Hats off to Phoenix
This distinction is not only welcome news, but it’s long overdue. A constant increase in sales and escalating housing prices has put buyers on alert: Act now! Another fact that increases Phoenix’s healthy real estate market is that today there are fewer foreclosures than ever before.
National real estate website, Realtor.com, has already predicted a rise in Phoenix area home prices of nearly six percent with sales very likely to top seven percent by 2018.
In this unique city where the Wild West, Modern America, and Old Mexico blend smoothly together, it’s not only the encouraging price increases but the fact that 2017 promises to be one of the top home sales years for the Greater Phoenix Area.
This is fantastic news for the Valley thanks to the typically more affordable home prices in the West.
Los Angeles, along with Sacramento and Riverside, California also made it into the top five list for rising home prices in the West, all with higher prices and a general lack in many of the amenities Arizona offers. Even good neighbor Tucson, at this point ninth best hosing market, can expect a real bounce in prices this year.
Interest Rates are Rising
Unfortunately, the great news for the Arizona housing market is not without its downside: Interest rates are rising again, and of course, rising interest rates never help the real estate market.
Sales forecasts for this year are predicted by Realtor.com to drop in all areas of Arizona as higher interest rates go into effect. This applies not only to Arizona but to the entire nation.
Only a few years back, Phoenix went through a boom and bust making it more important than ever for potential buyers to keep their focus on the facts rather than pay attention to all the hype.
In 2006, when Realtor.com told that Phoenix was at the forefront in U.S. home price increases, no one cheered. This notable increase was primarily driven by buyers on a speculation spree that, as we know, turned into a dark morass of bad loans that resulted in the crash.
Experts appear to believe that the rising interest rates come from the anticipation of job growth and higher wages. Realtor.com predicts that interest rates may climb to 4.5% by next year.
Overall, most investors believe the sudden spike in interest rates over the past month results from the election jitters felt by investors.