As the last ripples of the recession drift further away, it turns out that the areas that were hardest hit nearly a decade ago are leading the pace of housing recovery. This is especially true in Phoenix, where the homeownership rate in Q2 hit 63 percent, even as home prices continue rising, according to Ten-X Research.
"Phoenix continues its remarkable recovery from the volatility of the housing market boom and bust cycle, where it was one of the hardest hit cities in the country," said Ten-X executive vice president Rick Sharga. "The city's strong underlying economic fundamentals of high employment, growing wages, and increasing population bode well for continued growth in the housing market."
Existing home sales in Phoenix rose to 123,600 during the quarter. That’s a 12.5 percent year-over-year increase, hitting a new cyclical peak, and surpassing the national average for the first time since early 2015. As it is in so many cities, inventory of homes for sale in Phoenix remains tight, even with a 7.2 percent uptick in available homes compared to a year ago.
New home construction remained weak in Q2. Both housing starts and permits were down year-over-year. But home prices in Phoenix outpaced the nation. The city’s median price jumped to a little more than $222,000, more than 8 percent above last year. That’s still short of its peak, but was faster growth than most of the country.
"Compared to other major metropolitan areas, Phoenix real estate remains relatively affordable, even as prices continue to rise," Sharga said.
Part of the reason for such growth, he said, was the coinciding growth of certain professional sectors, namely financial and business services. Unemployment in Phoenix has also dropped to about 5 percent.
One potential issue for continued housing market growth, however, is that Phoenix's total population includes above-average proportions of residents under 24 years old and over 65 years old, Ten-X reported. This puts a large number of people outside the parameters of the typical homebuyer, who is between 25 and 64.