Phoenix condo owners need two years of income to upsize to a house
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Condo owners looking to upgrade to a house in many metro Phoenix areas will have to save for years to afford the larger space, according to a new analysis by real estate company Point2.
Why it matters: Bigger homes have grown more appealing as more people work from home. But even as home prices have fallen over the past year, upsizing remains out of reach for many across the Valley.
State of play: Point2 compared the median prices of single-family homes and condos in each city and used the median area income to determine how many years of savings were needed for the typical condo owner to buy a house.
- Single-family homes are more expensive than condos in every Valley city, but there are some pockets where upsizing is easier.
- For example, Phoenix, Chandler and Peoria condo owners need less than two years of income to afford to upgrade to a single-family home.
Meanwhile, Scottsdale owners need almost five years of income to cover the difference.
- The median condo price is $400,000 compared with $863,000 for a single-family home.
What they're saying: "Scottsdale seems to be an expensive outlier in an already hot market, which implicitly puts a strain on upsizing," Point2 researcher Alexandra Ciuntu tells Axios Phoenix.
- Additionally, only 67% of homes for sale in Scottsdale are single-family (the rest are condos or townhomes), which means there are fewer options for upsizing.
- By comparison, single-family homes make up more than 90% of listings in Peoria, Gilbert and Surprise, Ciuntu says.
The bright side: Point2's analysis applies only to current market values. People who purchased condos prior to the 2020 housing boom almost certainly have significant equity that would make purchasing a bigger home easier.
The big picture: Not all hope is lost for wannabe homeowners, especially since the cooled real estate market has forced sellers to lower prices and offer concessions, like helping with closing costs.