While more forward-looking data will need to confirm the trend, there is clear evidence that the rental market has shifted.
Active listings are up 44% from this time last year.
The average lease price per sq. ft. being offered is down from $1.80 to $1.69 over the last month, a fall of 6%.
The average lease price per sq. ft. being offered this time last year was $1.99. This equates to a 15% fall over the last 12 months.
If this trend continues, it will put pressure on cash investors to soften their aggressive upward pricing purchase binge on entry and mid-priced homes. Investors purchasing with financing will be impacted not only by the decrease in rental income, yet a higher mortgage payment as a result of recent rate increases.
March Maricopa County Sales Data
(single-family, condos, and townhomes)
There were 11,382 closed sales recorded during March 2022, down 5% from March 2021
There were 1,558 new homes closed, down 11% compared to March 2021
There were 9,824 re-sale closings, down 4% from March 2021
The median sales price was $470,000, up 29% from $365,000 in March 2021
The new home median sales price was $497,027, up 27% from $391,640 in March 2021
The re-sale median home price was $465,000, up 29% from $360,000 in March 2021
Supply chain issues are still preventing homebuilders from closing as many homes as they wish and work-in-progress remains very high. New home prices are still rising more slowly than re-sale prices, but the gap has narrowed considerably over the last six months. The new home median has jumped over 20% in the last half-year, while the re-sale median is up "only" 12%.
A Glimmer of Hope for Greater Phoenix Buyers?
While very premature in order to establish that we have a definitive upward trend taking place, active listings below 3,000 sq. ft. have increased 22% vs this time last year. Interest rate hikes like we are witnessing tend to impact buyers shopping for homes in this "lower" price range. Demand has softened in the segment, although new listings have also come at a slower pace.
Inventory above 3,000 sq. ft. is down 11% vs last year, and homes above 5000 sq. ft. have decreased 43%. It is apparent that interest rate hikes have not impacted demand for larger homes.
Balancing Your Wants and Needs as a Homeowner Today
Since the number of homes for sale is low today, it can feel challenging to find one that checks all your boxes. But if you know which features are absolutely essential in your next home and which ones are just nice bonuses, you can land a home that fits your needs.
Danielle Hale, Chief Economist for realtor.com, explains it like this:
“Focus on the goal you set out for yourself, like your list of must-haves and nice-to-haves and your budget, . . . Stick to that. Be persistent.”
So how do you go about creating your list of desired features? The first step is to get pre-approved for your mortgage. Pre-approval helps you better understand your budget, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s too far out of reach.
Once you have a good grasp of your budget, you can begin to list all the features of a home you would like. Here’s a great way to think about them before you begin:
Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, garage, etc.).
DreamState– This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).
Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.
Bottom Line
Crafting your home search checklist may seem like a small task, but it can save you time and money. It’s also one of the keys to being successful in today’s competitive market. Connect with a real estate professional so you can work together to find a home that fits your wants and needs.
Homes with quality listing photos can sell quicker and for more money. Professional listing photos will increase the number of buyers who want to see your home in person! Know a great photographer? Tag them below!
As of 4/7/2022 30-year fixed: 4.860% 20-year fixed: 4.617% 15-year fixed: 3.899% Rates have Increased Significantly since last week.
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 vibrant in the United States. An exodus from tax burdensome states such as CA, IL, and NY has helped fuel the growth. In spite of the rising prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. Overbidding and cash purchases are common themes. Currently, the market heavily favors sellers due to extremely low inventory.
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact meso I can learn more about your timeline and real estate goals. It is more important than ever to plan ahead and develop a strategy for success.
