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5 Arizona Housing Markets That Will Plummet in Value Before the End of 2024
By Laura Beck,
9 hours ago
Arizona living has a lot to recommend it. Sun, sight and delicious food are all on offer in the Copper State. If you’ve been eyeing a dream home in Arizona, you might want to hold your horses — particularly if they’re in these areas. GOBankingRates spoke to real estate experts about a few Arizona housing markets might be heading downhill — and fast.
Phoenix has been the golden child of real estate for years, with home values soaring higher than a heat mirage. But according to Chad Breeden from Sentry Real Estate , this party might be coming to an end.
“Phoenix, Arizona, has seen prices soar over the last few years, but interest rates have been rising and too many homes are on the market,” Breeden said. “I believe things [will] cool down in the near future, and home values could start dropping by the end of 2024.”
In other words, Phoenix might be in for a reality check hotter than its infamous summer temperatures. And it’s not just Phoenix proper. The ‘burbs are feeling the heat too.
“Places like Chandler, Gilbert and Queen Creek have seen rapid price increases, driven by remote work and out-of-state buyers. But as mortgage rates rise and the remote work boom fades, demand is slowing down,” said John Stevenson, a retirement expert at RetireGuide . “Home prices here have skyrocketed well above what locals can afford. As the market cools and inventory rises, home values are likely to drop, leaving recent buyers with homes worth less than what they paid.”
Looks like some folks might be left holding the bag — or in this case, an overpriced stucco house.
Tucson has long been the chill little brother to Phoenix’s party animal persona. But even this laid-back market might be in for a rude awakening.
Breeden didn’t mince words: “Tucson, Arizona, has been growing steadily over the last few years, but the economy is slowing and fewer people [are] looking to buy. Home prices might take a big hit by the end of the year, and this drop could surprise a lot of people given Tucson’s recent growth.”
Stevenson backed this up, adding, “Rising interest rates and inflation are squeezing the budgets of would-be homebuyers, causing demand to soften. With more homes on the market and fewer buyers, prices are set to drop.”
Looks like Tucson’s reputation as an affordable alternative might be making a comeback — just not in the way current homeowners were hoping.
Scottsdale: Luxury Living on Shaky Ground
Ah, Scottsdale. The land of fancy golf courses, high-end shopping and expensive homes. But even this bougie paradise isn’t immune to market forces.
“Scottsdale, Arizona, is known for its luxury homes, but those high price tags might not stay so attractive as mortgage rates climb. A correction in the market could be on the way, which makes those pricey homes harder to sell,” Breeden said.
Flagstaff: Mountain Views, Valley Lows
Flagstaff has always been Arizona’s cool kid, literally and figuratively. But this high-altitude haven might be in for a low blow.
“Flagstaff, Arizona, relies a lot on tourists and second-home buyers,” Breeden explained. “But with rising costs and higher interest rates, fewer people are buying here. This could cause home values to dip as we move through 2024.”
Stevenson added some color to this gloomy picture: “As the economy cools and inflation bites, demand for vacation homes is shrinking. Flagstaff’s overinflated prices could take a hit as fewer people are willing to pay a premium for a second home.”
Looks like those mountain views might come with a valley-sized drop in home values.
Mesa: Too Much of a Good Thing
Mesa’s been on a building spree, but as the old saying goes, you can have too much of a good thing.
“Mesa, Arizona, is dealing with way too many new homes and not enough buyers. I believe this could lead to a sharp drop in home values. If demand doesn’t pick up soon, we could see prices fall faster than expected,” Breeden said.
It’s like Mesa threw a huge house party but forgot to send out the invitations.
The Silver Lining (If You’re a Buyer)
Now, before you start thinking it’s all doom and gloom, remember that one person’s market crash is another’s golden opportunity. If you’re looking to buy in Arizona, patience might just be your best friend.
“If you’re planning to retire in Arizona, patience will pay off. These markets are showing signs of trouble, and home prices could drop significantly by the end of 2024. Hold off for now, and you could find yourself with a great deal in the not-so-distant future,” Stevenson said.
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