Arizona’s real estate market in June 2024 continues to be a focal point for investors, agents, and homeowners. Over the past week, headlines have highlighted notable trends in home prices, shifts in housing inventory, and fluctuating home sales throughout the state. Comparing these developments with both recent and historical data provides valuable context for real estate investors evaluating Arizona’s current opportunities and risks.
Home Prices Holding Firm with Modest Increases
Recent news updates show that home prices across Arizona are generally holding steady, with subtle upward movement in several major markets. Phoenix, the state’s largest metropolitan area, has seen median sale prices rise about 2 percent year-over-year, reaching around $440,000 as of early June. Cities such as Scottsdale and Chandler have experienced marginally higher growth, with some markets reporting price levels just below all-time highs set in 2022. The broader trend in Maricopa County shows resilience, with moderate price appreciation despite higher mortgage rates.
Tucson’s housing market displays similar firmness in prices. Local reports indicate that median home prices in Tucson are up roughly 2.5 percent year-over-year, reflecting persistent buyer interest. In smaller Arizona cities, price movements have been mixed. Flagstaff and Prescott continue to see steady prices due to restrained inventory rather than a surge in buyer demand.
Journalists attribute overall price stability to relatively low inventory levels. However, affordability remains an issue for many buyers as the median household income in Arizona continues to lag behind rising housing costs. First-time buyers are feeling the squeeze most acutely, leading some sellers to tweak listing prices or offer incentives.
Inventory Is Creeping Up, But Remains Tight
Perhaps the most significant news from the past week concerns the state’s housing inventory. Multiple outlets report an uptick in the number of active listings during May and early June. In the greater Phoenix area, inventory ticked up by nearly 20 percent in recent weeks. Tucson’s market shows a similar pattern, though at a smaller scale, with new listings increasing by about 12 percent compared to the prior month. This growth means buyers have a bit more breathing room, though overall inventory remains far below the levels seen before the pandemic.
Despite these increases, housing supply across Arizona is not enough to create a balanced market. The month’s supply of homes for sale in the Phoenix region hovers around two months, signifying a market that still favors sellers. Analysts point to factors such as homeowners clinging to historically low mortgage rates, slowing new home construction due to elevated building costs, and ongoing population growth in key metros.
The modest inventory buildup over the last several weeks is mainly attributed to seasonal patterns, as the spring and early summer typically see more sellers entering the market. Some homeowners appear to be testing the waters to see if they can capitalize on stable price levels and relatively low competition.
Home Sales Continue to Lag But Show Signs of Revival
Arizona’s latest data on home sales reveal continued sluggishness compared to the frenzy of recent years, but a gradual turnaround may be on the horizon. Reports from both the Arizona Regional Multiple Listing Service and local brokerages show home sales volumes dipping approximately 10 percent year-over-year in Phoenix and Tucson as high interest rates deter some prospective buyers.
The past week, however, brought some cautious optimism. Weekly pending sales rose marginally, and open house activity has ticked up in many neighborhoods throughout Phoenix, Mesa, and Gilbert. Some agents note that buyers seem to be adjusting to current mortgage rates, and competition for move-in ready homes priced under $500,000 remains evident.
The Arizona Association of Realtors suggested this week that while transaction count lags behind last year’s pace, the market is seeing more engagement from buyers who were previously “waiting out” the rate environment. Lenders in the state are also reporting a slight pickup in mortgage applications, particularly among move-up buyers and investors looking for single-family rentals.
Implications for Real Estate Investors
These intersecting trends create a complex picture for investors considering Arizona real estate in mid-2024. Recent news highlights several crucial themes that could influence both short-term and long-term investment strategies.
First, relatively stable pricing amid higher inventory and sluggish sales supports the notion that Arizona’s housing market has moved into a normalization phase, rather than a downturn. This is particularly apparent in core urban submarkets, where chronic housing shortages and inbound migration continue to place a floor under home values.
For investors with longer time horizons, Arizona’s underlying demographic growth remains a key positive. The state consistently ranks among the top destinations for domestic migration, with retirees, remote workers, and young professionals drawn to lower taxes, jobs, and the climate. This population growth supports sustained demand for both owner-occupied and rental housing, which has bolstered investor confidence in recent years.
The increase in inventory, albeit modest, may offer well-capitalized investors more options in the coming months. Slightly less competition among buyers allows for more careful deal selection and a better chance of negotiating favorable terms. In some submarkets where list-to-sale price ratios are narrowing, investors may also identify distressed properties or value-add opportunities not seen during the past few years of bidding wars.
The rental market also continues to demonstrate strength. Statewide, rental vacancy rates remain below national averages, reinforcing rental income potential for those acquiring single-family homes or small multifamily assets. Institutional investors are still actively acquiring properties in fast-growing suburbs around Phoenix, betting on continued migration and chronic underbuilding.
Caution Flags for Investors
While the situation remains broadly positive, risks persist. Interest rates remain elevated, which raises acquisition costs and could limit leverage for some investors. There is also uncertainty about the timing and magnitude of any future rate relief from the Federal Reserve, though some analysts now forecast a possible gradual decline by late 2024. Investors relying heavily on development or deep value-add strategies may encounter challenges as construction costs remain stubbornly high and consumer affordability remains stretched.
Moreover, while home prices are stable, momentum is slower than the explosive appreciation seen in 2021 and 2022. Investors should not count on double-digit annual price gains. A disciplined focus on fundamentals is required, including realistic rent growth assumptions and thorough due diligence on potential acquisitions.
Arizona’s chronic housing undersupply remains unresolved, which is a favorable backdrop for long-term property owners. The gradual increase in inventory may soon offer improved buying opportunities, but the pace is unlikely to overwhelm the market. Investors with a patient outlook, prudent leverage, and well-located properties are positioned to benefit most from Arizona’s evolving market.
Overall, the latest news and recent data suggest that the Arizona real estate landscape in June 2024 is one of stabilization and incremental improvement. While the investor playbook now calls for greater selectivity and caution than during the frenzied pandemic period, the state’s enduring demographic tailwinds and persistent housing shortage continue to support strong fundamentals for those focused on long-term value and income.
