Arizona has been one of the hottest real estate markets in the United States, and its greater housing market is extremely strong this year. While other cities in Arizona didn’t make it to the list, the Grand Canyon state generally showed an impressive housing market.
Predictions published in housing market news show that Arizona continues to be among the housing markets to watch out for in 2022.
Here is an Arizona housing market forecast that is more likely to happen.
Home values will increase
The average home value in the Phoenix housing market was $469,500 for April 2022 (representing an increase of 27.7%) and is expected to reach $598,400.
Many buyers will compete for the few available homes in 2022, increasing median home value. The increase is greatly influenced by demand and supply constraints.
Rental properties will become more popular
Reduced profit margins, higher acquisition costs, and unavailability are turning Arizona real estate investors into the rental market.
Long-term rental properties seem a better alternative in today’s market, where monthly rents can help cancel out higher prices. In addition, the lack of inventory in the housing industry will drive more tenants to rental houses, effectively lowering the risk of vacancies.
Interest rates will increase
The Federal Reserve is expected to increase interest rates to combat inflation, and this is not a question of if but when. The only hanging question is how the rates will go. Some predict more than five increases, but even if they are fewer, it will still impact home prices.
Rent will increase
Rent prices in the Phoenix housing market have increased 8% year-over-year. The average rent for a three-bedroom home in Phoenix is $2 345, according to Zumper.
However, the rise in home prices has created more tenants than usual, so it’s safe to assume that rents will increase over the next 12 months.
Phoenix as the Arizona real estate market driver
Real estate stars believe Phoenix will drive the Arizona real estate market. Phoenix is the fifth-largest city in the nation. The city is continuously growing, particularly due to the in-migration that has been happening since the onset of COVID-19.
It is also one of the regions where home cost rise is expected to continue. Zillow forecasts home prices in Arizona to rise by double digits in 2022 but at a slower rate than in 2021.
Tenants occupy 36% of Phoenix’s households, so its real estate market is a good blend of the owner and tenant-occupied housing units for sale. Three- and four-bedroom single-family homes are the most common types of property. However, you are more likely to come across a duplex for sale in some neighborhoods.
Endnote
The Arizona real estate market, intense in the previous year, is expected to thrill the housing industry in 2022. The main drivers of the Grand Canyon city’s housing market are the state’s promising jobs, quality of life, strong economy, and multiple attractions. The relatively low mortgage rates indicate that it’s the best time to purchase a property in Arizona. The rental market is favored by the lack of new housing inventory, the rising property costs, and the reluctance of homeowners to sell.