Top 5 predictions for Phoenix residential real estate
With Metro Phoenix’s residential real estate market breaking new records every day, it could help potential buyers and sellers to have an expert perspective on residential real estate in the Phoenix market – where it is now and a few predictions for 2022. Here are my top 5 predictions for Phoenix residential real estate:
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1. Migration to Arizona is likely to increase
As our weather becomes near-perfect in the winter months, residents will continue to look for relatively low cost of living and high quality of life. Current migration from states like California, Washington, and Illinois will continue and may increase this fall.
2. Home prices will continue to rise
The entire Phoenix area is breaking records in sales prices and I expect this to continue. Supply just cannot catch up with current demand and it will take time to get to that point. I expect this surge to continue through 2022 and beyond.
3. It will continue to be a sellers’ market
Due to increasing demand and rising property prices, I believe that here in the Valley it will continue to be a seller’s market for the foreseeable future. Buyers need to understand that competition is fierce, houses are being sold too far above the asking price, and contingencies are often foregone. It is important to plan accordingly to both maximize your chances of success and avoid the psychological agony that many experience after multiple declined offers.
4. Pinball machines and investors will be a challenge for buyers
Since interest rates are as low as they are, investors, pinball machines, seasoned veterinarians and even beginners are extremely active in this market, making it all the more difficult for buyers to find their dream home at the price they want. This trend is likely to intensify over the winter months and into the spring of next year.
5. Construction bottlenecks will continue to slow down the construction of new homes
The labor and material shortage is expected to continue through 2022, and the construction rate of new homes in the Phoenix area is expected to slow. As a result, existing homes that become available will be the biggest source of inventory for those looking to buy as owners choose to take advantage of the increased prices and sell their homes, often moving or downsizing to a different part of town .
Alex Molleo is a broker at The Brokery.