Year-over-year Phoenix home prices inched up a bit in November, according to the latest S&P CoreLogic Case-Shiller Indices.
Released on Jan. 27, the report shows a 1.56% year-over-year increase in November home prices in metro Phoenix. Home prices were down 0.05% between September and October, but remained stable at .02% between October and November.
"Phoenix continues to be one of the slower appreciating markets, though signs of revival are coming through, particularly in pricing of lower and higher priced properties," said Selma Hepp, economist at Irvine, California-based property data company CoreLogic Inc.
Phoenix has seen a jump in inventory over the last year, which also is helping to keep a lid on home price gains, Hepp said.
With mortgage rates hovering around 7%, homebuyers are starting to accept this rate as the new norm, at least in the near term, according to Denise McManus, a dual licensed professional as a mortgage lender with Xpert Home Lending and licensed real estate advisor with Engel & Voelkers Scottsdale.
“I believe we could see areas of The Valley with appreciation as much as 5% in 2025. In practical terms, that puts the 'net cost' of home ownership closer to 2% — 7% (rate) minus 5% (appreciation) — which starts to look like a bargain compared to renting," she said.
Some experts continue to see Arizona as one of the better performing "outlier" markets that will continue to outperform a lot of other markets across the nation with certain submarkets within metro Phoenix that will continue to see pricing growth into the spring.
Those submarkets include Paradise Valley, Arcadia, central Phoenix, much of Scottsdale and pockets of the southeast Valley.
"Many buyers have stayed on the sidelines for a few years and recognize it has not helped their home purchase journey," Denise said. "Those buyers will provide an influx of demand as they recognize 5% rates are not a reality and they want to participate in the benefits of home ownership."
This boost in homebuyer interest comes at a time when companies in Arizona added 3,400 workers in December, said Ben Ayer, senior economist for Nationwide. "The Arizona unemployment rate ticked higher to 3.8% but remains below the national rate as labor conditions within the state continue to be boosted by solid population increases in the Phoenix area," Ayer said.
"Arizona should be poised to outpace growth in most states, given the positive tailwinds from population growth and growing service industries," Ayer said.
If you are curious about the market and how best to navigate buying and selling a home in Scottsdale and the surrounding area, reach out to Denise. She will provide apt attention and knowledge to help find the best opportunities for you.
If you are curious about the market and how best to navigate buying and selling a home in Scottsdale and the surrounding area, reach out to Denise. She will provide apt attention and knowledge to help find the best opportunities for you.
