Maricopa County, Arizona Real Estate and Housing Market Trends and Forecasts
January 1, 2023
5 min read
With its temperate winters and affordable housing, Maricopa County, Arizona has become a popular destination for many families. That’s why it’s no surprise that the real estate market in Maricopa County is as hot as the Arizona summers – and is expected to remain so. Purchasing a home right now provides a wonderful financial opportunity for your clients and their families.
If you have clients who are hesitant to buy a home because they've heard talk of a housing bubble in the media or they’re worried home prices may decline, you can use MBS Highway's Real Estate Report Card to show them the strength of the market in Maricopa County right now.
Let's break this powerful tool down so you can see how you can use MBS Highway's Real Estate Report Card to help your clients move forward with a home purchase and to gain valuable referral relationships.
Forecasted Appreciation Provides Great Opportunity
Let’s begin by analyzing affordability and appreciation.
The median home price in Maricopa County is 299,216. We have really strong appreciation with the 10-year historical appreciation rate at 6.78%, while the forecasted 1-year and 5-year cumulative appreciation rates are 5.69% and 18.9% respectively!
While these figures are significant, let’s break down the numbers even further and look at what this really means for your clients. Purchasing that $299,216 home today, given the forecasted appreciation rate of 18.9% over the next 5 years, means that buyer will gain $56,555 in appreciation alone! Showing your clients this gain so clearly using the Real Estate Report Card can help them realize the financial advantage of acting on their home purchase now, which will increase your production and help you build valued referral relationships.
You may have customers that wonder if they can afford a home in this area. You can use the Real Estate Report Card to show them that affordability is very strong in this market, as evidenced by the Affordability Index of 132.8. This means that a family earning the median household income for Maricopa County of $70,331, which is well above the national average of $55,909, can afford 132.8% of the median home price when putting 20% down.
Of course, not everyone is putting 20% down, but you can see how this information gives homebuyers a good gauge of what they can afford, helping you build your pipeline and build relationships with both new and trusted referral sources.
Honing in on inventory, we can see that there are just four homes available for every 1,000 people in Maricopa County. Inventory is down a whopping 48% year over year and 3% month over month.
What’s more, it's crucial to explain to your clients that low inventory will likely be a factor for the foreseeable future – and it’s probably not going to get easier to purchase a home. Here's why…
Based on our demographics, there are currently around 617,790 people who are between 27-35 years old. This number is important because those in this age range are first-time homebuyers, and our goal is to see what kind of business we can gain from this demographic and how we can help them benefit through homeownership.
Out of these 617,790 people, 58,690 of them will either rent or purchase a home in the next year. And out of these 58,690 household formations, considering that Maricopa County has a healthy 57% homeownership rate, around 33,550 will purchase a home.
To meet this demand, builders would have to build 33,550 homes each year, or this amount of homes would have to become available for sale. Yet the actual number of homes being built is well below this, at just over 24,000!
This inventory and demographic data combined provides such an easy way to express to potential clients why they shouldn't delay their purchase, which again can help you increase production and gain the trust of key referral sources.
The bottom line is we have an inventory shortage, and this is a big reason as to why now is such a good time to purchase a home before it becomes even harder if inventory tightens even more or rates move higher due to rising inflation or other reasons. Plus, there's also the strong forecasted appreciation rates as discussed above and the fact that homes are selling fast.
Strong Job Market Bodes Well for Housing
Despite the dip in employment last year due to the pandemic, as was the case across much of the country, job growth in Maricopa County has remained healthy otherwise and it is already coming back strong.
The current unemployment rate is 7.06%. Though this is higher than the national average of 6.1%, we expect to see the unemployment rate decreasing further as the economy continues to reopen.
A strong job market is another reason the housing market is expected to remain strong in the Maricopa County area, as people are more inclined to purchase a home when they feel secure in their job. The opposite is also true.
MBS Highway’s Real Estate Report Card is just one of the many tools in MBS Highway that can be the crucial differentiator in turning prospects into buyers who have won their dream home – and turning originators into advisors their clients trust. With an MBS Highway membership, you'll have access to all of our tools, including Bid Over Asking Price, Buy vs. Rent Comparison, Loan Comparison tools, daily coaching videos, lock alerts and much more.
Do you want analysis like this on a daily basis? Try all of these tools for free with a 14-day trial and see for yourself the kind of difference they make in your business!