Numbers, as they usually do, are telling the story of the Phoenix housing market. A booming metropolitan area that has long grabbed housing market headlines for its white-hot activity and growth, Phoenix is apparently cooling.
A little. Maybe. Or is it?
Buyers and owners wondering if home prices are dropping in Phoenix are coming across a mixed bag of information. While Zillow reports that home prices in July in 30 of the country’s top 50 housing markets have cooled — including Phoenix by about 2.8% — Redfin is reporting that the median price is up 11.6% compared to last year. The Cromford Report, a service offering daily real estate market insight, is aligning with Redfin’s analysis, showing a 13% increase in median sales price year over year, but a 4% drop from last month.
So, prices are up but also down.
Regardless of differing statistics, the Phoenix housing market is still a healthy one and still far removed from anything resembling a subdued market. However, the current, less manic season in the Phoenix market provides opportunities for buyers who may have been more comfortable on the sidelines during the frenzied pace of the pandemic-era market.
For starters, homes are staying on the market just a bit longer. The median number of days a home is on the market is about 32 days, according to Redfin, which is about a week longer compared to the same time period last year. And the volume of sales is down more significantly while active listings have increased, indicating a swing towards a more favorable buyer’s market.
How does that play out for a buyer?
Market insights indicate sellers are offering to pay closing costs at a rate not seen since March of last year, while it appears cash-backed investors have pulled back a bit, giving the average buyer a better chance at not only securing a purchase but also negotiating a deal. For anyone who has tried to navigate the Phoenix market as a buyer recently, that is welcome news.
Even as sellers consider slight price reductions, and many have, Phoenix is still a highly underserved market when it comes to housing. According to the Cromford Report, if no new listings entered the market and the rate of sales remained the same, inventory would run out by Halloween — a truly scary thought.
That figure is higher than it was for the past two years, but it still illustrates the opportunities that exist for buyers and provides an impactful snapshot of the demand for housing in the Phoenix area. In fact, Newsweek recently classified the housing shortage in Phoenix as “just dire.”
As the rate of sales declines, up against rising interest rates and what were increasing home values, some experts are anticipating a market “correction” rather than a full crash — in part due to the seeming ever-present demand for housing in what is perennially one of the fastest growing markets in the country.
If the Phoenix market is experiencing a correction, it would behoove buyers to make their move before investors return, interest rates adjust downward or sellers decide to pull back, sit tight and see where the market moves in the months ahead.
If you’re considering a move, the team at Halpern Residential is ready to help. We keep an eye on market trends so you don’t have to. Moving is an exciting time of transition, and we’re ready to help you with it. Contact us today so we can learn more about how we can support your needs.