Having gone through one of the worst housing crisis in the past ten years, Phoenix home prices have been rising steadily and the market has seen a positive change in direction. However, there has been apprehension that the housing market in Phoenix was heading towards another bubble burst. Buyers and sellers alike can rest easy, as it seems the Phoenix housing market is on stable ground.
Michael Orr, Director of the Center for Real Estate Theory and Practice at the W.P Carey School of Business at ASU released his April 2013 report for the Valley on June 5. In it, he outlines a number of different factors giving indication that the Phoenix housing market has no need for alarm. One aspect that is a major influence is that fact that there is a chronic supply shortage of available homes in the Phoenix area. The amount of homes staying on the market for an extended period continues to decrease especially in the more affordable sector of homes. Due to the amount of negative equity some home owners still face, the amount of homes entering the market for sale is a very slow, but are climbing steady. Many homeowners seem to be waiting to see which way prices are going to trend.
While many agree that at some point the supply will increase at a more rapid rate, there has not been a move towards that as of yet. Another area that had greater influence before the housing crisis was the amount of investor involvement in the Phoenix area. While investors are still present, there seems to be a shift towards more traditional owner-occupier or second home buyers rather than investors. A final factor is the amount of new construction being seen in the Phoenix area. As of recent, home building, while increasing, has been at a lesser rate. The number of new build increases each month, however, there is a decreased rate at which new projects are started. It seems homebuilders are taking a more cautious route than before, but it will yield half the amount of homes necessary to compete with current population trends.
One thing is for certain, the Phoenix housing market is trending in a positive manner and many agree that is on stable footing. The Phoenix area, having taken a hit previously, is seemingly back on track.