Can You Afford to Move to Phoenix Arizona - Cost of Living Breakdown

If you're thinking about relocating to Phoenix, you've probably already fallen in love with a few homes online.

Maybe you've found the perfect house. Maybe you've compared Scottsdale, Chandler, Gilbert, Mesa, Queen Creek, or the West Valley. Maybe you've even started calculating what your monthly mortgage payment could look like.

But here's what a lot of relocation buyers don't think about:

The purchase price is only part of the cost of living in Phoenix.

Your property taxes, HOA, utilities, insurance, transportation, groceries, healthcare, and other everyday expenses can make a major difference in what it actually costs to live here.

And some of these expenses can vary dramatically depending on where you buy.

So, let's break down some of the costs you need to understand before moving to the Phoenix Valley.

PROPERTY TAXES IN ARIZONA

One of the advantages mentioned by many people relocating to Arizona is the relatively low property tax burden.

But when you're calculating your actual monthly housing costs, you can't stop at the property tax line.

There is another potential expense that can be particularly important when you're looking at new construction and master-planned communities:

COMMUNITY FACILITIES DISTRICTS, OR CFDS

A CFD is essentially a bond used to help finance infrastructure and improvements within a community.

Those improvements can include things like roads, parks, sewer systems, and other infrastructure required to build out a community.

The cost can then be passed along to homeowners.

And here's the part that surprises many buyers:

A CFD isn't necessarily a short-term expense that disappears after you buy the house.

Some of the communities including Verrado, Estrella Mountain Ranch, Marley Park, Vistancia, Eastmark, and Blossom Rock are examples where CFDs may apply.

The amount can also vary significantly depending on exactly where you purchase.

WHY CFDS MATTER WHEN BUYING NEW CONSTRUCTION

This is one reason I always tell relocation buyers:

Don't rely solely on the builder's estimate of your future property taxes.

When a buyer is initially given incorrect information about a CFD, requiring additional verification with the builder's management is important.

And there's another complication.

New construction homes may not be fully assessed for property taxes during the first couple of years.

That means your initial tax bill may not necessarily represent what you'll eventually pay.

So, if you're budgeting based on the first year's numbers, you could be in for an unpleasant surprise later.

This is something you want to understand before you buy—not after you close.

HOMEOWNERS INSURANCE IN PHOENIX

Homeowners insurance has become a much bigger consideration across the country, and Arizona is no exception.

The cost can vary depending on the property and its location.

For example, certain desirable areas may have flood-related considerations, while homes near natural desert areas can have higher fire-related coverage considerations.

And there's another advantage to newer homes:

New construction can potentially have lower insurance costs because the major components of the home are newer.

With an older resale property, you may encounter additional requirements from an insurance company, particularly regarding the age and condition of the roof.

That means when you're comparing a brand-new home to a 20 or 30-year-old home, don't just compare the purchase price.

Compare the total cost of ownership.

HOA FEES: ANOTHER PHOENIX HOUSING COST TO WATCH

If you're coming from an area where HOAs aren't common, welcome to Arizona.

Phoenix is HOA territory.

Many planned communities have HOA fees, but what you get for that fee can be dramatically different from one community to another.

Some older neighborhoods may have relatively inexpensive HOA fees simply to maintain common areas, landscaping, retention areas, or other basic community features.

Those fees can potentially be around $35–$40 per month.

Then you have larger master-planned or gated communities that can charge significantly more.

Some communities have HOA fees around $135 to $250 per month.

But here's the important part:

Higher HOA doesn't automatically mean better community.

You could find one community charging around $190 a month with relatively few amenities, while another community could charge less and offer pools, parks, clubhouses, fitness facilities, trails, and other amenities.

So don't just ask:

"How much is the HOA?"

Ask:

"What am I getting for that HOA fee?"

HOW MUCH IS ELECTRICITY IN PHOENIX?

Now let's talk about the expense everybody wants to know about before moving to Arizona:

The electric bill.

And yes, Phoenix gets hot.

But your electricity bill isn't determined by temperature alone.

It can depend on:

• Home size
• Single-story vs. two-story construction
• Direction the home faces
• Age and efficiency of the air-conditioning system
• Windows
• Roof
• Appliances
• Shade trees
• How cool you keep your home
• How much you're home during the day
• Your electricity plan

For a single-level home around 1,500–2,000 square feet, it is roughly around $220–$230 per month under certain conditions, including favorable orientation and some shade.

But that's an average example—not a guarantee.

A larger two-story home around 3,000 square feet can have a dramatically different summer bill, estimating roughly around $600–$800 during the hottest months.

That's a big difference.

YOUR AIR CONDITIONER MATTERS—A LOT

If you're buying a home in Phoenix, I cannot emphasize this enough:

Pay attention to the HVAC system.

Air conditioning is one of the most important systems in an Arizona home.

AC replacement costs can range from roughly $7,000 for a basic system to $15,000 or more for a higher-end variable-speed system, depending on the equipment and size.

This is another reason inspections and understanding the age of the major systems matter when you're buying resale.

And even with new construction, don't automatically assume every component is the absolute highest quality.

Builders have to balance price and features.

That can include windows, HVAC equipment, insulation, appliances, and other components that affect long-term energy costs.

WHAT ABOUT NATURAL GAS?

Natural gas is becoming more common in newer Phoenix-area homes.

Natural gas costs around $15–$20 per month during summer, when you're primarily using gas for things such as cooking or the dryer.

Winter usage can increase, particularly if you're using a gas fireplace or heating system.

But fireplace technology has changed significantly over the years, and newer construction may use different systems than older Arizona homes.

Again, the actual cost depends on how you use your home.

WATER, SEWER AND TRASH COSTS IN PHOENIX

Water is one of the topics I get asked about all the time when people are considering Arizona.

And there's an important distinction:

Water concerns are not necessarily the same in every city.

Buyers should look at the individual city's situation rather than treating the entire Phoenix Valley as one market.

Even the base sewer fees can vary substantially between municipalities.

For example, Chandler has a sewer base fee of about $32, while Gilbert's base fee is described as being significantly higher.

Actual monthly water usage can be much lower than many people expect.

Personally, I am spending around $30 per month on water in Chandler.

But your bill will depend on your household, property, landscaping, irrigation, and municipality.

If water is an important consideration for your relocation, this is absolutely something you should investigate before choosing your city.

TRASH AND RECYCLING COSTS CAN VARY TOO

Another cost people often overlook is trash and recycling.

These services are generally tied into the municipal utility structure, so your total bill can vary depending on the city.

It is approximately $100 per month in Chandler versus around $150 per month in Maricopa for combined municipal services.

At first glance, that might make Chandler look like the better deal.

But this is where the bigger picture matters.

Homes in Maricopa can potentially cost $300,000–$400,000 less than comparable homes in Chandler.

So, would you pay an additional $50 per month for municipal services if you saved hundreds of thousands of dollars on the purchase price?

For some buyers, absolutely.

For others, the commute or lifestyle may make Chandler worth the additional expense.

That's what I mean when I say there are trade-offs everywhere.

INTERNET AND PEST CONTROL

Two other household expenses are easy to forget when you're building your relocation budget.

INTERNET

Internet service can range from around $30 to $150 per month, depending on provider, speed, and plan.

I approximately pay $85 per month for a high-speed service. If you work remotely, this obviously becomes more important.

PEST CONTROL

Pest control is another Arizona expense that many people don't think about until they move here.

Crickets, spiders, insects, and other desert pests are simply part of living in Arizona.

It is approximately $65 every other month for a routine pest control.

That doesn't necessarily include termite or scorpion treatments.

And termites are something Arizona homeowners need to take seriously.

For resale homes, a termite inspection is recommended as part of the due diligence process.

For new construction, warranties can provide some additional protection during the early years.

GAS PRICES AND TRANSPORTATION COSTS

Transportation is another area where Phoenix has some positives and negatives.

Gas prices can be relatively high compared with some other parts of the country.

It attributes part of this to Phoenix's requirement for cleaner-burning fuel blends.

At the time of the original video, Greater Phoenix gasoline was roughly at $4.50–$4.70 per gallon, while a trip to Payson was at around $4.15 per gallon.

Prices, of course, change constantly, so don't treat those figures as today's prices.

One practical suggestion:

Membership warehouse clubs such as Costco or Sam's Club can help reduce fuel costs if you use them regularly.

But there's another transportation cost that can surprise relocation buyers even more.

CAR INSURANCE CAN BE A BIG PHOENIX EXPENSE

If you're moving to Phoenix from another state, don't assume your auto insurance will cost the same.

Car insurance is one of the biggest potential surprises for people moving here.

Rates can vary based on:

• ZIP code
• Population density
• Vehicle type
• Driving history
• Age
• Gender
• Credit
• Coverage
• Where you live

The important point is that the house you choose can indirectly affect your insurance costs.

Two people with similar vehicles and driving histories can potentially pay different rates simply because they live in different areas.

So, before you make an offer on a home, it's worth getting an insurance quote for the actual property.

CHILDCARE AND HEALTH INSURANCE

For families relocating to Phoenix, childcare needs to be part of the budget.

Phoenix childcare is approximately around $850 per month, but take note that rates can vary significantly by facility and arrangement.

Nannies and in-home childcare are also becoming more common.

But one expense that can be much more complicated is health insurance.

If you're relocating from another state, don't assume your existing coverage will transfer seamlessly.

If you’re coming from places such as California, including those who may currently have employer or retirement healthcare benefits, it's a big thing that you're going to want to weigh out pros and cons.

For retirees especially, this can become a major factor in the relocation decision.

If you have exceptional healthcare benefits where you currently live, you need to compare those benefits against what you'll have available in Arizona.

Sometimes the numbers can change the entire relocation decision.

GROCERY COSTS IN PHOENIX

Your grocery options will depend heavily on where you live.

In the suburbs, you may primarily have access to stores such as Fry's, Safeway, or Walmart.

Closer to the core of the Valley, you may have access to a much wider variety, including:

• Whole Foods
• Trader Joe's
• Aldi
• WinCo
• Food City
• Safeway
• Albertsons
• Fry's
• Farmers markets
• Specialty markets

And if you're looking for international groceries or Asian food, certain parts of the East Valley provide an especially strong selection.

Again, this comes back to location.

The grocery stores available to you can be very different depending on which community you choose.

WHAT DOES IT COST TO EAT OUT IN PHOENIX?

Dining costs are just as varied.

You can grab an inexpensive fast-food meal, eat at a neighborhood pub, go to a mid-range restaurant, or spend considerably more at a high-end Scottsdale or Phoenix restaurant.

Dining out, you’re going to spend anywhere from $13 for a fast-food meal to $20–$25 or more per person for casual dining, before additional drinks or higher-end options.

And yes, restaurant drinks can add up quickly.

The good news is that the Phoenix Valley has a huge variety of restaurants, so your dining budget can be as simple or extravagant as you want it to be.

ARIZONA INCOME TAXES AND RETIREMENT TAXES

Taxes are another reason Arizona attracts relocation buyers.

Arizona's state income tax is a flat 2.5%.

For retirees, there are additional considerations.

It is worthy to note that Social Security is not taxed by Arizona, while retirement accounts are subject to Arizona's income tax treatment.

Also, Arizona does not have an estate or inheritance tax.

For people considering retirement in Arizona, these factors can become particularly important when comparing Arizona with their current state.

However, taxes are complicated, and your individual situation can vary.

If taxes are a major reason you're considering the move, you should have your personal circumstances reviewed by a qualified tax professional before making a decision.

SO, IS PHOENIX EXPENSIVE TO LIVE IN?

Here's the answer I want relocation buyers to take away:

It depends.

You can find relatively affordable housing in parts of the Phoenix Valley, but that doesn't automatically mean your total monthly expenses will be lower.

And you can spend considerably more on a home in an area that offers shorter commutes, better amenities, better access to entertainment, or other lifestyle benefits.

There are trade-offs everywhere.

Maybe you pay more for the house but save on your commute.

Maybe you pay less for the house but spend more on gasoline.

Maybe you choose a master-planned community and pay a higher HOA but get incredible amenities.

Maybe you choose a less expensive community with a smaller HOA but fewer amenities.

Maybe you buy a newer home and have fewer immediate maintenance concerns.

Maybe you buy an older home at a lower price but need to budget for an HVAC system or roof replacement.

There isn't one perfect answer.

That's why choosing the right Phoenix-area community requires looking at more than the listing price.

THE REAL COST OF LIVING IN PHOENIX COMES DOWN TO THE TRADE-OFFS

When you're relocating from another state, it's easy to compare home prices.

But that's only the beginning.

Before you buy, you should understand:

• Property taxes
• CFDs
• HOA fees
• Homeowners insurance
• Electricity
• HVAC costs
• Water and sewer
• Trash and recycling
• Internet
• Pest control
• Gasoline
• Auto insurance
• Childcare
• Health insurance
• Groceries
• Dining
• State taxes

And most importantly:

How those costs change from one Phoenix-area city to another.

That's where having someone who understands the entire Valley can make a major difference.

If you're thinking about relocating to Phoenix, Chandler, Gilbert, Mesa, Scottsdale, Queen Creek, Maricopa, or another part of the Valley, don't just ask us to show you houses.

Ask us to help you understand the trade-offs.

Because relocation isn't simply about finding a beautiful house.

It's about finding a place that fits your budget, commute, lifestyle, family, and long-term plans.

If you're considering a move to Arizona, give us a call, send us a text, shoot us an email, or connect with us through our website. We'll help you understand what it really takes to live in the Phoenix Valley—and help you find the area that makes the most sense for you.