2023 Phoenix Housing Market Report

It's an interesting time in real estate.? Now that 2023 is over and time to review, there is a reason for many common? aspects of real estate across the US!? Brian Buffini reports that 90% of homeowners have interest rates less than 6%; and 25% of homeowners have interest rates below 3%.? This explains why inventory has been low!? ?And during the housing recession home builders stopped building.? This aspect of housing also helped to create a current inventory shortage.

?The 2023 Year To Date Dollar Volume for the Phoenix housing market was higher than 2019 and slightly lower than 2020. All things considered, 2023 was a good sales volume year if you look at the trajectory from 2019 to 2023 and ignore the frenzied years of 2020, 2021 and half of 2022.? The housing frenzy was an anomaly as compared to past sales markets.?

?Housing Inventory on December 31, 2023 was 14% lower than the same time in 2022.? The wild swings in inventory can best be attributed to rising interest rates.? As interest rates began to rise over 4% in 2022, buyers moved to the sidelines and sales slowed in the "red" line of 2022.? Seasonal demand is also part of inventory levels and home sales.? Only those who are truly serious want to move during winter holidays.

To understand the low 13,568 housing inventory? (homes, condos, townhomes, mobile homes and patio homes), consider that in 2009, inventory was over four times higher!? Check out the Extreme Statistics for our Arizona Regional MLS.?

The highest inventory recorded was in October, 2007 with 58,334 homes for sale.? The highest sales volume per month was 11,708 in June, 2019; with the highest sales year recorded June, 19, 2021.? The Cromford Market Index is best described as any number over 110 is a sellers market. Understanding this index assists realtors in how best to assist their buying and selling clients.

Scroll to the bottom to see that the highest Cromford Market Index (sellers market) occurred on March 11, 2021; while the lowest Cromford Market Index (buyers market) occurred on October 30, 2007. The Cromford Market Index is a is defined by how to react to current conditions, not historical sales data.

This chart below shows every major city in Maricopa County and the corresponding Cromford Market Index.? Any number over 110 reflects a sellers market.? From this chart you can see last month's numbers versus this month and decide how to structure an offer or a listing, based on the demand and potential supply in that city.? The town of Paradise Valley is the biggest loser. however, it's worth noting that in that luxury market, high sales figures can produce wild chart swings since there are no homes for sale under $1 million and supply has risen recently.? And the largest gain in Fountain Hills might be because 15% of their active inventory is new construction? Meanwhile, Scottsdale real estate is holding steady and rising in a sellers market.? Lots of improvement for 13 of 17 cities listed.

Excluding those homes that are already under contract and accepting back up offers, we currently have a 3.3 month supply of homes.? ?So if no other homes were listed for sale, it would take 3.3 months to sell the existing housing stock.? This is the sum of all inventory.? Expect to see this statistic drop thanks to improving market conditions shown above, depending on inventory of course.

Prices continue to rise as a whole for the Phoenix metro area.? Currently, the price is $333.83 per square foot on average for homes in the area.? Prices dipped to $297.38 on January 27, 2023, but rose again in early February, 2023 and have continued mostly an upward trajectory.? By comparison, prices were $145 per square foot in January, 2016.??

Thanks to fewer homes available for sale, active Inventory, there are also fewer sales.? Sales numbers for 2023 matched 2015 sales volume for normal sales.? Pent up demand from higher interest rates had slowed sales initially, but sales rates are leveling off.? ?The key difference in 2015 versus 2023 housing sales is the number of foreclosure sales.? Today, there are 62 listings that are foreclosure and short sales listed for sale in all of Maricopa County.?

In February, 2015 there were 4414 foreclosure listings, 418 HUD home listings, and 2929 short sale homes listed for sale.? ?The housing market was still recovering from the recession.? Investor purchases, fix and flip sales, and buyer beware was ever present!? For 2023, regular housing sales were 67,408 as of December 31, 2023. ?

This chart speaks VOLUMES about the lack of Trustees Sales, Short Sales and Foreclosures in general for 2023.? As compared to the 2009 Housing Market in Phoenix, today's very few missed mortgage payments pale in comparison to the sheer volume of them in 2009.? Arizona is a non-judicial state.? If you miss three mortgage payments, you'll receive a Notice of Trustees Sale in the 4th month.?

When you miss six payments, the Trustee will repossess your home unless you pay the missed payments.? Three things will happen to that home depending on the Trustee.? ?The home will be shifted to HUD to resell; the home will go to the courthouse steps to be auctioned off to the highest bidder; or the bank will list the home for sale with a listing broker.? Either way, the market corrects itself rather quickly in this type of housing market.? Today, this is a very small fraction of our housing sales in Arizona.?

If you're looking for a knowledgeable real estate agent in the state of Arizona, make sure they know the state of the current housing market.??

And if you have questions about your zip code and price range, reach out to me for more specific reports.? I'm happy to share.??

PLEASE DON'T COPY OR REPRODUCE THESE CROMFORD MARKET REPORT AS THEY ARE PRODUCED BY SUBSCRIPTION.?