Arizona homes have risen in prices and appreciation throughout the past few years. According to the Federal Housing Finance Agency House Price Index (FHFA HPI), Arizona has the second highest annual appreciation between first quarters of 2021 and 2022 at 27.5 percent, behind Florida at 29.8 percent. There are some areas of the state that experience more housing price growth than others. According to an article from AZ Big Media, Phoenix REALTORS’ October 2022 data report shows that in Phoenix; home sellers still get 100.4 percent of their asking price in 2022; median sales prices are still up 5.9% from 2021; and housing inventory increased 136.6 percent.
It would seem like these trends will continue into the new year, keeping the market in the favor of sellers. Norada Real Estate Investments forecast, heading into 2023, that home values throughout Arizona will continue to rise between 2.5 percent to as high as 7.8 percent depending on the area. These projections of high home prices are due to; the state being among the top three with the most rapid population increases; inflation; stagnant wages; high interest rate mortgages; and a lack of available properties despite the aforementioned inventory increase. They believe that for the foreseeable future this trend will likely continue unless inventory outpaces demand or rising interest rates diminish the demand of buyers.
Some experts are more optimistic of the future prospects for buyers since the housing market in parts of Arizona have seen a slowdown in activity with some prices going down, in comparison to the same time last year and early this year. For example, some projections of Phoenix predict that the market will return to a form of normalcy heading into 2023. Andrea Crouch, board president of Phoenix REALTORS has stated to AZ Big Media: “sellers are now having the opportunity to thoughtfully assess a more reasonable and realistic number of offers, while buyers are being spared from having to make what were often on-the-spot, snap decisions with their realtors.”
A big aspect of housing that is highlighted throughout this article is affordability, which Zillow predicts will continue to be among the driving forces in the housing market in 2023. Affordable housing is already a focus in Arizona since a multifamily housing development called Greenlight Communities plans to build several apartment complexes throughout Arizona for those earning between $35,000 and $60,000 a year. The company claims it is bringing more than 4,500 affordable housing units to the state.
Overall, it is difficult to be certain what Arizona’s housing situation will look like heading into the new year as a number of domestic and international factors can always influence the market in ways no one can fully expect. But regardless of whatever goals you may have, it is a great idea to do what you can to secure your finances heading into a year full of economic uncertainty.