The Maricopa real estate market strongly favored sellers for much of the year. And though 2020 will be forever ingrained in our minds for the coronavirus and crazy elections, we can now add huge home value gains.
The end of 2019 was classified as a “slight” seller’s market, but by the middle of January 2020, it had become a “strong” seller’s market, which continued throughout the year. The year was filled with buyers losing out on dream homes even though offering full price – and sometimes more.
On the seller’s side, the first weekend of a listing meant many showings and multiple offers for their home. The strong seller’s market was not just confined to the city of Maricopa. Real estate agents all over the Valley were struggling to get their buyers’ offers accepted with the low home inventory.
In fact, Phoenix metro had the highest year-over-year increase —11.4% through September 2020 — in the 20-City Composite Case-Shiller Home Price Index. It was the 16th straight month in which home prices in Phoenix increased more than any other city.
There was a slight hiccup in March when the state of Arizona went into a lockdown due to COVID-19. Three things resulted:
- Lenders raised the required credit scores to buy a home. Some buyers already approved were unable to close on their home because they no longer qualified.
- Real estate professionals shifted selling and buying a home from an in-person experience to video walkthroughs and virtual open houses.
- Many of the “we buy houses” companies canceled purchases already under contract due to the unknown effects of the pandemic on the market. Many sellers were left scrambling.
Ultimately, the market was uncertain for just a week or so, and then it promptly picked up where it left off.
Historically, a “normal” real estate market with typical ebbs and flows has generally appreciated about 4% per year, according to experts. Homes appreciated in 2020 at a much higher rate, with listing prices increasing more than 20% in Maricopa.
The median home sale price in the city at the beginning of 2020 was $220,000. Twelve months later, the median sales price was $249,500, an increase of 13.4% over the year.
Many buyers, with the luxury of time, decided to buy a new-build, which can take 6-10 months to complete. But they could avoid being outbid and travel back to their current homes knowing they had purchased a home in Maricopa. At least one of every five homes sold was a new-build.
To illustrate how builders competed against the resale of homes in Maricopa, here are the stats from the year:
In 2020, there was a resurgence in the number of new homes under construction, a much-needed complement to the tight inventory of available resale homes. Some noticeable changes include the filling in of some partial subdivisions. Three companies are building in both The Lakes at Rancho El Dorado and Tortosa, and homes under construction in Palo Brea and Santa Rosa Crossing.
The forecast for 2021 indicates a strong showing by current builders, with new builders coming in. Expect a parcel or two of land to be zoned residential and improved in 2021. Many of the new-builds will be single-story with some offering multigenerational floor plans as many families are growing and expanding with parents and grandparents.
Prices will continue to rise, and supply will stay low through the summer. Our fair city will continue to grow with more businesses, big and small. Most residents don’t realize there are 22,718 homes currently in Maricopa, but developers actually have land and plans set aside for another 35,000 homes. That would mean that we are currently only 40% built out.
Brian Petersheim is a local Realtor with Homesmart Success. He can be reached at 602-206-9644 or BrianPetersheim@gmail.com.