Mid May AZ 2023 Real Estate Market Update

The real estate market can be perplexing due to conflicting information from various sources, especially the media. High interest rates, affordability challenges, and recession fears have led some people to believe that a market crash is imminent. However, waiting for a crash might not be the best strategy.

While media stories focus on a shortage of homebuyers, the more significant issue is the shortage of sellers, which they have failed to mention. This problem is due to the low-interest rates on existing mortgages, making it more financially sensible for homeowners to upgrade or expand their homes instead of selling them.

The Phoenix Metro area has less than 12,000 listings in our MLS, a far cry from the usual 23,000 to 26,000, which is inadequate for a population of nearly 5 million. The number of active listings has declined for over six months and continues to trend downward. This is an essential issue that the media has not addressed, but it’s important to acknowledge.

• homes listed under $225,000 are down 52%
• homes listed between $225,000 and $275,000 are down 64%
• homes listed between $275,000 and $350,000 are down 47%
• homes listed between $350,000 and $500,000 are down 55%
• homes listed between $500,000 and $600,000 are down 47%
• homes listed between $600,000 and $800,000 are down 38%
• homes listed between $800,000 and $1 million are down 35%
• homes listed between $1 million and $1.5 million are down 33%
• homes listed between $1.5 million and $2 million are down 18%
• homes listed between $2 million and $3 million are up 9%
• homes listed over $3 million are up 14%

The drop in available supply is most severe in the price ranges below $600,000. It is only slightly better between $600,000 and $1.5 million. Once you reach $2 million, we have no real shortage – there is more choice available today than at the beginning of he year. However demand has held up quite well at these higher price ranges.

May 13 (From the Cromford Report website)- The months of supply reading for all areas and types is currently 1.6. There have been only 3 years since 2005 where months supply in mid-May was lower than this. These were 2012, 2021 and 2022. With only 1.6 months of supply, many buyers are having to compete with each other despite the weak demand. This is especially true of those trying to buy in the well-established and more central areas. In a balanced market we would expect to see 3 to 4 months of supply, while 6 months or more is seen in a market that is heading for decline.

Sara Waide Bowers, a long-time subscriber to the Cromford Report, recently wrote to tell me “Some of the crazy is coming back.  I recently wrote an offer $25,000 over list and my clients were beaten out by other offers ‘with more attractive terms’ on a home that needed flooring and paint throughout, new AC units and had evidence of water intrusion around the windows and roof leaks”.  This was in the 85248 zip code in Chandler. 

She added “I also had another agent saying how she didn’t want the insanity to start again, but would we waive inspections to beat the competing offer. Another home needing significant work.  We also came in over list on that offer.  Clean, no concessions, no home warranty”.

With sellers receiving multiple offers their will be fewer of them feeling pressure to be generous with concessions or agreeing to buy down the buyer’s mortgage rate.

Many buyers will be surprised to find they have much less leverage than they expected in this so called “weak market”. Buyer’s agents will have to do a lot of explaining to get them to understand the true nature of today’s market, especially if they have been watching YouTube videos by inexperienced and alarmist commentators. These are often so far removed from reality that they rival the flat-earth proponents.

There are many crazies on YouTube that seem to get far more views and subscribers than the sensible commentators. If you need an effective antidote to the crazy stuff, I can recommend Jon Schwartz’s YouTube channel. He only has just over 3,000 subscribers, but he should be commended for dealing in balanced facts and realism. Most of the others I have seen on YouTube are trying to boost subscriber counts by constantly spreading easily disproven falsehoods, laced with dire warnings that simply spread alarm and have no factual justification. Unfortunately human nature means that the crazies get most of the attention which is rewarded by YouTube monetarily. I suspect these commentators may not even believe the rubbish they present. But they are probably laughing all the way to the bank at the gullibility of their subscribers.

People are choosing to rent because they think that home prices are likely to come down. This is not at all likely in the face of a supply shortage like we are experiencing. Not to mention that the rental market is not any cheaper or better, with an average price per square foot of $1.35. Yikes! The rental market is over-priced, and the quality of the homes available leaves much to be desired.



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

  • Active Listings (excluding UCB & CCBS): 12,503 versus 6,688 last year – up 87% – but down 10.3% from 13,933 last month
  • Active Listings (including UCB & CCBS): 16,248 versus 10,191 last year – up 59% – but down 5.4% compared with 17,167 last month
  • Pending Listings: 6,224 versus 7,386 last year – down 15.7% – but up 9.2% from 5,701 last month
  • Under Contract Listings (including Pending, CCBS & UCB): 9,969 versus 10,889 last year – down 8.4% – but up 11.6% from 8,935 last month
  • Monthly Sales: 6,662 versus 10,141 last year – down 28% – and down 12.3% from 7,598 last month
  • Monthly Average Sales Price per Sq. Ft.: $279.92 versus $302.48 last year – down 7.5% – but up 0.8% from $277.61 last month
  • Monthly Median Sales Price: $425,000 versus $466,000 last year – down 8.8% – but up 1.2% from $419,900 last month

A year ago the market was weakening fast, but pricing was approaching its peak of $306.46 per sq. ft. and closings were still running high, fueled by the unwise purchasing frenzy of institutional investors and iBuyers. The slump that followed in the second half of 2022 is now well behind us, and the market is displaying increasing resilience despite interest rates that are far higher than during most of the last 10 years.

Closing volumes were unimpressive in April, but the growth in listings under contract makes up for that with one of the largest month-to-month increases (11.6%) that we have ever seen for this time of year. The net result is that demand is now growing again while supply is falling even faster than before. This is good news for sellers, but most home owners are still uninterested in selling, deterred by the large increase in mortgage interest rate that would incur.

With only 12,500 active listings without a contract we are once again approaching a dire shortage of homes for sale. Even a modest increase in demand is likely to force prices higher and quickly recover the ground lost over the past 12 months. The median sales price is down almost 9% compared to a year ago, but has recovered nearly 4% over the last 3 months.

The new home market remains robust with most publicly listed home builders in an optimistic mood, supported by their stock prices hitting new highs in the last few days. The numbers in the ARMLS database suggest their optimism is justified, especially if the perception that the Federal Reserve has finished hiking interest rates becomes a reality.

May 8 – With both buyers and sellers lacking enthusiasm, closing volumes remain weak compared to normal and especially to last year. This is causing the annual sales count to decline. It is now approaching the 75,000 level, having exceeded 95,000 in October

The peak was in mid-2021 when we saw over 115,000 listings closing per year.

At some point the annual sales rate will reach a bottom and start to climb again. It is not yet clear when this will occur.

CMI by City
Here are the most active areas in the valley
We are losing 246 listing per week, it will have to stop eventually

The peak of prices was May 2022, this is what has happened since then.

What led to the Arizona housing shortage

The gap is closing for deals off rent

These are the 5 hottest zip codes in the valley, more than double under contract than active


  • Extremely frustrating with no inventory to choose from in some parts.  Everyone is still hoping for a miracle, but that most likely will not come; it is what it is.
  • Not many people have said delaying homeownership is a good idea; figure out the math and determine what’s your best price point, type of housing, and what your monthly cost will be. 
  • Buy the right house.  There’s no need to buy extra sqft you will never use. And if you have flexibility on location try cities on the outskirts like Queen Creek or Buckeye.
  • Keep in contact with your lender about interest rates, programs for buying down the rates, and different programs. 
  • If you’re in the lower price points, you have to be aggressive, unfortunately.  I bid on a house with 32 offers the other day. 


  • Hold tight; as we go into summer, there will be fewer buyers.  
  • List asap, before summer gets too hot.  Sales taper down in July and August.
  • Clutter is the number one thing you can do to make your house sellable, and it’s free to do.
  • Get nosy neighbor alerts to know what sells in your neighborhood. Text 480-466-4917 to get alerts.
  • If you sell and buy at the same time, the market does not affect you as much. You have options with contingencies, holding 2 mortgages for a short time, or there are programs that can help. 
  • Get your pricing correct, figure out value, and aim to get the highest $/sqft, click here for a plan that we offer.

It can take decades to sort the inventory problem out, and high housing costs are likely here to stay until we build more homes.

If you would like to know exactly what’s going on in your zip code, please reach out to me at jay@jaybrugroup.com or 480-466-4917.

Jay Bru

Leave a Reply

Top Posts