PHOENIX — Arizona is facing a crisis when it comes to affordable housing.
"The problem is getting worse," Mark Stapp, a professor of real estate at Arizona State University, said. "It's not getting better."
The median price for a home in Phoenix is about $520,000. Head west to Goodyear, prices average about $20,000 more. If you go east to Gilbert, homes cost $100,000 more.
Stapp said people are battling high interest rates and high prices at the same time.
"We haven't seen home prices fall," Strapp said. "They remain rather stubborn and I think that has much to do with the available inventory."
Available inventory across the Valley is slim. Stapp said Arizona is "locked in" because homeowners with mortgages at 5% or lower are not giving up those rates.
“You’re going to start seeing them spending money on home improvement projects," Jim Rounds, CEO at Rounds Consulting Group, said. "It’s going to be more crowded at the Home Depots and the Lowes and the places like that."
Rounds, an economist, estimates households need to earn $75,000 to be considered middle class. That's about $10,000 more than the median household income in Phoenix.
“The very low-income folks are the ones I’m most worried about because no matter how they adjust things, they’re still going to come up short, and they will benefit when we start to see prices come down, it’s just going to take a little longer," Rounds said.
Experts can only predict when they think things will improve, but Stapp said a few factors need to fall into place first.
“Interest rates have to come down. Wages have to continue to rise," Stapp said. "Inventory has to raise substantially for available homes, and we have to have enough change in inventory that the supply and demand effect begins to work and it stabilizes the price of homes."
Some economists predict interest rates will lower this summer, but it's likely to take a few years for home prices to normalize.
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