Things may be feeling a bit wobbly in the Phoenix house market lately, but one survey suggests owners have earned $75 a day in equity since 2011.
Not bad for a decade’s work.
Point2 analyzed the growth of median single-family home prices in the United States’ 187 largest cities from the last decade. Single-family home price growth in Arizonia’s capital city exploded between 2011 and 2021, growing by as much as $75 a day.
Ten years ago, the median price of a property in the Phoenix-Mesa-Scottsdale metro was $115,500. Fast forward to 2021, and that has grown to a whopping $415,400, soaring by $299,900 in the span of a decade. This marks a 259.65% increase in Phoenix home prices, which is equivalent to a $75 net jump each day.
Rate of Phoenix home price growth one of the largest nationwide
Although Phoenix metro property prices are still far from the most expensive in the country — ranking in 32nd place out of the other metros on Point2’s list — their rate of growth is one of the highest in the U.S.
The Phoenix metro reported the fourth-highest percentage growth in home prices amongst the other cities between 2011 and 2021 at 259.65%, slightly less than the Naples-Immokalee-Marco Island (268.57%), Boise City-Nampa (306.07%) and Detroit-Warren-Dearborn (356.69%) metros. Compared to the single-family home prices in the 59 largest U.S. metro areas, Phoenix-Mesa-Scottsdale ranked in second place overall.
Unprecedented price growth amongst American cities stems from the common market catalysts, Point2 explained in its report — lower home inventories, higher buyer demand, construction challenges and fewer homeowners opting to downsize.
“In Phoenix, the situation closely resembles that of other metros: More Millennials are reaching an age where they want and can afford to buy a home, but they have to contend with low inventory and a slowed pace of new home construction,” said Point2’s report.
However, the real estate listing website pointed to another reason as to why Phoenix metro property prices continue to soar. Citing information from a Time investigation, the Phoenix metro has been one of the fastest-growing regions in the U.S. for several years, expanding about 20% in a decade. That growth became even more pronounced in 2020, as about 291 people moved to Maricopa County per day.
“One of the reasons they moved there—so they could have a yard and some space in a city where more than two thirds of homes are single family dwellings—is also one of the reasons it’s suffering such a housing shortage. In the same decade as its population has blossomed, the number of residential units grew by only 11%,” said the Time report.
Phoenix condo prices are also on the rise
It isn’t just Phoenix single-family dwellings that are seeing eye-popping price growth.
When examining condo prices in 83 U.S. metro areas, the median unit in the Phoenix-Mesa-Scottsdale metro cost just $65,900 in 2011. Over the span of ten years, condo prices have grown 290.29% in the city — a $48 net increase per day — to $257,200 in 2021, fetching $191,300 more on the market.
Phoenix condo prices rose at the fourth-highest rate over the ten-year period compared to the other metros, but slightly less than Las Vegas-Henderson-Paradise (299.28%), Reno (429.79%) and Atlanta-Sandy Springs-Marietta (544.07%).
“As the more affordable option compared to single family houses, condos are seeing increased demand from homebuyers who want to get on the ladder, but can’t come anywhere near the astronomical prices and increasing mortgage rates in the single-family home segment,” said Point2’s report.
“Although condos became almost taboo for a period of time during the pandemic, as Covid-19 cases decline, city life — and, therefore, condo life — is making a comeback,” it added.