If you have been watching the real estate market in Arizona, it is no surprise that we have seen a sharp increase in home prices for the past 20 months. One factor that home buyers are considering is the price per square footage. Even since last year, where the market had incredible growth, we are seeing a 20 to 30% price per square foot increase across the board.*
According to The Cromford Report, the cities with most expensive price per square foot are:
• $549.71 – Paradise Valley
• $372.07 – Scottsdale
• $337.12 – Carefree
• $298.31 – Rio Verde
• $295.03 – Fountain Hills
The current range of price per square foot is typically between $225 to $500 per square foot in the Phoenix metropolitan area. Nowadays, it is impossible to buy or build a home for $100 or less per square foot in the Valley.
One city that has outstanding growth and is projected to continue to see a substantial rise in pricing is Queen Creek. Despite being on the more affordable side with an average of about $200 per square foot, this booming city has seen an over 30 percent increase in price in comparison to last year.* With the freeway expansions, I feel safe in projecting that Queen Creek will continue to explode, and prices will continue to rise.
According to The Cromford Report, Arizona cities that are on the affordable end of the spectrum include:
• $180.66 – Sun City
• $179.34 – Avondale
• $178.97 – Tonopah
Due to the nature of the pandemic and a trend of people working from home, buyers might decide to invest their money in a property where they are getting more square footage for their dollar. Therefore, commute is becoming less of a factor when someone is buying their home, which could entice them to expand their search to these more rural areas. Also, with inventory being low in the market, buyers might have a better chance of finding a home due to the increase in new developments in these areas.
One thing to keep in mind for these developing cities is that when you start at a lower price, it will show a larger percent increase as they continue to grow. Therefore, buyers should not necessarily be wary of a large price per square foot percent increase, but rather, they should be encouraged by this! It is indicative of a growing neighborhood, which is great for investing.
Based on these market trends, it is projected that the Phoenix Metropolitan Area will have a strong first and second quarter in 2022 to continue this momentum. Therefore, buyers should be aware that this pricing per square foot should stay steady and might even continue to rise.
*Source: The Cromford Report