The Phoenix Real Estate Market in 2017: Is It a Good Time to Buy a House?

Market Overview

The real estate market in Phoenix, Arizona, in 2017 saw prices reaching record highs. However, it's crucial to understand that while prices are high, buying a house can still be a smart investment. Always remember, the key to a successful purchase is to negotiate the best price possible. Sellers might be particularly anxious to sell if their home has been on the market for an extended period.

Trends and Factors to Consider

Prices in Phoenix have been gradually increasing. Nonetheless, you can still find good deals if you're willing to look outside the immediate Scottsdale area, such as in Mesa, Chandler, and Gilbert. These areas offer comparable living conditions but might come with more affordable prices.

Personal Experience: My First Home Purchase in 2016

I purchased my first home in 2016 after carefully considering whether to continue renting. Although the decision was not without its challenges, I am satisfied with the outcome. My journey to buying a house is detailed in this in-depth article, which is tailored for millennials like myself.

Key Factors for Buyers

Ability to Borrow and Interest Rates

Interest rates play a significant role in determining how much of a house you can afford. As of 2017, interest rates were generally around 4-5%. These rates vary based on the term length, loan amount, and features like PMI (Private Mortgage Insurance) and LTV (Loan-to-Value), which is typically offset by your down payment. A favorable mortgage at a reasonable rate can make a substantial difference in your purchasing power.

Home Inventory

The inventory of homes available is crucial to consider. Though there are data points available, physically driving through neighborhoods of your desired location can provide a better understanding of the competition. Online tools like Zillow provide a good starting point, but accessing the MLS (Multiple Listing Service) through a real estate agent provides the most up-to-date listings with detailed search criteria.

Valuing Real Estate

While websites like Zillow and Redfin offer valuable data on neighborhood and expected home values, it's important to conduct your own comparable home research. The value of a home is ultimately determined by buyers, not algorithms. Don't place too much faith in market forecasts.

Market Conditions in Phoenix

I felt that housing prices were accelerating upward but not at a breakneck pace. The presence of numerous apartments built around Phoenix and the East Valley generally keeps buyers from rushing into the market. For me, the tipping point to stop renting was around $1100 per month. Once you cross the $1000 monthly mortgage threshold, the cost is often similar to a typical rent.

Working with a Buyer’s Agent

I found working with a buyer's agent to be highly beneficial. Local real estate trends, negotiation strategies, and understanding the local market were all key aspects that an experienced agent can provide. They can advocate on your behalf to ensure you get a fair price for both you and the seller.

While the thought of doubling your investment upon selling the house is tempting, the reality is more modest. During the 2007 recession, it might have been a better time to invest, but long-term, holding onto the value of your home can offer significant benefits. As you retire, owning a house can reduce your living expenses and ensure a roof over your head.

In conclusion, while the market in Phoenix during 2017 was indeed expensive, it could still be a good time to buy if you approach the process with careful research, strategic negotiation, and the support of a knowledgeable agent.