Home prices hit a new record in metro Phoenix last year, and so did incomes in the Valley. Some worry about another market crash because of the rising prices. BUT the previous crash came when prices far outpaced incomes AND lending regulations were far too lenient. Buyers were purchasing not just one home they couldn’t afford but several! Plus Buyers were accepting loan terms that were risky such as Adjustable Rate Mortgages instead of Fixed Rate Mortgages. This means over time the monthly payments would go up. Now we are seeing incomes keeping pace with housing costs, stricter lending regulations and more sophisticated Buyers which makes for a strong economy. Thanks
Last June, the median home price for the Phoenix area real estate market hit a record $275,000, passing the record of $266,500 during the boom in 2006. The median home price crashed to $118,500 during the foreclosure crisis in 2011.
Valley home prices have cooled just a bit since last summer with the median now hovering around $273,000. The dip is partly due to a shortage of homes priced below $350,000 for sale in the Phoenix area. Metro Phoenix still ranks among the top affordable cities in the country. However, many people find themselves moving to cities farther out from Phoenix to find the most affordable housing. Housing is predicted to continue with a healthy appreciation of 3%-4% over the next year.
Valley suburbs in Queen Creek, Pinal County and Buckeye are seeing increases in sales and prices now because new and existing homes are more affordable in those areas. With prices keeping pace with incomes, the market remains strong and it’s a great time to buy and sell!