Phoenix Housing Market 2022: Prices, Trends & Forecast
Phoenix, Arizona, is one of the most significant metropolitan areas in the state. The sizzling housing market was once overheated, but now it’s showing signs of cooling off. Find out if you should buy or sell with this complete article about the Phoenix housing market prices, trends, and forecasts.
Phoenix Housing Market Prices
Phoenix housing prices continue to rise, despite rumors of the market cooling off. According to Redfin, the median sale price in Phoenix is $430,000, an increase of 10.3% year over year. Keep in mind that this sale price is for all housing types.
Single-family homes are more expensive, even though this category experienced a minor price increase. The median cost of a single-family home in the Phoenix area is $455,000, an increase of 8.3%.
The massive demand for townhouses in the area has resulted in a sharp increase in prices. The median price of a townhouse on the Phoenix housing market is $319,000, an increase of 16.2% year over year.
Condos and co-ops are the cheapest types of housing in the Phoenix area. They have a median price of $300,000. This shows a price increase of 17.6% year over year.
This doesn’t look good for Arizona people looking to buy a house. According to this article, the median income in Arizona is almost $59,000 annually.
Phoenix Housing Market Trends
While prices are rising, sales have fallen in the Phoenix housing market. Sales in all housing categories are down by 30.6% year over year. They’re spending an average of 38 days on the market, an increase of 13 days yearly.
Single-family homes also saw a drop in sales. Year over year, we see a 29.7% decrease in sales. Only 1,255 of the homes sold fell into this category. Houses in this category spend an average of 39 days on the market, an increase of 15 days year over year.
Only 154 of the homes sold fell into the townhouse category. That’s a decrease of 28.7% decrease year over year. Townhouses also spend more time on the market than last year. They spend an average of 34 days on the market, an increase of 8 days yearly.
The housing category of condos and co-ops sees many of the same trends as other categories. Sales are down almost 40% year over year. Only 169 of the houses sold were in this category. Condos and co-ops are spending an average of 33 days on the market, an increase of 3 days year over year.
Other trends show that this sizzling market is slowing way down. It is only somewhat competitive. On average, homes are selling for about 2% below the list price. Only 21% of houses sold above the list price this year. However, almost 53% of homes on the market had price drops.
This signals that although prices are rising in the market, sellers are dropping them to get rid of houses.
Migration trends are slowing down in the Phoenix area. Nationwide, approximately 3% of people looking to purchase a home searched for a home in the Phoenix area.
Foreclosure trends are also up in the area. This has been happening nationwide, according to this article.
Phoenix Housing Market Forecast
The Phoenix housing market isn’t looking suitable for either buyers or sellers. Low mortgage rates last year resulted in a massive surge in the market. This resulted in a low housing supply for both existing and new homes. When there is a housing supply that is less than six months, it causes price increases due to supply and demand.
Now, interest rates and housing prices are rising. This trend is expected to continue.
The unemployment rate is low, but most people do not make enough at their jobs to afford the high housing costs. This is why there were more foreclosures this year. Unfortunately, this trend will continue.
We will continue to see buyers drop out of the market while sellers drop their prices in an attempt to offload homes. These trends will continue until the housing supply balances out. Cash buyers are the only people not impacted by future interest increases. Find a cash buyer today to sell your home in Phoenix.
Some are predicting a housing crash coming, but this is not likely. It’s highly unlikely that we will see another housing bubble burst like in the early 2000s. Although the FED continues to hike up interest rates, it will help the market become more balanced in the long run. However, this could take years.
Rising prices make this a poor time to invest in the Phoenix market. Housing prices are low, but houses are not selling like they did a year ago. Because of that, investors will not make as much money on investments. Unfortunately, now is not the best time for anyone in the Phoenix housing market.
Need to sell your home in Phoenix? We buy houses in the Phoenix area. Give us a call today!
Sellers that want to sell their homes are encouraged to do so sooner rather than later. As interest rates climb, sellers will find it harder to sell a home.
Buyers that want to purchase a home should wait to see if interest rates continue to climb. You don’t want to wind up with your house being auctioned off. If you choose to purchase a home now, make sure you’re prepared financially for the future. Have a nest egg for a rainy day to ensure you can ride out the coming storm.