Buying A House In Arizona: Get The Facts
Andrew Dehan6-Minute Read
September 19, 2020
Arizona. Saying the word brings to mind images of copper red mountains and sparse desert. Home to one of the world’s seven natural wonders – the Grand Canyon – Arizona’s beauty is no mirage. If colorful sunsets, warm weather and open spaces are for you, Arizona may be your dream. Read more to get the facts on buying a house in Arizona.
Buying A House In Arizona: A Smart Investment?
According to World Population Review, Arizona’s population has increased by half a million since 2010. From 2010 to 2015, Arizona was the seventh fastest-growing state, and in 2018, it was named the fastest-growing state in the country by the U.S. Census Bureau.This kind of growth and popularity make Arizona real estate a solid investment. It consistently ranks as one of the most attractive states to retire. The growing economy and its low cost of living make Arizona a magnet to many. A property in Arizona can provide a good return, whether it’s a primary residence or you rent it out.
The Arizona Housing Market
Statewide, it is safe to say that Arizona is a seller’s market. While there is variability by city and neighborhood, on average, homes don’t stay on the market long and many are selling above asking price. As a buyer, you need to be competitive and assertive to get the house you want.
Top Real Estate Cities In Arizona
Rocket Homes Real Estate LLC has compiled a list of the top real estate markets for buying a house in Arizona. All of these are in the surrounding Phoenix area. Here are 5 of our picks. For the full list, visit the Rocket HomesSM Arizona page.
Phoenix is the state capital and the most populous city in Arizona. For a long time, its economy was founded on the “Five C’s” – cotton, cattle, citrus, climate and copper. Nowadays, the economy leans toward military, finance and medical.
As the biggest city in Arizona, it’s also the state’s cultural center. Fine arts, performing arts, professional sports and excellent cuisines from around the world are all at home in Phoenix.
If you’re looking for big city life in the desert, look no further than Phoenix.
Part of the greater Phoenix area, Scottsdale borders the Tonto National forest and is home to a booming tourism industry. Scottsdale is home to more destination spas per capita than any city in country.
It’s also one of the pricier real estate markets on this list. According to our listings, as of August 2020, the median sold price was $516K, up 9.1% from August 2019.
It’s position, sandwiched between thriving Phoenix and the McDowell Mountains, make it a perfect spot for anyone looking for a balance of nearby culture and nature.
Chandler is another suburb of Phoenix, situated to the east of the city. Its major employers include Wells Fargo, Bank of America, PayPal and the tech company, Intel. The city’s population is estimated to have grown over 10% since 2010.
The town is full of historic homes, some of which have been included on the National Register of Historic Places. Homes like the McCullough-Price house, which display a Pueblo Revival-style.
It’s more affordable than Scottsdale, has growing job market, good schools and is close to larger cities like Mesa and Phoenix. What more could you want?
Just east of Tempe and north of Chandler sits Mesa, Arizona. Mesa is the largest suburban city in the U.S. With over 518,000 residents, the city is the third largest in Arizona. It’s home to the Mesa Arizona Temple, a large Church of Jesus Christ of Latter-Day Saints temple, as well as the Mesa Grande Ruins, which date back to 1100 A.D.
The median age of its residents is 32, with a median income of just over $42,000. Its top employers include the Banner Health System, Mesa Public Schools and the City of Mesa, bringing thousands of jobs to the area. And those jobs are needed since the population has grown 18% since 2010.
It’s extensive business and shopping districts, cultural history and growing economy, buying a house in Mesa could be a great investment.
What once was a small agricultural town is now a bustling economic center. Gilbert is located southeast of Phoenix, sandwiched between and east of Mesa and Chandler.
They town’s population growth is an incredible story. In 1980, there were 5,717 residents. Fast-forward 40 years and you have a city with over 208,000 people. That’s over 36 times its size in 1980.
It’s not stopping, either. The Gilbert, Arizona Office of Economic Development claims that, “By 2030, Gilbert is expected to be fully built out, with an anticipated population of over 300,000.” This means now is a good time to buy a house in Gilbert.
Things To Think About When Buying A House In Arizona
Whether you’re relocating to Arizona or buying your first home, it’s important to understand the nuances of real estate in Arizona. Keep reading to learn more tips and tricks when buying a house in Arizona.
Find A Trusted Arizona Real Estate Agent
Finding the right real estate agent can be crucial for finding the right a home. Linking up with a Rocket HomesSM Verified Partner Agent is the first step for house hunting in the areas you’re interested in. They’ll know the market, what will meet your needs, and laws and practices specific to Arizona.
Know Your Financing Options
Do your research. There may be state-specific first-time home buyer grants and programs available. For instance, Home Plus Arizona offers a Day Payment Assistance program geared to making homeownership a reachable reality for first-time buyers.
Be Prepared To Pay Earnest Money
Arizona is a competitive seller’s market, meaning that they often have their pick of bids. While putting down 1% of the price of the home as earnest money is standard, a larger amount can strengthen your offer. Earnest money shows the buyer you’re serious. To make your offer stand out, include more earnest money, if possible.
Enjoy Low Property Taxes
Arizona has a law that caps the tax rate on owner-occupied homes. This means that, as long as you aren’t renting out your home, you can enjoy property taxes that are well below the national average.
It should be noted that the state does have a vehicle property tax rate of 0.69%.
Plan To Pay More For Homeowners Insurance
Because of intense weather and flood risk, be prepared to pay higher homeowners insurance premiums. If your home is in an area that floods, you will need flood insurance. Also be aware that the state is a hotbed for wildfires.
Know Your Rights To Property Tax Exemption
Property Tax exemptions are limited in Arizona. If you’re disable, a senior or meet certain income brackets, you could be eligible and avoid paying property tax.
How To Buy A House In Arizona
While it’s a huge decision, there are 7 easy steps to buy a house in Arizona. Follow these steps and you’ll be moving into your new house in no time:
1. Save for a down payment. Depending on the lender and loan type, you will need a minimum down payment of 3% to 5%. But to avoid paying Private Mortgage Insurance (PMI), most mortgages will require 20% down.
2. Get mortgage preapproval. Find the mortgage lender you want to work with a get preapproved for a mortgage. They will take your info, check your credit and determine how much to lend you.
3. Decide what you want in a house. Know what’s a dealbreaker, what’s a necessity and where you’re willing to compromise
4. Find an agent. Working with a licensed real estate agent can make the whole home buying process better. Whether it’s Goodyear, Tucson or Flagstaff, a good agent will take the market conditions and your budget and combine them with your needs to find the right house for you.
5. Tour homes. Get out there and see the houses. You’ll get a good idea what you like and what you don’t like.
6. Make an offer. Make it competitive. Work with your real estate agent to put together an offer that beats out the rest.
7. Close on the house. This is where everything falls into place. Get the appraisal, the home inspection, complete the paperwork and sign your name on the line.
The Bottom Line
Arizona is a competitive market. The population is booming and shows little sign of stopping. Whether it’s your first house or your retirement house, investing in real estate in Arizona could payout in your favor. Phoenix and the surrounding communities draw in people from far and wide, whether for tourism or to stay. Your home in Arizona could be your refuge among the mountainous desert.
Interested in learning more about the home buying process? Check out more home buying articles at the Rocket HomesSM Learning Center.
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