The real estate market has turned around in Arizona, this is welcome news for anyone that experienced the massive boom and bust cycles of the last 6 years. However, buyers are now finding it difficult to find a bargain and in many cases even to find a home to purchase. Investors are driving up prices, and inventory is low, especially for homes priced under $250,000. That’s not great news for anyone hoping to buy an affordable house to live in.
Arizona is home to one of the nation’s extraordinary turnarounds. The Phoenix-area median home price rose 20 percent over the past year — 6 percent in March alone. But the easy money has already been made.
Anything under 180 thousand is receiving multiple offers and moving very quickly.
Inventory Down, Prices Up
Many of the homes that would have sat on the market a couple of years ago are now getting multiple offers.
Agents are now able to list properties above comps and wait for the market to catch them, a welcomed turn around from the previous years. A property that would’ve listed for $130- to $140,000 is now listing for $160- to $170,000.”
About a quarter of all home sales in Phoenix and Tucson are to investors — people looking to fix and flip or fix and rent, or people looking for a second home.
Many people are still looking for bargains, but the deals are harder to find. One of the main reasons prices are up is because inventory is down — there are fewer homes on the market. There are also fewer foreclosures — about 60 percent fewer than last year in the Phoenix area.
There is still a flow of foreclosures taking place, it’s dramatically down from the peak, which was2008 through 2010.
Homes worth more than $250,000 are moving up in value, too, but more slowly. Rising prices are good news for Arizona homeowners who saw their property plummet in value since 2008, but the investor frenzy on the market’s low end is bad news for people who just want to buy an affordable home and live in it.
When an investor is buying, they will very often offer cash and waive the appraisal contingency, and that is very attractive to a seller because they know the deal is almost certain to go through.
Sellers don’t have to wait to see if a buyer has good enough credit to get a mortgage, and the relatively tight credit is helping to keep the rental market strong — more good news for investors looking for tenants.
A Welcome Turnaround
Having an empty home occupied is good for any neighborhood.
Arizona, and especially Phoenix, experienced one of the biggest bubbles and biggest busts. So this turnaround is especially welcome.