A cold hard look at the inventory of affordable homes in Metro Phoenix, priced in the sub-$200K range – the sweet spot for first time and re-entry buyers, is sobering. Folks, there is no sugar coating this factoid. These homes are going fast.
There are only about 3300 single family homes in Metro Phoenix – 2,300 in Maricopa County and 1,000 in Pinal County that fall into this price range. That includes homes in the outskirt towns like Wickenburg and Gila Bend, small home, old homes and homes that won’t qualify for FHA financing. That might seem like a lot, but in the last year, about 34,000 homes were sold in this price range. Here are some rough stats for you for Maricopa County:
1875 homes with 3 or more bedrooms
608 with 4 or more bedrooms
800 built in 2000 or later
1375 built in 1978 or later
1500 with 2-car garages
265 with pools
Prices for these affordable homes are going up fast – faster than the more expensive price ranges – due to the higher demand. The monthly average sales price per sq. ft. for homes priced below $200,000 has increased by about 7.5% over the past year, from $93 to $100, compared to just under a 4% increase for homes priced between $200K-$500K. You know what that means, right? More homes will be pushed into the higher price range, shrinking that attractive $200K inventory.
If you are looking for the gold standard 3 bedroom, 2 bath home with a 2 car garage, built in 2000 or later, there are roughly 500 homes to choose from. If you want a pool – good luck! That number drops to less than 50.
AND the vast majority of these affordable homes are on the West side. If you want something similar in the East side of town, better up your budget closer to $250K.
ONE MORE THING! Interest rates are expected to move in the 5% range next year which will reduce your buying power. A 1% increase in the interest rate could increase your payment about $120.
Bottom line – don’t wait around or you could very well be priced out of the market. Right now is your best bet as a buyer – it’s what I like to call the “Black Friday of Real Estate” when inventory is higher and demand is lower. Once spring hits, activity will most likely increase, inventory will start to peak and – thanks to good old Supply and Demand – prices will rise.
If you could use some help getting your home-buying plans in action, you know where to find me!