January real estate in the greater Phoenix area continues 2020’s trend of higher prices and lower inventory. Active listings stand at 6,055 down 50.1%, year over year, and the median sales price is $332,000, up 14.7% year over year.
Interest rates have hardly moved for over a year and are still at historic lows. Thirty-year money is down slightly at 2.65% with 0.7 points, and although current Fed projections are calling for a slight increase in rates by the end of the year, rates overall are expected to remain historically low. (Freddie Mac, January 2021)
Phoenix is still in the top five states for inbound relocations in America, with many more moving here than moving out. This will continue to put pressure on home availability, whether sales or rentals.
Home appreciation should continue but perhaps at a slightly slower rate in the second half of 2021. Rental costs are rising as quickly as home prices, and owning is still a very strong mitigation strategy to these rising rents. (Cromford report, January 2021)
All this means that 2021 should be a good year for real estate in Phoenix and that sellers are still very much in the driver’s seat.
As always, if you are buying or selling, please work with a trusted real estate agent and loan officer. They can help you make the best real estate decision.