The Southern Arizona housing market has shown steady growth over the past years. The median single-family home value in Tucson, the region's largest city, has increased from $167,500 in 2013 to $385,000. Condos and townhomes have also seen a rise in value – from $160,000 to $248,500. With this significant growth comes the need for potential buyers and sellers to understand the current state of the market and make informed decisions.
This report aims to provide an overview of the housing market forecast for Southern Arizona in 2024.
A Glimpse into the 2024 Housing Market in South Arizona
· Projected Real Estate Value: Home prices are anticipated to rise in 2024, a result of limited housing stock.
· Rental Rate Discrepancies Across the State: There's a notable difference in rent prices across the state. For instance, Phoenix averages at $1,558, whereas Flagstaff stands at $1,968.
· Timeframe for Property Transactions: The median number of days properties stay on the market is 41 days.
· Availability of Properties: The current supply of homes lasts for 2 months, suggesting that we're in a seller's market.
Economic Growth and Job Opportunities
A University of Arizona report affirms that the state is unlikely to face a recession in 2024. There are several reasons supporting this outlook. Firstly, Arizona's diverse economy, with sectors such as healthcare, technology, and renewable energy, is expected to be resilient against possible downturns. In addition, the state is projected to see continued job growth of 2.4% - approximately 25,000 new jobs are anticipated to be created in 2024 alone. Huge companies like Raytheon and Amazon are already expanding their presence in the state. This is expected to bring in more job opportunities.
Predictions for Sellers
With the economic growth and job opportunities, Southern Arizona's housing market is expected to remain strong for sellers. The region has seen a trend of low inventory levels in recent years, leading to high demand for properties. This trend is anticipated to continue in 2024. Fewer homes for sale mean sellers can potentially receive multiple offers and sell their properties at a higher price. Experts predict that the median home value in the region will rise by 3-5% annually. This makes it an opportune time for sellers to put their homes on the market.
Predictions for Buyers
From a buyer's perspective, the anticipated property price increase might pose certain challenges. However, it's crucial to remember that these trends also bring about investment opportunities. For those considering purchasing a home, it is advised to act before prices rise further.
Mortgage Trends
There might not be a huge change in mortgage rates in Southern Arizona in 2024. A 30-year fixed-rate mortgage is expected to remain at an average of 6.5% to 7.5%. A 15-year fixed-rate mortgage is expected to average around 5.8% to 6.5%.
Mortgage rates will still depend on various factors such as the borrower's credit score, down payment amount, and type of loan.
New Construction Growth
In 2023, the state limited the construction of new properties in Phoenix due to water scarcity concerns. This restriction has been extended to Southern Arizona as well, which is expected to impact new construction in the region. However, with economic growth and demand for housing, experts predict that new construction will still continue at a moderate pace.
Besides housing construction, notable new construction projects in Southern Arizona include the expansion of Tucson International Airport and the continued development of downtown Tucson. These developments are expected to boost the local economy and attract more people to the area.
Investment Opportunities
Notable real estate investment opportunities in Southern Arizona include short-term rentals and fix-and-flip projects. With the region's growing tourism industry, short-term rentals through platforms like Airbnb have become increasingly popular. Fix-and-flip projects, on the other hand, involve purchasing distressed properties at a lower price and renovating them for a higher resale value.
Another potential investment opportunity is purchasing land in areas that are expected to experience growth in the next few years. This could include areas near new construction developments or upcoming commercial projects.
Long-term investment options for those willing to hold onto properties for a longer period include rental properties and land for future development.
Overall Market Outlook
Overall, the outlook for Southern Arizona's real estate market in 2024 is positive. (a) The region's steady economic growth and influx of new residents are expected to drive demand for housing. (b) New construction and development projects are also expected to contribute to the market's steady growth.
While there may be some fluctuations in the market due to factors like interest rates and economic trends, experts believe that Southern Arizona will continue to offer attractive opportunities for both buyers and investors. As such, it remains a promising region for real estate investment in the coming years