The economy in Phoenix is looking good. Those who remember the runaway growth of the last decade may not feel like it, but the Phoenix AZ area real estate and its economy are performing extremely well. The state of Arizona as a whole has continued to outpace the rest of the country (as previously predicted by economists). The state capitol serves as the economic center and is responsible for a large portion of that positive news. Furthermore, the area is set to continue its growth at a remarkably healthy rate thanks to recent expansions in the areas of finance and healthcare, as well as construction and service-sector work. Furthermore, tech companies looking to escape the stifling expense of doing business in places like California have discovered the utility of setting up shop here. It should really come as no surprise that the Phoenix AZ area real estate market is projected to be the number one real estate market in the entire country in the next year.
The Phoenix AZ Area Real Estate Primed to Remain a Hot Spot in 2017
As you could probably guess, the optimistic outlook for the real estate market is a factor of anticipated population gains driven by job growth, which pulls in younger residents and families. All of those companies looking to relocate to or expand in the Phoenix AZ area need employees to work there, right?
And what better place to live out your days playing golf whether than worrying about shoveling snow? While the Phoenix AZ area real estate market has long been popular with retirees (the Arizona sunshine will cure what ails you!), the aging Baby Boomer population will increase the number or retirees calling Arizona home both seasonally and year-round.
Through September of this year, the city of Phoenix itself has added between 50,000 and 61,000 jobs to the economy, outpacing cities like San Francisco both in terms of jobs added and wage growth. Already the fifth largest city in the United States, economists forecast Phoenix will be at least #4 by 2020.
The Phoenix, AZ area’s current housing shortage explains the anticipated gains in housing prices, even as Millenials nationwide continue to delay home buying when compared to earlier generations. Home prices have already risen by 6 percent through August when compared with the same period last year. That trend will continue into next year with gains of another 3 percent to 6 percent. Additionally, sales have grown 5 percent during through August of this year and are anticipated to rise another 1.9 percent to 7.2 percent in 2017. Gone are the days of the bubble and empty houses sitting for sale for months on end.
The Phoenix AZ Area Real Estate Economy
The Phoenix AZ area as a whole, with adjacent cities including Scottsdale, Mesa, Chandler, Gilbert, Glendale, Goodyear and Surprise, offer the opportunity to invest in Phoenix real estate at a variety of price points and in homes that suit a variety of lifestyles.
All of that being said, the real estate market is obviously constantly in flux. Real estate is one of the most significant investments you can make and should not be taken without caution, no matter the circumstances. While there is the real estate shortage mentioned earlier, the market for high-end homes (those at about the $500,000 mark) remains saturated. If you are looking to buy a home, from an investment standpoint, it makes more sense to look for something in the $200,000-$500,000 range. Would-be buyers should also be cognizant of timing as mortgage interest rates will likely continue their increase and drive home prices up at a faster pace—if you are serious about buying, it would be better to do it sooner than later.
As we have written about previously, when looking at the greater Phoenix AZ area, Glendale, AZ area real estate looks like an especially prudent investment given the suburb’s average price per square foot (around $123—a 9 percent increase when compared to the same period last year—$15 less per square foot than the average home price in Phoenix and $5 less per square foot than the average price in neighboring Peoria), current unemployment rate (a full percentage lower than the rest of the state) and other various amenities. And while a bevy of large companies already call Glendale home, in the past year, another dozen organizations within key industries have announced plans to relocate to or expand in Glendale, translating to an additional 3,300 job to be added to Glendale’s economy soon.
Wherever in the Phoenix, AZ area you decide to call home (or buy a rental to house some Millennial tenants), you can rest assured that though you may not get rich overnight, there are plenty of good indicators that over time, your investment will yield real financial rewards for you and your family.