Phoenix, amoung a few other cities, hit one of the highest year-over-year price increases. According to a Case-Shiller report recently released, Phoenix hit 23% for the past year with San Francisco, Las Vegas and Atlanta not too far behind. This is largely due to the mix of low mortgage interest rates and investor buying.
With the lack of distressed properties (short sales and foreclosures) bringing prices down, many sellers now have an equity position due to the price increases over the past 12-24 months. This has led to sellers being able to sell their current residence and purchase a move up home that is generally bigger or in a more desirable area. Many first-time buyers have also entered the market. First-time buyers typically represent 30-40% of the buyers pool at any given time.
This year’s housing growth rate represents the largest growth rate since 2006. Another variable that often goes unnoticed is the number of homes that have been remodeled. Many homeowners, as well as investors, have significantly improved homes over the past couple of years. This trend has helped fuel home sales and increase overall value to the homes and communities. Owners that renovated their homes in the past are now seeing large gains and significant return on their investments. Many homeowners also took advantage of low mortgage rates and refinanced, saving them hundreds of dollars per month and aiding in renovation budgets for kitchens and baths or other value added items such as pools and better landscaping.