ARIZONA, USA — A hot housing market is sticking around in Arizona as 2021 comes to a close, and a real estate expert expects it’s going to continue into 2022.
Hot housing market
Cynthia Saenz has experienced the hot housing market first hand in Arizona, complete with high prices, low inventory and multiple bids per house.
“You get emotional by the ‘bling bling’ and the ‘bling bling’ is what everybody wants,” Saenz said.
Saenz has been looking for a new home in the Valley. Originally, she had plans to move to Scottsdale, close to her work and her son’s school, but is in the process to close on a home in Peoria.
“In a lot of cases my offer got accepted and then suddenly, another investor came and offered $10,000 more,” Saenz said.
Her soon-to-be new home in Peoria will be the fourth home Saenz has put an offer in on and said it was about taking the emotion out of the buying process and seeing past the newly-renovated homes to find ones that may need a little more work but are less competitive.
“I learned to put my emotions on ease and enjoy the journey,” Saenz said.
Mark Stapp, Fred E. Taylor Professor in Real Estate at the W. P. Carey School of Business at ASU, said it’s a combination of more people moving here, thanks to employment growth and that means more housing is needed.
But, Stapp said, not enough supply has been added.
“That has caused this significant upward pressure on housing prices and I don’t see any change in that occurring over the next couple of years,” Stapp said.
With not enough housing supply being added to the Arizona housing market, Stapp anticipates the trends will continue, because it’s also taking a long time to add new supply.
Stapp said between supply chain-related issues, pushback against adding more housing density, and lengthy time to build.
“If you start today on an apartment project, as an example, it’s going to take you two years before the first person can move in,” Stapp said.
Stapp added it’s taking longer to build single-family homes as well because of things like labor shortages, effects of the pandemic and lack of supplies among others and he anticipates prices will continue to climb.
“We’re fortunate that our good employment growth has come with good wage growth, but there’s a significant difference between the wage growth from some of our employment and then those who are more service providers that aren’t able to afford some of the housing, so we have an affordability issue that goes with this at the same time,” Stapp said.
It’s affordable housing that Stapp anticipates will still be difficult to come by in 2022
“It’s not going to be easy to solve this problem. That’s I think one of the biggest single resiliency risks we have,” Stapp said.
However, Stapp said what Arizona’s housing market is experiencing, isn’t a bubble.
“Nothing suggests this is a bubble,” Stapp said. “This is not going to bust. The bubble would imply that there was not real actionable demand behind the growth, and there is.”
Buyers should be prepared
Stapp said buyers need to be prepared if they’re planning to buy in 2022 by getting pre-approved.
“You’re competing with a lot of institutional money and a lot of cash and so you have to be able to act quickly,” Stapp said.
Saenz said it was having the right realtor to navigate the market that helped her, along with setting the proper expectations to land her soon-to-be home.
“Put your emotions on ease and don’t give up,” Saenz said.
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