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January 2023 Arizona real estate market update

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2022 in Review!
Arizona real estate market update for January 2023

Market Summary for the Beginning of 2023

For a complete picture of all the charts used in the latest Cromford market report, click here. 

Here are the basics – (the ARMLS numbers for January 1, 2023, compared with January 1, 2022, for all areas & types):

* Active Listings (excluding UCB & CCBS): 16,298 versus 5,776 last year – up 182% – but down 14.9% from 19,155 last month

* Pending Listings: 3,657 versus 6,539 last year – down 44.1% – and down 15.0% from 4,301 last month

* Under Contract Listings (including Pending, CCBS & UCB): 5,456 versus 9,393 last year – down 41.9% – and down 14.1% from 6,352 last month

* Monthly Sales: 5,132 versus 9,265 last year – down 44.6% – but up 4.1% from 4,931 last month but this is the main problem.  Everyone is on hold.

* Monthly Average Sales Price per Sq. Ft.: $265.58 versus $267.92 last year – down 0.9% – and down 2.5% from $272.30 last month

 * Click here to see the 2022-2023 migration report

* January – May is typically the best time to list your home.

 *Waiting for the market to come down?  It has already.

*The peak of the market was May 2022.  The market fell 12% since then and days on market went from 7 days to 55.  Expected to fall slightly more. 

*More listings coming in Q1 2023

*More price reductions coming in Q1

* Arizona was in the top 5 states for population growth in the past year

* For a different set of data from ARMLS, they put together this presentation for 2022 in Review for the Arizona real estate market, click here.

There are lots of small numbers in December’s totals. We have very low volumes of closings because buyers and sellers are discouraged. Monthly sales are down almost 45% from this time last year, and listings under contract are down nearly 42%. The numbers confirm that demand is very weak compared to normal for the time of year and even weaker compared to the strong demand 12 months ago. However weak demand does not necessarily make a market crash. Excess supply is what really drives prices down hard. This is what we saw from 2006 through 2008. But in 2023, supply is low and getting lower. It is much higher than this time last year when it was abnormally low, but it is still a long way below normal.

Activity is very low across the board, but the market balance is average. By that, we mean we have an equal balance between buyers and sellers. The trend is now moving in favor of sellers, having been favorable to buyers a month ago. So although there is gloom and despondency almost everywhere, amid the murk, there are clear signs of improvement. Because sentiment is so poor, there is psychological pressure to lower prices. However, there is no such downward pressure coming from the market. If unemotional computers did all trading, prices should be stabilizing right now.

In the real world, strongly influenced by human emotions, prices fell sharply last month, losing 3.5% in the monthly median and 2.5% based on the average price per square foot. However, sales prices are a trailing indicator, and these moves reflect the balance in the market in November, when we experienced a clear advantage for buyers. Leading indicators are looking more positive. This probably stems from interest rates being less horrible than they were six weeks ago. Demand is starting to stabilize and showing a few slow recovery signs. With new supply very weak, we are not witnessing a market crash. This is merely a correction, with prices now just a tad lower than a year ago – the monthly average $/SF is down 0.9%.

We are still dependent on the whims of the Federal Reserve. If they continue to push the Federal Funds Rate higher to curb inflation, then mortgage rates could also move higher, putting a quick damper on any recovery in demand. However, if the 30-year fixed mortgage rate stays between 6% and 6.75%, then we should have confidence that the housing market can operate normally at this level. Prior to 2009, anything under 7% was considered a low-interest rate, and rates under 5% were unheard of.

To achieve confidence, we need several months of interest rate stability. This is by no means certain to happen, but it is possible. Once the fear is removed, we should see more signs of a recovery in demand, and volumes will rise back toward a more normal level.

The new supply is still very low, but we will be watching closely for any change in this trend.


  • What are you waiting for?  The market has dropped.
  • The next few months will be your best chance at getting a deal.  You can always get a 2/1 buydown on your mortgage and refinance later.
  • If you wait for interest rates to come down, expect there to be more competition, and prices will increase.
  • You can still negotiate prices, closing costs, and inspections currently.
  • It’s been frustrating, I know; prices are still high, and interest rates are high, but it is what it is.   Figure out the math of renting vs buying.  
  • I think all the waiting you’ve done has paid off, but if you wait for any more, you’re gonna be a lifelong renter.  Homeowners always win in the end. 
  • If you plan on staying in your home for five plus years, it’s worth it; if you’re planning on moving in 2-3 years, rent.


  • We went from 7 days on the market to 55.  It’s slow, and there are not many contracts yet.
  • November / December are the worst times to sell your home and Now till May is the best time to sell seasonally.
  •  You have to get that March 2022 price your realtor told you out of your head; that’s gone.  You have to consider the last 30-60 days of comps.  Plus prices are still dropping, and the house that closes next week will be one of your comps.  
  • Do not overprice your home in this market, it will sit, it will be frustrating, and you will get less than pricing conservatively.  

Between now and May is the best time to list your home typically.

A buyers market is considered if the cromford market index is below 90 pm the CMI

The bottom of the market could very well be December.  We will know when the data is in the future.  It could be January.  The tide is turning, but statistically the overall buyer market was only 4 weeks.  Below are the cities still in buyers markets.

Difference cities are in different stages of buyer/seller markets.  Places like Avondale, Chandler, Tempe, and Mesa have come out of a buyer’s market into a balanced one.  Higher zip codes like Scottsdale are still considered seller’s markets. 

Mortgage rates have come down from the peak in October 2022.  This follows inflation. 

What if payments come down to 5%? Its expected that prices would continue to increase with pent up demand in the wings.  

Rental inventory has grown significantly since the start of 2022 but we may have reached the peak. Rental prices have come down but are still high.

We may have seen the peak of rental supply in the fall as supply is turning. When supply starts to turn down, rent rates typically go up.

We seen Active listings skyrocket since March of 2022, and in the last few months listings have fallen significantly.  Mostly due to sellers not needing to sell, waiting for spring and buyers juggling fears.

December is always slow, and 56 days on market is typical in December.  Best time to buy and worst time to sell

When selling a home expect an average seller concession of $9425. This data adds to the decrease in median price. 47% of contracts have concessions. 

Prices have come down 12.4% since the peak in May 2022. Prices have already come down and not expected to fall much more.  Concessions are an average of $9400 in half transactions so you can lower the median price by an extra $5000 or so.  A guess would be that the market would fall 15% since peak, but falling prices not expected to continue much longer.


Once a recession is called, mortgage rates should start to come down. 


A guess is a guess, noone can guess this one. 

This market has been a wild ride due to interest rates, consumer sentiment, and buyers trying to figure out the problematic math of what makes sense.  If you need to sell or buy, reach out, and I can help you figure out what makes sense.

Call me at 480-466-4917 or email me at jay@jaybrugroup.com


Jay Bru

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