Arizona home values on the rise even with strict land-use restrictions
PHOENIX — Between 2010 and 2017, Arizona has seen a jump in home values.
According to Zillow, even with strict land-use restrictions, the state saw a 50 percent increase in home values over an eight-year span.
“As the housing market has recovered from the Great Recession and collapse in home values, a new challenge emerged that is driving market dynamics – the shortage of homes for potential buyers,” Zillow Senior Economist Aaron Terrazas said.
Along with the 50 percent spike in home values, employment has increased by 18.8 percent while housing stock increased by only 6.1 percent in Phoenix.
“We’ve seen inventory falling on an annual basis for more than three years now. As a result of job and population growth, housing demand has overwhelmed the inventory of pre-existing homes and builders are facing a number of challenges in adding new supply, including regulatory costs,” Terrazas said.
“In hot job markets with some of the strictest laws about building new residential housing, home values experience the most pressure. It’s helped home values recover and exceed their previous highs, but leaves many home shoppers unable to break into the market.”
Strict land-use regulations also contributed to the increase in home values. Zillow rated the housing markets of 35 of the nation’s largest cities as least restrictive, moderately restrictive and most restrictive. Phoenix received a rating of most restrictive.
There were three cities listed with home value growth of over 60 percent: Denver, Miami and San Jose.