Economists say interest rates are going to rise; however, still will be very affordable, at around 4%.
To get an idea of the overall national real-estate market, typically we sell about five-and-a-half million homes across the country each year. Last year, close to seven million homes sold. In 2022, that number is projected to be six-and-a-half million – still very high, but not as active as 2021.
The National Association of Realtors predicts a 2.9% overall increase in property values nationwide. However, Arizona will continue to be the third most popular destination for those looking to retire, find a new job or escape the weather or the political climate in other areas. We are one of the top states for job growth and our demographics remain strong for people who are retiring. In addition, we still expect individuals, families and businesses to be moving in from more populated states like California and colder places like Chicago.
On Arizona’s construction front, more homes are being built, but builders have not been able to keep up with demand; therefore, we will continue to see price increases, but not likely as high as we witnessed in 2020 and 2021.
Rents are forecast to rise 8% to 10%, as demand continues to be strong and we have a shortage of supply especially at the affordable end of the spectrum.
Economists say interest rates are going to rise; however, still will be very affordable, at around 4%. This may not have a big impact on the Prescott-area real estate market as we continue to see a good portion of homes purchased with cash.
One trend we are noticing is a big interest in land. Investors are diversifying their portfolios and some people are choosing to buy lots now with the intention of building later. This has made rural areas with wide open spaces, like Chino Valley, more popular among developers. Brown Homes is currently building homes on one-acre lots with RV garages in a subdivision called Heritage Pointe and has a new subdivision on the way. Arizona Development Company is building two new communities targeted at affordable price points that are expected to be available in late 2022 or early 2023. Craftsman Court will have 45 single family homes starting in the low 300s and Parkview at Brightstar will have 31 single family attached patio homes starting in the high 200s.
Home prices in Chino Valley and Prescott Valley have gone up more than 20% year-over-year from 2020 to 2021. Prescott is showing a 6% increase, which would be a healthy increase in any other year, but not as much in 2021 primarily because prices had already increased quite a bit in 2020.
In 2022, we will talk more about solutions around the lack of supply and increased demand as the Quad Cities area and other parts of Arizona continue to be highly desirable places to live. QCBN
By Leslie Guiley
For more information, please visit our office or call 928-443-8800 or bloomtreerealty.com. Leslie Guiley is chief operating officer at Better Homes and Gardens Real Estate | BloomTree Realty, which includes BHGRE Commercial and she is an area ambassador with Inman News.
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