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2022: What to Expect in the Arizona Real Estate Market
December 20, 2021

2022: What to Expect in the Arizona Real Estate Market

by The CE Shop Team

Get Ready for Another Hot Year in Arizona Real Estate 

Despite enduring yet another unusual year, the Arizona real estate industry has remained strong. The Grand Canyon State continues to grow, no matter what challenges it faces. 
With high demand, limited inventory, and rapidly rising home sale prices, real estate agents across Arizona should gear up for another booming year.

2022 Arizona Real Estate Outlook: Hot

In October 2021, the average home in Arizona was priced at $396,235, a 31.5% increase year-over-year (YoY). There’s little sign of prices stalling, though, as Zillow predicts this figure will rise another 12.7% within the next year.

Arizona Home Data Zillow
Source: Zillow

While home prices rose, the number of homes for sale statewide decreased by 21.5%  year-over-year as of November 2021. The latest figures show that there are only 10,358 active listings in the Grand Canyon State.

And experts expect this trend to continue.

“Inventory will stay sparse. While the low rates have brought homebuyers into the market, high demand and low inventory have increased prices. This is good news if you plan on selling. Buyers have adapted to virtual tours and many who are looking to relocate are comfortable making an offer sight unseen in order to seal the deal. In fact, it’s not uncommon to have a home go under contract in just a few hours because inventory is so low,” said Asher Cohen in an interview with AZBigMedia.com. Chone is the founder of Scottsdale-based BUYAZRE.com.

Buyers are still attracted to the housing market despite the inevitable bidding wars and high home prices. Mortgage rates remain low, and the 30-year fixed rate currently sits just above 2.5% as of writing.

The sparse supply of homes coupled with low mortgage rates will continue to attract motivated buyers into the Arizona real estate market. We expect many to strike while the iron is hot to capitalize on the current mortgage rates, which could save prospective buyers money in the long run.

On the rental side of the market, rent prices increased by a whopping 27.6% on average statewide, though not uniformly. Phoenix rent prices only increased by 6.6%, but rental prices in Mesa, Scottsdale, and Gilbert jumped by 27.7%, 38.8%, and 93.1%, respectively. This increase in rental costs is worrying to renters but also shows residents’ movement to smaller markets beyond Phoenix.

Amid all of this hot rental and residential activity, only 0.5% of Arizona homeowners fell delinquent on their mortgage as of the latest figures, and equity slipped into the negative on only 1.0% of homes statewide. Both of these figures are down from last year, which is a positive sign that the state is healing from the COVID-19 pandemic.

Despite this crazy activity, people are still drawn to the Grand Canyon State. The state has welcomed over 800,000 new residents over the last 10 years, expanding Arizona's total population by nearly 12.5%. 

Between the booming population and relative housing affordability, we can expect 2022 to be another strong year for Arizona real estate agents and sellers.

2021-2022 Arizona Real Estate Market Data
 

Zillow Home Value Index

$396,235

Home Value Change YoY

+31.5%

One Year Home Values Forecast

+12.7%

Rent Price Change YoY

+27.6%

The Percentage of Homes With Negative Equity

1.0%

Mortgage Delinquency Rate

0.5%

Available Housing Inventory

10,358

Buyer’s or Seller’s Market

Seller’s

Market Insights for Arizona

In November 2021, the U.S. Bureau of Labor Statistics reported Arizona’s unemployment rate at 4.7%, down from the state’s record-high of 14.2% in April 2020. Eight Arizona companies made the Fortune 500 this year, the most to make the list in the past 25 years. An additional 13 companies from the Grand Canyon State ranked in the list of top 1,000 companies. In other words, business is booming, and out-of-staters have taken notice.

Arizona continues to be a sought-after relocation destination. The state is ranked as the seventh most popular state to move to in 2020, and who can blame the newest crop of Arizonans? Beyond the great weather, the beautiful landscape, and endless outdoor activities, Arizona’s economy remains strong and stable. Here’s how the state currently ranks among the nation:

  • First in copper production
  • Seventh in economic growth
  • Twenty-first in health care

With a strong 2022 forecast, Arizona real estate agents will need to be at the top of their game. From buyers battling rising prices to sellers fielding multiple offers, there has never been a better time to serve your local community as a real estate agent. With massive strides in home sales, home price growth, and rent prices, it’s clear that living in Arizona is in high demand.

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