The latest report for Arizona showed an increase of 93,700 jobs for the state over the course of 2022. In Maricopa County, the unemployment rate dropped from 3.1% in January to 2.7% by the end of December, continuing to outperform national measures. Even as the labor force grew by nearly 58,000 people, even as layoffs swept the real estate and tech industries, people claiming unemployment declined by 9,500 over the course of 2022. Private sector earnings also grew by 4.1% year-over-year, a positive indicator for housing affordability to improve in Greater Phoenix.
For Sellers: Don’t be fooled by this seller’s market, it is nothing like the seller’s market of early 2022. Sellers may notice there is less pressure for a price reduction as there are few new listings entering the market. There were only 9,664 new listings added to the Arizona Regional MLS since the beginning of 2023, the lowest number of new listings measured in at least 23 years. The median is 14,000 listings, and the highest measured was over 21,000 in 2006 over the same 5-week time frame. Less competition is good for price stability. Sellers may notice fewer days on market prior to contract. Half of owners who accepted contracts last week were on the market for 40 days or less (listed after January 4th) compared to the peak of 56 days in December. In a weak seller’s market like this, as we shift into the Spring season, days on market prior to contract may settle in at 25-30 days; a far cry from the 5-7 days in early 2022. Sellers will notice little change in negotiations or concessions at this stage. Last month, 51% of sales involved seller concessions to the buyer with a median cost of $9,700. So far in February, 47% have involved concessions at a cost of $9,800. The average negotiation is 2.8% below the last list price, down from 3.5% last month. Sales measures rolling in now are reflecting contracts written in late December and early January, which was a mixed bag of cities in balance and cities in buyer’s markets at the time. The effects of the current seller’s market will not be seen in sales price measures until March, at which point we expect to see the rate of decline in sales price measures either slow down or stabilize. Mortgage rates could change the game quickly, however. It’s not a time for buyers or sellers to take market conditions for granted.
The recovery in listings under contract since the start of January has been spectacular, as can be seen from the chart below.
Of course, this was from a very low start below 5,400 but cracking the 9,000 by mid February is impressive. We remain 27% below the count on February 13, 2022, so we are really back to normal rather than the wild and crazy market we had 12 months ago.
If we can stay over 9,000 for several months, we will have established "relief" as the next stage of the market cycle, and optimism will be appropriate for the second half of the year. That is an uncertain if, but not an unlikely one.
Why It's Easy to Fall in Love with Homeownership
No matter how the housing market changes, there are some things about owning a home that never change—like the personal benefits it can provide. When you own your home, you likely feel a sense of attachment because of the comfort it gives and also because it’s a space that’s truly yours.
Over the last few years, we’ve fully embraced the meaning of our homes as we spent more time than ever in them. As a result, the emotional benefits our homes provide have become even more important to us.
“. . . one thing has stayed the same: the home continues to be of the utmost importance and a place of security and comfort.”
The same study from Unison notes:
91% of homeowners say they feel secure, stable, or successful owning a home
64% of American homeowners say living through a pandemic has made their home more important to them than ever
It’s no surprise this study also reveals that homeowners now love their homes even more as our attachments to them have grown:
The National Association of Realtors (NAR) also explains:
“In addition to tangible financial benefits, homeownership brings substantial social benefits for [households], communities, and the country as a whole.”
In other words, not only does owning a home build your net worth over time, but it also gives you and your loved ones a place to thrive. And by living near people with shared experiences, homeownership helps you connect with your community and contribute meaningfully.
Bottom Line
Whether you’re thinking of buying your first home, moving up to your dream home, or downsizing to something that better fits your changing lifestyle, a local market expert is the key to unlocking a home you can truly fall in love with.
Buying a home is so much more than just buying a house. A home is a feeling of comfort, safety, and happiness. And, this is the main reason I enjoy being a Realtor®.
As of 2/17/2023 30-year fixed: 6.78% 15-year fixed: 5.94% Mortgage rates have increased significantly since last week. Rates are up .77% since February 2nd. Information courtesy of Mortgage News Daily
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. Recent market activity has become more favorable to buyers vs sellers, as overall supply has increased while prices have decreased. The significance of market changes within the Phoenix Metro is impacted by location and price point. 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 meso I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success.
