(Published on - 9/6/2022 2:38:10 PM)
Watch this month's 3 minute market update with statistics and graphs here.
Real Estate is the best hedge against inflation, and there are still plenty of opportunities in the housing market. The Phoenix Valley of the Sun is frequently isolated from severe downturns due to a steady and consistent growth.
The metro Phoenix - Scottsdale Valley dominates Maricopa County, where 250 people ever
y day choose to call home. Much of the growth is young adults and families, following the employers who have been selecting Phoenix for some very good reasons: over 300 days of sunshine each year with little threat of natural disasters; a large educated labor pool; low property taxes and cost of living (in comparison to any other metropolitan its size); very little traffic congestion; and a thriving arts, theatre, sports, entertainment, shopping and new restaurant concepts.
Major colleges and universities include Arizona State University, Grand Canyon University and the University of Phoenix. Plentiful access to higher education has contributed to the Valley's position as the top technology hub in the country. And employees bring families and children which supports growth. It also provides ample research resources, necessary to attract a large variety of some of the most well respected healthcare systems.The Valley is considered one of the most active populations in the country, with outdoor activities that include hiking, boating, equestrian events, golf, tennis, triathalons, and an annual Ironman. It is recognized on par with Florida for Spring Training teams and short term rentals. Televised events include collector car auctions, the PGA's Phoenix Open, the Fiesta Bowl and championship teams in literally every professional sport. In 2023, the Valley will once again host the Super Bowl. And with sunshine over 300 days each year, this is the perfect "climate" for retirees, which today can include all ages.
Ahwatukee.
New awareness of the Ahwatukee Foothills accessibility will increase as we enter 2023, and property values will increase as homeowners realize their good fortune. The 22-mile South Mountain Freeway expansion was the final piece of one of the most efficient freeway systems in the nation. The Loop 101 circles Metrol-Phoenix area, and the 202 connecting the foothills just south of downtown was the last and final missing link. After several years of a "listing drought" which saw very few homes coming on the market, there is still time to buy and take advantage of the appreciation. More
Seasonality.
For the first time in three years, the metro Phoenix market, especially the luxury home market, experienced seasonality over the summer months. Add to this the increase in interest rates, a manic stock market and additional housing inventory coming on the market, and we experienced a significant dip in Contract Ratio. This is in sharp contrast to the peak of March 2022. Much of the Valley fell from a Seller's market to a more balanced market, to the delight of buyers. With 250 people moving into Maricopa County every day and a housing shortage that is still evident, we have no expectation of price drops, although those initially priced over market will reduce to a more reasonable range. Scottsdale, Paradise Valley and other luxury pockets remain strong. Watch this month's 3 minute market update here.
Luxury Marketing Institute.
The luxury home market remains strong. See the digital report here, with local reports on Scottsdale and Paradise Valley.
Paradise Valley was listed as #3 for Median Sales Price (just behind Aspen and Naples) in the current report (downloadable version). Investors in PV are generating huge profits in a short time to meet the demand for "move-in-ready" homes. “Despite escalating prices, it seems that buying a fixer-upper is still not on the radar of the affluent …. they simply do not want the hassle.” And according to the report, and what I am seeing every day here, this trend is escalating! The "flip" targets are homes priced under $5 Million which need even minor cosmetic updating. Call or text me at 602-980-0737 for ideas. Paradise Valley is an affluent suburb located in the heart of Phoenix and Scottsdale. More on Paradise Valley here.
Mortgage Rates will Come Back Down
According to the City of Phoenix, the Valley tops the nation in population growth for the fifth year in a row. The Valley includes dozens of communities, townships and villages and an extremely efficient freeway system. I relocated here in 1982 for graduate school at ASU when the Valley was just 1.5 Million, and still find that it retains its "small town" charm. The communities all blend together and you may eat at a restaurant in Scottsdale, and have coffee across the street in Tempe.
Arizona best place to find deals in real estate
According to azcentral on December 6, Taiwan Semiconductor, already under construction and dramatically changing the housing market in the northwest Valley, plans to expand their presence here. This will triple the company’s stake in Arizona from an original estimate of $12 billion to $40 billion. This will more than double the number of permanent jobs at the TSMC facility to 4,500. That is in addition to an estimated 10,000 construction jobs.
. The key words for sellers in this market are condition (buyers are demanding full updates), price, concessions (such as rate buy-downs) and patience.
A new factor is coming into play, as over half of all homebuyers in 2022 were Generation X or millennials. Interestingly, a survey by Bank of America found that these young and wealthy consumers prefer assets like cryptocurrency, real estate, and private equity over investing in the stock market. "Individuals ages 21 to 42 with at least $3 million in assets have only a quarter of their portfolio in equities, compared with more than half for those who are older," according to the study. This is significant, as Baby Boomers are expected to transfer over $84 trillion of their wealth to Generation X and millennials between now and 2045, according to market research by Cerulli Associates. It is also contributing to our housing inventory shortage.
As far back as 1930, the gas cooktop was glamorized to be sleek, sexy, and sophisticated. A new generation of homebuyers, focusing on more time at home raising young families are switching to induction as a healthier and safer option. Gas generates carbon monoxide, formaldehyde (a carcinogen), nitrogen dioxide (NO2, a respiratory irritant and asthmagen), and other nitrogen oxides into our homes, and our lungs. It also requires constant supervision (during which time toxins are the strongest). Induction is quicker, easier to clean, with the ability to set a precise temperature and no open flame risks for children, tenants, or the elderly. 
Spooky or Balanced? 
ven Buckeye, with the lowest current demand for housing, has recently learned of top new employers moving in. Hurricanes are rare in the Sonoran desert, as are earthquakes and other natural disasters. Sunshine 300 days provides a beautiful view, even if it is hot for 3 months. And a dry heat is so much more preferable when it is hot. These are some of the reasons people and businesses continue to move to Arizona and maintain a strong housing demand.
