The Desert Housing Market Keeps Coming Back
The nation’s fifth largest housing market is projected to have a solid 2019
According to Greek mythology, the Phoenix was a legendary bird that lived for hundreds of years and seemingly died, only to rise again from its ashes stronger than ever. In a curious twist of irony, the housing market in the city of Phoenix appears to be taking on the same qualities. The Phoenix market was nearly left for dead when the 2008 real estate bubble burst, but nowadays the Phoenix housing market is soaring. Phoenix, it seems, has been reborn.
It doesn’t take an expert to see why the city of Phoenix has traditionally had a strong housing market, albeit a very cyclical one. There’s the warm desert climate, the brilliant sunsets and the sprawling suburbs which contain a much larger supply of affordable homes than its higher-priced neighbor to the west, California. Once thought of strictly as a “retirement state”, Phoenix is increasingly attracting young professionals and young families, many of whom are first-time homebuyers.
But you don’t have to take our word for it. Realtor.com recently predicted that Phoenix will be one of the strongest housing markets in the country in 2019. Although there are signs that the real estate boom may be cooling off in many parts of the country, Phoenix is one of a few major metropolitan areas that should continue to thrive in the coming year.
Let’s look at the specific reasons why the Phoenix housing market has been reborn. To begin with, homes in Phoenix are still affordable, especially when compared to Los Angeles, San Diego, San Francisco and Seattle. The median sales price of a single-family home in Phoenix is a relatively low $267,318. Second, there are good values to be had depending on the area of town you’re looking. “Suburbs in the east Valley, such as Gilbert and Mesa, will continue to do well in the coming year,” said Jill DeBord, an agent with Vision Realty Pros in Mesa, “while young professionals are increasingly able to find value in Tempe, which is located closer to downtown as well as Arizona State University, and where there are a lot of desirable amenities for Millennials.”
Experts are hopeful that the Phoenix housing market could enter a “Goldilocks cycle” in 2019, one that’s not too hot and not too cold. As evidence, experts note that the inventory of homes for sale in Phoenix has increased 5% in recent months, which provides more options to homebuyers and helps to keep the market from overheating. For this reason, Realtor.com predicts that home values in Phoenix will increase modestly by about 5.6% in the coming year.
Even with all the appreciation in real estate that’s occurred over the past four years, home prices in Phoenix are only now approaching their pre-2008 levels when adjusted for inflation. Given the projections by a number of real estate experts, however, the Phoenix housing market could be experiencing a true rebirth in which the new Phoenix market is just as strong, if not stronger than the pre-2008 market. In this sense, the new Phoenix market resembles the Phoenix bird of legend, and has finally emerged from its ashes.
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