In 2020, the Arizona housing market rode through a phase of increased activity and heightened demand despite continued challenges. As we enter the new year, the Grand Canyon State is all set to repeat those successes.
According to Arizona real estate experts, the market’s future looks bright with various factors contributing to its growth. In addition to low mortgage rates, this also includes in-migration, luxury home sales, and a need for larger spaces.
Low Mortgage Rates Continue to Drive the Market
Soon after the coronavirus (COVID-19) outbreak lunged at the U.S. economy, the Federal Reserve cut its benchmark interest rates. With the Fed’s decision to hold these rates to near-zero through 2022, mortgage rates also experienced a remarkable impact.
As a result, 2020 saw repeated drops in mortgage rates. In just a few months, the 30-year fixed-rate mortgage broke various records for all-time low figures. For the Arizona housing market, it translated to an increased level of buyer interest. Those who were looking for their dream homes at lower costs flocked to the market and closed quick sales. This boosted market activity to the point where areas such as Phoenix posted significant improvements despite facing a pandemic.
The trend has made its way into 2021 and will most likely hold traction for the near future. If low mortgage prices continue to hold, it’s safe to assume that market activity would also quicken its pace.
Luxury Listings Are a Huge Part of the Market
From Phoenix to Gilbert, the trend for luxury listings has also captivated the local market left, right, and center. As a result, the Arizona real estate sector is embracing home sales above $1 million as a normal practice. In some cases, these prices go well beyond the $2 million mark for each property.
What makes this trend so noteworthy is its widespread outreach. As mentioned above, it’s not limited to popular areas such as Scottsdale or Paradise Valley. Luxury listings are also popping up across areas such as Queen Creek and Chandler. In turn, they are contributing to the market’s overall value and the inventory’s quick movement due to attracting affluent buyers.
This trend has massively contributed to the growth of the Grand Canyon State’s housing market. With demands of at-home amenities such as gyms, offices, and entertainment spaces, it’s also set to dominate through 2021.
Key Trends Are Going to Focus on At-Home Entertainment
In addition to local families, the Arizona housing market has been attracting homebuyers who want to relocate from another state. In either case, the decision of these families to switch homes mostly stems from a critical demand for larger spaces.
As the COVID-19 outbreak continues during vaccine distribution, those who are staying at home would continue yearning for at-home entertainment. In addition to more square footage, this calls for the availability of outdoor spaces such as swimming pools. As a result, the demand for larger as well as luxury is likely to continue in this quarter.
In addition to making the market more competitive, this could lead to a shortage in inventory and increase in prices. Collectively, these factors could lead to a thriving period for Arizona real estate. In the current era where any ray of sunshine is welcome, this spells good news for local realtors. At the same time, it’s also an indicator for interested homebuyers to move fast before prices go beyond their reach.
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