Article originally posted on Phoenix Business Journal on August 25, 2020
Once again, Phoenix is No. 1 in the nation in home price growth, with year-over-year price increases of 9% in June, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
Phoenix price growth far outdistances the next two major metros: Seattle, with 6.5% year-over-year growth, and Tampa, Florida, at 5.9% price growth.
Phoenix’s growth is now more than twice the year-over-year national increase, at 4.3%.
Peter O’Neil, research director for NorthMarq, said these results show the resiliency of the Valley housing market.
“Annual price gains in the Phoenix area have been outpacing the national average since early 2018, and the pace of increases has been accelerating in recent months,” O’Neil said.
June 2020 marks the 13th consecutive month where Phoenix was the leading market in the S&P CoreLogic Case-Shiller Index after Phoenix caught and passed Las Vegas, he said.
“What’s setting Phoenix apart has been the supply/demand imbalance in the market,” O’Neil said. “Several years of strong population growth — averaging more than 75,000 people per year — have created pent-up demand for housing, and to this point in the cycle, new home construction has not kept up with demand growth. This is putting upward pressure on housing prices.”
A similar trend has emerged in the rental housing market, he said.
“Apartment rents in Phoenix have been posting some of the highest increases in the country in recent years,” O’Neil said. “There’s simply more demand for housing than there is supply right now.”
Selma Hepp, chief economist for CoreLogic, said all price tiers in Phoenix are experiencing faster growth compared to other regions, with the high tier growing at 8% year-over-year in June.
“An average for the high tier in other regions is 3%,” Hepp said. ” The drivers behind the home price growth are very much related to supply and demand. The area has only about 1.6 supply of inventory — one of the lowest among metros nationwide, and population growth of almost 2%, again some of fastest growth in population nationally.
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