If you are looking to buy a home in Peoria, you should continue to expect to pay a pretty penny for a little while.
The Peoria housing market continues to remain knee-deep in a seller’s market, and while it’s reasonable to expect price appreciation to slow down at some point, there is little evidence at this stage to show prices declining in the near future, according to the most recent Cromford Report.
In April, nearly 60% of closings were over the asking price and had a 22% appreciation rate compared to April 2021.
The report stated supply is still 76% below normal for this time of year and demand is 6% above normal.
However, demand is declining in response to recent increases in interest rates — About 30 days ago, demand was 12% above normal and 30 days before that, it was 21% above normal.
“Buyers across the nation are in the best financial shape seen in decades with an average credit score of 714 last year, according to Experian; and Maricopa County has the lowest percentage of consumers with credit scores below 660 in the last 22 years,” the report stated.
“However, in just a few short months, the average interest rate increased from 3.1% in December to 4.7% in April. This resulted in a $500 increase in the estimated payment on a 1,500-2,000-square-foot home, pushing the cost to buy significantly higher than the cost to rent in greater Phoenix.”
The interest rate for a 30-year fixed loan is currently 5.1%.
Market demand is falling as interest rates and home prices continue to out-pace income to create a greater affordability issue, Peoria-based Realtor Rebecca Durfey said. But this could change if more people decide to rent, she said.
“The rental market is increasing in inventory and as supply grows and prices stop rising, more buyers who are unable to purchase homes will move over to the tenant lane. If that continues to happen, as we are seeing now — ever so slowly — the inventory for homes being sold should increase,” Durfey said.
The monthly median sale price in Arizona is up a whopping 26.9% from this time last year, and the median cost of a home is currently $457,000, according to the Cromford Report.
Durfey said this reflects the current market in Peoria, a strong seller’s market that only has a minimum of four buyers for every home available.
But there could be a light at the end of the tunnel, she said.
“While there are areas in Maricopa County that will see the shifts in a more dramatic fashion, Peoria continues to hold tight to the seller’s market,” Durfey said. “It may take a few months, but if the projections continue on the trajectory they are headed right now, buyers may start to feel some relief in coming months. It might be a little too late for the home buyers who were counting on the lower interest rates, which is discouraging to our buyers, but those buyers may see a path to home ownership a little sooner than expected if it starts to balance.”
Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman.
Meet Philip Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.
Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.
Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater.
Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.
Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.
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