2017 will go down as one of metro Phoenix’s best-ever years for home sales.
An early tally shows 93,500 Valley houses changed hands last year. That’s 6 percent higher than home sales in 2016.
“Only 2004, '05 and 2011 were better years for home sales,” said Tina Tamboer, senior housing analyst with the Cromford Report.
And in those years, the Valley's housing market was far from normal. The housing boom, fueled by subprime mortgages and speculators, started in 2004 and was in full swing during 2005.
Metro Phoenix’s housing market hit bottom in 2011, and investors snatched up a record number of bargain foreclosure homes that year.
So 2017 could be considered the Valley’s best healthy year for home sales, something real-estate analyst Tom Ruff predicted in August.
“2005 went down in the history books as the year our housing bubble rapidly inflated,” said Ruff of Arizona Regional Multiple Listing Service’s The Information Market. “2011 was the year housing prices bottomed out after the housing-market collapse.
“This leaves 2017 as the very best year for Valley resale homes in our history not influenced by some freakish market outlier,” he said.
Prices still shy of peak levels
2017 was a strong year for housing appreciation in the Valley, but prices still aren’t back to peak levels of 2006.
Tamboer said an early analysis of sales on the MLS shows Phoenix-area home prices climbed 6.5 percent last year.
The Valley’s median sales price climbed 7 percent in 2016.
Metro Phoenix’s median existing-home price is hovering around $250,000 now, after getting an 8 percent boost in December.
That is still $15,000 off the Valley’s peak median home price in 2006.
Most housing analysts, understandably, don’t like to make annual predictions about the market. No one wants be to be wrong and get skewered for it, particularly since buying or selling a home is most people's biggest financial decision.
In December 2016, Realtor.com predicted home prices would climb 5.9 percent and sales would jump 7.2 percent in the Phoenix area during 2017. That forecast ended up being a bit off for both.
The national real-estate website also predicted metro Phoenix would have the best housing market in the U.S. last year. The verdict on that one is still out.
Looking ahead in 2018
Here are some predictions — hopes and concerns, really — from Valley housing market experts.
- “Phoenix's housing market will continue to perform in 2018 much as it did in 2017,” said Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University's W.P. Carey School of Business. But he said not enough affordable housing, inflation and resulting interest rate hikes along with new tax laws could be factors that work against the market here in 2018.
- Ruff is concerned about not enough affordable housing. “The challenge is to build more housing that people can afford,” he said. “Valley prices can’t keep climbing at the current rate, if people can’t find homes they can afford.”
- Tamboer said she “wouldn’t be surprised to see appreciation soften a bit this year.” She believes home prices will keep climbing in 2018, but potentially not at the same rate as in the past two years.
Will 2018 be the year Valley home prices finally recover from the crash?
The area’s median price needs to climb 6 percent this year for that to happen.