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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.

Jan 30 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period September to November 2023. This means the typical home sale closed in mid October, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

We have 7 of the 20 cities showing rising prices for last month, with a lower index for Phoenix for the first time in 9 months. 13 cities declined over the last month with Seattle the most affected.

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

1. Miami +0.3%
2. Cleveland +0.3%
3. New York +0.3%
4. Charlotte +0.2%
5. Las Vegas +0.2%
6. Tampa +0.1%
7. Los Angeles +0.1%
8. Atlanta 0.0%
9. Boston -0.2%
10. Washington -0.3%
11. Phoenix -0.3%
12. Chicago -0.4%
13. Detroit -0.4%
14. San Diego -0.5%
15. Dallas -0.6%
16. Minneapolis -0.8%
17. Denver -0.9%
18. Portland -1.0%
19. San Francisco -1.3%
20. Seattle -1.4%

Phoenix has dropped from 2nd to 11th place since last month. The national average increase month to month was -0.18%, so Phoenix fell just below that standard.

Comparing year over year, we see the following changes:

1. Detroit +8.2%
2. San Diego +8.0%
3. New York +7.4%
4. Cleveland +7.4%
5. Los Angeles +7.2%
6. Miami +7.2%
7. Boston +7.1%
8. Chicago +7.0%
9. Minneapolis +7.0%
10. Atlanta +5.9%
11. Washington +4.7%
12. Tampa +3.4%
13. Minneapolis +2.7%
14. Phoenix +2.5%
15. Las Vegas +2.1%
16. San Francisco +2.0%
17. Dallas +1.7%
18. Seattle +1.6%
19. Denver +1.5%
20. Portland -0.7%

Phoenix has crept up from 18th to 14th place, but is still in the bottom half on a year over year basis. 19 of the 20 cities are now showing positive price movement from one year ago and Portland is again doing relatively poorly.

The national average is +5.1% year over year. Phoenix is showing less than half that percentage.

Sellers seem to have lost the reticence they developed last year and are delivering plenty of new supply. 8,278 new listings have been posted in the last 4 weeks. This is the highest total since October 20, 2022 and represents a 16% increase over this time last year. The CMI is stationary because demand and supply are both increasing in step. Which one will become dominant in February?

Will a Silver Tsunami Change the 2024 Housing Market?

Have you ever heard the term “Silver Tsunami” and wondered what it’s all about? If so, that might be because there’s been lot of talk about it online recently. Let’s dive into what it is and why it won’t drastically impact the housing market.

What Does Silver Tsunami Mean?

A recent article from HousingWire calls it:

“. . . a colloquialism referring to aging Americans changing their housing arrangements to accommodate aging . . .”

The thought is that as baby boomers grow older, a significant number will start downsizing their homes. Considering how large that generation is, if these moves happened in a big wave, it would affect the housing market by causing a significant uptick in the number of larger homes for sale. That influx of homes coming onto the market would impact the balance of supply and demand and more.

The concept makes sense in theory, but will it happen? And if so, when?

Why It Won’t Have a Huge Impact on the Housing Market in 2024

Experts say, so far, a silver tsunami hasn’t happened – and it probably won’t anytime soon. According to that same article from HousingWire:

“. . . the silver tsunami’s transformative potential for the U.S. housing market has not yet materialized in any meaningful way, and few expect it to anytime soon.”

Here’s just one reason why. Many baby boomers don’t want to move. Data from the AARP shows over half of the surveyed adults ages 65 and up plan to stay put and age in place in their current home rather than move (see chart below):

Clearly, not every baby boomer is planning to sell or move – and even those who do won’t do it all at once. Instead, it will be more gradual, happening slowly over time. As Mark Fleming, Chief Economist at First American, says:

“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”

Bottom Line

If you’re worried about a Silver Tsunami shaking up the housing market, don’t be. Any impact from baby boomers moving will be gradual over many years. Fleming sums it up best:

“Demographic trends, they don't tsunami. They trickle.”

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