Phoenix has ranked in third place for the real estate markets to watch out for in 2022. The Emerging Trends in Real Estate report placed the city in the top 10 for the first time in more than a decade. So what is it about Phoenix’s real estate market that has got people talking?
Soaring prices
Property costs in Phoenix are sky-high. In May 2021, the average Phoenix home cost $390,000 – more than $100,000 more than the average property price in America. Prices in some areas are particularly high. Paradise Valley, Scottsdale, and Gilbert are home to zip codes where house values have gone up between 40% and 50% in the past year. It’s now estimated by 12 News that the typical property in Phoenix will go for $500,000 in 2022, which explains why Phoenix’s real estate market is a hot talking point right now.
Demand from Zillow
As of September 2021, Zillow has more than 1,000 properties in it’s Arizona inventory. Fox10 reports that this is a rise of 1,000% in a year. Zillow’s model is a fairly simple one; they buy, complete minor modifications and repairs, and resell for a profit. Household goods that aren’t performing well will typically be repaired by a local repairer where possible. This is the cheapest and most reliable way for Zillow to complete the work. Items such as refrigerators and dishwashers will be fixed, if needed. Bigger jobs may be undertaken too, such as knocking down interior walls or replacing bathroom suites. It’s very much a house flipping model, but it’s one that has been well received in Phoenix.
Rising rent
It’s not just property prices in Phoenix that are going up, rental prices are too. On average, rent across Phoenix has increased by more than 19% in the past year, according to MarketWatch. Rent in some areas haven’t jumped up quite as much though. For example, in the Phoenix metro area, two-bed apartments have gone up in rent by 15% over the past year. This is still a considerable rise. One reason for the rent appreciation is that Phoenix has invested greatly in luxury developments, such as The Ryan in downtown Phoenix.
Phoenix’s real estate market is red hot and everyone is interested in it. It remains to be seen how long this excitement will last, but it’s safe to say that the industry is definitely on the up.