Phoenix turned red-hot, Flagstaff priced out newcomers entirely, while Tucson and some rural pockets offered rare opportunities.
Behind the headlines, each region told its own story of hopes, hurdles, and hard-won homes.
From just 2019 to 2023 alone, the median price jumped 57% to $423,400.
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Mortgage interest rates, which hit historic lows in 202021, began climbing in 2022 adding to the challenge.
Shrinking Share of First-Time Buyers
Faced with these hurdles, fewer first-timers managed to buy.
The typical profile of those who did buy a first home skewed older and higher-income than in the past.
Many in this group were Millennials who had delayed homeownership into their 30s while saving up.
However, the price surge forced many to adjust their expectations.
Because of these pressures, alternative property types saw increased popularity among first-timers.
Condos and townhomes became important options as they are usually cheaper than single-family houses in the same area.
Rise of Manufactured Homes
Another route to ownership was through manufactured homes (mobile homes).
Even so, demand for manufactured homes was strong as other options slipped out of reach.
Phoenix Metro Area
The Phoenix area dominated Arizonas housing activity and epitomized the statewide boom.
Phoenixs economy and population grew rapidly in these years, fueling huge demand for homes.
This price level priced out many middle-income and first-time buyers from central Phoenix.
As a result, buyers flowed into the suburbs and beyond.
Home prices did rise in Tucson, but less dramatically than Phoenixs.
The average home value in Tucson was about $327,000 in 2023, nearly $100K lower than Phoenix.
This meant relative accessibility for local first-time buyers.
That said, Tucson was not immune to the pandemic-era surge.
(For Phoenix, that number was even lower roughly 22% by late 2022.)
While Tucson remained comparatively more affordable, many locals still struggled with the higher prices.
Flagstaff, in particular, is a high-cost mountain town.
By 2023, Flagstaffs median home prices were hovering around $600K$700K.
For local first-time buyers in Flagstaff, the situation was daunting very few could afford to buy.
Most young adults and working families ended up continuing to rent or choosing to move to lower-cost towns instead.
Nearby Prescott also saw significant price increases.
Prescott became a popular spot for retirees and remote workers during 20202021, which pushed prices up sharply.
However, these areas have lower inventory and fewer sales overall, so choices were limited.
That could suddenly drive up prices in a normally quiet small town, surprising the local first-time buyers.
This program expanded over the 20182023 period to keep up with market conditions.
Various cities and counties had their own initiatives too.
Millennial vs. Gen Z Homebuyers
Generational shifts were evident in Arizonas first-time homebuying from 2018 to 2023.
However, affordability challenges hit Millennials hard.
In 2021, Millennials had been leading at 43% of purchases.
By 20222023, there were signs of Gen Z growing their footprint in the entry-level market.
Buying vs. Arizona saw some of the fastest rent growth in the nation during this period.
Comparing 20182023 to 20082017
How do the recent trends compare to the prior decade?
The differences are striking almost a mirror opposite scenario in some respects.
In contrast, 20182023 was defined by a boom (and short cooldown) with record high prices.
In the late 2000s and early 2010s, Arizona experienced a housing bust.
There were bargains everywhere for those who had the means to buy.
In 20182023, this was a sellers market like none other.
Home prices hit record highs year after year up to 2022.
Instead of foreclosures, buyers faced bidding wars.
Inventory of homes for sale was at record lows.
Housing Supply and Demand
Another key difference: housing supply.
By the early 2020s, the state was tens of thousands of units short of what was needed.
Those who bought in 20182021 also have seen strong equity gains because of the huge appreciation.
Conclusion
In summary, 20182023 versus 20082017 in Arizona were night-and-day for first-time homebuyers.
