The Phoenix real estate market continues it’s upward climb in real estate prices and once again leads the nation in home price growth. This has been an all to familiar story for Phoenix homebuyers for several years now but there may be some relief in sight going forward. Most analysts feel that with the strong price appreciation we have seen in our local Phoenix real estate market the pace of price increases should slow down in 2022.
According to the S & P CoreLogic Case-Shiller U.S. National Home Price NSA Index released yesterday, home prices in major metros across the U.S. reported a 19.5% annual gain in September, down from 19.8% in the previous month. The 20-City Composite index posted a 19.1% year-over-year gain, and the 10-City Composite Index posted a 17.8% year-over-year gain. For the month of September which is the most recent month that data is available, Phoenix, Tampa, and Miami reported the highest year-over-year gains among all of the 20 cities included in the index.
Phoenix Housing Market
The Phoenix housing market led the index in home price appreciation for the 28th consecutive month with a 33.1% increase. The median sales price in Phoenix now stands at $418,000 and the Phoenix housing market continues to remain a Seller’s market for the moment.
There is some positive news in the numbers that are being posted each month in Phoenix. According to Craig J. Lazzara, Managing Director at S & P DJI, “Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly”. The Case Shiller U.S. National Index posted a month-over-month increase of 1.2% which is down from the pandemic peak a year ago that saw 2% month over month price increases. And in each of the composite indexes, all saw a smaller rise in prices in September than in August.
This is good news for the Phoenix housing market as all signs point to a slight “deceleration” in prices going forward.
Housing analysts continue to believe that the pandemic shift in housing preferences will continue as potential buyers move from urban apartments to suburban homes. Phoenix will continue to benefit from these shifts in housing preferences as more people consider our market a viable alternative to the crowded urban city centers in their current home market.
Rental Rate Increases Starting to Slow Down
Rental rates remain strong nationally and especially here in Phoenix. According to the Zillow Observed Rent Index for October 2021, rents in the Phoenix area grew 26.1% year over year to an average of $1,848.
However, the rental rates story on an annual vs a monthly basis is very different. Rents rose 0.8% in October from September, a notable slowdown from the 1.4% appreciation recorded in September.
Looking Ahead at the Housing Market
The Phoenix real estate market is expected to continue to show strength in the upcoming months, just at a slower pace than we have seen in 2021. According to Zillow, housing prices are expected to rise 3.8% in the final quarter of 2021, and Zillow expects home prices to rise 13.6% nationally in the 12 months ending in October 2022.
We also follow a growing community located about a 20 – 30 minute drive from the East Valley in Phoenix called Casa Grande. This community is attracting a lot of new jobs and there are several new home and affordable resale home opportunities in this area. I wrote a summary of the Casa Grande real estate market for the month of October, 2021 and you can read that article by clicking HERE.
If you are looking to buy a home in the Phoenix area or surrounding communities, please feel free to reach out to me anytime and I would be happy to answer your home purchase or mortgage questions. I can also assist you with getting pre-qualified to buy a home. You can reach me directly at steveATthehomebuyinghub.com
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