By
Hannah Griffith
|
13 min read
|
January 17, 2023

Arizona Housing Market Report - 2023 Update

housing market arizona

What’s the Arizona Housing Market Like?

Home prices in Arizona have appreciated 2.0% higher than the national level. Looking back three years at the median price in October 2019 compared to October 2022, prices have increased 52.0% in Arizona VS 35.8% nationwide. 

As of October 2022, the median price for a home in the state was $428,300, which is up 5.0% above last year’s median price. Comparing prices over the last three years, we can see they have decreased -7.6% from the peak of $463,300 in May-2022. 

Sales volume has also decreased recently. In October 2022, there were 7,262 homes sold in the state of Arizona, a decrease of -16.2% from the previous month. 

Comparing year-over-year, we saw a decrease of -37.1% in sales from October 2021, when there were 11,548 home sales.

The number of sales peak was 13,655 sales in Jul-2020; compared to October 2022’s numbers, we are down -46.8% in the number of homes sold from the peak of the last three years.

It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in Arizona.

Arizona Houses prices

How Does The Arizona Housing Market Compare to the National Housing Market? 

The Arizona housing market is similar to other markets because supply and demand drive housing prices. Mortgage rates also similarly impact Arizona as the rest of the nation. 

Arizona’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of Arizona’s metro areas make those markets more vulnerable and others more resilient to the current economics. 

The current median price of homes in Arizona is $428,300 compared to the national median sales price of $397,549. Over the past three years, the median price of homes in Arizona has increased by 52.0% compared to the national average of 35.7%

Arizona Metro Areas With The Hottest Housing Markets 

The state of Arizona has seen aggressive growth in housing demand in recent years; consequently, prices have also gone up at a good pace.  Some areas within the state have outperformed others, though.  We will look at the cities with the highest increase in the median price year over year. 

The top markets with the highest appreciation rate:

  1. Heber-Overgaard
  2. Cave Creek
  3. Saddlebrook
  4. Coolidge
  5. Litchfield Park

Heber-Overgaard

For those who like cooler temperatures, Heber-Overgaard is the go-to place. It is nestled on the Mogollon Rim and surrounded by the Apache-Sitgreaves National Forest. There are several hiking, camping, and exploration opportunities for outdoor enthusiasts.

According to the 2020 census, its population was 2,898. Heber Overgaard is an all-season vacation and getaway destination for Arizonans. Trout fishing is highly well-liked in the area due to the availability of lakes and streams in both directions.

Heber-Overgaard’s home prices have been doing quite well over the last few years; in fact, Heber-Overgaard topped the list of cities in Arizona with the largest increase in prices in 2022, with an increase of 66.7% from the prior year.  For 2022, October’s median price was $425,000.

In October of 2022, there were 23 homes sold in Heber-Overgaard, up 100.0% from the same period in 2021.

The median days on the market in October 2022 was 52, which indicates a balanced market by today’s standards. Compared to October 2021, the median days on the market is up 100.0% compared to October 2022.

Cave Creek

Nestled in the desert foothills, Cave Creek is a place for outdoor adventures, cowboy heritage, and live music. It is an Old West-style town in the northeast of Phoenix. The population of the town was 4,892, according to the 2020 census. Regarding climate, this town is in an arid desert climate and cooler than the lower elevations of the Phoenix area.

The Cave Creek Real Estate market is currently somewhat competitive. In October 2022, there 26 homes were sold with a median price of $859,500. The median home price in Cave Creek has increased 15.4% from October of 2021, while the number of homes sold was 26, a -40.9% decrease compared to the same month the year before.

The median days on the market in October 2022 was 76, and it’s up 137.5% compared to Sept 2021.  

Saddlebrooke

SaddleBrooke is located north of Oro Valley, AZ., and close to Tucson, AZ, in the majestic Catalina Foothills at a 3,500 feet height. There is a cooler temperature year in SaddleBrooke that permits golf and outdoor activities all year long. It is a census-designated place and retirement community. Further, the population was 12,573 at the 2020 census.

Saddlebrooke is considered a somewhat competitive market right now. In October 2022, there 28 homes were sold with a median price of $859,500. The median price in Saddlebrooke was up 15.4% over October of 2021, while the number of homes sold was down -22.2% compared to the same period in 2021.

The median number of days on the market for October 2022 was 49 days which is up 32.4% from October 2021.  

Coolidge

Coolidge is situated in South Central Arizona in a low desert valley. It is a small city with over 13,000 (2020) population. This city owes its modern development to railroad and dam construction expansion that transformed sand into fertile farm and ranch land.

The real estate market in Coolidge is considered somewhat competitive. There were 42 homes sold in Oct 2022, with a median price of $307,495. The median price in Coolidge had an increase of 18.3%from Oct 2021, while the number of homes sold was up 7.7% compared to the same period last year. 

The median number of days on the market for Oct  2022 was 59 days which is up 68.6% to the same month in 2021, 

Litchfield Park

Litchfield Park is situated 16 miles west of central Phoenix and is a planned residential community. It is just north of Interstate 10, with convenient access to metropolitan Phoenix. The population of the city was 6,847 as of the 2020 census. 

Discover how cotton farms transformed into a beautiful town where the scent of orange blossoms fills the air and hiking trails are adorned with historic petroglyphs.

Litchfield Park is currently a somewhat competitive market. In Oct  2022, 24 homes were sold with a median price of $574,950. The median price in Litchfield Park saw an increase of 14.9% over Oct 2021, while the number of sales was down -33.3% compared to the same month in 2021.

The median number of days on the market for Oct 2022 was 74, which is an increase of 14.9% compared to the same month last year.

Higher Mortgage Rates Could Slow Price Growth in Arizona

How will interest rates affect the Arizona housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in Arizona has been flattening or on a slight decline for several months in 2022. However, Arizona is such a high-demand destination that it may fare better than many other areas of the country.

As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends. 

Key Market Stats for the Arizona Housing Market: 

As of the latest compiled housing report for October 2022.

Current ValueLast YearChange YOY
Median Sales Price$428,300$407,800Up 5.0%
Number of sales7,26211,548Down  -37.1%
Median Days On The Market5033Up -7.6%
Number of homes available39,45632,170Up 22.6%
Month's supply of inventory41Up 300.0%
% of homes sold above list14.5%43.1%Down -66.4%
% of homes with price drops47.4%17.7%Up 167.8%
New Listings917012949Down  -29.2%

Historic price changes & affordability in Arizona

The Arizona housing market has seen explosive appreciation for years. The last 3 years have been particularly favorable to homeowners as they saw their homes appreciate by 52.0% in 36 months.   

The steep rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 52.0% spike in home prices and a sharp increase in mortgage rates in the last 12 months do not spell good news for the Arizona Real Estate market.

We know that the average person’s wages do not increase by 52.0% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.

Key Takeaways

  1. The housing market is shifting, and Arizona housing market predictions for the short term seem to be going down along with many areas of the US.  Due to Arizona’s unprecedented growth, some of the state’s metro areas are predicted to drop in home values.
    The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
  2. Real Estate markets are highly local, and even within the same state, there will be areas that are projected to be hit hard by the market shift, and others will fare better.
  3. Timing the market for buying or selling is a big gamble. If it makes sense for you, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.

2023 Arizona Housing Market FAQ