ARIZONA, USA — The hot, hot housing market in the Phoenix-metro last year was a seller’s paradise, but misery for buyers. Experts studying the market put it simply: there were not enough homes for all the people who wanted to buy, or even rent, in the Valley in 2021.
While the majority of predictions showed the pricing increases may slow in 2022, the latest market analysts still suggest, housing prices will continue to rise.
Who’s buying houses?
12 News analyzed one year of home-sales data to find out how many buyers are coming from out-of-state, how many investment buyers are purchasing homes, and who was the single largest buyer of homes in Maricopa County.
What we found:
- More than 150,000 residential properties sold from June 2020 – June 2021
- About a quarter of these properties sold to cash buyers
- Two-thirds of all properties sold to someone with an Arizona address are considered “in-state” buyers
- Progress Residential was the single largest purchaser of residential properties during that time frame in Maricopa County.
The Valley needs more homes
Demand continues to outpace supply for rental homes and purchased homes alike. Developers tell 12 News, they are trying to add more apartments as rents continue increasing alongside home prices, but developers face roadblocks to building.
“Within the Phoenix Metro area, 80% of the land is zoned for single-family homes. And so that means even if developers wanted to create more multifamily developments, zoning regulations may prevent them from doing so,” said Alison Cook-Davis, the Associate Director for Research at Morrison Institute. “And in order to update zoning regulations include to include more multi-family homes, it's contingent also on public support.”
As developers work to find more locations to build rental properties, renters face increases of 20 percent or more, meaning some renters owed hundreds more pr month.
“It’s a consistent story across the Valley,” Danny Court, partner and senior economist with Elliot D. Pollack & Company told 12 News. “We’re seeing year-over-year rent increases of more than 20% pretty much across the Valley.”
Families make dozens of offers
In this market, sellers have grown to expect offers of thousands or tens of thousands of dollars over the asking price. Institutional buyers have the cash to do that, but, often, families do not.
Claudia Hernandez is a single mother of two who was attempting to buy a home with only her salary in 2020.
“Right now where we live at we live with my sister, and she has her family, and the baby’s getting older,” Hernandez said. “They need the space. I’m like if we don’t end up getting out of here I’m going to have to rent, and we don’t want to rent.”
But she faced an uphill battle. In all, she made offers on 18 homes – before finally securing a home for herself and her daughters, and offering about $10,000 over the asking price.
“It’s going to happen. Things happen for a reason, and the time that it does happen is because that’s the time it’s supposed to happen for you,” she said.
Prices likely to continue increasing
Zillow expects home values to grow 12.1% between July 2021 and July 2022, with a typical home costing about $517,000 by September.
“I don’t think by waiting you’re going to find a better deal,” said Professor Mark Stapp, the executive director of real estate programs in the W.P. Carey School of Business at Arizona State University. “In fact, it’s probably going to become more difficult.”
And Realtors say, don’t get discouraged. Multiple realtors provided 12 News tips on ways to make an offer stand out, and to set expectations:
Get pre-qualified and know your budget *hint: there are many affordability calculators available online*
Be patient, and persistent. Many buyers write multiple offers before getting a home
Consider writing a letter to the seller
Programs are available to help first-time buyers
Have a wish list, including some things you can live without
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