The Arizona housing market is an ever-changing landscape that has seen its fair share of fluctuations in recent years. Homebuyers and sellers alike are eager to understand the current state and future predictions of this dynamic real estate market. In this article, we will explore the forecast for the Arizona housing market in 2024, providing valuable insights into the trends and developments that lie ahead.
How is the Arizona Housing Market Doing Currently?
The Arizona housing market has been a topic of great interest, with fluctuating home values and changing trends. Staying informed about the current state of the market is essential for making informed real estate decisions. Let's delve into the data and trends related to the Arizona housing market to gain valuable insights.
Arizona Home Values and Trends
According to data from Zillow, the average home value in Arizona currently stands at $423,436. This value has seen a decrease of 6.1% over the past year, which is an important statistic for anyone considering a real estate transaction. Additionally, homes in Arizona tend to go pending in an impressively short time frame, with an average of approximately 19 days.
Key Statistics:
- Typical Home Values: $423,436
- 1-year Value Change: -6.1%
- Median days to pending: 19 days
The data, as of September 30, 2023, also reveals that the median sale-to-list ratio is 0.997, indicating a strong real estate market. Furthermore, 23.1% of sales in August 2023 were above the list price, while 51.0% were below the list price, showing the diversity of pricing in the market.
Source: Zillow
Arizona Housing Market Predictions 2024
One of the most pressing questions in the real estate market is whether home prices in Arizona will go down in 2024. While there might be minor fluctuations, the overall trend appears to be positive. With an expected increase in home values in major cities like Phoenix and Tucson, it suggests a stable and potentially appreciating housing market.
Hence, the Arizona housing market has its ups and downs, but it remains strong and attractive to both buyers and sellers. Keeping an eye on the latest data and forecasts is crucial for making informed real estate decisions in this dynamic market. As always, consulting with local real estate experts can provide even more insights into the specific areas you're interested in.
The Arizona housing market is not only about the state as a whole but also about its various regions and cities. Understanding the trends and forecasts for specific areas is crucial for making informed real estate decisions.
Phoenix, AZ
Phoenix, as one of the most populous cities in Arizona, plays a significant role in the state's housing market. As of September 30, 2023, the expected value change in Phoenix is 0.3%. Looking ahead, the forecast indicates a slight decrease by the end of December 2023, with a value change of 0%. However, the market is expected to bounce back and grow significantly by September 2024, with an expected value change of 3.2%. This suggests that the real estate market in Phoenix is resilient and poised for growth in the long term.
Tucson, AZ
Tucson is another major city in Arizona with its own unique real estate dynamics. As of September 30, 2023, the expected value change in Tucson is slightly higher than in Phoenix, standing at 0.4%. The forecast for Tucson shows a more positive trajectory, with an expected value change of 0.6% by the end of December 2023, and a promising 3.2% expected value change by September 2024. This suggests that Tucson's real estate market is showing resilience and steady growth.
Lake Havasu City, AZ
Lake Havasu City, located in western Arizona, presents a different picture in the real estate market. As of September 30, 2023, the city experienced a slight decrease with an expected value change of -0.1%. While it's expected to continue declining with a value change of -0.4% by the end of December 2023, the market may stabilize with an expected value change of 2.2% by September 2024. This indicates that Lake Havasu City's real estate market may experience a minor dip but is likely to recover in the near future.
Yuma, AZ
Yuma, situated on the border with California, presents a more optimistic scenario. As of September 30, 2023, the city had a significant value change of 0.5%. This trend is expected to continue with an even higher value change of 1% by the end of December 2023, and a remarkable 4.6% expected value change by September 2024. Yuma's real estate market is thriving, making it an attractive destination for both homebuyers and investors.
Flagstaff, AZ
Flagstaff, known for its stunning natural beauty and outdoor recreational opportunities, has a promising real estate market. As of September 30, 2023, the city has seen an expected value change of 0.3%. What's notable is that this positive trend is expected to continue, with an additional 0.3% value change by the end of December 2023, and a substantial 3.5% expected value change by September 2024. This makes Flagstaff an appealing destination for those seeking investment opportunities in a thriving market.
Sierra Vista, AZ
Sierra Vista, situated near the Mexican border, is another area with a positive outlook in the Arizona housing market. As of September 30, 2023, the city has experienced a value change of 0.2%. The forecast for Sierra Vista indicates steady growth, with an expected value change of 0.4% by the end of December 2023 and 2.3% by September 2024. This trend suggests that Sierra Vista's real estate market is on the rise.
Show Low, AZ
Show Low, a city in northeastern Arizona known for its natural beauty and recreational activities, presents an optimistic real estate picture. As of September 30, 2023, the city experienced a minor value change of 0.1%. However, the forecast shows a more promising future, with an expected value change of 0.1% by the end of December 2023 and a substantial 4.3% expected value change by September 2024. This makes Show Low an attractive destination for potential investors and homeowners.
Payson, AZ
Payson, situated in the heart of Arizona, boasts a thriving real estate market. As of September 30, 2023, the city experienced a significant value change of 0.5%. The forecast for Payson is equally promising, with an expected value change of 0.7% by the end of December 2023 and 3.7% by September 2024. Payson's real estate market is clearly on an upward trajectory.
Nogales, AZ
Nogales, located on the border with Mexico, has a robust real estate market. As of September 30, 2023, the city had a value change of 0.4%. The forecast for Nogales shows consistent growth, with an expected value change of 0.7% by the end of December 2023 and a remarkable 4% expected value change by September 2024. Nogales is a vibrant area for real estate opportunities.
Safford, AZ
Safford, a city in southeastern Arizona, presents a different scenario in the real estate market. As of September 30, 2023, the city had a value change of -0.2%. The forecast for Safford indicates that the market may experience a minor decrease, with an expected value change of -0.4% by the end of December 2023. However, it is expected to stabilize and recover with a value change of 1.3% by September 2024.
These regional trends and forecasts showcase the diversity of the Arizona housing market. Whether you're considering cities like Flagstaff, Sierra Vista, Show Low, Payson, Nogales, or Safford, it's essential to stay informed about local market conditions and consult with local experts for a deeper understanding of each area's unique dynamics.
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If mortgage rates go on a decreasing trajectory in 2024, prospective buyers may return to the market to increase demand. The important thing to take away from the shortage of housing units is that economists anticipate that the price of homes may continue to rise slowly in the AZ housing market in 2024.
On the supply side, it favors property sellers. The bottom line here is that a stark imbalance between supply and demand continues to put upward pressure on AZ home prices. This partly accounts for the somewhat bold Arizona real estate market forecast for the coming years. The other factors are that the economy of Arizona is robust, but the state is struggling with elevated levels of inflation and housing price growth. In 17 different states, the unemployment rate is at an all-time low.
As of September, Arizona has a 4.0 percent unemployment rate, a 0% change from a year ago. The pace of population increase in Arizona is the fourth fastest in the country. A significant number of states saw a loss in population as a consequence of COVID-19, low birth rates, and migration to neighboring states. Florida, Texas, and Arizona are the three states with the most rapid population increases. Years of underbuilding are a key contributor to the low inventory.
According to a study conducted by the Weldon Cooper Center for Public Service at the University of Virginia, Arizona's population is projected to expand by 26.1% between 2020 and 2040 - an increase of 1,897,585 people. As the population is expected to rise, there are only a few available homes on the market.
This also raises a bit of concern that in Arizona, wages are not keeping up with the rising costs of housing. When prices go up, some buyers can no longer afford to buy and drop out. The faster that pricing goes up, the more buyers tend to drop out, at least in a healthy market. Mortgage rates also play an impact here. In the past few years, interest rates have remained at historically low levels.
This is one of the causes that contributed to a nationwide increase in home-buying activity. However, rates have increased somewhat during the previous several months in 2022. If rates continue to rise, the Arizona real estate market might experience a general cooling trend. However, the persistent supply deficit is projected to "outweigh" this effect, guaranteeing that the AZ housing market will stay competitive long into 2023.
Of course, there is also a great deal of uncertainty in the air. From escalating inflation to the conflict in Ukraine, several elements might affect the economy in the future. Consequently, it is difficult to make reliable projections for the Arizona real estate market or any other market in the United States.
Here's the median price of a home in some of the counties of Arizona (source: Realtor.com):
- Maricopa County: Median listing home price - $549.5K, Listing price per square foot - $284
- Coconino County: Median listing home price - $720K
- Cochise County: Median listing home price - $299.9K
The data from Realtor.com shows that the housing market in Arizona is diverse and offers options for buyers with different budgets.
Arizona's housing market has over 900,000 renter households, accounting for 36% of the total number of households. Rental prices in Arizona have become out of reach for many residents, with wages not keeping pace with rising rents and home prices. Affordability remains a challenge for low-income workers.
According to the National Low Income Housing Coalition (NLIHC), to afford a fair-market rate two-bedroom rental in Arizona, a household must earn $43,892 annually, translating to an hourly Housing Wage of $21.10. The cost burden is prevalent in certain neighborhoods, while others have a lower percentage of housing cost-burdened households.
Flagstaff MSA and Phoenix-Mesa-Scottsdale are among the most expensive areas, with higher hourly wages needed to afford a two-bedroom rental.
Source: The National Low Income Housing Coalition
In conclusion, the Arizona housing market shows promising signs for the future, with expected growth and stability. However, various factors such as population growth, wage trends, inflation, and mortgage rates can impact the market's trajectory. Staying informed and consulting with local experts are key to making informed decisions in this dynamic real estate landscape.
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