The Phoenix housing market is a hot commodity with housing prices increasing 32% last year according to Craig J. Lazzara, Managing Director of S&P CoreLogic Case-Shiller.
More people are moving to the country's fifth-largest city.
“We’ve been experiencing this absolutely insane market," said Rich La Rue, Designated Broker for HomeSmart Professionals.
La Rue has more than three decades in real estate in both California and Arizona.
“This is not 2008, we’re not in the same circumstances," said La Rue. "What we’re anticipating happening in 2022 is maybe the insanity will subside but it’s still going to be furious.”
Right now, the average price for a home in Phoenix is $429,600 according to the National Realtors Association. La Rue says inventory is down in the greater Phoenix area, citing the Arizona Regional Multiple Listing Service.
“Normally in January we would have between 16,000 and 21,000 active listings," said La Rue. "Right now, we have 5,200.”
What do higher mortgage rates mean for Arizonans?
Mortgage forecasters predict average fixed mortgage rates will fall between 3.27% for 15-year and 3.88% for 30-year.
Last year, the fixed 30-year rate was a record low of 2.65% according to Freddie Mac.
"What we’re anticipating is a slight rise in interest rates," said La Rue. "It may slow the market a bit but a rise in interest rates will certainly get the attention of buyers sitting on the fence and it will be time to jump in the market.”
Will prices decrease or increase?
“What we anticipate is maybe a 1.1% to 1.3% a month increase which is a 12% to 15% increase in 2022 which is still a strong market.”
What advice does La Rue give first-time homebuyers?
“I would advise them to buy as soon as it’s practical for them," said La Rue. "Even if prices flatten out, over the next five years, they are going to build equity.”
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