The Arizona real estate market continues to exhibit a stable trajectory as of February 2024. With no immediate signs of a market crash, cities across Arizona are showing diverse market trends, some with moderate declines or stabilization, while others display positive growth. The overall robust demand for housing underpins a market that is still appealing to homebuyers.
Regional Forecasts
Phoenix, AZ:
In Phoenix, housing prices are expected to see a minor uptick of 0.1% by February 2024, with predictions indicating a 1.2% increase by April and a significant 6.3% rise by January 2025. The Phoenix area remains popular for its affordable cost of living, sunny climate, and job opportunities, contributing to a continuous influx of new residents and tight housing supply conditions.
Tucson, AZ:
Tucson’s housing market shows a slight anticipated decline of 0.1% by February, with a predicted turnaround of a 0.2% increase by April and a more considerable 4.8% rise by the following January.
Lake Havasu City, AZ:
An optimistic forecast is set for Lake Havasu City with projected growth of 0.2% by February, and a 5.2% increase by January 2025.
Yuma, AZ:
Yuma expects a 0.2% rise in housing prices by February and a significant 6.7% increase by January 2025, indicating a flourishing market.
Flagstaff, AZ:
A small dip is projected for Flagstaff with an expected turnaround to positive growth by April 2024 and a 5.7% increase by January 2025.
Other Areas:
Other areas like Sierra Vista, Show Low, Payson, Nogales, and Safford are also expected to see growth ranging from moderate to substantial over the same period.
Market Dynamics
Buyer or Seller's Market?
Arizona’s market seems favorable for both buyers and sellers as of 2024. Median sale prices have risen 6.9% year-over-year as of March, but the number of homes sold fell by 10.4%, and the number of homes for sale rose by 7.2%. These factors suggest that while home values are increasing, the market isn’t overheating.
Pricing Trends
The median list price varies by region, reflecting the different dynamics at play. For example, in Phoenix, the median listing price as of March 2024 was $459,000, reflecting a significant rise from $280,000 in 2019.
Migration Trends
Maricopa County continues to be the largest-gaining county in the nation, adding to the demand for housing in the region.
Housing Inventory
Although the Phoenix area has seen some increase in inventory levels, it remains a "soft" seller's market, meaning sellers need to price homes competitively and be ready for negotiations.
Interest Rates and Buyer Activity
Mortgage rates, after hitting a high in late 2023, have begun to stabilize, and with inflation rates easing, buyer activity is expected to rise. The trend suggests an improvement in affordability, making it a potentially good time for buyers to enter the market.
Home Construction
New home construction sales are expected to outpace the national average, with a 3.5% increase in 2024, underscoring the strong demand in the Arizona housing market.
Looking Ahead
As Arizona's economy thrives with strong job growth across various sectors like technology and healthcare, the real estate market is expected to maintain its resilience. With a stable job market and a cost of living close to the national average, Arizona remains an attractive state for both living and investing in real estate.
While the market dynamics favor a steady rise in home values, the current environment also offers opportunities for buyers, particularly in cities with increasing housing supply and moderated price growth.
As we advance through 2024, the Arizona real estate market presents a promising outlook for those looking to invest, sell, or purchase homes, with indicators pointing towards a balanced market conducive to both buyer and seller objectives.
The data provided above is backed by recent forecasts and market analysis from Zillow, Redfin, Houzeo, and the Home Buying Institute, which have been instrumental in painting a comprehensive picture of the current Arizona real estate market trends​ (Norada Real Estate Investments)​​ (Redfin)​​ (Houzeo)​​ (Home Buying Institute)​.
Comments