Housing Market Update Maricopa County 2021

Housing Market Update Maricopa County 2021
Kelley Norton:
It’s time for the annual review of what on earth happened in the real estate market in the Valley of the Sun in Arizona last year. Oh, my gosh. Hi, I’m Kelley Norton. I’m your AZ Realty Lady.

Now, I am here to give you an update. So from 2019 to 2020, if we went December to December, there has been such an increase in our market in the values, and there has been a huge decrease in the amount of homes available. So let’s talk numbers.

The National Association of Realtors actually only projected that nationally, the median home sales price would go up by 3.6%. And in our Valley of the Sun, we went up between 10% and 25% in median home price. That is just huge. So if we were to talk here about what that looks like from a single family home to a patio home to townhomes, I’ll break that down for you. So in a typical home, single family detached home, the average was a 14% increase in the median home price. And in-

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In condos, the median home sale price went up 15%. And you’ll never guess what had the biggest jump, at 25% increase in price. That was patio homes, folks. So a Gemini twin home or patio home. These typically have a little yard, but the reason I feel that these went up so much was because this is more affordable. People are seeing these big price increases. They can still get a little bit of a yard. They might have a combined wall with someone or sharing a garage, but they can still afford the property.

So let’s talk numbers. How much? What is 15%? What is 25%? Let’s go there now. The median home sale price last year in December, so 2019 in December, was 309. And then at December of 2020, it was 355,000. So there’s your 14% increase. For a condo, the median home sale price in 2019 in December was 188,000. And now in December of 2020, it went up to 216,000. So again, huge difference from the 3.6% that was anticipated nationally. Our Valley has definitely gone up quite a bit more. Now the patio homes have got up 25%. That is huge. In 2019, they were in the 239 range, and now they’re over 300,000 for a patio home. So still an affordable range, but quite the increase.

Now you might be asking, what does this all mean to me? Why is this important? Well, we have low inventory, which is the market that we’re in right now. We don’t have a lot of homes available, but we have a very high demand. So homes are selling faster and they’re selling for more money. With the National Association of Realtors only projecting a 3.6% increase, you saw how huge our numbers went up in the Valley. That’s because we have a lot of people moving here from other states. A lot of people move here because of the climate. So they come from the Midwest or they come from back East, and then we have a lot of people moving here from Colorado and from California. So we have a lot of people that really do have a desire to live in Arizona. And I mean, who can blame them? The weather is amazing here. There’s lots of golf. The weather’s great. So we do have a lot of people that are moving here that are helping with this as well.

Now, the interest rates are super low right now, all time low. So if you’re thinking about buying, this is actually a wonderful time to buy. Don’t be afraid of those increases that have already happened, because the National Association of Realtors is projecting an 8% increase for this coming year, 2021. They guessed 3% last time, and we were a lot more in our market. So let’s just say that our market goes up another 10 to 15%. What does that look like for you? Would you be able to afford a home at that point? Most people that answer might be no. So, don’t wait. The interest rates are super low. We are projected to have more increase in prices. So now’s the time for you to buy because you’re going to have a lower payment, a lower price. If you wait, the interest rate could go up and the values could go up, and then your payment’s going to be that much more.

Okay, so let me break this down for you in real numbers so that you have an understanding of what your payment would have been in 2019 versus 2020, and what that can look like if the interest rates rise up. In 2019, let’s say interest rates roughly somewhere around 4% in December of 2019. Now interest rates are roughly in 2.875% range.

So if we’re talking about a patio home, so let’s use those numbers. And I have a little cheat sheet here that I had to write all this out. So I’m just taking a …. Going to kind of take a quick peek at it now and again. So for a $239,000 patio home back in 2019, at that roughly 4% interest rate, your price for your mortgage would be estimated around $1,141. So now jump to 2020, and even though our prices went up 25% in the patio homes, so now we’re talking about $300,000, but our interest rate is only roughly 2.875%. Do you know that the mortgage only went up a hundred bucks? So even though the purchase price went up significantly, about $60,000, your mortgage payment only went up about $100. So now if we take that same $300,000 in mortgage and we add an interest rate of 4% to it, your payment is actually going to jump up another $200. So that’s why it is so important to buy when the interest rates are low, because you can still have increase in value and your payment not be affected as much as it would with a increase in interest rate.

So on single-family detached, let’s talk about those numbers. Again, if we’re using the 2019 figures of roughly 2.875%, or, I’m sorry, roughly 4%, for the interest rate back in 2019, on a purchase price of 310,000, your payment would have been roughly 1,480. Now, get this. In 2020, with the increase, so the price jumping up to what, 355, your payment would still be roughly the same as it was a year ago, even though the prices jumped up 14%. So your mortgage payment on that 355,000 would be 1,472, roughly, at a 2.875%. So that’s $8 cheaper than it was in 2019. But if we take that same price, that 355,000, and we increase the interest rate up to 4%, guess what happens? It jumps up your payment to 1,694 roughly. So you’re jumping up another $200. That’s a freaking utility bill, right? You can pay a utility bill with that 200 bucks. That’s a big difference.

So don’t be afraid of the values rising, you guys. You still have such great purchase power with these interest rates being low. You can still buy and keep your payment low even if the values go up.

Okay? I’m here to help you. Let me know if you have any questions. You can email me, text me, call me. I’m always here, and I do answer my phone. Thanks so much. Bye-bye.
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