What buyers, sellers, and investors should expect as the Phoenix housing market shifts into a more balanced year.
As seen on AZBigMedia.com, January 3, 2023 .
2022 was one of the most unpredictable years for Phoenix real estate. The market came out of a pandemic-driven surge with high demand, very low interest rates, and intense bidding wars that pushed home prices up quickly.
By the end of the year, the market began to shift. Conditions moved toward a more balanced environment. As we head into 2023, buyers and sellers are entering a very different market shaped by changing rates, rising inventory, and more realistic pricing.
While no one can predict the future with certainty, several clear trends are expected to shape Phoenix real estate in 2023.
1. Interest Rates Will Drive Buyer Demand
Interest rates will continue to influence the market. If rates drop, buyer demand will likely increase, bringing more competition back. Until then, buyers will hold stronger negotiating power.
2. Buyer Concessions Will Change Throughout the Year
Early in the year, buyers may still ask for concessions. If demand increases later, those concessions will likely become less common.
3. Inventory Will Continue to Rise
More homes are expected to hit the market. This will give buyers more options and reduce the intense competition seen in recent years.
4. Sellers Will Price More Realistically
Sellers are expected to adjust. Instead of overpricing homes, more will price according to current market conditions.
5. Investors May Return to the Market
As the market stabilizes, investors may return. Strong rental demand and improved financing conditions could create new opportunities.
6. Fewer Active Real Estate Agents
A slower market may lead to fewer active agents. Higher costs and fewer transactions will push some agents out of the industry.
7. iBuyer Activity Will Decline
iBuyer activity is expected to stay limited. The model struggles in markets where prices are stabilizing or leveling off.
Phoenix real estate in 2023 is expected to be more balanced than in recent years. Success in this market will depend on timing, strategy, and working with an experienced local agent who understands current conditions.