The future continues to look bright for the Scottsdale and Phoenix housing markets. Overall sales were up almost 15 percent in December 2015 with new home closings up 45 percent over the previous year, according to the Cromford Report.
Even though January is off to a somewhat sluggish start, the numbers remain positive. Closed sales are up 8 percent while pending listings are up by 11 percent compared to a year ago.
These indicators are in line with what Jonathan Smoke, chief economist for Realtor.com, sees for the Phoenix housing market. He told KTVK, Channel 3 that he predicts a 20 percent jump in new Valley home sales and a nice boost in home values. While the national forecast for home appreciation next year is expected to be around 3 percent, Smoke believes the Phoenix area will have a home value boost of 9.5 percent, making it one of the hottest housing markets in the nation in 2016.
“Phoenix is definitely not a market that’s cooling down,” he told KTVK.
In general, many indicators bode well for the housing market nationwide in 2016. According to a report released by Realtor.com in December, new home construction and moderate gains in the existing home market will push total home sales to their highest levels since 2006 despite higher mortgage rates, continuing tight credit standards, and lower affordability.
New construction is leading the way. The report indicates the new construction market will see significant gains in 2016 and predicts new home starts will increase 12 percent while new home sales will grow 16 percent.
Existing home sales, on the other hand, are expected to be moderate and solid, which is actually good news, according to Smoke. It indicates we are returning to a more normal housing market.
“We’ve lived through 15 years of truly abnormal trends, and after working off the devastating effects of the housing bust, we’re finally seeing signs of more normal conditions,” he writes in a Realtor.com article.
He indicates that the improvements we’ve seen over the last few years pave the way for total sales for both new and existing homes to reach 6 million for the first time since 2006. But, he warns, the housing market could be tempered by lack of access to credit and rising home prices.
This is a worry also confirmed by Fannie Mae, as homebuying remains out of reach for many people.
Still, we have reason to be excited about the outlook for the Valley housing market in 2016. If you’re thinking of buying or selling, feel free to reach out to us with any questions, and always be sure to work with a qualified Realtor!