Predictions for the 2022 Phoenix Real Estate Market
Phoenix’s real estate market performed well last year. From retirees, millennials, remote workers to big investors, diverse classes are looking to move to Phoenix to take advantage of its many benefits. With a great economy, affordable cost of living, and a good labor supply, experts predict that Phoenix’s real estate market will remain at the top over the next twelve months.
Metro Phoenix is No. 19 among Top Housing Markets of 2022
AZ Big Media reports that Realtor.com has predicted its Top Housing Markets for the year. The top ten housing markets include Salt Lake City, Utah; Spokane, Washington; and Tampa, Florida. Metro Phoenix has been ranked number 19 among the top housing markets. It is forecasted that it will have a home sales change of 14.3% and a home price increase of 7.5%. The combined sales and price change is expected to be 6.8%+.
Some of the factors expected to influence the growth in the housing hotspots include the many tech jobs available in these areas. The top ten market areas have a strong job market and a lower average unemployment rate than the top 100 metro cities. They are also attracting many remote workers and are hotspots for both young people and retirees. Additionally, the top 10 market areas have relatively more affordable house prices that are expected to rise.
Residential Trends to Watch in 2022
In an AZ Big Media article, realtor and broker Justin Thorstad spoke about some of the key trends driving growth in the top markets of 2022.
These areas are experiencing much growth due to factors such as a robust economy, several job opportunities in the tech sector, and being relatively affordable. Many people are interested in tech jobs, primarily those in less crowded areas. The pandemic has led to more workplace flexibility, and so these areas will also attract many remote workers.
As more persons look to move to the Phoenix area, high demand for the limited number of houses is created. This will cause home prices to rise in 2022. Homebuyers will need to be prepared with a pre-approval and pre-qualification for a mortgage loan. So once someone finds their dream home, a realtor can give a realistic offer.
Phoenix Ranked as One of the Most Competitive Rental Markets
Jeff Gifford and Brent Godwin of the Phoenix Business Journal reported that RentCafe studied the most competitive rental markets in the US, and Phoenix was ranked at number 39 out of 50 cities.
According to the report, vacant apartments got filled within 28 days. At that same time, 95.4% of all rentals were occupied, and there was an average of 14 prospective renters competing for a vacant apartment.
The report focused on 105 markets, and the factors that were taken into consideration include the applicant’s average credit scores and average days of vacancy, among others.
The RentCafe analysis was not based on rents or other real estate metrics. However, Apartment Guides’ recent rental trend report discloses that rents continue to increase in the US. Gilbert was in the lead for rent increases, while Tuscon was in the top ten. Other cities that saw rental increases included Mesa and Scottsdale.
27- Acre Parcel Bought in Buckeye by Dallas Health System for New Medical Campus
Angela Gonzales of the Phoenix Business Journal reports that Abrazo Health bought a 27-acre parcel. They intend to build a new medical campus. Located about 10 miles from the Abrazo West Campus, the parcel is found on the southwest corner of Interstate 10 and Verrado Way.
They want to break ground this year. The campus will have an acute care hospital, a medical office building, and ambulatory services. Company officials explain it’s too early to decide on the total cost for development or how many employees will be taken on.
The campus will be built at a time when Buckeye’s population is expected to grow as homebuilders and developers are planning to create master-planned communities with thousands of homes. This includes RVG Partners and former Phoenix Suns player Joel Kramer who are planning to build a master-planned community worth $200 million, consisting of a regional medical campus.
Major US Chipmaker Company Looks to Set up Multi-Billion-Dollar Plant
According to Evan Hoopfer and Lauren Ohnesorge of the Phoenix Business Journal, a US-based semiconductor company is looking for areas in Phoenix, California, Texas, and North Carolina to start a project with an investment value of over forty billion dollars. It is estimated that the project will provide as many as 10,000 jobs when completed.
Sources cannot confirm the company’s name, but they have shared that it is a US chipmaker.
Last October, the CEO of Idaho-based Micron Technology, Sanjay Mehrotra, says the company is looking to invest over $150 billion
worldwide in the next ten years. The company is looking to work with governments globally, such as the US, as they plan to expand and invest in the areas of research and development and memory manufacturing,
Micron’s spokesperson says that the company is looking at opportunities globally and is considering factors like workforce, cost-competitiveness, reliable utility services, favorable regulatory environment and more.
Is Phoenix the next Silicon Valley?
In an article from the Zayo Group published in the Phoenix Business Journal, it is revealed that Phoenix is one of the fastest-growing and dynamic regions in the US for tech business growth. This includes mainly aerospace, electronic manufacturing, and satellite telecommunications. Businesses are attracted to Phoenix because of the operational costs, up to 36% less than California. This is a big incentive for companies looking for a headquarters.
In addition to favorable amenities of a business hub like a highly skilled workforce, adequate transportation, and more, another reason for Phoenix’s suitability for tech-centered companies is a prominent data center landscape.
The significant growth of data centers in Phoenix leads to the need for network infrastructure to support operations. Network providers like Zayo are working with the data centers to provide high-performing fiber infrastructure to increase their value and tenants’ value. With a high network strength, data centers can continue their explosive growth and set the stage for a Silicon Desert-style tech center.
Phoenix is the Number 8 Hottest in the 2022 Housing Markets
According to a recent Zillow analysis highlighted in an AZ Big Media article, Tampa will take first place in the housing market for 2022. San Antonio, Raleigh, and Jacksonville were among the top five areas. Phoenix is in at number eight, followed by Orlando and Austin. It is expected to be another hot year for the Sun Belt region.
Home shoppers in that area can expect to face rising prices and intense competition. Additionally, there will be limited inventory that will leave the market fast.
Tampa is at the top of the list as it has the combined advantage of strong predicted home value growth, a relatively scarce inventory that is expected to be fast-moving, plus a thriving job market and a good number of potential buyers indicated by the demographics.
Overall, with more millennials and retirees looking to purchase homes, it is expected that there will be a significant price appreciation and sales volume to continue into the following year.
Arizona Real Estate Markets: Trends and Forecasts
Norada Real Estate Investments’ Marco Santarelli says Arizona’s home values have risen by 31.5% since the last year and are expected to keep growing at a similar rate for the next twelve months.
Homes in Phoenix were around $318,000 in November 2020. Last year alone, home values rose by 32.4%. Zillow’s Buyer-Seller Index says Phoenix is a hot real estate market for sellers and will increase 20.3% in the next year.
Furthermore, investing in the Phoenix real estate market has several advantages, including lower cost of living, moderately priced housing, an available workforce, and an economy expected to grow.
Phoenix’s real estate market continues to be attractive to residential real estate investors. As they continue competing for potential investment properties located at the lower end of the market, first-time homebuyers will continue to face challenges and could end up renting. It is recommended that the buyers look carefully at the specifics of the Phoenix housing market when they plan to purchase.
Rise48 Equity has completed $817,116,000 in total transactions since 2019, and currently has $659,516,000 of Assets Under Management, all in the Phoenix MSA.
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