The median list price for Phoenix-Mesa area homes is $244,900, up 14% from the same month last year, according to the National Housing Trend Report for February 2014 published by Realtor.com. This puts the median list price above the national average of $199,000, and it puts the Phoenix-Mesa market near the top of the list for the 146 metropolitan regions ranked in the report in terms of total number of listings. The properties currently listed for sale on Realtor.com for the Phoenix-Mesa area range in price from about $13,000 for a small, apartment-style condo in need of repairs and renovations to a $9.9 million 12,000+ square foot luxury home overlooking the Adobe Golf Course and designed by Vernon Swaback, architect and apprentice to Frank Lloyd Wright for 22 years. Of the approximately 10,000 properties listed on Realtor.com in the Phoenix-Mesa area, 212 are for sale in the $244,900 to $250,000 price range. Here’s a look at what buyers can expect to find for $250,000.

What $250,000 Will Buy

A scan of the Phoenix-Mesa inventory at the $250,000 price point reveals a surprising variety of properties. One would think that we would find a selection of homes very similar in size and amenities. Nothing could be further from the truth, says Terry S. Forsberg, an associate broker with RE/MAX Fine Properties and former president of the Arizona CRS Chapter. At $250,000, there are homes ranging from $65 dollars a square foot up to about $250 a square foot. So this would be 3,846 square feet to 1,000 square feet for the same $250,000 purchase price. The square footage within the home goes down as the price per square foot goes up.

In attached homes (condos and townhouses), buyers can find properties ranging from a two-bed, two-bath 1,285 square foot condo to a three-bed, three-bath property with more than 2,000 square feet. At this price point, buyers can expect stainless steel appliances, granite countertops, walk-in closets and well-manicured community areas.

Buyers looking for single-family homes will find a wide variety from which to choose, from a two-bed, one-bath 1,215 square foot home to a five-bed, three-bath home with nearly 3,100 square feet that backs up to state trust land. Some properties at the $250,000 price point offer upgraded appliances, countertops and backsplashes in the kitchen. In most, expect an owner’s suite with dual sinks, separate tub and shower, and walk-in closets. Tile floors, multiple-car garages, outdoor patios and automatic watering systems for the yard/landscaping are also common features at this price.

Forsberg emphasizes the variety of properties available at this price level. Homes priced at $250,000 come in all shapes, sizes, amenities and neighborhoods. There are numerous homes still available and with a little searching you can find the things you want. Because the homes at this price point differ greatly, buyers will have more options but may also have to decide which features are more important when looking for a home.

Land Values Driving Costs

Forsberg cites land values as one explanation for why buyers will see such a range of costs per square foot in the Phoenix-Mesa real estate market. The Metro area has way different demands on land values and it helps drive the costs, says Forsberg. More often than not, the price of the land is a determining factor. The areas can determine the land value and that has a direct impact on the sales price of the home. An example would be that land values in Scottsdale are higher than some other areas.

Indeed, when searching the multiple listing service (MLS) for vacant land, buyers can find a reasonable selection of one-acre lots in Phoenix starting at about $50,000. In nearby Scottsdale, however, it would be difficult to find an acre for less than $70,000, with the more desirable lots in some luxury home subdivisions costing upwards of $500,000. The largest vacant lot offered in Scottsdale right now is on the market for $12.9 million; it is just over 117 acres — or about $110,000 per acre. Like all real estate markets, location has a significant impact in how much house buyers can get for a certain price in Phoenix and the surrounding area.

One year ago, Trulia’s Rent vs. Buy Report . released by online real estate aggregator Trulia, showed that across the U.S. it was 44% cheaper to buy a house than rent. Today, the most recent report finds it is 38% cheaper to buy than rent. The report compares costs for a seven-year period using five calculations:

1. The average rent and for-sale price for an identical set of properties;
2. The initial total monthly costs of owning (assuming 20% down and a 30-year fixed-rate mortgage at 3.5% interest, as well as annual maintenance, insurance, utility, and property tax expenses) and renting (monthly rent plus renter’s insurance);
3. The future total monthly costs of owning and renting;
4. One-time costs and proceeds (for owning, this includes closing costs and capital gains tax of 15% for gains above the $500,000 annual exclusion; for renting, this includes one month’s security deposit); and
5. The net present value to account for opportunity cost of money (this compares cash flows over time).

Whether it’s better to buy or rent depends on a number of factors. including how long you plan on living in an area, what mortgage rate you secure and your tax bracket. For example, if your budget is $250,000 and you get a 4% 30-year fixed-rate loan. and you are in the 28% tax bracket and plan on living in a home for seven years, it might be 28% cheaper to buy than rent in Phoenix, according to the Trulia report. If you plan on staying in place for only two years, however, it would be 28% cheaper to rent than buy. all other factors remaining the same. If you are planning on remaining in the Phoenix-Mesa area for several years, it is generally cheaper to buy than rent.

Rental rates [in the Phoenix-Mesa market] have been climbing steadily since the big real estate bubble. as much as 8% a year, says Forsberg. For some time now, you can buy for less than you can rent. With some of the new mortgage programs it is easier to get people qualified without their own down payments, though that is not to say it is easier to get them qualified [for a mortgage].”

Many people who had to sell their homes in short sales years ago are finally in a position to purchase again. The short sale sellers who became renters, now called ‘Boomerang Buyers,’ can once again qualify and can give up renting, says Forsberg. Approximately three years after a short sale, people are able to once again become part of the American Dream. For the time being they can get their tax write offs and gain equity through appreciation or just straight out mortgage reduction by making payments on their own properties.

The Bottom Line

The Phoenix-Mesa real estate market ranks third out of 146 metro statistical areas in terms of the total number of listings, according to the National Housing Trend Report for February 2014, released by Realtor.com. The report also shows the number of listings in the Phoenix-Mesa market has increased more than 45% since February 2013, a significant boost to the market’s inventory. The 25 to 30% year-over-year price increases seen in 2013 are likely to fall to 6 to 8% this year as the market continues to recover and stabilize.

Buyers can find a variety of homes at the $250,000 price point, but should expect to be faced with decisions regarding which features are most important. While it’s not uncommon for certain real estate markets to present buyers with very similar homes at a certain price, the Phoenix-Mesa market offers a wide range of property types, sizes, features and amenities for $250,000.