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Best Cities for Homeownership in Arizona

The broad picture for homeownership in Arizona is somewhat mixed. In the first quarter of 2018, single-family home prices were 9% higher than a year earlier, according to an analysis from the Eller Economic and Business Research Center at the University of Arizona. That rate of appreciation, however, was still about 25% below peak levels seen in 2006 before the Great Recession hit.
Depending on where you live, your choice to own a home in Arizona may have paid off over the past few years. Of course, home value is not the only factor to consider when it comes to judging a community for its overall friendliness to homeowners.

To reveal the best spots for homeownership in the Grand Canyon State, LendingTree combed through data points including home value appreciation, average commute times and unemployment rates. Results include both metro and micro areas, using data from the U.S. Census Bureau’s American Community Survey for 2013 through 2017.  (Because of how the number of metropolitan statistical areas can vary by state, only 11 areas total were analyzed for Arizona, while other states in this series covered far more locations.)

Here is what we found.

Key findings

  • The Flagstaff metro area is the best place for homeownership in Arizona. It has the highest median home value ($278,700), a short average commute time (18.4 minutes) and solid home value appreciation from 2013 to 2017 (9.98%).
  • The second-best place for homeownership in Arizona is the Phoenix-Mesa-Scottsdale metro area. This area has a high median home value ($229,000), the lowest unemployment rate out of all of the areas surveyed (6.2%) and the highest increase in median home value appreciation from 2013 to 2017 (29.09%).
  • The worst place for homeownership in Arizona is the Safford micro area. Safford has a low median home value ($140,900), the second-highest rate of unemployment (12.2%) and increasing housing costs from 2013-2017 (3.46%).

The best cities for homeownership in Arizona

1. Flagstaff

Flagstaff had the highest 2017 median home value of all the areas on our list, at $278,700. From 2013 to 2017, home values appreciated by nearly 10%. At the same time, overall housing costs fell by 1.37%. The average commute time in Flagstaff is the lowest on our list, at 18.4 minutes.

2. Phoenix-Mesa-Scottsdale metro area

This area had a median home value of $229,000, the second-highest on our list. It also had the lowest 2017 rate of unemployment of any other area in the study, at 6.2%, and a 5% housing cost decrease from 2013 to 2017. At the same time, this area saw the highest median home value appreciation, at a hefty 29.09%. The area doesn’t have the best commute time among top cities, however, at 26.2 minutes.

3. Prescott metro area

Prescott’s median home value in 2017 was $218,900. Unemployment was relatively low compared to several of the other areas on our list, at 7.3%, and the average commute time is 23.2 minutes. Median home values appreciated by 12.49% from 2013 to 2017. Overall housing costs during this same time period fell by almost 3%.

4. Sierra Vista-Douglas metro area

Homes in the Sierra Vista-Douglas metro area were valued at $158,700 in 2017. The area had an unemployment rate of 7.6%, and workers in the city have an average commute time of 20.5 minutes. Median home value appreciation actually retreated 1.12% from 2013 to 2017, but housing costs fell by more than 5% at the same time.

5. Lake Havasu City-Kingman metro area

This area exists largely because of the Colorado River. The former abuts the large reservoir known as Lake Havasu and the recreational area known as  Lake Havasu State Park, with its lake, shoreline and trails. This metro area had a median home value of $157,400 in 2017, and values appreciated by 9.31% from 2013 to 2017. The average commute for workers is 20.4 minutes.

6. Payson micro area

Payson’s location, nestled in the Coconino National Forest, places it almost at the heart of Arizona. It’s also home to the Gary Hardt Memorial Rodeo, which is known as the world’s oldest continuous event of its kind. The Payton micro area had a median home value of $184,400 in 2017. The unemployment rate that same year was 11.7%, which is significantly higher than the state’s average of 4.8% at the end of 2017. Still, the community has advantages, such as an 18.7-minute average commute time. The median home  value appreciation from 2013 to 2017 was also a healthy 8.6%.

7. Tucson metro area

Tucson’s median home value was $173,100 in 2017, after a period of four years when appreciation was essentially flat, at 0.46%. During that same period, however, housing costs fell by 7.7%. The 2017 unemployment rate in Tucson was higher than the state unemployment rate, at 8.4%, and the average commute is one of the highest on our list, at 24.5 minutes.

8. Yuma metro area

Yuma is located on the banks of the Colorado River and has an international airport, offering convenience and natural beauty to homeowners in the area. The median home value was $140,000 in 2017. Unemployment was relatively high, at 10.9%, but the area does boast a short average commute time of 19.6 minutes. On the negative side, home values depreciated in this area, at a median rate of -1.48%, from 2013-2017.

9. Nogales micro area

The 2017 median housing value in the Nogales micro area was the lowest on our list, at $136,600. Median home values also dropped more than any other area on our list, at 5.27% between 2013 and 2017. The 2017 unemployment rate in Nogales was 8.7%, with workers commuting an average of 23.5 minutes. One positive: Housing costs dropped by 11.37% from 2013 to 2017, giving Nogales the highest ranking for this metric of all the areas on our list.

10. Show Low micro area

Show Low is located in the eastern reaches of the Apache-Sitgreaves National Forest. Homes in the city had a median value of $144,200 as of 2017, but values had fallen by 3.48% from 2013 to 2017. Housing costs, however, fell even more — 7.64%. The 2017 unemployment rate for Show Low was by far the highest on our list, at 16.3%, and workers there have an average commute of 21.6 minutes.

Homebuying tips for Arizona

If you are considering buying a home in one of these markets or anywhere else in Arizona, consider the following.

Arizona has a few provisions in its residential real estate laws that work out in favor of buyers, said Kelly Broaddus, a broker associate with eXp Realty, a cloud-based brokerage that has its principal office in Peoria, Ariz. Broaddus said buyers can cancel a contract within the inspection period for any reason at all and get their deposit back.

“Any buyer really needs to take advantage of that inspection period because, as consumers, they are very well protected,” Broaddus said.

Broaddus also notes the ability to buy with cash may strengthen a buyer’s position.

Choose a realtor with solid experience negotiating. Broaddus says it is important to use a realtor who has experience dealing with busy markets and multiple offers.

“A buyer’s agent should also be able to make offers quickly and get you in the game within minutes,” Broaddus said.

Whether buying or selling, choose an agent who has a good working relationship with other agents in the market, Broaddus says. Sellers are more likely to accept offers that come in from agents with a good reputation in the industry.

Understand all your loan options. There are several types of mortgage loans for homebuyers to consider, including a conventional loan financed by a bank, a Veterans Affairs loan and a U.S. Federal Housing Administration loan. Loans secured by the VA generally require no down payment, and FHA loans require a smaller down payment and can work for borrowers with lower credit scores. They therefore may adhere to much stricter appraisal requirements.

“A home seller will be advised that if three offers come in – a conventional, a VA and an FHA – he or she should choose the conventional loan,” Broaddus said.

You can check mortgage rates in Arizona here.

Methodology:

The methodology for this study was simple and straightforward.

1: Collect metropolitan statistical areas (“MSAs”) and micropolitan statistical areas from the U.S. Census Bureau using 2017 population data.

2: Each MSA and micropolitan statistical area was ranked on a scale from 11 (Best) to 1 (Worst) for five different metrics. Those metrics are:

Median Home Value (11-Highest Value, 1-Lowest Value)

Unemployment Rate (11-Lowest Rate, 1-Highest Rate)

Average Commute Time (11-Shortest Time, 1-Longest Time)

Median Home Value Appreciation (2013-2017) (11-Greatest Appreciation, 1-Smallest Appreciation)

Median Change in Yearly Housing Costs (2013-2017) (11-Smallest Cost Change, 1-Greatest Positive Cost Change) — The formula for this metric is:

(((Monthly Housing Costs for 2017 *12)+(Real Estate Tax for 2017))/ ((Monthly Housing Costs for 2013 *12)+(Real Estate Tax for 2013))-1)

3: An average score was then calculated for each MSA based upon the scores received for each metric.

4: The MSAs and micropolitan statistical areas were then ranked on a scale of 1 (Best) to 11 (Worst) based on their average scores.

5: All metrics were ranked equally.

Data:

All data were obtained from the U.S. Census Bureau. More information on where the data came from is provided below:

2017 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates

2017 Unemployment Rate and Median Commute Time

  • Filtered for all MSAs
  • Then filter for Selected Economic Characteristics – 2013-2017 American Community Survey 5-Year Estimates

2013 Median Home Value, Monthly Housing Costs, Real Estate Taxes

  • Filtered for all MSAs
  • Then filter for Financial Characteristics for housing units with a mortgage – 2013-2017 American Community Survey 5-Year Estimates
 

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