The residential property market in Phoenix is booming and, according to Zillow’s latest market report, has the highest annual growth in both property values (17.1%) and typical rent (8.4%) among the country’s largest metropolises.
Extreme demand, driven by exceptionally low mortgage rates, demographic pressures and pandemic trends, kept the real estate market boiling in 2021, according to Zillow.
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Monthly real estate appreciation in January hit recent record highs, while annual growth is higher than ever since 2006. Home sales are moving rapidly, with properties typically staying in the market for 18 days from mid-January before the seller one accepted an offer from a buyer – 28 days faster than in 2020 and 2019. The inventory for sale fell again in January and is now 26.3% below the level of the previous year.
The Zillow Home Value Index (ZHVI) rose $ 269,039 in January by 1.1% compared to the previous month, which is the record level of monthly data growth from December to 1996. The annual appreciation of the home was 9.1% – the largest annual growth since June 2006before the great recession.
“Home demand has pushed the pedal on the metal for price hikes this winter,” he said Jeff Tucker, senior economist at Zillow. “Ordinarily we’d talk about the upcoming spring sales season, but it looks more like last summer’s sales season just never ended. Buyers looking to secure more space and meet today’s rock-bottom interest rates need to move quickly and aggressively to win in this highly competitive market. “
House values rose in all 50 of the largest US metropolises, with the most dramatic annual growth in Phoenix (17.1%), San Jose (14.2%) and Austin (13.7%). The slowest growth – in this case a relative term – was seen in San Francisco (5.3%), Chicago (6.7%) and San Antonio (6.7%).
Some key demand drivers keep competition high and the market hot during the typically cool winter. For one, a wave of millennials is entering their prime years of home buying. The number of Americans between the ages of 25 and 34 was 12% higher July 2020 when July 2010According to estimates of the census – an increase of about 4.9 million people.
Another reason is mortgage rates, which averaged 2.74% for a 30-year standard set in January – a slight increase from an all-time low of 2.68% in December. These interest rates make monthly mortgage payments as a percentage of income more affordable, even when taking rising prices into account.
The COVID-19 pandemic and widespread changes to work-from-home policies have caused many to rethink what they want, need and where it should be in their living space.
For the next 12 months, the Zillow economists expect house values to grow by 10.1%. The Zillow forecast for existing home sales has been revised since December due to improved pending sales volumes and home buying applications. Existing property sales are expected to reach 7 million in 2021, 24.8% more than in 2020.
While property prices are rising rapidly, rents are relatively stagnant. The Zillow Observed Rent Index (ZORI) was $ 1,721 in January only 0.5% or $ 9higher than in January 2020 and by 0.3% compared to the previous month.
Rents in many expensive coastal metro are currently much lower than they were a year ago – a 9.2% decrease in San Francisco8.8% in new York7.2% in San Joseand 6.3% in Boston. In many metropolitan areas of the Sun Belt and the Midwest, however, there was solid rental growth. Phoenix led the 35 largest metropolitan areas with annual rental growth of 8.4%, followed by Sacramento (7.6%) and Indianapolis (6.9%).
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