With employment in Arizona now reaching pre-2008 levels and memories of the recession fading away across the country, housing is starting to pick back up again. In Arizona in particular, it is growing slow and steady—just the way it should be in order to encourage stability. Prior to the 2008-2009 real estate crash, there was a boom caused by people who were rushing to buy houses. Bidding wars ensued, raising the purchase price of many homes well beyond the initial asking price. This caused extreme market volatility and eventually, banks were unable to keep up. Today, demand is growing again, but it is stable. Below are some housing market trends, both across the state and in specific counties and cities.
By 2016, home prices throughout the state of Arizona had climbed 9% and new home construction had increased by 46%, with homes selling at a median price of $123 per square foot and a median sales price of $210,000.
A ten-year examination of home sales shows that in January 2006, the number of sold listings rested at 5,266. This dipped in January 2008 to 2,912 and increased to reach a peak of 6,541 in January 2011. The number of listings is currently sitting at 5,131 as of January 2016. The summer months of 2015, which traditionally make up the main selling season, demonstrated a similar upward trend as was seen during the peak in 2011.
Additionally, in 2006, sold listings remained on the market for an average of 50 days, a number that spiked to 137 in 2008 and is now down to about 80 days as of January 2016.
As of December 2015, houses remained on the market for an average of 51 days in Maricopa County, which is 20% less than the previous year. The average sales price was $273,791, indicating an increase of nearly 5% from the previous year. The median sales price went up by more than 8% to $220,000. This is in significant contrast to 2009-2011, where prices rested at about $120,000 until they started increasing in the first quarter of 2012.
When comparing Maricopa County with the overall state statistics, it is doing quite well. The average sales price is only slightly higher, but houses are selling much faster within the county by a difference of nearly 30 days.
In the past five years, Glendale has experienced a 90% increase in median home prices while still retaining one of the lowest median sales prices in the county. In January of 2011, the median sales price hovered around $100,000. It stayed there until January of the next year, when it began to rise quite quickly, reaching $140,000 by July 2012, $150,000 by January 2013, and finally $170,000 by July 2013. This remained the median sales price until February 2015 when it started to rise month by month to the current median price of $190,000, pricing at about $115 per square foot.
Scottsdale has the highest median sales price in the county at $389,000 and $198 per square foot. Scottsdale showed remarkable growth between January 2012 and July 2013. It was at about $275,000 in 2011, and remained until the January 2012 spike, when it then rose to $400,000 after a period of only 18 months. In July 2014, prices dipped to about $370,000 and steadily rose to the current median price of $389,000, demonstrating a 40% overall increase since January 2011, which is much less dramatic than the 90% increase in Glendale.
The capital city of Phoenix has performed quite well in comparison to its neighboring cities. In January 2011, the median house price sat at about $90,000. Phoenix’s rise in sales price has been notably steady and has mostly avoided dipping since 2011. Currently, prices sit at about $185,000, having increased by 6% over the past year and more than doubling since 2011. The average price per square foot also rose by $11, up to $131 from 12 months ago.
Tucson currently holds the lowest median house price at $157,900, which actually decreased by 1% in the past year. In contrast, the average price per square foot rose by $2 to $108. Tucson’s markets have fared differently than Phoenix’s, having experienced substantial volatility over the past five years. These dips occurred in April 2011, November 2011, March 2014, and February 2015. However, overall prices did rise from a low of $116,000 in November 2011 to a peak of $160,000 in August-October 2014. Over the past five years, Tucson’s median sales price has not increased nearly as much as its neighboring cities, having risen by only 17% over that period.
The city of Mesa has had a relatively steady rise in median sales prices since 2011, dipping only slightly in March-April 2014 and February-April 2015. Prices started at $116,000 in January 2011, and decreased slightly in April 2011 before climbing nicely to $190,750 by the end of 2015. Mesa has fared relatively well compared to other housing markets in Maricopa County, having experienced a 64% increase in median home prices since 2011 and 6% in just the past year.
Along with Tucson, Chandler also experienced a decrease in median home sales since last year, by 2%. However, Chandler has performed well overall by avoiding any significant dips in price in the past five years. Although it has not experienced massive growth, such as Phoenix or Glendale, it has held steady. In January 2011, median sales prices in Chandler were $167,000. They continued to rise steadily until they peaked at $260,000 in July 2015. The median price has been sliding down since then and it now sits at $239,000, with an average price of $141 per square foot.
Gilbert’s rise in median sales price has also been extremely steady, with a plateau beginning in May 2013 and continuing until August 2015, when it dipped very slightly from $270,000 to $260,000 and then rose again to $264,000 by the end of 2015. In the past five years, the price rose by 47%, with most of the increase occurring in the first two years.
The city of Tempe has experienced a 67% increase in home prices since January 2011. Prices in Tempe have jumped by 5% over the past 12 months. The median sales price in Tempe currently sits at $229,000, with an average price of $145 per square foot. This represents an increase of $10 over the past year.
Arizona Real Estate in 2016
It is expected that 2016 will be the most profitable year in real estate for Arizona in almost ten years. It is clear that not enough houses have been built to satisfy the demand. One housing report shows that used home sales in the state were up by more than 11% compared to sales from just 12 months ago.
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