2017 was undoubtedly one of the best years to sell a home in metro Phoenix. An astonishing 93,500 houses in the Valley exchanged ownership last year, which was a six percent increase when compared to home sales in 2016. According to a senior housing analyst, Tina Tamboer, in comparison to the prior 15 years, only the years of 2004, 2005, and 2011 saw better home sales.
It was during those years that the housing market acted anything but normal. In fact, the housing boom during those years largely took place because of an excess in subprime mortgages, giving buyers incredible financing options for purchasing a home. This housing boom started in 2004 but didn’t last long, hitting its bottom in 2011. It was during that year, though, that investors quickly noticed they could snatch up foreclosure homes at bargain prices.
2017 was unquestionably a very healthy year for purchasing a home in the Valley. Tom Ruff, an expert real-estate analyst, predicted the year to be one of the best years for buying a home and says, “2005 went down in the history books as the year our housing bubble rapidly inflated. 2011 was the year housing prices bottomed out after the housing-market collapse.This leaves 2017 as the very best year for Valley resale homes in our history not influenced by some freakish market outlier.”
2017 Was Good, but It Still Wasn’t As Good as 2006
Even though 2017 was a strong year in regard to the appreciation of homes in the Valley, the peak levels occurred back in 2006. 2016 saw a seven percent increase in median sale prices for homes in the Valley and continued to climb another 6.5 percent in 2017. However, with a current median sale price of only $250,000, this still puts average selling prices $15,000 lower than they were in 2006.
Predictions for 2018
The housing market in 2018 is expected to perform just as well as it did in 2017, but there will be several factors working against the market, including:
- Lack of affordable housing
- Interest rate hikes
- New tax laws
Ruff goes on to say that “The challenge is to build more housing that people can afford. Valley prices can’t keep climbing at the current rate if people can’t find homes they can afford.” Tamboer predicts a softening in appreciation during 2018. She says home prices will continue to climb throughout the year, but they won’t do so at the same rate as they had during the past two years.
In order for Valley home prices to fully recover, they will need to increase by at least six percent.