By Shelley Sakala
In this month’s real estate column, local realtor Shelley Sakala answers a question about home values and inflation. “What does this recession mean for homeowners? I know inflation is making things more expensive, but does that mean my home price will go up, too?” asks Angie, a Phoenix resident.
THE EXPERT’S ANSWER
Inflation tends to affect the price of new build homes because of the rising costs of building materials, supplies, and fuel. For an existing home such as yours, home prices are affected more by supply and demand, plus interest rates. Higher interest rates normally mean fewer buyers and lower demand, which will push down home prices, but not here in Arizona. We’ve got a secret weapon to help keep our real estate market strong: economics.
Low taxes and surging job growth have made Arizona a destination for job seekers, especially in the tech sector. Companies are hiring to fill high-paying jobs, and people are moving here to fill them. This is the result of a concerted effort over the last eight years by our governor’s office to create a business-friendly environment conducive to job creation. This includes economic and workforce development programs that are about to pay dividends. According to the Arizona Office of Economic Opportunity, Arizona is projected to add 700,000 new jobs over the next 10 years. That’s more than three times the projected job growth of the rest of the country. A recent story on azbigmedia.com tells us that we’re also recovering jobs lost during the pandemic at a faster rate than almost every other state.
What does this all mean? It means people are moving here for work and will continue to do so. And they need a place to live. With new home construction remaining somewhat modest, home buyers are forced to seek existing homes. For this reason, anyone looking to sell his/her home will be in the driver’s seat for quite some time, despite the recent cooling off in the housing market. You might not sell your home in three hours at $100,000 over the list price like last year, but by all accounts, your home value will hold strong and grow steadily.
Shelley Sakala is a local realtor and owner of The Sakala Group Real Estate. Learn more at shelleysakala.com.