After a turbulent start to the year, Phoenix residential real estate has resumed the low-inventory, high-demand trends that have contributed to our extended seller’s market. Not all homes or neighborhoods are created equal, however. Within the overall metro, certain types of residential properties are faring better than others—which has implications whether you are selling a home or buying one. Here’s a quick look at what’s happening:
What’s Hot in the Phoenix Residential Market
Rehabbed and Remodeled Homes
Homes that have been substantially improved continue to do well in the current market. Ideally, a remodeled home would include new flooring, new counters, new casework/cabinetry and new fixtures, with fully renovated bathrooms and kitchens. Why is this so important right now? In addition to the usual construction hassles and expense, would-be homeowners are hesitant to invite a stream of contractors onto their properties due to the risks of coronavirus.
The properties that are in super-high demand right are those with guesthouses, casitas, or multiple homes within one lot. A couple of factors are at play, including a movement away from putting elders into assisted living, and more adult children living at home. (This is an important trend—stay tuned for more detail in a future blog post.)
Luxury properties have continued their hot hand in the Phoenix market. Contract and sales activity has dramatically outpaced 2019. Through late September, the volume of homes sold from $500K–$1 million was up 85% over the previous year, while homes from $1 million–$2 million and over $2 million were up 101% and 158%, respectively.
What’s Selling More Slowly in the Valley
Homes in Need of Rehabilitation or Repair
If renovated homes are hot, the opposite is true of houses needing significant TLC. There are nuances, however: If a home is priced as a retail deal for an owner-occupant, you can expect it to sit on the market for longer than average. Priced as an investor deal, it will sell faster.
Properties in age-restricted communities are spending more time on the market, possibly an ancillary effect from the multigenerational trend noted above. A secondary factor is competition with newer properties with fancier, resort-style amenities—and there are more in the pipeline. For example, Austin-based Sparrow Partners recently announced five active adult communities planned for Goodyear totaling $200 million in development costs.
Strategic Seller Blog Series
Learn how to sell your current home or buy your next home—at the right price and right terms—through our Strategic Seller blog series:
- Understanding Appraisals in a Crazy Market
- How to Avoid a BOM During the Phoenix Housing Boom
- Ways to Position Yourself as the Most Attractive Buyer, Part 1
- Ways to Position Yourself as the Most Attractive Buyer, Part 2
- Tight Housing Markets Require Focus and Strategy
As always, there are opportunities for sellers and buyers in various pockets and property types within the Greater Phoenix market. To enlist the help of professionals who can help you formulate a strategic plan, contact R.O.I. Properties at [email protected] or 602-319-1326.