Phoenix 2021 Annual Report

Welcome to the Phoenix 2021 Annual Report. At the beginning of each year, we engulf ourselves in the sales charts, devour the data, look back at goals set, and check in on how our predictions for the past year held true. We do our best to learn from the past and prepare our clients and agents for the new year ahead.

With that, we present you with this synopsis of the national, regional, and localized trends that matter most to you, found here in our Phoenix 2021 Annual Report.

Whether your 2021 was personally challenging or highly successful, embarking into 2022 with a clear understanding of the data can help you make the best possible decisions to achieve your real estate goals. We have scoured the data to bring you information on the national, regional, and localized trends that matter most to you.

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As we reflect on the 2021 real estate market, there’s no precedent that yields proper perspective. It simply was a year like no other. When it began, we were still deep in the throes of the COVID-19 pandemic with little semblance of normalcy in our lives. The metro Phoenix real estate market was jittery, and no one could predict what lay ahead, least of all the white-hot market lurking just below the surface. In retrospect, a seller’s market had been percolating for some time. By January 2021, available inventory in the metro Phoenix market had declined to 64% below normal.

Home builders had repeatedly under-built to market demand, which left them flatfooted when the housing demand needle redlined in 2021. Then came work from home, Zoom, and the “hybrid” office…new concepts that changed how and where we work. Employees were no longer geographically tethered to employers, and the great migration from locked-down urban centers was on. Living in suburban cities that offered an easy, affordable way of life became reality for many and places like Phoenix exploded.

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Wanting in on the action, locals began to sell, reaping the benefits of double-digit appreciation, and often improving their physical space at the same time—since houses now had to function as schools, offices, and playgrounds. Add in a steady caravan of out-of-state buyers and the home rush was on. It doesn’t seem like things are cooling down. We’re seeing fewer full price, cash offers on day one, but the overall demand, inventory shortage, and market dynamics don’t appear to be changing much. We’re often asked if we’re in a “bubble,” but the faulty financial underpinnings that caused the 2008 collapse just aren’t there. If there is a market shift, it will be like turning a battleship: imperceptible to those on board, but noticeable from a distance. Only time will tell.

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