We are well past the midpoint of 2017, which means some residents of Phoenix, Arizona are considering the advantages of buying a home now versus 2018. Below, we have gathered some data and trends to help you decide the best path forward. Here’s what you should know about buying a home in Phoenix in 2018.
Is 2018 A Good Time to Buy a Home in Phoenix?
The first, and arguably most important, thing you should know is that home prices in the metro area are expected to continue rising through 2017 and into 2008.
In fact, house values in the Phoenix could rise slightly above the national average over the next year or so. Home-price appreciation in the area outpaced the national average over the last couple of years as well. This is based on the latest data reported by the real estate information company Zillow.
In July, the housing analysts at Zillow reported that the median home price for Phoenix had risen 9.7% over the previous 12 months (dating back to July 2017). Looking forward, they predicted that the median value would rise by another 4.5% over the next 12 months. This particular forecast stretches into summer of 2018.
That is a slightly higher projection than those being issued for the nation as a whole. For example, in May of this year, a panel of 100 economists were surveyed about their expectations for the national housing market. On average, they estimated that home prices would rise by 4.8% in 2017, followed by a gain of 3.65% 2018.
So the consensus seems to be that house values in Phoenix, Arizona will rise slightly above the national average pace over the coming months.
This is a key consideration for those who are planning to buy a home in Phoenix in 2018. If prices do indeed rise over the next year or so, as they are expected to do, then those buyers who postpone their purchases until 2018 will encounter higher housing costs.
Be Prepared for Limited Inventory and Competition
Housing inventory in the Phoenix area is still not meeting demand, and this is one reason why home prices are rising above the national average.
A “balanced” real estate market is one that has a 5- to 6-month supply of homes available for buyers. Earlier this summer, the Phoenix real estate market was reported to have only a 2-month supply. That means local housing conditions currently favor sellers over buyers.
It also means that those buying a home in Phoenix in 2018 should be prepared for competition from other buyers. Among other things, buyers should have their financing arranged before they enter the real estate market or make an offer on the house. In places like Phoenix, where the current supply of homes is below average, sellers will expect buyers to have their financing lined up.
Those paying cash for a home in Phoenix should have the funds in the bank with statements to prove it. Those planning to use mortgage loan to finance their purchase could benefit from getting pre-approved by a lender, before starting the house-hunting process.
Homes Are Selling More Slowly Than the Hottest Markets
Even though supply is relatively low in the Phoenix housing market, houses aren’t necessarily selling like hotcakes. In June, houses listed for sale in and around the city spent a median of 42 days on the market before going under contract.
By comparison, in the hottest markets across the country, the median number of days on market is less than 14 — and sometimes less than 10. So while there is a pretty high level of competition among buyers in Phoenix, the market there is not as “fast” as places like Seattle and Portland where homes so within days.
Conclusion: So those are some of the things you should know about buying a home in Phoenix in 2018. House values are expected to rise over the coming months, though at a slower pace than what we’ve seen in the last year or two. Supply is limited, fueling competition among home buyers. But houses are not selling as fast as they are in some of the hottest markets across the country. Hopefully this will give you some sense of what to expect when buying a home in Phoenix.
Disclaimer: This article uses data, forecasts and information from a variety of sources that are not associated with our company. We have compiled this information as an educational service to residents and potential home buyers in Phoenix, Arizona. All data are deemed reliable but not guaranteed.