The sunniest city in the world, with temperatures topping 100 degrees Fahrenheit most days from late May through early October, Phoenix is also one of the hottest housing markets in the U.S. — and that poses some real challenges for homebuyers.
During the 2008 recession, Phoenix’s housing market took a big hit. Real estate investors swooped in and bought up housing, either flipping those homes or turning them into rental properties. For homebuyers in Phoenix, these are still issues dogging the residential market. Investors continue to provoke inventory issues for buyers seeking homes that fit their budget and lifestyles.
The population continues to grow with millennials and young families moving to Phoenix for jobs in technology, healthcare, insurance and finance. With that growth comes the need for housing. According to Mashvisor’s 2020 housing predictions, “The average sales price of Phoenix homes that sold over the last month is $265,000. This is 6% higher than last year.”
For homebuyers, Phoenix is currently one of the tightest housing markets in the nation, says the Home Buying Institute, and prices will continue to rise due to low supply, competition for limited inventory, and steady growth. But don’t fear. We consulted experts with decades of experience in Phoenix real estate. We scoured the neighborhoods. And we did the math to find the best recommendations and resources for you.
Staying cool while buying in the hot market of Phoenix
At the center of a sprawling, multi-city metropolitan area known as the Valley of the Sun, Phoenix has been popular for its high-end spa resorts, Jack Nicklaus-designed golf courses, and influx of seasonal residents from northern climates, known as snowbirds.
The arts and culture scene is booming, hiking and bicycling in the Phoenix Mountain Preserve or nearby Superstition Mountains is immensely popular, and major sporting events and a signature restaurant scene add to the quality of life in Phoenix.
Within this booming metropolis are a variety of housing styles, from contemporary and minimalist downtown condos, to historic bungalows in the Roosevelt, to Pueblo Revival in the Coronado Arcadia historic neighborhoods.
The Willo neighborhood hosts an impressive collection of ranch-style homes. Contemporary and mid-century modern can be found in Marlen Grove, Marion Estates, Paradise Gardens, and Windemere. Spanish Mission, Mediterranean Revival, Hacienda-style (aka Spanish Revival), and Tudor styles are also scattered throughout the city.
Based on our housing transaction data for Phoenix, November is the best month for sellers. August is the recommended month for listing a home (as closing takes about three months). Steve Castle, a five-star agent with 23 years of experience in Phoenix who’s sold 75% more properties than the average Phoenix agent, agrees.
Castle says buyers should purchase before the holidays. “Sellers won’t otherwise want to think about it until the end of January or early February,” he explained. “There’s lower inventory at this time. But people who have listed their homes need to sell.”
Prices will vary depending on “proximity to high-paying jobs, access to freeways or public transportation or the airport, and schools,” Castle adds. “It’s supply and demand that are determining the prices.” If a buyer is willing to locate further from the city’s center, which can mean longer commutes on the heavily travelled I-10, I-17, or U.S. Route 60, then opportunities open up for bigger, newer homes.
“Size of house for budget is a huge deal in Phoenix,” Castle added.
“The farther you drive, the bigger the house for the same money. If you’re willing to drive a half hour each way to work, you’re more likely to find a 4,000-square-foot house for the same price as a 2,000-square-foot house.”
Also consider the home’s age; a home built in the ’90s may have big-ticket items, like the roof or the air-conditioning system, just about ready to fail. Account for these in your offer and budget.
Spiders, scorpions, and house flippers
When considering a home purchase in Phoenix, you should get a careful inspection on all mechanical systems — especially air conditioning, says Richard LaGrand, CEO of Alliance Property Inspections, who has conducted thousands of home inspections in the Valley of Sun. “We use air conditioning about 300 days a year,” he explains. “These systems all have lifespans, which are shorter in Phoenix.”
Despite the desert climate, water intrusion is also a big issue because of yearly monsoons, which can cause flash flooding in minutes. “New homebuilders like to stucco down to the grade or pavers right up to the threshold of the door, which looks nice,” LaGrand says, “but during monsoon season, that water will go right into the house.”
Blame the house flippers for one of the bigger issues home buyers face in Phoenix: the lipstick on a pig — or should we say javelina — approach. Flippers install new bathroom tile, new kitchen cabinets, paint the walls and carpet the floors. But the home still has its original plumbing, roof, and mechanical systems. “Especially on 30- to 40-year-old homes, it’s critical to do your due diligence,” LaGrand says.
With Phoenix’s desert climate also comes friends — the stinging, biting kind. Scorpions are territorial; the house you’re considering may not have them, but the house next door might. They like being near water and the mountains, as do outdoor enthusiasts. If you’re considering areas like South Mountain, Fountain Hills, or Mountain Preserve Estates, make sure to see whether scorpions are in the seller’s disclosures.
Phoenix is also home to two types of termites: subterranean (the largest colony in Arizona) and dry wood.
“If the home you’re considering has subterranean termites, don’t walk away from the house,” LaGrand advises. “With termites, the adage is: It’s not if you have them, but when. It takes a while for them to do significant damage. A trained inspector will know that and be able to ascertain the size of the colony and whether they’ve had any impact on the home’s structure.”
Don’t forget to ask about roof rats, too. Gilbert and Tempe, located in the East Valley of Phoenix, are among the worst areas in the nation for roof rats. These residential areas are known for their citrus trees. The fruit provides a consistent food source for the rats, which take up residence in people’s attics. All of these desert friends need to be disclosed by sellers.
Finding the right su casa
The fifth-largest city in the U.S., and sprawling across nearly 518 square miles, Phoenix has a diverse seller population and a range of price points. In the historic districts of Phoenix proper, well-preserved mid-century homes and ranch houses untouched since the 1960s can still be found for around $300,000.
In Del Norte Place, for instance, atomic ranches sit next to 19th-century Tudors. With a little sweat equity, these gems can provide years of vintage living near sports stadiums, coffee shops, shopping, public transportation, and parks.
Area Vibes calls out Deer Valley, North Gateway, Paradise Valley, North Mountain, New Village, Ahwatukee Foothills, Encanto, Camelback East, Desert View, and South Mountain as the best neighborhoods in Phoenix.
The crime rate in Ahwatukee is 89 percent safer than most cities in Arizona, with a median home price of $298,053 as of Q4 2019. The neighborhood also gets an “A-” grade in public schools from Niche.
“Ahwatukee has a distinctly Spanish feel with its Mediterranean Revival single-family homes and spacious Hacienda-style homes,” according to SpaceWise. “Residents can take advantage of excellent golfing at Foothills Golf Club and Ahwatukee Country Club, or get scenic views of the city while hiking to Chihuahua Ridge or Dobbins Lookout.”
The public school districts in Desert View, Paradise Valley and North Gateway also get high grades.
Deer Valley is also safe and quite affordable. Single-family ranches featuring adobe or territorial-style architecture are common throughout the neighborhood and sell for around $167,384 as of Q4 2019. Fun fact: One in five residents of Deer Valley is over the age of 55.
Buying in Phoenix? Get the right price
Right now, because the Phoenix housing market is as hot as the desert sun, working with a top Phoenix real estate agent is critical. Every home is different. The neighborhood, school district, square footage, year built, as well as the condition of your home will impact how much sellers can get for the house — and how much you’re willing to pay.
A top buyer’s agent in Phoenix can save you $36,331 on your new home and helps buyers purchase 1.7 times more homes than an average agent, so make sure you connect with the best agent for you today.
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