September 2023 Real Estate Arizona Market update

Here is the updated September 2023 Market update!



The current trends in the market are lessening the negotiation advantage for sellers and probably making them just a little nervous.  The Active listings have finally hit bottom and are on the rise.  More to choose from yet more competition for sellers.

The above chart shows us that supply is starting to rise again. The increase was very modest for the first 6 weeks, but last week saw active listings rise over 3.2% to 12,476. This is still a small number (last year we has over 19,000 at this time), but the trend is of psychological importance. Buyers can flex their muscles a little, especially in the areas with the lowest CMI, such as Casa Grande and Queen Creek.

Of course any major change in mortgage interest rates could set a cat among the pigeons. This uncertainty works both ways, but the 7% level seems to have established itself as the borderline between good and bad sentiment. I am tempted to mention that I bought my first home in 1976 with a variable rate mortgage fixed for the first 5 years at 8.25%. Funnily enough this is actually lower than the 8.75% I am currently paying for all 3 of my residential loans. These examples are in the UK so of limited relevance, but they do remind us that home-buyers in the USA are very lucky to have 30-year and 15-year fixed rate mortgage rates available to them. Such things rarely exist abroad. Banks don’t usually offer them without a huge amount of government intervention in the real estate lending market. This government intervention is abnormally large in the USA, compared with most foreign countries, and has been so ever since the end of the second world war.

Sep 9 – Like me, you may have been puzzled by the sudden drop in the new home median between July and August. It came in below $500,000 for the first time since April last year.

I had to examine the individual transactions filed in Maricopa County and immediately noticed something unusual. Invitation Homes purchased an entire subdivision of Build-to-Rent 2-story homes in Litchfield Park. The subdivision is called Las Casas at Windrose and each single-family home offers around 1,940 sq. ft. of living space. They are all rentals but there is also a community center and swimming pool. They are renting for $2,500 to $3,000 per month.

The price paid represents less than $400,000 per home, and the transaction involved 133 units. This is 8.3% of all the new homes closed in Maricopa County during August and it dragged the median down from $522,490 to $499,990.

There is always an explanation if you are able to dig deep enough.

Guess what? We’re still behind the housing market’s pace in June, as per the Case-Shiller Index. It’s like peeking in the rearview mirror – gives you a view of the past, not the present!
To stabilize and reach a turning point by October, we need to see a minimum 1.6% increase in the market.
In September, Phoenix home prices dipped slightly but have risen by 5.9% since May ’22. However, they’re down by 12.3% since December ’22. Limited selling days in September played a role. High-end homes eased off during summer, impacting prices. Homes under 2,500 square feet averaged $265.43/sqft in September.
Lenders offer diverse rates, and the index tracks prevalent 30-year fixed mortgage rates, ideal for those with 20% down and no major loan adjustments.
The Arizona housing market in September 2023 is closely tied to changing mortgage rates.
In mid- to late-2023, experts provide varying mortgage rate forecasts. The predictions for 30-year mortgages range from 5.5% to 7.75%, while for 15-year mortgages, they range from 4.875% to 6.90%.
Arizona’s FY 2023 records significant economic growth, with major companies investing millions and creating hundreds of jobs across various industries.”
The unemployment rate has gone up and down over the years. It was really high at 15.0% during the COVID recession, but as of July 2023, it’s lower at 3.5%. Different generations experienced these ups and downs in jobs at different points in time, like the Boomers in the 1970s and early 1980s.
Why have a ‘no dogs allowed’ policy in your rental place when you can have a ‘yes, please bring all the fur babies’ policy in your very own home? 🐶
In Year 1, we paid a chunk of interest and began building some home ownership. By Year 5, changing our loan or dropping extra insurance can save us money. Smart financial moves matter on this homeownership journey.
The Cromford Market Index rates how well different parts of Greater Phoenix are doing in real estate. Casa Grande is steady, and there are no places where it’s really hard for buyers in Greater Phoenix right now.
The data shows weekly counts of active residential listings in Greater Phoenix for 2021, 2022, and 2023. As of September 2, 2023 (Week 35), there were 5,536 active listings, a 40.4% decrease from the same period in 2022 (17,778 listings).  
August 2023 saw a slight real estate price dip, but more homes are selling above asking price and at a quicker pace!
On the economic front, Phoenix’s tech-driven economy is thriving, a clear win. Diving into the economic journey of various generations in their 20s and 30s? It’s a revealing ride, showing how we’ve all weathered different financial storms.
The actual median sales price for residential properties in Greater Phoenix, as of the last update on September 10, 2023, stands at $421,000
While there’s hope for lower mortgage rates in the future, uncertainty and factors like the Fed’s actions and housing inventory levels will play a significant role in determining the trajectory of mortgage rates in 2023.

If you would like to know more about what your current home is worth or what it looks like to get into a new home please reach out to me at 480-466-4917 or jay@jaybrugroup.com


Jay Bru

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