With the Metro Phoenix residential real estate market setting new records on a daily basis, it might help prospective buyers and sellers to have an expert’s 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:
1. Migration to Arizona is likely to increase
As our weather becomes near perfect during the winter months, residents will continue to seek out a relatively low cost of living, and high quality of life. The current migration from states like California, Washington, and Illinois will continue, and potentially increase this fall.
2. Home prices will continue to go up
The entire Phoenix area is breaking records over records in sales prices, and I expect this to continue. The supply simply isn’t close to catching up to the current demand, and it will take time to reach this point. I anticipate this increase continuing through 2022 and beyond.
3. It will continue to be a seller’s market
Due to increase demand and mounting home prices, I believe it will continue to be a seller’s market here in the Valley for the foreseeable future. Buyers will need to understand that competition is fierce, homes are selling for well over asking price, and contingencies are often waived. It is critical to plan accordingly, both to maximize chances of success and to avoid the mental anguish many are experiencing after multiple rejected offers.
4. Flippers and investors will present a challenge to buyers
With interest rates being as low as they are, investors, flippers, seasoned vets, and even rookies are extremely active in this market, making it that much more difficult for buyers to find their dream home at their desired price point. This trend is likely to intensify as we fly through the winter months and into spring of next year.
5. Construction shortages will continue to slow new home builds
The labor and materials shortages are expected to continue into 2022, slowing the rate of new home construction in the Phoenix area. As a result, the biggest source of inventory for those looking to buy will be existing homes that become available, as owners opt to take advantage of the increased prices and sell their homes, often relocating to another part of town or downsizing.
Alex Molleo is a Realtor at The Brokery.