In our current market, we need to think about how far we’ve come since the recession.
We’ve had annual appreciation rates reach 10%, 20%, and even 30%—we’ve come up significantly in value.
Recently, we’ve begun transitioning from a severe seller’s market with a shortage of inventory to more of a balanced market. This means that buyers have more homes to choose from. Overall, there’s still a relatively low amount of inventory for the number of homes that are selling every month and the number of new listings that are coming onto the market. We’re still at about 2.5 months’ worth of homes, meaning that if no additional homes came on the market, we’d sell all the listed homes in 2.5 months.
Maricopa County has also undergone a population growth. Over the last 12 months, Maricopa County and the surrounding area has gained about 150,000 people. Some have forecasted that another 1 million people will move to the Valley over the next five to seven years; while that is hard to quantify as accurate or not, we do know that there has been substantial growth over the past few years and businesses are moving in from high-tech states due to our lower cost to do business. Their employees are moving to Arizona to follow the jobs, which stimulates the local economy. Though our home prices have increased in recent times, they’re still more affordable than states like California.
What does this mean to you as a buyer or seller?
If you’re a seller who’s been thinking of listing your house but aren’t quite sure when is the right time, the value of your current home is likely to improve over the next five to 10 years due to the projected population growth. If you’d like to downsize or upsize, the value of the house you’d move to will also increase. With that in mind, it’s a good time to make the transition.
If you’re a buyer who is planning to purchase a home and stay in it long-term, or even just three to five years, now is also a great time to do so. First and foremost, your house is a place to live and your decision should be based on affordability, but it can also serve the secondary purpose as an investment vehicle, providing a place to maintain your savings and grow your wealth over time if you hang on to it.
If you have questions about buying or selling a home, please feel free to reach out. I’d love to sit down with you for a free consultation.