The housing markets of Houston and Phoenix are heating up as 2024 progresses, showcasing patterns of demand and limited supply, particularly attractive to new homebuyers.
For the third consecutive year, the Greater Phoenix area experienced a slight decline in closed single-family home sales, totaling 67,654, according to data from Phoenix REALTORS®. This marks a decrease of 0.4% from previous years, falling dramatically short of the peak 105,322 sales four years ago. Meanwhile, the metro's median sales price has managed to climb, reaching $460,000, which is up 4.3% from 2023. Amid these trends, optimism continues to permeate the market, particularly among real estate experts.
Christy Walker, the board president of Phoenix REALTORS®, expressed her hope for improvement. "When 2023 ended, we were all pretty optimistic... with declines flattening at the end of last year, we’re optimistic for a good year ahead,” she stated, reflecting expectations for 2025.
Notably, some submarkets within Phoenix exhibit impressive growth. The central Glendale area, particularly the 85303 zip code, saw closed transactions surge by 50.8% over the year. Midtown and Uptown Phoenix also reported substantial increases of 35.3%. The West Deer Valley area noted a 23.1% rise as well. Walker acknowledged these pockets of growth, saying, "While the overall metro area lacked strong performance, there were pockets of good news throughout the Valley.”
Shifting to Houston, the market shares similar yet distinct challenges and opportunities. Hockley, for example, reported 474 homes sold during the fourth quarter of 2024, with new construction accounting for 87% of these sales. This growth reflects broader trends across the Houston metro area, characterized by increasing affordability and demands for more living space.
The Houston Association of Realtors (HAR) highlighted several communities leading the sales charts, including Dickinson, Fulshear/South Brookshire, and Montrose, all trending toward providing affordable options under $425,150—the average price of homes in Houston. "These suburban communities are booming, highlighting the demand for affordable housing... I believe we will see this trend continue through 2025,” said HAR Chair Shae Cottar.
With the addition of new job opportunities, particularly from significant construction projects like the Taiwan Semiconductor Manufacturing Company's facilities, the Greater Phoenix area is witnessing steady progress. Employment opportunities are influencing nearby property values, with various neighborhoods starting to gain traction for investments.
The numbers show potential buyers increasingly gravitating toward locations within commuting distances to these job hubs. New listings surged by 12.8% across the area, reflecting this burgeoning demand. Notably, inventory for homes increased by 37% by the end of 2024, reaching over 20,000 properties. According to Walker, once again, the data reveals plenty of options for buyers going forward.
While the overall sales volume in both markets may not reflect prior booms, the shifts to suburban living, affordable options, and new job creation signal significant trends. The 85017 Camelback West zip code saw inventory jump 120.8%, with the east-central 85302 Glendale region following closely at 110%.
Prices have crossed million-dollar benchmarks for several communities, with more than five regions now topping this mark. Five years ago, the only submarket boasting median prices over $1 million was Paradise Valley. Now, North Scottsdale and Camelback East-Arcadia frequently flaunt similar valuations.
To summarize, 2024 so far has exhibited contrasting trajectories for these two vibrant real estate markets. While Greater Phoenix actively plants roots for growth with burgeoning sectors and creatives, Houston is equally poised, providing affordable options amid suburban expansions. Both environments encapsulate the lively nature of the American housing market, focusing on community development and improving quality of life for incoming residents.