By Mike Sunnucks | Rose Law Group Reporter
Home prices could see significant increases over the next 12 to 18 months, according to regional real estate expert Jim Belfiore.
“I think we have an environment that is a perfect storm. We have significant cost inflation. We have very high demand related to supply,” said Belfiore, president of Belfiore Real Estate Consulting.
Belfiore said the Phoenix housing market could see a 10 percent increase in existing home values. He said new home prices could rise at similar levels.
The median price for an existing home in the Phoenix market is now just under $281,000. The median price for a new home is close to $325,000. A 10 percent rise in values translates into roughly $30,000.
Belfiore said very low mortgage interest rates combined with inflationary pressures on builders led by labor costs and mandates for less density and more amenities by municipalities are moving prices higher.
The price gains are good for homeowners’ equity, but they challenge affordability. That dynamic has been seen in other growth markets such as Denver, Austin and Seattle.
“It is going to create some issues,” Belfiore said.
Affordability has been one of Phoenix’s calling cards in attracting new jobs, business investments and new residents.
“We are pricing people out of housing,” Belfiore said. That comes with rental housing prices having also increased.
