PHOENIX — The real estate market in Phoenix and the greater Phoenix area is hot. Homes are appreciating at more than 3% per month, according to the Cromford Report, a real estate data analytics firm that studies home sales in Maricopa and Pinal Counties.
For context, the Cromford Report’s data analyst Tina Tamboer told 12 News 0.5-1% appreciation per month is good and 3% is unsustainable.
Home price appreciation is great for sellers, but it is a nightmare for buyers.
12 News interviewed mortgage specialists, real estate agents and homebuyers who said buyers in this market are offering tens of thousands of dollars over the list price just to get a counteroffer on the scant number of properties for sale in the Valley.
So what is causing this rapid rise in prices?
12 News set out to Verify one common claim blaming out-of-state buyers, particularly those from California, for pricing Arizonans out of the housing market.
Are California home-buyers coming to Phoenix pricing local buyers out of the market?
- Tina Tamboer, data analyst with The Cromford Report
- Maricopa County Assessor, 115,000 home sales and buyer data
- Brian Cross, Phoenix realtor
No, homebuyers from California are not the primary reason Phoenix home prices are increasing, and may only play a small factor in prices overall.
WHAT WE FOUND
Not only are California buyers not new, they are a small percentage of buyers, according to the Maricopa County Assessor’s data. In the year of data that 12 News examined, buyers with Arizona addresses buying homes in Arizona accounted for more than 100,000 transactions. Buyers with California addresses did make up the next largest group, but the number of buyers was less than 5,000. Almost as many buyers had previous addresses listed in Texas and Washington as had California addresses.
“Nobody's been complaining about California, until this past year,” Tina Tamboer of the Cromford Report said. “Frankly, California had been one of the number one sources for most of our population growth for as long as I've been tracking it.”
There were about 25 times as many Arizona buyers as California buyers, according to the county assessor’s data.
Housing prices in Arizona have shot up, and one Phoenix-area real estate agent has launched a campaign he calls “Don’t LA my Phoenix.”
Brian Cross has been selling real estate in the Valley for 18 years and said his campaign isn’t just about increasing home prices and crowding the market, its aim is to encourage home sellers to consider offers from local families over selling to investors or cash buyers.
“If you look at our market and how quickly the average sales price has been going up, it doesn't take too much thinking to realize that we could very easily end up in a market where our local people cannot afford the homes,” Cross said. “And one of the first places I think of when I think of that is Los Angeles.”
Still, according to Tamboer, the issue driving up home prices in the Valley is supply and demand: too many people and not enough houses.
“We grew our population by 20%, since 2010, and we only grew our housing units by 11%,” Tamboer said. According to the Cromford Report, there are only about 6,500 houses available for sale in the local MLS database, and sellers can take their pick of multiple offers.
That means prices will stay high until more people decide to sell or until there are fewer people moving into the area searching for homes to buy.
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