Buying A House In Arizona: Get The Facts
Andrew Dehan6-Minute Read
UPDATED: November 08, 2022
Right now, buying a house in Arizona isn’t easy. The state’s population has grown by more than half a million people since 2010, according to the World Population Review. That means homes are in high demand.
Arizona’s appeal rests on economic opportunities and weather – say goodbye to dreary months of shoveling snow and hello to the Grand Canyon, Sedona’s famous red rocks and plenty of sunshine.
If this sounds like your idea of paradise, here are the facts you need about buying a house in Arizona.
Buying A House In Arizona: A Smart Investment?
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 statistics vary by city and neighborhood, on average, homes don’t stay on the market long and many sell 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 five of our picks. For the full list, visit the Rocket HomesSM Arizona page.
Phoenix
Phoenix is the state capital and the most populous city in Arizona. Its economy leans toward health care, retail, hospitality and construction.
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. There are also historic neighborhoods with one-of-a-kind homes, along with master-planned subdivisions. The city’s system of mountain preserves encompasses more than 41,000 acres and 200-plus miles of trail, allowing access to one of the largest urban outdoor areas in the nation.
If you’re looking for big city life in the desert, look no further than Phoenix.
Scottsdale
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 the country.
It’s also one of the pricier real estate markets on this list. According to our listings, as of November 2021, the median sold price was up to $658k, up 22% since October 2020.
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.
Scottsdale Real Estate Listings
Chandler
Chandler is another suburb of Phoenix, situated east of the city. Its major employers include Wells Fargo, Bank of America, PayPal and 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. One of these homes is the McCullough-Price house, which displays a Pueblo Revival-style.
Chandler is more affordable than Scottsdale, has a growing job market and good schools. It’s also closer to larger cities like Mesa and Phoenix. Plus, it has a thriving downtown area with plenty of restaurants and shops. What more could you want?
Tempe
If you like being in the middle of it all, Tempe might be the right city for you. It’s home to Arizona State University, while also offering easy access to the Phoenix Sky Harbor Airport and the local network of freeways.
On top of the airport and freeway access, Tempe is well-known for its many other transit options, including bike lanes, shuttles, light rail and buses.
The median price for homes sold climbed more than 20% in the last year. In October 2020, 55% of the homes that went on the market sold in less than 30 days.
Mesa
Just east of Tempe and north of Chandler sits Mesa. Mesa is the largest suburban city in the U.S. With over 518,000 residents, it is the third-largest city in Arizona. It’s home to the Mesa Grande Ruins, which date back to 1100 A.D.
Its downtown area, which is served by the Valley Metro Light Rail, is experiencing a renaissance thanks to locally owned businesses and a number of museums.
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. Those jobs are needed since the population has grown 18% since 2010.
With its extensive business and shopping districts, cultural history and growing economy, buying a house in Mesa could be a great investment. It’s worth noting, though, that more than 50% of homes sold recently went above the asking price.
Gilbert
What once was a small agricultural town is now a bustling economic center. Gilbert is located southeast of Phoenix.
The town’s population growth is an incredible story. In 1980, there were only 5,717 residents in Gilbert. Fast-forward to 2020 and the city grew to a population of over 208,000 people, 36 times its size from 40 years ago.
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.” If you want to be a part of an expanding community, now is a good time to buy a house in Gilbert, as home prices could rise over time.
Aside from rapid growth, Gilbert has a wide selection of recreational activities and excellent parks.
Tucson
Arizona’s second-largest city offers world-class outdoor recreation, a slightly cooler climate and a more historic, artsy vibe. It’s also home to the University of Arizona and Davis-Monthan Air Force Base. It’s even a few degrees cooler in summer.
According to the Rocket Homes Trend Reports, homes are staying on the market for about 40 days in Tucson, with a median price of $293,000. That’s slightly less than in previous months, so there may be a few deals to be had.
Flagstaff
Remember all that talk about Arizona’s deserts? Well, meet its largest forested mountain city.
Education is the primary industry powering Flagstaff’s economy thanks to Northern Arizona University. Hospitality, though, is a close second. Flagstaff is a popular escape from the summer heat, but is also a draw for skiing and snow play during the winter.
The median sold price for Flagstaff homes is $725,000, according to our Trend Reports. Most of the homes sold recently went above their asking price.
Flagstaff Real Estate Listings
Steps To 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 the area. 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 home. Linking up with a Rocket Homes 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.
Need a real estate agent?
Match with a local expert.
Know Your Financing Options
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. Plus, 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 disabled, 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 – 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 and 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. Consider what’s a dealbreaker, what’s a necessity and where you’re willing to compromise for your home.
4. Find an agent. Working with a licensed real estate agent can make the whole home buying process better. Whether it’s Gilbert, Tucson or Flagstaff, a good agent will analyze the market conditions and your budget, then 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 of what you like and what you don’t like.
6. Make an offer. Work with your real estate agent to put together an offer that’s competitive and beats out the rest.
7. Close on the house. This is where everything falls into place. Get the appraisal and the home inspection, then 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 Arizona real estate could pay out in your favor. Phoenix and the surrounding communities draw in people from far and wide, whether for tourism or to stay.
Interested in learning more about the home buying process? Check out more home buying articles at the Rocket Homes Learning Center.
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Andrew Dehan
Andrew Dehan is a professional writer who writes about real estate and homeownership. He is also a published poet, musician and nature-lover. He lives in metro Detroit with his wife, daughter and dogs.
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