I’m a Real Estate Agent: These 5 Arizona Cities Are About To Become Unaffordable
Written by
Angela Mae
Edited by
Ashleigh Ray
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Just like everywhere else in the country, the cost of living in Arizona has risen over the years.
According to the Missouri Economic Research and Information Center, Arizona falls somewhere in the middle in terms of affordability with an overall cost of living index of 110.5. Housing, groceries, utilities, and transportation costs are all a little above the national average. Only healthcare is a little cheaper.
In terms of property prices, the median sales price of a single-family home in Tucson was $385,000 at the end of last year — a 2.7% year-over-year change. Homes in other parts of the state are also on the rise. Zillow found that the average sales price of homes in Arizona have gone up by 4.3% in the past year and are now hovering around $435,000.
All of this is to say that Arizona could be becoming less affordable — or at least certain cities in the state could be.
“Affordability is a relative term, so when we are talking about Arizona cities, it is important to note that the cities that people would say are unaffordable are also the areas that are in high demand, and a lot of people are moving to,” said Rebecca Hildago Rains, CEO and designated broker at Integrity All Stars Realty in Phoenix, Arizona. “One city might be unaffordable to first-time home buyers but not to retirees.”
Given that, these are the top Arizona cities that are pricing some homebuyers out of the market due to their home values increasing, according to Rebecca.
Chandler
- Typical home sales price: $534,296 (4.9% one-year increase)
“Schools are one of the best indicators of home values. A city with good schools will see increased home values, and Chandler has the best school district in the Phoenix metro area,” said Rebecca.
“Every family wants to send their kids to good schools, and families are paying a premium in housing costs to access Chandler Schools. Chandler is also running out of space to build new homes, which means buyers will continue to pay more to buy a smaller supply of homes.”
Scottsdale
- Typical home sales price: $824,868 (6.4% one-year increase)
Scottsdale might have once been affordable to the average buyer, but that’s no longer the case. Even now, housing is only really accessible to millionaires in many parts of the city.
“Scottsdale continues to be a popular area for millionaires to move to with its high-end shopping areas and some of the best golf courses in Arizona,” said Rebecca. “As more high-income earners move to the area, Scottsdale will remain unaffordable for many buyers.”
Fountain Hills
- Typical home sales price: $662,798 (5.7% one-year increase)
While a little less expensive than Scottsdale, Fountain Hills has also seen significant growth in housing — and the prices to match.
“Despite being on the outskirts of the Valley, Fountain Hills has been a hot spot for custom-built homes,” said Rebecca. “These affluent custom builds are raising housing costs in the area and pricing some people out.”
Fountain Hills might still be affordable for higher net worth individuals or those who’ve already purchased and sold their first home or two. But for first-time buyers or lower-income households, it’s fast-approaching unaffordable.
Mesa
- Typical home sales price: $444,038 (4.4% one-year increase)
On the whole, housing prices in Mesa aren’t much different from the national average — they might even be lower. But with rising costs, this city could become unaffordable in the near future.
“Demand for homes in Mesa has skyrocketed. Most of the new construction in the East Valley is in Mesa, and we are still seeing home prices increase despite developers continuing to build in the region,” said Rebecca.
“I think that Mesa is going to continue to grow rapidly over the next decade, and it would not surprise me if it became the most in-demand city in the Valley,” she continued. “People want to live in the East Valley and Mesa currently gives people the best option even if it isn’t the most affordable one.”
Paradise Valley
- Typical home sales price: $3,491,291 (10.3% one-year increase)
It might be more accurate to say that Paradise Valley has already become unaffordable — at least to the average person thinking about moving to the area — but it’s worth including for its skyrocketing housing prices.
“Paradise Valley continues to see home values increase every year as more and more wealthy people move to Phoenix,” said Rebecca. “As wealthier residents move into the area, it could price out some well-off residents who maybe could afford a high-priced home, but not a really high-priced home.”
Some Other Arizona Cities To Consider
If affordability is a concern for you, but you still want to live in Arizona, you’ve still got options. Many places in Arizona are still reasonably priced. Even if costs do continue to rise, getting in now could be financially strategic. Just keep in mind that some of the most affordable cities might be smaller or a little bit further out from the metropolitan areas.
That said, Rebecca had a few suggestions of places to consider.
“Buckeye, Maricopa, Queen Creek and Suprise are all cities in Arizona that are becoming increasingly affordable,” she said.
“These cities are seeing less demand due to the fact they are further out from the Metro areas. If you are a middle-class family that wants to buy a home, these cities might be the best fit for you because the home prices are lower, and builders and sellers in the area are more likely to give concessions since demand is not nearly as high.”
Looking at property values alone, here’s the average sales price of residential homes in these four cities:
- Buckeye — $407,970 (2.8% one-year increase)
- Maricopa — $365,319 (2.2% one-year increase)
- Queen Creek — $661,405 (5.1% one-year increase)
- Surprise — $438,504 (1.7% one-year increase)
But again, affordability is a relative term. And even if housing prices are on the higher side — as is the case with Queen Creek — if other expenses are lower, they could offset the total cost of living.
Please note that typical and average home sales prices are sourced via Zillow and are accurate as of July 9, 2024.
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