The housing market has been grueling for many would-be buyers, making the dream of homeownership very difficult to attain. Inflation, soaring mortgage rates, and low inventory — which is further putting pressure on prices — are all contributing to the issue.
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Some states — such as Arizona — are also seeing some cities become unaffordable. With a median home price of $525,000, the state is well above the national median home price of $442,500, according to Realtor.com.
“There are a few metro areas in Arizona where prices are still below the national median, but price growth has outpaced national price growth,” said Realtor.com’s senior economic research analyst Hannah Jones. “These areas have become much less affordable relative to the national market over the last five years, and a few areas continue to see climbing prices.”
According to Suzy Minken, a realtor with COMPASS, although we are seeing a rise in inventory as part of the traditional Spring selling season, the inventory of homes in many areas continues to remain low and insufficient to meet the over-supply of buyer demand.
“Home prices are being pushed up, especially in sought-after towns in commuting distance to major urban areas,” said Minken. “And as home prices continue to rise, some potential buyers are being priced out of areas.”
Minken added that if we see a price drop in mortgage rates later this year, that might not be enough of a difference to make these towns more affordable to some buyers.
“One reason is because there are “buyers waiting in the wings” who will re-enter the home buying search process and increase the competition for homes. More buyer competition often translates to multiple offers — and we all know what that means!,” she added.
Here are some of these Arizona cities:
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Lake Havasu-Kingman
In May 2019, the median listing price in the area was 6.4% below the national median at $299,000, Jones said.
“However, by May 2024, prices had climbed 43.6%, reaching $430,000, just 2.8% below the national median,” she said. “Though prices in the area are below their May peak from 2022, prices remain elevated relative to pre-pandemic, and affordability has deteriorated.”
Safford
In May 2019, the median listing price in the area was 33.2% below the national median at $214,000, she said. Yet, by May 2024, prices had climbed 75.9%, reaching $376,000, just 15% below the national median.
“Prices in the area continue to climb and are up 14.5% year-over-year, signaling that affordability conditions continue to worsen in the area,” Jones said.
Sierra Vista-Douglas
In May 2019, the median listing price in the area was 38.5% below the national median at $197,000. By May 2024, prices had climbed 62.9%, reaching $321,000, just 27.6% below the national median, she noted.
“Prices in the area fell year-over-year in May, signaling some restoration of affordability, but with the significant price growth over the last five years suggests that this once-affordable locale has gotten significantly less so,” Jones said.
Yuma
In May 2019, the median listing price in the area was 30.9% below the national median at $221,000. But by May 2024, prices had climbed 60.8%, reaching $355,000, just 19.7% below the national median.
“Prices in the area climbed year-over-year in May, which suggests that demand in the area is resulting in less favorable affordability conditions,” added Jones.
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This article originally appeared on GOBankingRates.com: I’m a Real Estate Agent: These 4 Arizona Cities Are Becoming Unaffordable
