Market Insights
Phoenix Valuations monthly blog capturing national and local trends impacting the real estate and appraisal market
Last updated September 16, 2024
Biltmore Fashion Park sold by Macerich (Bizjournals.com)
Macerich sold its 50% stake in Biltmore Fashion Park to Red Development, reducing $110 million in debt. Red now fully owns the center and plans further development, including a mixed-use tower. Macerich also completed key deals, acquiring the rest of Arrowhead Towne Center and refinancing Chandler Fashion Square.
Why housing prices are on the rise in metro Phoenix (Bizjournals.com)
Home prices in metro Phoenix rose by 4.4% in May, driven by a strong job market and an influx of high-net-worth individuals. Phoenix remains resilient, with strict bank lending practices ensuring stability, unlike the Great Recession. Though mortgage rates have reached 7%, experts expect possible softening later in the year, but prices haven't significantly dropped due to strong demand.
Valley office tenant activity sees Q2 uptick despite more space being vacated (Bizjournals.com)
Phoenix's office market faced its worst quarter for net absorption in Q2, with over 883,000 square feet of negative net absorption, despite significant deals like Dutch Bros and WillScot Mobile Mini's new offices. Vacancies rose to 19%, but there remains strong tenant interest, especially in Scottsdale and the Camelback Corridor. The federal CHIPS Act could boost office demand, with Phoenix projected to add 7,000 tech jobs by 2028, spurring future growth.
X Phoenix luxury tower faces multiple lawsuits; project's future in question (Bizjournals.com)
The second phase of X Phoenix, a luxury residential tower, has faced delays and legal challenges as contractors and subcontractors claim tens of millions are owed for completed work. Despite these setbacks, Phoenix officials are working with developers to secure new financing and protect the city’s interests. Meanwhile, X Co.’s nearby project, X Roosevelt, continues to progress, with completion expected by fall 2025.
Silverleaf estate in Scottsdale sold for highest price in Arizona so far in 2024 (Bizjournals.com)
A Modern Mediterranean estate in Scottsdale’s Silverleaf community sold for a record $17 million, the highest home sale in Arizona so far in 2024. The custom-built 9,686-square-foot home by Salcito Custom Homes features stunning views and was under contract within three weeks. J. Andrew Turley, president of Phoenix Valuations, confirmed the sale as the largest of the year, highlighting the strength of the luxury market despite the typically quieter summer months.
Plans for CyrusOne, Pacific Proving data center campuses move forward in Mesa (Bizjournal.com)
Mesa's Planning and Zoning Commission approved two large data center projects, including Pacific Proving’s 2-million-square-foot campus and CyrusOne's 1.4-million-square-foot campus. Despite some resident concerns, the projects will bring high-paying jobs and reinforce Phoenix’s role as a key hub for tech infrastructure.
Phoenix cooling systems maker Air2O plans facility expansion (Bizjournal.com)
Phoenix-based Air2O has surpassed $50 million in product orders, driving the company to expand its north Phoenix manufacturing facility. Specializing in HVAC systems for mission-critical industries like data centers, semiconductors, and lithium-ion battery facilities, Air2O plans to double its manufacturing space and add 50 new jobs by the end of the year. With its rapid growth and continued innovation, the company is poised to further capitalize on Arizona's booming tech and industrial sectors.
The housing market remains strong for sellers, with nearly one-third of homes selling above list price and median days on the market dropping to 22. Sellers are receiving an average of 2.9 offers per home, and many buyers are waiving inspections and appraisals. However, optimism about increased buyer and seller traffic has declined, with only 13% expecting a rise in buyer activity and 17% predicting an increase in seller traffic in the coming months. Despite this, the market's momentum continues to favor sellers.
Amazon announces 500 new jobs in Goodyear (Bizjournals.com)
Amazon has confirmed plans to open a new 1.2 million-square-foot fulfillment center in Goodyear, bringing 500 new jobs to the area. This is Amazon's third major lease in Arizona this year, totaling 3.5 million square feet in new industrial space across Goodyear, Buckeye, and Glendale. The new facility is part of the ongoing industrial growth in Phoenix, which has seen nearly 22 million square feet of new developments come online this year, helping to reduce vacancy rates.
New listings jump 25% in Phoenix (PhoenixAgentMagazine.com)
New listings in Phoenix surged by 25% in June, one of the largest year-over-year increases in the nation, according to the RE/MAX National Housing Report. Realtors added 7,942 new listings, up from 6,354 in June 2023, marking the second-highest increase among metro areas. This rise in inventory offers more options for buyers, though high interest rates continue to impact overall sales activity.
Why Maricopa County was ranked No. 1 for economic development (Bizjournals.com)
Maricopa County has been ranked No. 1 in the U.S. for economic growth, thanks to a significant increase in jobs and business investment, according to Site Selection magazine. The county's success is attributed to major projects like Taiwan Semiconductor Manufacturing Co.'s $65 billion campus and a focus on workforce training in key industries such as healthcare and advanced manufacturing. With strong infrastructure, business-friendly policies, and community development efforts, the region continues to attract large-scale investments and job opportunities.
A 1.2 million-square-foot Amazon-leased warehouse in Glendale was sold for $128.1 million, marking the largest single-building industrial sale in metro Phoenix this year. The buyer, BlackRock Realty Advisors Inc., acquired the property at over $100 per square foot. The sale is part of CRG's ongoing success with The Cubes at Glendale industrial park, where four buildings have been sold for a combined $407 million, reflecting the continued demand for industrial properties in the Valley.
Surprise and Gilbert both ranked in the top 10 best cities for first-time homebuyers, according to WalletHub's latest report. Surprise, ranked sixth overall and second among small cities, stands out for its booming real estate market and affordability. Gilbert, ranked ninth overall and fourth among midsize cities, offers a strong real estate market and affordability as well. Other Phoenix-area cities like Scottsdale, Chandler, Peoria, and Mesa also ranked in the top 30, reflecting the region's appeal to new homebuyers.
Scottsdale, Chandler, Gilbert among best cities for renters (PhoenixAgentMagazine.com)
Multiple cities in the Phoenix area rank among the best places for renters in the U.S., according to studies by WalletHub and RentCafe. Scottsdale, Chandler, and Gilbert all ranked in the top 10, with Scottsdale earning praise for its thriving job market, high-quality infrastructure, and spacious rental properties. Chandler and Gilbert were highlighted for their quality of life, with Gilbert also recognized as one of the safest cities in the nation. Arizona's renter protections and affordable living in close proximity to major amenities contributed to these cities’ high rankings.
The Wealthy 1000: These Arizona ZIP codes made the cut (Bizjournals.com)
Paradise Valley's 85253 ZIP code has been ranked the wealthiest in Arizona and 418th in the U.S., according to a new Wealthy 1000 report from The Business Journals. This ranking, which considers factors like income, home equity, and savings, contrasts with the Phoenix Business Journal's earlier 2024 rankings that placed Scottsdale's 85262 at the top based solely on median household income. Eleven Arizona ZIP codes made the Wealthy 1000 list, further highlighting the state's affluent areas, with several Scottsdale and Phoenix ZIP codes also featured.
Intel launches Arizona semiconductor registered apprenticeship program (Bizjournals.com)
Intel Corp. is launching its first U.S. registered apprenticeship program in Arizona to train semiconductor technicians, supported by a $4 million state investment. This initiative aims to expand opportunities for underrepresented groups and address the growing demand for skilled workers in Arizona's booming semiconductor industry.
Investor activity in the housing market has rebounded, with investors purchasing 14.8% of homes sold in the first quarter of 2024, the highest share on record. However, this uptick comes amid lower overall home sales, as investor purchases are still below pandemic-era levels but higher than pre-pandemic trends. Smaller investors are now driving much of the activity, particularly in Midwest and Southern cities, reflecting a shift from larger investors who have pulled back due to rising home prices and mortgage rates. Despite these challenges, investors continue to contribute to the rental market by acquiring more properties than they sell.
Virgin Galactic closer to takeoff at Mesa-Gateway Airport (Bizjournals.com)
Virgin Galactic’s Mesa facility will create hundreds of high-wage jobs and enhance the city’s reputation as an aerospace hub. With assembly starting in 2025 and commercial operations by 2026, it positions Mesa as a leader in space technology. The project also benefits from tax incentives, supporting further growth in the aerospace sector.
Mortgage lender Newrez to cut 73 workers in Tempe (Bizjournals.com)
Pennsylvania-based Newrez LLC plans to lay off 73 workers at its Tempe facility by the end of August, part of a larger wave of layoffs across Arizona, Colorado, and Florida, totaling 569 employees. The company cites restructuring after acquiring Computershare Mortgage Services and Specialized Loan Servicing. Andrew Turley, president of Phoenix Valuations, noted a steep decline in mortgage appraisals due to rising interest rates, leading to industry-wide downsizing and business pivots. Experts predict more mergers, acquisitions, and layoffs as the mortgage industry faces ongoing instability.
Scottsdale vs Paradise Valley: Phoenix suburbs compared (BusinessInsider.com)
Phoenix offers easy living, attracting tech workers, executives, and retirees, but the wealthiest are flocking to its surrounding suburbs—Scottsdale and Paradise Valley. While both offer luxury, Paradise Valley is more exclusive, known as the "Beverly Hills of Arizona," with larger lots, privacy, and proximity to downtown Phoenix. In contrast, Scottsdale, though expansive with a booming real estate market, has smaller lot sizes and more residential communities. The flexibility for custom homes in Paradise Valley further sets it apart, making it a prime destination for high-profile residents.
Housing affordability got worse in Q2 — and homeownership costs hit a new high (Bizjournals.com)
Housing affordability remained a challenge in the second quarter of 2024, with 99% of U.S. counties seeing single-family homes and condos less affordable than historical averages, according to Attom Data Solutions. Despite an increase in housing inventory, higher mortgage rates and rising homeownership costs, including property taxes and insurance, have further strained affordability. The national median home price rose 4.7% annually, outpacing wage growth, while homeownership costs now consume 35.1% of the average national wage, the highest level since 2007.
Days on market drops in Phoenix as inventory swells (PhoenixAgentMagazine.com)
According to ARMLS, Phoenix's housing market remains strong with days on the market dropping from 70 last year to 66 today, even as inventory increased by 50%. Despite the higher supply, homes are still selling, indicating continued demand and a resilient market. This showcases Phoenix's robust housing sector, where supply growth hasn't slowed down the pace of sales.
Pair of Paradise Valley estates sell, including one owned by former MLB star (Bizjournals.com)
Joan Levinson of Realty One Group recently sold a 9,094-square-foot estate atop the Phoenix Mountains Preserve for $11.75 million, down from the original $16 million listing. The sale occurred quickly after a price reduction, motivated by the seller's personal circumstances. Levinson also closed a $12.5 million deal on another Paradise Valley estate soon after and has more high-value properties under contract, though she notes that the summer heat has slowed the luxury market slightly.
Peoria, Arizona, faces growing challenges as its population and businesses expand, while its primary water source, the Colorado River, diminishes due to climate change. City officials like Brett Fleck are focusing on long-term solutions, such as water recycling and infrastructure projects, to secure the city's future water supply. Arizona's broader efforts include costly but necessary investments in dam expansions and advanced water purification systems, supported by federal funds, to reduce reliance on dwindling river and groundwater supplies.
Komatsu unveils details of massive Mesa expansion for sales, service center (Bizjournals.com)
Komatsu, a Japanese manufacturer, is set to triple its footprint in Mesa with a new 225,000-square-foot sales and service facility at the Mesa Ellsworth business park. The multimillion-dollar expansion is expected to create 100 new jobs and open by spring 2026, adding significant capacity for the repair and maintenance of mining equipment. Komatsu's decision reflects the region’s growing economic potential, aligning with the broader trend of Japanese companies expanding into Arizona, especially following the arrival of Taiwan Semiconductor Manufacturing Co. in Phoenix.
Mortgage rates tick lower for third straight week (PhoenixAgentMagazine.com)
The average 30-year fixed mortgage rate dropped to 6.87%, marking the third consecutive week of declines, according to Freddie Mac's Primary Mortgage Market Survey. This decline is attributed to signs of cooling inflation and expectations of a future Fed rate cut. With lower rates and improving housing supply, Freddie Mac’s chief economist, Sam Khater, encourages potential buyers to shop around for the best mortgage rates, as they can vary significantly among lenders.
Recycle building materials and get a tax deduction - Phoenix Business Journal (bizjournals.com)
The president of Phoenix Valuations was featured in an article in the Phoenix Business Journal regarding tax salvage program for repurposing existing building materials for tax credits. This option is a growing trend amongst homeowners and developers with obsolete housing, housing with deferred maintenance, housing with functional obsolescence, and outdated elements.
Build-to-rent communities are a growing trend from a developer perspective due to the high interest rate environment most homeowners and would be homeowners have found themselves in. Over 256,000 identified residents in Phoenix have been reported as “high cost burdened in housing” and this growing trend to building housing stock to alleviate housing costs in the form of rent appears to gain momentum.
In late May 2024, a New York development group was the winning bidder in land surrounding the TSMC chip manufacturing plant to the tune of $56.28 million. This transaction further demonstrates the areas hub as a global destination for investment, jobs, and infrastructure around the plant.
According to Redfin, reporting in April 2024, for the first quarter, investors purchasing rate grew a modest +0.5% year over year. This may be a signal that investors who have played a larger role especially in Phoenix Metro over the last few years, might be accelerating their investment into the overall housing market.
Arizona’s largest hospitality transaction occurred in April 2024 as the Arizona Biltmore a historic landmark inspired by Frank Lloyd Wright, sold for a record $705 million. Arizona’s tourism industry continues to be a large facet in the overall Arizona economy and job sector.
Redfin: Median home-sale price reaches record level - The Business Journals (bizjournals.com)
According to RedFin analytics, the median sales price of homes in the US reached an all-time high of $383,725 in April 2024. The trend of rising pricing in housing stock continues to create an affordability issue to Americans either moving, entering the housing market, or trading into new housing stock.
Number of millionaires by state - The Business Journals (bizjournals.com)
A recent report in the Business Journals reported the acceleration of high net worth / millionaires movements within the US is accelerating and getting amplified in certain areas, in terms of Phoenix Metro, Scottsdale, Paradise Valley and East-Phoenix / Camelback Corridor continue to be an area drawing a large portion of these relocating millionaires.
Two luxury properties listed in Desert Mountain - Phoenix Business Journal (bizjournals.com)
The President of Phoenix Valuations has been featured in the Phoenix Business Journal shedding light and opinions regarding a few crown jewel architecturally inspired projects in North Scottsdale Desert Mountain which is one of the highest demand boroughs in all of Phoenix Metro in April 2024.
DOJ will intervene in NAR’s commission lawsuit settlement: KBW analysts - HousingWire
The Department of Justice plans to intervene in the NAR’s settlement of the transparency of commissions costs to the public participating in buying and selling of housing in a traditional manner where brokers are involved. This will undoubtedly add more pressure to the NAR and its members to adapt to the litigation findings and pressure now by the federal government.
TSMC to build 3rd Phoenix factory with new $6.6B from CHIPS Act (azcentral.com)
In early April 2024, Taiwan Semiconductor Manufacturing Corporation announced a $6.6 billion grant from the federal CHIPS Act which burgeon its global momentum at the $65 billion dollar plants in North Phoenix. The grant will be appropriated in the expansion into building a third chip plant for TSMC.
Henley & Partners in March 2024 ranked Scottsdale Arizona as the number two city in the entire United States for adding millionaires both organically and by inbound migration to its core of ultra wealthy demographics. Inbound wealth continues to be a major theme in spring of 2024 from a economic standpoint.
https://www.washingtonpost.com/business/2024/03/20/biden-chips-intel-phoenix/
In March 2024, the largest grant ever given to manufacturing of computer chips and computer chip R&D was granted to Intel which features one of its largest plants in Chandler Arizona to the tune of $8.5 billion. This will undoubtedly add additional momentum to the already strong computer chip industry and high skills/wage industry in Phoenix Metro.
Wealthiest buyers in Arizona are gravitating toward North Scottsdale in areas and boroughs that features gated communities, golf courses, and lifestyle options which are pushing pricing to never seen before levels.
BestBrokers compiled a list of the least affordable states in the US and Arizona was ranked as number nine as least affordable in February 2024. Affordability continues to be a concern and challenge for many living in the state of Arizona due to a housing shortage coupled with some of the highest inbound migration rates in the US and a burgeoning job economy.
Millionaire Home Buyers Have Turned Paradise Valley Into ‘a Different World’ - WSJ
The Wall Street Journal compiled a featured story on the town of Paradise Valley and it’s rapid increase in inbound millionaire migration patterns that have transformed the small town into one of the major destinations in the United States for high net-worth migration paradigm. The town of Paradise Valley continues to see price appreciation as a result partly due to the demand from the high-net worth relocation from out of state buyers.
Sales activity in February 2024 has picked up dramatically in Phoenix metro, the number of homes actively for sale was notably higher compared to last year, growing by 7.9% according to Realtor.com. With the rise in inventory, time spent on market dropped to more than two weeks shorter than pre-pandemic levels. Time on market dropped 14 days compared with 2023, good for second biggest drop in the nation.
https://www.axios.com/local/phoenix/2024/02/07/mortgage-free-homeowners
Phoenix continues to attract cash buyers and high equity homeowners as a place holder for their residential assets. Census Data tracked by Axios in February 2024 reported that 33.8% of homeowners in Phoenix own their house outright, that’s up from 32% in 2017.
Investors continue to play a large role nationally in overall residential purchasing activity. Redfin reported in February 2024 that investors accounted for 26.1% of all “low-priced homes sold in the United States in the fourth quarter”, this is the highest share on record and up from 24% a year ago.
https://www.bizjournals.com/phoenix/news/2024/01/30/home-prices-headed-back-up-in-metro-phoenix.html
Late January 2024, Case-Shiller reported that prices in Phoenix for the first time in nine months of steady declines in prices, a reverse was in order a January reversed that trend with month-over-month gains.
In January 2024, WalletHub announced its list of 182 cities with the Best Cities for Jobs in 2024, and Scottsdale ranked number one in the entire country. Tempe made the top 20 list on the ranking at number 13 and Chandler ranked 26. This further conveys the local job economy on a national level being a burgeoning place for jobseekers with fertile ground for expected job growth and income growth which underpins the real estate market.
High interest rates continue to be a headwind in the residential housing market, as nationally sellers are slashing their list prices at record levels according to Redfin Corp, which found 20.8% of active listings nationally had a price drop in October as reported in December 2023.
In December 2023, it was announced that Phoenix Metro continues to attract semi-conductor investment and burgeoning job activity as ASM International plans to invest $300 million in a new headquarters and research and development facility in Scottsdale that will create 500 new high skill jobs in 2026.
https://www.bizjournals.com/phoenix/news/2023/11/13/domestic-migration-patterns-impact.html
Recent data in November 2023 from a leading research firm reported that Arizona had fourth highest inbound net migration from 2021-2022 with +78,000 in the country. Continually buffering the demands on housing stock.
Seven Arizona billionaires land on Forbes 400 - Phoenix Business Journal (bizjournals.com)
Arizona continues to be a burgeoning market for those in ultra wealthy stratosphere calling the state home. Seven of the Forbes wealthiest Americans reside in Arizona as reported.
US Housing Market Is Starting to Flash Some Hope for Homebuyers (businessinsider.com)
Sellers are slashing asking prices, Redfin says | Fortune
Early fall 2023, signs of the real estate market shifting toward more competing listings was a welcome sign to potential buyers who have had less than typical listing on the market in relative historic terms. In addition to rising listings volume, the number of listings showing decreases in list prices gained in volume.
https://www.reuters.com/markets/us/us-existing-home-sales-drop-prices-up-year-earlier-2023-08-22/
Data from the NAR, reported that July home sales volume activity nationwide continues to slide as sales fell 2.2% from a number of 4.16 million units in June 2023. Sales in the Western US continue to see the sharpest declines in sale activity largely due to waning demand as a result of mortgage interest rates in the 7-8% range. Home resales nationwide fell 16.6% year over year basis in July 2023. Inventory remains tight as homeowners with contracted servicing mortgage interest rates in the 2-4% range are less likely to sell their housing stock to enter the market at 7-8% range.
Study published 08/01/2023 by MyeListing revealed that the “great migration” of Americans continues to shake-up the US and where specifically the segment of wealthy Americans are moving from and moving to. IRS data analyzed revealed that States with the Largest Net Negative Tax Income Migration for outflows ranked worst were: California (1 @ -$343.2 million), New York (2 @ -$299.6 million), Illinois (3 @ -$141.7 million). . IRS data analyzed revealed that States with the Largest Net Positive Tax Income Migration for inflows ranked best were: Florida (1 @ +12.4 billion), Texas (2 @ +10.7 billion), Arizona (3 @ +9.4 billion). Arizona continues to attract high net worth income earners at a robust state.
Axios reported that the Phoenix residential real estate market has largely been “locked up” as 67% of Arizona homeowners have mortgages below 4% per Redfin data. Given the current mortgage market in summer 2023 in the 6-8%, this lack of appetite for homeowners to trade in their existing mortgages for a mortgage much higher, potential sellers have been particularly resistant to selling which is compressing the available inventory and housing stock.
https://moneywise.com/real-estate/us-real-estate-investors-losing-money-on-roughly-1-in-7-homes
Investors continue to be a large component of all residential housing with Phoenix market reported by Redfin that over 30% of all homes sold by investors in March reported to lose money on their venture capital business model. Phoenix was rated as the worst impacted market for investors to have the highest rates of investor loss.
Short term residential market continues to be in a state of influx with low levels of barrier of entry in Phx Metro coupled with higher levels of market participants entering the marketplace. There continues to be a robust debate on the market finding its “new normal” but many experts cite this market to be nuanced and the short term rental space largely depends on a homes core attributes for overall level of fiscal success (location, floorplan utility, uniqueness of unit, and digital marketing approach).
https://www.reuters.com/markets/us/us-existing-home-sales-drop-prices-up-year-earlier-2023-08-22/
Data from the NAR, reported that July home sales volume activity nationwide continues to slide as sales fell 2.2% from a number of 4.16 million units in June 2023. Sales in the Western US continue to see the sharpest declines in sale activity largely due to waning demand as a result of mortgage interest rates in the 7-8% range. Home resales nationwide fell 16.6% year over year basis in July 2023. Inventory remains tight as homeowners with contracted servicing mortgage interest rates in the 2-4% range are less likely to sell their housing stock to enter the market at 7-8% range.
Study published 08/01/2023 by MyeListing revealed that the “great migration” of Americans continues to shake-up the US and where specifically the segment of wealthy Americans are moving from and moving to. IRS data analyzed revealed that States with the Largest Net Negative Tax Income Migration for outflows ranked worst were: California (1 @ -$343.2 million), New York (2 @ -$299.6 million), Illinois (3 @ -$141.7 million). . IRS data analyzed revealed that States with the Largest Net Positive Tax Income Migration for inflows ranked best were: Florida (1 @ +12.4 billion), Texas (2 @ +10.7 billion), Arizona (3 @ +9.4 billion). Arizona continues to attract high net worth income earners at a robust state.
Axios reported that the Phoenix residential real estate market has largely been “locked up” as 67% of Arizona homeowners have mortgages below 4% per Redfin data. Given the current mortgage market in summer 2023 in the 6-8%, this lack of appetite for homeowners to trade in their existing mortgages for a mortgage much higher, potential sellers have been particularly resistant to selling which is compressing the available inventory and housing stock.
https://moneywise.com/real-estate/us-real-estate-investors-losing-money-on-roughly-1-in-7-homes
Investors continue to be a large component of all residential housing with Phoenix market reported by Redfin that over 30% of all homes sold by investors in March reported to lose money on their venture capital business model. Phoenix was rated as the worst impacted market for investors to have the highest rates of investor loss.
Short term residential market continues to be in a state of influx with low levels of barrier of entry in Phx Metro coupled with higher levels of market participants entering the marketplace. There continues to be a robust debate on the market finding its “new normal” but many experts cite this market to be nuanced and the short term rental space largely depends on a homes core attributes for overall level of fiscal success (location, floorplan utility, uniqueness of unit, and digital marketing approach).
Case-Shiller index reported in early summer that the year over year % change was down approximately -6%, indicating a market rebalancing and modulating due to the continued interest rates pressure and household income debt levels at record highs.
https://thehill.com/business/4027962-investor-home-purchase-fall-by-record-amount-report/
Nationally, investor activity appears to be drastically pulling back as early 2023 investor activity accounted for as much as 40%, but by late May and early June the investor activity nationally has fallen to 18-20% as a total volume.
https://www.axios.com/2023/06/21/phoenix-chips-cars
Manufacturing at large continues to be a robust sector within the Arizona local economy. Large scale manufacturing groups like TSMC, LG, and EVelution are making Arizona a destination for jobs and a nationwide leader in chip manufacturing and electric battery dominance. Furthermore, a report by AXIOS featured Phoenix as one of the nation’s leaders in terms of technology and innovation notably due to the aforementioned manufacturing sectors but also a space for testing self-driving automation. As much as five EV manufacturers have set up their plants in Arizona since 2016.
https://www.cnbc.com/2023/05/11/homebuyers-are-interested-in-these-top-10-neighborhoods.html
HouseFresh a data online company tracked and segmented analytics from Zillow and put together their list of the 10 most queried neighborhoods for the US and Phoenix East Camelback / Camelback Corridor as the third most queried neighborhood. This emboldens the notion that Phoenix Metro is still a leader for inbound migration.
S&P Dow Jones: S&P CoreLogic Case-Shiller Phoenix Home Price NSA Index
Recent data reported by Core Logic, the Case Shiller Index reported for Phoenix metro a moderating macro trend with data ending in February 2023 conveying a negative annualized rate of -2.07%.
Rich States, Poor States: Arizona Economic Outlook Rank
Despite moderating prices in residential real estate adapting to the interest rate environment, the state of Arizona continues to be a top tier economic machine, as early 2023 data ranked Arizona as having the third most robust economic output of all 50 states.
United States Census Bureau: Growth in the Nation’s Largest Counties Rebounds in 2022
Migration patterns continue to be a leading indicator for Maricopa County in buttressing the local real estate market, as US Census released a recent report showing that the county ranks number one in terms of inbound migration sheer volume, this is the 7th year in a row Maricopa county has lead the country for this metric.
Construction Coverage: The Hottest U.S. Real Estate Markets of 2022
As the spring 2023 season changes to adaptations in demand, listing inventory, interest rates, and sellers have become more “friendly” in terms of striking deals with buyers, a recent report by Construction Coverage ranks Phoenix as falling in its ranking of hottest housing markets to number 41 on the list.
Forensic research studying the economy of Arizona during the pandemic showed that the job economy of the state was one of the most resilient and robust economies in the entire country according to the Brookings Report published February 2023
Phoenix Agent Magazine: Home appreciation drives significant wealth gains in Phoenix
Recent data conveys the robust nature of the appreciation experienced in Phoenix Metro from 2017-2022 from the NAR’s data index shows that Phoenix Metro showed the second highest percentage change over this five year window at 118% price appreciation. Many attributes are driving the rise in prices in housing stock ending in 2022, most notably a robust job economy, friendly business/personal state tax structure, and inbound migration.
Redfin News: The Typical U.S. Home Changes Hands Every 12 Years, Down From 2020 Peak
Recent data published by Redfin in March 2023, shows that average homeownership in a house is 12 years, down from the peak of 13.4 years in 2020 and 12.9 years in 2021. Analysts expect the average rate to continue to drop in the coming years as job portability and migration picks up.
Recent commentary by local Phoenix Association of Realtors president in February 2023 implied a rebalancing of the buyers and sellers market. The shift in the marketplace has been due to a myriad of factors (mortgage affordability, housing affordability, competing listings, and seller concessions rates), the rebalancing is a welcome state to many parties involved in early 2023 as the second half of 2022 saw the lowest levels of transactions on record while sellers and buyers assessed their options.
Fortune: The housing market correction just took a new turn
Housing analysts continue to report on the shifting attitudes of sellers in the changing landscape nationwide. More sellers are opting for price decreases and seller friendly terms to buyers as the market shifted from a sellers market to a buyers market from spring 2022 to summer 2022 in one of the quickest shifts all time.
Fox Business: Household debt skyrockets to highest level since 2008 financial crisis
Household debt continues to be a headwind for the American economy and likely is impacting the housing sector. Recently Fox News reported in Feb 2023 that household debt ranks at its highest level since 2008.
Real Estate Consulting: Top 10 Markets with the Most New Home Supply
Phoenix metro by the end of 2022 as reported in February 2023 that the offerings of new homes communities for sale by builders has the second highest rate of offerings in the entire nation. A welcome sign to shifting the tightness of available housing stock that the area experienced up until summer 2022.
Property Appraisal Zone: Housing Affordability Hits Record Low but Turning Point Lies Ahead
Housing affordability continues to be a major theme in residential real estate. According to the NAHB, housing start costs (bottlenecks in supply chain, rising construction, labor compression issues) have contributed to the affordability metrics declining in three straight quarters and now in 2023 the metric stands at its lowest level since the NAHB started tracking in 2012.
Yahoo Finance: 'Probably past the worst': Housing shows signs of stabilizing to round out 2022
Signs that the market’s worst sentiment and lowest activity levels are starting to take shape in February 2023. Builder sentiment conveyed a change from the lowest point a month prior in recent memory. Also, inventory continues to remain tight as available options for existing listings is just 10% higher than a year ago. Pending sales continues to gain modest traction, as December 2022 ended a six month slide in pending activity metrics.
Fox Business: Mortgage activity rebounds, skewed toward high priced homes
As mortgage rates have fallen over the course of 5 straight weeks into the first week in February 2023, mortgage applications have risen and average loan balances to highest levels since May 2022 in an uptick in recent activity, however, overall applications in February 2023 are still 58% lower from a year Prior.
National Mortgage News: Homebuyers prefer permanent buydowns rather than temps
Black Knight, one of the nation’s largest mortgage servicers and data providers on mortgage metrics reported that current buyers in early 2023 and late 2022 prefer permanent buydowns rather than temporary rate buydowns from their mortgage options both in sole purchasing of these options and in seller concessions due to the higher interest rate environment in relative terms to prior levels.
Market Watch: Mortgage demand recovers as mortgage rates fall for 5th week in a row
Mortgage demand continues to gain steam in February 2023 as applications are up 7.4% from the late January 2023.
WSJ: Home-Buying Companies Stuck With Hundreds of Houses as Demand Slows
Many interim home purchasing groups have been stuck and saddled with more inventory than their business models accounted for since the price volatility experienced in summer 2022 thru early 2023. It remains to be seen how much inventory these nouveau ventures will unload on the traditional open market if at all.
Phoenix Metro remains to be named as an MSA with market volatility as a recent national story citing an economist from Goldman Sachs sounded the alarm about the likelihood of 20% price decreases for the immediate future in the valley sun. The economist attributed many factors from the prior downturn in 2008, however, the valley’s economic activity is more robust and dynamic than the prior downturn.Expansion in the industries of high wage sectors of semiconductor, electric vehicle manufacturing /engineering, technology, software, and healthcare are many of reasons for a local economy less dependent on construction and tourism.
Forbes: A Record Share Of Home Sellers Gave Concessions To Buyers In The 4th Quarter
A record number of home sellers nationally have reportedly given buyer friendly concessions to get deals completed at a rate never seen before. According to Redfin, 41.9% of home sales in the fourth quarter 2022 had seller concessions, which is the highest metric ever reported. Concessions have made a comeback as rising mortgage rates, inflation and economic uncertainty have dampened home-buying demand, giving the buyers who remain in the market increased negotiating power.
BizJournals: Homebuyers now have the advantage in metro Phoenix market
The barometer for ever-shifting economics in the Phoenix housing market has recently tipped in the favor of Buyers in a dramatic fashion. Phoenix now ranks as one of the most Buyer friendly markets in the entire country due to the major shift in inventory and sellers opting for more favorable contract terms. Home buyers unequivocally have the advantage in purchasing power in early 2023. Home prices have slid in some areas, price points, building types (quality of construction / density) and vintage (year built).
Housing Wire: Dave Stevens on understanding this housing market
Demographically, the homebuyer age distribution for median age homebuyers is 34 years old, this segment of the population represents the largest grouping wave in age coming to the home-buying years the nation has ever seen.
Reuters: U.S. pending home sales sag more than expected in November
Continuing with the theme of stilted or mixed economic conditions, the NAR reported that pending home sales for a sixth straight month in November 2022 slid as an index of -4% to 73.9 down from October 2022's index of 77.0. "Pending home sales recorded the second lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paced on record this year, drastically cut into the number of contract signing to buy a home." said NAR Chief Economist Lawrence Yun. "Falling home sales and construction have hurt broader economic activity."
Seattle Agent Magazine: New-home sales rise again in November
Nationally, the data for demand continue to be choppy of inconclusive as the US Dept of Housing and Urban Development reported that on a monthly basis from October 2022 to November 2022 the uptick in new single family housing rose +5.8%.
RENT Check™ ARMLS: Closed Rental Units Per Month
Data released in December 2022 from the ARMLS continued to show the slowing demand in purchases in Phoenix Metro, as year-over-year data showed a slowing demand with -44.5% pending contracts in November 2022 relative to November 2021.
AXIOS: Mortgage buydowns are the hot new thing helping the housing market
Mortgage buydowns are a growing solution to the housing affordability issue as prices are holding in relative terms coupled with mortgage interest rates rising at their fastest rates in 40 years to help Buyers find their way into the market.
Realtor.com: Buyers May Have More Power Than They Realize Right Now—Here’s Why
Shifts in the marketplace have occurred as recent as October 2022 as reported by Realtor.com. Nationally, the number of houses on the market is up 33.5% (year over year) and over 92% of successful contracts have been negotiated with "buyer-friendly terms" per a survey completed, and days on market is up over 13% (year over year). Anecdotally, sellers are reporting more favorable terms with the recent increase in "mortgage rate buydowns" at the expense of the seller due to the rapidly increasing mortgage rates as reported.
Phoenix Agent Magazine: Phoenix named one of the cities with the best real estate prospects in 2023
Phoenix Metro continues to be a national player on the stage of competing markets for development as metrics in localized economics lend for support of developers and builders to stake new projects in the ground. According to the Emerging Trends in Real Estate report by PwC and Urban land Institute, they rank Phoenix as number 9 with the best cities for real estate prospects in 2023.
Phoenix Agent Magazine: Bidding wars with Wall Street
Competition with savvy investors, namely institutional financed groups and traditional buyers continues to add difficulty for conventional buyers to acquire the homes they desire. Recent data reported forensically that in 2021 alone, investors acquired as much as 31% of all single family homes as published by The Pew Charitable Trusts.
Forbes: The Power To Drive Change: How Millennials Are Affecting The Housing Market
Buyer demographics continue to shift in 2022 as Millennials (ages 23 to 41) represent a burgeoning segment of buyers encompassing roughly 43% (80 million) of all homebuyers according to the National Association of Realtors.
Phoenix Agent Magazine: International homebuyers target Arizona
Arizona as a state continued to be a large draw for international homebuyers as Coldwell Banker International Buyers Guide reported the sunshine state to be the 4th highest in demand for international homebuyers.
Phoenix Agent Magazine: Good news for prospective home buyers, according to RE/MAX
Nationally, the landscape for metrics in the residential real estate market is changing for Buyers and Sellers as demand continues to wane and listings continue to increase which results in a more competitive Buyers market according to RE/MAX as home sales across 53 major metro areas has declined 9.7% thru September and October 2022 from August 2022, first time inventory grew to a two-month supply of housing since November 2020.
Money Magazine: The 50 Best Places to Live in the U.S. | 2022—2023
Money Magazine recently named Tempe as the number two city in the entire country to live in terms of "50 Best Places to Live" as the category weighed a myriad of factors including economic metrics, low levels of unemployment, quality of life, diversity, and opportunities in the future. Affordability was cited as an important metric for Tempe, as was proximity to infrastructure and civic life options.
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