Real estate sales in the Phoenix area hit a record not seen since 2007 this summer, according to Arizona State University real estate professor Mark Stapp.

The demand for housing is creating a hot market, driving up prices, and laying the foundation for an affordable housing crisis.

Stapp says many factors — including lowered interest rates — are leading to this boom. One unexpected factor, though, is the area’s relatively low population density, which may be a strong selling point in a post-pandemic world.

“The interest rate reduction has obviously helped substantially — I think we have been a net benefactor of people’s behavioral changes related to COVID, they’re wanting to move out of more dense places,” Stapp said. "You take all of that and a really low inventory, and you're going to see exactly what's happening now, and that is pushing prices up."

With the median home price approaching $400,000, Stapp says an affordability crisis could be looming. Median rents in the Phoenix area have increased about 10% over 2019, despite stagnant wages and record unemployment.

“When you combine the fact that affordability is increasingly a problem, coupled with this potential eviction foreclosure crisis, we could have a significant problem on our hands,” he said. "I think the closer we get to the election, and the more distance we have from the stopping of (economic) stimulus, to the election, it's going to get even worse."

→ (Un)Affordable: How Did Arizona End Up With A Housing Crisis?