REAL ESTATE IN HIGH DEMAND
According to Norada Real Estate Investing, a Better Business Bureau A+ accredited business, as of August 2021:
“Phoenix has been one of the hottest real estate markets in the U.S. The Greater Phoenix housing market is extremely strong this year. The Phoenix real estate market has not only recovered after a slump due to COVID-19 but the demand has reached new heights. June recorded the highest median sales price and the highest average sales price ever reported but even as property prices in Greater Phoenix skyrocket, housing in the city remains affordable in comparison to many other major cities in the West.”
According to the Arizona Regional Multiple Listing Service:
- The typical existing home price in the Phoenix region was $399,900 in June.
- Up 31 percent from the previous year.
- More than $100,000 below the median home prices in San Francisco, Los Angeles, Seattle, Portland, and Denver.
- Compaivelty Phoenix’s housing prices remain relatively modest.
According to Redfin, a national real estate brokerage:
- Over a third of all home purchases in Greater Phoenix spring 2021 were purchased with cash.
- More than the 6 percentage increase from the previous year.
- Indicates that investors are buying properties.
- A quarter of Phoenix’s prospective out-of-state buyers came from Los Angeles.
- Another 17% were residents of Seattle.
PHOENIX HOUSING MARKET FORECAST- 2022 PREDICTIONS
The 5th largest city in the country, the biggest city in AZ and the state’s capital, Phoenix continues to grow. People are drawn to the strong economy, relatively low cost of living, high quality of life, economic opportunity, and cultural attractions. This real estate market is one of the top-performing nationwide. Phoenix has a mixture of owner-occupied and renter-occupied housing units for sale.
- Since 2000, Phoenix’s population has grown by 20%.
- Approximately 555,000 households.
- Additional 1.6million people.
The Phoenix housing market is much larger than Phoenix itself, encompassing the entire Valley of the Sun; these suburbs are home to another five million people.
- Facing a shortage of homes for sale.
- Home prices were up by roughly 7% over the last twelve months.
- In 2019, single-family homes grew by roughly 4% as compared to 2018. According to Neighborhoodscout, a national real estate data provider:
- Three and four-bedroom single-family detached homes are the most common housing units in Phoenix.
- Large apartment complexes, duplexes, row houses, and homes converted to apartments are also prevalent.
- Single-family homes account for about 60% of Phoenix’s housing units.
The housing forecast until April of 2022 shows there’s good profit potential for the period of one year if you are looking for homes for sale with a flipping profit. It can be a profitable property investment opportunity if you can find a good deal. A long-term investment in Phoenix real estate will yield even greater profits.
- Zillow predicts Phoenix-Mesa-Scottsdale Metro home values will rise 15.4% in the next twelve months.
- In the city of Phoenix, home values have gone up 30.3% over the past year and will continue to rise in the next twelve months.
- Maricopa County home values have gone up 29.7% over the past year and will continue to rise in the next twelve months.
- Mesa home values have gone up 29.5% over the past year and will continue to rise in the next twelve months.
- Scottsdale home values have gone up 30% over the past year and will continue to rise in the next twelve months
LARGE BUSINESS MOVING TO ARIZONA
As reported by BestCompaniesAZ, Arizona’s platform for connecting employers and job seekers, in July 2021 the following large businesses are moving to the state.
Align Technology Inc.-this dental device company now calls Tempe home to its global corporate headquarters. The goal is to expand its talent and will focus largely on recruiting a strong operations team.
Bonelli Doors + Windows– relocated to Mesa, AZ. Offering an expanded internship program to partner with the local universities, the manufacturing company is opening up plenty of opportunities for employment in the area with a goal of launching 17 new products in the next year.
DoorDash– decided to move to Tempe to pursue further growth. The on-demand food delivery service moved in spring of 2020 and is continuing its hire efforts. This new Arizona location focuses largely on sales and support functions.
LiveRamp– a winner of the Fortune Best Workplaces in Technology, will be opening 100 positions beginning summer of 2021.
Mechanical Keyboards, LLC– one of the largest providers of mechanical keyboards globally, they provide jobs to professionals interested in engineering and technology.
Moov Technologies– moving from Silicon Valley to Tempe, Arizona, the online manufacturing equipment marketplace saw growth in Arizona that surpassed their San Francisco office.
Viavi Solutions– a technology manufacturer specializing in network security and telecommunications, is moving from Scottsdale to Chandler. Roughly 100 new job opportunities will be available.
ACTIVE SELF STORAGE TREND (as reported in June 2021 from AZ Big Media)
Self storage is BOOMING! There are more self storage facilities in the U.S. than all the Best Buy, Lowe’s, Home Depot, Walmart, McDonald’s and Subway locations combined. Phoenix has seen the 5th largest storage increase in the country. The self storage industry is closely related to life events and socio-economic factors:
- Moving
- Home improvement
- Downsizing
- Changes in household composition
In 2020 self storage did not get negatively affected by the pandemic as many other industries did. New demand came from:
- High renter mobility as many people searched for favorable housing options.
- Seeking access to wider job markets in larger employment hubs.
- Displaced students.
- RV lifestyle enthusiasts who enjoyed vacations amid pandemic restrictions.
US MIGRATION TRENDS
North American Moving Services, one of the nation’s largest moving companies, reported in 2020 that Americans are following similar moving trends as prior years, moving either to start a new job or to move home.
MULTIGENERATIONAL HOMES
It’s being called the “Boomerang Effect” with both grandparents as well and children moving back home in Phoenix. The real estate brokerage in Arizona, R.O.I. Properties, reported on November 25, 2020 that multigenerational properties are in high demand, which comes down to two separate trends. Both of these trends have been caused and accelerated by the coronavirus.
Trend #1: Moving Away from Assisted Living- continuing care retirement communities have been a popular way to transition older relatives from independent living to assisted living while staying in their local communities. Unfortunately, COVID heightened the real and perceived risks for elders living in such circumstances. As a result, many families have chosen to move relatives out of assisted living and bring them home.
Trend #2: Adult Children Moving Back Home- job losses, economic uncertainty, and college closures drove a significant number of millennials back home.
- In July 2020, the number of 18 to 34-year-olds living with their parents grew to a majority—52%, the highest since the Great Depression according to Pew Research Center.
- Note that this trend also has an impact on demand within the multifamily market, as it takes many millennials out of prospective tenant inventory.
- While the economy is in recovery mode, it is still difficult to tell when adult children will feel financially secure enough to venture back into renting on their own or buying homes in a pricey market.
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