Metro Phoenix’s hot housing market cooled a few degrees during the summer, but prices are climbing again.
The Valley’s median home price is expected to have hit $410,000 in September and climb to a new record of $415,000 by mid-October, according to the Arizona Regional Multiple Listing Service’s analysis of pending sales.
The price increases are coming even as the supply of homes for sale continued to tick up and sales dipped slightly in August. That combination of slowing indicators had been keeping the Phoenix-area median home price hovering around $405,000 during the summer.
An increase in the number of "iBuyers," corporate buyers and other investors purchasing Valley homes could be behind the latest price increases.
In August 2020, traditional buyers who typically plan to live in their homes accounted for 91% of metro Phoenix sales. But in August 2021, traditional buyers were behind only about 75% of Valley home sales.
IBuyers — companies using instant online buying methods, including OpenDoor and Offerpad — bought 150 Phoenix-area houses in August 2020, compared to almost 1,000 in August this year.
“We saw a significant increase in the number of properties purchased by iBuyers, large institutional investors as well as small investors,” housing analyst Tom Ruff with ARMLS’ Information Market group wrote in his latest report.
“Currently, they are on a buying spree, which begs the question, are institutional buyers and iBuyers the driving force behind our recent price gains?” Ruff said.
Some of metro Phoenix’s most expensive neighborhoods are seeing the biggest increases in home prices.
Paradise Valley’s 85253 ZIP code led metro Phoenix for the biggest home price increase during the past year. The median price in the posh enclave jumped 50% to reach $2.398 million at the end of second quarter, according to ARMLS. That’s the highest median in the Valley.
The central Scottsdale ZIP 85250 came in at No. 2 with a 44.4% home price increase. The popular area’s median is now $516,000.
Home prices in the northeast Scottsdale ZIP 85260 climbed 43.8% to $575,000.
The Gilbert neighborhood in ZIP 85297 saw prices increase 42% to $518,750.
In the north Scottsdale ZIP 85262, prices climbed 40.3% to $1,175,000.
Metro Phoenix’s overall median price is up about 25% from a year ago, but some areas of the Valley are seeing prices drop or climb by less than half that much.
The median price in Phoenix’s uptown neighborhood, ZIP code 85012, is down 31% to about $368,000, according to ARMLS. But a big part of the lower price is due to less expensive new homes selling in the area.
In Phoenix’s Desert Ridge neighborhood, ZIP 85054, the median price fell 10.2% to $408,750.
Carefree’s ZIP code 85377 saw home prices increase 10.2%. The area’s median is up to $959,000.
Home prices climbed 11.6% in the north central Phoenix area ZIP 85021, where the median is $385,000.
ZIP 85340, home to Litchfield Park, posted an 11.7% gain for a median price of $430,000.
Metro Phoenix’s absorption rate, which is calculated by dividing the number of homes sold during a month by the number of available homes, peaked in March and then slowed for four months, Ruff said.
Those four months gave buyers dealing with bidding wars and rapidly rising prices a slightly better chance.
But in August, the absorption rate for the Valley’s housing market started climbing again, even as supply increased.
That signals rising demand for homes, and is why metro Phoenix’s median home price is expected to hit a record $415,000 this week.