The Phoenix real estate market is currently in a low-velocity state. This means there are fewer listings and fewer sales. The overall effect is rapidly changing the dynamic of the area. For the first time in nearly a year, sellers are again fielding multiple offers from buyers, and we are seeing an increase overall in home values.
Those looking to buy or sell need to understand what’s happening and align with a real estate agent that is up to date on current market trends.
Current real estate availability within the Phoenix-metro area
It’s no surprise that the residential real estate market has seen rapid shifts over the last 12 months. In April there were roughly 2,511 homes sold and only 1,170 new homes listed each week. For comparison, the average number of new listings in a typical week is 2,000 to 2,500. This significant decrease in newly listed homes has created an urgency for those looking to buy.
In general, the number of homes coming on the market each week is 30% to 40% below average for this time of year. The data we have shows us that the number of buyers is exceeding the number of homes on the market. What this is creating is a supply and demand issue — i.e., competition. Buyers have been waiting patiently and we are seeing more and more who are tired of waiting, which translates to a high value offer — driving home prices up.
The return of multiple offers to the market
Mortgage interest rates have seen unprecedented increases set forth by the Fed over the last year. The purpose was to curtail the rapidly increasing cost of housing. While this worked temporarily, it also reduced the number of homes people were willing to sell since buying became less affordable. But people need a place to live.
With a housing shortage we have hit a natural tipping point. We are now seeing an increase in the number of multiple offers that sellers are receiving.
According to the latest data from the Cromford Report, which analyzes the housing market in Maricopa and Pinal counties, the median home value in the greater Phoenix area is currently $443,000, compared to January’s $415,000 price. This is a 6.75% appreciation for just this year alone. This number is still lower than a year ago, but the growth rate for home values has not leveled out.
What to expect moving forward
The one thing we can absolutely predict is that the real estate market will continue to be unpredictable. However, we do know that home values will continue to rise if the inventory doesn’t support the number of buyers out there. The competition for homes we are currently seeing will most likely not go away anytime soon. We are in for an interesting summer as this is typically the slowest time of year for real estate.
If you are looking to sell your home, now could be a great time to get top dollar. It’s especially important to work with a real estate agent that understands the complexity of this market and can navigate both the marketing side of your home as well as multiple offers so you can get the most out of your home sale.
If you’re a buyer, it is essential that your agent knows how to negotiate for you in a competitive market. There are a lot of reports out there that have not kept up with the current state of our market so working with someone who clearly understands what is happening in real time is the key to helping you navigate one of the biggest purchasing or selling decisions of your life.
Greg Hague received his first real estate license at 18 and his first license to practice law at 26. In 2018, Hague developed and launched 72SOLD, a program that is currently revolutionizing the home selling process. In 2022, with a three-year revenue growth of 2,065%, 72SOLD was recognized in the Inc. 5000 list, a prestigious ranking of the fastest-growing private companies in America, ranking No. 260 overall, in the top 10 fastest growing real estate firms in the country and No. 1 in Arizona.
