IRVINE, Calif. and SILICON VALLEY, Calif., Jan. 11, 2017 /PRNewswire/ -- Ten-X, the nation's leading online real estate transaction marketplace, has released its Q3 2016 Economic and Single-Family Housing Market Outlook Report for Phoenix, which reveals that the metro's homeownership rate dropped slightly to 63 percent, just 0.4 percent down from Q2. Home sales also edged down slightly while home prices in the area continued to rise and inventories remained tight.
Phoenix Homeownership Rate Drops Slightly
Sources: US Census Bureau, Ten-X Research
"Like a number of other areas hit hard during the foreclosure crisis, Phoenix is now one of the healthiest housing markets in the country," said Ten-X Executive Vice President Rick Sharga. "Phoenix was ranked as the 12th strongest market in our Ten-X Winter single family housing report, due to the strength of the region's underlying economy."
Phoenix Home Sales Dip Down
Sources: IHS, Ten-X Research
Phoenix existing home sales dipped in the third quarter of 2016 to a seasonally adjusted annual rate (SAAR) of 114,000, a 1.3 percent year-over-year decrease. Though existing home sales cooled, they remained at a high level, just 16 percent below their bubble-peak, reflecting healthy demand for housing in the area. The inventory of homes for sale in Phoenix continued to be tight, hovering around 21,940 properties, down 0.3 percent from a year ago, while the average time a home for sale sat on the market remained at a seasonally adjusted 61 days. Though they continued to lag behind historical levels, both housing starts and permits picked up by 4.2 and 2.2 percent year-over-year respectively.
Phoenix Home Price Appreciation Continues to Outpace the US Average
Sources: FHFA, Census, IHS, Ten-X Research
Phoenix's median existing home price hit $226,700 in the third quarter of 2016, marking a 7.5 percent year-over-year increase. However, prices remained below the metro's prior peak, suggesting there is room for further price gains moving forward.
While home prices continue to rise in Phoenix, the region's median family income is also up. Strong affordability metrics suggest that Phoenix home prices can continue to rise without the metro becoming too expensive too quickly. Steady income growth will be key in maintaining affordability should prices continue to trend upward.
Economic and Demographic Fundamentals
Phoenix's economy continued to perform well in the third quarter of 2016 as key sectors such as Education and Healthcare drove job growth, pushing overall employment up 2.0 year over year. Unemployment fell 60 bps from year ago levels to 4.5 percent, just below the national average.
Phoenix's demographic picture remains strong, having outpaced the U.S. population growth over the past 20 years. The metro added 87,988 residents in 2015 measuring a 2 percent year-over-year increase, with domestic in-migration accounting for more than half of the population increase as Phoenix's strong labor market attracted domestic workers. One potential issue for continued housing market growth, however, is that Phoenix's total population skews to both extremes with larger-than-average proportions of residents in the under 24 years old and over 65 years old brackets. The metro lags the national average in age brackets between 25 and 64 years old, which are typically a consumer's prime home buying years.
Ten-X is the nation's leading online real estate transaction marketplace and the parent to Ten-X Homes, Ten-X Commercial and Auction.com. To date, the company has sold 260,000+ residential and commercial properties totaling more than $43 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include CapitalG (formerly Google Capital) and Stone Point Capital. For more information, visit Ten-X.com.