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Is Phoenix still an affordable city?

Housing experts for years regarded Phoenix as one of the few affordable major cities. After years of double-digit price increases, that may no longer be the case.

TEMPE, Ariz — Editor's note: The above video aired during a previous broadcast.

Holly McKillip is frustrated.

After years of building up her finances, she felt she was ready for the next step in the American dream, to buy a place to call her own.

“I was looking in Mesa. I was looking in Queen Creek. I was looking pretty much all over the place!” McKillip said.

The single mother of one and Army veteran said she knew the housing market was competitive, but felt after years of renting she would be able to find a home.

She remembers going to open house after open house, often seeing the competition firsthand.

“You are giving them that up and down. You are all there for the same reason. You want the house,” McKillip said.

In less than a month, McKillip said she put in more than 10 offers on different homes. Each time, the offer was above the list price. Each time, she didn't get the home.

“Being told no 10 or 15 times in a row is a little frustrating,” McKillip said.
“You try not to attach emotions to the situation, but we’re human.”

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McKillip's situation has become a common story in recent months. Competition for a limited supply of homes has made it a booming seller's market but has left some of the average family buyers struggling.

“It makes you want to give up, it really does,” McKillip said.

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“It’s difficult, it’s challenging,” said Jeremy Fierstein.

The real estate agent with West USA Realty said after rapid growth, Phoenix is no longer an affordable major city.

“I don’t believe it is. And it’s kinda sad to see how quickly things have gone up.” Fierstein said.

According to the U.S. Department of Housing and Urban Development, prices went up 21% last year. The growth was the most in the Southwest region of any metro area, with the median Phoenix metro home costing nearly $450,000.

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“In order for that to be affordable, a family needs to be making $111,000 a year,” said Tina Tamboer, a senior housing analyst with the Cromford Report.

According to the U.S. Census, the median family makes $68,000 in Maricopa county. That leaves a more than $40,000 gap between the median income and the expected income needed for the median house.

“A family needs 2 or 3 earners to afford it,” Tamboer said.

The problem: prices have gone up everywhere. 

Compared to the 55 largest metro areas in the U.S, Phoenix was 18th most expensive, still behind other cities like Los Angeles, San Fransico, Denver, and Seattle.

However, the lack of affordability has some potential buyers giving up.

McKillip decided to resign her lease instead of continuing her housing search. Pressing pause on part of the American dream.

“It is doing a really good job of delaying dreams,” McKillip said.

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