Greater Phoenix’s Market Continues To Trend In Favor Of Buyers
Latest Greater Phoenix RE Update
The Greater Phoenix real estate market isn't improving as some had hoped. The listing success rate has dropped compared to last year, which points to a softer market. We might even be nearing a buyer's market, especially with mortgage rates on the rise. This adds more uncertainty to the mix. As the election approaches, and with the holidays just around the corner, there's even more hesitation in the air. Today on LUXE BLOG, we go over what's happening in the Greater Phoenix real estate market, starting with the listing success rate.
Current Listing Success Rate In Greater Phoenix
The listing success rate refers to how many homes close versus those that expire or are canceled. A higher success rate shows a stronger market. As of now, the rate stands at 71%. This is above the long-term average of 68%, but lower than last year’s 75%.
Here’s a breakdown of what’s happening:
- Long-term average: 68%
- Current rate: 71%
- Last year’s rate: 75%
- 2008’s rate: 21%
In summary, while we're slightly above the long-term average, the Greater Phoenix market is softer than last year. This is surprising given the rise in interest rates, which initially seemed like they would push the market up. But as the summer rolled in, things slowed down significantly. Transaction volumes are still lower compared to last year, making 2024 look less favorable overall.
Mortgage Rates & Demand
Mortgage rates have been another big factor in shaping buyer behavior. Although rates dropped earlier in the year, they’ve spiked again recently. This is having a noticeable effect on buyer demand. Here’s what we’re seeing:
- Mortgage rates hit 6.44% recently, up from 6.32%.
- Applications to purchase homes fell by 7% week over week.
- Many buyers are waiting for mortgage rates to improve or for the election results to settle in.
These shifts in rates have made potential buyers cautious, waiting to see if rates will drop again before making their move.
Also Read: Are Supply Chain Disruptions Impacting Home Builds In Arizona?
Rising Supply & Weakening Demand
The number of active listings in Greater Phoenix continues to rise. This has been happening for 11 weeks straight. Here's the latest:
- Active listings: 19,039 (and climbing)
- Supply is growing faster than demand.
With more homes hitting the market and buyer demand remaining weak, we’re likely to see prices fall. This is why we're heading toward a buyer's market. Though it’s not fully there yet.
Affordability Concerns
Affordability has been another major issue for buyers. High mortgage rates and home prices have put homes out of reach for many potential buyers. Affordability is playing a huge role in the current market's dynamics.
The Cromford Market Index
The Cromford Market Index (CMI) is a key indicator of where the market is heading. Anything between 90 and 110 represents a balanced market. In Greater Phoenix, we’re currently at 92.6. Here’s what that means:
- Balanced market range: 90-110
- Greater Phoenix current score: 92.6
- Anything under 90 signals a buyer’s market.
It’s clear that Greater Phoenix is edging toward a buyer’s market. While demand has remained relatively unchanged, supply has been steadily increasing, tipping the scales.
Also Read: How Williams Luxury Homes Sells Luxury Arizona Properties Fast
City-Specific Trends
Different parts of the Greater Phoenix area are experiencing varied market conditions. Here’s a quick look at some trends:
- Buckeye, Maricopa, Queen Creek, Goodyear, & Surprise: Already in a buyer’s market.
- Tempe & Cave Creek: Balanced markets.
- Avondale, Paradise Valley, Fountain Hills: Still technically seller’s markets but shifting toward buyers.
Overall, cities that once had a strong seller advantage are starting to lose that edge.
What’s Next?
As we approach the election and other big economic events, we can expect more market changes. Mortgage rates, the job report, and Fed announcements will likely stir things up even more in the coming weeks. Meanwhile, supply continues to rise while demand remains low, pushing the market closer to buyers' favor.
For those looking to sell, it’s important to stay updated on these shifts. And if you're a buyer? This might be a great time to start paying attention to the Arizona real estate market. And if you have any questions, feel free to reach out to us using the below contact form. See you soon.