2024 is proving to be a very different year than the previous frenzied housing market of the last few years. Recall that interest rates started to rise in April 2022 over 4%, which immediately slowed housing markets across the country. Inventory rose dramatically and sales slowed. The 2024 housing market is less volatile and shows positive, slow gains in real estate sales and volume.
The Phoenix housing market has experienced volatility in the past, but that's not the case currently. Current listings under contract are about 9440, similar with the 2020 record in the header graph photo.
These reports are provided by private subscription to the Cromford Report. Please do not copy or reproduce. Reports provided here are derived from sales results from the Arizona Regional MLS and the tax records.
Active listings in Maricopa, South Yavapii and Northern Pinal Counties are included in these reports as their inventory is included in the largest MLS in Arizona, the Arizona Regional MLS. This February, inventory rose above 2023 levels and are currently 15,836 listings, about half of a normal inventory level.
Real estate sales have remained positive with the median sales price currently $453,000. The highest median sales price of $480,000 was recorded in May, 2022. It's worth noting that in February, 2016, the median sales price for a home in the Phoenix area was $210,000.
Like the rest of the country, affordable housing is an issue and unattainable for many. Also part of the reason that housing is in such demand is the explosive growth of the population in Arizona. Annually, Arizona nets about 100,000 new residents. Contributing factors are the influx of employment gains in tech, EV manufacturing, semi-conductor industry, big box companies like Amazon and Google, and many other industries relocating to Maricopa and Pinal Counties. Central to Arizona's growth is the efforts of the Greater Phoenix Economic Council. Arizona is now considered the "Silicon Valley of the Southwest."
The time it takes to sell a home in the Phoenix Metro area is currently 2.2 months, This chart dates back to 2010. Notice that the Phoenix Housing Market is cyclical with more homes selling typically in summer months. During 2021 and half of 2022, sales were not as cyclical as normal housing market trends. Traditionally, temperatures and the housing market both heat up during the summer months.
Foreclosures are at an all time history low in Maricopa County. Unemployment is currently 3.8% in Arizona, which is the same as the US average.
Sales for 2024 are on the same level as February 2015, which was more of a "normal" market in terms of supply and demand. As stated before, sales dropped significantly as soon as interest rates rose. A smaller percentage of buyers have bought homes since the peak sales rate in June, 2021 contributing to over 108,000 homes sold in 2021. For every person arriving in Arizona, a home was sold in 2021.
The bottom line for buyers is that now is a GREAT time to buy a home. Because there are so many buyers waiting for interest rates to drop, hint they won't by much, you'll have less competition in the current market place. Once interest rates reflect a slight drop, buyers will come off the fence to lock in a rate and competition will rise.
There is more inventory to choose from and you'll lock in a sale sprice now. If you buy a home and rates fluctuate, you might be able to refinance a home. Studies show it's better to lock in a price than wait for a rate. You can also use funds or ask for a seller concession to "buy down" a rate by up to 2%, depending on the number, so you'll achieve both - a home and a great rate!
For this and other real estate news, always ask a seasoned professional for sound advice.
