Here are the basics - the ARMLS numbers for March 1, 2023 compared with March 1, 2022 for all areas & types:
Active Listings (excluding UCB & CCBS): 14,739 versus 4,588 last year - up 221% - but down 5.5% from 15,598 last month
Under Contract Listings (including Pending, CCBS & UCB): 9,109 versus 12,050 last year - down 24% - but up 16.6% from 7,810 last month
Monthly Sales: 5,693 versus 7,993 last year - down 29% - but up 31% from 4,357 last month
Monthly Median Sales Price: $413,000 versus $445,000 last year - down 7.2% - but up 0.7% from $410,000 last month
Volumes remain much lower than a year ago, but they have recovered some ground. Monthly sales were down 29% compared with 2022, which is a major improvement from the 39% deficit last month.
Although the market remains unhealthy from a volume perspective, it is warming up from a supply versus demand point of view. The supply of active listings has been trending lower for several months, although this is not true of the luxury sector, particularly Paradise Valley. You might expect demand to be very weak because mortgage rates have jumped back over 7% again. However, buyers are not capitulating and the growth of listings under contract is much healthier than we expected under these circumstances.The 16.6% growth in listings under contract since the beginning of February, and the 31% increase in the monthly sales rate are surprisingly strong.
The balance between supply and demand has shifted significantly over the past 3 months and there is now upward pressure on pricing once more. We note that the monthly median sales price is up 0.7% over the last month while the average price per square foot for closed listings has risen by 1.2%. Pricing remains weaker than a year ago when we were still in a boom period with exceptionally low supply.But the trend is now pointing higher, not lower. It is possible that the Federal Reserve may do more damage to interest rates, but the risk premium in mortgage rates is currently far above normal. This means there is plenty of scope for lower mortgage rates to be introduced if the risk abates.
The current pricing trend may contradict the claims by various amateur pundits and their daft YouTube channels, but there is almost no data that supports the theory that prices are going to collapse from this point. For this to happen we would need to have a wave of new supply creating problems for sellers. While this is always a remote possibility, there is very little foreclosure activity and low levels of mortgage delinquency. So where is this flood of homes for sale supposed to come from? The builders have cut back drastically on new home permits, so we are more likely to see a shortage of homes for sale than a glut. And rising mortgage rates discourage homeowners with mortgages from selling because that would mean the loss of their cheap loan and the acquisition of a much more expensive one.
Even though buyers are scarce, homes for sale remain stubbornly hard to find. It is always good for sellers when they have less competition from other sellers. This means much less need to cut their asking price, especially if they are patient and present their property well.
2 Things Sellers Need to Know This Spring
A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
1. Houses That Are Priced Right Are Still Selling
Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.
2. Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.
Bottom Line
There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move, connect with a trusted real estate advisor.
The last few years have changed how we use and fill our homes. These trends reflect just that. If you could do anything to your home, where would you start?
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. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. 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.
Today’s homeowners are sitting on significant equity, even as home price appreciation has eased recently. If you’re a homeowner, your net worth got a boost over the past few years thanks to rising home prices. Here’s what it means for you, even as the market moderates.
How Equity Has Grown in Recent Years
Because of the imbalance between how many homes were for sale and the number of homebuyers in the market over the past few years, home prices appreciated substantially.
And while price appreciation has slowed this year, that doesn’t mean you’ve lost all the equity in your home. In fact, the latest Homeowner Equity Insights report from CoreLogicfindsthe average homeowner’s equity has grown by $34,300 over the past year alone.
And if you’ve been in your home longer than that, chances are you have even more equity than you realize.
While that’s the national number, if you want to know what happened in your area, look at the map below from the Federal Housing Finance Agency (FHFA). It shows on average how much home prices have risen over the past five years, which has been a major driver behind equity growth.
Why This Is So Important Right Now
While equity helps increase your overall net worth, it can also help you achieve other goals, like buying your next home. When you sell your current house, the equity you’ve built up comes back to you in the sale, and it may be just what you need to cover a large portion – if not all – of the down payment on your next home.
So, if you’ve been holding off on selling, it may be time to find out how much equity you have and how it can help fuel your next move.
Bottom Line
Homeownership is a long game, and if you’re planning to make a move, the equity you’ve gained over time can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, connect with a local real estate professional.
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. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. 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.
The positive signals continue to grow despite the gloomy trend in mortgage interest rates. With each passing week, fewer listings are getting canceled, fewer are expiring and more are going under contract. We can see this clearly from the listing success rate chart:
First, we need to make the obvious point that there is always a disconnect in January due to the large number of listings that expire on Dec 31 each year. We need to ignore the drop and the rise one month later and instead focus on the overall trend.
We can see that the listing success rate hit a low point of 61% around Thanksgiving 2022. We have now recovered to the 72% mark. This is actually better than average, though we were around 85% to 95% during the crazy COVID period. We are observing a remarkably fast recovery that appears to have some staying power.
The Two Big Issues the Housing Market is Facing Right Now
The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeownersandthe fear of not finding something to buy.”
Let’s break down these two big issues in today’s housing market.
Rate-Locked Homeowners
According to the Federal Housing Finance Agency (FHFA), the average interest rate for current homeowners with mortgages is less than 4% (see graph below):
But today, the typical mortgage rate offered to buyers is over 6%. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project mortgage rates will gradually fall this year, and that could mean more people will be willing to move as that happens.
The Fear of Not Finding Something To Buy
The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your options. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate buydowns.
What Does This Mean for You?
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a sweet spot that can work to your advantage.
Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to ATTOM:
“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”
This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.
Bottom Line
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market.
Bathrooms are a room you use daily; why not make them the best? Bathroom remodels are well worth the money, time, and effort. When you sell, you can recoup around 67% of the investment! What’s one feature you wish your bathroom had?
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. While overall there are more listings for buyers to choose from vs last year, new listings are scarce. As a result, prices have not crashed due to oversupply. 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.
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.
Feb 8 - Interest rates looked stable during January but they started misbehaving again in the first week of February.
All looked fine on February 2 when the 30-year fixed rate averaged 5.99%. This was the day AFTER the Federal Reserve increased its benchmark rate by 0.25%. However, the average 30-year rate has now jumped up to 6.45% in just 3 days. The FHA 30-year rate has increased from 5.36% to 5.90% over the same period.
The jumbo 30-year rate averaged 6% yesterday, up from 5.65% on February 2. This is not good for home buyers or sellers.
If these rates stick around it will probably apply the brakes to the recovery in demand we experienced in January. We advise you to keep a close eye on the accepted contract counts shown in our below.
The Top Reasons for Selling Your Home
Many of today’s homeowners bought or refinanced their homes during the pandemic when mortgage rates were at history-making lows. Since rates doubled in 2022, some of those homeowners put their plans to move on hold, not wanting to lose the low mortgage rate they have on their current house. And while today’s rates have started coming down from last year’s peak, they’re still higher than they were a couple of years ago.
Today, 93% of outstanding mortgages have a rate at or below 6%. That means a strong majority of homeowners with mortgages have a rate below what they’d get if they moved right now. But if you’re a homeowner in that position, remember that mortgage rates aren’t the only thing to consider when making a move. Your mortgage rate is important, but there are plenty of reasons you may still need or want to move. RealTrends explains:
“Sellers who don’t have to move won’t be moving. The most common sellers will be: Homeowners downsizing . . . people moving to get more space, [households] looking for better schools…etc.”
So, if you’re on the fence about selling your house, consider the other reasons homeowners are choosing to make a move. A recent report from the National Association of Realtors (NAR) breaks down why homeowners have decided to sell over the past year:
As the visual shows, the most commonly cited reasons for selling were the desire to move closer to loved ones, followed by moving due to retirement, and their neighborhood becoming less desirable. Additionally, the need for more space factored in, as did a change in household structure.
If you also find yourself wanting a change in location or needing space your current house just can’t provide, it may be time to sell.
What you want and need in a home can be reason enough to move. To find out what’s right for you, work with a trusted real estate professional who will offer advice and expert guidance throughout the process. They’ll be able to lay out all your options – giving you what you need to make a confident decision.
Bottom Line
When deciding whether or not to move, you have a lot to consider. There are plenty of non-financial reasons to factor in. Connect with a local real estate professional who can help you weigh the benefits of selling your house.
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.