What continues to drive the Phoenix real estate market? There's no sign of it slowing down as we begin the new year, and there are three reasons why:
1. Supply and demand. Right now, the Phoenix market has 65% fewer homes for sale and 35% more demand than usual. Even though there are fewer homes for sale, we’re still seeing record-breaking sales numbers. In fact, in the fourth quarter of 2020, sales rose 19% year over year.
2. First-time homebuyers. Rental rates rose by 16% in 2020, which has brought more and more first-time buyers to the market.
If you plan on waiting, you might be waiting a long time.
”
3. Population growth. Phoenix’s population grew by 17% in 2020, but there was only a 9% increase in homes built. Though there’s lots of new construction happening, we’ve only seen a 3.5% increase in single-family permits—not nearly enough to keep up with demand.
The question I’m hearing every day, then, is: “Should I wait for the market to change to buy or sell?” If you plan on waiting, you might be waiting a long time. The longer we’re in a seller’s market, the longer it will take to balance back out. If you’re a buyer, affordability may play a big part in your decision. Interest rates are averaging just 2.5%, and if prices continue to rise, the house you’re looking at today might become something you can’t afford a year from now.
If you’re a seller, you clearly have the advantage in this market. Homes are appreciating at a rate of 17% across the Phoenix marketplace, so you might be shocked at your home’s current value.
If you’re ready to buy, sell, or have any real estate questions I can answer, don’t hesitate to reach out to me. I’d love to speak with you.
