The sun isn’t the only thing that’s hot in Arizona right now. Phoenix is Arizona’s biggest city and the 5th most populous city in America. It is also a city with a red hot real estate market, with a burgeoning luxury market that had 2020 for the books.
The city of Phoenix is known for its delicious foods, diverse population, and unique desert landscapes. It is a city that has seen massive growth in the past few years in a variety of areas. One of those areas is the real estate market, where 2020 represented yet another banner year.
According to Osterman Real Estate, home values for the Phoenix-Mesa-Scottsdale metro area have gone up 11.7% in 2020, with further growth projected into 2021. With record low-interest rates fueling buyer action, the market in Phoenix was considered red-hot throughout the year. This is due in part to the surge in the luxury area of the real estate market.
“Buyers from high-cost areas like Seattle or Los Angeles are finding that their dollar will go further in Phoenix…”
According to a Forbes report, the luxury market in the Phoenix metro area took off in 2020 in a massive way. In the $1-6 million dollar range, home sales were up 49% in January through October compared to the same time period in 2019.
One particularly active area is the Scottsdale area, which has seen the numbers of homes sold in the $3-4 million dollar range increase by a massive 82%. For the August to October period alone, the increase was an absurd 285% year to year.
One of the reasons for the surge in 2020 has come due to an increase in out of state buyers. According to the same Forbes report, half of the demand for homes over $2 million has come from out of state buyers. Buyers from high-cost areas like Seattle or Los Angeles are finding that their dollar will go further in Phoenix, and they’ll still get to live in a thriving metropolis.
Phoenix has a relatively low cost of living compared to some of the more expensive American cities like New York or San Francisco and has warm year-round weather. While some would find Arizona heat too intense, others would jump at the opportunity to never deal with winter snow again.
There are many reasons why Phoenix’s real estate market has become such a consistent force. One of them is the growth of the population of the city. According to the US Census, Phoenix has led the nation in the most new residents attracted for 4 years in a row.
They are also the leader in the US over a 10-year period of population growth, with over 234,300 new residents since 2010. With all that growth, the demand for real estate will inevitably rise, and increase competition to drive prices up. As well, with a population boom, comes economic growth due to all the new people, so there’s more money in Phoenix than there would’ve been before.
Phoenix has become a real estate market that is one of America’s most potent. With both the luxury and non-luxury markets thriving, and strong growth projected into 2021, it figures to be a strong investment and a stable market. As well, the consistent population growth shows the desirability of a home in Phoenix, as do out of state buyers migrating into the area. Phoenix is the cultural heart of Arizona, and a real estate market that is as hot as the state it resides in.