Nationwide we’ve seen a housing shortage over the last 2 to 2-1/2 years and recent figures suggest that we’re 5.5 million homes shy of what is needed for a balanced market (supply equaling demand). Now, in the Phoenix metro area, we are no different, and in fact, probably a little more off balance. We currently have (as of typing this in March ’22) less than 50% of the inventory we had in March 2020, and 5% lower in supply than this time last year. It is continuing to decline. Demand has stayed fairly steady other than one week of drop when rates had their first hike this year. Demand went right back up the following week.
Why do we have such steady demand here, and more so than most places across the US? Because we have major job growth here, housing that is more affordable than many other metro areas people are moving here from (like Chicago, Seattle, Los Angeles, New York and so on), amazing weather, policies that support more freedoms for individuals, lower taxes, and so much more. That is why we are getting a net in migration of roughly 100,000 people a year, whereas many of the areas people are fleeing to come here, have negative net migration numbers. The Phoenix area, dubbed The Valley by many, is a land of sunshine, beauty, warmth (people and temperatures!), and best of all…opportunity!
Now is the time to buy!
Now, with all that being said, it is still a great time to move here and purchase a home! Why? Well, based off the current situation, it is estimated that we have 2-5 yrs more of price increases, so you wouldn’t be buying at the peak. Buying on an up before peak gives you a buffer when the market does adjust at some point. Just like everything else, it’s cyclical. Long term, it always goes up (lookup Case Shiller housing price index over long term), but having a buffer gives you more choices! Rates will be going up this year, to what is speculated to be, around the mid 4’s. Still historically low, so probably won’t curb demand too much.
Buying in this current market can be a major challenge, so it’s vital who you choose to work with. You’ll need someone that is very active and knows all the ways to craft an offer to get accepted, along with them having partners with programs to help you do that as well. Just remember to listen to your agent, lender and anyone else that is helping you; and be patient. It may take a few offers before something sticks, but it will all work out the way it was meant to.
About the author
Joseph Laney is a top 2% real estate professional in the Phoenix metro area. Coming from a line of pioneers that were some of the first to settle in Arizona, the state is in his blood! He enjoys sharing his passion & insight with many of those relocating to the valley from all over the country. He can be reached at 602.345.0670 or JLaneyaz@gmail.com
