House prices in Greater Phoenix soared by 32%

House prices in Greater Phoenix soared by 32%. In the past year, house prices in Phoenix soared by nearly one-third, and scarcity of housing has allowed house prices to continue to rise. WP Kyrialisan...

In the past year, housing prices in Phoenix have soared by nearly one-third, and the scarcity of housing has allowed housing prices to continue to rise. The WP Carey Arizona State University College of Business Administration reported that the average real estate sales price in May was 32% higher than the same period last year and rose 9% from April to $147,000. The recent trend of soaring prices is likely to end with the arrival of summer as people become less willing to live in 110-degree temperatures, said Mike Err, a real estate expert at Arizona State University.

"We're still going to see a nice healthy closing rate, but I think we've got a lot of people caught up on the pricing of this home, and it wouldn't surprise me if we went to price homes in this month or two," Orr said. "After all, there is a certain limit to the rise in housing prices."

On June 1, the number of houses on the market dropped to an unusual low, with only 8,550 units. This is down 50% in one year. Tight supply has led to tender wars and failed attempts to get buyers their due. A house in Chandler received 84 offers, and a house in Glendale had 95 offers - and sold for 17% more than the official offer price. "If I were to buy a house now, I would focus on a new segment," Orr said. The east side of the city remains the hottest area in the market for new homes. There are 187 new homes in Gilbert, 49 in Chandler and 49 in Mesa. Phoenix recorded 60 new homes on the market in May. However, the overall number of home sales fell nearly 6% as demand outstripped supply. Orr predicts that the market performance in the future will not be any crazier than in the past few months. If owner-occupiers lose some interest as prices rise, Orr said strong investment demand will fill the gap.

New home construction surged 57% last year amid a shortage of housing. "Builders will be quick to follow, but because of the labor shortage, it's not something that can happen very quickly," Orr said. "How quickly that will happen is unclear at the moment and it will take some time to fill the labor shortage."