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Axios Phoenix Thought Bubble

Thought Bubble

Data: Redfin; Note: Metro divisions are subdivisions of metropolitan areas; Chart: Axios Visuals

The majority of homes for sale in metro Phoenix are taking longer to find an interested buyer, according to new Redfin data.

This is a reversal from the market frenzy in 2020 and 2021, when sellers received multiple offers within days (if not hours) of listing their homes.

Why it matters: Houses that stay on the market for more than a month are usually overpriced or in need of major work, according to Redfin deputy chief economist Taylor Marr.

What's happening: Buyers, already hampered by gravity-defying prices and mortgage rates, don't want to spring for a home that looks like an HGTV "before" photo, Axios' Sami Sparber reports.

By the numbers: Metro Phoenix homes went off-market after a median of 42 days in July, compared with 32 days a year earlier, per Redfin.

Around 27% of Phoenix-area homes were snapped up in two weeks or less.

That's a slightly larger percentage than the same time last year but still well below the national rate of 41%, Redfin found.

Be smart: "Fixer-upper" listings made up 0.1% of sales here in the first half of 2023, per Zillow data, while those advertised as redone made up about 22%.

The big picture: Self-identified fixer-uppers are typically selling for less, and more slowly, than expected, according to Zillow data shared with Axios.

The bottom line: "Most homebuyers right now simply don't have enough money left over to invest in major repairs or remodeling," Marr tells The Wall Street Journal.

Sorry, Phoenix homeowners: No one wants your fixer-upper

Houses that linger on the market are usually overpriced or in need of major work.

Real estate

The majority of homes for sale in metro Phoenix are taking longer to find an interested buyer, according to new Redfin data.<ul><li>This is a reversal from the market frenzy in 2020 and 2021, when sellers received multiple offers within days (if not hours) of listing their homes.</li></ul>

Real Estate

Roughly 7% of homes in metro Phoenix are worth at least $1 million, per a new report from Redfin.

That's slightly fewer than we saw last year, but significantly more than before the pandemic-era market spike.

Why it matters: Low inventory is pushing prices up nationwide and sending more into seven-figure territory.

The big picture: Nearly one in 10 U.S. homes was valued at $1 million or more in June, a share close to last summer's all-time high and up from a 12-month low in February, the real estate brokerage found.

Arizona's slice of million-dollar houses has more than tripled since June 2019, data shared with Axios shows.

Between the lines: Rising prices are a boon for millions of homeowners who have seen big gains in equity in recent years.

Yes, but: With mortgage rates at a 22-year high, U.S. housing affordability looks increasingly bleak for buyers.

Million-dollar homes have tripled in Arizona since 2019

Roughly 7% of homes in metro Phoenix are worth at least $1 million.

Roughly 7% of homes in metro Phoenix are worth at least $1 million, per a new report from Redfin.<ul><li>That&#x27;s slightly fewer than we saw last year, but significantly more than before the pandemic-era market spike.</li></ul>

Data: RentCafe; Chart: Tory Lysik/Axios Visuals

Apartment developers looking to attract high-income renters say they're thinking beyond gyms and pools when it comes to amenities.

We're talking rooftop dog parks, coworking spaces, indoor rideshare waiting rooms and garage-to-apartment elevator service.

Why it matters: The push comes as many would-be homebuyers rent for longer, incentivizing properties to compete for a growing cohort of high-income renters.

By the numbers: The number of Phoenix-area renters earning $150,000 or more grew 91% between 2016 and 2021, per U.S. Census data.

That's higher than the national average increase of 87.5%.

Between the lines: High listing prices and mortgage rates aren't making home buying as feasible or desirable as it once was, Chris Salviati, senior economist at Apartment List, tells Axios.

Almost 99% of Phoenix properties are cheaper to rent than buy right now, according to a Redfin analysis.

What they're saying: "A lot of folks in that high-income band, who in the past would have owned homes, are now continuing to rent — whether that's for lifestyle reasons or because they are feeling like it's not a good time to buy," he says.

The number of high-income renters in Phoenix is surging

The number of Phoenix-area renters earning $150,000 or more grew 91%.

A chart showing change in renter occupied households in the Phoenix area by income. Households making $150,000 or more grew by 90.9%.

Apartment developers looking to attract high-income renters say they&#x27;re thinking beyond gyms and pools when it comes to amenities.<ul><li>We&#x27;re talking <a class="gtmContentClick" data-vars-link-text="rooftop dog parks" data-vars-click-url="https://alturaphx.com/amenities#slide5" data-vars-content-id="8b5d02b6-fbbf-46c5-a71e-4e1837a1e307" data-vars-headline="The number of high-income renters in Phoenix is surging" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://alturaphx.com/amenities#slide5" target="_blank">rooftop dog parks</a>, <a class="gtmContentClick" data-vars-link-text="coworking spaces" data-vars-click-url="https://www.aspireparkcentral.com/amenities" data-vars-content-id="8b5d02b6-fbbf-46c5-a71e-4e1837a1e307" data-vars-headline="The number of high-income renters in Phoenix is surging" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.aspireparkcentral.com/amenities" target="_blank">coworking spaces</a>, indoor <a class="gtmContentClick" data-vars-link-text="rideshare waiting rooms" data-vars-click-url="https://thehalstenscottsdale.com/amenities#community-amenities-anchor-scroll" data-vars-content-id="8b5d02b6-fbbf-46c5-a71e-4e1837a1e307" data-vars-headline="The number of high-income renters in Phoenix is surging" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://thehalstenscottsdale.com/amenities#community-amenities-anchor-scroll" target="_blank">rideshare waiting rooms</a> and garage-to-apartment <a class="gtmContentClick" data-vars-link-text="elevator service" data-vars-click-url="https://www.cityscaperesidences.com/amenities.aspx" data-vars-content-id="8b5d02b6-fbbf-46c5-a71e-4e1837a1e307" data-vars-headline="The number of high-income renters in Phoenix is surging" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cityscaperesidences.com/amenities.aspx" target="_blank">elevator service</a>.</li></ul>

Development

News

Data: ATTOM; Note: Companies include LLCs, corporations and other entities. Individuals include personal trusts; Chart: Simran Parwani/Axios

Cash is king in today's difficult Valley housing market.

What's happening: About 38% of homebuyers in metro Phoenix last year paid with cash, up from about 31% in 2019, according to ATTOM, a real estate data firm.

About 60% of cash buyers last year were individuals, while the other purchases were made by investment companies that plan to rent or flip them for profit.

Between the lines: With interest rates topping 8%, cash buying is the way to go, if you can swing it. Sellers often prefer cash buyers because they don't have to navigate loan requirements.

Yes, but: Most Valley families have to finance their homes to afford them, and they're struggling to compete with cash-flush buyers — just another obstacle for average buyers in this exceedingly tight real estate market.

The big picture: One in three U.S. homes sold in 2022 was bought in cash, per ATTOM.

Nearly 10% of those were sold to investors, while a quarter went to families and individuals.

Worth your time: "What Happens When Wall Street Buys Most of the Homes on Your Block?"

Almost 40% of Phoenix-area homes were bought with cash last year

About 60% of cash buyers last year were individuals, while the other purchases were made by investment companies

Cash is king in today&#x27;s <a class="gtmContentClick" data-vars-link-text="difficult Valley housing market" data-vars-click-url="https://www.axios.com/local/phoenix/2023/08/23/phoenix-million-dollar-homes" data-vars-content-id="adbaf93e-ca58-4be3-9e89-28efe0fb3519" data-vars-headline="Almost 40% of Phoenix-area homes were bought with cash last year" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/phoenix/2023/08/23/phoenix-million-dollar-homes" target="_self">difficult Valley housing market</a>.What&#x27;s happening: About 38% of homebuyers in metro Phoenix last year paid with cash, up from about 31% in 2019, according to ATTOM, a real estate data firm.

Data: RentCafe analysis of Yardi Matrix data; Note: Analysis includes 200 largest U.S. cities; Chart: Axios Visuals

If you can find an apartment for less than $2,000 per month, chances are it's going to be awfully cozy.

State of play: A monthly rent of $1,500 can get you a 772-square-foot apartment in Phoenix, per a new report from listing service RentCafe.

You can get slightly more bang for your buck if you head for the suburbs or down south to Tucson.

The big picture: The rental market is thriving because homes for sale are limited and interest rates are high. Gen Zers are also prioritizing location over home size, Doug Ressler of real estate research firm Yardi Matrix tells Axios.

Those renters are influencing development in big cities, from smaller floor plans to next-level amenities and conveniences.

Reality check: Rent is rising faster than income nationwide.

The median U.S. renter is spending close to 30% of their monthly income on an average rent, per the latest report from Moody's Analytics, an economic research firm.

Yes, but: It's still cheaper to rent than buy in the vast majority of the country, a new Redfin report shares.

What $1,500 gets you in rent in metro Phoenix

You can get slightly more bang for your buck if you head for the suburbs.

Housing

Apartment space for $1,500 per month in Arizona, by city.

If you can find an apartment for less than $2,000 per month, chances are it&#x27;s going to be awfully cozy.State of play: A monthly rent of $1,500 can get you a 772-square-foot apartment in Phoenix, per a <a class="gtmContentClick" data-vars-link-text="new report from listing service RentCafe" data-vars-click-url="https://www.rentcafe.com/blog/rental-market/market-snapshots/rental-space-for-1500/" data-vars-content-id="eebc418d-ceaa-4c58-b0cd-503d8c6fc9c5" data-vars-headline="What $1,500 gets you in rent in metro Phoenix" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.rentcafe.com/blog/rental-market/market-snapshots/rental-space-for-1500/" target="_blank">new report from listing service RentCafe</a>.

Sami Sparber

Featured stories

Almost 40% of Phoenix-area homes were bought with cash last year

Sorry, Phoenix homeowners: No one wants your fixer-upper

Million-dollar homes have tripled in Arizona since 2019

What $1,500 gets you in rent in metro Phoenix

The number of high-income renters in Phoenix is surging