The Phoenix is a famous real estate market in the United States that has made a major turn back since the Coronavirus struck. According to Zillow, experts predict that the Phoenix housing market will remain firm and in control in 2022. The sellers will remain in control as buyers prepare for the rising prices and bidding wars should anyone find the right home. Here are the expected trends in Phoenix, Arizona’s housing market, in 2022.
Prices and Trends
Affordability Squeeze
In 2021, the Phoenix home values were pretty high, ending the year at 32% higher than their starting point. The high home values put a lot of pressure on the buyers, especially the first-time buyers who had to save up for down payment yet had not had the benefits of the equity gains from their previous purchases.
2022 has some good news for those looking to make a move; the competition will not be quite stiff. However, the dealers should not mistake this for a buyers’ market. According to Zillow, the Phoenix home values may increase by 20%. This pace is pretty good, but it will be a steep drop from the hottest conditions of last year. Homes for sale in Phoenix currently value at $396,235; about 50% of the housing stock is worth more than this value, while the other 50% is worthless. Compared to 2021, the Arizona home value was at $301,000.
Impact on Rentals
Many Phoenix households will continue to sit out in the competition for sale market but continue renting. There are a lot of millennials out looking for big rental homes with an extra room for a home office or extra bedroom. The dynamic will add pressure to Phoenix’s single-family rental market. A two-bedroom apartment in Arizona is currently renting at $1,097, which means a household must earn at least $3,658 per month to cater for this rent.
Booming Renovations
There are high chances and possibilities that Phoenix homeowners will take a lot of home improvement projects in 2022. Some will be the new buyers who made a few compromises in the very competitive post-pandemic housing market. Others will be long-time owners looking to upgrade their houses rather than sell them.
According to Zillow’s research, around 72% of homeowners will have at least one house renovation project in 2022. This number makes a lot of sense in that over 80% of buyers in 2021 had to compromise on homes they bought in 2021.
2022 Forecast
According to Zillow, the phoenix housing market dropped from being the second hottest to position eight. They are falling behind Tampa and other several metros in the Sun Belt. Phoenix is continuously growing as it is already the 5th largest city in the country. There are a lot of new buyers drawn to Phoenix due to its low-cost living and a strong economy.
The favorable living conditions in Phoenix have made many real estate investors comfortable and thus ready to invest in Arizona’s real estate. The single-family homes continue to grow in Arizona, and in 2019, the growth grew by 4% compared to the previous year. In 2022, the results look promising as single-family houses take up around 80% of all sales.
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