Phoenix Retirement Community Market Report 2nd Quarter 2023
It’s hard to believe we are halfway through the year, so it’s time to see how home values have fared in our area’s Phoenix retirement communities. This month’s market report will look at the national housing outlook and then focus locally on where home values are compared to a year ago for Phoenix’s 55+ communities. We’ll also explore recent trends, so believe it or not, we’ll be talking about pickleball and grass. I bet a lot of you start at the end of this post and work your way backward.
National Housing Outlook
According to the National Association of Realtors, Pending home sales may be down significantly from a year ago, but housing activity is quite lively in many parts of the country, especially with new construction.
Contracts Signings are down, but Buyer Demand High
Low inventory is the primary reason contract signings are down a whopping 22% from a year ago, but strong homebuyer demand is evident. “Despite the sluggish pending contract signings, the housing market is resilient, with approximately three offers for each listing,” says NAR Chief Economist Lawrence Yun. Still, “the lack of housing inventory continues to prevent housing demand from being fully realized.”
New Home Boom?
Meanwhile, the market for new construction is a bright spot. Sales of newly built homes jumped 12.2% month over month in May and are up 20% compared to a year ago, “Demand for new homes is strengthening because of a lack of existing-home inventory,” says Alicia Huey, chairperson for the National Association of Home Builders.
Phoenix Retirement Community Outlook
Phoenix Retirement Community Home Values Down 2nd QTR 2023
The 2nd quarter of 2022 was the height of the market, which means it’s been a year since home prices were on the decline. Although it wasn’t the end of June exactly, we can compare year over year to get a feel for how much home values have gone down from the top of the market. What better time to do that than the yearly halfway point, June 31st, 2023?
Home Values 2nd Quarter 2023
| Retirement Communities | 2023 Median Estimated Value | 2022 Median Estimated Value | 12 Month Home Value Change +/- |
|---|---|---|---|
| #1 Trilogy at Vistancia** | $693,000 | $726,000 | -3% |
| #2 PebbleCreek** | $523,000 | $604,000 | -4% |
| #3 Corte Bella | $610,000 | $653,000 | -5% |
| #3 Sun City | $320,000 | $339,000 | -5% |
| #4 CantaMia** | $470,000 | $501,000 | -6% |
| #5 Arizona Traditions | $410,000 | $448,000 | -7% |
| #5 Sun City West | $392,000 | $425,000 | -7% |
| #6 Sun City Festival** | $506,000 | $557,000 | -8% |
| #7 Sun City Grand | $497,000 | $552,000 | -9% |
| #8 Victory at Verrado** | $594,000 | $692,000 | -14% |
| Copy Right 2022 Sharon Rowlson |  |
**Data goes from the AZ MLS and does not include new builds except spec homes.
The table above shows a 12-month snapshot of home values from June 2023 through June 2022. Every single community saw home values drop. The average home value decrease was -6.8% for the top 10 West Valley retirement communities I sell homes in. Homeowners saw decreased equity compared to a year ago, ranging from -3% to -14%. That’s not too bad, as interest rates during the same time frame went steadily up. Rates now sit at about 7%. The big crash didn’t happen, and due to low inventory, home prices are stabilizing or possibly going down to around 5.5% by the end of the year.
Victory at Verrado came in with the lowest home value decrease at -14%, while Trilogy at Vistancia was only -3%. They are both communities with new builds, as well as resale, so data is skewed as it doesn’t include new homes. Of the top 10 communities I work in, five are all resale. If we average those communities, home values dropped by -6.6%. This is the number I am going with. It is pretty close to the West region average of -5.7%.
Real Estate Trends in Phoenix
New Home Builds
Just like the rest of the country, new construction for homes is in full swing. New homes are popping up everywhere, along with retail, to support the growth.
Pickleball
The Arizona MLS just announced they are adding pickleball to their search criteria. Why, you might ask? Well, pickleball is extremely popular and buyers want to know which communities and properties have this amenity. The good news for those considering retirement communities is every single one has pickleball. Now how many courts compared to the size of the community is another story.
Grass
Scottsdale just banned any new builds from adding grass to their yards. According to USA Today, the ordinance will only apply to single-family homes built or permitted after August 15. You would think we lived in a desert! I suspect many cities will follow. Some have incentives for current homeowners to remove their grass and add dessert landscaping instead.
In conclusion
These are the top three takeaways from this blog article:
- Nationally, contracts are down and new builds are hot.
- Home value (equity) is down on average -6.7% in Phoenix retirement communities. In line with the West Region of the US.
- Phoenix real estate trends include new home construction hot, pickleball added to the AZ MLS, and grass banned from new construction in Scottsdale.
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