Phoenix tops nation in appreciation
A recent report by Veros Real Estate Solutions found that Phoenix is projected as the strongest market for appreciation. The real estate forecast is for the 12-month period ending September 1, 2013, and covered 918 counties, 305 metro areas and 12,985 ZIP codes. Real estate in Phoenix is currently forecasted at +8.3 percent.
On a national basis, the forecast improved from last quarter’s 0.26 percent to 1.1 percent, partly because the top five projected markets have gone through significant progress. Because of the decreased housing supply and the low interest rates seen across the board, the progress seen in Phoenix ranked the metro area at the top of the list for a second time. The Phoenix metro area saw an increase of 1.9 percent over the previous quarter’s 6.4 percent increase.
“Phoenix has benefited from a drastically reduced housing supply, which has plummeted by over 70 percent from its peak,” Veros’ vice president of statistical modeling, analysis and research Eric Fox said in a press release.“The area continues its trend of remaining well below the nation’s 8.1 percent average for unemployment, with a jobless rate of 7.2 percent. These factors, combined with the prevailing low interest rates, set the stage for Phoenix to be our top performing market.”
The Phoenix market is continuing the trend of home price resurgence, according to the East Valley Tribune. In the Phoenix metro area, the median price of a single-family home was at $150,000 in August, which was a 33.7 percent increase year-over-year. A report by Arizona State University’s W.P. Carey School of Business found that new home sales were up 55 percent, proving the market is recovering. Resales of homes that weren’t foreclosures, short sales or investor flips were up 81 percent from August 2011.
These increasing prices are reflective of the 28 percent drop in the overall supply of homes in Phoenix. This lack of inventory leads to fewer foreclosed homes and a smaller number of homeowners seeking to sell their properties. More buyers are becoming competitive with one another, which has pushed prices even further up. Real estate experts are positive about the increase in amount of activity in relation to the upward price tags. In time, the market is expected to improve with more inventory for stronger growth.