Well, the wild ride is still playing out this August 2022 Arizona Real Estate Market report. Active listings have grown tremendously in such a short time with Summer, rising interest rates, inflation, a recession, and buyer hesitancy. The next six months are going to be crucial to watch if you’re interested in where home prices are heading. I know a lot of you are hoping and predicting that there will be a massive fire sale on real estate but that will not be the case. The buyer dream may more look like, a semi-low ball offer will be looked at, you may get concessions, you’ll be able to ask the seller to fix items from an inspection report, ask for a home warranty, and have a lot more options to choose from. Sellers, on the other hand, need to make their homes presentable, be willing to adjust their home price to market value, be patient, and try to work with buyers needs.
Arizona still has a housing shortage, and you cannot just build those new homes overnight. We are adjusting right now, and some say it will level out this winter when things are back to normal. Remember back in 2014 or 2017, the market wasn’t robust as it was the past couple of years from Covid. People still buy and sell homes in every market and circumstance. Here are a few key points followed by some charts and explanations. Every city is different, and I have access to every city’s data, let me know if you need help with that.
- Active listings: Phoenix metro from MLS=18,609 Aug 18th (You will see different numbers because some sources are pulled in from all of AZ to metro Phoenix etc, and then straight from the MLS with CCBS. Nonetheless, we are balanced right now. We can handle the supply currently. Active Listings means the number of MLS listings marked active or active with a contingent offer on the date. This will fluctuate on any particular day. If this number gets over 25,000, this will be considered a good buyers market, and prices will most likely come down.
- Days on market = 25 this month. In 2007-2009 = 130 days and Dec 2018 = 38 days. We are still low, but this number is climbing.
- List prices came down 18.3%, but Sales prices came down only 4%. The media was clinging to this story, not stating all the facts. Sellers are starting to give up on their dreams of bags of cash.
- Months Supply = 3.3 months. Indicates how many months it would take to sell all the Active Listings if they were to sell at the rate implied by Sales per Month (7 Day Average).
- Market changes in 3 stages. 1. Price reductions increase 2. days on the market increases and then 3. Seller concessions from sellers appear in contracts.
List prices came down 18.3% compared to 4% sale price
Open door just got sued for 62 million dollars and has now cut back on purchasing and dumped all of its inventory on the market.
23% of all Active listings had a price reduction. Your home must be priced accordingly, or it won’t get showings or an offer.
Phoenix Housing Market Forecast 2022 & 2023 (commentary via ARMLS)
What could be the Phoenix real estate market predictions for 2022 to 2023? Phoenix is the 5th largest city in the country and continues to grow. New residents are drawn to Phoenix by its strong economy, relatively low cost of living, high quality of life, economic opportunity, and cultural attractions. Since 2000, Phoenix’s population has grown by 20% to approximately 555,013 households and 1.6 million people.
It is the biggest city in Arizona and the state’s capital. It is a minimally walkable city in Maricopa County with a population of approximately 1,442,530 people. However, Phoenix itself is massive. It is the only state capital with more than a million people. It is the fifth-largest city in the country. The Phoenix housing market is much larger than Phoenix itself – it encompasses the entire Valley of the Sun, Phoenix’s sprawling suburbs that are home to another five million people. That makes the Phoenix metro area the twelfth largest in the country.
The favorable living conditions have, furthermore, comforted real estate investors and buyers to invest in Arizona real estate market. The Phoenix housing market was a headline in the news a decade ago when the housing crisis of 2007 and 2008 caused home values here to fall by as much as half. The slow recovery of the national housing market has taken a decade.
Since 2006, the population has grown faster than housing. This growth fueled by job growth has finally consumed the glut of re-sale housing created during the bubble years. Now the market is facing a shortage of homes for sale. Phoenix home prices were up by roughly 7% over the last twelve months. Despite the increase in property prices, the Phoenix real estate market remains much more affordable than in other places.
Single-family homes continue to drive the Arizona real estate market. In 2019, single-family homes grew by roughly 4% as compared to 2018. Particularly, previously-owned single-family houses compromise the majority of residential sales in the Arizona real estate market- approximately 80% of all sales. Annually, the number of previously-owned single-family homes is three to four times greater than new single-family home sales.
The Phoenix real estate market is the top-performing, not only in the Arizona real estate market but nationwide as well. Phoenix has a mixture of owner-occupied and renter-occupied housing units for sale. According to Neigborhoodscout.com, a national real estate data provider, three and four-bedroom single-family detached are the most common housing units in Phoenix. Other types of housing that are prevalent in Phoenix include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 60% of Phoenix’s housing units.
Over the last 10 years (July 2012), housing prices in the Phoenix metro have appreciated by nearly 213% (ZILLOW HOME VALUE INDEX). The current typical home value of homes in the Phoenix-Mesa-Scottsdale Metro is $476,098. It indicates that 50 percent of all housing stock in the area is worth more than $476,098 and 50 percent is worth less (adjusting for seasonal fluctuations and only includes the middle price tier of homes).
In May 2021, the typical value of homes in Phoenix was around $368,000. Home values have gone up 29% over the past year alone. Phoenix is a sizzling hot seller’s real estate market and prices will continue to rise in the next twelve months. Similar growth has been recorded by NeighborhoodScout.com as their data also shows that in the past ten years, Phoenix real estate appreciated by 273.66%. This amounts to an annual real estate appreciation of nearly 14.09%, which puts Phoenix in the top 10% nationally for real estate appreciation.
During the latest twelve months, Phoenix’s appreciation rate has been 33.00%, which is higher than appreciation rates in 98.95% of the cities and towns in the nation. In the latest quarter, the appreciation rate has been 11.85%, which annualizes to a rate of 56.50%. This figure also corroborates Zillow’s positive forecast of +10%. It tells us that home prices in this region are expected to continue their growth in 2022 in double-digits. First-time home buyers will remain a strong force while younger Gen-Z buyers are expected to play a growing role in this housing market.
Here is the latest housing forecast for Phoenix, Metro Phoneix, and Maricopa County. There’s good profit potential for the period of one year if you are looking for homes for sale with good flipping profit. It can be a profitable property investment opportunity if you can find a good deal. A long-term investment in Phoenix real estate will yield even greater profits.
- Phoenix-Mesa-Scottsdale Metro home values have gone up 29% over the past year and they will continue to rise at a similar pace in the next twelve months.
- The Phoenix metro housing market forecast ending with May 2033 is positive.
- Zillow predicts that Phoenix metro home values may grow by 14.1% by May 2023.
- If this forecast is correct, Phoenix metro home prices will be higher in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
- In the city of Phoenix, home values have gone up 27.8% (current value = $425,130) over the past year and will continue to rise in the next twelve months.
- Maricopa County home values have increased 28.5% over the past year ($485,880 as of May 2022).
- Mesa home values have gone up 26.9% over the past year ($442,674 as of May 2022).
- Scottsdale home values have gone up 29.3% ($862,348 as of May 2022).
Hope this was a good read. I’m not sure this month solved any concerns over the future. It’s a push-pull of data that ultimately affect prices. The experts are confident that there will not be a bubble. If you need a home, buy it; if you have to sell a home, sell it. I think we will ride in a balanced market for a while. Prices could come down a bit more but not much more.
Cheers,
Jay Bru
480-466-4917
jay@jaybrugroup.com
