Phoenix realtor, first-time buyer give inside look at sizzling housing market
This story is part of KTAR News’ “Arizona’s Rising Real Estate” weeklong special series on 92.3 FM, online and our app.
PHOENIX — As Arizona’s housing market continues to boom, it seems as though the average buyer is getting squeezed out.
“It is 200% a sellers market,” Bobby Lieb declared to KTAR News 92.3 FM with certainty.
Lieb, who has been selling real estate in north central Phoenix for more than 30 years, said this market is unlike any he’s ever seen.
“I’m in shock,” Lieb said of the prices he’s seeing people list and buy houses at these days. “In central Phoenix, about six months ago, the market was semi-crazy then, now it’s very, very crazy.”
This is something first-time buyer Cynthia knows all too well.
“It was a little slim pickings,” she said with a bit of a laugh. “My limit for buying was comfortably around $250,000, no more than $300,000 was my max.
“When I was looking over $300,000, it would just be running tight for my income. It’s just me, so there’s no two-income, just sole income. So budget was really important to me.”
Unfortunately for Cynthia, this budget had a lot more buying power just a year ago.
According to Zillow, the average home value in Phoenix is $328,883—a 21.6% increase over the past year.
But Lieb argues that in this market, the sky’s the limit.
“There just really is not any reality on what the homes are worth because people are willing to pay whatever they’ve got to pay to get the house,” Lieb said.
That’s something Cynthia experienced first-hand.
“There [were] a couple of places I did put offers in but I was all out-beat by cash offers,” she said.
Lieb explained this is part of the problem.
“You’re going to have a hard time buying any house unless you pay cash,” he said.
But who are these cash buyers? Often, they’re coastal state transplants.
According to recent data, on average, more than 50,000 Californians move to Arizona every year.
“One thing that I heard was there’s a lot of California residents coming over here,” Cynthia said. “Because the [Phoenix] housing market is so different [compared to California], seeing a house for $300,000, [California buyers] may have cash for that and they say ‘I want to have that, so let me give you $50,000 on top of that.’
“And so, not having that ability to put that kind of offer made me rethink what would be available to me.”
Lieb echoed her claim.
“To people that live in Arizona [the market] is definitely unaffordable, but if you’re coming from out of state, back East or California, it’s very affordable,” Lieb said. “This is a paradise to them, moving to Phoenix where it doesn’t even come close to where they came from.”
And the market only gets more hectic when you look at the actual number of homes available.
According to Lieb, the housing supply in the greater Phoenix area is down 75% compared to a typical year.
Real estate consultant and Valley economist Elliott Pollack indicates we are down to an eight-day supply of housing when it’s usually a six-month supply.
That reality is putting even more pressure on buyers like Cynthia.
“That factor of [the market] being so hot and just so active and crazy, it made me have to rethink my strategy and rethink what was actually available to me.”
Cynthia switched her plan from looking for a single-family home to condos and townhouses, and she even started to look further west of her ideal, Biltmore-adjacent neighborhoods.
Even with tempered expectations, there came a point where Cynthia was ready to give up.
“I actually told my realtor, Sheryl, I’m getting a little disheartened with this process and I feel like this market is a little too crazy for me and I want to take a pause,” Cynthia said.
But that’s the moment when the perfect house became available.
Her realtor became the selling agent for a property in Cynthia’s desired area and under her budget.
For non-cash buyers with limited funds, Lieb explained that the realtor makes all the difference in a buyer’s odds.
“To me, if I get three offers, or four offers or whatever, five offers on a house and I’ve done business with one of the five agents, that goes a long way,” Lieb said.
He adds that the right realtors, who are experts in your desired areas will, like Cynthia’s agent, know what houses are coming before they even hit the market.
Now, Cynthia is the owner of her dream home.
“Once I got the keys in my hand, I was so ecstatic, it still feels so surreal,” she beamed with pride.
And Lieb has good news for recent buyers like Cynthia.
“Check back at the end of the year, your home is going to be worth probably 10% more, or 15% more, just because it’s gotten later in the year,” he said.
And while Cynthia’s story has a happy ending, both she and Lieb recognize that in today’s surging market, typical Arizonans are quickly being edged out of home ownership in the state.