start-ups, existing industry growth and new companies opening offices or moving their headquarters from Northern California and other markets to the area. On a whole, the state is registering 2.9 percent job growth, ranking it sixth in the country.
- Supply and demand
Inventories are tighter than a year ago. Builders cannot build fast enough to keep up with population growth that is ticking up by about 2 percent per year, the foreclosures are almost all gone and resale listings remain flat or down. This bodes well for home values continuing to rise, but may make it tougher if you are in the market to purchase.
- Mortgage rates
Current mortgage rates remain low at under 4 percent for a 30-year fixed loan, making purchasing extremely attractive, especially as rents continue to climb.
The high temps of summer may generate complaints, but for the other eight months of the year Phoenix tops the list of cities to live in for weather, access to recreation and entertainment. The area also boasts some of the best hiking trails, restaurants and local events (Waste Management Open, Barrett Jackson and Spring Training) that draw crowds.
If this isn’t enough to convince you to purchase a new home or invest, perhaps you’d like to speak with our resident expert at Landmark Title Assurance Agency. Senior Escrow Officer for Residential Real Estate, Jonie Alden has lived and worked in the Phoenix market for 40 years. She can be reached directly at firstname.lastname@example.org or call (602) 748 -2800.