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.
Nov 13 - The monthly table of 41 cities ranked by annual average $/SF has been published today.
It is striking how far Paradise Valley has moved in a positive price direction (12.7%) over the past 12 months, opening up an even wider gap with the rest of Greater Phoenix. Scottsdale has also moved slightly higher by 1.3%, but Paradise Valley is now priced at 71% higher than Scottsdale, up from a 54% premium last year.
Wittmann and Youngtown, both tiny and therefore subject to volatility, are the only other cities showing a positive move over the past 12 months, based on the ANNUAL average $/SF. The monthly average $/SF for these locations is close to useless because of the small sample size for sales in a single month.
At the other end of the scale, Arizona City, Sun City West, Sun City, Tonopah, Queen Creek, Avondale, Florence, and Surprise have seen the largest declines in their average $/SF, down more than 5%. We conclude that the huge rise in mortgage rates has negatively affected the lower-priced areas on the perimeter of the valley more than the luxury locations and those closer to the center.
The new year is right around the corner, and you might be wondering if 2024 will be the right time to buy or sell a home. If you want to make the most informed decision possible, it’s important to know what the experts have to say about what’s ahead for the housing market. Spoiler alert: the projections may be better than you think. Here’s why.
As you can see in the orange bars on the left, on average, experts forecast prices will end this year up about 2.8% overall, and increase by another 1.5% by the end of 2024. That’s big news, considering so many people thought prices would crash this year. The truth is, prices didn’t come tumbling way down in 2023, and that’s because there just weren’t enough homes for sale compared to the number of people who wanted or needed to buy them, and that inventory crunch is still very real. This is the general rule of supply and demand, and it continues to put upward pressure on prices as we move into the new year.
Looking forward, experts project home prices will continue to rise next year, but not quite as much as they did this year. Even though the expected rise in 2024 isn’t as big as in 2023, it’s important to understand home price appreciation is cumulative. In simpler terms, this means if the experts are right, according to the national average, after your home’s value goes up by 2.8% this year, it should go up by another 1.5% next year. That ongoing price growth is a big part of why owning a home can be a smart decision in the long run.
Projections Show Sales Should Increase Slightly Next Year
While 2023 hasn’t seen a lot of home sales relative to more normal years in the housing market, experts are forecasting a bit more activity next year. Here’s what those same three organizations project for the rest of this year, and in 2024 (see graph below):
While expectations are for just a slight uptick in total sales, improved activity next year is a good thing for the housing market, and for buyers and sellers like you. As people continue to move, that opens up options for hopeful buyers who are looking for a home.
So, what do these forecasts show? The housing market is expected to be more active in 2024. That may be in part because there will always be people who need to move. People will get new jobs, have children, get married or divorced – these and other major life changes lead people to move regardless of housing market conditions. That will remain true next year, and for years to come. And if mortgage rates come down, we’ll see even more activity in the housing market.
Bottom Line
If you’re thinking about buying or selling, it’s important to know what the experts are forecasting for the future of the housing market. When you’re in the know about what’s ahead, you can make the most informed decision possible. Connect with a local real estate agent to chat about the latest forecasts, and craft a plan for your next move.
As of 11/16/2023 30-year fixed: 7.36% 15-year fixed: 6.75% 30-year mortgage rates have decreased 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.”
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
Are You Thinking of Selling or Buying?
Thank you for reading the Arizona Metro Market Report. I hope this newsletter provides value and helps you stay informed about local real estate trends.
The Phoenix metro real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles, Seattle, and cold climates to the Northeast 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 listings are historically low creating a challenge for home shoppers, the listing count has recently been increasing thus creating more opportunities. Although buyer demand has been hampered due to higher interest rates, a recent surge in inventory not typical this time of year has buyers feeling a little better.
Even though we have seen a recent upward trend in inventory, sellers still have an opportunity to get ahead of the curve and sell with limited competition. Taking action in a low inventory environment can result in a significantly higher sales price if your home is positioned correctly in the marketplace.
If you are considering buying or selling in Arizona and would like to discuss this possibility without being pressured, contact me so I can learn more about your timeline and real estate goals. Together, we will drill down and identify what's most important to you. Planning ahead and implementing a strategy for success is the most engaging and effective way to create the outcome you deserve.
