IRVINE, Calif. and SILICON VALLEY, Calif., Aug. 8, 2017 /PRNewswire/ -- Ten-X, the nation's leading online real estate transaction marketplace, has released its First Quarter 2017 Economic and Single-Family Housing Market Outlook Report for Phoenix, which reveals a strengthening housing market despite a slight dip in homeownership. In the first quarter, the region's homeownership rate fell from 63 percent to 62.3 percent and continues to trail the national level, yet is still 120 basis points higher than the same period one year ago.
"It is taking a while for the Phoenix housing market to bounce back, but overall, its recovery remains impressive," said Ten-X Executive Vice President Rick Sharga. "Home sales growth in the Phoenix metro region led the U.S. in year-over-year gains, yet prices are below their prior peak, which suggests there is still room for them to increase. We continue to see signs of long-term growth thanks to the area's economic diversity, strong demographics and favorable quality of life. In fact, the region's population grew at nearly triple the national rate, and employment is at an all-time high."
Phoenix Homeownership Rate Remains Flat
Sources: US Census Bureau, Ten-X Research
Phoenix Home Sales Tick Up
Sources: IHS, Ten-X Research
Existing home sales in Phoenix edged higher in Q1 to a seasonally adjusted annual rate (SAAR) of 121,794, posting a 10.2 percent year-over-year gain that led the nation. Inventory of homes for sale in Phoenix ticked slightly higher from the previous quarter to 21,415 on a seasonally adjusted basis, yet inventory was down 7.8 percent from one year ago. The average time a home sat on the market dropped sharply to 48 days, a whopping 20 percent decrease from one year ago. Some inventory relief may be coming in the form of new home construction. Compared to one year ago, housing starts and permits were up 2.1 percent and 10.6 percent, respectively.
Phoenix Home Prices Continue to Outpace the US Average
Sources: FHFA, Census, IHS, Ten-X Research
Phoenix home prices continued their impressive ascent with a 7.1 percent year-over-year gain, which is outpacing the U.S. average. The median home price climbed modestly to $236,440, which is still below the city's prior peak before the 2008 housing crisis and may point to further appreciation ahead.
"Despite tight inventory and the likelihood of further rate increases, the Phoenix market remains affordable for most buyers. The region's strong economy and relatively modest price increases are keeping homeownership attainable," Sharga said.
Economic and Demographic Fundamentals
Phoenix's economy continued to expand at a solid clip during the first quarter. While payrolls contracted in late 2016, employment was up 2.5 percent year-over-year and remains near all-time highs. The region's unemployment rate stood at 4.5 percent, near the U.S. average. Professional/business services remained the city's strongest economic driver. In spite of job losses in three of the past five months, the sector saw an 1.8 percent increase in payrolls from one year ago. Employment in the financial services sector is up 5 percent from one year ago and continues to outpace the national rate.
Phoenix added 93,680 residents in 2016 to account for a 2.1 percent year-over-year increase, which is nearly triple the U.S. growth rate. Domestic in-migration comprised more than half of the increase, thanks to the metro's strong labor market. However, the region has significantly fewer residents between 25 and 64 years old, which are a consumer's prime homebuying 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 292,000+ residential and commercial properties totaling almost $48 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.