By Sean Colón
Welcome, Arizona realtors, to our latest market snapshot of the vibrant Phoenix metro area! In this blog, we'll provide you with valuable insights and statistics to help you navigate the current state of the local real estate market. Whether you're working with buyers or sellers, understanding the dynamics and trends of the market will empower you to provide exceptional service to your clients. So, let's delve into the details and uncover the exciting opportunities that await!
Buyers:
Seize the Opportunity in a Competitive Market The Greater Phoenix area is experiencing a decline in housing supply, creating a sense of urgency for potential buyers. Supply counts have been decreasing at an average rate of 246 listings per week since the beginning of 2023, with a total supply reduction of 42% since the peak in October. If new sources of supply don't emerge, the Valley could witness extremely low inventory levels within 7-8 months. While permits for new single-family homes dropped by 74% in the last half of 2022, there has been a recent increase, although the build time for new homes is estimated at approximately one year. While prices are rising, the current appreciation rate is more modest compared to previous years, indicating a sustainable growth pattern. Additionally, mortgage rate predictions suggest a potential decline into the mid-to-low 5% range by the end of the year, which could further stimulate both supply and demand in the market.
Sellers:
Leverage Opportunities in the Luxury Market The luxury market segment in Greater Phoenix, priced over $1 million, is experiencing strong performance. May typically represents the peak of buyer activity in the top-tier price ranges, followed by a slowdown as summer temperatures rise. Sellers in this category may observe a temporary increase in canceled or expired listings during June, with reactivation expected in the fall. For sellers with properties under $600,000, it's important to consider FHA buyers. The recent loan limit increase to $530,000, combined with reduced mortgage insurance premiums, has made FHA financing more attractive. As a result, more well-qualified buyers are opting for FHA loans, contributing to increased demand. This shift is reflected in closing statistics, with FHA loans accounting for 21% of closings in March, compared to 9.5% in May of the previous year. Meanwhile, cash sales have decreased, indicating the popularity of FHA financing. While prices continue to rise due to high demand and decreasing supply, the pace of appreciation has become more moderate, allowing for a healthier and sustainable market growth.
Conclusion: The Phoenix metro area's real estate market presents a dynamic landscape filled with opportunities for both buyers and sellers. As a realtor, staying informed about the latest market trends and statistics is crucial for providing exceptional service to your clients. By understanding the urgency buyers face and the strategies to help them navigate the market, as well as leveraging opportunities in the luxury segment and FHA financing, you can effectively guide your clients and achieve successful outcomes. Embrace the current market snapshot and seize the exciting opportunities that await you in Arizona's real estate market.
Remember, knowledge and adaptability are the keys to success in this thriving market. Stay informed, stay motivated, and continue to deliver exceptional service to your clients. Happy selling!
Note: The statistics and information mentioned in this blog are based on the data available at the time of writing. For the most accurate and up-to-date insights, it's recommended to refer to reputable real estate sources and consult with local experts.
Graphic: Cromford Report. (May 2023). Retrieved from https://cromfordreport.com/
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