Main Content

Monthly Cost of Living: An Important Factor in Buying a Home

Woman calculating her Debt.

As any experienced home buyer knows, buying a home in Arizona won’t be the last of your expenses. Learn more about the cost of living in Phoenix to find out how you can maintain a lifestyle close to the one you currently enjoy, if not better.

Cost of living

The cost of living in Phoenix is 5% below the national average and lower compared to major cities like Los Angeles, San Francisco, New York City, and Seattle.

According to a recent report by GoBankingRates.com, the median income as of 2019 is $52,080. The average homeowner needs $86,407 to maintain their properties, while the average renter needs $86,413.

Arizona’s top income earners make $195,113 on average. The report defines top earners as residents within the top 5% of the state’s income bracket.

As a high net worth individual, you will be able to maximize your resources in Phoenix, channeling more of your finances towards investments, philanthropy, recreation, and other worthwhile efforts.

Utilities

Numbeo states that as of May 2019, the average cost of a basic utilities package including water, heating, electricity, and garbage disposal for a 915-square foot living space in Phoenix is $159.19 per month – close to the national average of $152.09. Internet service generally costs around $74.35 each month.

Home prices

The Phoenix Business Journal notes that luxury home prices are rising in the city, with top-tier buyers willing to fork over $3 million or more for upscale properties – which is considerably less than what you would pay for comparable properties in major cities like Los Angeles, San Francisco, or New York.

Home values are rising across the board in Phoenix, with historic neighborhoods like Garfield and Coronado increasing by a staggering 21%, making the city an excellent place to invest in residential real estate.

Renovations

According to Home Advisor, the national average for remodeling costs is $46, 221 as of 2019. The typical range for remodeling multiple rooms spans from $18,840 to $75,432. High end renovation projects can cost an upwards of $150,000.

For Phoenix, HA gives the following cost estimates based on actual remodeling projects that have been carried out in the area:

  • Average remodeling cost: $37,907
  • Typical price range: $14,310 – $63,773
  • Low end to high end cost estimate: $4,000 – $120,000

Common renovation projects include:

  • Adding square footage
  • Knocking down walls
  • Electrical, plumbing, and structural improvements

Click here for the complete list of guidelines, permits, requirements, and procedures for residential renovations in Phoenix.

If you live in a historic home or neighborhood, click here to read about the city’s historic preservation plan.

Property taxes

The Maricopa County Assessor found that home valuations in Phoenix climbed in 2018, with single-family home values increasing 7.2%, and condo values, 10.5%.

Recent home valuations will determine the amount you’ll pay in taxes in any given year. For this year, property tax bills were due in September.

The Assessor delays the tax system by 18 months in order to give homeowners sufficient time to appeal. Those who want to have their property taxes reassessed must do so within 60 days of receiving their bills. You can jumpstart the process online.

To avoid property bills that are too high or too low, make sure that the full-cash value on your report is close to what your home is worth.

Vehicle tax

You will be considered an Arizona resident when you successfully apply for a driver license. The fee varies per age group:

  • $25 (16-39 years old)
  • $20 (40-44 years old)
  • $15 (45-49 years old)
  • $10 (50 years old and older)
  • $10 (Limited license for military and students)

Visit the Arizona Department of Transportation for other fees.

The new vehicle registration fee is $32 which will be in place until 2021, although lawmakers are moving to place a cap of $18.

You’ll also have to pay additional vehicle license tax (VLT), which is assessed during registration and renewal. The tax is lowered by 16.25% during each succeeding renewal.

VLT is higher for more valuable vehicles like newer models and luxury cars, which typically command annual fees of up to several hundred dollars.

The tax is assessed per $100 of the vehicle’s value, and value is generally calculated at 60% of the retail price.

Visit the Arizona Motors and Vehicle Department (MVD) for more information.

Carol Royse is the top producing luxury Realtor in Phoenix and the surrounding areas. She brings 33 years of experience to Carol Royse Luxury Division, a 25-stong, family-owned real estate company. Get in touch with them today to start your luxury lifestyle in Phoenix.

Contact us

Get In Touch