Greater Phoenix Residential Market
June 3, 2022
Explosive Job Growth Fuels Higher Home Prices
New Record: April Purchase Price $522,000
Monthly Rent $520 Higher Than Two Years Ago
April 2022 Results for Sales of Single-Family Resale Homes
It has not stopped. Once again purchase price ascended a new height. The April 2022 median purchase price (MPP) for a single-family resale home in Greater Phoenix was $522,000. It was $515,000 in March, $500,000 in February and $485,000 in January. April’s 2022 MPP is $102,000 or 24% higher than April 2021 and $187,000 or 56% higher than April 2020. In the conclusion section of this article, I predict the May 2022 MPP. Will MPP reach a new record high, or not?
The number of sales and listings in April 2022 for single-family resale homes were lower than March 2022. April 2022 sales of 5,928 were 557 or 9% lower than March 2022. Year-over-year (YOY) April 2022 sales were 771 or 12% lower than April 2021. April 2022 listings of 6,767 were 296 or 4% lower than March 2022. YOY April 2022 listings were 705 or 9% lower than April 2021.
Days on market (DOM) declined in April 2022 compared to March 2022. DOM in April 2022 were 26 compared to 28 in March 2022. DOM in April 2021 were 26 and in April 2020 they were 47.
Median monthly rent (MMR) in April 2022 for a single-family resale home in Greater Phoenix was $2,300. This is $5 more than March 2022. April 2022 MMR is $305 or 15% higher than April 2021. Look at how much MMR has climbed in two years. April 2022 MMR is $580 or 34% higher than in April 2020 when MMR was $1,720.
Scottsdale median purchase price for a single-family resale home in April 2022 was $1,100,000 the same as it was in March 2022. YOY Scottsdale’s MPP is $233,000 or 27% higher than April 2021 when it was $867,000. Paradise Valley median purchase price for a single-family resale home in April 2022 was $3,625,000. In March 2022 it was $3,620,000. YOY Paradise Valley’s MPP is $816,000 or 29% higher than April 2021 when it was $2,809,000.
Thirty-One Cities Purchase Price & Monthly Rent
Table Two shows the YOY median purchase price and the YOY median monthly rent for 31 cities that are located in either Pinal or Maricopa Counties.
Explosive Growth: The Arizona Job Recovery Story
An article published in the Wall Street Journal highlighted that only four states have recovered all the lost jobs at the start of the Covid-19 pandemic. Arizona is one of the four states. In February 2020, right before the start of the Covid-19 pandemic, 3,007,600 people in Arizona were employed according to the Arizona Commerce Authority. Two months later, by the end of April 2020, 340,200 Arizonians had lost their jobs. Fast forward to March 2022. As of March 2022, the number of people employed in Arizona is 3,035,800. There are now more people employed than before the Covid-19 pandemic!
The following is a synopsis of Arizona’s tremendous job growth story. Since January 2015, Arizona has added 424,000 jobs. Out of this number are 29,000 manufacturing jobs, 54,000 financial jobs and 38,000 tech jobs. Arizona has more than tripled the number of six-figure jobs since 2015 (from 55,000 to 167,000), which is the third fastest growth rate of any state. Both Phoenix (#2) and Tucson (#8) ranked in the top-ten for growth of high-wage jobs among major metropolitan areas.
The following are significant company expansions since 2015: Intel, TSMC, Lucid Motors, KORE Power, Nikola, ElectraMeccanica, Benchmark Electronics, Zoom, Silicon Valley Bank, Raytheon, Infosys, Opendoor, Dot Foods, UACJ Whitehall, Amazon, General Motors, Caterpillar, Leonardo, ZenniHome, TuSimple, Zovio, Mark Anthony Brewing, Orbital ATK, Cognizant and many more! See Chart Two for fiscal year 2021 business expansions and attractions.
More economic information. Arizona’s unemployment rate dipped to 3.3% in March 2022, the lowest recorded rate under the current estimation methodology going back to 1976. Arizona has added 18,565 business establishments between 2015 and 2020. Arizona’s poverty rate has declined significantly, from 17.4% in 2015 to 12.8% today, the second fastest poverty rate decrease during that time, only behind Idaho. The number of people in poverty in Arizona dropped by more than 230,000 between 2015 and 2020. In 2019, the credit rating company Moody’s Investors Service announced it is upgrading Arizona’s credit rating from Aa2 to Aa1, the second-highest rating Moody’s offers.
Market Update Conclusion
Arizona’s explosive job growth will continue the fire for housing. The all-time high number of people with jobs in Arizona is fueling demand to own and demand to rent single-family homes. This demand is fueling both rising purchase prices and monthly rental prices. My prediction is the May median purchase price will reach a new record high. It will end at $535,000 plus or minus $5,000.
The information in this report was compiled from the Arizona Regional Multiple Listings Services, Inc. and the Arizona Commerce Authority.
Chart One: Median Purchase Price & Median Monthly Rent
Chart Two: Arizona Fiscal Year 2021 Business Attractions & Expansions
Table One: Purchase Price & Monthly Rent for Thirty-One Cities