The Hardest Working Agent in Arizona

Concise Daily Market Snapshot

The table below provides a concise statistical summary of today's residential resale market in the Phoenix metropolitan area.

The figures shown are for the entire Arizona Regional area as defined by ARMLS. All residential resale transactions recorded by ARMLS are included. Geographically, this includes Maricopa County, the majority of Pinal county, and a small part of Yavapai County. In addition, "out of area" listings recorded in ARMLS are included, although these constitute a very small percentage (typically less than 1%) of total sales and have very little effect on the statistics.

All dwelling types are included. For-sale-by-owner, auctions, and other non-MLS transactions are not included. Land, commercial units, and multiple dwelling units are also excluded.

2005 saw an increase of almost 80% during the same period, so we are not in that territory. But the increase in available supply is making life more difficult for sellers since they now have to compete far more aggressively for the relatively few buyers out there.

As you might expect, price cuts have risen sharply since July and we are recording well over 2,000 cuts per week. As recently as September, we were seeing fewer than 1,500.

Oct 31 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period June to August 2023. This means the typical home sale closed in mid-July, more than 3 months ago.

We have 13 of the 20 cities showing rising prices for last month, with a higher index for Phoenix for the sixth month in a row. However, 7 cities declined slightly over the last month.

Compared with the previous month's series we see the following changes:

1. Miami +1.21%
2. Las Vegas +1.10%
3. Detroit +0.81%
4. Charlotte +0.77%
5. Atlanta +.76%
6. Phoenix +0.67%
7. Boston +0.60%
8. San Diego +0.58%
9. New York +0.50%
10. Los Angeles +0.45%
11. Tampa +0.38%
12. Seattle +0.18%
13. Chicago +0.04%
14. Denver -0.06%
15. Washington -0.08%
16. Minneapolis -0.12%
17. Portland -0.12%
18. Dallas -0.18%
19. Cleveland -0.20%
20. San Francisco -0.47%

Phoenix has fallen from 2nd to 6th place since last month. The national average increase month to month was +0.43%, so Phoenix remains comfortably ahead of that standard.

Comparing year over year, we see the following changes:

1. Chicago +5.0%
2. New York +5.0%
3. Detroit +4.8%
4. San Diego +4.1%
5. Cleveland +3.9%
6. Atlanta +3.4%
7. Washington +3.4%
8. Miami +3.3%
9. Los Angeles +3.2%
10. Boston +3.1%
11. Charlotte +3.0%
12. Minneapolis +1.9%
13. Tampa +0.0%
14. Denver -0.6%
15. Portland -1.5%
16. Seattle -1.5%
17. Dallas -1.7%
18. San Francisco -2.5%
19. Phoenix -3.9%
20. Las Vegas -4.9%

Phoenix lies in 19th place, the same as last month, and among the weakest cities on a year-over-year basis. 13 of the 20 cities are now showing positive price movement from one year ago, and once again the northern cities are looking good on the year-over-year measure.

The national average is +2.6% year over year.

We can see that Phoenix pricing has been much weaker than the national average between 3Q 2022 and 3Q 2023.

What Are Accessory Dwelling Units and How Can They Benefit You?

Maybe you’re in the market for a home and are having a hard time finding the right one that fits your budget. Or perhaps you’re already a homeowner in need of extra income or a place for loved ones. Whether as a potential homebuyer or a homeowner with changing needs, accessory dwelling units, or ADUs for short, may be able to help you reach your goals.

What Is an ADU?

As AARP says:

“An ADU is a small residence that shares a single-family lot with a larger, primary dwelling.”

“An ADU is an independent, self-contained living space with a kitchen or kitchenette, bathroom and sleeping area.”

“An ADU can be located within, attached to, or detached from the main residence. It can be created out of an existing structure (such as a garage) or built anew.”

If you’re thinking about whether an ADU makes sense for you as a buyer or a homeowner, here’s some useful information and benefits that ADUs can provide. Keep in mind, that regulations for ADUs vary based on where you live, so lean on a local real estate professional for more information.  

The Benefits of ADUs

Freddie Mac and the AARP identify some of the best features of ADUs for both buyers and homeowners:

• Living Close by, But Still Separate: ADUs allow loved ones to live together while having separate spaces. That means you can enjoy each other’s company and help each other out with things like childcare, but also have privacy when needed. If this appeals to you, you may want to consider buying a home with an ADU or adding an ADU onto your house. According to Freddie Mac:

“Having an accessory dwelling unit on an existing property has become a popular way for homeowners to offer independent living space to family members.”

• Aging in Place: Similarly, ADUs allow older people to be close to loved ones who can help them if they need it as they age. It gives them the best of both worlds – independence and support from loved ones. For example, if your parents are getting older and you want them nearby, you may want to buy a home with an ADU or build one onto your existing house.

• Affordable To Build: Since ADUs are often on the smaller side, they’re typically less expensive to build than larger, standalone homes. Building one can also increase your property’s value.

• Generating Additional Income: If you own a home with an ADU or if you build an ADU on your land, it can help generate rental income you could use toward your own mortgage payments. It’s worth noting that because an ADU exists on a single-family lot as a secondary dwelling, it typically cannot be sold separately from the primary residence. But that’s changing in some states. Work with a professional to understand your options. 

These are a few of the reasons why many people who benefit from ADUs think they’re a good idea. As Scott Wild, SVP of Consulting at John Burns Research, says:

“It’s gone from a small niche in the market to really a much more impactful part of new housing.”

Bottom Line

ADUs have some great advantages for buyers and homeowners alike. If you're interested, reach out to a real estate professional who can help you understand local codes and regulations for this type of housing and what’s available in your market.