|
 |  | March is here, and while the rest of the country is thawing out, we're still enjoying prime Phoenix weather—one of the many reasons people keep moving here! This month's newsletter recaps the biggest real estate trends from February and what's ahead. January's Market Snapshot gave us a lot to digest, especially with the Phoenix condo market inventory explosion—buyers, take note! We also explored whether Build-to-Rent is the next big boom in Arizona and how homebuilders are pressing Trump to ease tariffs on building materials. Meanwhile, the market is seeing a demographic shift as Gen Z steps in while Millennials step back. On the commercial side, Phoenix ranked 11th in the U.S. for office-to-apartment conversions, a trend reshaping urban real estate. If you're thinking about buying, we broke down the true cost of homeownership in Phoenix-Scottsdale-Mesa in 2025—it's more than just the mortgage. And for a historical perspective, we looked at U.S. housing price returns since 1942—because knowing the past helps predict the future. Stay ahead of the market, enjoy the perfect March weather, and let's make smart moves in real estate! |
|
|  | Market Snapshotπ―January 2025 |
|
|  | Is Build-to-Rent the Next Big Boom in Arizona?The American Dream is changing. Instead of buying homes, more people are renting brand new houses. This new trend, called Build-to-Rent (BTR), is gaining popularity, especially in Arizona.
Why is Build-to-Rent Popular?Affordable and Easy: Renting is cheaper than buying, with no large down payments or repair worries. Flexibility: Renters can move easily without the hassle of selling a home, perfect for those who like to move or work remotely. Modern Living: Many BTR homes offer private yards, gated access, and community centers.
Arizona Leading the WayAccording to Point2Homes, Arizona is a major hub for Build-to-Rent developments, with nearly 14,000 new single-family rental homes under construction, primarily in the Phoenix metro area, Buckeye, Surprise, Goodyear, and Queen Creek.
Changing the American DreamBuild-to-Rent communities provide stability and comfort without the long-term commitment of homeownership. These new rental homes are a great option, especially in well-developed communities.
With Arizona at the forefront, renting new, well-equipped homes offers a fulfilling alternative to traditional homeownership.
For more insights, check out the full article on Point2Homes. |
|  | Homebuilders Urge Trump to Exempt Building Materials from TariffsThe National Association of Home Builders (NAHB) has asked President Trump to exempt building materials from the new 25% tariffs on imports from Canada and Mexico. They argue that these tariffs will increase construction costs and worsen the housing affordability crisis. |
|
|  | Millennials Out (Somewhat), Gen Z In: Arizona's Shifting DemographicsA recent StorageCafe study reveals that Arizona is attracting a significant number of new residents, primarily from California, Texas, and Florida. The main drivers for this migration are job opportunities, a more affordable lifestyle, and Arizona's natural beauty. Interestingly, Gen Z is making up nearly 26% of these new residents, driving Arizona's growth with their pursuit of opportunities and careers. Remote work has also played a big role, with 21% of newcomers working from home.
However, this influx has put pressure on the housing market, causing home prices to rise by 61% over the past five years. While many are moving to Arizona, some are also leaving, mainly millennials and Gen Zers, in search of career opportunities and affordable housing elsewhere.
Despite the challenges, Arizona remains a dynamic and attractive place to live, offering a unique blend of job opportunities, affordable living, and a beautiful outdoor lifestyle.
For more detailed insights, check out the full Storage Cafe article. |
|  | Phoenix Ranks 11th in U.S. for Office-to-Apartment Conversions
As of 2025, the trend of converting office spaces into residential units has hit a new high, with a pipeline of 70,700 units across the U.S. Phoenix stands out as the 11th largest market for these conversions, boasting 1,634 units in the pipeline. Despite this, only around 4% of Phoenix's office spaces are suitable for such transformations, significantly below the national average of 14%. However, it still represents almost 6 million square feet of potential residential space. One notable project is the redevelopment of the Canyon Corporate Center into 400 apartments. Although Phoenix lags behind cities like New York and Los Angeles, it remains a key player in adaptive reuse, with 71% of its new units expected from office-to-apartment conversions. |
|  | The True Cost of Owning a Home in Phoenix-Scottsdale-Mesa in 2025Owning a home is more than just a mortgage payment. According to Nick Pisano on Real Estate Witch, homeowners in Phoenix-Scottsdale-Mesa face additional annual costs exceeding $24,000. These include:
For those in a Homeowners Association (HOA), add an extra $3,077, totaling $27,606 annually.
Despite these costs, 81% of homeowners find expenses higher than anticipated, and many spend an average of 6.9 hours per week on maintenance and repairs.
In Phoenix, the median home price ranges from $445,000 to $495,000. Here's the breakdown:
Cost Category | Annual Cost | Percentage of Home Value ($445,000) | Percentage of Home Value ($495,000) |
|---|
Utilities | $7,319 | 1.64% | 1.48% | Maintenance | $6,087 | 1.37% | 1.23% | Renovations | $5,762 | 1.29% | 1.16% | Property Taxes | $3,057 | 0.69% | 0.62% | Homeowners Insurance | $2,304 | 0.52% | 0.47% | HOA Fees | $3,077 | 0.69% | 0.62% |
Total annual cost: $445,000 Home: 5.51% (without HOA), 6.20% (with HOA) $495,000 Home: 4.96% (without HOA), 5.58% (with HOA)
Understanding these costs can help you better advise clients on the true costs of homeownership in the Valley of the Sun.
For more detailed insights, check out the full article by Nick Pisano on Real Estate Witch. |
|  | New Year, New Heat π₯ Phoenix Condo Market Inventory Explodes π£ in January 2025
The January 2025 market update is in, and inventory is way up, giving buyers more options and sellers more competition.
πΉ Phoenix – Inventory doubled (+112%), homes take 69 days to sell, and prices hold at $321K. More choices = more buyer power! πΉ Scottsdale – 8 months of inventory (+87%), median price $597K. Sellers need patience, buyers can take their time. πΉ Tempe – A balanced market with 4.88 months inventory, prices at $335K, and homes selling in 66 days. πΉ Surprise (Bonus Market!) – 8.54 months inventory, homes sitting for 93 days, and a buyer-friendly market with prices at $338K.
π‘ The Takeaway: More condos = more opportunities for buyers to negotiate. Sellers, pricing competitively is key! Want to make a move? Let's chat! π |
|  | The Good. The Bad. The Ugly. U.S. Housing Price Returns Since 1942
The U.S. housing market has seen its share of ups and downs over the past 82 years. Here's a quick look at the trends:
The Good: Booms & Growth π Post-WWII Boom (1940s-1950s): The economy surged, and the G.I. Bill fueled homeownership. Notable years: 1946 (+24%), 1947 (+21%). Tech Boom & Economic Growth (1990s-2000s): Economic expansion pushed housing prices upward. Notable years: 1999 (+8%), 2000 (+9%). Pandemic Housing Surge (2020-2021): Remote work, low interest rates, and demand for space sent prices skyrocketing. Notable year: 2021 (+19%).
The Bad: Slowdowns & Corrections π High-Interest Rate Era (1980s): Inflation and steep mortgage rates slowed price growth. Notable year: 1990 (-1%). Market Readjustments (2010s): The economy healed after the 2008 crash, but price growth remained moderate. Notable years: 2012-2013 (+6% to +11%).
The Ugly: Crashes & Recessions π Where Are We Today? (2024 Market Snapshot) π€ High Home Prices: Prices remain elevated due to past demand surges. High Interest Rates: Mortgage rates have climbed, making affordability tougher. More Inventory: Homes are sitting longer, giving buyers more choices. Uncertainty: Will prices dip, or will demand keep them steady?
Conclusion: Lessons from History πThe U.S. housing market has always bounced back, but not without bumps along the way. Whether it's the booms of the post-war years, the busts of the Great Recession, or today's uncertainty, history teaches us that the market moves in cycles. Patience and strategic pricing are key for buyers and sellers.
What do you think? Are we heading for a slowdown or another boom? |
| | |  | |
|
|
|
| |
|
No comments:
Post a Comment