By: Robert Joffe, Founder, Joffe Group | Guest Commentary
Place. Place. Place. It’s the real estate mantra that drives the industry, and in Arizona, that’s still the case. I have been in the residential market for almost 40 years – specializing in Arcadia, Paradise Valley, Biltmore area and Scottsdale.
Now, for sure, it’s an interesting market. Rising interest rates, rising mortgages, inflation and a possible recession have changed the market and the behavior of our residential buyers.
However, one thing remains true: Arizona remains a huge growth market where people want to live, work and support their families. It’s always been that way — good markets and bad markets — and it’s still the same today.
While many people and those who choose Arizona as their home come from all over the US – the Midwest, the East Coast and California, I see an interesting trend. Many buyers in the luxury market come from the Pacific Northwest, especially Seattle.
They’re looking for sunny skies, a stable economy, and a safe place to raise a family.
Of course, there are challenges, especially in the luxury market. In the three months through August, U.S. luxury home sales fell 28% year over year on the 31st, according to a recent report from real estate brokerage Redfin. That marked the biggest drop since at least 2012, when Redfin’s records began, and even surpassed the 23% drop recorded during the pandemic in 2020, the report said.
Still, Arizona has remained resilient and continues to prove to be a solid market.
According to CoreLogic, homeowners’ equity across the country has reached new heights over the past few years. In fact, U.S. homeowners have acquired more than $3.5 billion in equity over the past few years. That’s impressive given rising mortgage rates and headline inflation.
While the National Association of Realtors reported a drop in U.S. home sales during the summer, year-over-year growth pushed up the national median home price.
Arizona, especially Greater Phoenix, remains a great value for those who choose to relocate and move into a larger home. As history has proven, with my decades of experience, I believe this is still true.
As areas closer to the city center have become more expensive—just a supply and demand effect—there has been a surge of interest in areas outside the valley, such as Gilbert, Pinar counties and Western Maricopa counties.
This is reflected not only in home sales, but also in the economic benefits of our Silicon Valley, where semiconductor, industrial, data center and other industries see tremendous opportunity in Greater Phoenix.
It goes back to the mantra: location, location, location. Fortunately, we are in a very desirable place that will remain so and the opportunity is ripe.