Will Phoenix Be the Number 1 Housing Market in 2017?
National Real Estate websites are predicting Phoenix will be on top of the housing market this year. Realtor.com reports prices in Phoenix will increase by 5.9% and the number of sales will increase by 7.2% in 2017. Different sources report the home values in Phoenix rose from 9% to 11% in 2016. Zillow, a real estate data gathering company reports that our home values increased by 9.4%, from 2015 to 2016. However, Zillow expects we will only appreciated by 3.7% in 2017. The National Association of Realtors is calling the Valley the hottest market for the new year. Nationally home prices rose in 2016 by approximately 6%. In 2017 home prices are expected to increase by only 3.9% which is lower, however considered healthy. In addition, new home builds are expected to go up by 10% in 2017.
The National Association of Realtors looked at 100 US cities and ranked them based on appreciation of home values and the number of homes sold. Phoenix ranked number one with Los Angeles, Boston, Sacramento, Riverside, Jacksonville, Orlando, Raleigh, Tucson, and Portland rounding out the top 10.
Home prices are steadily rising and buyers thinking of waiting until the end of the year will pay more. Factors that attribute to our number one ranking include low inventory and the high demand. This causes prices to increase due to multiple buyers bidding for the limited homes available for sale. The low number of foreclosures in our market, which has bounced back to a normal rate after being one of the hardest hit markets during the bust. The prices of homes are affordable compared to other cities in the study. The median price is $300,000, the fourth most affordable in the NAR study and found to be the eight most affordable large cities in the United States by HSH.com, a mortgage firm’s study. Insurance rates in Arizona are low nationally, since we do not experience national disasters and storms like other parts of the country. The property taxes in Arizona are very low compared to other states in the country, these all contribute to the affordability of our market.
Interest rates have been historically low and have risen slightly in the last few months. Rates are expected to increase in 2017 and this has a bigger impact on a homeowner’s monthly payment and the price of a home that a buyer can qualify to buy as well. If a family were to purchase a home for $300,000 today at an interest rate of 3% their principle and interest would be $1,201.57, if rates increase by 1% that payment would increase to $1,360.63! Prices are expected to increase and interest rates are also going up, if buying a home is in your future now is the time to make a move.
The Census Bureau ranked Arizona as one of the top places to move to from other states! The state is experiencing strong economic growth and in Phoenix we are adding jobs at two time the national rate. We are going into a new year and the market is going to be strong, steady and healthy.