Phoenix’s Solar Home Market at Year’s End: A Reflection of Resilience and Change



As 2023 draws to a close, the solar home market in Phoenix offers a detailed narrative of resilience and adaptability amidst fluctuating economic conditions. December’s figures reveal a nuanced picture of how solar homes are maintaining their allure and value, even as they navigate the broader currents of the real estate market.

In December 2023, the median price for all solar homes in Phoenix slightly dipped to $478,000 from November’s $495,000. This decrease reflects a market responding to end-of-year economic shifts and buyer sentiment. However, the story varies across different types of solar homes. Owned solar systems, typically a marker of higher value and desirability, saw a significant decrease to $515,000, suggesting some cooling in what might be the market’s most premium segment. Meanwhile, homes with financed solar systems experienced an increase, reaching parity with owned systems at $515,000. Leased systems saw a decrease to $413,500, while homes with prepaid solar leases jumped to $616,500, indicating a robust confidence in the long-term benefits of solar energy.

Comparatively, the overall resale home market in Phoenix decreased to a median of $429,990, a slight dip from November’s figures. This broader context of a cooling market is vital in understanding the relative stability and appeal of solar homes, which consistently fetch a higher median price and demonstrate strong year-over-year growth of 5.05%.

The total number of solar homes sold in December was 379, making up 7.7% of the total resale volume. This represents a slight contraction from the previous month but still underscores a significant niche market’s robustness. Sellers of solar homes continued to nearly meet their asking prices, receiving 99% on average, a testament to the enduring appeal of these energy-efficient, cost-effective homes.

Delving into the sales composition, owned solar systems comprised 54% of the total solar sales, indicating a solid preference for ownership, perhaps due to the long-term benefits and incentives associated with solar energy. The remaining 46% were leased systems, reflecting a market that values both the immediate and long-term benefits of solar adoption.

The average time on the market for solar homes was 61 days, slightly higher than the average for all resale homes in Phoenix, which was 60 days. This marginal difference might be influenced by the premium nature of solar homes, their pricing, or the specific buyer market for these types of properties.

Looking at the year-over-year data, the solar market’s median price increase contrasts with a slight decrease in sales volume, down by 1.7%. In comparison, the overall market’s sales volume was down by 4%, illustrating that while the solar home market isn’t immune to broader trends, it exhibits certain resilience and appeal that sustains buyer interest even in slower economic times.

The general market health in Phoenix is cautiously optimistic. Inventory levels have risen about 31% from four months ago but are still low, with a three-month supply indicating a balanced but tight market. Foreclosure rates remain minimal, suggesting that despite economic pressures, homeowners are generally not in distress. The slight retreat in mortgage rates provides some hope for buyers, and there’s a sense of anticipation with the new year, buoyed by controlled inflation and potential federal interest rate decreases.

As Phoenix enters 2024, the solar home market reflects a microcosm of broader trends: economic uncertainties, evolving buyer preferences, and a steady commitment to sustainable living. The city’s homeowners and potential buyers are increasingly recognizing the long-term value and ecological benefits of solar homes. With this continued interest and potential economic easing on the horizon, the solar home market is poised to maintain its relevance and desirability, offering a green alternative in the vibrant tapestry of Phoenix’s real estate scene.

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About the author, Rob Madden

Rob Madden is an experienced real estate broker in the Phoenix metro area, having worked in the industry for over 28 years. He has helped many home buyers and sellers navigate the local real estate market, and is considered a trusted expert in the field. Rob is committed to making the buying or selling process as seamless and straightforward as possible for his clients, and provides hands-on assistance at every stage of the transaction. In his free time, Rob enjoys being a Scoutmaster for a local Scouts BSA troop, hiking, backpacking, photography, and playing pinball.