While many have come to love Arizona for its phenomenal weather, the housing market is also a popular attribute of living in this sunny state. However, as with any housing market, Arizona can be complicated primarily because of its harsh summers. So, if you need some insight and tips for the best times to invest in a new house in Arizona and when is the best time to buy a house in Arizona while also understanding how to handle its housing estate climate, keep reading!
What’s a Seller’s Market?
Firstly, you need to understand what market you’re dealing with to understand how to get the best deals – and at what time. For example, the Arizona property market is a seller’s market. This means more buyers are interested in the property than the number of sellers offering it.
And what does this mean for you? Well, it means the sellers have the upper hand; and can dictate the price.
This also means that the higher the number of houses being sold, the lower the price is likely to be – as there is less buyer interest per house.
Therefore, despite there being times when the interest in buying housing outstrips the available supply, resulting in higher prices in a particular region, there are times when there is less demand and more houses on the market–this is the time to buy!
💡Key Insight:Seller's market in real estate refers to more buyers on the market than the available inventory--ultimately this mans the perceived value is higher
Why Does the Weather Affect House Prices?
As we mentioned earlier, the housing market is a seller’s market, but there are also fluctuations between supply and demand. Because of this, you can identify a ‘seasonal pattern’ in the market when you’ll find you don’t have as much competition from the average home buyer.
As the summer tends to be the busiest moving time for most people, mainly due to school starting in August/September, the demand for houses is usually much higher in the summer, which means there are fewer houses to choose from per buyer.
Additionally, people usually prefer to avoid the hassle of moving in summer due to the weather inconvenience and time inconvenience (if you have kids). This means this is the perfect low-demand period to buy a house at a much lower price than the annual average.
During this time, sellers tend to get fewer offers on their houses, so most are willing to negotiate, giving you the upper hand on the price you pay.
💡Key Insight: Arizona has a different climate then the rest of the United States and results in a varied market conditions in relation to the weather.
Keep in Mind the Golden Rule: Buy When Everyone Else is Selling
Arizona is in a seller’s market, which means that there are likely to be a lot of offers on the houses available during the busy season, and prices will be driven up according to the demand.
Therefore, the most efficient strategy is to buy when everyone else is selling. This will mean that there are more houses to choose from but less demand per house, thus keeping the prices lower than the average.
💡Key Insight:Buy when everybody is selling. Sounds easy but in practice is quite difficult. Monitor the market in advance to purchasing your Arizona home. Check out the historical data of the previous years
The National Data
To examine the market a little better, let us first look at the national statistics over a period of 6 years. Then, ATTOM Data Solutions, the curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), revealed its analysis which shows that really only 3 days of the year offer discounts below estimated market value — all falling in December.
This analysis includes data on more than 23 million single-family home and condo sales over 6 years from 2013 to 2019 and shows the continuation of what is referred to as the ‘hot seller’s market.’
# of Sales
2013 to 2018 Sales of Single Family Homes and Condos (Source: https://www.attomdata.com/news/market-trends/attom-data-solutions-2019-best-day-to-buy-a-home-analysis/)
ATTOM Data Solutions examined all calendar days between the years 2013 and 2019, considering the prices of at least 10,000 single-family home and condo sales.
To calculate the premium or discount paid on a given day, ATTOM compared the median sales price for homes with a purchase closing on that day with the median automated valuation model (AVM) for those same homes at the time of sale.
However, this calculation is for the US as a whole, not just Arizona. So let’s look at the data for Arizona in particular as, as we all know, Arizona sometimes tends to be a little different.
💡Key Insight:While the data for the entire housing market of the US reflect that selling your house in December will bring you the most money; Arizona is a different case
The Variety in the Market
When it comes to buying any house, many will acknowledge that it can be a long and stressful process, possibly full of emotions and full of touring properties and filling out hundreds of forms. After all, you are likely to spend a lot of your savings; for the vast majority, it will be their most significant investment.
You need to have enough data – especially when it comes to Arizona's market, which tends to fluctuate vastly. For example, the listing prices in 2020 have been the lowest in May so far, and $38,319 less expensive than the year average.
The highest prices were in November – $41,822 more than the annual average.
However, it is essential to note that prices tend to fluctuate year to year, and in previous years, December was the best time to buy a house, not only in Arizona but nationally.
It is also important to remember that everyone’s priorities and situation are different – but we have included a table accounting precisely for that.
2020: What was the Best Month For Buying a House in Arizona?
6.2% lower than average
34.4% more homes to choose from
2.92% interest for 30-yr mortgage
Realtor.com data (October 2020) Bankrate data (December 2020)
Why is the Arizona Housing Market So Distinguishable?
Compared with the rest of the US, where the best time to buy a new house tends to be around spring or winter, it is much better to buy a house during winter in Arizona. This is mainly due to the harsh summers and mild winters experienced in the state.
While most of the US sees fewer homes on the market and rock-bottom prices in the dead of winter, Arizona saw these in the heat of summer last year.
However, suppose you’re looking for variety. In that case, you’ll find more house variety during the January and February months, as the sellers hope to attract those who do not particularly like the cold winters in other states (snowbirds). Because of this, the market tends to be busiest between late fall to early spring.
💡Key Insight:Summer can be a good time to bargain hunt in Arizona. However, if you are looking for variety then consider January--February. Spring to Fall are the busiest times of the year.
The House Prices and the Weather
One thing to note is that summer is the most expensive time to buy (nationwide). However, statistics show that December, January, and February represent lower price points than June and August.
Therefore, you will likely stumble upon many articles telling you January is prime buying time. However, as with many other things, Arizona’s rules are a little different.
The best time to buy in Arizona is during the summer if you are price sensitive. Locals tend to flee elsewhere to find colder temperatures, with the Arizona heat peaking at around 120 degrees Fahrenheit. And with that, fewer buyers are in the market, creating the best conditions to get the cheapest deals possible.
However, this may only be true across some of Arizona Flagstaff and Sedona, the two of the northernmost parts of Arizona, do not get nearly as warm during the summer months, with mild temperatures around 80 degrees Fahrenheit in August.
💡Key Insight:Finding cheap prices in the summer is easier in Arizona, however, this doesn't apply to cooler places like Flagstaff and Sedona
The Other Things to Keep in Mind
Take into account that interest rates are down in case you need to take out a loan or until cheaper deals are going on. And as buying a new house is a big investment, you want to ensure that the house is good and that the rate you’re paying for the home is ideal. This means you should also consider the economic season the house is being bought in.
While December 2018 – January 2019 were marked by steady increases in mortgage interest rates, at the end of February, the interest rates spiked nationally. However, you have to remember that even a 0.5% change is significant, as this interest rate is likely to be paid over a period of around 15 to 30 years. And depending on the size of the mortgage loan, a yearly repayment is expected to be about $50,000 or more.
💡Key Insight: Take into consideration of the interest rates. Even the difference of 0.5% is a big jump when considering that you will be paying it off over the next 15 to 30 years.
Conclusion: When Is the best time to buy a house in Arizona
At the moment, Arizona is a hot market as people from the United States are moving to the sunshine state. The best time to buy is really up to you and what your schedule looks like. In life, we can’t always plan everything perfectly, and our article gives a broad set of standards based on the historical market’s data. However, if you want a cheaper house, the summer is the best time to buy in Arizona. On the other hand, if you want more flexibility and better prices, then the best time to buy a house in Arizona is in the winter.
But ultimately, it is up to you to do your due diligence because the market conditions change yearly. Certainly, the demand for houses in Arizona is greater than the supply. So start by watching Youtube videos and reading blogs from local companies with key market insights. Remember, variety will give you the best education because everybody has subjective views.
What are some of the forecasts for the house market in Arizona?
Forecasts for the Arizona Housing Market
Arizona House Price Forecast for 2021
As people from California maintain their mass exodus and move to Arizona, house prices will continue to rise. Zillow's studies forecast that Arizona home prices will increase 8.2% from September 2021.
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