Phoenix has boomed during the 21st century. From 2000 to 2010, the Phoenix metropolitan statistical area (MSA) added nearly 1 million residents. Its growth has slowed somewhat since, though it still ranks among the fastest-growing MSAs in the country, adding between 50,000 and 90,000 residents each year. With its warm climate, diversified job market and 330 sunny days per year, Phoenix draws a mix of young professionals, families and retirees.

The area's rapid growth during the 2000s contributed to its turbulent housing market during the financial crisis of 2008. Anticipating the boom would never end, developers overbuilt during the years leading up to the crash, creating a supply glut that drove prices down when homebuying activity plummeted amidst tightening credit and economic chaos. Sunny, vibrant cities viewed as ideal relocation destinations tend to recover faster from downturns. It is simple supply and demand, and Phoenix is no exception. Since bottoming out in 2011, its housing market has once again embarked on a strong and steady growth trend.

Market Insights

In May 2011, following a steep period of decline, the median home sales price in Phoenix stood at $87,000. It began rising slowly the following summer and surpassed $100,000 by May 2012. Its acceleration picked up the next year, with the median price reaching $160,000 by May 2013. From May 2013 to May 2016, prices continued to rise, though not at the accelerated rate seen in 2012 and 2013. As of May 2016, the median sales price stood at $193,200.

Seasonal fluctuations in prices have been minimal, though sales volume has been highest during the summer months by a large margin and lowest in January and February. Moreover, sales volume peaked during the summer months of 2011, when over 6,000 homes per month were sold in Phoenix. By early 2016, that number had fallen to between 4,000 and 4,500 home sales per month.

The inflated numbers from 2011 reflect the hordes of bargain hunters who descended on the city following the crash to scoop up discounted homes. Cash buyers, perhaps the best indicator of investor demand, dominated the Phoenix real estate market in 2011. More than 30% of home purchasers each month in 2011 were cash buyers, up from 25% in 2010 and 12% in 2009.

Property and Transfer Taxes

Exact property tax rates in Phoenix depend on where in the MSA a home is located. Arizona charges homeowners a primary tax, which is used to fund municipalities and school districts, and a secondary tax, earmarked to fund special projects. A primary tax rate of 9% and a secondary rate of 5% is common, bringing one's total tax liability to 14% of the home's tax-assessed value. Arizona offers homeowners a major break on tax-assessed value, as it equals only 10% of a home's market value. Therefore, a home valued at $200,000 has a tax-assessed value of $20,000. Assuming a 14% rate, the owner of this home is responsible for $2,800 in annual property taxes. Arizona has no transfer taxes other than a $2 fee per deed or contract.

Most Expensive Neighborhoods

The Jokake Camelback subdivision, located in suburban Paradise Valley, features the most expensive homes in the Phoenix MSA. The neighborhood's average home sells for more than $11 million, with the least expensive homes still listed for over $8 million. Jokake Camelback offers palatial homes, large lots, security gates around each home, and easy access to upscale shopping and entertainment in the neighboring suburb of Scottsdale. The gated community of Silverleaf in Scottsdale features gated mansions situated on a golf course and surrounded by private parks. Its average home sells for more than $8 million.

Top Real Estate Websites

Those wanting to learn more about Phoenix real estate, or who wish to search for specific homes for sale in the area, have several places to look online. PhoenixRealEstateGuy.com, operated by a local real estate agent, features a user-friendly home search function and a regularly updated blog on market trends in the area. Otherwise, the national real estate sites such as Trulia, Zillow and Realtor.com have the Phoenix area well covered, offering specific home listings and data on larger local trends.

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