February 2023 AZ Real Estate Market update!

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Arizona Real Estate market.

What a week this has been in Arizona with the Super Bowl and the Phoenix open, we are bursting at the seems.  Arizona continues to be a major tourist destination with so many fun activities going on.

Real estate seems to be so confusing right now and I tend to stay away from click bate and stick with actual stats and data.  Always ask yourself, why are investors still buying?  What do you think they tell a home owner when they make a cash offer?  Why is our inventory so low compared to only a couple months ago?   Yes we had a terrible Novemeber/December and it is seasonally a good time for sellers up till spring. The summer is going to be the pivot in my opinion, and I cannot get any real information about what will happen but until then the phoenix market will be semi strong but still dependant on Interest rates.

Interest rates looked stable during January, but they started misbehaving again in the first week of February.

All looked fine on February 2, when the 30-year fixed rate averaged 5.99%. This was the day AFTER the Federal Reserve increased its benchmark rate by 0.25%. However, the average 30-year rate has jumped to 6.45% in just three days. The FHA 30-year rate has increased from 5.36% to 5.90% over the same period.

The jumbo 30-year rate averaged 6% yesterday, up from 5.65% on February 2. This is not good for home buyers or sellers.

If these rates stick around, it will probably apply the brakes to the recovery in demand we experienced in January.

Although closed sales volumes are low and prices are down from last year, total dollar volume is higher than in February 2020, just three years ago. This is because prices are so much higher than they were in 2020.

Based on the number of listings under contract, February closed sales should be significantly higher than January’s. This is a safe bet because it has happened every year since we started measuring.

For Buyers:

The Spring season is upon Greater Phoenix. February hosts the Waste Management Open and Super Bowl LVII this year, putting the metro area in the national spotlight more than usual during our peak season for weather, tourism, and buyer activity. This, combined with mortgage rates briefly stabilizing between 6.0-6.2% in January, contributed to an 86% increase in accepted contracts since the beginning of the year. Six major cities moved out of balanced markets into seller’s markets over the last 4 weeks: Phoenix, Avondale, Glendale, Tempe, Mesa, and Gilbert. Two cities came out of buyer’s markets into balance: Peoria and Surprise. Only Goodyear, Queen Creek, Maricopa, and Buckeye remain in buyer’s markets. Now 11 of the 17 major cities are in seller’s markets, but much weaker compared to the last 2.5 years. However, the shift is in its early stage and fragile and could fall back to balance if mortgage rates become too volatile. Rates remain unpredictable, but that doesn’t stop the industry from trying to predict them. Multiple outlets, such as the National Association of Realtors, Mortgage Bankers Association, Freddie Mac, Fannie Mae, and CoreLogic, released expectations in January that mortgage rates will either stabilize or trend down in the first quarter of 2023. Very few predict rates to increase this year overall, but we may see them bounce around as the bond market flinches with every report on inflation and employment. This may also cause buyer demand to ebb and flow over the next few months. Speaking of employment, the latest report for Arizona showed an increase of 93,700 jobs for the state throughout 2022. In Maricopa County, the unemployment rate dropped from 3.1% in January to 2.7% by the end of December, continuing to outperform national measures. Even as the labor force grew by nearly 58,000 people, even as layoffs swept the real estate and tech industries, people claiming unemployment declined by 9,500 throughout 2022. Private sector earnings also grew by 4.1% year-over-year, a positive indicator for housing affordability to improve in Greater Phoenix.

For Sellers:

Don’t be fooled by this seller’s market; it is nothing like the seller’s market of early 2022. Sellers may notice less pressure for a price reduction as few new listings are entering the market. There were only 9,664 new listings added to the Arizona Regional MLS since the beginning of 2023, the lowest number of new listings measured in at least 23 years. The median is 14,000 listings; the highest measured was over 21,000 in 2006 over the same 5-week time frame. Less competition is good for price stability. Sellers may notice fewer days on the market before the contract. Half of the owners who accepted contracts last week were on the market for 40 days or less (listed after January 4th) compared to the peak of 56 days in December. In a weak seller’s market like this, as we shift into the Spring season, days on market prior to a contract may settle in at 25-30 days, a far cry from the 5-7 days in early 2022. Sellers will notice little change in negotiations or concessions at this stage. Last month, 51% of sales involved seller concessions to the buyer with a median cost of $9,700. So far in February, 47% have involved concessions at the cost of $9,800. The average negotiation is 2.8% below the last list price, down from 3.5% last month. Sales measures now reflect contracts written in late December and early January, which was a mixed bag of cities in balance and cities in buyer’s markets at the time. The effects of the current seller’s market will not be seen in sales price measures until March, at which point we expect to see the rate of decline in sales price measures either slow down or stabilize. Mortgage rates could change the game quickly, however. It’s not a time for buyers or sellers to take market conditions for granted.

The Affidavits of Value have been processed from Maricopa County for January, and we deduce:


      • There were 4,559 closed sales – down 44% from January 2022

      • There were 976 new home sales – down 6%

      • There were 3,583 re-sales – down 49%

      • The monthly median sales price was $439,000 – down 0.5% from January 2022

      • The new home median sales price was $503,195 – up 9.4%

      • The re-sale median sales price was $420,000 – down 4.3%

    New homes are faring much better than re-sales in volume and pricing.



     CMI is a value that provides a short-term forecast for the balance of the market. It is derived from the pending, active, and sold listings trends compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.


    Fountain Hills continues to hold the top spot but is being challenged by Chandler. The Southeast Valley is improving very fast, while the Northeast Valley is deteriorating or improving only slowly for sellers. Scottsdale managed an improvement of just 3%, but Paradise Valley is down 15%, while Fountain Hills and Cave Creek are also moving in favor of buyers. In the Northeast, supply is growing, although it is declining almost everywhere else.

    The middle of the market seems to be most favorably affected by recent trends, with Avondale, Glendale, Phoenix, and Goodyear all seeing their CMI increase by 25% or more.

    The outer areas, such as Buckeye, Maricopa, and Surprise, are improving for sellers but at a slower rate.

    The improving situation for sellers is causing the pricing to firm up. However, the increase in mortgage rates over the past week may take some of the wind out of those sails.


    It might not feel like a seller’s market for some, but it is, statistically speaking. Some cities are still buyers’ markets.


    Overall we had a 4-week buyers market. The best time to buy is from October to New Year’s, don’t forget that!


     The rental supply is coming down as well.


    Over-list price offers are coming back slightly. But to get this, you have to price your home competitively.  Homes that get multiple offers are perfectly presented, priced competitively, and typically are not on busy roads or have weird floor plans.  If you want a high listing price when selling your home, you may have to refer to the Days on Market average of 40 days.


    Listings typically go up this time of year, but they are getting eaten up by buyers. After this high season, do you think all Airbnb rentals will hit the market?



    Still high.


    Expect Days on the market to come down in the next few months. Spring is the best time to sell, but we don’t know what this spring will bring; it’s been odd. Not suitable for all the anxious people like myself, lol.


    Buyers got treated badly for all those years; now they’re just plain %*#@s with all that pent-up anger. It’s true; I got lowballed $125,000 on my house. Don’t do this; why would a seller accept this? They could reduce their price by $20k increments.

    February, in my opinion, cannot tell us where prices will be in a year, even though the Cromford market index tells us it’s a seller’s market in most cities.  Interest rates and buyer sentiment are still dominating the market.  According to experts, this summer will be the telltale sign, but interest rates should be down by this time.  If you have to sell, sell; if you have to buy, buy.  Life moves on!  As a buyer, you can always refinance later, homeowners always win in the long run, and sellers can never time the market.  If you are thinking of moving, I can plan what to expect for $$$ in your pocket now.  

    Jay Bru



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