Dennis Carr

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Phoenix, AZ Metro Weekly Housing Market Update

Posted On: September 1st, 2023 10:36PM

The Hardest Working Agent in Arizona
 
 
 

 
Aug 26 - When buyers are actively looking for homes their main source of information about home prices are the list prices for homes they see listed for sale. All the other data is historic, based on what someone agreed to pay weeks or even months ago. Here is what they see when they look at the ARMLS active listings:

First of all, they notice that the average price per square foot is higher in week 34 of 2023 than in week 34 of all the years back to 2015. They can also see that every year has been higher than the one before for week 34. The weak pricing triggered in 2Q 2022 by a sudden jump in mortgage rates has had only a temporary effect and now looks to be of only minor lasting significance.

The current average $/SF for all active listings is $350.27. This is an average across all areas within the ARMLS database and all dwelling types. Because this is a very large sample, the chart is very well-behaved and shows us that:

  1. The long-term trend has been higher for the last 8 years, with 2023 some 91% higher than 2015.
  2. The summer is a seasonally weak period, each year showing a decline from May to August, except for 2020 which was bouncing back from the severe COVID scare that occurred in March and April that year. The weakness in 3Q 2023 is similar to 3Q 2015 through 2018, relatively normal and uneventful years.
  3. Today we see active list pricing of 8.7% higher than we did this time last year. This is a larger increase than the 6.0% we measured at the same time last year.
  4. There was an unusually large and rapid fall between May and August last year on top of the seasonal weakness. This was heavily influenced by the pricing actions of the iBuyers who realized too late that they had continued buying even while the market was cooling, resulting in them having far too much inventory by June 2022. They had a fire-sale of this inventory in the second half of 2022 in order to rid themselves of that exposure.

One key problem is that the reality represented above is completely unlike the false narratives peddled by several sensationalist and misguided pundits on YouTube and other social networks and even those more sober and serious analysts who were working for Goldman Sachs in January. If buyers have been reading or watching this stuff, they may enter the market with preconceived notions that are very wide of the mark.

Buyers expecting lower prices are going to be sorely disappointed, especially when the real prices are coupled with the latest 30-year mortgage rates around 7.4%. This is another reason why demand is so persistently weak this year. Simplistic observers believe weak demand translates to weaker prices. Nope. It translates to weak sales. But for prices, supply is just as important and remains drastically below normal, even though it has risen slightly over the past few weeks. Rising slightly will make little difference. We would need supply to almost double for the market to achieve balance.

Commentary written by Michael Orr, Founder of The Cromford Report
©2023 Cromford Associates LLC
 

 

How Inflation Affects the Housing Market

Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two.

The Relationship Between Housing Inflation and Overall Inflation

Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if they weren’t living in them.

Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that survey, shelter inflation has been coming down (see graph below):

Why does this matter? Well, shelter inflation makes up about one-third of overall inflation, as measured by the Consumer Price Index (CPI). So, when shelter inflation moves, it leads to noticeable moves in overall inflation. That means the recent dip in shelter inflation might be a sign that overall inflation could fall in the months ahead.

That moderation would be a welcome sight for the Federal Reserve (the Fed). They’ve been working to get inflation under control since early 2022. While they’ve made some headway (it peaked at 8.9% in the middle of last year), they’re still trying to get to their 2% goal (the latest report is 3.3%). 

Inflation and the Federal Funds Rate  

What’s the Fed been doing to lower inflation? They’ve been increasing the Federal Funds Rate. That interest rate influences how much it costs banks to borrow money from each other. When inflation climbed, the Fed responded by raising the Federal Funds Rate to keep the economy from overheating.

The graph below shows the relationship between the two. Each time inflation (shown in the blue line) starts to climb, the Fed raises the Federal Funds Rate (shown in the orange line) to try to get it back to their target of 2% (see below):

The circled portion of the graph shows the most recent spike in inflation, the Fed’s actions to raise the Federal Funds Rate to fight that, and the moderation of inflation that happened in response to that hike. As inflation gets closer to the Fed’s current 2% goal, they may not need to raise the Federal Funds Rate much further.

A Brighter Future for Mortgage Rates?

So, what does all of this mean for you? While the actions coming out of the Fed don’t determine mortgage rates, they do have an impact. As Mortgage Professional America (MPA) explains:

“. . . mortgage rates and inflation are connected, however indirectly. When inflation rises, mortgage rates rise to keep up with the value of the US dollar. When inflation drops, mortgage rates follow suit.”

While no one can predict the future for mortgage rates, it’s encouraging to see the signs of moderating inflation in the economy. 

Bottom Line

Whether you’re looking to buy, sell, or just stay informed about the housing market, connect with a local real estate expert who can help.
 

  

 Don't worry, your grandma's florals aren't coming back! The freshest floral prints add instant vibrancy to your home! Which of these trends do you plan on trying in your home?
 
As of 8/31/2023
30-year fixed: 7.07% 
15-year fixed: 6.45%
Mortgage rates have decreased noticeably since this time last week. 

“Some lenders advertise much lower rates than others. Other lenders can be "out of the market" at times. Our index attempts to capture the most prevalently quoted conventional conforming 30-year fixed rate for a loan scenario with at least 20% down and no major loan level price adjustments.”

~ Mortgage News Daily website ~
 
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Dennis Carr - Realtor, GRI
Licensed in AZ and CA
480.825.2870
 
Thinking of Selling or Buying?
 
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.

The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
 
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact me so I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success. 

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Arizona Metro Market Report 8-25-23

Posted On: August 25th, 2023 11:43PM

The Hardest Working Agent in Arizona
 
 
  

 

The chart above plots the number of listings under contract, measured on a weekly basis. Under contract means the listing is either in pending or UCB (Under Contract Back-Up Offers) status.

Apart from weeks 16-18 at the trough of the housing shock in 2020, this year has seen the lowest number of listings under contract measured on a weekly basis dating back to 2015. The rapid rise in the Fed Funds Interest rate went from .25% in March of 2022 to today's rate of 5.5%. That's an eye-popping 5.25% rate increase over 16 months.

Looking back at the time period just before the housing crash of 07'-08', rates went from 1.25% in June of 2004 to 5.25% in June of 2006. That equates to a 4% increase over a 24-month period. 

Comparing these two time periods, it is evident that our current rate hike cycle is more significant both in the rise of the Fed Funds Rate, and the shorter time period in which that rate hike occurred. Mortgage rates have increased accordingly, and the result has been crippling the ability of homeowners with a mortgage to trade homes. Why would you trade a 3-5% mortgage (current home) for a 7-8% mortgage (upsize or downsize home)?  

 

 

People Want Less Expensive Homes - And Builders Are Responding

 

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

People Are Spending Less on Newly Built Homes

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:

 

Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge. 

Builders Are Offering Lower-Cost Options

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, explains:

“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”

New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):

 

And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are forming pathways to homeownership:

 “. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”

 How an Agent Can Help

 Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby. 

Bottom Line

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.

 
 
 
As of 8/24/2023
30-year fixed: 7.37% 
15-year fixed: 6.75%
Mortgage rates are the same as this time last week. 
Information courtesy of Mortgage News Daily
 
Home Valuation Tool
Client Reviews
Search Homes
 
Market Reports (By Request)
 
Scottsdale
Phoenix
Paradise Valley
Cave Creek
Carefree
Fountain Hills
Mesa
Tempe
Chandler
Gilbert
Glendale
Peoria
 

 
Dennis Carr - Realtor, GRI
Licensed in AZ and CA
480.825.2870
 
Thinking of Selling or Buying?
 
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.

The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
 
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact me so I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success. 

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Phoenix, AZ Metro Weekly Housing Market Update

Posted On: August 4th, 2023 9:20PM

The Hardest Working Agent in Arizona
 
 
 

Aug 3 - The Maricopa County affidavits of value have been counted and show us the following numbers for July 2023:
  • There were 6,081 closed transactions with a median sales price of $464,990
  • Closings were down 15% from July 2022, and down 20% from June 2023
  • The median sales price was down 2.1% from a year ago and down 1.3% from last month
  • The median sales price has fallen for the first time since January and is now up 5.7% from the low point of January 2023.
  • New home closings totaled 1,352 with a median sales price of $533,592, an all-time record high price
  • The new home closed sales count was up 7.6% from July 2022 but down 18.4% from June 2023.
  • The new home median sales price is up 3.2% from a year ago, and up 2.8% from last month
  • The re-sale transaction count was 4,729 with a median sales price of $445,000.
  • The re-sale count was down 20% from July 2022 and down 21% from June 2023.
  • The re-sale median sales price was down 4.1% from last year and down 0.5% from last month

Closed transaction counts remain very weak for re-sales, with both supply and demand in poor shape. Closing counts were much stronger in the new home market, up almost 8% from this time last year. Pricing was also higher for new builds than a year ago. Resale pricing paused in July but still looks likely to overtake last year's pricing during the next three months.
Aug 1 - The chart below is extracted from the Cromford® Public section of the site and includes all recorded deeds in Maricopa and Pinal counties for single-family and condo/townhouse properties up to the end of June 2023

What jumps out at you is that the average price recorded at closing is now higher at $580,373 than at any time in the past. The correction over the last 12 months is now complete.

At the same time the average size of homes closed has increased, so the same chart for average $/SF has not accomplished a complete recovery of the ground lost since mid-2022.

We should also point out that new homes made a big contribution to the health of this chart. If we only count resale transactions, then the full recovery is not yet achieved.

© 2023 Cromford Associates LLC
 

How Inflation Affects Mortgage Rates

When you read about the housing market in the news, you might see something about a recent decision made by the Federal Reserve (the Fed). But how does this decision affect you and your plans to buy a home? Here’s what you need to know.

The Fed is trying hard to reduce inflation. And even though there’s been 12 straight months where inflation has cooled (see graph below), the most recent data shows it’s still higher than the Fed’s target of 2%: 

While you may have been hoping the Fed would stop their hikes since they’re making progress on their goal of bringing down inflation, they don’t want to stop too soon, and risk inflation climbing back up as a result. Because of this, the Fed decided to increase the Federal Funds Rate again last week. As Jerome Powell, Chairman of the Fed, says:

“We remain committed to bringing inflation back to our 2 percent goal and to keeping longer-term inflation expectations well anchored.”

Greg McBride, Senior VP, and Chief Financial Analyst at Bankrate, explains how high inflation and a strong economy play into the Fed’s recent decision:

“Inflation remains stubbornly high. The economy has been remarkably resilient, the labor market is still robust, but that may be contributing to the stubbornly high inflation. So, Fed has to pump the brakes a bit more.”

Even though a Federal Fund Rate hike by the Fed doesn’t directly dictate what happens with mortgage rates, it does have an impact. As a recent article from Fortune says:

“The federal funds rate is an interest rate that banks charge other banks when they lend one another money . . . When inflation is running high, the Fed will increase rates to increase the cost of borrowing and slow down the economy. When it’s too low, they’ll lower rates to stimulate the economy and get things moving again.”

How All of This Affects You 

In the simplest sense, when inflation is high, mortgage rates are also high. But, if the Fed succeeds in bringing down inflation, it could ultimately lead to lower mortgage rates, making it more affordable for you to buy a home.

This graph helps illustrate that point by showing that when inflation decreases, mortgage rates typically go down, too (see graph below): 

As the data above shows, inflation (shown in the blue trend line) is slowly coming down and, based on historical trends, mortgage rates (shown in the green trend line) are likely to follow. McBride says this about the future of mortgage rates:

“With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably.”

Bottom Line

What happens to mortgage rates depends on inflation. If inflation cools down, mortgage rates should go down too. Count on a real estate professional you can trust for expert advice on housing market changes and what they mean for you.

 

 
 

Ready to turn up the heat on your real estate plans this summer? ???????? With longer days and motivated buyers, it's the perfect time to sell your home and make a move toward your next sunny adventure. Contact me today to get started!

 

 
 
As of 8/3/2023
30-year fixed: 7.2% 
15-year fixed: 6.6%
Mortgage rates increased slightly since last week.
Information courtesy of Mortgage News Daily
 
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Client Reviews
Search Homes
 
Market Reports (By Request)
 
Scottsdale
Phoenix
Paradise Valley
Cave Creek
Carefree
Fountain Hills
Mesa
Tempe
Chandler
Gilbert
Glendale
Peoria
 

 
Dennis Carr - Realtor, GRI
Licensed in AZ and CA
480.825.2870
 
Thinking of Selling or Buying?
 
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.

The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
 
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact me so I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success. 
Find Out More

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Phoenix, AZ Metro Weekly Housing Market Update

Posted On: July 14th, 2023 4:02PM

The Hardest Working Agent in Arizona
 
 
 

Jul 10 - If the Maricopa County recordings for June are analyzed in detail and compared with June 2022, we see the following changes in the mix of residential sales (single-family and condo/townhouse):

  • trustee sales to third parties are down 47%
  • REO sales are up 333% (but only from 3 to 13)
  • fix and flip sales are down 37%
  • new construction closings are up 7.4%
  • FSBO sales outside the MLS are down 53%
  • normal MLS sales are down 13%
  • OfferPad sales are down 76%
  • OpenDoor sales are down 56%
  • Redfin sales are down 100% (from 4 to 0)
  • short sales are up 12%
  • wholesale transactions are down 42%
  • purchases by institutional investors are down 88%
  • overall sales are down 19%

So we can see that overall transaction volume is down almost 20%, but the drop is not evenly distributed.

New homes are having a very good year and 1,646 were closed in June 2023, compared with 1,532 in June 2022. Investors and iBuyer volumes have collapsed, as have FSBOs. Normal MLS transactions are down only 13%, less than the overall market.

© 2023 Cromford Associates LLC
 

Reasons Your Home May Not be Selling

When it comes to selling your house, you want three things: to sell it for the most money you can, to do it in a certain amount of time, and to do all of that with the fewest hassles. And, while the current housing market is generally favorable to sellers due to today’s limited housing supply, there are still factors that can cause delays or even prevent a house from selling.

If you’re having trouble getting your house to sell in today’s sellers’ market, here are a few things to think about.

Limited Access – If You Can’t Show It, You Can’t Sell It.

One of the biggest mistakes you can make as a seller is limiting the days and times when buyers can view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ ability to view it. Remember, minimal access equals minimal exposure.

In some cases, some of the most motivated buyers may come from outside of your local area. Because they’re traveling, they might not have the luxury to adjust their schedules when faced with limited options to tour your house, so make it available as much as possible.

Priced Too High – Price It To Sell, Not To Sit.

Pricing is a critical factor that can significantly impact your home sale. While it’s tempting to push the price higher to try to maximize your profit, overpricing can deter potential buyers and lead to your home sitting on the market longer.

Jeff Tucker, Senior Economist at Zillow, notes:

“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.” 

Not to mention, buyers today have access to a number of tools and resources to view available homes in your area. If your house is priced unreasonably high compared to similar homes, it may drive potential buyers away. Listen to the feedback your agent is getting at open houses and showings. If the feedback is consistent, it may be time to re-evaluate and potentially lower the price. 

Not Freshened Up Before Listing – If It Looks Good, It’ll Make a Good Impression.

When selling your house, the old saying “you never get a second chance to make a first impression” matters. Putting in the work on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact upfront. As an article from Investopedia says:

“Curb-appeal projects make the property look good as soon as prospective buyers arrive. While these projects may not add a considerable amount of monetary value, they will help your home sell faster—and you can do a lot of the work yourself to save money and time.”

But don’t let that stop at the front door. By removing personal items and reducing clutter inside, you give buyers more freedom to picture themselves in the home. Additionally, a new coat of paint or cleaning the floors can go a long way to freshening up a room.

For all of these things, lean on your real estate agent for expert advice based on your unique situation and feedback you get from buyers throughout the process.

Bottom Line

If your house isn’t getting the attention you feel it deserves and isn’t selling in the timeframe you wanted, it’s time to ask your trusted real estate agent for advice on what you may need to revisit or change in your approach. To get those expert insights, connect with a real estate professional.
 

 

 
 
As of 7/14/2023
30-year fixed: 6.87% 
15-year fixed: 6.28%
Mortgage rates decreased significantly since last week. 
Information courtesy of Mortgage News Daily
 
Home Valuation Tool
Client Reviews
Search Homes
 
Market Reports (By Request)
 
Scottsdale
Phoenix
Paradise Valley
Cave Creek
Carefree
Fountain Hills
Mesa
Tempe
Chandler
Gilbert
Glendale
Peoria
 

 
Dennis Carr - Realtor, GRI
Licensed in AZ and CA
480.825.2870
 
Thinking of Selling or Buying?
 
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.

The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
 
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact me so I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success. 
Find Out More

Add Comment

Phoenix, AZ Metro Weekly Housing Market Update

Posted On: July 7th, 2023 4:34PM

The Hardest Working Agent in Arizona
 

Cromford® Market Index values for the single-family markets in the 17 largest cities

Cromford Demand Index™ is a value that provides a short-term forecast for the demand for resale homes in the market. It is derived from the trends in pending and sold listings compared with historical data over the previous four years. Values above 100 indicate more demand than usual, while values below 100 indicate less demand than usual. A value of 100 indicates the demand is close to normal.

 

 

The market is softening and we have 8 cities showing improvement for sellers over the last month but 9 showing deterioration. The average change over the last month is -1.5%, and this is the first negative monthly movement since early December 2022.

There is a wide range between the cities improving the most for sellers (Buckeye, Chandler and Paradise Valley, all up 11%) and those moving in favor of buyers (Cave Creek -27%, Glendale -15%, and Tempe -14%).

Demand dropped sharply between June and July and the third quarter is never the strongest part of the year, so there is no reason to expect much from the next 3 months. However, the supply of new listings remains very weak, down more than 40% compared to this time last year. This is likely to keep supply low despite the weak level of demand. Lower pricing looks unlikely while supply remains tight.

16 of the cities are currently seller's markets, while 1 (Buckeye) remains balanced.

No major city has a CMI below 100

Among the secondary cities, Casa Grande has the lowest CMI at 90, but this has moved up over the last month meaning we have no buyer's markets left. Casa Grande has been our weakest market over the past 12 months and until this week had been a buyer's market since August 2022.

© 2023 Cromford Associates LLC
 

I wonder how the people predicting a new "foreclosures wave" are going to explain away the chart below:

Pending foreclosures have been in decline for almost 3 months now and have gone back down to the level we saw this time last year.

All the lines on the chart above are quite low. The highest line is for 2015, but that is because we did not select years prior to 2015.

In 2009 we exceeded 50,000 pending foreclosures. This means the current count of 939 is trivial.
 

 

 
 

The Maricopa County affidavits of value have been counted and show us the following numbers for June 2023:

  • There were 7,665 closed transactions with a median sales price of $470,937
  • Closings were down 19% from June 2022, and down 7.7% from May 2023
  • The median sales price was down 3.3% from a year ago but up 1.6% from last month
  • The median sales price has risen 5 months in a row and is now up 7.1% from the low point of January 2023.
  • New home sales totaled 1,657 with a median sales price of $519,101
  • The new home closed sales count was up 8.1% from June 2022 but down 7.3% from May 2023.
  • The new home median sales price is up 3.7% from a year ago, and up 2.4% from last month
  • The re-sale transaction count was 6,008 with a median sales price of $450,250.
  • The re-sale count was down 24% from June 2022 but down 7.1% from May 2023.
  • The re-sale median sales price was down 7.0% from last year but up 0.5% from last month

The re-sale market shows prices that are continuing to recover but remain lower than a year ago. Closed transaction counts also remain very weak for re-sales, hampered by the lack of both supply and demand.

Closing counts were much stronger in the new home market, up more than 8% from last year. Pricing was also higher for new builds than a year ago with the median staying above $500,000 since May 2022.

The mood in the new home market is positive while the re-sale market continues to limp along. Market share for new homes was 21.6%, while this time last year it was only 16.2%.

© 2023 Cromford Associates LLC

 

Today's Housing Inventory is a Sweet Spot for Sellers

One of the biggest challenges in the housing market right now is how few homes there are for sale compared to the number of people who want to buy them. To help emphasize just how limited housing inventory still is, let’s take a look at the latest information on active listings, or homes for sale in a given month, as it compares to more normal levels.

According to a recent report from Realtor.com: 

 “On average, active inventory in June was 50.6% below pre-pandemic 2017–2019 levels.”

The graph below helps illustrate this point. It uses historical data to provide a more concrete look at how much the numbers are still lagging behind the level of inventory typical of a more normal market (see graph below):

It’s worth noting that 2020-2022 are not included in this graph. That’s because they were truly abnormal years for the housing market. To make the comparison fair, those have been omitted so they don’t distort the data.

When you compare the orange bars for 2023 with the last normal years for the housing market (2017-2019), you can see the count of active listings is still far below the norm.

What Does This Mean for You? 

If you’re thinking about selling your house, that low inventory is why this is a great time to do so. Buyers have fewer choices now than they did in more normal years, and that’s continuing to impact some key statistics in the housing market. For example, sellers will be happy to see the following data from the latest Confidence Index from the National Association of Realtors (NAR):

  • The percentage of homes that sold in less than a month ticked up slightly to 74%. 
  • The median days on the market went down to 18 days, showing homes are still selling fast when priced right. 
  • The average number of offers on recently sold homes went up to 3.3 offers.

Bottom Line

When supply is so low, your house is going to be in the spotlight. That’s why sellers are seeing their homes sell a little faster and get more offers right now. If you’ve thought about selling, now’s the time to make a move. Connect with a trusted real estate professional to get the process started.

 

 
 
 

 

 
As of 7/7/2023
30-year fixed: 7.22% 
15-year fixed: 6.65%
Mortgage rates increased noticeably since last week. 
Information courtesy of Mortgage News Daily
 
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Dennis Carr - Realtor, GRI
Licensed in AZ and CA
480.825.2870
 
Thinking of Selling or Buying?
 
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.

The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
 
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact me so I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success. 

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