Realtors Predict House Prices Will Plummet in These 10 Arizona Towns

It can be hard to beat the views and sense of community you find in Arizona, which is why it has become a popular place for both families and retirees. When you consider the favorable tax laws for retirees and the property tax benefits to those in Maricopa County, it's no wonder so many folks are looking to call The Grand Canyon State home.

Arizona's typical sky-high housing prices may make you think the state is out of reach. But there are ways to save and put that money aside to help pay for your mortgage, including looking for places to buy a home where prices are set to plummet. 

FinanceBuzz talked to some real estate experts to find out which cities and towns in Arizona they expect house prices to fall.

Prices in parts of Arizona jumped during the pandemic as people moved away from cities like Phoenix and into the suburbs. According to Jon Wade, broker and owner of The Steamboat Group, that's the case with Maricopa, where housing prices are set to fall.

"That wave we saw during the pandemic has faded," Wade notes. "Now homes are sitting longer and sellers are having to adjust."

Wade puts Casa Grande on the list thanks to electric vehicles, and he says that the town had its moment with all the talk of EV manufacturing and future growth, which didn't materialize quite as everyone had hoped.

"Housing prices here got ahead of actual income levels," according to Wade. "People moved out here thinking they'd get more for their money, but now they're stuck with higher payments and less buyer interest."

Here's another town that makes the list, thanks in part to the pandemic. "Bullhead City saw a lot of cash buyers during the pandemic rush," according to Judi Kutner, a licensed real estate associate who works with clients in Arizona. 

"But the market overshot. Sellers are hanging on too long, and homes are now sitting for more than 80 days on average, double what it was two years ago.

Kutner added that median prices have dropped more than 6% in the past nine months, which she believes is making sellers nervous across the state.

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According to Ryan Whitcher, a real estate expert and CEO of Harmony Home Buyers, Goodyear is still considered an up-and-coming area, but rapid development here could lead to an increase in housing inventory.

"If supply outpaces demand, particularly with rising interest rates affecting buyer affordability, price appreciation could slow or even reverse in some segments," Whitcher adds.

Supply and demand is poised to play a bit role in Surprise as well, according to Whicher, who says that the significant growth in this area could inadvertently make it easier for hopeful homeowners to put down roots.

"A surge in new construction, coupled with affordability challenges for potential buyers, could lead to increased competition and potential price adjustments."

Gagan Saini, a nationally known real estate expert with JIT Home Buyers, says the Arizona real estate market is experiencing drastic changes that'll impact property values in several areas. One of those expected to see price decreases is Gilbert.

"This town will face price adjustments from increased mortgage levels and decreased consumer buying power," says Saini. "The town's previously red-hot real estate market will slow as budget restraints stifle potential home buyers."

In Tempe, the average home value is around $476,000, according to Zillow. That's down 0.2% over the past year and heads to pending in around 20 or so days.  According to Saini, that may have a lot to do with the influx of students coming in and out of the area.

"The Tempe property market will be affected by economic variations driven by the university," Saini says of nearby Arizona State University. "Student and academic staff trends will bring volatility to the local property market."

Similar to other parts of Arizona, the cost of living in Peoria is about 10% higher than the national average, according to PayScale. Housing, utilities, and grocery costs may be higher here than other parts of the U.S. However, house prices here are set to fall.

"Peoria will experience pressures on prices due to increased suburban competition," says Saini. "Suburban growth will challenge existing housing and drive prices lower."

The average home value in Glendale is around $409,000, down 0.7% over the past 365 days.

"Glendale will undergo a price adjustment due to infrastructure issues and poor economic diversification," Saini says. "Over-reliance on specific industries exposes the city to greater market volatility risks."

This may be a town to watch in Arizona to see prices fall. As they say, what goes up must come down.

In Fort Mohave, in February, home prices were up nearly 10% compared to last year, according to Redfin. The media price was $368,000, lower than in other parts of the state. But this is a place to keep an eye on if you're looking for a new home in Arizona and you want to get a deal.

If your retirement plan includes moving to a new state, perhaps now is the time to check out Arizona. Even if you're not near retirement age, Arizona still has a lot to offer, and in these 10 towns, you may be able to enjoy the perks of the state without having to stretch your budget.

Buying a new home can be an exciting time, but potentially lower housing costs shouldn't be the only factor you consider when picking a new town. 

So you may want to do more research into these areas to see if they have everything you're looking for in a new community.